SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

 X      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
---     EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2005

                                       OR

-----   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
        EXCHANGE ACT OF 1934


                         Commission file number 0-28538


                           Titanium Metals Corporation
    ------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


               Delaware                                       13-5630895
------------------------------------------           ---------------------------
    (State or other jurisdiction of                         (IRS Employer
     incorporation or organization)                       Identification No.)


                1999 Broadway, Suite 4300, Denver, Colorado 80202
--------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (303) 296-5600
                            ------------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days.

Yes               No        X
          -------        ---------



Indicate by check mark whether the  registrant  is an  accelerated  filer
(as defined in Rule 12b-2 of the Exchange Act).

Yes          X     No
          --------        --------



Indicate by check mark whether the registrant is a shell company
(as defined by rule 12b-2 of the Exchange Act).

Yes                No        X
          --------        --------


Number of shares of common stock outstanding on January 3, 2006: 35,482,522
<PAGE>


Forward-Looking Information

         The  statements  contained  in  this  Quarterly  Report  on  Form  10-Q
("Quarterly Report") that are not historical facts,  including,  but not limited
to,  statements found in the Notes to Consolidated  Financial  Statements and in
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations ("MD&A"), are forward-looking  statements that represent management's
beliefs   and   assumptions   based   on   currently   available    information.
Forward-looking  statements can generally be identified by the use of words such
as  "believes,"   "intends,"   "may,"  "will,"   "looks,"   "should,"   "could,"
"anticipates,"   "expects"  or  comparable  terminology  or  by  discussions  of
strategies  or trends.  Although  the  Company  believes  that the  expectations
reflected in such forward-looking  statements are reasonable, it cannot give any
assurance that these  expectations will prove to be correct.  Such statements by
their  nature   involve   substantial   risks  and   uncertainties   that  could
significantly  affect  expected  results.  Actual  future  results  could differ
materially  from those  described in such  forward-looking  statements,  and the
Company   disclaims  any  intention  or  obligation  to  update  or  revise  any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise. Among the factors that could cause actual results to differ
materially are the risks and  uncertainties  discussed in this Quarterly Report,
including risks and  uncertainties in those portions  referenced above and those
described  from time to time in the Company's  other filings with the Securities
and  Exchange  Commission  ("SEC")  which  include,  but are not limited to, the
cyclicality of the commercial  aerospace industry,  the performance of aerospace
manufacturers and the Company under their long-term  agreements,  the renewal of
certain long-term agreements,  the difficulty in forecasting demand for titanium
products,  global economic and political conditions,  global productive capacity
for  titanium,  changes in product  pricing and costs,  the impact of  long-term
contracts  with  vendors  on the  ability of the  Company to reduce or  increase
supply, the possibility of labor disruptions,  fluctuations in currency exchange
rates,  fluctuations  in the market price of marketable  securities,  control by
certain   stockholders  and  possible   conflicts  of  interest,   uncertainties
associated with new product or new market  development,  the availability of raw
materials and services, changes in raw material prices and other operating costs
(including  energy costs),  possible  disruption of business or increases in the
cost of doing business resulting from terrorist  activities or global conflicts,
the  potential  for  adjustment  of the  Company's  deferred  income  tax  asset
valuation  allowance  and other risks and  uncertainties.  Should one or more of
these risks materialize (or the consequences of such a development  worsen),  or
should the underlying  assumptions prove incorrect,  actual results could differ
materially from those forecasted or expected.



<PAGE>


                           TITANIUM METALS CORPORATION

                                      INDEX

<TABLE>
<CAPTION>

                                                                                                            Page
                                                                                                           Number

PART I.       FINANCIAL INFORMATION
<S>      <C>                                                                                                 <C>
         Item 1.    Consolidated Financial Statements

                    Consolidated Balance Sheets - September 30, 2005 (unaudited)
                      and December 31, 2004                                                                   2

                    Consolidated Statements of Operations - Three and nine months
                       ended September 30, 2005 and 2004 (unaudited)                                          4

                    Consolidated Statements of Comprehensive Income (Loss) - Three
                      and nine months ended September 30, 2005 and 2004 (unaudited)                           5

                    Consolidated Statements of Cash Flows - Nine months ended
                       September 30, 2005 and 2004 (unaudited)                                                6

                    Consolidated Statement of Changes in Stockholders' Equity -
                      Nine months ended September 30, 2005 (unaudited)                                        8

                    Notes to Consolidated Financial Statements (unaudited)                                    9

         Item 2.    Management's Discussion and Analysis of Financial
                      Condition and Results of Operations                                                    22

         Item 3.    Quantitative and Qualitative Disclosures About Market Risk                               35

         Item 4.    Controls and Procedures                                                                  35

PART II.     OTHER INFORMATION

         Item 1.    Legal Proceedings                                                                        37

         Item 6.    Exhibits                                                                                 37
</TABLE>


                                      -1-
<PAGE>


                           TITANIUM METALS CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                                 (In thousands)
<TABLE>
<CAPTION>
                                                                               September 30,           December 31,
ASSETS                                                                             2005                    2004
                                                                            --------------------    --------------------
                                                                               (unaudited)             (as restated,
                                                                                                         see Note 1)
<S>                                                                         <C>                     <C>
Current assets:
   Cash and cash equivalents                                                $           5,540       $           7,194
   Restricted cash and cash equivalents                                                   146                     721
   Accounts and other receivables, less
     allowance of $1,614 and $1,683, respectively                                     140,353                  96,756
   Inventories                                                                        337,157                 258,324
   Prepaid expenses and other                                                           4,766                   2,400
   Deferred income taxes                                                                3,218                   4,974
                                                                            --------------------    --------------------

       Total current assets                                                           491,180                 370,369

Marketable securities                                                                  48,560                  47,214
Investment in joint ventures                                                           24,183                  22,591
Investment in common securities of TIMET Capital Trust I                                  180                   6,259
Property and equipment, net                                                           245,257                 228,173
Intangible assets, net                                                                  4,309                   5,057
Deferred income taxes                                                                  16,293                   1,053
Other                                                                                  11,401                  11,577
                                                                            --------------------    --------------------

Total assets                                                                $         841,363       $         692,293
                                                                            ====================    ====================
</TABLE>


           See accompanying Notes to Consolidated Financial Statements
                                       -2-

<PAGE>


                           TITANIUM METALS CORPORATION

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      (In thousands, except per share data)
<TABLE>
<CAPTION>

                                                                               September 30,           December 31,
LIABILITIES, MINORITY INTEREST AND                                                 2005                    2004
                                                                            --------------------    --------------------
<S>                                                                         <C>                     <C>
STOCKHOLDERS' EQUITY                                                             (unaudited)          (as restated, see
                                                                                                           Note 1)
Current liabilities:
   Notes payable                                                            $          64,996       $          43,176
   Accounts payable                                                                    55,940                  44,164
   Accrued liabilities                                                                 57,304                  53,130
   Deferred gain on sale of property                                                        -                  12,016
   Customer advances                                                                   18,827                   6,913
   Income taxes payable                                                                12,139                   2,516
   Other                                                                                  556                     257
                                                                            --------------------    --------------------

       Total current liabilities                                                      209,762                 162,172

Long-term debt                                                                         10,727                       -
Accrued OPEB cost                                                                      14,824                  14,470
Accrued pension cost                                                                   72,414                  77,515
Accrued environmental cost                                                              1,948                   1,985
Deferred income taxes                                                                      57                      60
Debt payable to TIMET Capital Trust I                                                   5,965                  12,010
Other                                                                                   4,823                   5,114
                                                                            --------------------    --------------------

       Total liabilities                                                              320,520                 273,326
                                                                            --------------------    --------------------

Minority interest                                                                      12,237                  12,539
                                                                            --------------------    --------------------

Stockholders' equity:
   Series A Preferred Stock, $.01 par value; $167,686 liquidation preference;
     3,469 and 4,025 shares authorized, respectively, 3,354 and 3,909 shares
     issued, respectively                                                             148,978                 173,650
   Common stock, $.01 par value; 90,000 shares
     authorized, 34,174 and 31,926 shares
     issued, respectively                                                                 342                     319
   Additional paid-in capital                                                         383,257                 350,707
   Accumulated earnings (deficit)                                                      27,619                 (77,044)
   Accumulated other comprehensive loss                                               (51,590)                (39,989)
   Treasury stock, at cost; 0 and 90 shares, respectively                                   -                  (1,208)
   Deferred compensation                                                                    -                      (7)
                                                                            --------------------    --------------------

         Total stockholders' equity                                                   508,606                 406,428
                                                                            --------------------    --------------------

Total liabilities, minority interest and stockholders' equity               $         841,363       $         692,293
                                                                            ====================    ====================

Commitments and contingencies (Note 14)
</TABLE>


          See accompanying Notes to Consolidated Financial Statements
                                       -3-

<PAGE>


                           TITANIUM METALS CORPORATION

                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                      (In thousands, except per share data)
<TABLE>
<CAPTION>

                                                                 Three months ended                     Nine months ended
                                                                    September 30,                         September 30,
                                                          ----------------------------------    ----------------------------------
                                                               2005               2004               2005               2004
                                                          ---------------    ---------------    ---------------    ---------------
                                                                              (as restated,                         (as restated,
                                                                               see Note 1)                           see Note 1)

<S>                                                       <C>                <C>                <C>                <C>
Net sales                                                 $      190,032     $     120,246      $      529,013     $      364,859
Cost of sales                                                    134,284           105,534             396,430            320,356
                                                          ---------------    ---------------    ---------------    ---------------

   Gross margin                                                   55,748            14,712             132,583             44,503

Selling, general, administrative and development expense          13,287            11,710              38,625             32,378
Equity in earnings joint ventures                                  1,235               393               3,381                161
Other income (expense), net                                        8,048            10,088              10,723             12,941
                                                          ---------------    ---------------    ---------------    ---------------

  Operating income                                                51,744            13,483             108,062             25,227

Interest expense                                                   1,080             3,099               2,697             11,497
Other non-operating income (expense), net                          1,350            15,399              17,518             16,296
                                                          ---------------    ---------------    ---------------    ---------------

Income before income taxes and minority interest                  52,014            25,783             122,883             30,026

Income tax expense (benefit)                                      14,426              (629)              4,886                692
Minority interest, net of tax                                      1,325               120               3,430                881
                                                          ---------------    ---------------    ---------------    ---------------

   Net income                                                     36,263            26,292             114,567             28,453

Dividends on Series A Preferred Stock                              2,830             1,099               9,426              1,099
                                                          ---------------    ---------------    ---------------    ---------------

   Net income attributable to
     common stockholders                                  $       33,433     $      25,193      $      105,141     $       27,354
                                                          ===============    ===============    ===============    ===============

Earnings per share attributable to common stockholders:
     Basic                                                $        1.02      $        0.79      $        3.27      $        0.86
     Diluted                                              $        0.80      $        0.71      $        2.53      $        0.85

Weighted average shares outstanding:
     Basic                                                        32,737             31,774             32,191             31,752
     Diluted                                                      45,476             40,078             45,326             33,375
</TABLE>




          See accompanying Notes to Consolidated Financial Statements
                                       -4-

<PAGE>



                           TITANIUM METALS CORPORATION

       CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

                                 (In thousands)

<TABLE>
<CAPTION>

                                                                 Three months ended                  Nine months ended
                                                                   September 30,                       September 30,
                                                          ----------------------------------    ----------------------------------
                                                               2005               2004               2005               2004
                                                          ---------------    ---------------    ---------------    ---------------
                                                                              (as restated,                         (as restated,
                                                                               see Note 1)                           see Note 1)

<S>                                                       <C>                <C>                <C>                <C>
Net income                                                $       36,263     $      26,292      $      114,567     $       28,453
                                                          ---------------    ---------------    ---------------    ---------------
Other comprehensive income (loss):

   Currency translation adjustment, net
     of taxes                                                     (2,268)              445             (10,378)               428

   Unrealized gains (losses) on marketable
     securities, net of taxes                                       (768)            4,950                (935)            11,536

   TIMET's share of VALTIMET SAS's                                                                         `
     unrealized net losses on derivative
     financial instruments qualifying as cash
     flow hedges, net of taxes                                      (404)              (67)               (288)              (122)
                                                          ---------------    ---------------    ---------------    ---------------

     Total other comprehensive (loss) income                      (3,440)            5,328             (11,601)            11,842
                                                          ---------------    ---------------    ---------------    ---------------

   Comprehensive income                                   $       32,823     $      31,620      $      102,966     $       40,295
                                                          ===============    ===============    ===============    ===============
</TABLE>














          See accompanying Notes to Consolidated Financial Statements
                                       -5-

<PAGE>



                           TITANIUM METALS CORPORATION

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                 (In thousands)
<TABLE>
<CAPTION>

                                                                                         Nine months ended
                                                                                           September 30,
                                                                              ----------------------------------------
                                                                                     2005                 2004
                                                                              -------------------   ------------------
                                                                                                      (as restated,
                                                                                                        see Note 1)
<S>                                                                           <C>                   <C>
Cash flows from operating activities:
   Net income                                                                 $       114,567       $        28,453
   Depreciation and amortization                                                       23,357                24,303
   Gain on exchange on BUCS                                                                 -               (15,465)
   (Gain) loss on disposal of fixed assets                                            (13,532)                   33
   Noncash impairment of equipment                                                      1,251                     -
   Equity in (earnings) losses of joint ventures, net
     of distributions                                                                  (3,381)                1,518
   Equity in earnings of common securities of TIMET
     Capital Trust I, net of distributions                                                  -                   536
   Deferred income taxes                                                              (10,549)               (1,270)
   Minority interest, net of tax                                                        3,429                   881
   Other, net                                                                             (50)                   16
   Change in assets and liabilities:
     Receivables                                                                      (48,861)              (18,854)
     Inventories                                                                      (86,925)              (50,692)
     Prepaid expenses and other                                                        (3,298)                 (898)
     Accounts payable and accrued liabilities                                          17,343                12,273
     Customer advances                                                                 12,298                14,194
     Income taxes                                                                      10,201                 3,316
     Accrued OPEB and pension costs                                                       384                 2,820
     Accrued interest on debt payable to TIMET Capital Trust I                              -               (18,936)
     Other, net                                                                           818                (1,642)
                                                                              -------------------   ------------------
       Net cash provided (used) by operating activities                                17,052               (19,414)
                                                                              -------------------   ------------------

Cash flows from investing activities:
   Capital expenditures                                                               (43,292)              (10,868)
   Purchase of marketable securities                                                   (2,223)              (29,135)
   Change in restricted cash, net                                                         576                     -
   Proceeds from the sale of property                                                   1,289                     -
                                                                              -------------------   ------------------
       Net cash used by investing activities                                          (43,650)              (40,003)
                                                                              -------------------   ------------------

Cash flows from financing activities:
   Indebtedness:
     Borrowings                                                                       255,248               101,114
     Repayments                                                                      (222,701)              (67,359)
   Dividends paid on Series A Preferred Stock                                          (9,687)                    -
   Dividend paid to minority shareholder                                               (2,216)                 (691)
   Issuance of common stock                                                             5,256                     -
   Principal payments on capitalized leases                                               (16)                 (488)
                                                                              -------------------   ------------------
       Net cash provided by financing activities                                       25,884                32,576
                                                                              -------------------   ------------------

Net cash used by operating, investing and financing activities                $          (714)      $       (26,841)
                                                                              ===================   ==================
</TABLE>

          See accompanying Notes to Consolidated Financial Statements
                                       -6-

<PAGE>



                           TITANIUM METALS CORPORATION

          CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)

                                 (In thousands)
<TABLE>
<CAPTION>

                                                                                         Nine months ended
                                                                                           September 30,
                                                                              ----------------------------------------
                                                                                    2005                  2004
                                                                              ------------------    ------------------
                                                                                                        (as restated,
                                                                                                         see Note 1)
<S>                                                                           <C>                   <C>
Cash and cash equivalents:
   Net decrease from:
     Operating, investing and financing activities                            $          (714)      $      (26,841)
     Effect of exchange rate changes on cash                                             (940)                (226)
                                                                              ------------------    ------------------
                                                                                       (1,654)             (27,067)
   Cash and cash equivalents at beginning of period                                     7,194               35,040
                                                                              ------------------    ------------------

   Cash and cash equivalents at end of period                                 $         5,540       $        7,973
                                                                              ==================    ==================

Supplemental disclosures:
   Cash paid for:
     Interest, net of amounts capitalized of
        $526 and $5, respectively                                             $         2,297       $       29,863
     Income taxes, net                                                        $         5,214       $      -
</TABLE>




          See accompanying Notes to Consolidated Financial Statements
                                       -7-

<PAGE>


                           TITANIUM METALS CORPORATION

      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

                      Nine months ended September 30, 2005
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                                          Accumulated
                                                         Series A   Additional Accumulated Other Comp-       Deferred
                                         Common  Common  Preferred    Paid-in   (Deficit)  rehensive Treasury Comp-
                                         Shares   Stock    Stock      Capital   Earnings      Loss    Stock  ensation   Total
                                         ------   -----   -------     -------   --------      ----    -----  --------  --------

<S>                   <C>                 <C>     <C>       <C>       <C>        <C>       <C>       <C>        <C>   <C>
Balance at December 31, 2004  (as
   restated, see Note 1)                  31,836  $  319    $173,650  $350,707   $(77,044) $(39,989) $(1,208)   $(7)  $406,428
   Comprehensive income                        -       -          -        -      114,567   (11,601)      -       -    102,966
   Issuance of common stock                  485       5          -      5,393        -         -         -       -      5,398
   Conversion of Series A
       Preferred Stock                     1,853      19     (24,672)   24,653        -         -         -       -         -
   Treasury stock retirement                   -      (1)         -       (990)     (217)       -      1,208      -         -
   Tax benefit of stock options
       exercised and restricted
       stock vested                            -       -          -      3,494        -         -         -       -     3,494
   Dividends declared on Series A
       Preferred Stock                         -       -          -         -     (9,687)       -         -       -    (9,687)
   Amortization of deferred
       compensation                            -       -          -         -         -         -         -       7         7
                                         -------  ------   --------   --------  --------  --------   -------    ---   --------

   Balance at September 30, 2005          34,174  $  342    $148,978  $383,257  $ 27,619   $(51,590) $    -     $-    $508,606
                                         =======  ======    ========  ========  ========   ========  =======    ===   ========
</TABLE>



          See accompanying Notes to Consolidated Financial Statements
                                       -8-

<PAGE>


                           TITANIUM METALS CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 - Organization and basis of presentation

         Titanium  Metals  Corporation  ("TIMET")  is  a  vertically  integrated
producer of titanium sponge,  melted products and a variety of mill products for
aerospace,  industrial and other  applications.  The  accompanying  Consolidated
Financial  Statements  include  the  accounts  of TIMET and its  majority  owned
subsidiaries  (collectively,  the  "Company"),  except the TIMET Capital Trust I
(the "Capital Trust"). All material intercompany  transactions and balances with
consolidated subsidiaries have been eliminated.  Certain prior year amounts have
been reclassified to conform to the current year presentation.  The Consolidated
Balance  Sheet  at  September  30,  2005  and  the  Consolidated  Statements  of
Operations,  Comprehensive  Income (Loss),  Changes in Stockholders'  Equity and
Cash  Flows for the  interim  periods  ended  September  30,  2005 and 2004,  as
applicable,  have been prepared by the Company  without audit in accordance with
accounting  principles  generally  accepted  in the  United  States  of  America
("GAAP").  In the opinion of  management,  all  adjustments  necessary to fairly
state the consolidated financial position,  results of operations and cash flows
have  been  made.  The  results  of  operations  for  interim  periods  are  not
necessarily  indicative  of the  operating  results  of a full year or of future
operations.  Certain information and footnote  disclosures  normally included in
financial  statements  prepared in accordance  with GAAP have been  condensed or
omitted.  The Company's first three fiscal quarters reported are the approximate
13-week  periods ending on the Saturday  generally  nearest to March 31, June 30
and September 30. The Company's fourth fiscal quarter and fiscal year always end
on December 31. For presentation  purposes, the Company's Consolidated Financial
Statements and notes thereto have been presented as ending on March 31, June 30,
September 30 and  December  31, as  applicable.  The  accompanying  Consolidated
Financial  Statements  should  be  read in  conjunction  with  the  Consolidated
Financial  Statements  included in the Company's  Annual Report on Form 10-K for
the year ended December 31, 2004 (the "2004 Annual Report").

         At September 30, 2005,  Valhi,  Inc. and  subsidiaries  ("Valhi")  held
40.9% of TIMET's outstanding common stock and 0.4% of the Company's 6.75% Series
A Convertible Preferred Stock (the "Series A Preferred Stock"). At September 30,
2005, Contran Corporation  ("Contran") held,  directly or through  subsidiaries,
approximately  92% of Valhi's  outstanding  common stock. At September 30, 2005,
the Combined Master  Retirement Trust ("CMRT"),  a trust sponsored by Contran to
permit the  collective  investment by trusts that maintain the assets of certain
employee  benefit plans adopted by Contran and certain related  companies,  held
11.2% of the  Company's  common  stock.  TIMET's U.S.  pension plans invest in a
portion of the CMRT that does not hold TIMET common stock.  Substantially all of
Contran's outstanding voting stock is held by trusts established for the benefit
of certain children and grandchildren of Harold C. Simmons, of which Mr. Simmons
is sole trustee,  or is held by Mr. Simmons or persons or other entities related
to Mr. Simmons.  In addition,  Mr. Simmons is the sole trustee of the CMRT and a
member of the trust  investment  committee  for the CMRT. At September 30, 2005,
Mr.  Simmons  directly  owned 1.5% of TIMET's  outstanding  common stock and Mr.
Simmons' spouse owned 0.4% of TIMET's  outstanding common stock and 47.7% of the
Company's outstanding Series A Preferred Stock. Consequently, Mr. Simmons may be
deemed to control each of Contran,  Valhi and TIMET.  During  October 2005,  Mr.
Simmons   purchased  190,000  shares  of  TIMET  common  stock  in  open  market
transactions, increasing his direct ownership to approximately 2.0%.

                                      -9-
<PAGE>


         Effective January 1, 2005, the Company changed its method for inventory
costing  from the  last-in,  first-out  ("LIFO")  cost  method  to the  specific
identification cost method for the approximate 40% of the Company's consolidated
inventories  previously  accounted  for  under the LIFO  cost  method.  With the
significant  volatility  seen  recently  in raw  material  prices,  the  Company
believes this change in accounting method provides a better matching of revenues
and  expenses.  As required by GAAP,  the Company  has  restated  its  financial
statements for prior periods.  As a result,  the Company's net inventory balance
as of December 31, 2004 increased by $26.7 million from the previously  reported
amount,  with a  corresponding  decrease to the Company's  accumulated  deficit.
There was no impact on the Company's cash flow from  operations for the three or
nine months ended  September  30, 2004 related to this  accounting  change.  The
effect of the  accounting  change on income for the three and nine months  ended
September  30,  2004 was to (i)  increase  net income by $1.1  million  and $3.0
million,  respectively,  (ii)  increase  earnings  per basic  share by $0.03 and
$0.10,  respectively and (iii) increase  earnings per diluted share by $0.02 and
$0.09, respectively. See Note 2.

         The Company  completed a two-for-one  split of its common stock,  which
was effected in the form of a stock dividend (whereby an additional one share of
post-split  stock was distributed for each share of pre-split  stock) and became
effective after the close of trading on September 6, 2005. The Company completed
a  five-for-one  split of its common stock,  which was effected in the form of a
stock  dividend  (whereby an  additional  four shares of  post-split  stock were
distributed  for each share of pre-split  stock) and became  effective after the
close of trading on August 26, 2004.  All share and per share  disclosures  have
been adjusted to give effect to these stock splits.

         The Company currently follows the disclosure  alternative prescribed by
Statement of Financial  Accounting  Standards  ("SFAS") No. 123,  Accounting for
Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based
Compensation  -  Transition  and  Disclosure,  and has chosen to account for its
stock-based  employee  compensation  related to stock options in accordance with
Accounting  Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued
to Employees,  and its various  interpretations.  See Note 15. Under APB Opinion
No. 25,  compensation  cost is generally  recognized for fixed stock options for
which the exercise price is less than the market price of the  underlying  stock
on the grant date.  All of the  Company's  stock  options have been granted with
exercise  prices equal to or in excess of the market price on the date of grant,
and the Company recognized no compensation  expense for stock options during the
three and nine months  ended  September  30,  2005 and 2004.  If the Company had
applied  the fair value  recognition  provisions  of SFAS No. 123 to all options
granted,   basic  and  diluted   earnings  per  share   attributable  to  common
stockholders would have been unchanged for all periods presented.

         VALTIMET,  the  Company's  43.7% owned  affiliate  accounted for by the
equity method,  has entered into certain derivative  financial  instruments that
qualify  as cash  flow  hedges  under  GAAP.  The  Company's  pro-rata  share of
VALTIMET's   unrealized  net  gains  (losses)  on  such   derivative   financial
instruments is included as a component of other comprehensive income.


                                      -10-
<PAGE>


Note 2 - Inventories

                                            September 30,         December 31,
                                               2005                  2004
                                    ---------------------    -------------------
                                                   (In thousands)

Raw materials                       $           91,101       $        71,067
Work-in-process                                145,031                97,848
Finished products                               88,636                77,012
Supplies                                        12,389                12,397
                                    ---------------------    -------------------

                                    $          337,157       $       258,324
                                    =====================    ===================

         In  connection   with  finalizing  the  preparation  of  the  Company's
consolidated  financial  statements  for the third quarter of 2005,  the Company
determined that certain cost variances in prior periods that had been charged to
cost of sales when  incurred  should have been  capitalized  into  inventory and
allocated to cost of sales when the related  inventory was sold. The Company has
analyzed the impact of this error and has determined  that prior periods' annual
and quarterly financial  statements were not materially  misstated.  The Company
corrected its  methodology  of  capitalizing  variances to inventory,  effective
during  the third  quarter of 2005,  so that such  variances  are now  initially
capitalized  into inventory and then expensed to cost of sales in future periods
as the related  inventory is sold. The  cumulative  effect of this change on the
Company's  consolidated  third quarter  results during the third quarter of 2005
was an increase in  inventory  and a decrease in cost of sales of $0.9  million,
and an  increase  in net  income  attributable  to common  stockholders  of $0.6
million (or $0.01 per diluted share).

         Effective January 1, 2005, the Company changed its method for inventory
costing from the LIFO cost method to the specific identification cost method, as
described in Note 1. As a result of this  accounting  change,  the Company's net
inventory  balance as of December 31, 2004  increased by $26.7  million from the
previously  reported amount  (representing the elimination of the Company's LIFO
reserve at such date).

Note 3 - Marketable securities

         The following table summarizes the Company's  marketable  securities as
of September 30, 2005 and December 31, 2004:
<TABLE>
<CAPTION>

                                                           September 30, 2005                 December 31, 2004
                                                      -----------------------------    --------------------------------
                                                                         Market                              Market
              Marketable security                       Shares           value           Shares              value
------------------------------------------------      ------------    -------------    --------------    --------------
                                                                              ($ in thousands)

    <S>                                                 <C>           <C>                <C>             <C>
    CompX International, Inc. ("CompX")                 2,696,420     $     44,222       2,549,520       $    42,144
    NL Industries, Inc. ("NL")                            222,100            4,173         222,100             4,908
    Kronos Worldwide, Inc. ("Kronos")                       5,203              165           3,985               162
                                                                      -------------                      --------------
                                                                      $     48,560                       $    47,214
                                                                      =============                      ==============
</TABLE>


                                      -11-
<PAGE>


         During the first nine months of 2004, the Company  purchased  2,212,820
shares of CompX Class A common shares and, on October 1, 2004,  contributed such
shares to CompX Group, Inc. ("CGI") in return for a 17.6% ownership  interest in
CGI (the  remaining  82.4% interest is held by NL). As of September 30, 2005 and
December  31,  2004,  the Company  directly  held  483,600  and 336,700  shares,
respectively,  of CompX, which were purchased subsequent to October 1, 2004. The
Company has not  contributed any of the 483,600 shares  purchased  subsequent to
October 1, 2004, and currently does not expect to contribute those shares or any
other shares of CompX Class A common stock that it may subsequently  acquire, to
CGI.

         During each of the first three quarters of 2005,  CompX and Kronos each
paid cash dividends on their  respective  common stock.  NL paid a first quarter
2005  dividend in the form of shares of Kronos  common stock and paid second and
third quarter 2005 cash dividends. See Note 11.

Note 4 - Property and equipment

                                         September 30,           December 31,
                                              2005                   2004
                                      --------------------    ------------------
                                                    (In thousands)

Land and improvements                 $           6,292       $         8,703
Buildings and improvements                       31,735                31,780
Information technology systems                   61,396                63,609
Manufacturing equipment and other               327,056               333,031
Construction in progress                         47,298                14,819
                                      --------------------    ------------------
                                                473,777               451,942
Less accumulated depreciation                   228,520               223,769
                                      --------------------    ------------------

                                      $         245,257       $       228,173
                                      ====================    ==================

         During the first quarter of 2005, the Company  determined  that certain
of its  manufacturing  equipment  would no longer be utilized in its operations,
and,  accordingly,  recognized a $1.2 million noncash abandonment charge to cost
of sales during the period.

         In November 2004, pursuant to an agreement with Basic Management,  Inc.
and certain of its affiliates ("BMI"), the Company sold certain property located
adjacent  to its  Henderson,  Nevada  plant  site to BMI, a  32%-owned  indirect
subsidiary of Valhi,  and recorded a $12.0 million  deferred gain related to the
cash proceeds  received in November 2004. During the second quarter of 2005, the
Company ceased using the property and,  accordingly,  recognized a $13.9 million
gain  related  to the  sale of such  property,  which  is  comprised  of (i) the
previously  reported $12.0 million cash proceeds received in November 2004, (ii)
the reversal of $0.6  million  previously  accrued by the Company for  potential
environmental  issues  related  to the  property  and (iii) an  additional  $1.2
million cash payment received from BMI in June 2005. See Note 11.


                                      -12-
<PAGE>


Note 5 - Other noncurrent assets
<TABLE>
<CAPTION>

                                                                               September 30,           December 31,
                                                                                    2005                   2004
                                                                            --------------------    ------------------
                                                                                         (In thousands)

<S>                                                                         <C>                     <C>
Prepaid pension cost                                                        $          11,047       $        10,531
Deferred financing costs                                                                  179                   786
Notes receivable from officers                                                              -                    49
Other                                                                                     175                   211
                                                                            --------------------    ------------------

                                                                            $          11,401       $        11,577
                                                                            ====================    ==================

Note 6 - Accrued liabilities

                                                                               September 30,           December 31,
                                                                                   2005                    2004
                                                                           ---------------------    ------------------
                                                                                         (In thousands)

OPEB cost                                                                  $           2,686        $         2,777
Pension cost                                                                           4,856                  5,285
Payroll and vacation                                                                   4,825                  5,810
Performance-based employee incentive compensation                                     15,996                 12,570
Other employee benefits                                                                9,756                  9,721
Deferred income                                                                        2,013                  1,736
Environmental costs                                                                    1,632                  2,530
Taxes, other than income                                                               6,240                  4,166
Other                                                                                  9,300                  8,535
                                                                           ---------------------    ------------------

                                                                           $          57,304        $        53,130
                                                                           =====================    ==================
</TABLE>

Note 7 - Customer advances

         Under the terms of the Company's previous  long-term  agreement ("LTA")
with The Boeing Company ("Boeing"), in 2002 through 2007, Boeing was required to
advance  TIMET $28.5 million  annually less $3.80 per pound of titanium  product
purchased by Boeing  subcontractors  from TIMET during the preceding  year.  The
advance  related to Boeing's  take-or-pay  obligations  under the previous  LTA.
Effectively,  the Company  collected $3.80 less from Boeing than the LTA selling
price for each pound of titanium product sold directly to Boeing and reduced the
related customer advance recorded by the Company.  For titanium products sold to
Boeing  subcontractors,  the Company  collected the full LTA selling price,  but
gave Boeing credit by reducing the next year's annual advance by $3.80 per pound
of titanium product sold to Boeing  subcontractors.  The Boeing customer advance
is also reduced as  take-or-pay  benefits are earned.  As of September 30, 2005,
approximately  $11.8  million of  customer  advances  related  to the  Company's
previous LTA with Boeing.

         Effective July 1, 2005, the Company amended its LTA with Boeing for the
purchase and sale of titanium products. The new LTA expires on December 31, 2010
and provides  for,  among other things,  (i) mutual  annual  purchase and supply
commitments by both parties,  (ii) continuation of the existing buffer inventory
program  currently  in place for  Boeing  and  (iii)  certain  improved  product
pricing. Beginning in 2006, the new LTA also replaces the take-or-pay provisions
of the previous LTA with an annual makeup payment early in the following year in
the event Boeing purchases less than its annual volume commitment in any year.

                                      -13-
<PAGE>


Note 8 - Bank debt

         During the second quarter of 2005, the Company  amended its U.S. credit
facility to increase its maximum authorized borrowings from $105 million to $125
million.   In  addition,   the  amended  credit  facility   reduced  the  excess
availability  requirement  related to the payment of dividends on the  Company's
Series A  Preferred  Stock  and  distributions  on the  Capital  Trust's  6.625%
mandatorily  redeemable  convertible preferred securities,  beneficial unsecured
convertible securities ("BUCS") from $25 million to $10 million.

         During the second quarter of 2005, the Company's subsidiary,  TIMET UK,
terminated its previous credit  agreement and entered into a new working capital
credit  facility  that  expires  on April 30,  2008.  Under the new U.K.  credit
facility,  TIMET  UK  may  borrow  up  to  (pound)22.5  million,  subject  to  a
formula-determined borrowing base derived from the value of accounts receivable,
inventory and property, plant and equipment.  Borrowings under the U.K. facility
can be in various  currencies,  including U.S. dollars,  British pounds sterling
and euros and are  collateralized  by  substantially  all of TIMET UK's  assets.
Interest on  outstanding  borrowings  generally  accrues at rates that vary from
1.125% to 1.375%  above the  lender's  published  base rate.  The U.K.  facility
agreement  also contains  financial  ratios and  covenants  customary in lending
transactions of this type, including a minimum net worth covenant.

         As of September  30, 2005,  the Company had  outstanding  borrowings of
$65.0  million  under its U.S.  credit  agreement  and $10.7  million  under its
European credit  facilities.  Aggregate unused borrowing  availability under the
Company's U.S. and European credit facilities was approximately  $102 million as
of September 30, 2005.

Note 9 - Capital Trust

         In August 2004, the Company  completed an exchange  offer,  pursuant to
which  the  Company  had  offered  to  exchange  any  and  all of the  4,024,820
outstanding  BUCS issued by the Capital Trust for shares of the Company's Series
A Preferred  Stock at the exchange rate of one share of Series A Preferred Stock
for each BUCS.  Based upon the 3,909,103 BUCS tendered and accepted for exchange
as of the close of the offer on August 31, 2004,  the Company  issued  3,909,103
shares of Series A Preferred  Stock in exchange for such BUCS.  During the third
quarter of 2004, the Company  recognized a $15.5 million non-cash  non-operating
gain  related  to the BUCS  exchange,  reflecting  the  difference  between  the
carrying value of the related  Subordinated  Debentures ($195.5 million) and the
fair value of the Series A Preferred Stock issued ($173.7 million,  based on the
closing  price of the BUCS on August 31, 2004  according to NASDAQ's  website of
$45.25  per  share,  less  $3.2  million  attributable  to  accrued  and  unpaid
dividends), less $6.3 million of unamortized deferred financing costs related to
the exchanged BUCS.

         On September 1, 2005,  the Company and the Capital  Trust agreed to the
cancellation of 120,907 of the Capital  Trust's common  securities (all of which
were held by the Company) and a  corresponding  cancellation  of $6.0 million of
the  Company's   6.625%   convertible   junior   subordinated   debentures  (the
"Subordinated  Debentures") (all of which were held by the Capital Trust). There
was no net effect of this  transaction on the Company's  consolidated  financial
position or results of operations, as the Company's carrying value of the common
securities of the Capital Trust that were  cancelled  equaled the carrying value
of the Subordinated Debentures that were also cancelled.


                                      -14-
<PAGE>


Note 10 - Stockholders' equity

         Preferred stock.  During the third quarter of 2005,  certain holders of
the Company's  Series A Preferred Stock converted an aggregate of 555,390 shares
of the Series A Preferred Stock into 1,852,697 shares of TIMET's common stock.

         Treasury  stock.  On August 12,  2005,  the Company  retired all 90,000
shares of its treasury stock. The retirement of such treasury stock, which had a
cost basis of $1.2  million,  resulted in a $900  reduction of common  stock,  a
$990,000  reduction of  additional  paid-in  capital and a $217,000  decrease in
accumulated earnings.

Note 11 - Other income (expense)
<TABLE>
<CAPTION>

                                                         Three months ended                   Nine months ended
                                                            September 30,                       September 30,
                                                    -------------------------------    -------------------------------
                                                        2005              2004             2005              2004
                                                    --------------    -------------    --------------    -------------
                                                                             (In thousands)

<S>                                                 <C>               <C>              <C>               <C>
Other operating income (expense):
   Settlement of customer claim                     $     -           $      -         $      1,800      $     -
   Boeing take-or-pay                                      8,285            10,058            8,729            12,565
   Other, net                                               (237)               30              194               376
                                                    --------------    -------------    --------------    -------------

                                                    $      8,048      $     10,088     $     10,723      $     12,941
                                                    ==============    =============    ==============    =============

Other non-operating income (expense):
   Dividends and interest                           $        491      $         68     $      1,440      $        304
   Equity in earnings of common
      securities of the Capital Trust                         70               103              276               320
   Gain on sale of property (Note 4)                           -                 -           13,881                 -
   Gain on BUCS exchange                                       -            15,465                -            15,465
   Foreign exchange gain (loss), net                         498              (471)           2,030               100
   Other, net                                                291               234             (109)              107
                                                    --------------    ------------- -- --------------    -------------

                                                    $      1,350      $     15,399     $     17,518      $     16,296
                                                    ==============    =============    ==============    =============
</TABLE>

         During the first  quarter of 2005,  the Company  received  $1.8 million
related  to  its   settlement  of  a  customer  claim   regarding   prior  order
cancellations from such customer.  Additionally,  the Company received dividends
from its investments in marketable securities, as discussed in Note 3.


                                      -15-
<PAGE>


Note 12 - Income taxes
<TABLE>
<CAPTION>

                                                                                Nine months ended September 30,
                                                                          --------------------------------------------
                                                                                  2005                    2004
                                                                          ---------------------    -------------------
                                                                                        (In thousands)

<S>                                                                       <C>                      <C>
Expected income tax expense, at 35% (1)                                   $          43,009        $         10,509
Non-U.S. tax rates                                                                     (863)                    (217)
U.S. state income taxes, net                                                          1,706                     (103)
Dividends received deduction                                                           (227)                     (25)
Change in state income tax law                                                          550                        -
Tax on repatriation of foreign earnings                                                 998                        -
Revision of estimated tax liability                                                       -                     (551)
Adjustment of deferred income tax asset
   valuation allowance (1)                                                          (41,345)                  (8,800)
Other, net                                                                            1,058                     (121)
                                                                          ---------------------    -------------------

                                                                          $           4,886        $             692
                                                                          =====================    ===================

----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 2004 amount as restated. See Note 1.

         The  Company  periodically  reviews its  deferred  income tax assets to
determine  if future  realization  is more  likely  than not.  During  the first
quarter of 2005, based on the Company's recent history of U.S. income,  its near
term  outlook and the effect of its change in method of  inventory  costing from
the LIFO cost method to the specific identification cost method for U.S. federal
income tax  purposes  (see Note 1), the  Company  changed  its  estimate  of its
ability to utilize  the tax  benefits of its U.S.  net  operating  loss  ("NOL")
carryforwards,  alternative  minimum tax ("AMT") credit  carryforwards and other
net deductible  temporary  differences (other than the majority of the Company's
capital loss carryforwards).  Consequently,  the Company determined that its net
deferred  income tax asset  related to such U.S.  tax  attributes  and other net
deductible   temporary   differences   now  meets   the   "more-likely-than-not"
recognition  criteria.  Accordingly,  the Company  reversed $28.2 million of the
valuation  allowance  attributable to such U.S. deferred income tax asset in the
first three quarters of 2005 ($5.6 million in the third quarter) and the Company
will  reverse  the  remaining  valuation  allowance  attributable  to such  U.S.
deferred  income tax asset of $8.6 million  during the fourth quarter of 2005 in
accordance with the GAAP  requirements of accounting for income taxes at interim
dates.

         During the first quarter of 2005, based on the Company's recent history
of U.K. income, its near term outlook and its historic U.K.  profitability,  the
Company also  changed its estimate of its ability to utilize its net  deductible
temporary  differences and other tax attributes  related to the U.K.,  primarily
comprised of (i) the future  benefits  associated  with the reversal of its U.K.
minimum pension liability deferred income tax asset and (ii) the benefits of its
U.K.  NOL  carryforward.  Consequently,  the  Company  determined  that  its net
deferred  income  tax asset in the U.K.  now  meets  the  "more-likely-than-not"
recognition  criteria.  Accordingly,  the Company  reversed $13.1 million of the
valuation allowance  attributable to such deferred income tax asset in the first
three  quarters of 2005 ($0.1 million in the third quarter) and the Company will
reverse the remaining U.K. valuation allowance of $0.3 million during the fourth
quarter of 2005 in  accordance  with the GAAP  requirements  of  accounting  for
income taxes at interim dates.


                                      -16-
<PAGE>


         At September  30, 2005,  the Company had, for U.S.  federal  income tax
purposes, (i) NOL carryforwards of $46 million that expire in 2020 through 2023,
(ii) a capital loss  carryforward  of $73 million that expires in 2008 and (iii)
AMT credit carryforwards of $5 million,  which can be utilized to offset regular
income taxes payable in future years, with an indefinite carryforward period. In
addition,  at  September  30,  2005,  the Company had the  equivalent  of a $0.7
million  NOL  carryforward  in  Germany,  which has an  indefinite  carryforward
period.

         In October  2004,  the American  Jobs  Creation Act of 2004 was enacted
into law. The new law provides for a special 85% deduction for certain dividends
received from controlled foreign  corporations in 2005. In the second quarter of
2005, the Company  completed its evaluation of this new provision and determined
that it would  benefit  from  the  special  dividend  received  deduction.  As a
consequence,  the Company  repatriated $19 million of earnings from its European
subsidiaries  in the third quarter of 2005. The $1 million related tax impact of
this  repatriation  was recorded as tax expense in the second quarter of 2005 in
accordance with the requirements of FASB Staff Position No. 109-2.  However, the
Company has not provided for U.S.  deferred income taxes or foreign  withholding
taxes on basis differences in its non-U.S. consolidated subsidiaries that result
primarily  from   undistributed   earnings  the  Company   intends  to  reinvest
indefinitely.  Determination of the deferred income tax liability on these basis
differences is not practicable  because such liability,  if any, is dependent on
circumstances existing if and when remittance occurs.

         The new law also  provides for a special  deduction  from U.S.  taxable
income equal to a specified percentage of a U.S. company's qualified income from
domestic  manufacturing  activities (as defined).  The Company believes that the
majority  of  its  operations   meet  the   definition  of  qualified   domestic
manufacturing activities.  However, the Company expects to derive only a minimal
benefit from the special  manufacturing  deduction in 2005,  because the Company
projects  that its existing U.S. NOL  carryforwards  will offset the majority of
its 2005 U.S. taxable income.

         In June 2005,  the State of Ohio  enacted a new tax law that phases out
Ohio's  existing  corporate  income  tax  system  over the next  five  years and
replaces it with a tax based on gross  receipts.  In the second quarter of 2005,
as a result of this phase out, the Company reduced its deferred income tax asset
related primarily to its Ohio NOL carryforwards by $0.6 million.

Note 13 - Employee benefits

         Defined  benefit  pension  plans.  The  components  of the net periodic
pension expense are set forth below:
<TABLE>
<CAPTION>

                                                         Three months ended                 Nine months ended
                                                            September  30,                    September 30,
                                                    -------------------------------    -------------------------------
                                                        2005              2004             2005              2004
                                                    --------------    -------------    --------------    -------------
                                                                             (In thousands)

<S>                                                 <C>               <C>              <C>               <C>
Service cost                                        $        901      $        789     $      2,798      $      2,466
Interest cost                                              3,346             3,135           10,298             9,429
Expected return on plan assets                            (3,651)           (3,257)         (11,198)           (9,791)
Amortization of net losses                                 1,186             1,088            3,640             3,272
Amortization of unrecognized prior service cost              139               122              417               366
                                                    --------------    ------------- -- --------------    -------------

  Net periodic pension expense                      $      1,921      $      1,877     $      5,955      $      5,742
                                                    ==============    =============    ==============    =============
</TABLE>

                                      -17-
<PAGE>

         During the first  three  quarters  of 2005,  the  Company has made $6.6
million of cash  contributions  to its defined  benefit  pension plans,  and the
Company currently expects to make additional cash contributions of approximately
$2.2 million to its defined  benefit  pension plans during the fourth quarter of
2005. All of the contributions relate to the Company's U.K. plan.

         Postretirement  benefits  other than  pensions.  The  components of net
periodic OPEB expense are set forth below:
<TABLE>
<CAPTION>

                                                         Three months ended                 Nine months ended
                                                            September 30,                       September 30,
                                                    -------------------------------    -------------------------------
                                                        2005              2004             2005              2004
                                                    --------------    -------------    --------------    -------------
                                                                             (In thousands)

<S>                                                 <C>               <C>              <C>               <C>
Service cost                                        $        165      $        152     $        496      $        405
Interest cost                                                413               529            1,239             1,335
Amortization of unrecognized prior service cost             (116)             (116)            (348)             (348)
Amortization of net losses                                   245               386              735               840
                                                    --------------    ------------- -- --------------    -------------

  Net periodic OPEB expense                         $        707      $        951     $      2,122      $      2,232
                                                    ==============    =============    ==============    =============
</TABLE>

         The Medicare  Prescription  Drug,  Improvement and Modernization Act of
2003 (the "Medicare Act of 2003")  introduced a prescription  drug benefit under
Medicare  (Medicare Part D) as well as a federal  subsidy to sponsors of retiree
health care benefit  plans that  provide a benefit that is at least  actuarially
equivalent to Medicare Part D. In May 2004, the Financial  Accounting  Standards
Board ("FASB")  issued FSP No. 106-2 which  provides  guidance on (i) accounting
for  the  effects  of the  Medicare  Act of 2003  once  the  Company  is able to
determine actuarial equivalency and (ii) various required disclosures.

         During 2005, the Company  determined that the benefits  provided by its
U.S. health and welfare plan are  actuarially  equivalent to the Medicare Part D
benefit and therefore the Company is eligible for the federal  subsidy  provided
for by the Medicare  2003 Act. The effect of such  subsidy,  which was accounted
for  prospectively  from  the  date  actuarial  equivalence  was  determined  in
accordance  with FASB Staff  Position No. 106-2,  resulted in a reduction in the
Company's  accumulated  OPEB  obligation  of  approximately  $5  million  and  a
reduction in net periodic OPEB cost of approximately $0.6 million in 2005.

Note 14 - Commitments and contingencies

         Environmental  matters.  In November  2004, the Company and BMI entered
into  several  agreements  pursuant to which the Company  conveyed  certain land
owned by the Company  adjacent to its Henderson,  Nevada plant site on which the
Company operated  settling ponds (the "TIMET Pond Property") to BMI. See Note 4.
Subsequent  to the  conveyance,  TIMET  continued to use certain of the settling
ponds  located on the TIMET Pond  Property  (pursuant to a lease with BMI) until
May  2005,  at which  time  all such  usage  ceased.  Based on the  terms of the
conveyance agreement, BMI assumed the Company's obligation for certain potential
environmental issues related to the TIMET Pond Property.

         The Company is also continuing  assessment work with respect to its own
active plant site in Henderson,  Nevada.  The Company currently has $3.4 million
accrued  based on the  undiscounted  cost  estimates of the  probable  costs for
remediation of this site related to specific future  remediation costs which the
Company now considers probable. The Company expects these accrued expenses to be
paid over a period of up to thirty years.

                                   -18-
<PAGE>
         At  September  30,  2005,  the  Company  had  accrued an  aggregate  of
approximately $3.6 million for environmental matters,  including those discussed
above.  The upper end of the range of  reasonably  possible  costs to  remediate
these  matters is  approximately  $6 million.  The Company  records  liabilities
related to environmental remediation obligations when estimated future costs are
probable  and  reasonably  estimable.  Such  accruals  are  adjusted  as further
information  becomes available or circumstances  change.  Estimated future costs
are not  discounted to their present  value.  The  imposition of more  stringent
standards or requirements under  environmental laws or regulations,  the results
of future  testing  and  analysis  undertaken  by the  Company at its  operating
facilities,  or a determination that the Company is potentially  responsible for
the release of hazardous  substances  at other  sites,  could result in costs in
excess of amounts  currently  estimated  to be  required  for such  matters.  No
assurance can be given that actual costs will not exceed accrued amounts or that
costs  will not be  incurred  with  respect  to sites as to which no  problem is
currently known or where no estimate can presently be made.  Further,  there can
be no  assurance  that  additional  environmental  matters will not arise in the
future.

         Legal  proceedings.  The Company records  liabilities  related to legal
proceedings  when estimated  costs are probable and reasonably  estimable.  Such
accruals are adjusted as further  information becomes available or circumstances
change.  Estimated future costs are not discounted to their present value. It is
not  possible to estimate the range of costs for certain  matters.  No assurance
can be given that  actual  costs will not exceed  accrued  amounts or that costs
will not be incurred with respect to matters as to which no problem is currently
known or where no  estimate  can  presently  be made.  Further,  there can be no
assurance that additional legal proceedings will not arise in the future.

         Other.  The Company has entered into letters of credit to collateralize
(i) potential workers' compensation claims in Ohio and Nevada and (ii) potential
obligations  under contracts  relating to future usage of electricity in Nevada.
As of September 30, 2005,  the  outstanding  amounts for such letters of credit,
which reduce the Company's excess  availability under its U.S. credit agreement,
were $2.3 million and $1.3 million, respectively.

         The  Company  is  involved   in  various   employment,   environmental,
contractual,  product  liability  and  other  claims,  disputes  and  litigation
incidental to its business  including those discussed  above.  While  management
currently  believes that the outcome of these matters,  individually  and in the
aggregate,  will not have a material  adverse effect on the Company's  financial
position, liquidity or overall trends in results of operations, all such matters
are subject to inherent uncertainties. Were an unfavorable outcome to occur with
respect to several of these  matters in a given  period,  it is possible that it
could have a material  adverse impact on the results of operations or cash flows
in that particular period.

         See the  2004  Annual  Report  for  additional  information  concerning
certain legal and environmental matters, commitments and contingencies.

Note 15 - Earnings per share

         Basic  earnings  per share is based on the weighted  average  number of
unrestricted common shares outstanding during each period.  Diluted earnings per
share attributable to common stockholders reflects the dilutive effect of common
stock options, restricted stock and the assumed conversion of the Company's BUCS
and the  Series A  Preferred  Stock,  if  applicable.  A  reconciliation  of the
numerator and denominator  used in the calculation of basic and diluted earnings
per share is presented below:

                                      -19-
<PAGE>


<TABLE>
<CAPTION>

                                                         Three months ended                  Nine months ended
                                                             September 30,                      September 30,
                                                    -------------------------------    -------------------------------
                                                        2005              2004             2005              2004
                                                    --------------    -------------    --------------    -------------
                                                                             (In thousands)
<S>                                                 <C>               <C>              <C>               <C>
Numerator:
  Net income attributable to common
     Stockholders (1)                               $     33,433      $     25,193     $    105,141      $     27,354
  Interest on BUCS (2)                                        73             2,254              235            -
  Dividends on Series A
     Preferred Stock                                       2,830             1,099            9,426             1,099
                                                    --------------    -------------    --------------    -------------

  Diluted net income attributable
     to common stockholders                         $     36,336      $     28,546     $    114,802      $     28,453
                                                    ==============    =============    ==============    =============

Denominator:
  Average common shares outstanding                       32,737            31,774           32,191            31,752
  Average dilutive stock options
     and restricted stock                                    175               173              162               112
  BUCS (2)                                                   155             3,549              155            -
  Series A Preferred Stock                                12,409             4,582           12,818             1,511
                                                    --------------    -------------    --------------    -------------

Diluted shares                                            45,476            40,078           45,326            33,375
                                                    ==============    =============    ==============    =============

----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) 2004 amounts as restated. See Note 1.
(2) Antidilutive during the nine months ended September 30, 2004.

         Stock  options to purchase  61,000 and 441,380  shares of common  stock
during the three and nine months ended  September  30, 2005,  respectively,  and
576,600  and  726,200  shares of common  stock  during the three and nine months
ended  September 30, 2004,  respectively,  were excluded from the calculation of
diluted  earnings  per share  because the  exercise  price for such  options was
greater than the average market price of the common shares and such options were
therefore  antidilutive during the respective period. Net income attributable to
common  stockholders  for the three and nine  months  ended  September  30, 2005
included $0.9 million ($0.28 per outstanding  share) of undeclared  dividends on
its Series A Preferred Stock.

Note 16 - Business segment information

         The  Company's  production  facilities  are located in the U.S.,  U.K.,
France and Italy,  and its products are sold throughout the world. The Company's
Chief Executive Officer is the Company's chief operating decision maker ("CODM")
as that term is  defined  in SFAS No.  131,  Disclosures  about  Segments  of an
Enterprise  and Related  Information.  The CODM receives  financial  information
about TIMET from which he makes decisions  concerning  resource  utilization and
performance analysis only on a global, consolidated basis. Based upon this level
of  decision-making,  the  Company  currently  has one  segment,  its  worldwide
"Titanium  melted and mill products"  segment.  Sales,  gross margin,  operating
income,  inventory  and  receivables  are the key  management  measures  used to
evaluate segment  performance.  The following table provides segment information
supplemental to the Company's Consolidated Financial Statements:

                                      -20-
<PAGE>

<TABLE>
<CAPTION>


                                                         Three months ended                  Nine months ended
                                                             September 30,                      September 30,
                                                    -------------------------------    -------------------------------
                                                        2005              2004             2005              2004
                                                    --------------    -------------    --------------    -------------
                                                             ($ in thousands, except product shipment data)
<S>                                                 <C>               <C>              <C>               <C>
Titanium melted and mill products:
   Melted product net sales                         $     31,137      $     16,461     $     77,044      $     51,942
   Mill product net sales                                128,184            87,183          373,793           268,111
   Other product sales                                    30,711            16,602           78,176            44,806
                                                    --------------    -------------    --------------    -------------

                                                    $    190,032      $    120,246     $    529,013      $    364,859
                                                    ==============    =============    ==============    =============

Melted product shipments:
   Volume (metric tons)                                    1,345             1,180            4,120             3,935
   Average selling price ($ per kilogram)           $      23.15      $         13.95  $      18.70      $      13.20

Mill product shipments:
   Volume (metric tons)                                    2,940             2,695            9,380             8,525
   Average selling price ($ per kilogram)           $      43.60      $         32.35  $      39.85      $      31.45
</TABLE>

Note 17 - Accounting principles not yet adopted

         In November 2004,  the FASB issued SFAS No. 151,  Inventory  Costs,  an
amendment of ARB No. 43, Chapter 4 ("SFAS No. 151"),  which  clarifies the types
of costs that should be expensed  rather than  capitalized  as  inventory.  This
statement  also  clarifies the  circumstances  under which fixed  overhead costs
associated with operating  facilities involved in inventory processing should be
capitalized.  The guidance is effective  for  inventory  costs  incurred  during
fiscal years  beginning after June 15, 2005, and the Company will adopt SFAS No.
151 on January 1, 2006.  Because of the Company's  currently  expected  capacity
utilization  levels for 2006, the Company does not believe that adoption of this
statement will have a material impact on its consolidated  financial position or
results of operations.

         In  December  2004,  the FASB  issued  SFAS  No.  123  (revised  2004),
Share-Based  Payment  ("SFAS  No.  123R"),  which  replaces  SFAS  No.  123  and
supersedes  APB No. 25. SFAS No. 123R requires the  measurement  of all employee
share-based  payments to employees,  including grants of employee stock options,
to be recognized in the financial  statements based on their fair values.  Under
SFAS No. 123R, the pro forma disclosures previously permitted under SFAS No. 123
will  no  longer  be an  alternative  to  financial  statement  recognition.  As
permitted by SEC regulations, the Company will adopt SFAS No. 123R as of January
1,  2006 and the  adoption  of SFAS No.  123R  will not have any  effect  on the
Company's  financial  position  or  results  of  operations,  as all of  TIMET's
outstanding options are fully vested.


                                      -21-
<PAGE>


Item 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

         Summarized  financial  information.   The  following  table  summarizes
certain information  regarding the Company's results of operations for the three
and nine months ended September 30, 2005 and 2004.  Average  selling prices,  as
reported by the Company,  are a  reflection  of not just actual  selling  prices
received by the Company, but also include other related factors such as currency
exchange rates and customer and product mix during a given period. Consequently,
changes in average  selling  prices  from  period to period  will be impacted by
changes occurring not just in actual prices, but by these other factors as well.
The percentage change  information  presented below represents  changes from the
respective  prior  year.


<TABLE>
<CAPTION>

                                                          Three months ended                 Nine months ended
                                                            September 30,                      September 30,
                                                    -------------------------------    -------------------------------
                                                        2005              2004             2005              2004
                                                    --------------    -------------    --------------    -------------
                                                             ($ in thousands, except product shipment data)
<S>                                                 <C>               <C>              <C>               <C>
Net sales:
   Melted products                                  $     31,137      $     16,461     $     77,044      $     51,942
   Mill products                                         128,184            87,183          373,793           268,111
   Other products                                         30,711            16,602           78,176            44,806
                                                    --------------    -------------    --------------    -------------

Net sales                                           $    190,032      $    120,246     $    529,013      $    364,859
                                                    ==============    =============    ==============    =============

Gross margin (1)                                          55,748            14,712          132,583            44,503
Gross margin percent of net sales (1)                        29%               12%              25%               12%

Melted product shipments:
   Volume (metric tons)                                    1,345             1,180            4,120             3,935
   Average selling price ($ per kilogram)           $      23.15      $      13.95     $      18.70      $      13.20

Mill product shipments:
   Volume (metric tons)                                    2,940             2,695            9,380             8,525
   Average selling price ($ per kilogram)           $      43.60      $      32.35     $      39.85      $      31.45

Percentage change in:
   Sales volume:
       Melted products                                       +14                -3               +5               +12
       Mill products                                          +9               +34              +10               +31

   Average selling prices:
       Melted products                                       +66               +39              +42               +12
       Mill products                                         +35                 -              +27                -2

   Selling prices - excludes changes in product mix:
       Melted products                                       +44               +15              +29                +6
       Mill products in U.S. dollars                         +31                +6              +23                +4
       Mill products in billing currencies (2)               +31                +2              +22                -1
----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  The 2004 periods have been restated for the Company's change in method of
     inventory costing, effective on January 1, 2005. See Notes 1 and 2 to the
     Consolidated Financial Statements.
(2)  Excludes the effect of changes in foreign currencies.

                                      -22-
<PAGE>

         In  connection   with  finalizing  the  preparation  of  the  Company's
consolidated  financial  statements  for the third quarter of 2005,  the Company
determined that certain cost variances in prior periods that had been charged to
cost of sales when  incurred  should have been  capitalized  into  inventory and
allocated to cost of sales when the related  inventory was sold. The Company has
analyzed the impact of this error and has determined  that prior periods' annual
and quarterly financial  statements were not materially  misstated.  The Company
changed its methodology of capitalizing variances to inventory, effective during
the third quarter of 2005, so that such variances are now initially  capitalized
into  inventory  and then  expensed  to cost of sales in future  periods  as the
related inventory is sold. The cumulative effect of this change on the Company's
consolidated  third  quarter  results  during  the third  quarter of 2005 was an
increase in inventory  and a decrease in cost of sales of $0.9  million,  and an
increase in net income  attributable to common  stockholders of $0.6 million (or
$0.01 per diluted share).

         Third quarter of 2005 compared to third quarter of 2004. Melted product
sales  increased  89% and mill  product  sales  increased  47%  during the third
quarter of 2005 compared to the year ago period,  primarily  due to  significant
increases  in average  selling  prices for both melted and mill  products.  Mill
product  sales  volume in the third  quarter of 2005 was  adversely  impacted by
various  manufacturing  interruptions  related to certain  production  equipment
breakdowns at the Company's U.S. and European locations.  Other non-mill product
sales  increased 85% compared to the year ago period due  principally  to higher
selling  prices  for  titanium  scrap  and  improved  demand  for the  Company's
fabrication products. Average selling prices use actual customer and product mix
and foreign currency  exchange rates prevailing  during the respective  periods.
The Company's melted products are generally sold only in U.S.  dollars.  Average
selling  prices for both melted and mill  products were  positively  affected by
current market conditions and changes in customer and product mix.

         In addition to average  selling price  increases,  the third quarter of
2005 was  positively  impacted by a 14% increase in melted  product sales volume
and a 9% increase in mill product  sales  volume,  a result of increased  demand
across all market segments.

         Effective January 1, 2005, the Company changed its method for inventory
costing from the LIFO cost method to the specific identification cost method for
the  approximate  40%  of  the  Company's  consolidated  inventories  previously
accounted for under the LIFO cost method.  With the significant  volatility seen
recently in raw material prices,  the Company believes this change in accounting
method provides a better matching of revenues and expenses. As required by GAAP,
the Company has restated its financial statements for prior periods. As a result
of this change, the Company's cost of sales for the three months ended September
30, 2004 was  restated to $105.5  million,  a decrease of $1.1  million from the
previously  reported  amount.  See Notes 1 and 2 to the  Consolidated  Financial
Statements.

         Gross margin (net sales less cost of sales)  increased during the third
quarter of 2005 compared to the year ago period  primarily due to higher average
selling prices and improved plant operating rates (from 72% in the third quarter
of 2004 to 77% in the third quarter of 2005). In addition, the Company generated
an additional  $5.1 million of gross margin from the sale of titanium  scrap and
other  non-mill  products  during the third  quarter of 2005, as compared to the
year ago period.  These positive  effects were partially  offset by higher costs
for raw materials as compared to the year ago period.

         Selling,  general,  administrative  and development  expenses increased
from $11.7 million  during the third quarter of 2004 to $13.3 million during the
third quarter of 2005,  principally as a result of increased  personnel costs as
compared to the year ago period.

                                      -23-
<PAGE>

         The Company  recognized  equity in  earnings of joint  ventures of $1.2
million  during the third quarter of 2005,  compared to $0.4 million  during the
year ago period.  This change was principally due to improved  operating results
of VALTIMET, the Company's minority-owned welded tube joint venture.

         Net other income  (expense)  decreased during the third quarter of 2005
as compared to the year ago period primarily related to lower Boeing take-or-pay
income during the 2005 period as compared to the 2004 period.  Boeing  purchased
approximately  0.8 million  pounds of titanium from the Company  during the 2005
period,  as compared to approximately  0.4 million pounds of titanium during the
2004 period.

         First nine months of 2005 compared to first nine months of 2004. Melted
product  sales  increased  48% and mill product  sales  increased 39% during the
first nine months of 2005  compared to the first nine months of 2004,  primarily
due to significant  increases in average selling prices for both melted and mill
products.  Other non-mill  product sales  increased 74% compared to the year ago
period due  principally to higher selling prices for titanium scrap and improved
demand for the Company's fabrication products. Average selling prices use actual
customer and product mix and foreign currency  exchange rates prevailing  during
the respective periods. Average selling prices for both melted and mill products
were  positively  affected by current market  conditions and changes in customer
and product  mix.  Mill product  average  selling  prices  during the first nine
months of 2005 were also  positively  affected by the  relative  weakness of the
U.S. dollar compared to both the British pound sterling and the euro.

         In addition to average selling price  increases,  the first nine months
of 2005 were positively impacted by a 5% increase in melted product sales volume
and a 10% increase in mill product  sales volume,  a result of increased  demand
across all market segments.

         As a result of the Company's  change in inventory  costing  methods (as
previously  discussed),  the  Company's  cost of sales for the nine months ended
September  30, 2004 was restated to $320.4  million,  a decrease of $3.0 million
from the  previously  reported  amount.  See  Notes 1 and 2 to the  Consolidated
Financial Statements.

         Gross margin  increased during the nine months ended September 30, 2005
compared to the year ago period  primarily due to higher average  selling prices
and  improved  plant  operating  rates  (from 72% during the nine  months  ended
September 30, 2004 to 78% during the nine months ended  September 30, 2005).  In
addition, the Company generated an additional $15.0 million of gross margin from
the sale of titanium  scrap and other  non-mill  products  during the first nine
months of 2005, as compared to the year ago period.  These positive effects were
offset by higher raw  material  costs as well as charges to cost of sales during
the 2005 period for:

         o        $3.6  million  of  additional  costs  during  the 2005  period
                  related to the accrual of certain  performance-based  employee
                  incentive compensation payments, as compared to the first nine
                  months of 2004; and

         o        A $1.2  million  noncash  impairment  charge  during  the 2005
                  period  related  to  the  Company's   abandonment  of  certain
                  manufacturing equipment.

         In  addition,  gross  margin  during  the 2004  period  was  positively
affected  by  a  $1.6  million  reduction  in  cost  of  sales  related  to  the
modification of the Company's  vacation policy.  On January 1, 2004, the Company
modified  its  vacation  policy for its U.S.  salaried  employees,  whereby such
employees no longer accrue their entire year's  vacation  entitlement on January
1, but rather accrue the current year's vacation  entitlement over the course of
the year.

                                      -24-
<PAGE>


         Selling,  general,  administrative  and development  expenses increased
from $32.4 million  during the first nine months of 2004 to $38.6 million during
the first nine months of 2005,  principally  as a result of (i) $1.0  million of
additional  auditing and consulting  costs incurred  during the first quarter of
2005 primarily related to the Company's compliance with the Sarbanes-Oxley Act's
internal control  requirements for the fiscal year ended December 31, 2004, (ii)
additional  personnel costs,  including $0.9 million of additional costs related
to the  accrual of certain  performance-based  employee  incentive  compensation
payments and (iii) a $0.3 million reduction in the first quarter of 2004 related
to the previously discussed change in the Company's vacation policy.

         The Company recognized equity in earnings of joint ventures of $3.4
million during the first nine months of 2005, compared to $0.2 million during
year ago period. This change was principally due to improved operating results
of VALTIMET.

         Net other income  (expense)  decreased  during the first nine months of
2005 primarily related to lower Boeing take-or-pay income during the 2005 period
as compared  to the 2004  period.  Boeing  purchased  approximately  2.2 million
pounds of  titanium  from the  Company  during the 2005  period,  as compared to
approximately  1.2  million  pounds of  titanium  during the 2004  period.  This
decrease was  partially  offset by the  Company's  settlement  of a $1.8 million
customer  claim  during  the  first  quarter  of  2005  regarding   prior  order
cancellations from such customer.

         Non-operating income (expense).
<TABLE>
<CAPTION>

                                                         Three months ended                  Nine months ended
                                                             September 30,                      September 30,
                                                    -------------------------------    -------------------------------
                                                        2005              2004             2005              2004
                                                    --------------    -------------    --------------    -------------
                                                                             (In thousands)
<S>                                                 <C>               <C>              <C>               <C>
Interest expense:
   On debt payable to the Capital Trust             $        165      $      2,357     $        563      $      9,604
   On bank debt and capital leases                           915               742            2,134             1,893
                                                    --------------    -------------    --------------    -------------

                                                    $      1,080      $      3,099     $      2,697      $     11,497
                                                    ==============    =============    ==============    =============

Dividends and interest                              $        491      $         68     $      1,440      $        304
Equity in earnings of common
   securities of the Capital Trust                            70               103              276               320
Gain on sale of property                                       -                 -           13,881                 -
Gain on BUCS exchange, net                                     -            15,465                -            15,465
Foreign exchange gain, net                                   498              (471)           2,030               100
Other, net                                                   291               234             (109)              107
                                                    --------------    ------------- -- --------------    -------------

                                                    $      1,350      $     15,399     $     17,518      $     16,296
                                                    ==============    =============    ==============    =============
</TABLE>


                                      -25-
<PAGE>


         Prior to September 1, 2004, quarterly interest expense on the Company's
debt payable to the Capital Trust  approximated  $3.4 million,  exclusive of any
accrued  interest on deferred  interest  payments.  On  September  1, 2004,  the
Company  exchanged  97.1% of its  outstanding  BUCS for its  Series A  Preferred
Stock.  After such  exchange,  interest  expense  related to the remaining  debt
payable to the Capital Trust  approximated  $0.2 million per quarter,  partially
offset by $0.1 million of equity in earnings  related to the Company's  holdings
of the common securities of the Capital Trust. On September 1, 2005, the Company
and the  Capital  Trust  agreed to the  cancellation  of 120,907 of the  Capital
Trust's  common  securities.  Upon  such  cancellation,  the  related  equity in
earnings became  insignificant  and the interest  expense on debt payable to the
Capital Trust decreased to approximately $0.1 million per quarter. See Note 9 to
the Consolidated Financial Statements.

         Dividends  and interest  income  during the three and nine months ended
September  30, 2005 and 2004  consisted of dividends  received on the  Company's
investments in marketable securities and interest income earned on cash and cash
equivalents.

         In November  2004,  pursuant to an agreement with BMI, the Company sold
certain property located adjacent to its Henderson,  Nevada plant site to BMI, a
32%-owned indirect subsidiary of Valhi, and recorded a $12 million deferred gain
related  to the cash  proceeds  received  in  November  2004.  During the second
quarter  of 2005,  the  Company  ceased  using the  property  and,  accordingly,
recognized a $13.9 million gain related to the sale of such  property,  which is
comprised of (i) the previously reported $12.0 million cash proceeds received in
November  2004,  (ii) the  reversal of $0.6  million  previously  accrued by the
Company for potential  environmental issues related to the property and (iii) an
additional $1.2 million cash payment received from BMI in June 2005.

         In August 2004, the Company  completed an exchange  offer,  pursuant to
which  the  Company  had  offered  to  exchange  any  and  all of the  4,024,820
outstanding  BUCS issued by the Capital Trust for shares of the Company's Series
A Preferred  Stock at the exchange rate of one share of Series A Preferred Stock
for each BUCS.  Based upon the 3,909,103 BUCS tendered and accepted for exchange
as of the close of the offer on August 31, 2004,  the Company  issued  3,909,103
shares of Series A Preferred  Stock in exchange for such BUCS.  During the third
quarter of 2004, the Company  recognized a $15.5 million non-cash  non-operating
gain  related  to the BUCS  exchange,  reflecting  the  difference  between  the
carrying value of the related  Subordinated  Debentures ($195.5 million) and the
fair value of the Series A Preferred Stock issued ($173.7 million,  based on the
closing  price of the BUCS on August 31, 2004  according to NASDAQ's  website of
$45.25  per  share,  less  $3.2  million  attributable  to  accrued  and  unpaid
dividends), less $6.3 million of unamortized deferred financing costs related to
the exchanged BUCS.

         Income taxes. The Company operates in several tax  jurisdictions and is
subject to varying income tax rates.  As a result,  the geographic mix of pretax
income or loss can impact the Company's overall effective tax rate. For the nine
months ended  September 30, 2005 and 2004, the Company's  income tax rate varied
from the U.S. statutory rate primarily due to changes in the deferred income tax
valuation  allowance related to the Company's tax attributes with respect to the
"more-likely-than-not" recognition criteria during those periods. See Note 12 to
the Consolidated Financial Statements.


                                      -26-
<PAGE>


         The  Company  periodically  reviews its  deferred  income tax assets to
determine  if future  realization  is more  likely  than not.  During  the first
quarter of 2005, based on the Company's recent history of U.S. income,  its near
term  outlook and the effect of its change in method of  inventory  costing from
the LIFO cost method to the specific identification cost method for U.S. federal
income tax  purposes  (see Note 1), the  Company  changed  its  estimate  of its
ability to utilize the tax  benefits of its U.S. NOL  carryforwards,  AMT credit
carryforwards  and other net deductible  temporary  differences  (other than the
majority of the Company's capital loss carryforwards). Consequently, the Company
determined  that its net  deferred  income tax asset  related  to such U.S.  tax
attributes  and  other  net  deductible  temporary  differences  now  meets  the
"more-likely-than-not"  recognition criteria.  Accordingly, the Company reversed
$28.2  million of the valuation  allowance  attributable  to such U.S.  deferred
income  tax asset in the first nine  months of 2005  ($5.6  million in the third
quarter) and the Company will reverse the  remaining  U.S.  valuation  allowance
attributable  to its U.S. net deferred  income tax asset of $8.6 million  during
the  fourth  quarter  of  2005 in  accordance  with  the  GAAP  requirements  of
accounting for income taxes at interim dates.

         During the first quarter of 2005, based on the Company's recent history
of U.K. income, its near term outlook and its historic U.K.  profitability,  the
Company also  changed its estimate of its ability to utilize its net  deductible
temporary  differences and other tax attributes  related to the U.K.,  primarily
comprised of (i) the future  benefits  associated  with the reversal of its U.K.
minimum pension liability deferred income tax asset and (ii) the benefits of its
U.K.  NOL  carryforward.  Consequently,  the  Company  determined  that  its net
deferred  income  tax asset in the U.K.  now  meets  the  "more-likely-than-not"
recognition  criteria.  Accordingly,  the Company  reversed $13.1 million of the
valuation allowance  attributable to such deferred income tax asset in the first
nine months of 2005 ($0.1  million in the third  quarter)  and the Company  will
reverse the remaining U.K. valuation allowance of $0.3 million during the fourth
quarter of 2005 in  accordance  with the GAAP  requirements  of  accounting  for
income taxes at interim dates.

         In October  2004,  the American  Jobs  Creation Act of 2004 was enacted
into law. The new law provides for a special 85% deduction for certain dividends
received from controlled foreign  corporations in 2005. In the second quarter of
2005, the Company  completed its evaluation of this new provision and determined
that it would  benefit  from  the  special  dividend  received  deduction.  As a
consequence,  the Company  repatriated $19 million of earnings from its European
subsidiaries  in the third quarter of 2005. The $1 million related tax impact of
this  repatriation  was recorded as tax expense in the second quarter of 2005 in
accordance with the requirements of FASB Staff Position No. 109-2.  However, the
Company has not provided for U.S.  deferred income taxes or foreign  withholding
taxes on basis differences in its non-U.S. consolidated subsidiaries that result
primarily  from   undistributed   earnings  the  Company   intends  to  reinvest
indefinitely.  Determination of the deferred income tax liability on these basis
differences is not practicable  because such liability,  if any, is dependent on
circumstances existing if and when remittance occurs.


                                      -27-
<PAGE>


         Dividends on Series A Preferred Stock. Shares of the Company's Series A
Preferred  Stock are  convertible,  at any  time,  at the  option of the  holder
thereof,  into three and one-third shares of the Company's common stock, subject
to adjustment in certain events. The Series A Preferred Stock is not mandatorily
redeemable,  but is  redeemable  at the  option  of the  Company  under  certain
circumstances.  When,  as and if declared by the  Company's  board of directors,
holders of the Series A Preferred Stock are entitled to receive  cumulative cash
dividends at the rate of 6.75% of the $50 per share  liquidation  preference per
annum per share  (equivalent  to $3.375 per annum per  share).  During the third
quarter of 2005,  certain  holders of the Series A Preferred  Stock converted an
aggregate  of 555,390  shares of the  Series A  Preferred  Stock into  1,852,697
shares of TIMET's  common stock.  The Company paid dividends of $2.8 million and
$9.4  million  during  the three  and nine  months  ended  September  30,  2005,
respectively, to holders of the Series A Preferred Stock.

         European operations.  The Company has substantial operations located in
Europe,  principally  the  U.K.,  France  and  Italy.  Approximately  40% of the
Company's  sales  originated  in Europe for the nine months ended  September 30,
2005, of which  approximately 59% were denominated in the British pound sterling
or the euro. Certain purchases of raw materials, principally titanium sponge and
alloys, for the Company's  European  operations are denominated in U.S. dollars,
while  labor  and other  production  costs are  primarily  denominated  in local
currencies. The functional currencies of the Company's European subsidiaries are
those of their respective  countries,  and the European subsidiaries are subject
to exchange rate  fluctuations  that may impact reported earnings and may affect
the  comparability  of  period-to-period  operating  results.  Borrowings of the
Company's  European   operations  may  be  in  U.S.  dollars  or  in  functional
currencies.  The Company's  export sales from the U.S. are  denominated  in U.S.
dollars and are not subject to currency exchange rate fluctuations.

         The  Company  does not use  currency  contracts  to hedge its  currency
exposures.   At  September  30,  2005,   consolidated   assets  and  liabilities
denominated in currencies  other than functional  currencies were  approximately
$51.9  million and $41.9  million,  respectively,  consisting  primarily of U.S.
dollar cash, accounts receivable and accounts payable.

         VALTIMET has entered into certain derivative financial instruments that
qualify  as cash  flow  hedges  under  GAAP.  The  Company's  pro-rata  share of
VALTIMET's  unrealized  net gains on such  derivative  financial  instruments is
included as a component of other comprehensive income.

         Outlook.  The "Outlook"  section  contains a number of  forward-looking
statements,  all  of  which  are  based,  unless  otherwise  noted,  on  current
expectations  and  exclude the effect of  potential  future  charges  related to
restructurings,  asset impairments,  valuation allowances, changes in accounting
principles  and  similar  items.  Undue  reliance  should not be placed on these
statements,  as  more  fully  discussed  in  the  "Forward-Looking  Information"
statement of this Quarterly Report.  Actual results may differ  materially.  See
also  Notes to the  Consolidated  Financial  Statements  regarding  commitments,
contingencies, legal matters, environmental matters and other matters, including
new accounting  principles,  which could materially  affect the Company's future
business, results of operations, financial position and liquidity.

         Over the past several  quarters,  the Company has seen the availability
of  raw  materials   (primarily   titanium  scrap  and  sponge)  tighten,   and,
consequently,  the prices for such raw materials  increased  generally over that
period. The Company currently expects that a shortage in raw materials is likely
to continue  throughout 2006, which could limit the Company's ability to produce
enough titanium products to fully meet customer demand. In addition, the Company
has certain long-term agreements that limit the Company's ability to pass on all
of its increased raw material costs to its customers.

                                      -28-
<PAGE>


         In July 2005, The Airline  Monitor,  a leading  aerospace  publication,
issued its semi-annual  forecast for commercial  aircraft  deliveries.  This new
forecast increased its estimate of large commercial aircraft deliveries over the
next five years beginning in 2006 by 460 planes,  including 55 additional Boeing
787 wide bodies  (which are expected to require a higher  percentage of titanium
in their airframes, engines and other parts than any other commercial aircraft).
This updated forecast  supports the Company's belief that the titanium  industry
is in the early stages of the business  cycle and that the current  uptrend will
likely continue through 2006 and beyond.

         The  Company's  backlog at the end of September  2005 was a record $710
million,  a $130 million (22%) increase over the $580 million backlog at the end
of June 2005 and a $310 million (78%) increase over the $400 million  backlog at
the end of September 2004.

         The  Company's  cost of  sales  is  affected  by a  number  of  factors
including customer and product mix, material yields,  plant operating rates, raw
material  costs,  labor and energy  costs.  Raw material  costs,  which  include
sponge,  scrap and  alloys,  represent  the  largest  portion  of the  Company's
manufacturing cost structure.  As previously  reported,  scrap and certain alloy
prices have increased  significantly  from year ago prices, and increased energy
costs also  continue to have a negative  impact on gross  margin.  However,  the
Company has recently begun to see a softening of certain alloy costs.

         Overall, the Company currently expects it sales and operating income in
the fourth  quarter  and full year of 2005 will  continue  to be higher than the
comparable  amounts in 2004 due primarily to higher  average  selling prices and
sales volumes for both melted and mill products and higher  production  capacity
utilization, offset in part by higher costs for raw materials and energy. Income
attributable to common  stockholders is also expected to be higher in the fourth
quarter  and full year of 2005 due to the higher  expected  operating  income as
well  as  the  favorable  effect  of  the  $13.9  million  second  quarter  2005
non-operating  gain on the sale of certain  property and a $50.2 million  income
tax benefit in 2005 related to the reversal of the Company's deferred income tax
asset valuation allowance in the U.S. and the U.K.

         In May 2005,  the Company  announced  its plans to expand its  existing
titanium sponge facility in Henderson, Nevada. This expansion, which the Company
expects to complete by the first  quarter of 2007,  will provide the capacity to
produce an  additional  4,000  metric  tons of sponge  annually,  an increase of
approximately 42% over current Henderson sponge production  capacity levels. The
Company  currently  estimates the capital cost for the project will  approximate
$38 million.

         Non-GAAP  financial  measures.  In an effort to provide  investors with
information  in addition to the Company's  results as  determined  by GAAP,  the
Company has  provided  the  following  non-GAAP  financial  disclosures  that it
believes may provide useful information to investors:

    o    The Company discloses percentage changes in its melted and mill product
         selling prices in U.S. dollars, which have been adjusted to exclude the
         effects of changes in product mix. The Company believes such disclosure
         provides  useful  information  to investors by allowing them to analyze
         such  changes  without  the impact of changes in product  mix,  thereby
         facilitating  period-to-period  comparisons of the relative  changes in
         average  selling  prices.  Depending on the  composition  of changes in
         product mix, the  percentage  change in selling  prices  excluding  the
         effect of  changes  in  product  mix can be  higher or lower  than such
         percentage  change  would be using the actual  product  mix  prevailing
         during the respective periods; and

                                      -29-
<PAGE>

    o    In  addition  to  disclosing  percentage  changes  in its mill  product
         selling  prices  adjusted  to exclude the effects of changes in product
         mix,  the Company also  discloses  such  percentage  changes in billing
         currencies,  which have been further adjusted to exclude the effects of
         changes in foreign  currency  exchange rates. The Company believes such
         disclosure provides useful information to investors by allowing them to
         analyze such changes without the impact of changes in foreign  currency
         exchange rates,  thereby facilitating  period-to-period  comparisons of
         the relative  changes in average  selling  prices in the various actual
         billing  currencies.   Generally,  when  the  U.S.  dollar  strengthens
         (weakens)  against other  currencies,  the percentage change in selling
         prices  in  billing   currencies  will  be  higher  (lower)  than  such
         percentage  changes  would be using actual  exchange  rates  prevailing
         during the respective periods.

LIQUIDITY AND CAPITAL RESOURCES

         The  Company's  consolidated  cash  flows  for the  nine  months  ended
September 30, 2005 and 2004 are presented below. The following discussion should
be read in conjunction with the Company's  Consolidated Financial Statements and
Notes thereto.
<TABLE>
<CAPTION>

                                                                              Nine months ended September 30,
                                                                        --------------------------------------------
                                                                               2005                    2004
                                                                        --------------------    --------------------
                                                                                      (In thousands)
<S>                                                                     <C>                     <C>
Cash provided (used) by:
   Operating activities                                                 $          17,052       $        (19,414)
   Investing activities                                                           (43,650)               (40,003)
   Financing activities                                                            25,884                 32,576
                                                                        --------------------    --------------------

   Net cash used by operating, investing and
     financing activities                                               $            (714)      $        (26,841)
                                                                        ====================    ====================
</TABLE>

         Operating activities.  The titanium industry historically has derived a
substantial portion of its business from the aerospace  industry.  The aerospace
industry is cyclical,  and changes in economic  conditions  within the aerospace
industry  significantly  impact the Company's earnings and operating cash flows.
Cash flow from  operations  is  considered  a  primary  source of the  Company's
liquidity.  Changes in titanium pricing,  production volume and customer demand,
among other things, could significantly affect the Company's liquidity.

         Certain  items  included  in the  determination  of net income  have an
impact on cash flows from operating activities,  but the impact of such items on
cash may differ from their impact on net income.  For example,  pension  expense
and OPEB expense will generally  differ from the outflows of cash for payment of
such benefits. In addition, relative changes in assets and liabilities generally
result from the timing of production, sales and purchases. Such relative changes
can  significantly  impact the  comparability  of cash flow from operations from
period to period,  as the income  statement  impact of such items may occur in a
different period than that in which the underlying cash transaction  occurs. For
example,  raw materials may be purchased in one period, but the cash payment for
such raw materials may occur in a subsequent period. Similarly, inventory may be
sold in one period,  but the cash  collection of the  receivable  may occur in a
subsequent period.

         Net income was $114.6  million for the nine months ended  September 30,
2005,  compared  to net  income  of  $28.5  million  for the nine  months  ended
September 30, 2004.

                                     -30-
<PAGE>

         Accounts receivable  increased during the first nine months of 2005 and
2004 primarily as a result of increased sales.  Inventories increased during the
first  nine  months  of 2005 and 2004 as a result  of  increased  run  rates and
related  inventory build in order to meet expected  customer demand,  as well as
the effects of increased raw material costs.

         Changes in  accounts  payable and accrued  liabilities  reflect,  among
other  things,  the timing of (i)  payments to  suppliers  of  titanium  sponge,
titanium  scrap and other raw  material  purchases  and (ii)  changes to accrued
employee benefits,  including performance-based employee incentive compensation.
During the first nine months of 2004, accrued  liabilities also decreased due to
payment of the $2.8 million  final  installment  related to  termination  of the
Company's prior agreement with Wyman-Gordon Company.

         The increase in customer  advances during the first nine months of 2005
and 2004  primarily  reflects the Company's  receipt of a $27.9 million  advance
from  Boeing  in  each  of  January  2005  and  2004,  partially  offset  by the
application of customer  purchases.  Under the terms of the previous Boeing LTA,
Boeing advanced TIMET $28.5 million  annually,  less $3.80 per pound of titanium
product purchased from TIMET by Boeing subcontractors during the preceding year.

         See  "Results  of  Operations  - Income  taxes" for  discussion  of the
Company's income taxes.

         Investing  activities.  The Company's  capital  expenditures were $43.3
million for the nine months ended September 30, 2005,  compared to $10.9 million
for the comparable period in 2004,  principally for replacement of machinery and
equipment,  capacity  maintenance and environmental  compliance and improvement.
The 2005 amount  includes  $20.2 million  related to  construction  of the water
conservation facility and $4.9 million related to the expansion of the Company's
sponge plant in  Henderson,  Nevada.  During the first nine months of 2005,  the
Company purchased 146,900 shares of CompX Class A common stock for $2.2 million.
During the first nine months of 2004, the Company purchased  2,212,820 shares of
CompX  Class  A  common  stock  for  $26.7  million  and  221,100  shares  of NL
Industries,  Inc. common stock for $2.5 million.  See Note 3 to the Consolidated
Financial Statements.

         Financing  activities.  Cash  provided  during  the nine  months  ended
September 30, 2005 related  primarily to the  Company's net  borrowings of $32.5
million,  used  in part  to (i)  fund  construction  of the  water  conservation
facility as well as the Company's expansion of its sponge plant and (ii) support
the  accumulation of inventory in order to meet expected  customer  demand.  The
Company also  received $5.3 million from the issuance of common stock related to
the exercise of certain  employee  stock options  during the 2005 period.  These
cash inflows were  partially  offset by the  Company's  $9.7 million  payment of
dividends on the Company's Series A Preferred Stock. In addition,  the Company's
70%-owned  subsidiary,  TIMET Savoie,  S.A.  made  dividend  payments to its 30%
minority  partner of $2.2  million  during  the second  quarter of 2005 and $0.7
million  during the second  quarter  2004.  The Company had $33.8 million of net
borrowings during the nine months ended September 30, 2004, primarily to support
the  Company's  accumulation  of  inventory in order to meet  expected  customer
demand  during  the  balance  of 2004  and into  2005 and to fund its  investing
activities.


                                      -31-
<PAGE>


         Borrowing arrangements.  During the second quarter of 2005, the Company
amended its U.S. credit facility to increase its maximum  authorized  borrowings
from $105 million to $125  million.  In addition,  the amended  credit  facility
reduced the excess availability  requirement related to the payment of dividends
on the  Company's  Series A  Preferred  Stock and  distributions  on the Capital
Trust's BUCS from $25 million to $10 million.  During the first quarter of 2004,
the Company amended its U.S.  credit facility to, among other things,  allow the
Company the flexibility to remove the equipment component from the determination
of the  Company's  borrowing  availability  in order to  avoid  the  costs of an
appraisal.  Interest  currently  accrues at rates based on LIBOR plus 2% or bank
prime rate plus 0.5%.  Borrowings are collateralized by substantially all of the
Company's U.S. assets.  The Company was in compliance with all covenants for all
periods  during  the nine  months  ended  September  30,  2005 and  2004.  As of
September 30, 2005, the Company had outstanding borrowings under the U.S. credit
agreement  of $65.0  million,  and excess  availability  was  approximately  $56
million.

         During the second quarter of 2005, the Company's subsidiary,  TIMET UK,
terminated its previous credit  agreement and entered into a new working capital
credit  facility  that  expires  on April 30,  2008.  Under the new U.K.  credit
facility,  TIMET  UK  may  borrow  up  to  (pound)22.5  million,  subject  to  a
formula-determined borrowing base derived from the value of accounts receivable,
inventory and property, plant and equipment.  Borrowings under the U.K. facility
can be in various  currencies,  including U.S. dollars,  British pounds sterling
and euros and are  collateralized  by  substantially  all of TIMET UK's  assets.
Interest on  outstanding  borrowings  generally  accrues at rates that vary from
1.125% to 1.375%  above the  lender's  published  base rate.  The U.K.  facility
agreement  also contains  financial  ratios and  covenants  customary in lending
transactions of this type, including a minimum net worth covenant.  TIMET UK was
in compliance  with all  covenants for all periods  during the nine months ended
September  30,  2005 and  2004.  As of  September  30,  2005,  the  Company  had
outstanding  borrowings  under the U.K.  facility of $10.7  million,  and unused
borrowing availability was approximately $29 million.

         The Company also has overdraft  and other credit  facilities at certain
of its other European subsidiaries.  These facilities accrue interest at various
rates and are payable on demand.  As of September  30, 2005,  the Company had no
borrowings  under  these  facilities,  and  unused  borrowing  availability  was
approximately $17 million.

         No  dividends  were paid by the Company on its common  stock during the
three and nine months  ended  September  30, 2005 or 2004.  During the three and
nine months ended  September  30,  2005,  the Company paid $3.1 million and $9.7
million in dividends on its Series A Preferred Stock.

         Legal  and  environmental  matters.  See  Note  14 to the  Consolidated
Financial  Statements  for  discussion  of  legal  and  environmental   matters,
commitments and contingencies.


                                      -32-
<PAGE>

         Other. The Company periodically  evaluates its liquidity  requirements,
capital needs and availability of resources in view of, among other things,  its
alternative  uses of capital,  debt service  requirements,  the cost of debt and
equity capital and estimated  future  operating cash flows.  As a result of this
process, the Company has in the past, or in light of its current outlook, may in
the future,  seek to raise additional  capital,  modify its common and preferred
dividend  policies,   restructure  ownership  interests,   incur,  refinance  or
restructure indebtedness,  repurchase shares of common stock, purchase or redeem
BUCS or Series A Preferred  Stock,  sell assets,  or take a combination  of such
steps or other steps to increase or manage its liquidity and capital  resources.
In the normal course of business, the Company investigates, evaluates, discusses
and engages in  acquisition,  joint venture,  strategic  relationship  and other
business  combination  opportunities in the titanium,  specialty metal and other
industries.   In  the  event  of  any  future   acquisition   or  joint  venture
opportunities,  the Company may consider using then-available liquidity, issuing
equity securities or incurring additional indebtedness.

         Corporations  that may be deemed to be controlled by or affiliated with
Mr.  Simmons  sometimes  engage  in  (i)  intercorporate  transactions  such  as
guarantees,   management   and   expense   sharing   arrangements,   shared  fee
arrangements, joint ventures, partnerships, loans, options, advances of funds on
open account,  and sales, leases and exchanges of assets,  including  securities
issued by both related and unrelated  parties,  and (ii) common  investment  and
acquisition     strategies,     business     combinations,      reorganizations,
recapitalizations,  securities  repurchases,  and purchases and sales (and other
acquisitions  and  dispositions)  of  subsidiaries,  divisions or other business
units,  which  transactions have involved both related and unrelated parties and
have included  transactions  which  resulted in the  acquisition  by one related
party of a publicly-held  minority equity interest in another related party. The
Company  continuously  considers,  reviews and evaluates such transactions,  and
understands  that  Contran,  Valhi and  related  entities  consider,  review and
evaluate  such  transactions.   Depending  upon  the  business,  tax  and  other
objectives  then  relevant,  it is possible that the Company might be a party to
one or more such transactions in the future.

         The Company  completed a two-for-one  split of its common stock,  which
was effected in the form of a stock dividend (whereby an additional one share of
post-split  stock was distributed for each share of pre-split  stock) and became
effective after the close of trading on September 6, 2005. The Company completed
a  five-for-one  split of its common stock,  which was effected in the form of a
stock  dividend  (whereby an  additional  four shares of  post-split  stock were
distributed  for each share of pre-split  stock) and became  effective after the
close of trading on August 26, 2004.  All share and per share  disclosures  have
been adjusted to give effect to these stock splits.

         Effective July 1, 2005, the Company amended its LTA with Boeing for the
purchase and sale of titanium products. The new LTA expires on December 31, 2010
and provides  for,  among other things,  (i) mutual  annual  purchase and supply
commitments by both parties,  (ii) continuation of the existing buffer inventory
program  currently  in place for  Boeing  and  (iii)  certain  improved  product
pricing. Beginning in 2006, the new LTA also replaces the take-or-pay provisions
of the previous LTA with an annual makeup payment early in the following year in
the event Boeing  purchases less than its annual volume  commitment in any year.
Based on its current  expectations of Boeing  purchases during 2006, the Company
anticipates that any annual makeup payment for 2006 will be minimal.


                                      -33-
<PAGE>


         On September 1, 2005,  the Company and the Capital  Trust agreed to the
cancellation of 120,907 of the Capital  Trust's common  securities (all of which
were held by the Company) and a  corresponding  cancellation  of $6.0 million of
the  Company's   6.625%   convertible   junior   subordinated   debentures  (the
"Subordinated Debentures ") (all of which were held by the Capital Trust). There
was no net effect of this  transaction on the Company's  consolidated  financial
position or results of operations, as the Company's carrying value of the common
securities of the Capital Trust that were  cancelled  equaled the carrying value
of the of the Subordinated Debentures that were also cancelled.

         On August 12,  2005,  the  Company  retired  all  90,000  shares of its
treasury stock. The retirement of such treasury stock, which had a cost basis of
$1.2 million, resulted in a $900 reduction of common stock, a $990,000 reduction
of additional paid-in capital and a $217,000 increase in accumulated deficit.


                                      -34-
<PAGE>


Item 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         For a discussion of the Company's  market risks,  refer to the Item 7A,
"Quantitative and Qualitative Disclosures About Market Risk," in the 2004 Annual
Report.  There have been no material  changes to the  information  provided that
would  require  additional  information  with  respect to the nine months  ended
September 30, 2005.

Item 4.       CONTROLS AND PROCEDURES

         Evaluation of disclosure controls and procedures. The Company maintains
a system of disclosure  controls and procedures.  The term "disclosure  controls
and  procedures," as defined by regulations of the SEC, means controls and other
procedures that are designed to ensure that information required to be disclosed
in the reports that the Company files or submits to the SEC under the Securities
Exchange Act of 1934, as amended (the "Exchange  Act"), is recorded,  processed,
summarized  and reported,  within the time periods  specified in the SEC's rules
and forms.  Disclosure  controls and  procedures  include,  without  limitation,
controls  and  procedures  designed  to ensure that  information  required to be
disclosed  by the  Company  in the  reports  that it files or submits to the SEC
under  the  Exchange  Act is  accumulated  and  communicated  to  the  Company's
management,   including  its  principal  executive  officer  and  its  principal
financial officer,  or persons  performing similar functions,  as appropriate to
allow timely decisions to be made regarding required disclosure.  Each of Harold
C. Simmons, the Company's Chairman of the Board and Chief Executive Officer, and
Bruce  P.  Inglis,   the  Company's  Vice  President  -  Finance  and  Corporate
Controller,  have evaluated the Company's  disclosure controls and procedures as
of September 30, 2005.  Based upon their  evaluation,  these executive  officers
have  concluded  that the  Company's  disclosure  controls  and  procedures  are
effective as of the date of such evaluation.

         Internal control over financial  reporting.  The Company also maintains
internal  control over  financial  reporting.  The term  "internal  control over
financial  reporting,"  as defined by  regulations  of the SEC,  means a process
designed by, or under the supervision of, the Company's  principal executive and
principal  financial  officers,  or persons performing  similar  functions,  and
effected by the Company's board of directors, management and other personnel, to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with GAAP, and includes those policies and procedures that:

   o     Pertain  to the  maintenance  of  records  that  in  reasonable  detail
         accurately and fairly reflect the  transactions and dispositions of the
         assets of the Company;

   o     Provide   reasonable   assurance  that  transactions  are  recorded  as
         necessary to permit  preparation of financial  statements in accordance
         with GAAP, and that receipts and  expenditures of the Company are being
         made only in accordance with authorizations of management and directors
         of the Company; and

   o     Provide reasonable  assurance regarding  prevention or timely detection
         of unauthorized acquisition, use or disposition of the Company's assets
         that  could  have  a  material  effect  on the  Company's  Consolidated
         Financial Statements.


                                      -35-
<PAGE>


         As permitted by the SEC, the Company's  assessment of internal  control
over financial  reporting excludes (i) internal control over financial reporting
of its equity method investees and (ii) internal control over the preparation of
the Company's financial statement schedules required by Article 12 of Regulation
S-X.  However,  the  Company's  assessment  of internal  control over  financial
reporting with respect to the Company's  equity method investees did include its
controls over the recording of amounts related to the Company's investments that
are recorded in its Consolidated  Financial Statements,  including controls over
the  selection  of  accounting  methods  for  the  Company's  investments,   the
recognition  of  equity  method  earnings  and  losses  and  the  determination,
valuation and recording of the Company's investment account balances.

         Changes in internal control over financial reporting.  During the third
quarter  of  2005,  the  Company  implemented  new  accounting  software  at the
Company's operations in France,  replacing a combination of older systems as the
Company's  sole  principal  accounting  software  system at this  location.  The
implementation,  effective  July 3, 2005,  was carried out  according  to a plan
based on Company policy that included controls to (i) safeguard data migrated to
the new system,  (ii) test the  functionality of the new system in a development
environment  prior to  implementation  and (iii)  develop a  post-implementation
internal  control   environment.   Management  has  conducted   testing  of  the
implementation  plan and the  post-implementation  environment  and has  limited
evidence that internal  controls  involved with the  development of new software
are operating effectively.  As a result of the implementation,  certain controls
previously  operating in France were  migrated to the  Company's UK location for
the third quarter of 2005.  Further testing of the  post-implementation  control
environment  will be  necessary  for  management  to conclude  that its internal
controls  over  information  technology  and internal  controls  over  financial
reporting as a whole are  operating  effectively  at this  location.  Management
expects to conclude its evaluation by the end of the fourth quarter of 2005.


                                      -36-
<PAGE>


PART II. - OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS

         Reference is made to Note 14 of the Consolidated  Financial Statements,
which information is incorporated herein by reference, and to the Company's 2004
Annual Report for descriptions of certain previously reported legal proceedings.

Item 6.    EXHIBITS

10.1*    General Terms Agreement  between The Boeing Company and Titanium Metals
         Corporation,   incorporated   by  reference  to  Exhibit  10.2  to  the
         Registrant's  Current  Report  on  Form  8-K/A  filed  with  the SEC on
         November 16, 2005.

10.2*   Special  Business  Provisions  between The Boeing  Company and Titanium
        Metals  Corporation,  incorporated  by reference to Exhibit 10.3 to the
        Registrant's  Current  Report  on  Form  8-K/A  filed  with  the SEC on
        November 16, 2005.

31.1    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

        *    Portions  of the  exhibit  have  been  omitted  pursuant  to a
             request for confidential treatment.

Note:    The Company has retained a signed  original of any exhibit listed above
         that contains signatures, and the Company will provide any such exhibit
         to the SEC or its staff upon request.  Such request  should be directed
         to the attention of the Company's  Corporate Secretary at the Company's
         corporate  offices  located  at  1999  Broadway,  Suite  4300,  Denver,
         Colorado 80202.

                                      -37-
<PAGE>



SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                               TITANIUM METALS CORPORATION
                                       -----------------------------------------



Date:  January 4, 2006              By  /s/ Harold C. Simmons
                                        -------------------------------------
                                        Harold C. Simmons
                                        Chairman of the Board and
                                        Chief Executive Officer


Date: January 4, 2006               By  /s/ Bruce P. Inglis
                                        --------------------------------------
                                        Bruce P. Inglis
                                        Vice President - Finance and Corporate
                                         Controller





                                      -38-