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 June 30, 2001
                                                 -------------

                                                        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     X       No
                                                 --------       ---------


Number of shares of common stock outstanding on July 31, 2001: 31,877,497 .
                                                               ----------

<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 under the
captions  "Results of Operations"  and "Liquidity and Capital  Resources"  (both
contained in  Management's  Discussion  and Analysis of Financial  Condition and
Results  of   Operations),   are   forward-looking   statements  that  represent
management's  beliefs and assumptions based on currently available  information.
Forward-looking  statements  can 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 assurances 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 in those portions
referenced  above and those  described from time to time in the Company's  other
filings with the Securities and Exchange  Commission which include,  but are not
limited  to,  the  cyclicality  of  the  commercial   aerospace  industry,   the
performance of aerospace manufacturers under their long-term purchase agreements
with the Company,  the difficulty in forecasting  demand for titanium  products,
global economic 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 or achieve lower costs,  the
possibility  of labor  disruptions,  fluctuations  in currency  exchange  rates,
control  by  certain   stockholders   and   possible   conflicts   of  interest,
uncertainties  associated  with  new  product  development,  the  supply  of raw
materials  and  services,  changes in raw  material  and other  operating  costs
(including energy costs) 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>
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<CAPTION>

                           TITANIUM METALS CORPORATION

                                      INDEX


                                                                                              Page
                                                                                             Number

PART I.       FINANCIAL INFORMATION

<S>                                                                                          <C>
         Item 1.    Financial Statements

                    Consolidated Balance Sheets - June 30, 2001 and
                      December 31, 2000                                                        2-3

                    Consolidated Statements of Operations - Three months and
                      six months ended June 30, 2001 and 2000                                   4

                    Consolidated Statements of Comprehensive Income (Loss) -
                      Three months and six months ended June 30, 2001 and 2000                  5

                    Consolidated Statements of Cash Flows - Six months
                      ended June 30, 2001 and 2000                                             6-7

                    Consolidated Statement of Changes in Stockholders' Equity -
                      Six months ended June 30, 2001                                            8

                    Notes to Consolidated Financial Statements                                9-16

         Item 2.    Management's Discussion and Analysis of Financial
                      Condition, Results of Operations and Liquidity
                      and Capital Resources                                                   17-24

         Item 3.    Quantitative and Qualitative Disclosures about Market Risk                 25

PART II.     OTHER INFORMATION

         Item 1.    Legal Proceedings                                                          26

         Item 4.    Submission of Matters to a Vote of Security Holders                        26

         Item 6.    Exhibits and Reports on Form 8-K                                           26

                                      -1-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                           TITANIUM METALS CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                                 (In thousands)

ASSETS                                                                         June 30,
                                                                                 2001                December 31,
                                                                             (unaudited)                 2000
                                                                         ---------------------    --------------------
<S>                                                                      <C>                      <C>
Current assets:
   Cash and cash equivalents                                             $        24,802          $         9,796
   Accounts and other receivables, less allowance
     for doubtful accounts of $2,808 and $2,927                                   80,136                   75,913
   Receivable from related parties                                                 4,355                    5,029
   Refundable income taxes                                                           418                      637
   Inventories                                                                   147,435                  148,384
   Prepaid expenses and other                                                     13,458                    8,049
   Deferred income taxes                                                             686                      397
                                                                         ---------------------    --------------------
     Total current assets                                                        271,290                  248,205
                                                                         ---------------------    --------------------


Other assets:
   Investments in joint ventures                                                  18,851                   18,136
   Preferred securities                                                           80,000                   80,000
   Accrued dividends on preferred securities                                       8,665                    8,136
   Goodwill                                                                       46,218                   49,305
   Other intangible assets                                                        11,500                   13,258
   Deferred income taxes                                                          12,887                   27,820
   Other                                                                          12,214                   12,156
                                                                         ---------------------    --------------------
     Total other assets                                                          190,335                  208,811
                                                                         ---------------------    --------------------


Property and equipment:
   Land                                                                            6,114                    6,158
   Buildings                                                                      35,733                   37,593
   Information technology systems                                                 53,954                   54,426
   Manufacturing and other                                                       289,802                  305,856
   Construction in progress                                                        7,249                    8,811
                                                                         ---------------------    --------------------
                                                                                 392,852                  412,844
   Less accumulated depreciation                                                 118,225                  110,714
                                                                         ---------------------    --------------------
     Net property and equipment                                                  274,627                  302,130
                                                                         ---------------------    --------------------

                                                                         $       736,252          $       759,146
                                                                         =====================    ====================
</TABLE>
                                      -2-
<PAGE>
<TABLE>
<CAPTION>

                           TITANIUM METALS CORPORATION

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                                 (In thousands)

LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY                      June 30,
                                                                               2001                 December 31,
                                                                            (unaudited)                 2000
                                                                        --------------------    ---------------------

<S>                                                                     <C>                     <C>
Current liabilities:
   Notes payable                                                        $         2,116         $        24,112
   Current maturities of long-term debt and
     capital lease obligations                                                      326                   2,011
   Accounts payable                                                              50,248                  50,456
   Accrued liabilities                                                           45,159                  36,180
   Payable to related parties                                                     1,521                   1,099
   Income taxes                                                                     434                     852
   Deferred income taxes                                                              -                   1,132
                                                                        --------------------    ---------------------
     Total current liabilities                                                   99,804                 115,842
                                                                        --------------------    ---------------------

Noncurrent liabilities:
   Long-term debt                                                                 5,122                  18,953
   Capital lease obligations                                                      8,089                   8,642
   Payable to related parties                                                     1,332                   1,332
   Accrued OPEB cost                                                             17,379                  18,219
   Accrued pension cost                                                           5,906                   5,361
   Accrued environmental cost                                                     3,262                   3,262
   Deferred income taxes                                                          9,255                   9,655
   Accrued dividends on Convertible Preferred Securities                              -                  11,154
   Other                                                                            111                     117
                                                                        --------------------    ---------------------
     Total noncurrent liabilities                                                50,456                  76,695
                                                                        --------------------    ---------------------

Minority interest - Company-obligated mandatorily
   redeemable preferred securities of subsidiary trust
   holding solely subordinated debt securities
   ("Convertible Preferred Securities")                                         201,250                 201,250
Other minority interest                                                           8,147                   7,844

Stockholders' equity:
   Preferred stock                                                                    -                       -
   Common stock                                                                     320                     319
   Additional paid-in capital                                                   350,550                 350,078
   Retained earnings                                                             51,861                  25,925
   Accumulated other comprehensive loss                                         (24,121)                (16,408)
   Treasury stock, at cost (90 shares)                                           (1,208)                 (1,208)
   Deferred compensation                                                           (807)                 (1,191)
                                                                        --------------------    ---------------------
     Total stockholders' equity                                                 376,595                 357,515
                                                                        --------------------    ---------------------

                                                                        $       736,252         $       759,146
                                                                        ====================    =====================
</TABLE>
Commitments and contingencies (Note 10)

          See accompanying notes to consolidated financial statements.
                                      -3-

<PAGE>
<TABLE>
<CAPTION>


                           TITANIUM METALS CORPORATION

                CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

                      (In thousands, except per share data)

                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                        2001              2000             2001              2000
                                                    --------------    -------------    --------------    -------------
Revenues and other income:
<S>                                                 <C>               <C>              <C>               <C>
   Net sales                                        $    120,035      $    108,838     $    244,043      $    213,550
   Equity in earnings (losses)
     of joint ventures                                       248              (672)           1,114              (725)
   Other, net                                             75,379             1,364           77,615             3,893
                                                    --------------    -------------    --------------    -------------
                                                         195,662           109,530          322,772           216,718
                                                    --------------    -------------    --------------    -------------
Costs and expenses:
   Cost of sales                                         123,514           107,619          240,260           215,630
   Selling, general, administrative
     and development                                      21,211            11,216           31,911            22,557
   Restructuring charge (credit)                               -              (896)            (220)            2,805
   Interest                                                1,083             1,996            2,594             4,258
                                                    --------------    -------------    --------------    -------------
                                                         145,808           119,935          274,545           245,250
                                                    --------------    -------------    --------------    -------------
     Income (loss) before income taxes,
       minority interest and
       extraordinary item                                 49,854           (10,405)          48,227           (28,532)

Income tax expense (benefit)                              17,532            (3,653)          16,963           (10,037)
Minority interest - Convertible
   Preferred Securities, net of tax                        2,493             2,191            4,679             4,358
Other minority interest, net of tax                          277               575              649               915
                                                    --------------    -------------    --------------    -------------

     Income (loss) before
         extraordinary item                               29,552            (9,518)          25,936           (23,768)

Extraordinary item, net of tax                                 -                 -                -              (873)
                                                    --------------    -------------    --------------    -------------

     Net income (loss)                              $     29,552      $     (9,518)    $     25,936      $    (24,641)
                                                    ==============    =============    ==============    =============

Earnings (loss) per share:
   Basic:
     Before extraordinary item                      $       .94       $      (.30)     $       .82       $      (.76)
     Extraordinary item                                       -                 -                -              (.03)
                                                    --------------    -------------    --------------    -------------
                                                    $       .94       $      (.30)     $       .82       $      (.79)
                                                    ==============    =============    ==============    =============
   Diluted:
     Before extraordinary item                      $       .86       $      (.30)     $       .82       $      (.76)
     Extraordinary item                                       -                 -                -              (.03)
                                                    --------------    -------------    --------------    -------------
                                                    $       .86       $      (.30)     $       .82       $      (.79)
                                                    ==============    =============    ==============    =============

Weighted average shares outstanding:
   Common shares                                          31,504            31,373           31,460            31,372
   Diluted shares                                         37,193            31,373           31,755            31,372

</TABLE>
          See accompanying notes to consolidated financial statements.
                                      -4-
<PAGE>
<TABLE>
<CAPTION>

                           TITANIUM METALS CORPORATION

       CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

                                 (In thousands)

                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                        2001              2000             2001              2000
                                                    --------------    -------------    --------------    -------------

<S>                                                 <C>               <C>              <C>               <C>
Net income (loss)                                   $    29,552       $    (9,518)     $    25,936       $   (24,641)

Other comprehensive loss - currency
   translation adjustment                                (3,404)           (5,145)          (7,713)           (7,777)
                                                    --------------    -------------    --------------    -------------

     Comprehensive income (loss)                    $    26,148       $   (14,663)     $    18,223       $   (32,418)
                                                    ==============    =============    ==============    =============


</TABLE>



          See accompanying notes to consolidated financial statements.
                                      -5-
<PAGE>
<TABLE>
<CAPTION>
                           TITANIUM METALS CORPORATION

                CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

                                 (In thousands)
                                                                           Six months ended June 30,
                                                                     -------------------------------------
                                                                           2001                2000
                                                                     -----------------    ----------------

<S>                                                                  <C>                  <C>
Cash flows from operating activities:
   Net income (loss)                                                 $      25,936        $     (24,641)
   Depreciation and amortization                                            20,161               21,406
   Noncash restructuring (credit) charge                                      (220)               2,405
   Noncash special charges                                                  14,599                6,729
   Gain on sale of castings joint venture                                        -               (1,205)
   Extraordinary loss on early extinguishment of debt, net                       -                  873
   Equity in (earnings) losses of joint ventures,
     net of distributions                                                     (714)                 975
   Deferred income taxes                                                    14,998              (11,781)
   Other minority interest                                                     649                  915
   Other, net                                                                  781                   47
   Change in assets and liabilities:
     Receivables                                                            (6,362)              21,437
     Accrued dividends receivable on preferred securities                     (529)              (1,485)
     Inventories                                                            (2,923)              27,061
     Prepaid expenses and other                                             (4,725)                 539
     Accounts payable and accrued liabilities                                5,509              (16,266)
     Accrued restructuring charges                                            (395)              (1,904)
     Income taxes                                                               90                8,012
     Accounts with related parties, net                                      1,457               (2,559)
     Accrued OPEB and pension costs                                           (286)              (1,640)
     Accrued dividends on Convertible Preferred Securities                 (10,043)               3,358
     Other, net                                                             (2,793)              (2,987)
                                                                     -----------------    ----------------
       Net cash provided by operating activities                            55,190               29,289
                                                                     -----------------    ----------------

Cash flows from investing activities:
   Capital expenditures                                                     (4,200)              (4,814)
   Proceeds from sale of castings joint venture                                  -                7,000
                                                                     -----------------    ----------------
       Net cash (used) provided by investing activities                     (4,200)               2,186
                                                                     -----------------    ----------------

Cash flows from financing activities:
   Indebtedness:
     Borrowings                                                            272,015              194,715
     Repayments                                                           (308,557)            (240,805)
   Issuance of common stock                                                    513                    -
   Other, net                                                                  (79)                (114)
                                                                     -----------------    ----------------
       Net cash used by financing activities                               (36,108)             (46,204)
                                                                     -----------------    ----------------

       Net cash provided (used) by operating,
         investing and financing activities                          $      14,882        $     (14,729)
                                                                     =================    ================
</TABLE>

          See accompanying notes to consolidated financial statements.
                                      -6-
<PAGE>
<TABLE>
<CAPTION>

                           TITANIUM METALS CORPORATION

          CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (CONTINUED)

                                 (In thousands)



                                                                                      Six months ended June 30,
                                                                                 -------------------------------------
                                                                                       2001                2000
                                                                                 -----------------    ----------------

<S>                                                                              <C>                  <C>
Cash and cash equivalents:
   Net increase (decrease) from:
     Operating, investing and financing activities                               $      14,882        $     (14,729)
     Currency translation                                                                  124                  288
                                                                                 -----------------    ----------------
                                                                                        15,006              (14,441)
   Balance at beginning of period                                                        9,796               20,671
                                                                                 -----------------    ----------------

   Balance at end of period                                                      $      24,802        $       6,230
                                                                                 =================    ================



Supplemental disclosures - cash paid for:
   Interest, net of amounts capitalized                                          $       2,127        $       3,915
   Convertible Preferred Securities dividends                                    $      17,227        $       3,333
   Income taxes, net                                                             $       1,926        $           -

</TABLE>




          See accompanying notes to consolidated financial statements.
                                      -7-
<PAGE>
<TABLE>
<CAPTION>
                           TITANIUM METALS CORPORATION

      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited)

                         Six months ended June 30, 2001

                                 (In thousands)




                                                                                Accumulated Other
                                                                                Comprehensive Loss
                                                 Additional                   -----------------------                     Total
                                 Common  Common  Paid-In  Retained    Currency     Pension   Treasury    Deferred      Stockholders'
                                 Shares  Stock   Capital  Earnings  Translation  Liabilities Stock      Compensation     Equity
                               --------- ------- -------- --------- ----------- ------------ ---------- -------------  -------------

<S>                 <C> <C>      <C>     <C>    <C>       <C>       <C>         <C>           <C>        <C>            <C>
Balance at December 31, 2000     31,817  $ 319  $ 350,078 $ 25,925  $ (10,920)  $  (5,488)    $ (1,208)  $   (1,191)    $   357,515

Components of comprehensive
   income (loss):
     Net income                       -      -          -   25,936          -           -            -            -          25,936
     Change in currency
        translation adjustment        -      -          -        -     (7,713)          -            -            -          (7,713)

Issuance of common stock             80      1        577        -          -           -            -            -             578

Stock awards (cancellations)
   under the long-term
   incentive plan                   (20)     -       (105)       -          -           -            -          105               -

Amortization of deferred
   compensation                       -      -          -        -          -           -            -          279             279
                               --------- ------- --------- --------- ----------  ------------ ---------- -------------  ------------

Balance at June 30, 2001         31,877  $ 320  $ 350,550 $ 51,861  $ (18,633)  $  (5,488)    $ (1,208)   $    (807)    $   376,595
                               ========= ======= ========= ========= ==========  ============ ========== =============  ============


</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.  At  June  30,  2001,  Tremont
Corporation  ("Tremont") held  approximately 39% of TIMET's  outstanding  common
stock. At June 30, 2001, the Combined Master Retirement Trust ("CMRT"),  a trust
formed by Valhi, Inc.,  ("Valhi") to permit the collective  investment by trusts
that maintain the assets of certain  employee benefit plans adopted by Valhi and
related  companies,  held  approximately 2% of TIMET's common stock. At June 30,
2001,  subsidiaries of Valhi held an aggregate of approximately 80% of Tremont's
outstanding common stock, and Contran Corporation  ("Contran") held, directly or
through  subsidiaries,  approximately 93% of Valhi's  outstanding  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.  In addition,  Mr. Simmons is the
sole trustee of the CMRT and a member of the trust investment  committee for the
CMRT. Mr. Simmons may be deemed to control each of Contran,  Valhi,  Tremont and
TIMET.

     The consolidated balance sheet of TIMET and subsidiaries (collectively, the
"Company") at December 31, 2000 has been  condensed  from the Company's  audited
consolidated  financial  statements at that date. The consolidated balance sheet
at June 30, 2001 and the  consolidated  statements of operations,  comprehensive
income (loss), stockholders' equity and cash flows for the interim periods ended
June 30, 2001 and 2000 have been prepared by the Company  without audit.  In the
opinion  of  management,   all  adjustments  necessary  to  present  fairly  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 prior year amounts have been reclassified to conform to the current year
presentation.

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting  principles
have  been  condensed  or  omitted.  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, 2000 (the "2000 Annual Report").

     The Company adopted Statement of Financial  Accounting  Standards  ("SFAS")
No. 133,  "Accounting  for Derivative  Instruments  and Hedging  Activities," as
amended,  effective  January  1,  2001.  SFAS  No.  133  establishes  accounting
standards for derivative  instruments,  including certain derivative instruments
embedded in other contracts, and for hedging activities. Under SFAS No. 133, all
derivatives  are recognized as either assets or liabilities and measured at fair
value. The accounting for changes in fair value of derivatives is dependent upon
the intended use of the derivative.  As permitted by the transition requirements
of SFAS No. 133, as amended, the Company has exempted from the scope of SFAS No.
133 all host  contracts  containing  embedded  derivatives  that were  issued or
acquired prior to January 1, 1999. The Company is not a party to any significant
derivative  or hedging  instrument  covered by SFAS No. 133, and the adoption of
SFAS No. 133 had no  material  effect on the  Company's  consolidated  financial
position, liquidity or results of operations.

                                      -9-
<PAGE>


Note 2 - Business segment information:

     The  Company's  worldwide  operations  are  conducted  through one business
segment - the production and sale of titanium melted and mill products.

<TABLE>
<CAPTION>

                                                           Three months ended                  Six months ended
                                                                June 30,                           June 30,
                                                     -------------------------------    -------------------------------
                                                         2001             2000              2001             2000
                                                     -------------    --------------    --------------   --------------
                                                             (In thousands)                     (In thousands)

<S>                                                  <C>              <C>               <C>              <C>
Net sales                                            $    120,035     $    108,838      $    244,043     $    213,550
Cost of sales                                             123,514          107,619           240,260          215,630
                                                     -------------    --------------    --------------   --------------

Gross margin                                               (3,479)           1,219             3,783           (2,080)

Selling, general, administrative
   and development                                         21,211           11,216            31,911           22,557
Equity in (earnings) loss of
   joint ventures                                            (248)             672            (1,114)             725
Restructuring charge (income)                                   -             (896)             (220)           2,805
Other expense (income)                                    (73,052)            (305)          (73,588)            (284)
                                                      -------------   --------------    --------------   --------------

Operating income (loss)                                    48,610           (9,468)           46,794          (27,883)

General corporate income:
   Dividends and interest income                            2,039            1,406             3,571            3,054
   Gain on sale of castings joint venture                       -                -                 -            1,205
   Currency transactions and other, net                       288             (347)              456             (650)
Interest expense                                            1,083            1,996             2,594            4,258
                                                     -------------    --------------    --------------   --------------

Income (loss) before income taxes,
   minority interest, and
   extraordinary item                                $     49,854     $    (10,405)     $     48,227     $    (28,532)
                                                      =============    ==============   ==============   ==============

Titanium melted and mill products:
   Mill product net sales                            $     89,980     $     82,799      $    183,778     $    166,229
   Melted product net sales                                14,456           12,308            29,134           20,657
   Other                                                   15,599           13,731            31,131           26,664
                                                     -------------    --------------    --------------   --------------

                                                     $    120,035     $    108,838      $    244,043     $    213,550
                                                     =============    ==============    ==============   ==============
Mill product shipments:
   Volume (metric tons)                                     3,045            2,890             6,230            5,590
   Average price ($ per kilogram)                    $      29.55      $     28.65       $     29.50      $     29.70

Melted product shipments:
   Volume (metric tons)                                     1,040              905             2,070            1,495
   Average price ($ per kilogram)                    $      13.90      $     13.60       $     14.05      $     13.85

</TABLE>

                                      -10-
<PAGE>
<TABLE>
<CAPTION>
Note 3 - Inventories:

                                                                                 June 30,             December 31,
                                                                                   2001                   2000
                                                                            -------------------    -------------------
                                                                                         (In thousands)

<S>                                                                         <C>                    <C>
Raw materials                                                               $        32,618        $        31,127
Work-in-process                                                                      82,780                 74,631
Finished products                                                                    45,087                 53,685
Supplies                                                                             12,700                 14,991
                                                                            -------------------    -------------------
                                                                                    173,185                174,434
Less adjustment of certain
   inventories to LIFO basis                                                         25,750                 26,050
                                                                            -------------------    -------------------

                                                                            $       147,435        $       148,384
                                                                            ===================    ===================
</TABLE>
<TABLE>
<CAPTION>
Note 4 - Intangible and other noncurrent assets:


                                                                                 June 30,             December 31,
                                                                                   2001                   2000
                                                                            -------------------    -------------------
                                                                                         (In thousands)
<S>                                                                         <C>                    <C>
Intangible assets:
   Patents                                                                  $        12,972        $        13,521
   Covenants not to compete                                                           8,500                  8,500
                                                                            -------------------    -------------------
                                                                                     21,472                 22,021
   Less accumulated amortization                                                     13,661                 12,452
                                                                            -------------------    -------------------
                                                                                      7,811                  9,569
   Intangible pension assets                                                          3,689                  3,689
                                                                            -------------------    -------------------

                                                                            $        11,500        $        13,258
                                                                            ===================    ===================

Other noncurrent assets:
   Deferred financing costs                                                 $         8,742        $         9,194
   Notes receivable from officers                                                       163                    544
   Prepaid pension cost                                                               2,545                  1,359
   Other                                                                                764                  1,059
                                                                            -------------------    -------------------

                                                                            $        12,214        $        12,156
                                                                            ===================    ===================
</TABLE>

                                      -11-
<PAGE>
<TABLE>
<CAPTION>

Note 5 - Accrued liabilities:
                                                                                 June 30,             December 31,
                                                                                   2001                   2000
                                                                            -------------------    -------------------
                                                                                         (In thousands)

<S>                                                                         <C>                    <C>
OPEB cost                                                                   $         3,042        $         3,129
Pension cost                                                                          1,080                  1,251
Accrued profit sharing                                                               10,339                      -
Other employee benefits                                                              13,710                 15,120
Accrued dividends on Convertible Preferred Securities                                 1,111                      -
Deferred income                                                                         564                  2,558
Accrued tungsten costs                                                                3,450                      -
Environmental costs                                                                     724                    818
Restructuring costs                                                                     394                  1,012
Taxes, other than income                                                              4,090                  3,593
Other                                                                                 6,655                  8,699
                                                                            -------------------    -------------------

                                                                            $        45,159        $        36,180
                                                                            ===================    ===================
</TABLE>
<TABLE>
<CAPTION>

Note 6 - Notes payable, long-term debt and capital lease obligations:

                                                                                 June 30,             December 31,
                                                                                   2001                   2000
                                                                            -------------------    -------------------
                                                                                         (In thousands)
<S>                                                                         <C>                    <C>
Notes payable:
   U.S. credit agreement                                                    $             7        $        19,893
   European credit agreements                                                         2,109                  4,219
                                                                            -------------------    -------------------

                                                                            $         2,116        $        24,112
                                                                            ===================    ===================

Long-term debt:
   Bank credit agreement - U.K.                                             $         4,958        $        20,263
   Other                                                                                318                    514
                                                                            -------------------    -------------------
                                                                                      5,276                 20,777
   Less current maturities                                                              154                  1,824
                                                                            -------------------    -------------------

                                                                            $         5,122        $        18,953
                                                                            ===================    ===================


Capital lease obligations                                                   $         8,261        $         8,829
   Less current maturities                                                              172                    187
                                                                            -------------------    -------------------

                                                                            $         8,089        $         8,642
                                                                            ===================    ===================
</TABLE>

     Upon entering into new U.S. and U.K.  credit  facilities in February  2000,
the  Company's  previous U.S.  credit  facility was repaid and  terminated.  The
deferred financing costs associated with the previous U.S. facility were written
off and reflected as an extraordinary item in 2000 of $.9 million, net of tax.

                                      -12-
<PAGE>

     The weighted average interest rate on borrowings outstanding under the U.S.
and U.K. credit agreements at June 30, 2001 was 7.5% and 6.2%, respectively.  As
of June 30,  2001,  the  Company  had  approximately  $148.5  million  of unused
borrowing availability under its U.S. and European credit agreements.

Note 7- Restructuring and other special charges:

     Accrued  restructuring  costs of $.4  million at June 30,  2001  consist of
unpaid personnel severance and benefits and other exit costs (primarily carrying
costs on closed leased facilities) relating to the Company's restructuring plans
implemented  during 1999 and 2000.  During the six months  ended June 30,  2001,
payments of $.4 million  were applied  against the accruals  related to the 2000
plan,  while payments  related to the 1999 plan were  insignificant.  During the
first quarter of 2001, the Company also recorded  income of $.2 million  related
to revisions to estimates of previously established restructuring accruals.

     During the second  quarter of 2001,  the Company  recorded $10.8 million in
special charges to cost of sales for the impairment of certain equipment located
in  Millbury,  Massachusetts.  The  Company  recently  completed  studies of the
potential  uses of  this  equipment  in the  foreseeable  future  as well as the
economic  viability of those  alternatives,  resulting in the determination that
the  equipment's  undiscounted  future  cash flows  could no longer  support its
carrying  value.  The loss on impairment  represents the difference  between the
equipment's estimated fair value, as determined through a third-party appraisal,
and its previous carrying amount.

     The Company also recorded special charges to cost of sales aggregating $3.8
million  for the six  months  ended June 30,  2001  ($2.8  million in the second
quarter of 2001) for  potential  losses  related to  products  which may contain
tungsten inclusions. See Note 10 for additional information.

     During the first quarter of 2000, the Company  recorded  special charges to
cost  of  sales  aggregating  $6.7  million,   consisting  of  $3.4  million  in
equipment-related  impairment charges and $3.3 million of environmental charges.
Certain accrued  environmental costs are reflected as noncurrent  liabilities in
the  consolidated  balance  sheet at June 30, 2001 and December 31, 2000 as they
are expected to be paid over a period of up to thirty years.

                                      -13-
<PAGE>

Note 8 - Income taxes:

     The  difference   between  the  Company's  income  tax  expense   (benefit)
attributable  to pretax  income  (loss) and the  amounts  that would be expected
using the U.S. federal statutory income tax rate of 35% is summarized below.
<TABLE>
<CAPTION>
                                                                                    Six months ended June 30,
                                                                            ------------------------------------------
                                                                                   2001                   2000
                                                                            -------------------    -------------------
                                                                                         (In thousands)

<S>                                                                         <C>                    <C>
Expected income tax expense (benefit), at 35%                               $        16,879        $        (9,987)
Non-U.S. tax rates                                                                      277                    561
U.S. state income taxes, net                                                            662                   (313)
Dividends received deduction                                                           (632)                  (688)
Adjustment of deferred tax valuation allowance                                          (39)                   336
Other, net                                                                             (184)                    54
                                                                            -------------------    -------------------

                                                                            $        16,963        $       (10,037)
                                                                            ===================    ===================
</TABLE>

Note 9 - Other, net:
<TABLE>
<CAPTION>
                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                        2001              2000             2001              2000
                                                    --------------    -------------    --------------    -------------
                                                            (In thousands)                     (In thousands)

<S>                                                 <C>               <C>              <C>               <C>
Dividends and interest income                       $      2,039      $     1,406      $      3,571      $     3,054
Boeing settlement, net                                    73,000                -            73,000                -
Gain on sale of castings joint venture                         -                -                 -            1,205
Other income (expense)                                       340              (42)            1,044             (366)
                                                    --------------    -------------    --------------    -------------

                                                    $     75,379      $     1,364      $     77,615      $     3,893
                                                    ==============    =============    ==============    =============
</TABLE>


                                      -14-
<PAGE>

Note 10 - Commitments and contingencies:

     For  additional   information  concerning  certain  legal  proceedings  and
contingencies  related to the  Company,  see (i) Part I, Item 2 -  "Management's
Discussion  and  Analysis of  Financial  Condition,  Results of  Operations  and
Liquidity and Capital  Resources,"  (ii) Part II, Item 1 - "Legal  Proceedings,"
and (iii) the 2000 Annual Report on Form 10K.

     In April 2001, the Company reached a settlement of the previously  reported
litigation  between  TIMET and The Boeing  Company  ("Boeing")  relating  to the
parties' 1997 long-term titanium purchase and supply agreement.  Pursuant to the
settlement,  TIMET  received a cash payment of $82.0 million and recorded  $73.0
million (cash  settlement  less legal fees of $9.0  million) as other  operating
income and  approximately  $10.3  million for profit  sharing and other costs as
selling,  general,  administrative and development expense for the three and six
month  periods  ended June 30,  2001.  The parties  also entered into an amended
long-term  agreement that,  among other things,  allows Boeing to purchase up to
7.5 million pounds of titanium product annually from TIMET through 2007, subject
to certain maximum quarterly volume levels.  Under a separate  agreement,  TIMET
will establish and hold titanium buffer stock for Boeing at TIMET's  facilities.
See Part I, Item 2.A. - "Financial  Condition and Results of Operations - Boeing
Special Items" for additional information regarding the settlement with Boeing.

     In March  2001,  the Company was  notified by one of its  customers  that a
product  manufactured  from  standard  grade  titanium  produced  by the Company
contained  what has been  confirmed  to be a  tungsten  inclusion.  The  Company
believes that the source of this  tungsten was  contaminated  silicon  purchased
from an outside vendor in 1998. The silicon was used as an alloying  addition to
the titanium at the melting stage.  The Company is currently  investigating  the
possible scope of this problem,  including an evaluation of the  applications to
which such material has been placed by customers.

     At the  present  time,  the  Company is aware of only four  standard  grade
ingots that have been  demonstrated  to contain  tungsten  inclusions;  however,
further  investigation  may  identify  other  material  that has been  similarly
affected.  Until  this  investigation  is  completed,  the  Company is unable to
determine  the  possible  remedial  steps that may be required  and the ultimate
liability  the Company may incur with respect to this matter.  During the second
quarter of 2001,  the Company  completed an  assessment of the possible loss the
Company might incur. As a result, the Company increased its loss accrual by $2.8
million in the second  quarter of 2001 to an aggregate  charge  through June 30,
2001 of $3.8 million. This amount represents the Company's current best estimate
of the most likely  amount of loss to be  incurred.  It does not  represent  the
maximum  possible loss,  which it is not possible for the Company to estimate at
this time,  and may be  periodically  revised in the future as more facts become
known.  The Company  currently  believes  that it is unlikely that its insurance
policies will provide  coverage for any costs that may be  associated  with this
matter.  However,  the Company has filed suit  seeking  full  recovery  from the
silicon  supplier  for any  liability  the  Company  might  incur,  although  no
assurances can be given that the Company will  ultimately be able to recover all
or any portion of such  amounts.  The Company has not  recorded  any  recoveries
related  to this  matter as of June 30,  2001.  See also  Part I,  Item  2.A.  -
"Financial  Condition  and  Results of  Operations  - Other  Special  Items" for
additional information.

     The  Company is  involved  in  various  other  environmental,  contractual,
product  liability and other claims,  disputes and litigation  incidental to its
business.

     The Company currently  believes the disposition of all claims and disputes,
individually or in the aggregate,  should not have a material  adverse effect on
the Company's financial condition, results of operations or liquidity.

                                      -15-
<PAGE>

Note 11 - Earnings per share:

     A  reconciliation  of the numerator and denominator used in the calculation
of basic  and  diluted  earnings  per  share  is  presented  below.  Convertible
Preferred  Securities and restricted shares omitted from the calculation because
they were  antidilutive  approximated 5.4 million for the six month period ended
June 30, 2001 and 5.9 million for the three and six month periods ended June 30,
2000, respectively.
<TABLE>
<CAPTION>
                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                        2001              2000             2001              2000
                                                    --------------    -------------    --------------    -------------
                                                            (In thousands)                     (In thousands)
<S>                                                 <C>               <C>              <C>               <C>
Numerator:
   Net income (loss)                                $     29,552      $     (9,518)    $     25,936      $    (24,641)
   Minority interest - Convertible
     Preferred Securities                                  2,493                 -                -                 -
                                                    --------------    -------------    --------------    -------------

   Diluted net income (loss)                        $     32,045      $     (9,518)    $     25,936      $    (24,641)
                                                    ==============    =============    ==============    =============

Denominator:
   Average common shares outstanding                      31,504            31,373           31,460            31,372
   Average dilutive stock options and
     restricted shares                                       299                 -              295                 -
   Convertible Preferred Securities                        5,390                 -                -                 -
                                                    --------------    -------------    --------------    -------------

   Diluted shares                                         37,193            31,373           31,755            31,372
                                                    ==============    =============    ==============    =============

</TABLE>

Note 12 - Accounting principle not yet adopted:

     The Company will adopt SFAS No. 142, Goodwill and Other Intangible  Assets,
effective  January 1, 2002. Under SFAS 142,  goodwill will not be amortized on a
periodic  basis,  but  instead  will  be  subject  to an  impairment  test to be
performed at least on an annual  basis.  The Company is currently  studying this
new  standard;  however,  the  effect  of  adopting  SFAS  142 has not yet  been
determined.  The Company  anticipates  adoption of this standard will reduce its
amortization expense commencing on January 1, 2002; however,  impairment reviews
may also result in future periodic write-downs.



                                      -16-
<PAGE>

Item 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION,
              RESULTS OF OPERATIONS AND LIQUIDITY AND CAPITAL RESOURCES

A.   Financial Condition and Results of Operations

     Boeing  Special Items.  In April 2001, the Company  reached a settlement of
the  litigation  between TIMET and Boeing related to the parties' 1997 long term
purchase and supply agreement ("LTA").  Pursuant to the settlement,  the Company
received a cash  payment of $82  million.  In the  second  quarter of 2001,  the
Company reported  approximately $73 million (cash settlement less legal fees) as
other  operating  income,  with  partially   offsetting  operating  expenses  of
approximately  $10.3  million for profit  sharing and other costs  reported as a
component  of  selling,   general,   administrative   and  development   expense
(collectively  the "Boeing  Special  Items"),  resulting in a net pre-tax income
effect of $62.7 million in the second quarter of 2001.

     In connection  with the  settlement,  TIMET and Boeing also entered into an
amended  LTA that,  among  other  things,  allows  Boeing to  purchase up to 7.5
million pounds of titanium product annually from TIMET through 2007,  subject to
certain  maximum  quarterly  volume levels.  Under the amended LTA,  Boeing will
advance TIMET $28.5 million  annually for 2002 through 2007.  The annual advance
will occur in December 2001 for 2002, with subsequent  advances  occurring early
each  calendar  year  beginning in 2003.  The LTA is structured as a take-or-pay
agreement  such  that  Boeing  will  forfeit a  proportionate  part of the $28.5
million  annual  advance  in the event that its  orders  for  delivery  for such
calendar year are less than 7.5 million pounds. Under a separate agreement TIMET
will establish and hold buffer stock for Boeing at TIMET's facilities, for which
Boeing will pay TIMET as such stock is produced.

     Other  Special  Items.  During the  second  quarter  of 2001,  the  Company
determined  that an  impairment  of the  carrying  amount of certain  long-lived
assets  located at its  Millbury,  Massachusetts  facility  had  occurred.  This
determination  was made  after the  Company  recently  completed  studies of the
potential uses of such assets in the foreseeable  future as well as the economic
viability  of those  alternatives.  Accordingly,  the  Company  recorded a $10.8
million pretax impairment charge to cost of sales in the second quarter of 2001,
representing  the difference  between the assets'  previous  carrying amount and
their estimated fair value.

     In March  2001,  the Company was  notified by one of its  customers  that a
product  manufactured  from standard  grade  titanium that the Company  produced
contained  what has been  confirmed  to be a  tungsten  inclusion.  The  Company
believes that the source of this  tungsten was  contaminated  silicon  purchased
from an outside vendor in 1998. The silicon was used as an alloying  addition to
the titanium at the melting stage.  The Company is currently  investigating  the
possible  scope of this problem,  including an  evaluation of the  identities of
customers  who  received  material  manufactured  using  this  silicon  and  the
applications  to which such material has been placed by such  customers.  At the
present time,  the Company is aware of only four standard grade ingots that have
been demonstrated to contain tungsten inclusions; however, further investigation
may  identify  other  material  that has been  similarly  affected.  Until  this
investigation  is  completed,  the Company is unable to  determine  the possible
remedial  steps that may be required and the ultimate  liability the Company may
incur with  respect to this  matter.  During  the  second  quarter of 2001,  the
Company completed an assessment of the possible loss the Company might incur. As
a result,  the Company  increased its loss accrual by $2.8 million in the second
quarter of 2001 to an aggregate  charge  through June 30, 2001 of $3.8  million.
This amount  represents  the Company's  current best estimate of the most likely
amount of loss to be incurred.  It does not represent the maximum possible loss,
which it is not  possible  for the Company to estimate at this time,  and may be
periodically revised in the future as more facts become known.

                                      -17-
<PAGE>
<TABLE>
<CAPTION>

     Sales, margins and operating income.

                                                         Three months ended                 Six months ended
                                                              June 30,                          June 30,
                                                   --------------------------------  -------------------------------
                                                       2001              2000              2001             2000
                                                   --------------    --------------  --------------  --------------
                                                           ($ in millions)                   ($ in millions)

<S>                                                <C>               <C>               <C>              <C>
Net sales                                          $     120.0       $     108.8       $     244.0      $     213.6
Gross margin                                              (3.5)              1.2               3.8             (2.1)
Gross margin, excluding special items                     10.1               7.9              18.4              4.6
Operating income (loss)                                   48.6              (9.5)             46.8            (27.9)
Operating loss, excluding special items                   (0.5)             (2.8)             (1.3)           (21.2)

Percent change in:
     Mill product sales volume                              +5                                 +11
     Mill product selling prices (1)                        -3                                  -4
     Melted product sales volume                           +15                                 +38
     Melted product selling prices (1)                      +4                                  +1

(1)      Change expressed in U.S. dollars and mix adjusted.
</TABLE>


     Sales of $120.0  million in the second quarter of 2001 were 10% higher than
the year-ago  period due principally to the net effects of a 5% increase in mill
product volume, a 3% decrease in mill product selling prices  (expressed in U.S.
dollars using actual  foreign  currency  exchange  rates  prevailing  during the
respective  periods)  and changes in product mix. In billing  currencies  (which
exclude the  effects of foreign  currency  translation),  mill  product  selling
prices  decreased 1%. Melted product (ingot and slab) sales volume increased 15%
while selling prices increased 4% from year ago levels.

     Gross margin (net sales less cost of sales) was negative  2.9% of sales for
the second quarter of 2001 compared to 1.1% in the year-ago  period,  reflecting
the net effect of changes in selling  prices and product mix,  higher  operating
rates and the effect of special  items.  Gross margin for the second  quarter of
2001 was adversely impacted by $10.8 million of equipment impairment charges and
$2.8 million of estimated costs related to the tungsten inclusion matter.  Gross
margin for the second  quarter of 2000 was adversely  impacted by a $3.4 million
equipment   impairment   charge  and  a  $3.3  million  charge  for  anticipated
environmental  remediation  costs. Gross margin excluding special items was 8.4%
of sales for the second quarter of 2001 compared to 7.3% in the year-ago period,
principally  reflecting  the net effect of changes in selling prices and product
mix as well as higher operating rates.

     Selling, general, administrative and development expenses during the second
quarter of 2001 (excluding  $10.3 million of Boeing Special Items)  decreased by
approximately 3% from year-ago levels, principally as a result of reduced travel
and other personnel costs.

     Equity in earnings of joint ventures  during the second quarter of 2001 was
$.9 million higher than the year-ago  period  principally  due to an increase in
earnings of Valtimet, the Company's minority-owned welded tube joint venture.

                                      -18-
<PAGE>

       Sales of $244.0  million for the six months  ended June 30, 2001 were 14%
higher than the  year-ago  period due  principally  to the net effects of an 11%
increase in mill product  volume,  a 4% decrease in mill product selling  prices
(expressed  in  U.S.  dollars  using  actual  foreign  currency  exchange  rates
prevailing during the respective periods) and changes in product mix. In billing
currencies  (which exclude the effects of foreign  currency  translation),  mill
product  prices  decreased  1%. Melted  product sales volume  increased 38% from
year-ago levels while selling prices increased 1%.

     Gross  margin  was 1.6% of sales for the six  months  ended  June 30,  2001
compared to a negative 1.0% in the year-ago period,  principally  reflecting the
net effect of changes in selling prices and product mix, higher  operating rates
and the effect of special items.  Gross margin for the six months ended June 30,
2001 was adversely impacted by $10.8 million of equipment impairment charges and
$3.8 million of estimated costs related to the tungsten inclusion matter.  Gross
margin for the six months ended June 30, 2000 was  adversely  impacted by a $3.4
million  equipment  impairment  charge and a $3.3 million charge for anticipated
environmental  remediation  costs. Gross margin excluding special items was 7.5%
of sales for the six months ended June 30, 2001 compared to 2.2% in the year ago
period,  principally  reflecting the net effect of changes in selling prices and
product mix as well as higher operating rates.

     Selling,  general,  administrative  and  development  expenses  for the six
months ended June 30, 2001  (excluding  $10.3 million of Boeing  Special  Items)
decreased by approximately  4% from year-ago levels,  principally as a result of
reduced travel and other personnel costs.

     Equity in earnings of joint  ventures  during the six months ended June 30,
2001 was $1.8  million  higher  than the year ago period  principally  due to an
increase in earnings of Valtimet.

     General corporate income. General corporate income for all periods includes
interest  income  and  dividend  income on $80  million of  nonvoting  preferred
securities  of Special  Metals  Corporation,  which accrues at an annual rate of
6.625%.  General  corporate income in the second quarter of 2000 also includes a
$1.2 million gain on the previously  reported sale of the Company's  interest in
its castings joint venture.

     Interest  expense.  Interest  expense during the three and six months ended
June 30, 2001 was lower than in the comparable periods in 2000, primarily due to
the paydown of the Company's  revolving  U.S. debt during the second  quarter of
2001.

     Income  taxes.  The  Company's   consolidated  effective  income  tax  rate
approximated  the U.S.  statutory rate in all periods.  The Company  operates in
several  tax  jurisdictions  and is subject to  various  income tax rates.  As a
result,  the  geographical  mix of pretax income (loss) can impact the Company's
effective tax rate. See Note 8 to the Consolidated Financial Statements.

     Minority  interest.  Dividend  expense  related  to  the  Company's  6.625%
Convertible  Preferred  Securities  approximates $3.3 million per quarter and is
reported as minority  interest,  net of allocable  income  taxes.  In the second
quarter of 2001,  the  Company  recorded  an  additional  $.5  million of pretax
dividend expense related to dividends in arrears.

                                      -19-
<PAGE>

     Supplemental   information.   Approximately  44%  of  the  Company's  sales
originated  in  Europe  for the  six  months  ended  June  30,  2001,  of  which
approximately  58% were  denominated in currencies  other than the U.S.  dollar,
principally the British pound and European  currencies tied to 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;  thus, the U.S. dollar value of these subsidiaries' sales
and costs  denominated  in  currencies  other  than their  functional  currency,
including sales and costs denominated in U.S.  dollars,  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 as such
are not subject to currency exchange rate fluctuations.

     The  Company  does  not  use  currency  contracts  to  hedge  its  currency
exposures.  At June 30, 2001, consolidated assets and liabilities denominated in
currencies other than functional  currencies were  approximately $20 million and
$12 million,  respectively,  consisting  primarily of U.S. dollar cash, accounts
receivable, accounts payable and borrowings.

     Outlook.   The  Outlook  section  contains  a  number  of   forward-looking
statements,  all of which are based on current expectations.  Actual results may
differ  materially.  See  Note 10 to the  Consolidated  Financial  Statements  -
"Commitments  and  contingencies"  and  Note  12 to the  Consolidated  Financial
Statements -  "Accounting  principle not yet  adopted",  regarding  commitments,
contingencies,  legal,  environmental,  and other matters,  which information is
incorporated  herein by reference and may affect the Company's future results of
operations and liquidity.

     Sales  revenues  in 2001 are  expected  to range from $510  million to $520
million,  reflecting the net effects of increased sales volume,  price increases
in certain  products  and changes in mix.  The Company  currently  expects  mill
product  sales volume to increase 10% to 15% and melted  product sales volume to
increase 20% to 30% in 2001 over prior year levels. Selling prices (expressed in
billing   currencies  during  the  respective   periods)  on  aerospace  product
shipments,  while  difficult  to  forecast,  are  expected to rise during  2001.
Recently  announced  selling price increases are expected to principally  affect
the second half of 2001 and 2002 due to associated  product lead times.  Average
selling prices per kilogram, as reported by the Company, reflect the net effects
of changes in selling prices,  currency exchange rates, and customer and product
mix. Accordingly,  average selling prices are not necessarily  indicative of any
one factor.

     The Company's firm order backlog at the end of June 2001 was  approximately
$300 million.  Comparable  backlogs  approximated $290 million at March 31, 2001
and $245 million at December 31, 2000.

                                      -20-
<PAGE>

     Gross margins as a percent of sales are presently expected to increase over
the  year;  however,  energy,  raw  material  and  other  cost  increases  could
substantially  offset  expected  realized  selling price  increases in 2001. The
Company has experienced increases in energy cost as a result of volatile natural
gas and electricity  prices in the U.S.  Although energy prices in the U.S. have
recently declined, the Company expects them to remain volatile in the near term.
The Company is also  experiencing  increases in the cost for purchased  titanium
scrap and expects costs for purchased titanium sponge to increase in the future.
The Company currently believes its gross margin excluding special items for 2001
will approximate 8% of sales. Selling, general, administrative,  and development
expenses  should  approximate  $44  million,   excluding  Boeing  Special  Items
discussed  previously.  Interest expense is expected to approximate $4.5 million
while interest income should be slightly less than $1 million. Minority interest
expense  on the  Company's  Convertible  Preferred  Securities  is  expected  to
approximate  2000 levels for the  remainder  of the year.  Excluding  the Boeing
Special Items, the Company expects to be near break-even on operating income and
report a net loss in 2001, but at a substantially lower level than 2000.

     For the third  quarter of 2001,  sales  revenue is expected to  approximate
$130  million.  Mill  product  sales volume is likely to increase 5% compared to
second  quarter levels while melted product sales volume may increase up to 15%.
Most of the melted product that the Company  produces is consumed  internally in
the manufacture of mill products.  Accordingly,  melted product sales volume can
vary significantly from period to period and is influenced by customer order mix
and  capacity  availability.  Gross  margin in the third  quarter is expected to
approximate 8.5% of sales.  Selling,  general,  administrative,  and development
expenses  in the third  quarter of 2001  should  increase  slightly  over second
quarter levels,  excluding  Boeing Special Items.  Interest expense in the third
quarter of 2001 is expected to approximate $1 million. Minority interest expense
on the Company's  Convertible  Preferred  Securities is expected to  approximate
third quarter 2000 levels.

     The Company's  cost of sales is affected by a number of factors  including,
among others,  customer and product mix, material yields, plant operating rates,
raw  material  costs,  labor  costs  and  energy  costs.  Restructuring,   asset
impairments and other special charges have occurred in the past and may occur in
the future causing operating results to vary from expectations.

     With regard to the tungsten  inclusion  matter,  until the investigation is
completed,  the Company is unable to determine the possible  remedial steps that
may be required  and whether it might incur any  additional  material  liability
with respect to this matter.  The Company currently believes that it is unlikely
that its  insurance  policies  will  provide  coverage for any costs that may be
associated  with this matter.  However,  the Company has filed suit seeking full
recovery  from the silicon  supplier  for any  liability  it might incur in this
matter,  although no assurances can be given that the Company will ultimately be
able to recover all or any portion of such amounts.

                                      -21-
<PAGE>

     The Company's  effective  consolidated tax rate in 2001 should  approximate
the  U.S.  statutory  rate.  However,   the  Company  operates  in  several  tax
jurisdictions  and is  subject to varying  income  tax rates.  As a result,  the
geographic  mix of pretax  income  (loss) can impact its overall  effective  tax
rate.  For financial  reporting  purposes,  the Company has  recognized  the tax
benefit of its net operating loss carryforwards  ("NOLs"),  and expects that tax
provisions  and  benefits  to be  recognized  during  2001 will  principally  be
deferred  income tax items with cash  income tax  payments  expected  in certain
foreign  jurisdictions.  For U.S.  federal income tax purposes,  the Company had
NOLs of approximately $89 million as of December 31, 2000 of which approximately
$49 million were utilized through June 30, 2001.  Accordingly,  the Company does
not expect the  Boeing  settlement  to result in any  material  cash  income tax
payments.  As of June 30, 2001, the Company's  NOLs for U.S.  federal income tax
purposes  approximated  $40  million.  At that date,  the  Company  also had the
equivalent  of an $8.4 million NOL in the United  Kingdom and a $1.8 million NOL
in Germany,  both of which have  indefinite  carryforward  periods.  The Company
periodically  reviews the recoverability of its deferred tax assets to determine
whether  future  realization  is more  likely than not.  Based on such  periodic
reviews,  the Company could record an additional  valuation allowance related to
its deferred tax assets in the future.

     The Company expects to generate  positive cash flow from operations in 2001
in the  range  of $80  million  to $90  million  principally  due to the  Boeing
settlement  and the related $28.5 million  advance that TIMET expects to receive
in December 2001.  Depreciation and amortization  expense should approximate $41
million in 2001.  Receivables  and inventory  levels are expected to increase in
2001 to support the  anticipated  increase in sales.  Dividends on the Company's
common stock are prohibited  under its U.S. credit  agreement.  Capital spending
for 2001 is  currently  expected  to  range  from $15  million  to $20  million,
covering principally capacity enhancements,  capital maintenance, and safety and
environmental  projects.  At June 30, 2001, the Company had approximately $148.5
million of borrowing availability under its various worldwide credit agreements.
The  Company  believes  its  cash,  cash  flow  from  operations  and  borrowing
availability will satisfy its expected working capital, capital expenditures and
other requirements in 2001.

B.  Liquidity and Capital Resources

     The Company's consolidated cash flows provided by operating,  investing and
financing activities are presented below:
<TABLE>
<CAPTION>

                                                                                        Six months ended
                                                                                            June 30,
                                                                            ------------------------------------------
                                                                                   2001                   2000
                                                                            -------------------    -------------------
                                                                                          (In millions)
<S>                                                                         <C>                    <C>
Cash provided (used) by:
    Operating activities:
       Excluding changes in assets
         and liabilities                                                    $      76.2            $      (4.3)
       Changes in assets and liabilities                                          (21.0)                  33.6
                                                                            -------------------    -------------------
                                                                                   55.2                   29.3
    Investing activities                                                           (4.2)                   2.2
    Financing activities                                                          (36.1)                 (46.2)
                                                                            -------------------    -------------------

    Net cash provided (used) by operating,
       investing and financing activities                                   $      14.9            $     (14.7)
                                                                            ===================    ===================

</TABLE>

                                      -22-
<PAGE>

     Operating activities. Cash used by operating activities,  excluding changes
in assets and liabilities,  generally  followed the trend in operating  results.
Changes in assets and  liabilities  reflect  primarily  the timing of purchases,
production and sales and can vary significantly from period to period.  Accounts
receivable  decreased  in the  second  quarter  of 2001 as a result of  improved
collection  efforts.  Inventories  increased  in  the  second  quarter  of  2001
principally  as a  result  of  higher  plant  operating  rates  needed  to  meet
anticipated  increases  in  shipments  during the second  half of 2001.  Accrued
profit sharing cost  increased as a result of the Boeing  settlement and accrued
tungsten costs increased related to the tungsten  inclusion matter in the second
quarter of 2001.  Changes in  accounts  payable  and  accrued  liabilities  also
reflect,  among other  things,  the timing of payments to  suppliers of titanium
sponge, titanium scrap and other raw materials purchases.

     Dividends  for  the  period  October  1998  through  December  1999  on the
Company's  $80  million  of  Special  Metals  Corporation   ("SMC")  convertible
preferred  securities  have been  deferred by SMC.  In April  2000,  SMC resumed
current dividend payments of $1.3 million each quarter. Dividends in arrears due
the  Company  approximate  $8.7  million  as of June 30,  2001.  There can be no
assurance that the Company will continue to receive additional  dividends in the
future.

     The Company's  Convertible  Preferred  Securities do not require  principal
amortization,  and the Company has the right to defer dividend  payments for one
or more periods of up to 20 consecutive quarters for each period. In April 2000,
the  Company  exercised  its right to defer  future  dividend  payments on these
securities for a period of 10 quarters, although interest continued to accrue at
the coupon rate on the principal and unpaid dividends. During the second quarter
of 2001, the Company resumed  payment of dividends on these  securities and made
the scheduled payment of $3.3 million due on June 1, 2001. The Company also paid
the previously deferred aggregate dividends of $13.9 million on that date.

     Restructuring and special items are described in Note 7 to the Consolidated
Financial Statements.

     Investing activities.  The Company's capital expenditures were $4.2 million
for the six months  ended June 30, 2001  compared  to $4.8  million for the same
period in 2000, principally for capacity enhancements,  capital maintenance, and
safety and  environmental  projects.  In the first quarter of 2000,  the Company
sold its interest in the castings joint venture to  Wyman-Gordon  for $7 million
and recorded a pretax gain of $1.2 million.

     Financing  activities.  At June  30,  2001,  the  Company's  net  cash  was
approximately  $17.4  million,  consisting  of  $24.8  million  of cash and $7.4
million of debt. The Company also had approximately  $148.5 million of borrowing
availability under its various worldwide credit agreements. Net cash in the 2001
period  was  primarily  attributed  to receipt  of the  Boeing  settlement.  Net
repayments  in the 2000 period  reflect  reductions  of  outstanding  borrowings
principally in the U.S.

     Boeing Special Items. In April 2001, the Company received a cash payment of
$82.0 million in connection  with the settlement of its litigation  with Boeing.
The proceeds  were used  partially to (i) repay $33.3  million of the  Company's
outstanding  revolving bank debt, (ii) pay the current and deferred dividends of
$17.2 million on the Company's Convertible  Preferred Securities,  and (iii) pay
legal and other costs of $9.0 million associated with the Boeing settlement.

     See  Note  10 to  the  Consolidated  Financial  Statements  for  additional
discussion of environmental and legal matters.

                                      -23-
<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 in the past has sought and in the future may seek, to raise
additional   capital,   modify  its  common  and  preferred  dividend  policies,
restructure ownership interests,  incur, refinance or restructure  indebtedness,
repurchase  shares of capital 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.


                                      -24-
<PAGE>

Item 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     General.  The  Company is exposed  to market  risk from  changes in foreign
currency exchange rates and interest rates. The Company typically does not enter
into  interest  rate swaps or other  types of  contracts  in order to manage its
interest  rate market risk and typically  does not enter into  currency  forward
contracts  to  manage  its  foreign   exchange   market  risk   associated  with
receivables,  payables and indebtedness denominated in a currency other than the
functional currency of the particular entity.

     Interest Rates. Information regarding the Company's market risk relating to
interest  rate  volatility  was  disclosed  in its Form 10-K for the year  ended
December 31, 2000 and should be read in conjunction with this interim  financial
information.  Since December 31, 2000,  there has been no significant  change in
the nature of the Company's exposure to market risks.

     Foreign  Currency  Exchange  Rates.  The  Company is exposed to market risk
arising  from  changes in  foreign  currency  exchange  rates as a result of its
international operations.  See Item 2 - "Management's Discussion and Analysis of
Financial Condition, Results of Operations and Liquidity and Capital Resources,"
which information is incorporated herein by reference.

                                      -25-
<PAGE>

PART II - OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS

     Reference is made to Note 10 of the Consolidated Financial Statements which
information is incorporated herein by reference and to the Company's 2000 Annual
Report  on Form  10K for  descriptions  of  certain  previously  reported  legal
proceedings.

Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Company held its Annual  Meeting of  Stockholders  on May 22, 2001, for
the purpose of electing five directors to serve until the 2002 Annual Meeting of
Shareholders  and until their  successors  are duly elected and  qualified.  All
nominees for director were elected with the following vote:
<TABLE>
<CAPTION>

                 Director                 Votes for          Votes Withheld
------------------------------------    ---------------    ---------------------

<S>                                       <C>                    <C>
Edward C. Hutcheson, Jr.                  29,390,771             706,519
J. Landis Martin                          29,329,480             767,810
Glenn R. Simmons                          29,329,709             767,581
Gen. Thomas P. Stafford (retired)         29,393,556             703,734
Steven L. Watson                          29,331,811             765,479
</TABLE>

Item 6.    EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>

(a)      Exhibits:

<S>           <C>
              10.1         Intercorporate  Services Agreement,  effective as of
                           January 1, 2001, by and between the Registrant and
                           Tremont Corporation.

              10.2         Intercorporate  Services Agreement,  effective as of
                           January 1, 2001, by and between the Registrant and NL
                           Industries, Inc.

              10.3         Amended and  Restated  1996  Non-Employee  Director
                           Compensation  Plan, as amended and restated effective
                           June 8, 2001.
</TABLE>

(b)      Reports on Form 8-K:

              Reports on Form 8-K filed by the  Registrant  for the  quarter
              ended June 30,  2001 and the month of July 2001:
<TABLE>
<CAPTION>
                             Date of Report                  Items Reported
                      ------------------------------   -------------------------

<S>                                                            <C>
                             April 26, 2001                    5 and 7
                             May 9, 2001                       5 and 7
                             June 4, 2001                      5 and 7
                             June 13, 2001                     5 and 7
                             July 26, 2001                     5 and 7
                             July 26, 2001                     5 and 7
</TABLE>


                                      -26-
<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
                                 -----------------------------------------------
                                                          (Registrant)




Date: August 1, 2001      By     /s/ Mark A. Wallace
-----------------------          -----------------------------------------------
                                 Mark A. Wallace
                                 (Executive Vice President and
                                 Chief Financial Officer)



Date: August 1, 2001      By     /s/ JoAnne A. Nadalin
-----------------------          -----------------------------------------------
                                 JoAnne A. Nadalin
                                 Vice President and Corporate Controller
                                 (Principal Accounting Officer)






                                      -27-