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, 2003

                                       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
                                 ---         ---


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

                             Yes          No  X
                                 ---         ---


Number of shares of common stock outstanding on August 7, 2003: 3,183,182

<PAGE>












Forward-Looking Information

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



<PAGE>




                           TITANIUM METALS CORPORATION

                                      INDEX


                                                                           Page
                                                                          Number

PART I.   FINANCIAL INFORMATION

      Item 1. Consolidated Financial Statements

              Consolidated Balance Sheets - June 30, 2003 (unaudited) and
                December 31, 2002                                            2

              Consolidated Statements of Operations - Three and
                six months ended June 30, 2003 and 2002 (unaudited)          4

              Consolidated Statements of Comprehensive Loss - Three
                and six months ended June 30, 2003 and 2002 (unaudited)      6

              Consolidated Statements of Cash Flows - Six months ended
                June 30, 2003 and 2002 (unaudited)                           7

              Consolidated Statement of Changes in Stockholders' Equity -
                Six months ended June 30, 2003 (unaudited)                   9

              Notes to Consolidated Financial Statements (unaudited)        10

      Item 2. Management's Discussion and Analysis of Financial
                Condition and Results of Operations                         21

      Item 3. Quantitative and Qualitative Disclosures about Market Risk    31

      Item 4. Controls and Procedures                                       31

PART II.  OTHER INFORMATION

      Item 1. Legal Proceedings                                             32

      Item 4. Submission of Matters to a Vote of Security Holders           32

      Item 6. Exhibits and Reports on Form 8-K                              32




                                      - 1 -
<PAGE>



                           TITANIUM METALS CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

<TABLE>
                                                                                  June 30,             December 31,
ASSETS                                                                              2003                   2002
                                                                              ------------------     ------------------
                                                                                  (unaudited)
<S>                                                                           <C>                    <C>
Current assets:
   Cash and cash equivalents                                                  $         26,434       $         6,214
   Accounts and other receivables, less allowance
     of $2,792 and $2,859, respectively                                                 81,604                66,393
   Receivable from related parties                                                       1,913                 2,398
   Refundable income taxes                                                               2,335                 1,703
   Inventories                                                                         160,316               181,932
   Prepaid expenses and other                                                            2,619                 3,077
   Deferred income taxes                                                                 1,147                   809
                                                                              ------------------     ------------------

       Total current assets                                                            276,368               262,526

Investment in joint ventures                                                            21,801                22,287
Property and equipment, net                                                            242,184               254,672
Intangible assets, net                                                                   7,551                 8,442
Other                                                                                   16,487                15,851
                                                                              ------------------     ------------------

         Total assets                                                         $        564,391       $       563,778
                                                                              ==================     ==================
</TABLE>

           See accompanying Notes to Consolidated Financial Statements
                                      - 2 -


<PAGE>


                           TITANIUM METALS CORPORATION

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                      (In thousands, except per share data)
<TABLE>

                                                                                 June 30,             December 31,
LIABILITIES, MINORITY INTEREST AND                                                 2003                   2002
STOCKHOLDERS' EQUITY                                                         ------------------     ------------------
                                                                                (unaudited)

<S>                                                                          <C>                    <C>
Current liabilities:
   Notes payable                                                             $          5,384       $         12,994
   Current maturities of long-term debt and capital
     lease obligations                                                                    587                    642
   Accounts payable                                                                    27,140                 26,460
   Accrued liabilities                                                                 45,322                 46,511
   Customer advances                                                                   28,184                  5,416
   Payable to related parties                                                             330                    602
                                                                             ------------------     ------------------

       Total current liabilities                                                      106,947                 92,625

Long-term debt                                                                              -                  6,401
Capital lease obligations                                                               9,289                  9,575
Payable to related parties                                                                644                    644
Accrued OPEB cost                                                                      12,989                 13,417
Accrued pension cost                                                                   62,101                 61,080
Accrued environmental cost                                                              3,531                  3,531
Deferred income taxes                                                                   1,086                  1,036
Accrued dividends on BUCS                                                              11,333                  4,462
Other                                                                                   1,244                      -
                                                                             ------------------     ------------------

       Total liabilities                                                              209,164                192,771
                                                                             ------------------     ------------------

Minority interest - Company-obligated mandatorily
   redeemable convertible preferred securities of subsidiary
   trust holding solely subordinated debt securities ("BUCS")                         201,241                201,241
Other minority interest                                                                 9,863                 10,416

Stockholders' equity:
   Preferred stock $.01 par value; 100 shares authorized,
     none issued                                                                            -                      -
   Common stock, $.01 par value; 9,900 shares authorized,
     3,192 and 3,194 shares issued                                                         32                     32
   Additional paid-in capital                                                         350,733                350,889
   Accumulated deficit                                                               (147,313)              (127,371)
   Accumulated other comprehensive loss                                               (57,997)               (62,737)
   Treasury stock, at cost (9 shares)                                                  (1,208)                (1,208)
   Deferred compensation                                                                 (124)                  (255)
                                                                             ------------------     ------------------
       Total stockholders' equity                                                     144,123                159,350
                                                                             ------------------     ------------------

       Total liabilities and stockholders' equity                            $        564,391       $        563,778
                                                                             ==================     ==================

Commitments and contingencies (Note 14)
</TABLE>


           See accompanying Notes to Consolidated Financial Statements
                                      - 3 -


<PAGE>


                           TITANIUM METALS CORPORATION

                CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
                      (In thousands, except per share data)

<TABLE>

                                                          Three months ended                 Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2003              2002             2003              2002
                                                    --------------    -------------    --------------    -------------

<S>                                                 <C>               <C>              <C>               <C>
Net sales                                           $    101,813      $     94,295     $    201,106      $    198,735
Cost of sales                                             97,455            92,871          195,730           192,203
                                                    --------------    -------------    --------------    -------------

   Gross margin                                            4,358             1,424            5,376             6,532

Selling, general, administrative and
development expense                                        9,583            11,414           19,478            21,793
Equity in earnings of joint ventures                         228               823              413             1,328
Other income (expense), net                                2,910             2,158            3,538             2,209
                                                    --------------    -------------    --------------    -------------

   Operating loss                                         (2,087)           (7,009)         (10,151)          (11,724)

Interest expense                                             488               735            1,176             1,473
Other non-operating
   income (expense), net                                    (269)             (228)            (789)          (28,357)
                                                    --------------    -------------    --------------    -------------

   Loss before income taxes, minority
     interest and cumulative effect of
     change in accounting principles                      (2,844)           (7,972)         (12,116)          (41,554)

Income tax expense (benefit)                                  24               615              481              (839)
Minority interest - BUCS                                   3,463             3,333            6,871             6,666
Other minority interest, net of tax                           20               425              283             1,046
                                                    --------------    -------------    --------------    -------------

   Loss before cumulative effect of
     change in accounting principles                      (6,351)          (12,345)         (19,751)          (48,427)

Cumulative effect of change in
accounting principles                                          -                 -             (191)          (44,310)
                                                    --------------    -------------    --------------    -------------

   Net loss                                         $     (6,351)     $    (12,345)    $    (19,942)     $    (92,737)
                                                    ==============    =============    ==============    =============

</TABLE>

           See accompanying Notes to Consolidated Financial Statements
                                      - 4 -

<PAGE>


                           TITANIUM METALS CORPORATION

          CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (CONTINUED)
                      (In thousands, except per share data)

<TABLE>

                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2003             2002              2003             2002
                                                    --------------    -------------    --------------    -------------

<S>                                                 <C>               <C>              <C>               <C>
Basic and diluted loss per share:
   Before cumulative effect of change in
     accounting principles                          $      (2.00)     $      (3.91)    $      (6.24)     $     (15.33)

   Cumulative effect of change in
     accounting principles                                     -                 -            (0.06)           (14.03)
                                                    --------------    -------------    --------------    -------------

Basic and diluted loss per share                    $      (2.00)     $      (3.91)    $      (6.30)     $     (29.36)
                                                    ==============    =============    ==============    =============

Weighted average shares outstanding                        3,170             3,160            3,167             3,158
                                                    ==============    =============    ==============    =============

Pro forma amounts assuming SFAS
   No. 143 was applied during all
   periods affected:

   Net loss                                         $     (6,351)     $    (12,353)    $    (19,751)     $    (92,754)
                                                    ==============    =============    ==============    =============

   Basic and diluted loss per share                 $      (2.00)     $      (3.91)    $      (6.24)     $     (29.37)
                                                    ==============    =============    ==============    =============
</TABLE>

           See accompanying Notes to Consolidated Financial Statements
                                      - 5 -
<PAGE>


                           TITANIUM METALS CORPORATION

            CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited)
                                 (In thousands)

<TABLE>

                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2003             2002              2003              2002
                                                    --------------    -------------    --------------    -------------

<S>                                                 <C>               <C>              <C>               <C>
Net loss                                            $     (6,351)     $    (12,345)    $   (19,942)      $    (92,737)

Other comprehensive income (loss) -
   currency translation adjustment                         4,830             8,842           4,740              7,566
                                                    --------------    -------------    --------------    -------------

Comprehensive loss                                  $     (1,521)     $     (3,503)    $   (15,202)      $    (85,171)
                                                    ==============    =============    ==============    =============

</TABLE>

           See accompanying Notes to Consolidated Financial Statements
                                      - 6 -

<PAGE>


                           TITANIUM METALS CORPORATION

                CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
                                 (In thousands)
<TABLE>

                                                                                      Six months ended June 30,
                                                                                 -------------------------------------
                                                                                       2003                2002
                                                                                 -----------------    ----------------

<S>                                                                              <C>                  <C>
Cash flows from operating activities:
   Net loss                                                                      $      (19,942)      $      (92,737)
   Depreciation and amortization                                                         18,986               18,248
   Cumulative effect of change in accounting principles                                     191               44,310
   Noncash impairment of investment in Special Metals
     Corporation preferred securities                                                         -               27,500
   Equity in earnings of joint ventures, net of distributions                              (362)              (1,058)
   Deferred income taxes                                                                   (248)              (1,672)
   Other minority interest                                                                  284                1,046
   Other, net                                                                               575                  827
   Change in assets and liabilities:
     Receivables                                                                        (11,438)              10,529
     Inventories                                                                         24,862               (8,662)
     Prepaid expenses and other                                                             497                6,165
     Accounts payable and accrued liabilities                                              (948)             (17,740)
     Customer advances                                                                   22,691               (6,884)
     Income taxes                                                                          (562)              (1,421)
     Accounts with related parties, net                                                     207                2,648
     Accrued OPEB and pension costs                                                        (896)              (1,418)
     Accrued dividends on BUCS                                                            6,871                    -
     Other, net                                                                            (543)                 962
                                                                                 -----------------    ----------------

       Net cash provided (used) by operating activities                                  40,225              (19,357)
                                                                                 -----------------    ----------------

Cash flows from investing activities:
   Capital expenditures                                                                  (3,579)              (3,337)
   Other                                                                                     37                    -
                                                                                 -----------------    ----------------

       Net cash used by investing activities                                             (3,542)              (3,337)
                                                                                 -----------------    ----------------

Cash flows from financing activities:
   Indebtedness:
     Borrowings                                                                         237,703              206,196
     Repayments                                                                        (251,764)            (198,640)
   Dividends paid to minority interest                                                   (1,892)              (1,115)
   Other, net                                                                              (632)                (322)
                                                                                 -----------------    ----------------

       Net cash (used) provided by financing activities                                 (16,585)               6,119
                                                                                 -----------------    ----------------

       Net cash provided (used) by operating,
         investing and financing activities                                      $       20,098       $      (16,575)
                                                                                 =================    ================

</TABLE>
           See accompanying Notes to Consolidated Financial Statements
                                      - 7 -

<PAGE>


                           TITANIUM METALS CORPORATION

          CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (CONTINUED)
                                 (In thousands)

<TABLE>

                                                                                      Six months ended June 30,
                                                                                 -------------------------------------
                                                                                        2003                2002
                                                                                 -----------------    ----------------
<S>                                                                              <C>                  <C>
Cash and cash equivalents:
   Net increase (decrease) from:
     Operating, investing and financing activities                               $       20,098       $      (16,575)
     Currency translation                                                                   122                 (553)
                                                                                 -----------------    ----------------
                                                                                         20,220              (17,128)
   Cash at beginning of period                                                            6,214               24,500
                                                                                 -----------------    ----------------

   Cash at end of period                                                         $       26,434       $        7,372
                                                                                 =================    ================

Supplemental disclosures:
   Cash paid for:
     Interest, net of amounts capitalized                                        $          799       $          876
     BUCS dividends                                                              $            -       $        6,666
     Income taxes, net                                                           $        1,291       $        2,253

   Noncash investing and financing activities:
     Capital lease obligations incurred when the Company
     entered into certain leases for new equipment                               $            -       $          731

</TABLE>


           See accompanying Notes to Consolidated Financial Statements
                                      - 8 -

<PAGE>


                           TITANIUM METALS CORPORATION

      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited)

                         Six months ended June 30, 2003
                                 (In thousands)

<TABLE>

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

<S>                              <C>     <C>       <C>         <C>          <C>         <C>        <C>       <C>         <C>
Balance at December 31, 2002     3,185   $    32   $ 350,889   $ (127,371)  $  (1,036)  $(61,701)  $(1,208)  $    (255)  $  159,350

Components of comprehensive
 income (loss):
     Net loss                        -         -           -      (19,942)          -          -         -           -      (19,942)
     Change in cumulative
       currency translation
       adjustment                    -         -           -            -       4,740          -         -           -        4,740

Issuance of common stock             3         -          72            -           -          -         -           -           72

Stock award cancellations           (5)        -        (228)           -           -          -         -         228            -

Amortization of deferred
   compensation, net of effects
of stock award cancellations         -         -           -            -           -          -         -         (97)         (97)
                                -------  --------  ----------  -----------  ----------  ---------  --------  ----------  -----------

Balance at June 30, 2003         3,183   $    32   $ 350,733   $ (147,313)  $   3,704   $(61,701)  $(1,208)  $    (124)  $  144,123
                                =======  ========  ==========  ===========  ==========  =========  ========  ==========  ===========
</TABLE>



           See accompanying Notes to Consolidated Financial Statements
                                      - 9 -

<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, 2003, Valhi, Inc. and
subsidiaries  ("Valhi") held approximately  40.8% of TIMET's  outstanding common
stock and  approximately  0.4% of the  Company's  outstanding  BUCS. At June 30,
2003, the Combined Master Retirement Trust ("CMRT"),  a trust formed by Valhi to
permit the  collective  investment by trusts that maintain the assets of certain
employee  benefit plans  adopted by Valhi and certain  related  companies,  held
approximately  9% of TIMET's  common  stock.  TIMET's U.S.  pension  plans began
investing in the CMRT in the second quarter of 2003; however, these plans invest
in only a portion of the CMRT that does not hold TIMET common stock. At June 30,
2003, Contran  Corporation  ("Contran") held directly an additional 42.2% of the
Company's   outstanding  BUCS  and  held,  directly  or  through   subsidiaries,
approximately  90% 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 and TIMET.

     The accompanying  Consolidated Financial Statements include the accounts of
TIMET and its majority-owned  subsidiaries  (collectively,  the "Company").  All
material  intercompany  transactions  and  balances  have been  eliminated.  The
Consolidated  Balance Sheet at June 30, 2003 and the Consolidated  Statements of
Operations,  Comprehensive Loss, Changes in Stockholders'  Equity and Cash Flows
for the periods  ended June 30, 2003 and 2002 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, 2002 (the "2002 Annual Report").

     On  February 4, 2003,  the  Company's  stockholders  approved a proposal to
amend TIMET's  Certificate of  Incorporation  to effect a reverse stock split of
the Company's  common stock at a ratio of one share of  post-split  common stock
for each  eight,  nine or ten  shares  of  pre-split  common  stock  issued  and
outstanding,  with the  final  exchange  ratio to be  selected  by the  Board of
Directors.  Subsequently,  the Company's Board of Directors unanimously approved
the reverse stock split on the basis of one share of post-split common stock for
each  outstanding ten shares of pre-split  common stock. The reverse stock split
became  effective after the close of trading on February 14, 2003. All share and
per share  disclosures for all periods  presented in the Consolidated  Financial
Statements  and Notes  thereto have been  adjusted to give effect to the reverse
stock split.

                                     - 10 -


<PAGE>


     The Company adopted Statement of Financial  Accounting  Standards  ("SFAS")
No. 143,  Accounting for Asset Retirement  Obligations on January 1, 2003. Under
SFAS No. 143, the fair value of a liability for an asset  retirement  obligation
covered under the scope of SFAS No. 143 is recognized in the period in which the
liability is incurred, with an offsetting increase in the carrying amount of the
related  long-lived  asset.  Over time,  the liability is accreted to its future
value,  and the  capitalized  cost is  depreciated  over the useful  life of the
related asset.  Upon  settlement of the liability,  an entity either settles the
obligation for its recorded amount or incurs a gain or loss upon settlement.

     Under the transition provisions of SFAS No. 143, the Company recognized (i)
an asset retirement cost capitalized as an increase to the carrying value of its
property,  plant and equipment of approximately  $0.2 million,  (ii) accumulated
depreciation on such capitalized cost of approximately $0.1 million and (iii) an
other noncurrent liability for the asset retirement  obligation of approximately
$0.3 million.  Amounts  resulting  from the initial  application of SFAS No. 143
were  measured  using  information,  assumptions  and  interest  rates all as of
January 1, 2003. The amount recognized as the asset retirement cost was measured
as of  the  date  the  asset  retirement  obligation  was  incurred.  Cumulative
accretion on the asset retirement obligation and accumulated depreciation on the
asset  retirement  cost were  recognized  for the time  period from the date the
asset  retirement  cost  and  liability  would  have  been  recognized  had  the
provisions  of SFAS  No.  143 been in  effect  at the  date  the  liability  was
incurred,  through  January 1, 2003.  The  difference  between the amounts to be
recognized  as described  above and any  associated  amounts  recognized  in the
Company's  balance sheet as of December 31, 2002 was  recognized as a cumulative
effect of a change in  accounting  principle  as of January  1, 2003.  The asset
retirement  obligation  recognized  as a result of adopting SFAS No. 143 relates
primarily to landfill closure and leasehold restoration costs.

     The following table shows pro forma amounts relating to the Company's asset
retirement  obligations as if SFAS No. 143 were applied throughout 2002, as well
as a roll forward of the asset retirement obligation through June 30, 2003:

<TABLE>

                                                                                   (In thousands)

             <S>                                                                     <C>
             Asset retirement obligation, 1/1/2002                                   $      312
             Accretion expense                                                               15
                                                                                --------------------

             Asset retirement obligation, 12/31/2002                                        327
             New obligation                                                                  69
             Accretion expense                                                                9
                                                                                ---------------------

             Asset retirement obligation, 6/30/2003                                  $      405
                                                                                =====================
</TABLE>

     Accretion  expense  during  the first six months of 2003 is  reported  as a
component of other operating expense.

     The Company has elected the disclosure  alternative  prescribed by SFAS No.
123,  Accounting  for  Stock-Based  Compensation,  as amended  by SFAS No.  148,
Accounting for  Stock-Based  Compensation - Transition and  Disclosure,  and has
chosen to account for its  stock-based  employee  compensation  related to stock
options in accordance with Accounting  Principles  Board ("APB") Opinion No. 25,
Accounting for Stock Issued to Employees, and its various interpretations. Under
APB Opinion No. 25,  compensation  cost is generally  recognized for fixed stock
options  for  which the  exercise  price is less  than the  market  price of the
underlying stock on the grant date. The Company  recognized no compensation cost
for fixed stock options  during the three and six months ended June 30, 2003 and
2002.

                                     - 11 -

<PAGE>


     The following  table  illustrates the effect on net loss and loss per share
if the Company had applied  the fair value  recognition  provisions  of SFAS No.
123:

<TABLE>

                                                           Three months ended                  Six months ended
                                                                June 30,                           June 30,
                                                     -------------------------------    -------------------------------
                                                         2003             2002              2003             2002
                                                     -------------    --------------    --------------   --------------
                                                                   (In thousands, except per share data)


<S>                                                  <C>              <C>               <C>              <C>
Net loss, as reported                                $     (6,351)    $    (12,345)     $    (19,942)    $    (92,737)
Less total option related stock-based
  employee compensation expense
  determined under SFAS No. 123                               (54)            (146)             (156)            (374)
                                                     -------------    --------------    --------------   --------------

Pro forma net loss                                   $     (6,405)    $    (12,491)     $    (20,098)    $    (93,111)
                                                     =============    ==============    ==============   ==============

Basic and diluted loss per share:
  As reported                                        $      (2.00)    $      (3.91)     $      (6.30)    $     (29.36)
                                                     =============    ==============    ==============   ==============
  Pro forma                                          $      (2.02)    $      (3.96)     $      (6.35)    $     (29.48)
                                                     =============    ==============    ==============   ==============
</TABLE>


     In January 2003, the Financial  Accounting  Standards Board ("FASB") issued
FASB Interpretation No. 46,  Consolidation of Variable Interest Entities.  TIMET
Capital Trust I (the "Trust"),  a  wholly-owned  subsidiary of TIMET that issued
the Company's  BUCS, is the Company's only variable  interest  entity covered by
the scope of FASB Interpretation No. 46 that would require consolidation.  TIMET
is the primary beneficiary of the Trust and has consolidated the Trust since its
formation,   as  the  Company  owns  100%  of  the  Trust's  outstanding  voting
securities.  See the Company's 2002 Annual Report for further  discussion of the
Trust. The Company is still evaluating whether it has involvement with any other
variable interest  entities and will apply the provisions of the  Interpretation
to those entities,  if applicable,  in the quarter ending September 30, 2003. It
is possible that VALTIMET SAS  ("VALTIMET"),  a manufacturer of welded stainless
steel and titanium  tubing in which the Company has a 43.7%  equity  investment,
may be  determined  to be a variable  interest  entity.  TIMET's  investment  in
VALTIMET was $21.4 million at June 30, 2003.

     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with  Characteristics  of both Liabilities and Equity.  SFAS No. 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments  with  characteristics  of both  liabilities  and equity,
generally  requiring  classification  of a financial  instrument within SFAS No.
150's  scope as a  liability.  The Company  completed a review of the  potential
applicability  of SFAS No. 150 to the Company's BUCS,  which have both liability
and equity  characteristics  and are  classified on the  mezzanine  level of the
Consolidated  Balance Sheet (between liabilities and equity), in accordance with
current SEC guidance.  Based upon this review,  the Company  determined SFAS No.
150 does not apply to its BUCS.

                                     - 12 -

<PAGE>


Note 2 - Business segment information

     The  Company's  production  facilities  are  located in the United  States,
United  Kingdom,  France and Italy,  and its  products are sold  throughout  the
world. The Company's worldwide  integrated  activities are conducted through its
"Titanium  melted and mill  products"  segment,  currently  the  Company's  only
segment. Sales, gross margin, operating income (loss), inventory and receivables
are the key  management  measures  used to  evaluate  segment  performance.  The
following  table  provides  supplemental  segment  information  to the Company's
Consolidated Financial Statements:
<TABLE>

                                                           Three months ended                  Six months ended
                                                                June 30,                            June 30,
                                                     -------------------------------    -------------------------------
                                                         2003              2002              2003             2002
                                                     -------------    --------------    --------------   --------------
                                                                ($ in thousands, except selling price data)

<S>                                                  <C>              <C>               <C>              <C>
Titanium melted and mill products:
   Mill product net sales                            $     69,760     $     70,290      $    143,391     $    149,987
   Melted product net sales                                16,252            9,269            29,070           19,228
   Other                                                   15,801           14,736            28,645           29,520
                                                     -------------    --------------    --------------   --------------

                                                     $    101,813     $     94,295      $    201,106     $    198,735
                                                     =============    ==============    ==============   ==============
Mill product shipments:
   Volume (metric tons)                                     2,180            2,130             4,495            4,815
   Average price ($ per kilogram)                    $      32.00     $      33.00      $      31.90     $      31.15

Melted product shipments:
   Volume (metric tons)                                     1,295              620             2,280            1,265
   Average price ($ per kilogram)                    $      12.55     $      14.95      $      12.75     $      15.20

</TABLE>

Note 3 - Inventories

<TABLE>
                                                                                   June 30,             December 31,
                                                                                     2003                  2002
                                                                              ------------------    ------------------
                                                                                           (In thousands)

<S>                                                                           <C>                   <C>
Raw materials                                                                 $        40,202       $        52,825
Work-in-process                                                                        76,219                82,190
Finished products                                                                      60,238                63,458
Supplies                                                                               13,460                13,829
                                                                              ------------------    ------------------
                                                                                      190,119               212,302
Less adjustment of certain inventories to LIFO basis                                   29,803                30,370
                                                                              ------------------    ------------------

                                                                              $       160,316       $       181,932
                                                                              ==================    ==================
</TABLE>

                                     - 13 -

<PAGE>


Note 4 - Preferred securities of Special Metal Corporation ("SMC")

     As previously disclosed in the Company's 2002 Annual Report, in March 2002,
SMC and its U.S.  subsidiaries  filed a voluntary  petition  for  reorganization
under Chapter 11 of the U.S. Bankruptcy Code. As a result, the Company undertook
an  assessment  of its  investment  in SMC with the  assistance  of an  external
valuation  specialist  and recorded a $27.5 million  impairment  charge to other
non-operating  expense  during  the  first  quarter  of 2002 for an  other  than
temporary  decline in the  estimated  fair value of its  investment in SMC. This
charge  reduced  the  Company's  carrying  amount of its  investment  in the SMC
securities  to zero.  Based  upon SMC's  plan of  reorganization  filed with the
Bankruptcy  Court, the Company  currently  believes that it will not recover any
amount from this investment.

Note 5 - Property and equipment

<TABLE>


                                                                                 June 30,             December 31,
                                                                                   2003                   2002
                                                                           ---------------------    ------------------
                                                                                         (In thousands)

<S>                                                                        <C>                      <C>
Land                                                                       $           6,288        $         6,224
Buildings                                                                             39,738                 38,874
Information technology systems                                                        58,605                 58,217
Manufacturing and other                                                              316,243                312,163
Construction in progress                                                               4,320                  3,493
                                                                           ---------------------    ------------------
                                                                                     425,194                418,971
Less accumulated depreciation                                                        183,010                164,299
                                                                           ---------------------    ------------------

                                                                           $         242,184        $       254,672
                                                                           =====================    ==================
</TABLE>

Note 6 - Goodwill

     On January 1, 2002,  the Company  adopted SFAS No. 142,  Goodwill and Other
Intangible  Assets.  Under SFAS No. 142,  goodwill is no longer  amortized  on a
periodic  basis,  but  instead is subject  to a two-step  impairment  test to be
performed on at least an annual  basis.  As a result of the adoption of SFAS No.
142,  the  Company  recorded  a  non-cash  goodwill  impairment  charge of $44.3
million,  representing the entire balance of the Company's  recorded goodwill at
January 1, 2002.  Pursuant to the transition  requirements of SFAS No. 142, this
charge was reported in the Company's  Consolidated  Statement of Operations as a
cumulative effect of a change in accounting principle as of January 1, 2002.

Note 7 - Other noncurrent assets

<TABLE>

                                                                                   June 30,            December 31,
                                                                                     2003                  2002
                                                                              ------------------    ------------------
                                                                                           (In thousands)

<S>                                                                           <C>                   <C>
Deferred financing costs                                                      $         7,903       $         8,244
Prepaid pension cost                                                                    8,272                 7,295
Notes receivable from officers                                                            163                   163
Other                                                                                     149                   149
                                                                              ------------------    ------------------

                                                                              $        16,487       $        15,851
                                                                              ==================    ==================
</TABLE>

                                     - 14 -


<PAGE>


Note 8 - Accrued liabilities

<TABLE>

                                                                                 June 30,             December 31,
                                                                                   2003                   2002
                                                                           ---------------------    ------------------
                                                                                          (In thousands)

<S>                                                                        <C>                      <C>
OPEB cost                                                                  $           3,701        $         3,818
Pension cost                                                                           8,339                  7,969
Payroll and vacation                                                                   6,645                  6,007
Incentive compensation                                                                   410                  1,326
Other employee benefits                                                                8,715                 11,141
Deferred income                                                                        1,556                  1,679
Environmental costs                                                                      301                    803
Accrued tungsten costs                                                                 2,168                  2,190
Taxes, other than income                                                               4,490                  3,519
Other                                                                                  8,997                  8,059
                                                                           ---------------------    ------------------

                                                                           $          45,322        $        46,511
                                                                           =====================    ==================
</TABLE>

Note 9 - Boeing advance

     Under the terms of the amended  long-term  agreement  ("LTA") between TIMET
and The  Boeing  Company  ("Boeing"),  in years  2002  through  2007,  Boeing is
required  to  advance  TIMET  $28.5  million  annually  less  $3.80 per pound of
titanium  product  purchased  by Boeing  subcontractors  from  TIMET  during the
preceding year.  Effectively,  the Company  collects $3.80 less from Boeing than
the LTA selling price for each pound of titanium product sold directly to Boeing
and reduces the related customer  advance recorded by the Company.  For titanium
products  sold to  Boeing  subcontractors,  the  Company  collects  the full LTA
selling  price,  but gives  Boeing  credit by reducing  the next  year's  annual
advance by $3.80 per pound of titanium  product  sold to Boeing  subcontractors.
The Boeing customer advance is also reduced as take-or-pay  benefits are earned.
As of June 30, 2003, approximately $23.1 million of customer advances related to
the Company's LTA with Boeing.

Note 10 - Notes payable, long-term debt and capital lease obligations

<TABLE>
                                                                                   June 30,            December 31,
                                                                                     2003                  2002
                                                                             -------------------    ------------------
                                                                                           (In thousands)
<S>                                                                          <C>                    <C>
Notes payable:
  U.S. credit agreement                                                      $                -     $        11,944
  European credit agreements                                                              5,384               1,050
                                                                             -------------------    ------------------

                                                                             $            5,384     $        12,994
                                                                             ===================    ==================
Long-term debt:
  U.K. bank credit agreement                                                 $                -     $         6,401
                                                                             ===================    ==================

Capital lease obligations                                                    $            9,876     $        10,217
  Less current maturities                                                                   587                 642
                                                                             -------------------    ------------------

                                                                             $            9,289     $         9,575
                                                                             ===================    ==================
</TABLE>

                                     - 15 -

<PAGE>


     During the second  quarter of 2003,  TIMET UK received an  interest-bearing
intercompany  loan from a U.S.  subsidiary of the Company  enabling  TIMET UK to
reduce its long-term borrowings under its U.K. bank credit agreement to zero. As
of June 30, 2003, the Company had aggregate unused borrowing  availability under
its U.S. and European credit facilities of approximately $135 million.

Note 11 - Minority interests

     In October 2002, the Company  exercised its right to defer future  dividend
payments on its BUCS for a period of up to 20  consecutive  quarters,  effective
beginning  with the  Company's  December  1, 2002  scheduled  dividend  payment.
Dividends  continue  to accrue at the coupon  rate on the  principal  and unpaid
dividends. Based on this deferral, accrued dividends on these BUCS are reflected
as long-term  liabilities  in the  Consolidated  Balance  Sheets.  Dividends are
reported in the Consolidated Statements of Operations as minority interest.

     TIMET  Savoie,  S.A.  ("TIMET  Savoie"),  the  Company's  70% owned  French
subsidiary,  paid dividends during the second quarter of 2003 and 2002, of which
$1.9 million and $1.1 million,  respectively, was paid to Compagnie Europeene du
Zirconium ("CEZUS"), the 30% minority owner in TIMET Savoie.

Note 12 - Other income (expense)

<TABLE>

                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2003             2002              2003              2002
                                                    --------------   --------------    --------------    -------------
                                                                              (In thousands)

<S>                                                 <C>              <C>               <C>               <C>
Other operating income (expense):
  Boeing take-or-pay                                $      2,820     $      2,156      $      2,820      $      2,156
  Litigation settlement                                        -                -               475                 -
  Other income (expense), net                                 90                2               243                53
                                                    --------------   --------------    --------------    -------------

                                                    $      2,910     $      2,158      $      3,538      $      2,209
                                                    ==============   ==============    ==============    =============

Other non-operating income (expense):
  Interest income                                   $         69     $         24      $        181      $         93
  Impairment of investment in SMC
preferred securities                                           -                -                 -           (27,500)
  Foreign exchange loss                                     (257)            (226)             (887)             (342)
  Other income (expense), net                                (81)             (26)              (83)             (608)
                                                    --------------   --------------    --------------    -------------

                                                    $       (269)    $       (228)     $       (789)     $    (28,357)
                                                    ==============   ==============    ==============    =============

</TABLE>


     During the first quarter of 2003, the Company received $0.5 million related
to its settlement of certain  litigation  relating to power outages  suffered at
its  Henderson,  Nevada  facility  in 1997 and 1998 as a  result  of  contractor
activity.

                                     - 16 -

<PAGE>


Note 13 - Income taxes

<TABLE>
                                                                                      Six months ended June 30,
                                                                              ----------------------------------------
                                                                                     2003                  2002
                                                                              ------------------    ------------------
                                                                                          (In thousands)

<S>                                                                           <C>                   <C>
Expected income tax expense, at 35%                                           $        (4,241)      $       (14,544)
Non-U.S. tax rates                                                                        309                   658
U.S. state income taxes, net                                                                5                   162
Dividends received deduction                                                             (312)                    -
Extraterritorial income exclusion                                                        (187)                    -
Change in valuation allowance:
  Effect of change in tax law                                                               -                (1,797)
  Adjustment of deferred tax valuation allowance                                        4,926                14,767
Other, net                                                                                (19)                  (85)
                                                                              ------------------    ------------------

                                                                              $           481       $          (839)
                                                                              ==================    ==================
</TABLE>

     During the first  quarter of 2002,  the Job Creation and Worker  Assistance
Act of 2002 (the "JCWA Act") was signed  into law.  The  Company  benefits  from
certain provisions of the JCWA Act, which liberalized certain net operating loss
("NOL")  and  alternative  minimum tax ("AMT")  restrictions.  As a result,  the
Company recognized $1.8 million of refundable U.S. income taxes during the first
quarter of 2002. The Company  received $0.8 million of this refund in the fourth
quarter of 2002 and anticipates  receiving the remaining $1.0 million during the
fourth quarter of 2003.

     At June 30, 2003,  the Company had, for U.S.  federal  income tax purposes,
NOL  carryforwards  of  approximately  $141 million that expire between 2020 and
2023.  At  June  30,  2003,  the  Company  had  AMT  credit   carryforwards   of
approximately  $4 million,  which can be utilized to offset regular income taxes
payable  in  future  years.  The  AMT  credit  carryforward  has  an  indefinite
carryforward  period.  At June 30, 2003, the Company had the equivalent of a $22
million NOL carryforward in the United Kingdom and a $2 million NOL carryforward
in Germany, both of which have indefinite carryforward periods.

Note 14 - Commitments and contingencies

     Environmental matters. As previously disclosed in the Company's 2002 Annual
Report,  in 1999  TIMET and Basic  Management,  Inc.  ("BMI")  agreed  that upon
payment by BMI of the cost to design,  purchase and install the  technology  and
equipment  necessary to allow the Company to stop  discharging  liquid and solid
effluents and co-products  into settling ponds located on certain lands owned by
the  Company  adjacent  to its  Henderson,  Nevada  plant site (the  "TIMET Pond
Property"),  the Company would convey to BMI, at no additional  cost,  the TIMET
Pond  Property.  Under  this  agreement,  BMI will pay 100% of the  first  $15.9
million of the cost for this project,  and TIMET agreed to contribute 50% of the
cost in excess of $15.9 million, up to a maximum payment by TIMET of $2 million.
The  Company  presently  expects  that the total cost of this  project  will not
exceed $15.9 million. The Company and BMI are continuing  discussions about this
project and also  continuing  investigation  with respect to certain  additional
issues associated with properties in the vicinity of the BMI industrial complex,
including possible groundwater issues.

                                     - 17 -

<PAGE>


     The  Company is also  continuing  assessment  work with  respect to its own
active plant site in Henderson, Nevada. During 2000, an initial study of certain
groundwater   remediation   issues  at  the  Company's   plant  site  and  other
Company-owned  sites within the BMI Complex was completed.  The Company  accrued
$3.3 million in 2000 based on the  undiscounted  cost estimates set forth in the
initial  study.  During  2002,  the  Company  updated  this study and accrued an
additional  $0.3 million based on revised cost  estimates.  The Company  expects
these accrued expenses to be paid over a period of up to thirty years.

     As of June 30, 2003, the Company had accrued an aggregate of  approximately
$3.8 million for  environmental  matters,  including those discussed  above. The
Company records  liabilities  related to environmental  remediation  obligations
when estimated future costs are probable and reasonably estimable. Such accruals
are adjusted as further information  becomes available or circumstances  change.
Estimated  future costs are not  discounted  to their present  value.  It is not
possible to estimate the range of costs for certain  sites.  The  imposition  of
more  stringent   standards  or  requirements   under   environmental   laws  or
regulations,  the  results of future  testing  and  analysis  undertaken  by the
Company at its  operating  facilities,  or a  determination  that the Company is
potentially  responsible for the release of hazardous substances at other sites,
could  result in costs in excess of amounts  currently  estimated to be required
for such  matters.  No assurance  can be given that actual costs will not exceed
accrued  amounts or that costs will not be incurred  with respect to sites as to
which no problem is currently  known or where no estimate can presently be made.
Further,  there can be no assurance that additional  environmental  matters will
not arise in the future.

     Legal  proceedings.  In September  2000, the Company was named in an action
filed by the U.S. Equal Employment  Opportunity  Commission  ("EEOC") in Federal
District  Court  in  Las  Vegas,  Nevada  (U.S.  Equal  Employment   Opportunity
Commission v. Titanium Metals Corporation,  CV-S-00-1172DWH-RJJ). The complaint,
as amended,  alleged that several female  employees at the Company's  Henderson,
Nevada  plant were the subject of sexual  harassment  and  retaliation.  In June
2003,  the EEOC and TIMET  settled  this  litigation.  The amount  paid by TIMET
pursuant to the settlement was not material.

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

                                     - 18 -

<PAGE>


     Other.   TIMET  is  the  primary  obligor  on  two  $1.5  million  workers'
compensation  bonds  issued  on  behalf of a former  subsidiary,  Freedom  Forge
Corporation ("Freedom Forge"), which TIMET sold in 1989. The bonds were provided
as part of the conditions  imposed on Freedom Forge in order to self-insure  its
workers' compensation obligations. Freedom Forge filed for Chapter 11 bankruptcy
protection on July 13, 2001, and discontinued payment on the underlying workers'
compensation  claims in November 2001.  During 2002, TIMET received notices that
the issuers of the bonds were required to make payments on one of the bonds with
respect to certain of these claims and were requesting reimbursement from TIMET.
Based upon loss  projections,  the Company  accrued  $1.6  million for this bond
(including  $0.1 million in legal fees  reimbursable to the issuer of the bonds)
as other  non-operating  expense  in 2002.  Through  June 30,  2003,  TIMET  has
reimbursed  the  issuer  approximately  $0.6  million  under  this bond and $1.0
million  remains  accrued for future  payments.  At this time one  claimant  has
submitted  minor claims under the second bond.  Payments  made to this  claimant
have been  immaterial,  and no additional  claimants are currently  anticipated.
Accordingly,  no accrual has been  recorded for  potential  claims that could be
filed under the second  bond.  TIMET may revise its  estimated  liability  under
these bonds in the future as additional facts become known or claims develop.

     As of June 30, 2003,  the Company has $2.2 million  accrued for pending and
potential future customer claims associated with certain standard grade material
produced  by the  Company,  which was  subsequently  found to  contain  tungsten
inclusions as a result of tungsten contaminated silicon sold to the Company by a
third-party  supplier.  This amount does not represent the maximum possible loss
(which is not  possible  for the  Company to  estimate  at this time) and may be
periodically  revised in the future as more facts become  known.  As of June 30,
2003, the Company has received claims aggregating approximately $5.0 million and
has made settlement payments aggregating $0.6 million.  Pending claims are being
investigated  and  negotiated.  The Company  believes  that  certain  claims are
without merit or can be settled for less than the amount of the original  claim.
There is no  assurance  that all  potential  claims have been  submitted  to the
Company.  The  Company has filed suit  seeking  full  recovery  from its silicon
supplier for any liability the Company might incur, although no assurance can be
given that the Company will  ultimately be able to recover all or any portion of
such  amounts.  In April 2003,  the Company  received  notice that this  silicon
supplier had filed a voluntary petition for  reorganization  under Chapter 11 of
the U.S. Bankruptcy code. TIMET is currently  investigating what effect, if any,
this bankruptcy may have on the Company's  potential  recovery.  The Company has
not recorded any recoveries related to this matter as of June 30, 2003.

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

     For  additional  information  concerning  certain  legal and  environmental
matters, commitments and contingencies related to the Company, see the Company's
2002 Annual Report.

                                     - 19 -

<PAGE>


Note 15 - Earnings (loss) per share

     Basic earnings (loss) per share is based on the weighted  average number of
unrestricted  common shares  outstanding  during each period.  Diluted  earnings
(loss)  per  share  reflects  the  dilutive  effect  of  common  stock  options,
restricted stock and the assumed  conversion of the BUCS. The assumed conversion
of the BUCS was omitted  from the  diluted  loss per share  calculation  for the
three and six  months  ended  June 30,  2003 and 2002  because  the  effect  was
antidilutive. Had the BUCS not been antidilutive, diluted losses would have been
decreased  by $3.5  million and $6.9  million for the three and six months ended
June 30, 2003, respectively,  and by $3.3 million and $6.7 million for the three
and six  months  ended  June 30,  2002,  respectively.  Diluted  average  shares
outstanding  would  have been  increased  by  540,000  shares  for each of these
periods from the assumed  conversion of the BUCS.  Stock options and  restricted
shares excluded from the calculation because they were antidilutive approximated
148,000  for the three and six months  ended June 30,  2003 and  166,000 for the
three and six months ended June 30, 2002.



                                     - 20 -


<PAGE>


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

RESULTS OF OPERATIONS

     The following table summarizes certain information  regarding the Company's
results of operations for the three and six months ended June 30, 2003 and 2002.
The 2003 percentage change information  represents changes from the 2002 periods
to the corresponding  2003 periods,  and the 2002 percentage change  information
represents changes from the 2001 periods to the corresponding 2002 periods.  See
"Outlook" for further discussion of the Company's business  expectations for the
remainder of 2003.

<TABLE>

                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2003              2002             2003             2002
                                                    --------------    -------------    --------------   --------------
                                                           ($ in thousands)                   ($ in thousands)

<S>                                                 <C>               <C>              <C>              <C>
Net sales                                           $    101,813      $     94,295     $    201,106     $    198,735
Gross margin                                               4,358             1,424            5,376            6,532
Operating loss                                            (2,087)           (7,009)         (10,151)         (11,724)

Gross margin percent of net sales                             4%                2%               3%               3%

Percentage change in:
   Sales volume:
     Mill product sales volume                                +2               -30               -7              -23
     Melted product sales volume                            +109               -40              +80              -39

   Selling prices - excludes changes in
    product mix:
       Mill products in U.S. dollars                          -2                +4               -2               +4
       Mill products in billing currencies(1)                 -8                +4               -7               +4
       Melted product in U.S. dollars                        -13                +3              -13               +5

   Average selling prices - includes
    changes in product mix:
       Mill products                                          -3               +12               +2               +6
       Melted products                                       -16                +8              -16               +8
<FN>
----------------------------------------------------------------------------------------------------------------------
(1) Excludes the effect of changes in foreign currencies.
</FN>

</TABLE>



     Second  quarter of 2003 compared to second  quarter of 2002.  The Company's
sales of mill products decreased 1% from $70.3 million during the second quarter
2002 to $69.8  million  during the second  quarter of 2003.  This  decrease  was
principally  due to an 8% decrease in mill product  selling prices  expressed in
billing  currencies (which exclude the effects of foreign currency  translation)
and changes in product  mix,  partially  offset by a 2% increase in mill product
sales volume and the effects of the weakening of the U.S. dollar compared to the
British pound sterling and the euro.  Mill product  selling prices  expressed in
U.S. dollars (using actual foreign currency exchange rates prevailing during the
respective  periods)  decreased 2% in the second quarter of 2003 compared to the
second quarter of 2002.

                                     - 21 -
<PAGE>


     Melted  product  sales  increased  75% from $9.3 million  during the second
quarter of 2002 to $16.3 million during the second quarter of 2003 primarily due
to a 109%  increase in melted  product  sales volume as a result of new customer
relationships,  share gains and changes in product mix.  Melted product  selling
prices  decreased  13% during the second  quarter of 2003,  as  compared  to the
second  quarter  of 2002.  Substantially  all melted  products  are sold in U.S.
dollars.  Average  selling  prices in the  second  quarter  of 2003 for mill and
melted  products (using actual product mix and foreign  currency  exchange rates
prevailing during the respective  periods)  decreased 3% and 16%,  respectively,
from the second quarter of 2002.

     Gross  margin  (net sales less cost of sales) was 4% of sales in the second
quarter of 2003,  compared to 2% in the year-ago  period.  The increase in gross
margin during the second quarter of 2003 was primarily a result of the Company's
cost reduction  efforts.  Improved  average plant  operating  rates,  which were
approximately  59% of capacity during the second quarter of 2003 compared to 56%
during the second  quarter  of 2002,  also  contributed  to the  improved  gross
margin.  However,  gross  margin  remains  below  acceptable  levels  due to the
relatively low product volumes and the related impact on manufacturing  overhead
costs.  As  the  Company  reduces  production  volume  in  response  to  reduced
requirements, certain manufacturing overhead costs decrease at a slower rate and
to a lesser extent than production volume changes, generally resulting in higher
costs relative to production levels.

     Selling, general, administrative and development expenses during the second
quarter of 2003 decreased by approximately 16% from year-ago levels, principally
as a result of lower personnel and travel costs, as well as focused cost control
in other administrative areas.

     Equity in earnings of joint ventures  during the second quarter of 2003 was
$0.6 million lower than the year-ago  period,  principally  due to a decrease in
earnings of VALTIMET, the Company's minority-owned welded tube joint venture.

     Net other  income  (expense)  during  the  second  quarter of 2003 was $0.8
million higher than the year-ago  period  principally  due to an increase in the
amount of income the Company recognized under the take-or-pay  provisions of its
agreement with Boeing.

     First  six  months  of 2003  compared  to first  six  months  of 2002.  The
Company's sales of mill products decreased 4% from $150.0 million during the six
months  ended June 30, 2002 to $143.4  million  during the six months ended June
30, 2003.  This  decrease was  principally  due to a 7% decrease in mill product
sales  volume and a 7% decrease in mill  product  selling  prices  expressed  in
billing currencies,  partially offset by changes in customer and product mix and
the effects of the  weakening of the U.S.  dollar  compared to the British pound
sterling and the euro.  Mill product  selling prices  expressed in U.S.  dollars
decreased  2% in the six months  ended June 30, 2003  compared to the six months
ended June 30, 2002.

     Melted product sales increased 51% from $19.2 million during the six months
ended June 30, 2002 to $29.1  million  during the six months ended June 30, 2003
primarily  due to an 80% increase in melted  product sales volume as a result of
new  customer  relationships,  share  gains and changes in product  mix.  Melted
product selling prices  decreased 13% during the six months ended June 30, 2003,
as compared to the six months ended June 30, 2002. Average selling prices in the
first half of 2003 (using actual product mix and foreign currency exchange rates
prevailing  during the  respective  periods)  increased 2% for mill products and
decreased 16% for melted products from the first half of 2002.

                                     - 22 -
<PAGE>


     Gross  margin was 3% of sales  during the six months  ended June 30,  2003,
unchanged  from the prior  year,  as the  Company  was able to reduce  its costs
sufficiently to offset the impact of lower selling prices and lower mill product
volumes.  Average  plant  operating  rates  declined from  approximately  60% of
capacity in the six months ended June 30, 2002 to  approximately  55% in the six
months ended June 30, 2003.

     Selling,  general,  administrative and development  expenses during the six
months ended June 30, 2003 decreased by approximately  11% from year-ago levels,
principally as a result of lower  personnel and travel costs, as well as focused
cost control in other administrative areas.

     Equity in earnings of joint  ventures  during the six months ended June 30,
2003 was $0.9  million  lower than the  year-ago  period,  principally  due to a
decrease in earnings of VALTIMET.

     Net other  income  (expense)  during the six months ended June 30, 2003 was
$1.3 million higher than the year-ago  period  principally due to an increase in
the amount of income the Company recognized under the take-or-pay  provisions of
its agreement  with Boeing and a $0.5 million first quarter 2003 gain related to
the  Company's  settlement  of  certain  litigation  relating  to power  outages
suffered  at its  Henderson,  Nevada  facility  in 1997 and 1998 as a result  of
contractor activity.

Non-operating income (expense).

<TABLE>
                                                         Three months ended                  Six months ended
                                                              June 30,                            June 30,
                                                   --------------------------------    -------------------------------
                                                        2003              2002              2003             2002
                                                   --------------    --------------    --------------   --------------
                                                           (In thousands)                      (In thousands)

<S>                                                <C>               <C>               <C>              <C>
Interest income                                    $       69        $         24      $        181     $         93
SMC impairment charge                                       -                   -                 -          (27,500)
Foreign exchange loss                                    (257)               (226)             (887)            (342)
Interest expense                                         (488)               (735)           (1,176)          (1,473)
Other income (expense), net                               (81)                (26)              (83)            (608)
                                                   --------------    --------------    --------------   --------------

                                                   $     (757)       $       (963)     $     (1,965)    $    (29,830)
                                                   ==============    ==============    ==============   ==============
</TABLE>

     In March 2002, SMC and its U.S. subsidiaries filed a voluntary petition for
reorganization  under Chapter 11 of the U.S.  Bankruptcy Code. As a result,  the
Company  undertook an assessment of its investment in SMC with the assistance of
an external  valuation  specialist  and  recorded an  additional  $27.5  million
impairment  charge during the first quarter of 2002 for an other than  temporary
decline  in the  estimated  fair value of its  investment  in SMC.  This  charge
reduced the Company's carrying amount of its investment in the SMC securities to
zero. Based upon SMC's plan of  reorganization  filed with the Bankruptcy Court,
the  Company  currently  believes  that it will not recover any amount from this
investment.

     Income taxes. The Company operates in several tax jurisdictions and is
subject to varying income tax rates. As a result, the geographic mix of pretax
income can impact the Company's overall effective tax rate. For the three and
six months ended June 30, 2003 and 2002, the Company's income tax rate varied
from the U.S. statutory rate primarily due to an increase in the deferred tax
valuation allowance related to the Company's tax attributes that did not meet
the "more-likely-than-not" recognition criteria during those periods. See Note
13 to the Consolidated Financial Statements.

                                     - 23 -

<PAGE>


     Minority  interest.  Dividend  expense related to the Company's 6.625% BUCS
generally  approximates  $3.3  million  per  quarter  and  is  reported  in  the
Consolidated  Statement  of  Operations  as  minority  interest.  As  previously
reported in the Company's 2002 Annual Report, no income tax benefit is currently
associated with this expense.  In October 2002, the Company  exercised its right
to defer  future  dividend  payments  on  these  securities  effective  with the
Company's  December 1, 2002 scheduled  dividend payment.  Dividends  continue to
accrue at the coupon rate on the  principal  and unpaid  dividends.  The Company
will consider resuming payment of dividends on the BUCS once the outlook for the
Company's  business  improves  substantially.  See  Note 11 to the  Consolidated
Financial Statements.

     Cumulative effect of change in accounting  principles.  On January 1, 2003,
the Company adopted SFAS No. 143,  Accounting for Asset Retirement  Obligations,
and recognized (i) an asset  retirement  cost  capitalized as an increase to the
carrying  value of its  property,  plant and  equipment  of  approximately  $0.2
million, (ii) accumulated depreciation on such capitalized cost of approximately
$0.1  million  and (iii) a  liability  for the asset  retirement  obligation  of
approximately $0.3 million. The asset retirement  obligation  recognized relates
primarily to landfill closure and leasehold restoration costs.

     On January 1, 2002,  the Company  adopted SFAS No. 142,  Goodwill and Other
Intangible Assets,  and recorded a non-cash goodwill  impairment charge of $44.3
million,  representing the entire balance of the Company's  recorded goodwill at
January 1, 2002.

     See further discussion regarding the Company's adoption of these accounting
principles in Notes 1 and 6 to the Consolidated Financial Statements.

     European  operations.  The Company has  substantial  operations  and assets
located in Europe,  principally the United Kingdom,  with smaller  operations in
France and Italy.  Titanium is sold worldwide,  and many factors influencing the
Company's  U.S. and European  operations are similar.  Approximately  44% of the
Company's sales  originated in Europe for the six months ended June 30, 2003, of
which  approximately  61% were  denominated  in  currencies  other than the U.S.
dollar,  principally  the British pound and the euro.  Certain  purchases of raw
materials,  principally  titanium sponge and alloys,  for the Company's European
operations are  denominated in U.S.  dollars,  while labor and other  production
costs are primarily  denominated in local currencies.  The functional currencies
of the Company's European  subsidiaries are those of their respective countries,
and the European subsidiaries are subject to exchange rate fluctuations that may
impact reported  earnings and may affect the  comparability of  period-to-period
operating  results.  Borrowings of the Company's  European  operations may be in
U.S.  dollars or in functional  currencies.  The Company's export sales from the
U.S. are  denominated in U.S.  dollars and are not subject to currency  exchange
rate fluctuations.

     The  Company  does  not  use  currency  contracts  to  hedge  its  currency
exposures. The Company's results of operations included net currency transaction
losses of $0.9  million  during  the six  months  ended  June 30,  2003 and $0.3
million  during  the  six  months  ended  June  30,  2002.  At  June  30,  2003,
consolidated  assets  and  liabilities  denominated  in  currencies  other  than
functional  currencies  were  approximately  $39.6  million  and $44.3  million,
respectively,  consisting  primarily of U.S. dollar cash,  accounts  receivable,
accounts payable and borrowings.

                                     - 24 -

<PAGE>


     Supplemental  information.  On February 4, 2003, the Company's stockholders
approved a proposal to amend TIMET's  Certificate of  Incorporation  to effect a
reverse  stock split of the  Company's  common  stock at a ratio of one share of
post-split  common stock for each eight,  nine or ten shares of pre-split common
stock issued and  outstanding,  with the final  exchange ratio to be selected by
the  Board  of  Directors.   Subsequently,  the  Company's  Board  of  Directors
unanimously  approved  the  reverse  stock  split on the  basis of one  share of
post-split  common stock for each  outstanding  ten shares of  pre-split  common
stock.  The reverse stock split became  effective  after the close of trading on
February 14, 2003. All share and per share disclosures for all periods presented
in MD&A have been adjusted to give effect to the reverse stock split.

     As previously  discussed in the Company's  2002 Annual  Report,  imports of
most titanium  products into the U.S. are generally  subject to a 15% tariff. In
2002, the Government of Kazakhstan  filed a petition to allow titanium sponge to
be imported duty free into the U.S. from  Kazakhstan  and Russia under a special
trade  program known as the  "Generalized  System of  Preferences"  or "GSP." In
addition,  TIMET filed a petition  seeking the  removal of  duty-free  treatment
under the GSP program for imports of  titanium  wrought  products  into the U.S.
from Russia.  TIMET's  Henderson,  Nevada sponge  operations  represent the last
remaining  titanium  sponge  production of any size in the U.S. On July 1, 2003,
the Kazakh petition was denied. As a result, the normal 15% tariff will continue
to apply to all  imports  of  titanium  sponge  into the U.S.  Action on TIMET's
petition  was  deferred,  meaning  duty-free  treatment  on imports of  titanium
wrought products into the U.S. from Russia will continue for the time being.

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

     The commercial airline industry business environment continues to face many
challenges.  The weak economy and the uncertainties surrounding the aftermath of
the recent war in Iraq,  as well as the  potential  threat of further  terrorist
attacks, have extended the down cycle in the commercial airline market. Further,
the outbreak of the Severe Acute Respiratory Syndrome ("SARS") virus in Asia has
also  negatively  impacted  demand for  commercial  air  travel to that  region.
However,  with the SARS virus  seemingly  under control,  commercial air traffic
results appear to be headed in a positive  direction,  although still well below
pre-September  11,  2001  levels.  The  Airline  Monitor,  a  leading  aerospace
publication,  forecasts  that the major U.S.  airlines will lose $6.3 billion in
2003 after incurring  $11.2 billion in losses in 2002. In addition,  The Airline
Monitor's  most recent  forecast  (published  in July 2003) of large  commercial
aircraft deliveries projects deliveries by Boeing and Airbus to be 580 airplanes
in  2003,  decreasing  8% to 535  deliveries  in 2004  and  forecast  to reach a
low-point of 475 deliveries in 2005, an 18% decrease from estimated 2003 levels.
The Airline  Monitor  delivery  projections do not reach 2003 levels again until
2007.

                                     - 25 -

<PAGE>

     TIMET  currently  expects sales for the full year 2003 to approximate  $375
million to $395 million,  which reflects a $20 million  improvement in the upper
range from the Company's prior  guidance.  Sales in 2003, when compared to 2002,
are benefiting primarily from increased volumes for melted products and from the
weakening  of the U.S.  dollar  compared to the British  pound  sterling and the
euro.  Offsetting  these  increases are slightly lower volumes for mill products
and lower pricing for melted products.

     Mill product sales volume for the full year 2003 is expected to approximate
8,700  metric tons,  reflecting  a 2% decrease  compared to 2002 levels and a 5%
decrease from the Company's prior guidance.  Melted product sales volume for the
full year 2003 is expected to  approximate  4,250 metric tons,  reflecting a 77%
increase over 2002 levels and a 20% increase from the Company's  prior guidance.
The  increase  in melted  product  sales  volume is due in part to new  customer
relationships,  share gains at certain  customers,  increased military aerospace
business and, to a lesser  extent,  a shift in purchasing  preference by certain
customers in favor of ingot and away from wrought products.

     The Company's backlog of unfilled orders was approximately  $140 million at
June 30,  2003,  down  from the $165  million  level  at  March  31,  2003,  but
comparable  to the $145 million  level at June 30, 2002.  Substantially  all the
June 30, 2003 backlog is  scheduled to ship within the next 12 months.  However,
the Company's  order backlog may not be a reliable  indicator of future business
activity.

     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 and energy costs.  Raw material costs  represent the
largest  portion of the  Company's  manufacturing  cost  structure.  The Company
expects to manufacture a significant portion of its titanium sponge requirements
during the next several  quarters and purchase the balance.  The Company expects
the aggregate cost of purchased sponge to remain  relatively stable in 2003. The
Company is  experiencing  higher prices for certain  types of scrap,  but it has
mitigated those increased costs by utilizing other cheaper raw material  inputs.
Overall capacity utilization should average  approximately 54% in 2003; however,
practical capacity  utilization measures can vary significantly based on product
mix.  The Company has  implemented  a number of actions to reduce  manufacturing
costs,  including seeking supplier price concessions and implementing  stringent
spending  controls  and  programs to improve  manufacturing  yields.  These cost
reduction  efforts have improved gross margins,  and the Company now expects its
gross  margin to be about 2% for the full year 2003  versus  prior  guidance  of
breakeven.

     Selling,  general,  administrative and development expenses for 2003 should
approximate $39 million. Interest expense in 2003 should approximate $2 million.
Minority interest on the Company's BUCS in 2003 should  approximate $14 million,
including  additional  interest  costs  related to the  deferral  of the related
dividend payments. These amounts are unchanged from prior guidance.

     The Company  currently  anticipates  Boeing will purchase about 1.2 million
pounds of product from the Company in 2003. At this projected  order level,  the
Company  expects to recognize about $24 million of income under the Boeing LTA's
take-or-pay  provisions in 2003,  which is $1 million lower than prior guidance.
Any such earnings will be reported as operating income, but will not be included
in sales revenue, sales volume or gross margin.

                                     - 26 -

<PAGE>

     The Company operates in several tax jurisdictions and is subject to varying
income tax rates.  As a result,  the  geographic  mix of pretax income (or loss)
significantly  impacts the  Company's  overall  effective  income tax rate.  The
Company  anticipates  that its  effective  consolidated  income tax rate will be
significantly  below the U.S.  statutory  rate,  because  it does not  expect to
record any income tax benefit on U.S.  losses  generated in 2003.  Additionally,
the  Company  does not expect to record any  income tax  benefit on U.K.  losses
generated  in 2003.  Income tax  expense  recorded  in the first half of 2003 is
primarily the result of operations in other European jurisdictions.

     The Company  presently  expects an operating  loss in 2003 of $5 million to
$15 million and a net loss of $25 million to $35 million,  an  improvement  from
prior guidance of an operating loss of $10 million to $20 million and a net loss
of $30 million to $40 million.

     The Company  currently  expects to  generate  $40 million to $50 million in
cash flow from  operations  during  2003,  as compared to prior  guidance of $25
million to $35 million.  This improvement is principally driven by reductions in
working capital, especially inventory. Capital expenditures in 2003 are expected
to approximate $12 million, principally covering capital maintenance, safety and
environmental  programs.  Depreciation and amortization  should  approximate $36
million in 2003.  The Company does not expect its year-end net cash  position to
change significantly from the current position.

     Although the second quarter 2003 results showed  improvement as compared to
both the first  quarter  2003 and  second  quarter  of last  year,  the  Company
currently  expects a softening in demand for titanium  during the second half of
2003 and continuing into 2004. TIMET's focus for the balance of 2003 will remain
in the important  areas of cost and  inventory  reductions to assure the Company
achieves the goals it set at the beginning of the year.

LIQUIDITY AND CAPITAL RESOURCES

     The  Company's  consolidated  cash  flows  provided  (used)  by  operating,
investing and financing activities are presented below. The following discussion
should  be  read  in  conjunction  with  the  Company's  Consolidated  Financial
Statements and Notes thereto.

<TABLE>

                                                                                     Six months ended June 30,
                                                                            ------------------------------------------
                                                                                   2003                   2002
                                                                            -------------------    -------------------
                                                                                         (In thousands)
<S>                                                                         <C>                    <C>
Cash provided (used) by:
   Operating activities:
     Excluding changes in assets and liabilities                            $           (516)      $         (3,536)
     Changes in assets and liabilities                                                40,741                (15,821)
                                                                            -------------------    -------------------
                                                                                      40,225                (19,357)
   Investing activities                                                               (3,542)                (3,337)
   Financing activities                                                              (16,585)                 6,119
                                                                            -------------------    -------------------

   Net cash provided (used) by operating,
     investing and financing activities                                     $         20,098       $        (16,575)
                                                                            ===================    ===================

</TABLE>

     Operating  activities.   Cash  provided  (used)  by  operating  activities,
excluding  changes in assets and  liabilities,  generally  followed the trend in
operating  results.  Changes in assets and  liabilities  primarily  reflect  the
timing of purchases, production and sales and can vary significantly from period
to period.

                                     - 27 -

<PAGE>


     Accounts receivable  increased during the first half of 2003 primarily as a
result of increased sales.  Accounts receivable  decreased during the first half
of 2002  primarily  as a result  of  decreased  sales,  partially  offset  by an
increase in days sales outstanding.  Inventories decreased during the first half
of 2003 as a result of higher melted product sales volumes during the first half
of 2003 and the  Company's  focus on inventory  reduction.  The Company  expects
inventory  levels to decline  further during the remainder of 2003.  Inventories
increased  in the  first  half of 2002 as a result  of  production  begun by the
Company prior to certain  customer  cancellations  and push-outs  related to the
downturn in the commercial aerospace market, the timing of certain raw materials
purchases  and the  accelerated  production  of  certain  orders  as part of its
contingency  planning for a possible labor  disruption at the Company's  Toronto
plant.

     Changes in accounts payable and accrued  liabilities  reflect,  among other
things,  the timing of payments to suppliers of titanium sponge,  titanium scrap
and other raw materials purchases. Changes in customer advances during the first
half of 2003 reflect the Company's  receipt in January 2003 of the $27.7 million
advance from Boeing,  partially offset by the application of customer  purchases
and the recognition of Boeing-related  take-or-pay  income during the first half
of the year.  Under the terms of the amended  Boeing LTA, in years 2002  through
2007,  Boeing  advances  TIMET $28.5 million  annually,  less $3.80 per pound of
titanium  product  purchased  from  TIMET by Boeing  subcontractors  during  the
preceding year.  Effectively,  the Company  collects $3.80 less from Boeing than
the LTA  selling  price for each pound of  titanium  product  sold  directly  to
Boeing,  which reduces the related customer advance recorded by the Company. For
titanium products sold to Boeing  subcontractors,  the Company collects the full
LTA selling  price,  but gives Boeing  credit by reducing the next year's annual
advance by $3.80 per pound of titanium  product  sold to Boeing  subcontractors.
The Company currently estimates that the reduction against the 2004 advance from
Boeing  will be less than $1 million.  The LTA is  structured  as a  take-or-pay
agreement such that,  beginning in calendar year 2002, Boeing forfeits $3.80 per
pound in the event that its orders for delivery are less than 7.5 million pounds
in any given calendar year. The Company recognized $2.8 million and $2.2 million
of  take-or-pay  income  during  the six months  ended  June 30,  2003 and 2002,
respectively.

     See "Results of Operations - Non-operating income (expense),  net" and Note
4 to the  Consolidated  Financial  Statements  for  discussion  of the Company's
impairment of its investment in SMC securities.

     In October 2002, the Company  exercised its right to defer future  dividend
payments on its BUCS for a period of up to 20  consecutive  quarters,  effective
beginning  with the  Company's  December  1, 2002  scheduled  dividend  payment.
Dividends  continue  to accrue at the coupon  rate on the  principal  and unpaid
dividends and are reflected as long-term liabilities in the Consolidated Balance
Sheet. The Company will consider  resuming payment of dividends on the BUCS once
the outlook for the Company's business improves substantially. Since the Company
exercised its right to defer dividend payments,  it is unable under the terms of
these  securities,  among other  things,  to pay  dividends on or reacquire  its
capital stock during the deferral period.  However,  the Company is permitted to
reacquire the BUCS during the deferral period provided the Company has satisfied
certain conditions under its U.S. credit facility,  including maintenance of the
Company's  excess   availability   above  $25  million  before  and  after  such
reacquisition.

     Investing activities. The Company's capital expenditures were $3.6
million for the six months ended June 30, 2003 compared to $3.3 million for the
same period in 2002, principally for capital maintenance and safety and
environmental projects.

                                     - 28 -

<PAGE>


     Financing  activities.  Cash used during the six months ended June 30, 2003
was due  primarily  to the  Company's  $14.1  million of net  repayments  on its
outstanding  borrowings  upon the Company's  receipt of the $27.7 million Boeing
advance in January 2003. Cash provided during the six months ended June 30, 2002
was due  primarily  to $7.6 million of net  borrowings  necessary to fulfill the
Company's  working  capital needs.  TIMET Savoie also made dividend  payments to
CEZUS of $1.9  million and $1.1  million  during the second  quarter of 2003 and
2002, respectively.

     Borrowing  arrangements.  Under the terms of the Company's U.S. asset-based
revolving  credit  agreement,  which matures in February  2006,  borrowings  are
limited to the lesser of $105  million or a  formula-determined  borrowing  base
derived  from  the  value  of  accounts  receivable,   inventory  and  equipment
("borrowing availability"). This facility requires the Company's U.S. daily cash
receipts  to be  used  to  reduce  outstanding  borrowings,  which  may  then be
reborrowed, subject to the terms of the agreement. Interest generally accrues at
rates  that  vary  from  LIBOR  plus  2% to  LIBOR  plus  2.5%.  Borrowings  are
collateralized  by substantially  all of the Company's U.S.  assets.  The credit
agreement  prohibits  the  payment  of  dividends  on  TIMET's  BUCS if  "excess
availability,"  as  defined,  is  less  than  $25  million,   limits  additional
indebtedness,  prohibits the payment of dividends on the Company's  common stock
if  excess  availability  is less than $40  million,  requires  compliance  with
certain  financial  covenants and contains other covenants  customary in lending
transactions  of this  type.  The  Company  was in  compliance  in all  material
respects  with all  covenants for the six months ended June 30, 2003 and for all
periods  during  the year  ended  December  31,  2002.  Excess  availability  is
essentially   unused   borrowing   availability  and  is  defined  as  borrowing
availability  less outstanding  borrowings and certain  contractual  commitments
such  as  letters  of  credit.  At  June  30,  2003,  excess   availability  was
approximately $86 million.

     The Company's  subsidiary,  TIMET UK, has a credit  agreement that provides
for   borrowings   limited   to  the   lesser  of   (pound)22.5   million  or  a
formula-determined borrowing base derived from the value of accounts receivable,
inventory  and  equipment  ("borrowing  availability").   The  credit  agreement
includes a revolving and term loan facility and an overdraft facility (the "U.K.
facilities") and matures in December 2005.  Borrowings under the U.K. facilities
can be in various currencies including U.S. dollars, British pounds sterling and
euros;  accrue  interest  at rates  that vary from  LIBOR  plus 1% to LIBOR plus
1.25%; and are  collateralized  by substantially  all of TIMET UK's assets.  The
U.K.  facilities require the maintenance of certain financial ratios and amounts
and other covenants customary in lending transactions of this type. TIMET UK was
in  compliance  in all material  respects  with all covenants for the six months
ended June 30, 2003 and for all periods during the year ended December 31, 2002.
The U.K.  overdraft  facility  is subject to annual  review in  December of each
year. In the event the overdraft  facility is not renewed,  the Company believes
it could  refinance  any  outstanding  overdraft  borrowings  under  either  the
revolving  or term loan  features  of the U.K.  facilities.  During  the  second
quarter of 2003, TIMET UK received an interest-bearing  intercompany loan from a
U.S.  subsidiary  of the  Company  enabling  TIMET UK to  reduce  its  long-term
borrowings under the U.K.  facilities to zero. Unused borrowing  availability at
June 30, 2003 under the U.K. facilities was approximately $37 million.

     The Company also has  overdraft  and other credit  facilities at certain of
its other European  subsidiaries.  These  facilities  accrue interest at various
rates and are payable on demand. Unused borrowing  availability at June 30, 2003
under these facilities was approximately $12 million.

                                     - 29 -

<PAGE>


     Although excess  availability  under TIMET's U.S. credit agreement  remains
above $40 million,  no dividends  were paid by TIMET on its common shares during
the three and six month  periods  ended June 30,  2003 and 2002.  As  previously
discussed,  TIMET  is not  permitted  under  the  terms  of the BUCS to pay such
dividends while deferring dividend payments on the BUCS.

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

     Other.  The Company  periodically  evaluates  its  liquidity  requirements,
capital needs and availability of resources in view of, among other things,  its
alternative  uses of capital,  debt service  requirements,  the cost of debt and
equity capital and estimated  future  operating cash flows.  As a result of this
process, the Company has in the past, or in light of its current outlook, may in
the future,  seek to raise additional  capital,  modify its common and preferred
dividend  policies,   restructure  ownership  interests,   incur,  refinance  or
restructure  indebtedness,  repurchase  shares  of  common  stock or BUCS,  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.

Non-GAAP financial measures

     In an effort to provide  investors  with  information  in  addition  to the
Company's results as determined by accounting  principles  generally accepted in
the United  States of America  ("GAAP"),  the Company has provided the following
non-GAAP  financial  disclosures that it believes may provide useful information
to investors:

     o    The  Company  discloses  percentage  changes  in its mill  and  melted
          product  selling prices in U.S.  dollars,  which have been adjusted to
          exclude the effects of changes in product  mix,  thereby  facilitating
          period-to-period comparisons.  Depending on the composition of changes
          in product mix, the percentage  change in selling prices excluding the
          effect of  changes  in  product  mix can be higher or lower  than such
          percentage  change  would be using the actual  product mix  prevailing
          during the respective periods and

     o    In  addition  to  disclosing  percentage  changes in its mill  product
          selling  prices  adjusted to exclude the effects of changes in product
          mix, the Company also  discloses  such  percentage  changes in billing
          currencies  which have been further adjusted to exclude the effects of
          changes in foreign currency exchange rates, also thereby  facilitating
          period-to-period   comparisons.   Generally,   when  the  U.S.  dollar
          strengthens (weakens) against other currencies,  the percentage change
          in selling  prices in billing  currencies  will be higher (lower) than
          such   percentage   changes  would  be  using  actual  exchange  rates
          prevailing during the respective periods.

                                     - 30 -

<PAGE>


Item 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     For a  discussion  of the  Company's  market  risks,  refer to the Item 7A,
"Quantitative  and Qualitative  Disclosures About Market Risk," in the Company's
2002  Annual  Report.  There have been no  material  changes to the  information
provided  that would  require  additional  information  with  respect to the six
months ended June 30, 2003.

Item 4.       CONTROLS AND PROCEDURES

     The Company maintains a system of disclosure  controls and procedures.  The
term "disclosure controls and procedures," as defined by regulations of the SEC,
means  controls and other  procedures of the Company that are designed to ensure
that information  required to be disclosed in the reports that the Company files
or submits to the SEC under the Securities Exchange Act of 1934, as amended (the
"Exchange  Act"), is recorded,  processed,  summarized and reported,  within the
time  periods  specified in the SEC's rules and forms.  Disclosure  controls and
procedures  include,  without  limitation,  controls and procedures  designed to
ensure that  information  required to be disclosed by the Company in the reports
that it files or submits to the SEC under the  Exchange Act is  accumulated  and
communicated  to the Company's  management,  including  its principal  executive
officer and its  principal  financial  officer,  or persons  performing  similar
functions,   as  appropriate  to  allow  timely  decisions   regarding  required
disclosure.  Both J. Landis Martin, the Company's Chief Executive  Officer,  and
Bruce  P.  Inglis,   the  Company's  Vice  President  -  Finance  and  Corporate
Controller,  have evaluated the Company's  disclosure controls and procedures as
of June 30, 2003.  Based upon their  evaluation,  these executive  officers have
concluded that the Company's disclosure controls and procedures are effective as
of the date of such evaluation.

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

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

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

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

     There has been no change to the Company's  system of internal  control over
financial  reporting  during the quarter ended June 30, 2003 that has materially
affected,  or is reasonably likely to materially affect, the Company's system of
internal controls over financial reporting.

                                     - 31 -

<PAGE>


PART II. - OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS

     Reference  is made to Note  14 of the  Consolidated  Financial  Statements,
which information is incorporated herein by reference, and to the Company's 2002
Annual Report 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 20, 2003, for
the purpose of electing  seven  directors to serve until the 2004 Annual Meeting
of Shareholders and until their  successors are duly elected and qualified.  All
nominees for director were elected with the following vote:

<TABLE>

                      Director                           Votes For                  Votes Withheld
         ------------------------------------    --------------------------    --------------------------
         <S>                                             <C>                            <C>
         Norman N. Green                                 2,717,636                      15,374
         J. Landis Martin                                2,717,298                      15,712
         Albert W. Niemi, Jr.                            2,717,898                      15,112
         Glenn R. Simmons                                2,714,450                      18,560
         Steven L. Watson                                2,682,577                      50,433
         Terry N. Worrell                                2,718,713                      14,297
         Paul J. Zucconi                                 2,718,656                      14,354
</TABLE>

Item 6.    EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

          10.1 Intercorporate   Services   Agreement   between  Titanium  Metals
               Corporation and Contran  Corporation,  effective as of January 1,
               2003.

          10.2 Intercorporate   Services   Agreement   between  Titanium  Metals
               Corporation and NL Industries,  Inc.,  effective as of January 1,
               2003,  incorporated  by  reference  to  Exhibit  10.2  to  the NL
               Industries,  Inc.'s Quarterly Report on Form 10-Q for the quarter
               ended June 30, 2003.

          10.3 Intercorporate   Services   Agreement   between  Titanium  Metals
               Corporation and Tremont LLC, effective as of January 1, 2003.

          10.4*Titanium   Metals   Corporation   Amended   and   Restated   1996
               Non-Employee  Director Compensation Plan, as amended and restated
               effective May 20, 2003.

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

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

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

              * Management contract, compensatory plan or arrangement.

                                     - 32 -

<PAGE>


          Note:The Company has retained a signed  original of any exhibit listed
               above that contains signatures,  and the Company will provide any
               such exhibit to the SEC or its staff upon request.

     (b)  Reports on Form 8-K filed by the registrant for the quarter ended June
          30, 2003 and through August 7, 2003:

<TABLE>


                                Date of Report                        Items Reported
                      -----------------------------------    ---------------------------------

                             <S>                                       <C>
                             April 2, 2003                               5 and 7
                             April 14, 2003                              5 and 7
                             April 23, 2003                            12 (under 9)
                             May 7, 2003                                 5 and 7
                             May 23, 2003                                5 and 7
                             July 3, 2003                                5 and 7
                             July 7, 2003                                5 and 7
                             July 25, 2003                             12 (under 9)

</TABLE>

                                     - 33 -

<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 8, 2003  By       /s/ J. Landis Martin
                               -------------------------------------------------
                               J. Landis Martin
                               Chairman of the Board, President and
                                Chief Executive Officer



Date: August 8, 2003  By       /s/ Bruce P. Inglis
                               -------------------------------------------------
                               Bruce P. Inglis
                               Vice President - Finance and Corporate Controller


                                     - 34 -