SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

 X   ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
ACT OF 1934 - For the fiscal year ended December 31, 2000
                                       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

           Securities registered pursuant to Section 12(b) of the Act:

Title of each class                   Name of Each Exchange on Which Registered
    Common Stock                                 New York Stock Exchange
($.01 par value per share)

           Securities registered pursuant to Section 12(g) of the Act:

                                      None.

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 if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K _ _

As of March 12, 2001,  31,827,405 shares of common stock were  outstanding.  The
aggregate  market  value  of the 17  million  shares  of  voting  stock  held by
nonaffiliates of Titanium Metals  Corporation as of such date  approximated $158
million.

                      Documents incorporated by reference:

The  information  required by Part III is  incorporated  by  reference  from the
Registrant's definitive proxy statement to be filed with the Commission pursuant
to  Regulation  14A not later  than 120 days  after the end of the  fiscal  year
covered by this report.

<PAGE>




Forward-Looking Information

         The  statements  contained in this Annual  Report on Form 10-K that are
not historical  facts,  including,  but not limited to,  statements found in the
Notes to Consolidated  Financial  Statements and in Item 1 - Business,  Item 2 -
Properties,  Item 3 - Legal Proceedings and Item 7 - Management's Discussion and
Analysis of Financial  Condition and Results of Operations,  are forward-looking
statements  that  represent   management's  beliefs  and  assumptions  based  on
currently available information. Forward-looking statements can be identified by
the  use of  words  such  as  "believes,"  "intends,"  "may,"  "will,"  "looks,"
"should,"  "could,"  "anticipates,"  "expects" or comparable  terminology  or by
discussions  of  strategies  or trends.  Although the Company  believes that the
expectations  reflected in such  forward-looking  statements are reasonable,  it
cannot give any  assurances  that these  expectations  will prove to be correct.
Such statements by their nature involve substantial risks and uncertainties that
could significantly affect expected results.  Actual future results could differ
materially  from those  described in such  forward-looking  statements,  and the
Company   disclaims  any  intention  or  obligation  to  update  or  revise  any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise. Among the factors that could cause actual results to differ
materially  are the risks and  uncertainties  discussed  in this Annual  Report,
including in those portions  referenced  above and those  described from time to
time in the Company's other filings with the Securities and Exchange  Commission
which  include,  but are not  limited  to,  the  cyclicality  of the  commercial
aerospace  industry,  the  performance of The Boeing Company and other aerospace
manufacturers  under their long-term purchase  agreements with the Company,  the
difficulty  in  forecasting  demand  for  titanium  products,   global  economic
conditions,  global productive capacity for titanium, changes in product pricing
and costs, the impact of long-term  contracts with vendors on the ability of the
Company to reduce or increase supply or achieve lower costs,  the possibility of
labor disruptions,  fluctuations in currency exchange rates,  control by certain
stockholders and possible conflicts of interest,  uncertainties  associated with
new product  development,  the supply of raw materials and services,  changes in
raw material and other operating costs (including  energy costs) and other risks
and  uncertainties.  Should  one or  more of  these  risks  materialize  (or the
consequences of such a development worsen), or should the underlying assumptions
prove incorrect, actual results could differ materially from those forecasted or
expected.


<PAGE>
                                     PART I

ITEM 1:  BUSINESS

         General.  Titanium Metals Corporation ("TIMET" or the "Company") is one
of the world's leading integrated producers of titanium sponge,  melted and mill
products.  The  Company is the only  integrated  producer  with  major  titanium
production  facilities  in both  the  United  States  and  Europe,  the  world's
principal markets for titanium.  The Company estimates that in 2000 it accounted
for  approximately  24% of worldwide  industry  shipments  of mill  products and
approximately 10% of worldwide sponge production.

         Titanium  was first  manufactured  for  commercial  use in the  1950's.
Titanium's  unique  combination  of corrosion  resistance,  elevated-temperature
performance and high  strength-to-weight  ratio makes it particularly  desirable
for use in  commercial  and  military  aerospace  applications  in  which  these
qualities are essential  design  requirements for certain critical parts such as
wing  supports and jet engine  components.  While  aerospace  applications  have
historically  accounted  for a substantial  portion of the worldwide  demand for
titanium and were  approximately 40% of industry mill product shipments in 2000,
the  number  of   non-aerospace   end-use  markets  for  titanium  has  expanded
substantially.  Today,  numerous  industrial uses for titanium exist,  including
chemical and industrial power plants,  desalination plants and pollution control
equipment.  Demand for titanium is also increasing in emerging markets with such
diverse  uses  as  offshore  oil and gas  production  installations,  geothermal
facilities, military armor, automotive and architectural applications.

         TIMET's products include:  titanium sponge,  the basic form of titanium
metal used in processed titanium products; melted products comprised of titanium
ingot and slab, the result of melting sponge and titanium scrap, either alone or
with various other alloying  elements;  and forged and rolled products  produced
from ingot or slab,  including  long  products  (billet and bar),  flat products
(plate,  sheet and strip),  pipe and pipe fittings.  The Company  believes it is
among the lower cost  producers  of titanium  sponge and melted  products due in
part to its  manufacturing  expertise and technology.  The titanium  industry is
comprised of several manufacturers which, like the Company, produce a relatively
complete  range of  titanium  products  and a  significant  number of  producers
worldwide  that  manufacture  a limited  range of titanium  mill  products.  The
Company is presently the only active titanium sponge producer in the U.S.

         The  Company's  long term strategy is to maximize the value of its core
aerospace business and, at the same time, develop new markets,  applications and
products to help reduce its  traditional  dependence on the aerospace  industry.
The Company's focus in the short-term is to return to profitability and generate
positive  cash  flow.  To  accomplish  its  short-term  goals,  the  Company  is
attempting to reduce costs,  improve quality and streamline its overall business
and  manufacturing  processes  as  well as  maximize  its  participation  in the
increasing demand for aerospace quality titanium during this business cycle.

         Industry.  The titanium industry historically has derived a substantial
portion of its business from the aerospace industry.  The cyclical nature of the
aerospace industry has been the principal driver of the historical  fluctuations
in the performance of titanium  companies.  Over the past 20 years, the titanium
industry had cyclical peaks in mill product shipments in 1980, 1989 and 1997 and
cyclical  lows in 1983,  1991 and  1999.  During  the 1996 to 1998  period,  the
Company reported aggregate net income of $176 million which more than offset the
aggregate  net losses of $93 million it reported  during the  difficult  1991 to
1995 period.  The Company also reported net losses in 1999 and 2000  aggregating
$70  million.  The  Company  currently  expects  to  report  a net loss in 2001;
however,  it expects  that its loss in 2001 will be  substantially  reduced from
2000 levels as a result of the recent upturn in its business cycle. See Item 7 -
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations."
<PAGE>
         Demand for titanium reached a peak in 1997 when worldwide industry mill
product shipments reached an estimated 60,000 metric tons. Industry mill product
shipments  subsequently declined  approximately 5% to an estimated 57,000 metric
tons in 1998,  with a further 16% decline to an estimated  48,000 metric tons in
1999 and  2000.  The  Company  expects  that  worldwide  industry  mill  product
shipments  will  increase in 2001 by  approximately  10% to about 53,000  metric
tons.  The  expected  increase is  primarily  attributable  to  stronger  demand
resulting  from an increase in  forecasted  aircraft  build rates,  as well as a
substantial  decrease in the amount of excess titanium inventory  throughout the
aerospace supply chain.

         The present business  environment is substantially  different from that
in 1996 to 1998.  During  the  second  half of 1998 it became  evident  that the
anticipated record rates of aircraft production would not be reached, and that a
decline  in  overall   production  rates  would  begin  earlier  than  forecast,
particularly  in   titanium-intensive   wide  body  planes.   This  resulted  in
considerable  excess  inventory   throughout  the  supply  chain.  During  1999,
aerospace customers continued to focus on reducing inventories and a significant
number of the  Company's  aerospace  customers  canceled  or delayed  previously
scheduled  orders.  The aerospace  supply chain is fragmented and  decentralized
making it difficult to quantify excess  inventories.  However,  customer actions
such as order delays (i.e. pushouts) and cancellations, combined with other data
provide limited visibility.  During 2000, the Company experienced no significant
customer  pushouts or cancellations of deliveries.  Late in 2000 and early 2001,
the Company  experienced  an increase in orders for aerospace  quality  titanium
products and certain  customers  requested  advanced delivery of existing orders
and its order backlog increased substantially. Although quantitative information
is not readily  available,  these factors and others lead the Company to believe
that  the  excess  titanium  inventory  throughout  the  supply  chain  has been
substantially reduced and is unlikely to be a significant factor in 2001 in most
areas.

         Mill product  shipments to the aerospace  industry in 2000  represented
about 40% of total  industry  demand and about 85% of the Company's  annual mill
product shipments.  Aerospace demand for titanium products,  which includes both
jet engine components (i.e. blades, discs, rings and engine cases) and air frame
components  (i.e.  bulkheads,  tail sections,  landing gears,  wing supports and
fasteners)  can be  broken  down  into  commercial  and  military  sectors.  The
commercial  aerospace sector has a significant  influence on titanium companies,
particularly  mill product producers such as TIMET.  Industry  shipments of mill
products to the commercial  aerospace sector in 2000 accounted for approximately
85% of aerospace demand and 35% of aggregate  titanium mill product demand.  The
Company  believes  that demand for mill  products for the  commercial  aerospace
sector will be the  principal  driver of the  expected  10% increase in industry
mill product  shipments during 2001. Demand growth for these markets and sectors
is  expected  to exceed  the 10%  aggregate  growth  in  titanium  mill  product
shipments  while  other  markets  are  expected  to  experience  lesser  growth.
Shipments to the commercial  aerospace sector  represented  approximately 80% of
the Company's sales volume in 2000. Accordingly,  the Company believes its sales
volume in 2001 may  increase  more than the  expected  10%  increase in titanium
industry mill product shipments.

         According to The Airline Monitor, a leading aerospace publication,  the
commercial  airline industry  reported  operating  income of  approximately  $15
billion  (estimated) in 2000, compared to $13 billion in 1999 and $16 billion in
1998. According to The Airline Monitor, large commercial aircraft deliveries for
the 1996 to 2000 period peaked in 1999 with 889 aircraft including 254 wide body
aircraft.  Wide body aircraft use  substantially  more titanium than narrow body
aircraft.  Commercial  aircraft  deliveries  are  currently  expected  to be 905
(including 230 wide bodies) in 2001 and 825 (including 220 wide bodies) in 2002.
The demand for titanium  generally  precedes  aircraft  deliveries  by about one
year,  although this varies considerably by titanium product.  Accordingly,  the
Company's  cycle  historically  precedes the cycle of the aircraft  industry and
related  deliveries.  The  Company  can give no  assurance  as to the  extent or
duration of the  current  commercial  aerospace  cycle or the extent to which it
will affect demand for the Company's products.
<PAGE>
         Since  titanium's  initial  applications in the aerospace  sector,  the
number of end-use markets for titanium has expanded. Established industrial uses
for titanium  include chemical  plants,  industrial  power plants,  desalination
plants, and pollution control equipment. Titanium is also experiencing increased
customer demand in several  emerging  markets with diverse uses such as offshore
oil and gas production installations, geothermal facilities, military armor, and
automotive and architectural  applications.  While shipments to emerging markets
represented  less than 5% of the  Company's  sales  volume in 2000,  the Company
believes these emerging  applications  represent potential growth opportunities.
If titanium  usage in these markets  continues to develop,  they may, over time,
reduce the  industry's and the Company's  dependence on the aerospace  industry.
For example,  titanium  manufactured by the Company is being used to produce the
exhaust  system  for the 2001 model of the  Chevrolet  Corvette  Z06,  the first
significant titanium component selected for a production automobile.  Volkswagen
is using titanium supplied by the Company in the suspension  springs on the 2001
model year Lupo FSI  automobile.  In a separate  market,  the Company  delivered
titanium  production casing during 2000 for one of the largest  geothermal wells
in the world.

         Customer  Agreements.  The Company has long-term  agreements  ("LTA's")
with certain major aerospace customers, including The Boeing Company ("Boeing"),
Rolls-Royce plc, United  Technologies  Corporation  (and related  companies) and
Wyman-Gordon  Company  (a  unit  of  Precision  Castparts  Corporation).   These
agreements,  which became effective in 1998 and 1999,  generally provide for (i)
minimum  market shares of the  customers'  titanium  requirements  (generally at
least  70%)  for  extended  periods  (nine  to ten  years)  and  (ii)  fixed  or
formula-determined prices generally for at least the first five years. The LTA's
were structured to provide incentives to both parties to lower TIMET's costs and
share in the  savings.  These  contracts  and others  represent  the core of the
Company's long-term aerospace strategy.  These agreements were designed to limit
pricing volatility (both up and down) for the long-term benefit of both parties,
while providing TIMET with a solid base of aerospace volume.

         The LTA with Boeing requires Boeing to purchase a minimum percentage of
its and its  suppliers  titanium  requirements  from TIMET  commencing  in 1999.
Although  Boeing placed orders and accepted  delivery of certain volumes in 1999
and  2000,  the  level  of  orders  placed  by  Boeing  in  1999  and  2000  was
significantly  below the contractual volume requirements for those years. Boeing
informed  the Company in 1999 that it was  unwilling  to commit to the  contract
beyond the year 2000.  The Company  presently  expects to receive  less than the
minimum contractual order volume from Boeing in 2001.

         In March 2000, the Company filed a lawsuit against Boeing in a Colorado
state court seeking  damages for Boeing's  repudiation  and breach of the Boeing
contract.  TIMET's complaint seeks damages from Boeing that TIMET believes could
be in excess of $600 million and a declaration  from the court of TIMET's rights
under the contract.  In June 2000,  Boeing filed its answer to TIMET's complaint
denying   substantially   all  of  TIMET's   allegations   and  making   certain
counterclaims against TIMET. TIMET believes such counterclaims are without merit
and intends to vigorously  defend against such claims.  The litigation is in the
discovery  phase,  with a trial date currently set for January 2002. The Company
continues to have  discussions  with Boeing  about  possible  settlement  of the
matter.  There can be no  assurance  that the Company  will  achieve a favorable
outcome to this litigation.
<PAGE>
         As a  complement  to the  LTA's  entered  into with the  Company's  key
customers,  the  Company  has also  entered  into  agreements  with  certain key
suppliers that are intended to assure  anticipated raw material needs to satisfy
production  requirements for the Company's key customers.  Certain provisions of
these  contracts,  such as minimum  purchase  commitments and prices,  have been
renegotiated  in the past and may be renegotiated in the future to meet changing
business conditions and to address Boeing's underperformance under its LTA.

         Acquisitions  and Capital  Transactions  During the Past Five Years. At
the  beginning  of 1996,  the  Company  was  75%-owned  by  Tremont  Corporation
("Tremont")  and its operations  were conducted  primarily in the United States.
During 1996, the Company  expanded both  geographically  and  operationally as a
result of the  acquisition of the titanium  business of IMI plc, the acquisition
of  certain  assets  from  Axel  Johnson   Metals,   Inc.  and  certain  smaller
acquisitions in Europe.

         In 1998, TIMET (i) acquired Loterios S.p.A. to increase market share in
industrial markets,  and provide increased  geographic sales coverage in Europe,
(ii) purchased for cash $80 million of non-voting and  non-marketable  preferred
securities  of  Special  Metals  Corporation,  a U.S.  manufacturer  of  wrought
nickel-based superalloys and special alloy long products, and (iii) entered into
a castings  joint venture with  Wyman-Gordon.  In January 2000, the Company sold
its interest in the castings joint venture for $7 million and realized a gain of
$1.2 million on the sale.  These  transactions are more fully described in Notes
3, 4 and 5 to the Consolidated Financial Statements.

        In 1998, Tremont purchased  additional  TIMET  common  stock  in  market
transactions. In 1999, Tremont exercised an option to purchase approximately two
million shares of the Company's common stock. At December 31, 2000, Tremont held
approximately  39% of TIMET's  outstanding  common  stock.  An  additional 8% of
TIMET's  outstanding  common  stock is owned by the Combined  Master  Retirement
Trust,  a trust formed by Valhi,  Inc.  ("Valhi"),  an affiliate of Tremont,  to
permit the  collective  investment by trusts that maintain the assets of certain
employee benefit plans adopted by Valhi and related entities. See Note 15 to the
Consolidated Financial Statements.

         Products  and  Operations.  The  Company  is  a  vertically  integrated
titanium  producer whose products  include:  titanium sponge,  the basic form of
titanium metal used in processed titanium products; melted products comprised of
titanium ingot and slab, the result of melting sponge and titanium scrap, either
alone or with various other alloying  elements;  and forged and rolled  products
produced  from ingot or slab,  including  long products  (billet and bar),  flat
products  (plate,  sheet and strip),  pipe and pipe  fittings.  In 2000,  all of
TIMET's sales were  generated by the Company's  integrated  titanium  operations
(its "Titanium melted and mill products" segment). The titanium product chain is
described below.

         Titanium   sponge  (so  called  because  of  its   appearance)  is  the
commercially  pure,  elemental form of titanium metal.  The first step in sponge
production involves the chlorination of titanium-containing rutile ores, derived
from beach  sand,  with  chlorine  and coke to produce  titanium  tetrachloride.
Titanium  tetrachloride  is purified and then reacted with magnesium in a closed
system,  producing  titanium sponge and magnesium  chloride as co-products.  The
Company's titanium sponge production capacity in Henderson, Nevada, incorporates
vacuum distillation process ("VDP") technology,  which removes the magnesium and
magnesium   chloride  residues  by  applying  heat  to  the  sponge  mass  while
maintaining vacuum in the chamber.  The combination of heat and vacuum boils the
residues from the reactor mass into the condensing  vessel. The titanium mass is
then mechanically pushed out of the original reactor, sheared and crushed, while
the residual magnesium chloride is electrolytically separated and recycled.
<PAGE>
         Titanium   ingots  and  slabs  are  solid   shapes   (cylindrical   and
rectangular,  respectively) that weigh up to 8 metric tons in the case of ingots
and up to 16  metric  tons in the  case of  slabs.  Each is  formed  by  melting
titanium sponge or scrap or both,  usually with various other alloying  elements
such as vanadium, aluminum,  molybdenum, tin and zirconium.  Titanium scrap is a
by-product  of the  forging,  rolling,  milling and  machining  operations,  and
significant  quantities  of scrap are  generated in the  production  process for
finished titanium products.  The melting process for ingots and slabs is closely
controlled and monitored  utilizing computer control systems to maintain product
quality and  consistency and to meet customer  specifications.  Ingots and slabs
are both sold to customers and further processed into mill products.

         Titanium  mill  products  result from the  forging,  rolling,  drawing,
welding  and/or  extrusion of titanium  ingots or slabs into products of various
sizes and grades.  These mill products include titanium billet, bar, rod, plate,
sheet,  strip,  pipe and pipe  fittings.  The Company sends certain  products to
outside vendors for further  processing  before being shipped to customers or to
the Company's  service  centers.  The Company's  customers  usually  process the
Company's products for their ultimate end-use or for sale to third parties.

         During  the   production   process  and  following  the  completion  of
manufacturing, the Company performs extensive testing on its products, including
sponge,  ingot  and  mill  products.  Testing  may  involve  chemical  analysis,
mechanical  testing and ultrasonic and x-ray testing.  The inspection process is
critical  to  ensuring  that  the  Company's  products  meet  the  high  quality
requirements of customers, particularly in aerospace components production.

         The Company is reliant on several outside processors to perform certain
rolling  and  finishing  steps in the U.S.,  and  certain  melting,  forging and
finishing  steps in France.  In the U.S.,  one of the  processors  that performs
these  steps in  relation  to strip  production  and another as relates to plate
finishing are owned by a  competitor.  These  processors  are currently the sole
source  for  these  services.   Other  processors  used  in  the  U.S.  are  not
competitors.  In France the  processor  is also a joint  venture  partner in the
Company's 70%-owned subsidiary, TIMET Savoie. Although the Company believes that
there are other  metal  producers  with the  capability  to  perform  these same
processing  functions,   arranging  for  alternative  processors,   or  possibly
acquiring or installing comparable  capabilities,  could take several months and
any  interruption in these functions could have a material and adverse effect on
the Company's  business,  results of  operations,  financial  condition and cash
flows in the short term.

         Raw  Materials.  The principal raw materials  used in the production of
titanium  mill  products  are  titanium  sponge,  titanium  scrap  and  alloying
elements.  The Company  processes  rutile ore into  titanium  tetrachloride  and
further processes the titanium  tetrachloride into titanium sponge. During 2000,
approximately  25% of the Company's melted and mill product  production was made
from internally  produced sponge,  29% from purchased sponge,  39% from titanium
scrap and 7% from alloying elements.

         The primary raw materials used in the production of titanium sponge are
titanium-containing   rutile  ore,  chlorine,   magnesium  and  petroleum  coke.
Titanium-containing rutile ore is currently available from a number of suppliers
around the world, principally located in Australia,  South Africa, India and the
United  States.  A majority of the  Company's  supply of rutile ore is currently
purchased from Australian  suppliers.  The Company  believes the availability of
rutile ore will be adequate for the  foreseeable  future and does not anticipate
any interruptions of its raw material  supplies,  although political or economic
instability in the countries from which the Company  purchases its raw materials
could  materially  and  adversely  affect  availability.  Although  the  Company
believes that the availability of rutile ore is adequate in the near-term, there
can be no assurance that the Company will not experience interruptions. Chlorine
is currently  obtained from a single  supplier near the Company's  sponge plant.
The Company  believes  that this  supplier  is  experiencing  certain  financial
difficulties  and,  accordingly,  there can be no assurances the chlorine supply
<PAGE>
from this  provider  may not be  interrupted.  The  Company is in the process of
evaluating  whether  to make  certain  equipment  modifications  to enable it to
utilize  alternative  chlorine suppliers or to purchase an intermediate  product
which will  allow the  Company to bypass the  purchase  of  chlorine  if needed.
Magnesium and petroleum coke are generally available from a number of suppliers.
Various alloying elements used in the production of titanium ingot are available
from a number of suppliers.

         While the Company was one of six major worldwide  producers of titanium
sponge in 2000,  it cannot  supply all of its needs for all  grades of  titanium
sponge  internally  and  is  dependent,   therefore,  on  third  parties  for  a
substantial  portion  of its  sponge  requirements.  Titanium  mill  and  melted
products  require  varying  grades  of  sponge  and/or  scrap  depending  on the
customers'   specifications   and   expected   end  use.   Recently,   Allegheny
Technologies,  Inc.  announced that it was idling its titanium sponge production
facility,  making TIMET the only active U.S.  producer of titanium sponge.  As a
consequence, the Company believes the availability of certain grades of titanium
sponge,   principally   premium  quality  sponge,  used  for  certain  aerospace
applications currently is tight. Presently, TIMET and certain suppliers in Japan
are the only producers of premium quality sponge. Historically,  the Company has
purchased sponge  predominantly from producers in Japan and Kazakhstan.  In 2001
the Company expects to purchase sponge principally from Japan,  Kazakhstan,  and
from the U.S. Defense Logistics Agency's stockpile of sponge.

         TIMET has a ten year LTA for the purchase of titanium  sponge  produced
in  Kazakhstan  to  support   demand  for  both   aerospace  and   non-aerospace
applications.  The sponge  contract runs through 2007, with firm pricing through
2002 (subject to certain possible  adjustments and possible early termination in
2004).  The contract  provides  for annual  purchases by the Company of 6,000 to
10,000 metric tons. The Company agreed to reduced  minimums of 1,000 metric tons
for 2000 and 3,000  metric tons for 2001.  The  Company  has no other  long-term
sponge supply agreements.

         Markets and Customer  Base.  About 55% of the Company's 2000 sales were
to customers within North America,  with about 40% to European customers and the
balance to other regions.  During 1999 and 2000, Precision Castparts Corporation
("PCC") acquired Wyman-Gordon Company and a forging company in the U.K. Sales to
PCC and these  related  entities  aggregated  10% of the  Company's net sales in
2000.  Approximately  85% of the  Company's  mill product sales were used by the
Company's  customers  to produce  parts and other  materials  for the  aerospace
industry. Sales under the Company's LTA's with certain major aerospace customers
accounted  for  approximately  50% of its aerospace  sales in 2000.  The Company
expects  that  while a  majority  of its  2001  sales  will be to the  aerospace
industry,  other  markets will  continue to represent a  significant  portion of
sales.

         The primary market for titanium  products in the  commercial  aerospace
industry  consists  of  two  major  manufacturers  of  large  (over  100  seats)
commercial  aircraft,  European  Aeronautic  Defence and Space  Company  (parent
company of the Airbus consortium) and Boeing Commercial Airplane Group, and four
major manufacturers of aircraft engines: Rolls-Royce, Pratt & Whitney (a unit of
United  Technologies  Corporation),  General Electric and SNECMA.  The Company's
sales are made both  directly  to these  major  manufacturers  and to  companies
(including  forgers such as  Wyman-Gordon)  that use the  Company's  titanium to
produce parts and other  materials for such  manufacturers.  If any of the major
aerospace  manufacturers were to significantly  reduce aircraft build rates from
those  currently  expected,  there  could be a  material  adverse  effect,  both
directly and indirectly, on the Company.
<PAGE>
         The Company's order backlog was approximately  $245 million at December
31,  2000,  compared to $195  million at December  31, 1999 and $350  million at
December 31, 1998.  Substantially  all of the 2000 year end backlog is scheduled
to be shipped during 2001.  Although the Company  believes that the backlog is a
reliable indicator of near-term  business activity,  conditions in the aerospace
industry  could  change  and  result in future  cancellations  or  deferrals  of
existing  aircraft  orders and  materially  and  adversely  affect the Company's
existing backlog, orders, and future financial condition and operating results.

         As of December 31, 2000,  the  estimated  firm order backlog for Boeing
and Airbus,  as reported by The Airline  Monitor,  was 3,224 planes versus 2,943
planes at the end of 1999 and 3,095  planes at the end of 1998.  The newer  wide
body planes,  such as the Boeing 777 and the Airbus A-330 and A-340, tend to use
a higher percentage of titanium in their frames,  engines and parts (as measured
by total fly weight) than narrow body  planes.  "Fly weight" is the empty weight
of a finished  aircraft with engines but without fuel or passengers.  The Boeing
777, for example,  utilizes  titanium for  approximately 9% of total fly weight,
compared to between 2% to 3% on the older 737, 747 and 767 models. The estimated
firm order  backlog  for wide body planes at year end 2000 was 751 (23% of total
backlog)  compared to 679 (23% of total  backlog)  at the end of 1999.  Although
Airbus has announced  that it intends to build the new wide body A380, no orders
for the A380 were included in The Airline  Monitor's backlog figures at December
31, 2000 as firm order agreements were  unconfirmed.  Additionally,  the A380 is
still being  designed,  therefore,  reliable  estimates of titanium usage on the
A380 are not available at this time.

         Through  various  strategic  relationships,  the Company  seeks to gain
access to unique process technologies for the manufacture of its products and to
expand  existing  markets and create and develop new markets for  titanium.  The
Company has explored and will continue to explore strategic  arrangements in the
areas of product development, production and distribution. The Company also will
continue to work with existing and  potential  customers to identify and develop
new or improved  applications  for  titanium  that take  advantage of its unique
qualities.

         Competition.  The titanium metals  industry is highly  competitive on a
worldwide basis.  Producers of mill products are located primarily in the United
States, Japan, Europe, Former Soviet Union ("FSU") and China. With the idling of
Allegheny  Technologies'  sponge  manufacturing  facility  discussed  above, the
Company will be one of four integrated  producers in the world, with "integrated
producers"  being  considered  as those that  produce  at least both  sponge and
ingot.  There are also a number of  non-integrated  producers  that produce mill
products from purchased sponge, scrap or ingot.

         The Company's principal  competitors in aerospace markets are Allegheny
Technologies   Inc.,  RTI  International   Metals,   Inc.  and  Verkhanya  Salda
Metallurgical Production Organization ("VSMPO"). These companies, along with the
Japanese  producers  and other  companies,  are also  principal  competitors  in
industrial  markets.  The  Company  competes  primarily  on the  basis of price,
quality of products,  technical support and the availability of products to meet
customers' delivery schedules.

         In the U.S. market,  the increasing  presence of non-U.S.  participants
has become a  significant  competitive  factor.  Until 1993,  imports of foreign
titanium  products  into the U.S. had not been  significant.  This was primarily
attributable to relative currency  exchange rates,  tariffs and, with respect to
Japan and the FSU,  existing and prior duties  (including  antidumping  duties).
However, imports of titanium sponge, scrap, and mill products,  principally from
the FSU, have  increased in recent years and have had a significant  competitive
impact on the U.S. titanium industry. To the extent the Company has been able to
take  advantage  of  this  situation  by  purchasing   such  sponge,   scrap  or
intermediate  mill  products from such  countries for use in its own  operations
during  recent  years,  the negative  effect of these imports on the Company has
been somewhat mitigated.
<PAGE>
         Generally,  imports into the U.S. of titanium  products from  countries
designated by the U.S. Government as "most favored nations" are subject to a 15%
tariff (45% for other  countries).  Titanium  products  for tariff  purposes are
broadly classified as either wrought or unwrought. Wrought products include bar,
sheet, strip, plate and tubing.  Unwrought products include sponge,  ingot, slab
and billet.  Starting in 1993,  imports of titanium wrought products from Russia
were exempted from this duty under the  "generalized  system of  preferences" or
"GSP" program designed to aid developing economies.

         In 1997,  GSP benefits to these  products were suspended when the level
of Russian  wrought  products  imports  reached  50% of all  imports of titanium
wrought  products.  A petition was filed in 1997 to restore  duty-free status to
these  products,  and that  petition was granted in June 1998.  In  addition,  a
petition was also filed to bring unwrought products under the GSP program, which
would allow such products from the countries of the FSU (notably  Russia and, in
the case of sponge, Kazakhstan and Ukraine) to be imported into the U.S. without
the payment of regular duties. This petition  concerning  unwrought products has
not been  acted  upon  pending  further  investigation  of the  merits of such a
change.  In addition to regular duties,  titanium sponge imported from countries
of the FSU (Russia,  Kazakhstan  and Ukraine) had for many years been subject to
substantial antidumping penalties.  Titanium sponge imports from Japan were also
subject to a standing  antidumping  order, but no penalties had been attached in
recent years. In 1998, the  International  Trade Commission  ("ITC") revoked all
outstanding  antidumping  orders on titanium  sponge based upon a  determination
that changed  circumstances in the industry did not warrant  continuation of the
orders. TIMET has appealed that decision and the matter is still pending.

         Further  reductions in, or the complete  elimination  of, all or any of
these tariffs could lead to increased imports of foreign sponge, ingot, and mill
products  into the U.S.  and an increase  in the amount of such  products on the
market  generally,  which could adversely affect pricing for titanium sponge and
mill products and thus the business,  financial condition, results of operations
and cash flows of the Company. However, the Company has, in recent years, been a
large importer of foreign titanium sponge and mill products into the U.S. To the
extent the  Company  remains a  substantial  purchaser  of these  products,  any
adverse  effects  on  product  pricing  as a  result  of any  reduction  in,  or
elimination  of, any of these  tariffs  would be  partially  ameliorated  by the
decreased  cost to the  Company for these  products  to the extent it  currently
bears the cost of the import duties.

         Producers of other metal products, such as steel and aluminum, maintain
forging,  rolling  and  finishing  facilities  that  could be  modified  without
substantial  expenditures to process titanium  products.  The Company  believes,
however, that entry as a producer of titanium sponge would require a significant
capital investment and substantial  technical expertise.  Titanium mill products
also compete with stainless steels, nickel alloys, steel, plastics, aluminum and
composites in many applications.

         Research  and  Development.  The  Company's  research  and  development
activities are directed toward expanding the use of titanium and titanium alloys
in all  market  sectors.  This  is  achieved  through  developments  in  process
technology, development of new alloys and products and enhancing the performance
of the Company's existing products. Applications for TIMET's proprietary alloys,
such as TIMETAL(R)834,  TIMETAL 5111 and TIMETAL LCB,  continue to develop.  The
Company conducts the majority of its research and development  activities at its
Henderson,  Nevada laboratory,  which the Company believes is one of the largest
titanium research and development centers in the world.  Additional research and
development  activities  are  performed  at the Witton  facility in  Birmingham,
England.
<PAGE>
         Patents and  Trademarks.  The Company  holds U.S. and non-U.S.  patents
applicable to certain of its titanium alloys and manufacturing  technology.  The
Company  continually  seeks patent protection with respect to its technical base
and has  occasionally  entered  into  cross-licensing  arrangements  with  third
parties.  However, most of the titanium alloys and manufacturing technology used
by the  Company  do not  benefit  from  patent  or other  intellectual  property
protection.  The Company  believes that the trademarks  TIMET(R) and TIMETAL(R),
which  are  protected  by  registration  in the U.S.  and other  countries,  are
significant to its business.

         Employees.  The historic cyclical nature of the aerospace  business and
its impact on the Company's  business is the  principal  reason that the Company
periodically  implements cost reduction,  reorganization  and other changes that
impact  the  Company's   employment   levels.  The  following  table  shows  the
significant  reduction in the number of employees over the past 3 years. The 14%
reduction  in  employees  from 1998 to 1999 was  principally  in  response  to a
reduction in market demand.  During 2000, the Company  reduced  employment by an
additional  130 people,  or  approximately  6% of TIMET's  worldwide  workforce.
However,  in the third quarter of 2000 the Company began  increasing  production
levels and employment at certain facilities in response to an increase in demand
for its products.  During 2001,  the Company  expects to add  approximately  100
people, principally in its manufacturing operations.
<TABLE>
<CAPTION>
                                      Employees at December 31,
                     -----------------------------------------------------------
                           1998                 1999                 2000
                     ------------------    ----------------    -----------------

<S>                        <C>                    <C>                 <C>
U.S.                       1,715                  1,490               1,333
Europe                     1,025                    860                 887
                     ------------------    ----------------    -----------------

Total                      2,740                  2,350               2,220
                     ==================    ================    =================
</TABLE>

         The Company's  production and maintenance workers in Henderson,  Nevada
and its production, maintenance, clerical and technical workers in Toronto, Ohio
are represented by the United  Steelworkers of America  ("USWA") under contracts
expiring in October 2004 and June 2002,  respectively.  In September  2000,  the
Company entered into a new, four-year  collective  bargaining agreement with the
USWA  representing  approximately  300 hourly workers at its  Henderson,  Nevada
facility.  Employees at the Company's  other U.S.  facilities are not covered by
collective bargaining agreements.

         Approximately 65% of the salaried and hourly employees at the Company's
European facilities are represented by various European labor unions,  generally
under annual agreements.

         In March 2001, the Company was notified that certain  workers at CEZUS'
plant in Ugine,  France  were  engaged  in a work  slowdown  related to wage and
benefit  issues.  CEZUS  performs  certain  melting and forging  operations on a
contract  basis for TIMET  Savoie.  While this  slowdown  may  adversely  impact
shipments  by TIMET  Savoie to its  customers  in the near term,  based upon the
Company's current understanding of the situation, the Company does not presently
anticipate that this action will have a material  adverse effect on the business
or operations of the Company.

         While the Company  currently  considers  its  employee  relations to be
satisfactory,  it is possible  that there could be future  work  stoppages  that
could  materially  and  adversely  affect  the  Company's  business,   financial
condition, results of operations or cash flows.

         Regulatory  and  Environmental  Matters.  The Company's  operations are
governed by various Federal,  state, local and foreign  environmental and worker
safety laws and  regulations.  In the U.S., such laws include the  Occupational,
Safety and Health Act,  the Clean Air Act,  the Clean Water Act and the Resource
Conservation  and Recovery  Act. The Company uses and  manufactures  substantial
quantities  of  substances   that  are  considered   hazardous  or  toxic  under
<PAGE>
environmental and worker safety and health laws and regulations. In addition, at
the  Company's  Henderson,  Nevada  facility,  the  Company  produces  and  uses
substantial  quantities  of titanium  tetrachloride,  a material  classified  as
extremely hazardous under Federal  environmental laws. The Company has used such
substances  throughout  the  history  of its  operations.  As a result,  risk of
environmental  damage is inherent in the  Company's  operations.  The  Company's
operations pose a continuing risk of accidental releases of, and worker exposure
to,  hazardous  or  toxic  substances.  There  is  also a risk  that  government
environmental requirements, or enforcement thereof, may become more stringent in
the future. There can be no assurances that some, or all, of the risks discussed
under this heading will not result in liabilities  that would be material to the
Company's business, results of operations, financial condition or cash flows.

         The Company's  operations  in Europe are  similarly  subject to foreign
laws and regulations  respecting  environmental and worker safety matters, which
laws have not had, and are not  presently  expected to have, a material  adverse
effect on the business,  financial condition, results of operations or cash flow
of the Company.

         The Company  believes  that its  operations  are in  compliance  in all
material  respects with  applicable  requirements  of  environmental  and worker
health and safety laws. The Company's policy is to continually strive to improve
environmental, health and safety performance. From time to time, the Company may
be subject to  environmental  regulatory  enforcement  under  various  statutes,
resolution of which typically involves the establishment of compliance programs.
Occasionally,  resolution  of  these  matters  may  result  in  the  payment  of
penalties.  The Company  incurred capital  expenditures  for health,  safety and
environmental compliance matters of approximately $4 million in each of 1998 and
1999 and $2.6  million  in 2000.  The  Company's  capital  budget  provides  for
approximately $2.7 million of such expenditures in 2001. However, the imposition
of more strict standards or requirements under  environmental,  health or safety
laws and regulations could result in expenditures in excess of amounts estimated
to be  required  for such  matters.  See Note 16 to the  Consolidated  Financial
Statements - "Commitments  and  Contingencies  -  Environmental  Matters," which
information is incorporated herein by reference.
<PAGE>
ITEM 2:  PROPERTIES

         Set forth below is a listing of the Company's manufacturing facilities.
In addition to its U.S. sponge capacity discussed below, the Company's worldwide
melting capacity in 2001 aggregates  approximately 45,000 metric tons (estimated
30% of world capacity),  and its mill products capacity aggregates approximately
20,000  metric tons  (estimated  16% of world  capacity).  Approximately  35% of
TIMET's  worldwide  melting capacity is represented by electron beam cold hearth
melting ("EB") furnaces,  63% by vacuum arc remelting ("VAR") furnaces and 2% by
a vacuum induction melting ("VIM") furnace.

         The Company has operated  its major  production  facilities  at varying
levels of practical  capacity  during the past three years.  In 1998, the plants
operated at 80% of practical capacity,  decreasing to 55% in 1999 and increasing
to  approximately  60% in 2000. In 2001,  the  Company's  plants are expected to
operate at 70% to 75% of practical  capacity.  However,  practical  capacity and
utilization  measures  can vary  significantly  based  upon the mix of  products
produced.  During 1998, the Company closed 2,500 metric tons of melting capacity
by  permanently   shutting  down  facilities  in  Verdi,  Nevada  and  Millbury,
Massachusetts.  In 1999, the Company  temporarily idled its Kroll-leach  process
sponge facility in Nevada due to changing  market  conditions for certain grades
of titanium sponge.
<TABLE>
<CAPTION>
                                                                                                   Annual Practical
                                                                                                 Capacities  (3) (4)
                                                                                            -----------------------------
          Manufacturing Location                         Products Manufactured               Melting      Mill Products
                                                                                            ----------- -----------------
                                                                                                   (metric tons)

<S>                                          <C>                                                <C>                <C>
Henderson, Nevada(1)                         Sponge, Ingot                                      12,250                 -
Morgantown, Pennsylvania(1)                  Slab, Ingot, Raw Materials Processing              20,000                 -
Vallejo, California(2)                       Ingot (including non-titanium    superalloys)       1,600                 -
Toronto, Ohio(1)                             Billet, Bar, Plate, Sheet, Strip                        -             9,900
Witton, England(2)                           Ingot, Billet, Bar                                  8,700             8,000
Ugine, France(2)                             Ingot, Bar, Billet, Wire, Extrusions                2,450             2,000
Waunarlwydd (Swansea), Wales(1)              Bar, Plate, Sheet                                       -             3,900
</TABLE>
----------------
(1)  Owned facilities
(2)  Leased facilities
(3)  Practical capacities are variable based on production mix
(4)  Practical capacities are not additive


         TIMET UK's Witton,  England facilities are leased pursuant to long-term
capital leases expiring in 2026.  TIMET Savoie has the right to utilize portions
of  Compagnie  Europeene du  Zirconium-CEZUS,  S.A.,  ("CEZUS")  plant in Ugine,
France pursuant to an agreement expiring in 2006.
<PAGE>
         United States Production. The Company's VDP sponge facility is expected
to operate at approximately 90% of its annual practical capacity of 8,600 metric
tons during 2001, which is up from approximately 65% in 2000. VDP sponge is used
principally as a raw material for the Company's ingot melting  facilities in the
U.S. The Company has  expanded the use of VDP sponge to its European  facilities
and  approximately  1,100  metric  tons of VDP  production  from  the  Company's
Henderson   facility  was  used  in  Europe  during  2000,   which   represented
approximately 20% of the sponge consumed in the Company's  European  operations.
The Company  expects the  consumption  of  Henderson  produced VDP sponge in its
European  operations  to be 25% of their sponge  requirements  in 2001.  The raw
materials  processing  facilities in Morgantown  primarily process scrap used as
melting feedstock, either in combination with sponge or separately.

         The Company's  U.S.  melting  facilities  produce ingots and slabs both
sold to customers and used as feedstock for its mill products operations.  These
melting  facilities  are expected to operate at  approximately  75% of aggregate
capacity in 2001.

         Titanium mill products are produced by TIMET in the U.S. at its forging
and  rolling  facility  in Toronto, Ohio, which  receives intermediate titanium
products principally from the Company's U.S. melting facilities.  The Company's
U.S. forging and rolling facilities are expected to operate at approximately 80%
of practical capacity in 2001. Capacity utilization across the Company's product
lines varies.

         European  Production.  TIMET UK's melting  facility in Witton,  England
produces VAR ingots used primarily as feedstock for its forging operations, also
in Witton.  The forging  operations  process the ingots  principally into billet
product for sale to customers  or into an  intermediate  for further  processing
into bar and plate at its facility in Waunarlwydd,  Wales. U.K. melting and mill
products  production  in 2001  is  expected  to be  approximately  83% and  70%,
respectively, of capacity.

         Capacity of  70%-owned  TIMET  Savoie in Ugine,  France is to a certain
extent dependent upon the level of activity in CEZUS' zirconium business,  which
may from time to time  provide  TIMET  Savoie  with  capacity  in excess of that
contractually  required  to be provided  by CEZUS (the 30%  minority  partner in
TIMET Savoie). During 2001, TIMET Savoie expects to operate close to the maximum
capacity required to be provided by CEZUS.

         Sponge for melting requirements in both the U.K. and France that is not
supplied by the Company's U.S.  Henderson  plant, is purchased  principally from
suppliers in Japan and Kazakhstan.

        Distribution. The Company sells its products through its own sales force
based in the U.S. and Europe,  and through  independent  agents  worldwide.  The
Company's  marketing and distribution  system also includes eight  Company-owned
service centers (five in the U.S. and three in Europe), which sell the Company's
products on a just-in-time basis.

         The Company believes that it has a competitive sales and cost advantage
arising from the location of its production  plants and service  centers,  which
are in  close  proximity  to  major  customers.  These  centers  primarily  sell
value-added and customized mill products including bar and flat-rolled sheet and
strip. The Company believes its service centers give it a competitive  advantage
because of their ability to foster customer relationships, customize products to
suit specific customer requirements and respond quickly to customer needs.
<PAGE>

ITEM 3:  LEGAL PROCEEDINGS

         From time to time,  the Company is involved in  litigation  relating to
claims arising out of its operations in the normal course of business.  See Note
16 of the Consolidated  Financial Statements,  which information is incorporated
herein by reference.


ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters  were  submitted  to a vote of security  holders  during the
quarter ended December 31, 2000.


<PAGE>
                                     PART II

ITEM 5:  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         TIMET's common stock is traded on the New York Stock Exchange  (symbol:
"TIE"). On March 12, 2001, the closing price of TIMET common stock was $9.30 per
share.  The high and low sales  prices for the  Company's  common  stock are set
forth below.
<TABLE>
<CAPTION>
<S>                                              <C>              <C>
Year ended December 31, 1999:                       High             Low
   First Quarter                                 $  9.88          $  5.69
   Second Quarter                                  12.13             5.81
   Third Quarter                                   13.06             7.13
   Fourth Quarter                                   6.88             4.12

Year ended December 31, 2000:                       High             Low
   First Quarter                                  $ 5.50           $ 4.19
   Second Quarter                                   5.00             3.13
   Third Quarter                                    8.94             4.50
   Fourth Quarter                                   8.19             6.00
</TABLE>

         As  of  March  12,  2001,   there  were   approximately   7,500  common
shareholders of record.

         Starting in the third quarter of 1999, the Company suspended payment of
the regular quarterly common stock dividend. The Company's U.S. credit facility,
which was  entered  into  after the  suspension,  presently  prohibits  both the
payment of common stock dividends and common stock repurchases.
<PAGE>

ITEM 6:  SELECTED FINANCIAL DATA

         The  selected  financial  data  set  forth  below  should  be  read  in
conjunction with the Company's  Consolidated  Financial  Statements and Item 7 -
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations."
<TABLE>
<CAPTION>

                                                                    Years Ended December 31,
                                            -------------------------------------------------------------------------
                                              1996(1)           1997           1998           1999           2000
                                                    ($ in millions, except per share and selling price data)
STATEMENT OF OPERATIONS DATA:
<S>                                          <C>              <C>            <C>            <C>             <C>
   Net sales                                 $ 507.1          $ 733.6        $ 707.7        $ 480.0         $ 426.8
   Operating income (loss)                      59.8            133.0           82.7          (31.4)          (41.7)
   Interest expense                              9.0              2.0            2.9            7.1             7.7
   Net income (loss)                            47.6             83.0           45.8          (31.4)          (38.9)
   Earnings per share (2):
     Basic                                  $   1.72          $  2.64        $  1.46       $  (1.00)       $  (1.24)
     Diluted (3)                                1.72             2.49             -               -               -
   Cash dividends per share                        -               -             .12            .12               -

BALANCE SHEET DATA:
   Cash and cash equivalents                $   86.5         $   69.0       $   15.5       $   20.7        $    9.8
   Total assets                                703.0             793.1         953.2          883.1           759.1
   Indebtedness (4)                             10.5              5.0          105.6          117.4            44.9
   Net Debt (7)                              $     -         $      -       $   90.1       $   96.7        $   35.1
   Capital lease obligations                    11.6             11.2           10.3           10.1             8.8
   Minority interest - Convertible
    Preferred     Securities                   201.2            201.2          201.2          201.2           201.2
   Stockholders' equity                        326.2            408.9          448.4          408.1           357.5

OTHER OPERATING DATA:
   Cash flows provided (used):
     Operating activities                   $   (.7)          $  72.6        $  76.1      $    19.5         $  63.3
     Investing activities                     (131.4)           (79.8)        (223.2)         (21.7)           (4.2)
     Financing activities                      215.1             (9.8)          92.2            8.6           (70.7)
                                            -------------    -----------    -----------    ------------    ----------
          Net provided (used)               $   83.0          $ (17.0)       $ (54.9)      $    6.4         $ (11.6)

   Mill product shipments (6)                   12.4             15.1           14.8           11.4            11.4
   Average mill product prices (6)          $  32.00          $ 35.00        $ 35.25       $  33.00         $ 28.70
   Melted product shipments (6)                  6.0              7.1            3.6            2.5             3.5
   Average melted product prices (6)        $  12.55          $ 15.55        $ 18.50       $  14.20         $ 13.65
   Active employees at year end                2,950            3,025          2,740          2,350           2,220
   Order backlog at year end (5)            $  440.0          $ 530.0        $ 350.0       $  195.0         $ 245.0
   Capital expenditures                     $   21.7          $  66.3        $ 115.2       $   24.8         $  11.2
<FN>
Notes

(1)      Significant acquisitions accounted for by the purchase method were made
         during 1996,  which included the  acquisitions  of the titanium  metals
         businesses  of IMI  plc  and  affiliates,  Axel  Johnson  Metals,  Inc.
         (including the remaining 50% interest in Titanium Hearth  Technologies)
         and a 70% interest in TIMET Savoie.
(2)      Common shares used to compute  earnings per share have been adjusted to
         reflect the 65-for-1  split of the Company's  common stock  effected in
         connection  with TIMET's June 1996  initial  public  offering of common
         stock.
(3)      Antidilutive in 1998, 1999 and 2000.
(4)      Bank and other debt including loans payable to related parties of $1.0
         million in 1996.
(5)      "Order backlog" is defined as firm purchase orders (which are generally
         subject to cancellation by the customer upon payment of specified
         charges).
(6)      Shipments in thousands of metric tons; average selling prices stated
         per kilogram.
(7)      Net debt represents notes payable including long and short term debt,
         less cash and cash equivalents.
</FN>
</TABLE>
<PAGE>
ITEM 7:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

                              RESULTS OF OPERATIONS

         General.  The  aerospace  industry in recent  history has accounted for
approximately  75% of U.S.  and 40% to 50% of  worldwide  titanium  mill product
consumption. Accordingly, the aerospace industry has a significant effect on the
overall sales and  profitability of the titanium metals industry.  The aerospace
industry, and consequently the titanium metals industry, is highly cyclical. The
Company  estimates that worldwide  industry  shipments of titanium mill products
peaked in 1997 at  approximately  60,000  metric  tons.  Industry  mill  product
shipments  subsequently declined approximately 5% in 1998 to an estimated 57,000
metric tons;  with a further 16% decline to an estimated  48,000  metric tons in
1999 and  2000.  The  Company  expects  that  worldwide  industry  mill  product
shipments  will  increase in 2001 by  approximately  10% to about 53,000  metric
tons.  The  expected  increase is  primarily  attributable  to  stronger  demand
resulting from an increase in forecasted commercial aircraft build rates as well
as a  decrease  in the  amount  of  excess  titanium  inventory  throughout  the
aerospace supply chain.

      Mill product shipments to the aerospace industry in 2000 represented about
40% of total industry demand and about 85% of the Company's  annual mill product
shipments.  Aerospace  demand for titanium  products,  which  includes  both jet
engine  components (i.e.  blades,  discs,  rings and engine cases) and air frame
components  (i.e.  bulkheads,  tail sections,  landing gears,  wing supports and
fasteners)  can be  broken  down  into  commercial  and  military  sectors.  The
commercial  aerospace sector has a significant  influence on titanium companies,
particularly  mill product producers such as TIMET.  Industry  shipments of mill
products to the commercial  aerospace sector in 2000 accounted for approximately
85% of aerospace demand and 35% of aggregate  titanium mill product demand.  The
Company  believes  that demand for mill  products for the  commercial  aerospace
sector will be the  principal  driver of the  expected  10% increase in industry
mill product  shipments during 2001. Demand growth for these markets and sectors
is  expected  to exceed  the 10%  aggregate  growth  in  titanium  mill  product
shipments  while  other  markets  are  expected  to  experience  lesser  growth.
Shipments to the commercial  aerospace sector  represented  approximately 80% of
the Company's sales volume in 2000. Accordingly,  the Company believes its sales
volume in 2001 may  increase  more than the  expected  10%  increase in titanium
industry mill product shipments.

         The present business  environment is substantially  different from that
in 1996 to 1998.  During  the  second  half of 1998 it became  evident  that the
anticipated record rates of aircraft  production would not be reached and that a
decline  in  overall   production  rates  would  begin  earlier  than  forecast,
particularly  in   titanium-intensive   wide  body  planes.   This  resulted  in
considerable  excess  inventory  throughout the aerospace  supply chain.  During
1999,  aerospace  customers  continued to focus on reducing  inventories,  and a
significant  number of the  Company's  aerospace  customers  canceled or delayed
previously  scheduled  orders.  The  aerospace  supply chain is  fragmented  and
decentralized  making it  difficult  to quantify  excess  inventories.  However,
customer  actions  such as  order  delays  (i.e.  pushouts)  and  cancellations,
combined with other data provide limited visibility.

         During 2000, the Company  experienced no significant  customer pushouts
or  cancellations  of  deliveries.  Late in 2000 and  early  2001,  the  Company
experienced an increase in orders for aerospace quality titanium  products,  and
certain customers  requested  advanced delivery of existing orders and its order
backlog  increased  substantially.  Although  quantitative  information  is  not
readily available, these factors and others lead the Company to believe that the
excess  titanium  inventory  throughout the supply chain has been  substantially
reduced and is unlikely to be a significant factor in 2001 in most areas.
<PAGE>
         The Company's order backlog increased to approximately  $245 million at
December  31, 2000 from $195  million at December  31, 1999 and $350  million at
December 31, 1998.  Substantially  all of the 2000 year end backlog is scheduled
to be shipped during 2001.

         The Company announced selling price increases on new orders for certain
grades of titanium  products,  principally  aerospace quality products,  late in
2000 and early in 2001. The 2000 announced price increases ranged from 6% to 12%
while  the 2001  announced  price  increases  ranged  from 7% to 15%.  The price
changes  were  intended to reflect  increases  in certain  manufacturing  costs,
including  raw materials  and energy,  as well as the Company's  need to improve
financial  performance.  The price increases did not apply to certain industrial
products  or to orders  under LTA's and other  agreements  with  customers  that
contain specific provisions governing selling prices. Accordingly,  about 40% of
the  Company's  annual  sales  are  expected  to be  eligible  for  these  price
increases.  Several other titanium  companies have also recently announced price
increases,  particularly for aerospace quality titanium products. Actual selling
price  increases  are  subject to  negotiations  with  customers  and may differ
materially from announced increases.

         Outlook.  The  outlook  section  contains a number of  forward  looking
statements,  all of which are based on current expectations.  Actual results may
differ  materially.  See  Note 16 to the  Consolidated  Financial  Statements  -
"Commitments and Contingencies"  regarding  commitments,  contingencies,  legal,
environmental,  and other matters,  which information is incorporated  herein by
reference  and may  affect  the  Company's  future  results  of  operations  and
liquidity.

         Sales  revenue  in  2001  is  expected  to  approximate  $500  million,
reflecting the combined  effects of increased  sales volume,  price increases on
certain  products  and  changes in product  mix.  The  Company  expects its mill
products  sales volume to increase  15% to 20% in 2001  compared to 2000 levels,
while melted  product  sales volume is expected to remain near 2000 levels.  The
Company  believes  its  mill  products  sales  volume  may  grow  more  than the
forecasted 10% increase in titanium industry shipments because the proportion of
the Company's sales to the commercial aerospace sector (approximately 80% of the
Company's  sales)  exceeds the total  industry  mill  product  shipments to that
sector  (approximately  35% of industry mill  shipments).  Demand growth for the
commercial  aerospace  sector is expected to exceed the 10% aggregate  growth in
titanium industry shipments of mill products while other markets and sectors are
expected to experience lesser growth.  Selling prices (expressed in U.S. dollars
using actual currency exchange rates during the respective periods) on aerospace
product shipments,  while difficult to forecast,  are expected to rise gradually
during 2001.  However,  the recently  announced  price increases are expected to
principally affect the second half of 2001 due to associated product lead times.
Average selling prices per kilogram, as reported by the Company, reflect the net
effects of changes in selling  prices,  currency  exchange  rates,  customer and
product mix. Accordingly,  average selling prices are not necessarily indicative
of any one factor.

         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.  Restructuring,
asset  impairments  and other special  charges have occurred in the past and may
occur in the future causing  operating  results to vary from  expectations.  See
Note 6 to the Consolidated Financial Statements.

         Gross margins as a percent of sales are presently  expected to increase
over the year,  however,  energy and other cost  increases  could  substantially
offset expected  realized selling price increases in 2001. TIMET is experiencing
increases  in energy  costs as a result of recent  increases  in natural gas and
electricity  prices in the U.S. The largest  portion of the cost  increases  are
presently  associated with electrical power at the Company's  Henderson,  Nevada
facility where  titanium  sponge is produced and melted.  The Company  purchases
<PAGE>
electricity  from both hydro and fossil  fuel  sources,  with  hydropower  being
substantially less costly. The Company purchases fossil fuel power to supplement
its  electricity  needs above the amount it can buy from hydro  sources.  As the
Company  increases  production  rates during 2001 at its Nevada  facility,  more
fossil fuel power is required as a percentage  of total power  consumed.  Energy
costs in 2000 comprised  about 4% of the Company's  cost of sales.  Energy costs
may fluctuate  substantially  from period to period and may adversely affect the
Company's  gross margins  causing  actual results to differ  significantly  from
expected amounts.

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

         At the present  time,  the Company is aware of only a single ingot that
has  been  demonstrated  to  contain  tungsten  inclusions;   however,   further
investigation  may identify  other  material that has been  similarly  affected.
Until this  investigation  is completed,  the Company is unable to determine the
possible remedial steps that may be required and whether the Company might incur
any  material  liability  with  respect to this  matter.  The Company  currently
believes that it is unlikely that its insurance  policies will provide  coverage
for any costs that may be  associated  with this  matter.  However  the  Company
currently  intends  to seek full  recovery  from the  silicon  supplier  for any
liability the Company might incur in this matter,  although no assurances can be
given that the Company will  ultimately be able to recover all or any portion of
such amounts.  At December 31, 2000,  the Company had not recorded any liability
related to this matter. The amount of liability the Company may ultimately incur
related to this matter is not reasonably estimable at this time.

         In March 2001, the Company was notified that certain  workers at CEZUS'
plant in Ugine,  France  were  engaged  in a work  slowdown  related to wage and
benefit  issues.  CEZUS  performs  certain  melting and forging  operations on a
contract  basis for TIMET  Savoie.  While this  slowdown  may  adversely  impact
shipments  by TIMET  Savoie to its  customers  in the near term,  based upon the
Company's current understanding of the situation, the Company does not presently
anticipate that this action will have a material  adverse effect on the business
or operations of the Company.

         Depreciation  and   amortization   expense  for  2001  is  expected  to
approximate  2000  levels.  The Company  intends to maintain  selling,  general,
administrative, and development costs relatively constant as a percent of sales,
however,  this is dependent  on,  among other  things,  how the  business  cycle
develops.  Interest  expense  and  minority  interest  expense on the  Company's
Convertible  Preferred  Securities in 2001 is also expected to approximate  2000
levels for the full year. The Company's effective  consolidated tax benefit rate
in 2001  should  approximate  the U.S.  statutory  rate.  However,  the  Company
operates  in several  tax  jurisdictions  and is  subject to varying  income tax
rates.  As a result,  the  geographic mix of pretax income (loss) can impact the
Company's  overall  effective tax rate. For financial  reporting  purposes,  the
Company has recognized the tax benefit of substantially all of its net operating
loss  carryforwards,  and expects that tax benefits to be recognized during 2001
will  principally be deferred  income tax benefits with cash income tax payments
expected in certain foreign jurisdictions.  The Company periodically reviews the
recoverability   of  its  deferred  tax  assets  to  determine   whether  future
realization is more likely than not. Based on such periodic reviews, the Company
could  record an  additional  valuation  allowance  related to its  deferred tax
assets in the future. See Note 13 to the Consolidated Financial Statements.  The
Company  presently  expects to report both an  operating  loss and a net loss in
2001;  however,  the Company  believes the losses in 2001 will be  substantially
reduced from 2000 levels.
<PAGE>

         The Company  expects to generate  positive cash flow from operations in
2001, but at levels substantially  reduced from 2000.  Receivables and inventory
levels are expected to increase in 2001 to support the  anticipated  increase in
sales whereas both  receivables and  inventories  decreased in 2000. The Company
presently  intends to continue to defer dividends on its  Convertible  Preferred
Securities  during  2001.  The  Company  may  consider  resuming  the payment of
dividends on the Convertible  Preferred Securities or purchase the securities if
the outlook for TIMET's operating results improves  substantially or a favorable
result in the Boeing-related  litigation is achieved,  or both. Dividends on the
Company's common stock are prohibited under the Company's U.S. credit agreement.
Capital  spending  for 2001 is currently  expected to be $15  million,  covering
principally  capacity   enhancements,   capital  maintenance,   and  safety  and
environmental  projects. Net debt is expected to increase in 2001 as compared to
year end 2000 levels. At December 31, 2000, the Company had  approximately  $117
million of borrowing availability under its various worldwide credit agreements.
The  Company  believes  its  cash,  cash  flow from  operations,  and  borrowing
availability will satisfy its expected working capital, capital expenditures and
other requirements in 2001.
<TABLE>
<CAPTION>

         Historical Operating Information.
                                                                                     Year ended December 31,
                                                                            -------------------------------------------
                                                                               1998            1999           2000
                                                                            -----------     -----------    ------------
                                                                                         ($ in millions)

<S>                                                                         <C>             <C>            <C>
Net sales                                                                   $707.7          $480.0         $426.8
Operating income (loss)                                                       82.7           (31.4)         (41.7)

Percent change in:
   Mill product sales volume                                                                   -23             -1
   Mill product selling prices (1)                                                              -8             -9
   Melted product sales volume                                                                 -31            +39
   Melted product selling prices (1)                                                           -17            -10
</TABLE>

(1) Change expressed in U.S. dollars

         Net Sales and  Operating  Loss - 2000  Compared to 1999.  Sales of mill
products in 2000 declined 13% from $376.2  million in 1999 to $326.3  million in
2000.  This  decrease  is due to a 9% decline  in mill  product  selling  prices
(expressed  in  U.S.  dollars  using  actual  foreign  currency  exchange  rates
prevailing  during the  respective  periods),  a less than 1%  decrease in sales
volume,  and changes in product mix. In billing  currencies  (which  exclude the
effects of foreign currency  translation),  mill product selling prices declined
7% from 1999.  Melted product sales  increased 33% from $35.5 million in 1999 to
$47.4 million in 2000 due to the net effects of a 39% increase in melted product
sales  volume,  a 10% decline in melted  product  selling  prices and changes in
product mix. The decrease in the selling prices was  principally  due to greater
price competition in the Company's non-LTA business.

         Early in 2000, the Company  implemented a plan to address  then-current
market and operating conditions, which resulted in the recognition of a net $2.8
million  restructuring  charge in 2000. The restructuring  charge is included in
the operating  loss of the "Titanium  melted and mill  products"  segment and is
principally  related to personnel  severance and benefits for the  approximately
170 employees terminated as part of the restructuring. Additionally, the Company
recorded  net special  charges of $3.5  million,  consisting  of $3.4 million of
equipment related impairment charges, $3.3 million of environmental  remediation
charges, a special income item of $2.0 million related to the termination of the
Company's  1990  agreement  to sell  titanium  sponge to Union  Titanium  Sponge
Corporation,  and the $1.2  million gain on the sale of the  Company's  castings
joint venture.
<PAGE>
         Total cost of sales in 2000 was 99% of sales  compared  to 95% in 1999.
The  increase  in the  percentage  is  principally  the result of lower  average
selling  prices  and a shift in  product  mix,  partially  offset  by lower  raw
material costs and lower operating expenses.  Selling,  general,  administrative
and development  expenses  decreased 9% in 2000 compared to 1999 principally due
to the impact of the  restructuring  plan  implemented  in early 2000 as well as
reduced expenses related to the  business-enterprise  information system project
that was completed in early 1999 and "Year 2000" computer systems expenses which
were incurred in 1999 but not 2000.

         Equity in earnings  (losses) of joint ventures of the "Titanium  melted
and  mill  products"  segment  in 2000  decreased  by  $1.4  million  from  1999
principally due to the decline in earnings of Valtimet,  the Company's 46%-owned
welded tube joint venture.

         Sales and  Operating  Income - 1999  Compared  to 1998.  The  "Titanium
melted and mill  product"  segment net sales in 1999  decreased  30% compared to
1998 primarily due to a 23% decrease in mill products  shipment volume resulting
primarily  from reduced  demand in the aerospace  market.  Mill product  selling
prices  (expressed in U.S. dollars using actual foreign currency  exchange rates
prevailing during the respective  periods) for 1999 were  approximately 8% lower
than 1998 reflecting both the price effect of long-term agreements and increased
price  competition  on non-LTA  business.  In billing  currencies,  mill product
selling prices declined 7% from 1998. As described in Note 9 to the Consolidated
Financial Statements, the Company produced approximately $16 million of titanium
ingots in 1999,  for which the  customer was billed but income  recognition  was
deferred. Approximately 72% of this material was shipped in 2000.

         The  decrease  in net sales of the  "Other"  segment is a result of the
Company's ceasing to consolidate its castings business after July 1998. See Note
4 to the Consolidated Financial Statements.

         Total cost of sales in 1999 was 95% of sales  compared  to 77% in 1998.
The increase in the  percentage is a result of the lower selling  prices,  lower
production volumes, higher depreciation,  and increased reserves for slow-moving
inventory.  Yield, rework and deviated material costs were also higher and plant
operating rates were lower. Selling,  general,  administrative and developmental
expenses  in 1999 were lower than 1998 in dollar  terms due in large part to the
completion  of  the  implementation  of  the  initial  phase  of  the  Company's
business-enterprise  system  during  the first  half of 1999.  These  costs as a
percentage of sales,  however,  increased to approximately  10% primarily due to
the decline in sales.

         In the fourth  quarter of 1999,  the Company  recorded  $6.8 million of
special  charges  consisting of $4.5 million of  restructuring  charges and $2.3
million of  write-downs  associated  with the  Company's  investment  in certain
start-up joint  ventures.  During the same quarter,  the Company also recorded a
$4.3 million charge to cost of sales for  slow-moving  inventory.  Approximately
half of the  restructuring  charges  were  non-cash,  primarily  related  to the
disposition of a Germany  subsidiary,  with the cash  component  relating to the
termination of 100 people. The $4.3 million charge for slow-moving inventory and
$4.7  million  of the $6.8  million  of  special  charges  are  included  in the
operating  loss of the  "Titanium  melted  and mill  products"  segment in 1999.
Operating  income of the  "Titanium  melted and mill  products"  segment in 1998
included  special  charges of $19.5  million.  Operating  losses of the  "Other"
segment  included  $4.5 million and $2.1 million of special  charges in 1998 and
1999, respectively. See Note 6 to the Consolidated Financial Statements.
<PAGE>
         Equity in earnings  (losses) of joint ventures of the "Titanium  melted
and mill products"  segment  decreased by $1.3 million from 1998 principally due
to the decline in earnings of Valtimet.  Equity in losses of the "Other" segment
were higher in 1999 due to the Company's  recording a higher share of the losses
for a full year in 1999 as a result of  increased  ownership in certain of these
ventures in mid-1998.
<TABLE>
<CAPTION>

         Other Income, net.    Other income, net, consists of the following:

                                                                      1998               1999               2000
                                                               ---------------    ---------------    --------------

<S>                                                                  <C>                 <C>                <C>
   Dividends and interest income                                     $ 6,303             $ 6,034            $ 6,154
   General corporate income (expense), net                              (243)             (1,246)                67
   Other                                                                 799                 164              2,156
                                                               ---------------    ---------------    --------------
                                                                     $ 6,859             $ 4,952            $ 8,377
                                                               ===============    ===============    ==============
</TABLE>

         In 1999 and 2000,  dividends and interest income consisted  principally
of dividends on $80 million of non-voting preferred securities of Special Metals
Corporation,  which were  purchased by the Company in October 1998. In 1998, the
amount  represented  primarily  earnings on corporate cash equivalents.  General
corporate  income  (expense)  consisted   principally  of  currency  transaction
gains/losses. In 2000, net currency losses of $1.1 million were offset by a $1.2
million gain on the sale of the Company's castings joint venture. In 2000, other
income consisted principally of $2 million received from UTSC in connection with
the termination of the sponge purchase agreement between the Company and UTSC as
more fully described in Note 15 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,  Italy and  Germany.  Titanium  is a  worldwide  market and the  factors
influencing  the Company's U.S. and European  operations are  substantially  the
same.

         Approximately  60% of the Company's  European sales are  denominated in
currencies  other  than the U.S.  dollar,  principally  the  British  pound  and
European  currencies  tied to the  euro.  Certain  purchases  of raw  materials,
principally  titanium sponge and alloys, for the Company's  European  operations
are  denominated in U.S.  dollars,  while labor and other  production  costs are
primarily  denominated in local  currencies.  The  functional  currencies of the
Company's European subsidiaries are those of their respective  countries;  thus,
the U.S.  dollar value of these  subsidiaries'  sales and costs  denominated  in
currencies  other  than their  functional  currency,  including  sales and costs
denominated in U.S. dollars, are subject to exchange rate fluctuations which may
impact reported  earnings and may affect the  comparability of  period-to-period
operating  results.  Borrowings of the Company's  European  operations may be in
U.S.  dollars or in functional  currencies.  The Company's export sales from the
U.S.  are  denominated  in U.S.  dollars and as such are not subject to currency
exchange rate fluctuations.

         The  Company  does not use  currency  contracts  to hedge its  currency
exposures.  Net  currency  transaction  gains/losses  included in earnings  were
losses of $1.2  million and $1.1 million in 1999 and 2000,  respectively,  and a
$.4  million  gain in 1998.  At  December  31,  2000,  consolidated  assets  and
liabilities  denominated in currencies  other than  functional  currencies  were
approximately $21 million and $19 million, respectively, consisting primarily of
U. S.  dollar  cash,  accounts  receivable,  accounts  payable  and  borrowings.
Exchange rates among 11 European currencies (including the French franc, Italian
lira and German mark,  but excluding the British pound) became fixed relative to
each  other as a result of the  implementation  of the euro  effective  in 1999.
Costs  associated  with  modifications  of  systems  to handle  euro-denominated
transactions are not expected to be significant.
<PAGE>
         Interest Expense.  Interest expense for 2000 increased over 1999 due to
the net effect of increased  interest  rates related to U.S.  credit  facilities
entered into in early 2000, lower average borrowings outstanding during the year
and a lower level of capitalized  interest.  Interest expense for 1999 more than
doubled from the levels of 1998  primarily  due to higher levels of average debt
and  increased  interest  rates.  Also  contributing  to the higher  comparative
interest  expense was a lower level of interest  capitalized in 1999 compared to
1998 as major capital projects were completed.

         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 (loss) can impact the Company's overall effective tax rate. For financial
reporting purposes,  the Company has recognized the tax benefit of substantially
all of its net operating loss  carryforwards and expects that tax benefits to be
recognized during 2001 will be deferred income tax benefits. The Company expects
to make cash income tax payments in certain foreign  jurisdictions  in 2001. See
Note 13 to the Consolidated Financial Statements.

         Minority  Interest.  Annual  dividend  expense related to the Company's
6.625% Convertible Preferred Securities approximates $13 million and is reported
as minority  interest net of allocable  income taxes.  Other  minority  interest
relates primarily to the 30% interest in TIMET Savoie held by CEZUS.

        Extraordinary Item. During 2000, the deferred financing costs associated
with the Company's  prior U.S. credit facility were written off and reflected as
an extraordinary item of $.9 million after taxes in the Consolidated  Statements
of Operations.
<PAGE>
                         LIQUIDITY AND CAPITAL RESOURCES

         The Company's consolidated cash flows provided by operating,  investing
and financing activities for each of the past three years are presented below.
<TABLE>
<CAPTION>

                                                                              Year ended December 31,
                                                                ----------------------------------------------------
                                                                     1998              1999               2000
                                                                ---------------    --------------    ---------------
                                                                                  (In thousands)
Cash provided (used) by:
    Operating activities:
<S>                                                                 <C>                <C>              <C>
      Excluding changes in assets and liabilities                   $108,660           $ 23,958         $ (4,119)
      Changes in assets and liabilities                              (32,543)            (4,415)          67,447
                                                                ---------------    --------------    ---------------
                                                                      76,117             19,543           63,328
    Investing activities                                            (223,215)           (21,663)          (4,218)
    Financing activities                                              92,232              8,563          (70,678)
                                                                ---------------    --------------    ---------------

      Net cash provided (used) by operating,
         investing and financing activities                         $(54,866)          $  6,443         $(11,568)
                                                                ===============    ==============    ===============
</TABLE>


         Operating Activities.   Cash provided  by  operating   activities   was
approximately $63 million in 2000, $19 million in 1999 and $76 million in 1998.

         Cash provided by operating activities,  excluding changes in assets and
liabilities,  during  the  past  three  years  generally  follows  the  trend in
operating  results.  Changes in assets  and  liabilities  reflect  the timing of
purchases,  production  and sales,  and can vary  significantly  from  period to
period.  Accounts receivable provided cash in 1998, 1999 and 2000 reflecting the
decrease in sales levels as well as an  improvement,  particularly  in 2000,  in
collections  as  reflected  by a  decrease  in the  average  number of days that
receivables are  outstanding.  The significant  reduction in receivables in 2000
was also  attributable to $16 million of customer payments received in the first
quarter of 2000 related to a bill-and-hold arrangement near the end of 1999. See
Note 9 to the Consolidated Financial Statements.

         Inventories  increased   significantly  in  1998,  reflecting  material
purchases and  production  rates that were based on expected sales levels higher
than the actual  sales level turned out to be. The Company  reduced  inventories
during  1999 and 2000 as excess raw  materials  and other  inventory  items were
consumed and inventory reduction and control efforts were put in place.

         Changes in net current  income taxes payable  decreased in 1998 in part
due to the  delayed  timing of cash  payments  for taxes in Europe  relative  to
earnings.  In 1999,  income  taxes  payable  decreased  as the 1999  losses were
carried back to recover a portion of prior years' taxes paid.  Changes in income
taxes in 2000  primarily  reflects  net tax  refunds of $8  million.  Changes in
accounts  with related  parties  resulted  primarily  from  relative  changes in
receivable levels with joint ventures in 1998, 1999 and 2000.

         In April 2000, the Company exercised its right to defer future dividend
payments on its outstanding 6.625% Convertible Preferred Securities for a period
of 10 quarters (subject to possible further extension for up to an additional 10
quarters),  although  interest  continues  to accrue at the  coupon  rate on the
principal  and unpaid  dividends.  Changes in accrued  dividends on  Convertible
Preferred Securities reflects accrued but unpaid dividends.

         Restructuring and other special items  are  described  in Note 6 to the
Consolidated Financial Statements.

<PAGE>

      Investing Activities.  The Company's capital expenditures were $11 million
in 2000,  down  from $25  million  in 1999 and  $115  million  in 1998.  Capital
spending  for  2000  was   principally   for  capacity   enhancements,   capital
maintenance, and safety and environmental projects. Capital expenditures in 1999
were primarily related to the expansion of forging capacity at the Toronto, Ohio
facility,  the  installation  of the  business-enterprise  system in Europe  and
various environmental and other projects. About one-half of capital expenditures
during 1998 related to capacity  expansion  projects  associated  with long-term
customer agreements.

         Approximately  10% of the Company's capital spending in 1999 related to
the major  business-enterprise  information  systems and information  technology
project  implemented  at various  sites  throughout  the Company.  Approximately
one-fourth of the 1998 capital spending related to this project.  The new system
was implemented in stages in the U.S.  during 1998, with initial  implementation
substantially  completed with the rollout to the U.K. in February 1999.  Certain
costs  associated  with the  business-enterprise  information  systems  project,
including training and reengineering, were expensed as incurred.

         Cash used for business  acquisitions and joint ventures in 1998 related
primarily to the Loterios and Wyman-Gordon  transactions more fully described in
Notes 3 and 4 to the Consolidated Financial Statements.

         Proceeds  from sale of joint  venture in 2000  represents  the proceeds
from the  Company's  sale to  Wyman-Gordon  of the  Company's  20%  interest  in
Wyman-Gordon Titanium Castings, LLC. This transaction is more fully described in
Note 4 to the Consolidated Financial Statements.

         In October 1998, the Company  purchased for cash $80 million of Special
Metals  Corporation  6.625%  convertible  preferred  stock  (the "SMC  Preferred
Stock") in conjunction  with, and concurrent with, SMC's acquisition of the Inco
Alloys  International  high  performance  nickel  alloys  business  unit of Inco
Limited  ("Inco").  Dividends on the SMC  Preferred  Stock had  previously  been
deferred  by SMC due to  limitations  imposed by SMC's bank  credit  agreements.
During 2000,  TIMET received three  quarterly  dividends from SMC and received a
fourth dividend in January 2001; however,  there can be no assurances that TIMET
will continue to receive regular  quarterly  dividends.  SMC has filed a lawsuit
against Inco alleging that Inco made fraudulent misrepresentations in connection
with SMC's acquisition, which action is still pending.

         Financing Activities.  At December 31, 2000, the Company's net debt was
approximately   $35.1  million   ($44.9  million  of  notes  payable  and  debt,
principally  borrowings under the Company's U.S. and U.K. credit agreements less
$9.8 million of cash and  equivalents).  At December  31, 2000,  the Company had
about $117 million of borrowing  availability under its various worldwide credit
agreements.

         Early  in  2000,  the  Company  completed  a $125  million,  three-year
U.S.-based  revolving credit  agreement  replacing its previous U.S. bank credit
facility.   Borrowings   under  the   credit   agreement   are   limited   to  a
formula-determined borrowing base derived from the value of accounts receivable,
inventory and equipment.  The credit agreement limits  additional  indebtedness,
prohibits the payment of common stock  dividends,  and contains other  covenants
customary in lending  transactions  of this type. The Company also increased its
U.K. credit agreement from (pound)18  million ($29 million) to (pound)30 million
($48 million) with its existing U.K.  lender in 2000. The Company  believes that
its U.S. and U.K. credit facilities will provide it with the liquidity necessary
for current market and operating conditions.

         Net repayments of $70 million in 2000 reflect reductions of outstanding
borrowings  principally in the U.S.  resulting from  collection of  receivables,
reduction in inventories,  tax refunds,  the sale of the Company's casting joint
venture and deferral of dividend payments on the Company's Convertible Preferred
Securities.  Net  borrowings of $13 million in 1999 and $97 million in 1998 were
primarily to fund capital expenditures and the 1998 Loterios acquisition.
<PAGE>

         In November 1999, the Company's Board of Directors voted to suspend the
regular  quarterly  dividend on its common stock in view of, among other things,
the continuing  weakness in overall  market demand for titanium metal  products.
The Company's  U.S.  credit  agreement,  entered into in early 2000,  after such
suspension, prohibits the payment of dividends on the Company's common stock and
the repurchase of common shares.

         The Company's Convertible Preferred Securities do not require principal
amortization, and TIMET has the right to defer dividend payments for one or more
periods of up to 20  consecutive  quarters for each period.  In April 2000,  the
Company  exercised  its  right  to  defer  future  dividend  payments  on  these
securities for a period of 10 quarters  (subject to possible  further  extension
for up to an additional 10 quarters),  although interest will continue to accrue
at the coupon  rate on the  principal  and unpaid  dividends.  The  Company  may
consider resuming payment of dividends on the Convertible  Preferred  Securities
or purchase the  securities if the outlook for TIMET's  results from  operations
improves substantially or a favorable result in the Boeing-related litigation is
achieved,  or both. As of December 31, 2000,  accrued dividends on the Company's
Convertible   Securities   are  reflected  as  noncurrent   liabilities  in  the
consolidated balance sheet.

         The Company periodically evaluates its liquidity requirements,  capital
needs  and  availability  of  resources  in view of,  among  other  things,  its
alternative uses of capital, its 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 and, 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 capital stock, sell assets, or
take a  combination  of such  steps or other  steps to  increase  or manage  its
liquidity and capital resources.

         In the normal course of business, the Company investigates,  evaluates,
discusses and engages in acquisition,  joint venture, strategic relationship and
other business  combination  opportunities in the titanium,  specialty metal and
related  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.

         Environmental Matters.

         See Item 1 - "Business--Regulatory  and Environmental Matters" and Note
16 to the  Consolidated  Financial  Statements for a discussion of environmental
matters.


ITEM 7A:    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

         Interest  Rates.  The Company is exposed to market risk from changes in
interest rates related to indebtedness.  At December 31, 2000  substantially all
of the Company's  indebtedness  was  denominated in U.S.  dollars or the British
pound sterling and bore interest at variable rates, primarily related to spreads
over LIBOR, as summarized below.
<PAGE>
<TABLE>
<CAPTION>

                                                     Contractual maturity date (1)
                                  ---------------------------------------------------------------------     Interest
                                     2001          2002           2003          2004           2005         rate (2)
                                  -----------    ----------    -----------    ----------    -----------    ------------
                                                             (In millions)
Variable rate debt:
<S>                                <C>            <C>           <C>            <C>           <C>              <C>
   U. S. dollars                   $  22.1        $    -        $  5.4         $   -         $   -            8.70%
   British pounds                      1.5           1.5           1.5           1.5           8.9            7.85%
   Italian lira                        1.8            .2             -             -             -            5.60%
   French francs                        .5             -             -             -             -            6.60%
<FN>
(1)      Non-U. S. dollar denominated amounts are translated at year-end rates of exchange.
(2)      Weighted average.
</FN>
</TABLE>

         At December 31, 1999,  substantially  all of the Company's  outstanding
indebtedness consisted of U.S. dollar-denominated variable rate debt.

         Foreign Currency  Exchange Rates. The Company is exposed to market risk
arising  from  changes in  foreign  currency  exchange  rates as a result of its
international operations.  See Item 7 - "Management's Discussion and Analysis of
Financial  Condition and Results of Operations -Results of Operations - European
Operations," which information is incorporated herein by reference.

         Other.  The Company holds $80 million of preferred  securities that are
not publicly  traded,  are accounted  for by the cost method and are  considered
"held-to-maturity"  securities.  See  Item  7  -  "Management's  Discussion  and
Analysis of  Financial  Condition  and  Results of  Operations  - Liquidity  and
Capital  Resources  -  Investing  Activities"  and  Note 5 to  the  Consolidated
Financial Statements.

ITEM 8:     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The  information  required  by this  Item is  contained  in a  separate
section of this Annual Report. See "Index of Financial Statements and Schedules"
on page F.

ITEM 9:     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

         Not applicable.

ITEM 10:    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The  information  required by this Item is incorporated by reference to
TIMET's  definitive proxy statement to be filed with the Securities and Exchange
Commission  pursuant  to  Regulation  14A  within  120 days after the end of the
fiscal year covered by this Annual Report (the "TIMET Proxy Statement").

ITEM 11:    EXECUTIVE COMPENSATION

         The  information  required by this Item is incorporated by reference to
the TIMET Proxy Statement.

<PAGE>

ITEM 12:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The  information  required by this Item is incorporated by reference to
the TIMET Proxy Statement.

ITEM 13:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The  information  required by this Item is incorporated by reference to
the  TIMET  Proxy  Statement.  See also  Note 15 to the  Consolidated  Financial
Statements.

<PAGE>
                                     PART IV

ITEM 14:  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

  (a) and (d) Financial Statements and Schedules

                  The consolidated  financial statements and schedules listed by
the Registrant on the accompanying  Index of Financial  Statements and Schedules
(see page F) are filed as part of this Annual Report.

  (b)         Reports on Form 8-K

      Reports on Form 8-K for the quarter ended December 31, 2000 and the months
of January and February 2001:
<TABLE>
<CAPTION>


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

                 <S>                                     <C>                <C>
                 October 2, 2000                         -                  5 and 7
                 October 19, 2000                        -                  5 and 7
                 January 11, 2001                        -                  5 and 7
                 January 12, 2001                        -                  5 and 7
                 January 29, 2001                        -                  5 and 7

</TABLE>
<PAGE>

(c)                  Exhibits

                    Included  as  exhibits  are the items  listed in the Exhibit
Index.  TIMET  will  furnish a copy of any of the  exhibits  listed  below  upon
payment  of $4.00 per  exhibit  to cover the  costs to TIMET of  furnishing  the
exhibits.  Instruments  defining the rights of holders of long-term  debt issues
which do not exceed 10% of  consolidated  total  assets will be furnished to the
Commission upon request.

Item No.           Exhibit Index

3.1                Amended and Restated Certificate of Incorporation of Titanium
                   Metals Corporation,  incorporated by reference to Exhibit 3.1
                   to Titanium Metals  Corporation's  Registration  Statement on
                   Form S-1 (No. 333-2940).

3.2                Bylaws  of  Titanium  Metals  Corporation  as  Amended  and
                   Restated, dated February 23, 1999, incorporated by reference
                   to Exhibit 3.2 to Titanium Metals Corporation's Annual Report
                   on  Form  10-K  (No.  1-14368)  for  the  year  ended
                   December 31, 1998.

4.1                Certificate  of  Trust  of  TIMET  Capital  Trust I,  dated
                   November 13, 1996, incorporated by reference to  Exhibit 4.1
                   to Titanium Metals  Corporation's  Current Report on Form 8-K
                   filed with the Commission on December 5, 1996.

4.2                Amended and Restated  Declaration  of Trust of TIMET  Capital
                   Trust I, dated as of November 20, 1996, among Titanium Metals
                   Corporation,   as  Sponsor,  the  Chase  Manhattan  Bank,  as
                   Property  Trustee,   Chase  Manhattan  Bank  (Delaware),   as
                   Delaware  Trustee  and  Joseph  S.  Compofelice,   Robert  E.
                   Musgraves   and  Mark  A.  Wallace,   as  Regular   Trustees,
                   incorporated by reference to Exhibit 4.2 to the  Registrant's
                   Current  Report  on Form 8-K  filed  with the  Commission  on
                   December 5, 1996.

4.3                Indenture  for  the 6 5/8%  Convertible  Junior  Subordinated
                   Debentures,  dated as of November  20, 1996,  among  Titanium
                   Metals  Corporation and The Chase Manhattan Bank, as Trustee,
                   incorporated by reference to Exhibit 4.3 to the  Registrant's
                   Current  Report  on Form 8-K  filed  with the  Commission  on
                   December 5, 1996.

4.4                Form of 6 5/8% Convertible Preferred Securities (included in
                   Exhibit 4.2 above), incorporated by reference to Exhibit  4.4
                   to the Registrant's Current Report  on Form  8-K  filed  with
                   the  Commission on December 5, 1996.

4.5                Form of 6 5/8%  Convertible  Junior  Subordinated  Debentures
                   (included  in Exhibit  4.3 above), incorporated  by reference
                   to Exhibit 4.6 to the Registrant's Current Report on Form 8-K
                   filed with the Commission on December 5, 1996.

4.6                Form  of  6 5/8%  Trust  Common  Securities  (included  in
                   Exhibit 4.2 above), incorporated by reference to Exhibit  4.5
                   to the  Registrant's Current  Report on Form 8-K filed  with
                   the Commission on December 5, 1996.

4.7                Convertible  Preferred  Securities  Guarantee,  dated  as of
                   November 20, 1996,  between  Titanium Metals  Corporation, as
                   Guarantor,  and  The  Chase  Manhattan  Bank,  as  Guarantee
                   Trustee, incorporated  by  Reference to  Exhibit 4.7 to the
                   Registrant's  Current  Report on  Form 8-K  filed with the
                   Commission on December 5, 1996.

9.1                Shareholders'  Agreement,  dated  February 15, 1996,  among
                   Titanium Metals  Corporation,  Tremont Corporation,  IMI plc,
                   IMI Kynoch Ltd.,  and IMI  Americas,  Inc.,  incorporated  by
                   reference  to Exhibit 2.2 to Tremont  Corporation's  Current
                   Report on Form 8-K (No.  1-10126)  filed with the Commission
                   on March 1, 1996.

9.2                Amendment  to  the  Shareholders'  Agreement,   dated
                   March  29,  1996,  among  Titanium  Metals Corporation,
                   Tremont Corporation, IMI  plc, IMI Kynoch Ltd., and
                   IMI  Americas,  Inc., incorporated  by reference to Exhibit
                   10.30 to Tremont  Corporation's  Annual Report on Form 10-K
                   (No. 1-10126) for the year ended December 31, 1995.

10.1               Lease  Agreement,  dated  January 1, 1996,  between  Holford
                   Estates Ltd. and  IMI Titanium  Ltd. related to the building
                   known  as  Titanium  Number 2 Plant  at  Witton,  England,
                   incorporated  by  reference  to  Exhibit 10.23  to  Tremont
                   Corporation's Annual Report on Form 10-K (No. 1-10126) for
                   the year ended December 31, 1995.

10.2               Purchase Agreement, dated November 20, 1996, between Titanium
                   Metals  Corporation,  TIMET Capital Trust I, Salomon Brothers
                   Inc, Merrill Lynch,  Pierce,  Fenner & Smith Incorporated and
                   Morgan  Stanley & Co.  Incorporated,  as Initial  Purchasers,
                   incorporated by reference to Exhibit 99.1 to the Registrant's
                   Current  Report  on Form 8-K  filed  with the  Commission  on
                   December 5, 1996.

10.3               Registration  Agreement,  dated  November 20, 1996,  between
                   TIMET  Capital  Trust I and Salomon Brothers Inc, as
                   Representative of the Initial  Purchasers,  incorporated by
                   reference to Exhibit 99.2 to the Registrant's Current  Report
                   on Form 8-K filed with the  Commission  on December 5, 1996.

10.4               Loan and Security  Agreement by and among Congress  Financial
                   Corporation  (Southwest) as Lender and Titanium  Metals
                   Corporation  and Titanium  Hearth  Technologies,  Inc. as
                   borrowers, dated February 25, 2000, incorporated by reference
                   to Exhibit 10.12 to the Registrant's  Annual Report on
                   Form 10-K for the year ended December 31, 1999.

10.5               Investment  Agreement  dated July 9, 1998,  between  Titanium
                   Metals  Corporation,  TIMET Finance Management Company and
                   Special Metals  Corporation,  incorporated by reference to
                   Exhibit 10.1 to the Registrant's Current Report on Form 8-K
                   dated July 9, 1998.

10.6               Amendment to Investment  Agreement,  dated October 28, 1998,
                   among Titanium Metals  Corporation, TIMET Finance  Management
                   Company and Special Metals  Corporation,  incorporated by
                   reference to Exhibit 10.4 to the  Registrant's  Quarterly
                   Report on Form 10-Q for the quarter ended September 30, 1998.

10.7               Registration  Rights  Agreement,   dated  October  28,  1998,
                   between TIMET Finance  Management  Company and Special Metals
                   Corporation, incorporated by reference to Exhibit 10.5 to the
                   Registrant's  Quarterly  Report on Form 10-Q for the  quarter
                   ended September 30, 1998.



<PAGE>




10.8               Certificate   of   Designations   for  the   Special   Metals
                   Corporation  Series A Preferred  Stock,  filed on October 28,
                   1998,  with the Secretary of State of Delaware,  incorporated
                   by reference  to Exhibit 4.5 of a Current  Report on Form 8-K
                   dated October 28, 1998,  filed by Special Metals  Corporation
                   (No. 000-22029).

10.9               Intercorporate  Services Agreement between Titanium Metals
                   Corporation and Tremont  Corporation, effective as of January
                   1, 2000,  incorporated  by reference to Exhibit 10.1 to the
                   Registrant's Quarterly Report on Form 10-Q for the quarter
                   ended June 30, 2000.

10.10              Intercorporate  Services  Agreement between Titanium Metals
                   Corporation and NL Industries, Inc. effective as of January
                   1, 2000,  incorporated by reference to Exhibit 10.4 to a
                   Quarterly Report on Form 10-Q for the quarter ended June 30,
                   2000 filed by NL Industries, Inc. (No. 1-640).

10.11*             1996 Long Term  Performance  Incentive  Plan of  Titanium
                   Metals  Corporation,  incorporated  by reference to Exhibit
                   10.19 to Titanium  Metals  Corporation's  Amendment  No. 1 to
                   Registration Statement on Form S-1 (No.333-18829).

10.12*             Titanium  Metals   Corporation   Amended  and  Restated  1996
                   Non-Employee  Director  Compensation  Plan,  as  amended  and
                   restated effective February 28, 2001.

10.13*             Senior Executive Cash Incentive Plan, incorporated by
                   reference to Appendix B to Titanium Metals Corporation's
                   proxy statement  included as part of a statement on Schedule
                   14A dated April 17, 1997.

10.14*             Executive Severance Policy, as amended and restated effective
                   May 17, 2000,  incorporated  by reference  to Exhibit  10.3
                   to the  Registrant's  Quarterly  Report on Form 10-Q for the
                   quarter ended June 30, 2000.

10.15*             Severance  Agreement between Titanium Metals  Corporation and
                   Andrew R. Dixey dated February 25, 2000,  incorporated by
                   reference to Exhibit 10.19 to the Registrant's  Annual Report
                   on Form 10-K for the year ended December 31, 1999.

10.16*             Executive  Agreement dated as of September 27, 1996, between
                   Titanium Hearth  Technologies,  Inc. and Charles H.
                   Entrekin,  Jr.,  incorporated  by reference to Exhibit 10.22
                   to the  Registrant's Annual Report on Form 10-K for the year
                   ended December 31, 1999.

10.17*             Titanium Metals Corporation Executive Stock  Ownership Loan
                   Plan, as amended and restated effective February 28, 2001.

10.18*             Form of Loan and Pledge  Agreement  by and  between  Titanium
                   Metals  Corporation and individual TIMET executives under the
                   Corporation's Executive Stock Ownership Loan Program.

21.1               Subsidiaries of the Registrant

23.1               Consent of PricewaterhouseCoopers LLP

<PAGE>



99.1               Complaint   and  Jury  Demand   filed  by   Titanium   Metals
                   Corporation  against The Boeing  Company in  District  Court,
                   City and County of Denver,  State of  Colorado,  on March 21,
                   2000, Case No.  00CV1402,  including  Exhibit A, Purchase and
                   Sale Agreement (for titanium  products)  dated as of November
                   5, 1997 by and between The Boeing Company, acting through its
                   division,  Boeing  Commercial  Airplane  Group,  and Titanium
                   Metals Corporation, incorporated by reference to Exhibit 99.2
                   to the  Registrant's  Current  Report on Form 8-K dated March
                   22, 2000.

* Management contract, compensatory plan or arrangement.


<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) 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)



                                                By   /s/ J. Landis Martin
                                                J. Landis Martin, March 20, 2001
                                               (Chairman of the Board, President
                                                and Chief Executive Officer)


        Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated:



/s/ J. Landis Martin                            /s/ Steven L. Watson
J. Landis Martin, March 20, 2001                Steven L. Watson, March 20, 2001
(Chairman of the Board, President              (Director)
and Chief Executive Officer)



/s/ Edward C. Hutcheson, Jr.                  /s/ Thomas P. Stafford
Edward C. Hutcheson, Jr., March 20, 2001      Thomas P. Stafford, March 20, 2001
(Director)                                    (Director)


/s/ Glenn R. Simmons                           /s/ Mark A. Wallace
Glenn R. Simmons, March 20, 2001               Mark A. Wallace, March 20, 2001
(Director)                                    (Executive Vice President and
                                                Chief Financial Officer)


/s/ JoAnne A. Nadalin
JoAnne A. Nadalin, March 20, 2001
Vice President and Corporate Controller
(Principal Accounting Officer)
<PAGE>
                           TITANIUM METALS CORPORATION

                           ANNUAL REPORT ON FORM 10-K
                            ITEMS 8, 14(a) and 14(d)

                   INDEX OF FINANCIAL STATEMENTS AND SCHEDULES

                                                                          Page
Financial Statements

  Report of Independent Accountants                                        F-1

  Consolidated Balance Sheets - December 31, 1999 and 2000              F-2/F-3

  Consolidated Statements of Operations - Years ended
     December 31, 1998, 1999 and 2000                                      F-4

  Consolidated Statements of Comprehensive Income - Years ended
     December 31, 1998, 1999 and 2000                                      F-5

  Consolidated Statements of Cash Flows - Years ended
     December 31, 1998, 1999 and 2000                                    F-6/F-7

  Consolidated Statements of Stockholders' Equity - Years ended
     December 31, 1998, 1999 and 2000                                     F-8

  Notes to Consolidated Financial Statements                            F-9/F-35


Financial Statement Schedules

  Report of Independent Accountants                                        S-1

  Schedule II - Valuation and qualifying accounts                          S-2






                                       F

<PAGE>





                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Stockholders and Board of Directors of Titanium Metals Corporation:

         In our opinion,  the accompanying  consolidated  balance sheets and the
related  consolidated  statements of operations,  of  comprehensive  income,  of
stockholders' equity and of cash flows present fairly, in all material respects,
the financial  position of Titanium Metals  Corporation  and  Subsidiaries as of
December  31, 1999 and 2000 and the results of their  operations  and their cash
flows for each of the three  years in the  period  ended  December  31,  2000 in
conformity with accounting principles generally accepted in the United States of
America.  These  financial  statements are the  responsibility  of the Company's
management;  our  responsibility  is to express  an  opinion on these  financial
statements  based on our audits.  We conducted our audits of these statements in
accordance with auditing  standards  generally  accepted in the United States of
America,  which require that we plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.





PricewaterhouseCoopers LLP


Denver, Colorado
January 29, 2001

                                      F-1
<PAGE>
                           TITANIUM METALS CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                           December 31, 1999 and 2000
                      (In thousands, except per share data)
<TABLE>
<CAPTION>

ASSETS                                                                1999               2000
                                                                 --------------    ---------------

Current assets:
<S>                                                                  <C>                <C>
   Cash and cash equivalents                                         $20,671            $ 9,796
   Accounts and other receivables, less
     allowance of $3,330 and $2,927                                  106,204             75,913
   Receivable from related parties                                     4,071              5,029
   Refundable income taxes                                            10,651                637
   Inventories                                                       191,535            148,384
   Prepaid expenses and other                                          7,177              8,049
   Deferred income taxes                                               2,250                397
                                                                 --------------    ---------------
          Total current assets                                       342,559            248,205
                                                                 --------------    ---------------

Other assets:
   Investment in joint ventures                                       26,938             18,136
   Preferred securities                                               80,000             80,000
   Accrued dividends on preferred securities                           6,530              8,136
   Goodwill                                                           54,789             49,305
   Other intangible assets                                            16,326             13,258
   Deferred income taxes                                               9,600             27,820
   Other                                                              12,598             12,156
                                                                 --------------    ---------------
          Total other assets                                         206,781            208,811
                                                                 --------------    ---------------

Property and equipment:
   Land                                                                6,230              6,158
   Buildings                                                          38,177             37,593
   Information technology systems                                     55,877             54,426
   Manufacturing and other                                           317,792            305,856
   Construction in progress                                            8,121              8,811
                                                                 --------------    ---------------
                                                                     426,197            412,844
   Less accumulated depreciation                                      92,432            110,714
                                                                 --------------    ---------------
     Net property and equipment                                      333,765            302,130
                                                                 --------------    ---------------

                                                                    $883,105           $759,146
                                                                 ==============    ===============

</TABLE>
          See accompanying notes to consolidated financial statements.
                                       F-2
<PAGE>
                           TITANIUM METALS CORPORATION

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                           December 31, 1999 and 2000
                      (In thousands, except per share data)

<TABLE>
<CAPTION>

LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY                                      1999               2000
                                                                                       --------------    ---------------
<S>                                                                                          <C>               <C>
Current liabilities:
   Notes payable                                                                             $ 9,635           $ 24,112
   Current maturities of long-term debt and
     capital lease obligations                                                                85,679              2,011
   Accounts payable                                                                           48,679             50,456
   Accrued liabilities                                                                        42,879             36,180
   Payable to related parties                                                                  1,984              1,099
   Income taxes                                                                                  516                852
   Deferred income taxes                                                                       5,049              1,132
                                                                                       --------------    ---------------

          Total current liabilities                                                          194,421            115,842
                                                                                       --------------    ---------------

Noncurrent liabilities:
   Long-term debt                                                                             22,425             18,953
   Capital lease obligations                                                                   9,776              8,642
   Payable to related parties                                                                  1,332              1,332
   Accrued OPEB cost                                                                          19,961             18,219
   Accrued pension cost                                                                        5,634              5,361
   Accrued environmental cost                                                                      -              3,262
   Deferred income taxes                                                                      12,950              9,655
   Accrued dividends on Convertible Preferred Securities                                           -             11,154
   Other                                                                                           -                117
                                                                                       --------------    ---------------
                                                                                       --------------    ---------------
          Total noncurrent liabilities                                                        72,078             76,695
                                                                                       --------------    ---------------

Minority  interest  -   Company-obligated   mandatorily   redeemable   preferred
   securities of subsidiary trust holding solely
   subordinated debt securities ("Convertible Preferred Securities")                         201,250            201,250
Other minority interest                                                                        7,275              7,844

Stockholders' equity:
     Preferred stock $.01 par value; 1,000 shares authorized,
        none outstanding                                                                           -                  -
     Common stock, $.01 par value; 99,000 shares authorized,
        31,461 and 31,907 shares issued, respectively                                            315                319
     Additional paid-in capital                                                              347,984            350,078
     Retained earnings                                                                        64,827             25,925
     Accumulated other comprehensive income (loss)                                           (3,837)           (16,408)
     Treasury stock, at cost  (90 shares)                                                    (1,208)            (1,208)
     Deferred compensation                                                                         -            (1,191)
                                                                                       --------------    ---------------
                                                                                       --------------    ---------------
          Total stockholders' equity                                                         408,081            357,515
                                                                                       --------------    ---------------

                                                                                            $883,105           $759,146
                                                                                       ==============    ===============
</TABLE>
Commitments and contingencies (Note 16)


          See accompanying notes to consolidated financial statements.
                                       F-3
<PAGE>
                           TITANIUM METALS CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                  Years ended December 31, 1998, 1999 and 2000
                      (In thousands, except per share data)
<TABLE>
<CAPTION>

                                                                                   1998              1999               2000
                                                                            ---------------   ---------------    ---------------

<S>                                                                              <C>               <C>              <C>
Revenues and other income:
     Net sales                                                                   $707,677          $480,029           $426,798
     Equity in earnings (losses) of joint ventures                                    351            (1,709)              (865)
     Other, net                                                                     6,859             4,952              8,377
                                                                            ---------------   ---------------    ---------------
                                                                                  714,887           483,272            434,310
                                                                            ---------------   ---------------    ---------------

Costs and expenses:
     Cost of sales                                                                542,285           454,506            422,917
     Selling, general, administrative and development                              59,837            48,577             44,017
     Special charges                                                               24,000             6,834              2,805
     Interest                                                                       2,916             7,093              7,704
                                                                            ---------------   ---------------    ---------------
                                                                                  629,038           517,010            477,443
                                                                            ---------------   ---------------    ---------------

     Income (loss) before income taxes, minority interest
      and extraordinary item                                                       85,849           (33,738)           (43,133)

Income tax expense (benefit)                                                       29,197           (12,021)           (15,097)
Minority interest - Convertible Preferred Securities, net of tax                    8,840             8,667              8,710
Other minority interest, net of tax                                                 2,060             1,006              1,283
                                                                            ---------------   ---------------    ---------------

     Income (loss) before extraordinary item                                       45,752           (31,390)           (38,029)

Extraordinary item, early extinguishment of debt, net of tax                            -                 -               (873)
                                                                            ---------------   ---------------    ---------------

     Net income (loss)                                                           $ 45,752         $ (31,390)          $(38,902)
                                                                            ===============   ===============    ===============


Basic and diluted earnings (loss) per share:
     Before extraordinary item                                                   $   1.46         $   (1.00)          $  (1.21)
     Extraordinary item                                                                 -                 -               (.03)
                                                                            ---------------   ---------------    ---------------

                                                                                 $   1.46         $   (1.00)          $  (1.24)
                                                                            ===============   ===============    ===============


Weighted average shares outstanding                                                31,435            31,371             31,373
</TABLE>


          See accompanying notes to consolidated financial statements.
                                       F-4
<PAGE>

                           TITANIUM METALS CORPORATION

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                  Years ended December 31, 1998, 1999 and 2000
                                 (In thousands)
<TABLE>
<CAPTION>


                                                                           1998               1999              2000
                                                                      ---------------    ---------------    --------------

<S>                                                                        <C>               <C>               <C>
Net income (loss)                                                          $  45,752         $  (31,390)       $ (38,902)

Other comprehensive income (loss):
   Currency translation adjustment                                             1,692             (5,637)         (10,883)
   Pension liabilities adjustment, net of tax of
     $2,300, $(260), and $909 in 1998, 1999 and
     2000, respectively                                                       (4,283)               483           (1,688)
                                                                      ---------------    ---------------    --------------

                                                                              (2,591)            (5,154)        (12,571)
                                                                      ---------------    ---------------    --------------

   Comprehensive income (loss)                                             $  43,161         $  (36,544)      $ (51,473)
                                                                      ===============    ===============    ==============
</TABLE>
          See accompanying notes to consolidated financial statements.
                                       F-5
<PAGE>
                           TITANIUM METALS CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                  Years ended December 31, 1998, 1999 and 2000
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                             1998              1999               2000
                                                                       --------------    ---------------    ---------------
<S>                                                                       <C>               <C>                <C>
Cash flows from operating activities:
   Net income (loss)                                                      $ 45,752          $(31,390)          $(38,902)
   Depreciation and amortization                                            32,514            42,693             41,942
   Noncash restructuring charge                                                  -                 -                245
   Noncash special charges                                                  15,425             3,936              6,729
   Gain on sale of castings joint venture                                        -                 -             (1,205)
   Extraordinary loss on early extinguishment of debt, net                       -                 -                873
   Earnings of joint ventures, net of dividends
    received                                                                   170             3,730              1,710
   Deferred income taxes                                                    13,172              (464)           (17,245)
   Other minority interest                                                   2,060             1,006              1,283
   Other, net                                                                 (433)            4,447                451
   Change in assets and liabilities, net of acquisitions:
      Receivables                                                           37,454            17,406             25,273
      Inventories                                                          (62,990)           23,598             37,026
      Prepaid expenses and other                                             2,539             3,137               (452)
      Accounts payable and accrued liabilities                              (7,723)          (24,151)            (1,837)
      Accrued restructuring charges                                          6,727            (5,042)              (974)
      Income taxes                                                         (12,213)          (16,220)            10,386
      Accounts with related parties, net                                     9,650             2,409             (1,791)
      Accrued OPEB and pension costs                                        (1,774)             (411)            (4,256)
      Accrued dividends on preferred securities                               (890)           (5,640)            (1,606)
      Accrued dividends on Convertible Preferred
        Securities                                                               -                 -             10,043
      Other, net                                                            (3,323)              499             (4,365)
                                                                       --------------    ---------------    ---------------

      Net cash provided by operating activities                             76,117            19,543             63,328
                                                                       --------------    ---------------    ---------------

Cash flows from investing activities:
   Capital expenditures                                                   (115,155)          (24,772)           (11,182)
   Business acquisitions and joint ventures                                (27,413)                -                  -
   Proceeds from sale of joint venture                                           -                 -              7,000
   Purchase of preferred securities                                        (80,000)                -                  -
   Disposition of fixed assets                                                   -             2,900                 38
   Other, net                                                                 (647)              209                (74)
                                                                       --------------    ---------------    ---------------
      Net cash used by investing activities                               (223,215)          (21,663)            (4,218)
                                                                       --------------    ---------------    ---------------

Cash flows from financing activities:
   Indebtedness:
     Borrowings                                                            153,765           111,900            364,214
     Repayments                                                            (56,670)          (99,284)          (434,257)
   Dividends paid                                                           (3,772)           (3,764)                 -
   Treasury stock purchased                                                 (1,208)                -                  -
   Other, net                                                                  117              (289)              (635)
                                                                       --------------    ---------------    ---------------
     Net cash provided (used) by financing activities                       92,232             8,563            (70,678)
                                                                       --------------    ---------------    ---------------

                                                                          $(54,866)        $   6,443           $(11,568)
                                                                       ==============    ===============    ===============
</TABLE>
          See accompanying notes to consolidated financial statements.
                                       F-6
<PAGE>

                           TITANIUM METALS CORPORATION

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                  Years ended December 31, 1998, 1999 and 2000
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                         1998               1999              2000
                                                                     --------------    ---------------    --------------

<S>                                                                      <C>              <C>                 <C>
Cash and cash equivalents:
   Net increase (decrease) from:
     Operating, investing and financing activities                       $(54,866)        $   6,443           $(11,568)
     Cash acquired                                                          1,187                 -                  -
     Currency translation                                                     186            (1,236)               693
                                                                     --------------    ---------------    --------------
                                                                          (53,493)            5,207            (10,875)
   Balance at beginning of year                                            68,957            15,464             20,671
                                                                     --------------    ---------------    --------------

   Balance at end of year                                                $ 15,464          $ 20,671          $   9,796
                                                                     ==============    ===============    ==============

Supplemental disclosures:
   Cash paid for:
     Interest, net of amounts capitalized                               $   2,215         $   6,669      $       7,642
     Convertible Preferred Securities dividends                            13,332            13,332              3,333
     Income taxes (refunds), net                                           23,737               148             (8,238)

   Business acquisitions and joint ventures:
     Cash acquired                                                      $   1,187        $        -      $           -
     Receivables                                                            6,574                 -                  -
     Inventories                                                           15,352                 -                  -
     Property, equipment and other                                         21,765                 -                  -
     Investments in joint ventures                                          8,460                 -                  -
     Goodwill and other intangibles                                         8,566                 -                  -
     Liabilities assumed                                                  (18,117)                -                  -
                                                                     --------------    ---------------    --------------
                                                                           43,787                 -                  -
     Less noncash consideration, principally
       property and equipment                                             (16,374)                -                  -
                                                                     --------------    ---------------    --------------

         Cash paid                                                       $ 27,413        $        -       $          -
                                                                     ==============    ===============    ==============

</TABLE>

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

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                  Years ended December 31, 1998, 1999 and 2000
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                                Accumulated Other
                                                      Additional            Comprehensive Income (Loss)
                                                                            -------------------------
                                    Common   Common   Paid-in     Retained   Currency    Pension      Treasury   Deferred
                                    Shares   Stock    Capital     Earnings  Translation  Liabilities   Stock   Compensation  Total
                                    -------- -------- ----------- --------- ------------ -----------  -------- ----------- ---------

<S>                                  <C>     <C>       <C>        <C>        <C>          <C>          <C>      <C>        <C>
Balance at December 31, 1997         31,458  $   315   $ 346,723  $ 58,001   $   3,908    $       -    $    -   $     -    $408,947
   Comprehensive income                   -        -           -    45,752       1,692       (4,283)        -         -      43,161
   Dividends paid ($.12 per share)        -        -           -    (3,772)          -            -         -         -      (3,772)
   Treasury stock purchases             (90)       -           -         -           -            -    (1,208)        -      (1,208)
   Other, net                             1        -       1,249         -           -            -         -         -       1,249
                                    -------- -------- ----------- --------- ------------  ----------- --------  ---------- ---------

Balance at December 31, 1998         31,369      315     347,972    99,981       5,600       (4,283)   (1,208)        -     448,377
   Comprehensive income (loss)            -        -           -   (31,390)     (5,637)         483         -         -     (36,544)
   Dividends paid ($.12 per share)        -        -           -    (3,764)          -            -         -         -      (3,764)
   Other, net                             2        -          12         -           -            -         -         -          12
                                    -------- -------- ----------- --------- ------------  ----------- --------  ---------- ---------

Balance at December 31, 1999         31,371      315     347,984    64,827         (37)      (3,800)   (1,208)        -     408,081
   Comprehensive income (loss)            -        -           -   (38,902)    (10,883)      (1,688)        -         -     (51,473)
   Long-term incentive plan
       stock awards                     444        4       1,936         -           -            -         -    (1,940)          -
   Amortization of deferred
      compensation                        -        -           -         -           -            -         -       749         749
   Other                                  2        -         158         -           -            -         -         -         158
                                    -------- -------- ----------- --------- ------------  ----------- -------- ----------- ---------

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

</TABLE>
          See accompanying notes to consolidated financial statements.
                                       F-8
<PAGE>
                           TITANIUM METALS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Summary of significant accounting policies:

         Principles of consolidation.  The accompanying  consolidated  financial
statements include the accounts of Titanium Metals Corporation ("TIMET") and its
majority-owned   subsidiaries   (collectively,   the  "Company").  All  material
intercompany  accounts and balances  have been  eliminated.  Certain  prior year
amounts have been reclassified to conform to the current year presentation.

         Use of estimates. The preparation of financial statements in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements,  and the  reported  amount of revenues  and expenses
during the reporting  period.  Estimates are used in accounting for, among other
things,   allowances   for   uncollectible   accounts,   inventory   allowances,
self-insurance  accruals,  restructuring  accruals and  environmental  accruals.
Actual results may, in some instances, differ from previously estimated amounts.
Estimates  and  assumptions  are  reviewed  periodically,  and  the  effects  of
revisions are reflected in the consolidated  financial  statements in the period
they are determined to be necessary.

         Translation   of  foreign   currencies.   Assets  and   liabilities  of
subsidiaries  whose  functional  currency  is deemed  to be other  than the U.S.
dollar are  translated  at year end rates of exchange  and revenues and expenses
are translated at average exchange rates prevailing  during the year.  Resulting
translation  adjustments are accumulated in the currency translation adjustments
component of other comprehensive  income (loss).  Currency transaction gains and
losses are recognized in income  currently and were a net gain of $.4 million in
1998, and net losses of $1.2 million in 1999 and $1.1 million in 2000.

         Revenue recognition. Revenue generally is recognized when products have
been  shipped  and title and the risks and  rewards of  ownership  passes to the
customer. The Securities and Exchange Commission ("SEC") issued Staff Accounting
Bulletin  ("SAB") No. 101,  "Revenue  Recognition" in December 1999. SAB 101, as
amended,  summarizes  certain of the SEC's views in applying  generally accepted
accounting  principles to revenue recognition in financial  statements,  and the
Company was  required to comply  with SAB 101 in 2000.  The impact of  complying
with SAB 101 was not material.

         Inventories  and cost of sales.  Inventories are stated at the lower of
cost or market.  Approximately  one-half  of  inventories  are costed  using the
last-in,  first-out ("LIFO") method with the remainder primarily stated using an
average cost method.

         Cash and cash  equivalents.  Cash  equivalents  include  highly  liquid
investments with original maturities of three months or less.

         Other  investments.  Investments in 20% to 50%-owned joint ventures are
accounted for by the equity method. Differences between the Company's investment
in joint ventures and its  proportionate  share of the joint ventures'  reported
equity  are  amortized  over not more  than 15  years.  Nonmarketable  preferred
securities  are  accounted  for by the  cost  method  and are  considered  to be
"held-to-maturity" securities.

                                      F-9
<PAGE>
         Intangible assets and amortization.  Goodwill,  representing the excess
of cost over the fair  value of  individual  net  assets  acquired  in  business
combinations  accounted  for by the  purchase  method,  is  amortized  using the
straight-line method over 15 years and is stated net of accumulated amortization
of $15.2 million and $19.7 million at December 31, 1999 and 2000, respectively.
Patents and other  intangible  assets,  except  intangible  pension assets,  are
amortized  using  the  straight-line  method  over the  periods  expected  to be
benefited, generally nine years.

         Property,  equipment,  depreciation  and  amortization.   Property  and
equipment  are  stated at cost.  Maintenance,  repairs  and minor  renewals  are
expensed;  major improvements are capitalized.  Interest costs related to major,
long-term capital projects are capitalized as a component of construction  costs
and were $2.6 million in 1998, $1.3 million in 1999 and $1.0 million in 2000. In
accordance with SOP 98-1,  "Accounting for Costs of Computer Software  Developed
or Obtained for Internal Use," the Company capitalized certain computer software
costs in 1998 and 1999 associated with its implementation of certain information
technology systems.

         Depreciation is computed  principally on the straight-line  method over
the estimated useful lives of 15 to 40 years for buildings and three to 25 years
for machinery and equipment.  Capitalized  software costs are amortized over the
software's estimated useful life, generally three to five years.

         Long-lived  assets.  When events or changes in  circumstances  indicate
that the  carrying  amount of  long-lived  assets,  including  goodwill or other
intangible  assets,  may not be  recoverable,  an  evaluation  is  performed  to
determine if an impairment  exists.  The Company compares the carrying amount of
the assets to the  undiscounted  expected  future cash flows. If this comparison
indicates  that  an  impairment  exists,  the  amount  of the  impairment  would
typically  be  calculated  using  discounted  expected  future cash  flows.  All
relevant factors are considered in determining whether impairment exists.

         Stock-based  compensation.  The  Company  has  elected  the  disclosure
alternative  prescribed by Statement of Financial  Accounting Standards ("SFAS")
No.  123,  "Accounting  for  Stock-Based  Compensation,"  and to account for the
Company's  stock-based  employee  compensation  in  accordance  with  Accounting
Principles  Board  Opinion  ("APB")  No.  25,  "Accounting  for Stock  Issued to
Employees" and its various  interpretations.  Under APB No. 25, no  compensation
cost is  generally  recognized  for fixed stock  options for which the  exercise
price is not less than the market  price of the  Company's  common  stock on the
grant date.

         Employee benefit plans.  Accounting and funding policies for retirement
plans and postretirement  benefits other than pensions ("OPEB") are described in
Note 14.

     Research and development. Research and development expense was $3.4 million
in 1998, $2.5 million in 1999 and $2.6 million in 2000.

         Advertising costs.  Advertising  costs, which are not significant,  are
expensed as incurred.

         Self Insurance. The Company is self insured for certain losses relating
to  workers  compensation  claims,  employee  medical  benefits,  environmental,
product and other liabilities. The Company maintains certain stop loss and other
insurance to reduce its exposure  and provides  accruals for  estimates of known
liabilities and incurred but not reported claims. See Note 16.

                                      F-10
<PAGE>
         Income taxes. Deferred income tax assets and liabilities are recognized
for the expected future tax  consequences of temporary  differences  between the
income tax and financial  reporting  carrying amounts of assets and liabilities,
including  investments in subsidiaries not included in TIMET's consolidated U.S.
tax group. The company periodically reviews its deferred tax assets to determine
if future  realization  is more  likely  than not and a change in the  valuation
allowance is recorded in the period it is determined  to be necessary.  See Note
13.

         Fair value of financial instruments. Carrying amounts of certain of the
Company's  financial  instruments   including,   among  others,  cash  and  cash
equivalents,  accounts  receivable,  accrued  compensation,  and  other  accrued
liabilities  approximate  fair value  because  of their  short  maturities.  The
Company's  bank debt  reprices  with  changes  in  market  interest  rates  and,
accordingly,  the carrying amount of such debt is believed to approximate market
value.

         The Company's preferred securities are not marketable and, accordingly,
quoted market prices are  unavailable.  The Company believes the carrying amount
of these securities to be recoverable and, therefore,  the preferred  securities
are recorded in the consolidated  financial  statements at cost. The Company has
estimated  the fair value of its preferred  securities,  using  discounted  cash
flow,  to  approximate  $80  million.   The  Company  periodically  reviews  the
recoverability  of its  investment  in the  securities.  In the event that TIMET
determines  in  the  future  that  its  investment  in  the  securities  is  not
recoverable,  then the Company  would report an  appropriate  write down at that
time.

         Earnings per share.  Basic  earnings per share is based on the weighted
average number of  unrestricted  common shares  outstanding  during each period.
Diluted earnings per share reflects the dilutive effect of common stock options,
restricted  stock  and  the  assumed  conversion  of the  Convertible  Preferred
Securities, if applicable. See Note 18.

         New accounting  principles not yet adopted. The Company will adopt SFAS
No. 133,  "Accounting  for Derivative  Instruments  and Hedging  Activities," as
amended,  effective January 1, 2001. Under SFAS No. 133, all derivatives will be
recognized  as either  assets or  liabilities  and  measured at fair value.  The
accounting  for  changes  in fair  value of  derivatives  will  depend  upon the
intended use of the  derivative,  and such changes will be recognized  either in
net  income  or other  comprehensive  income.  As  permitted  by the  transition
requirements of SFAS No. 133, as amended, the Company will exempt from the scope
of SFAS No. 133 all host contracts  containing  embedded  derivatives which were
issued or acquired  prior to January 1, 1999. The Company was not a party to any
significant derivative or hedging instrument covered by SFAS No. 133 at December
31, 2000.  The  adoption of SFAS No. 133 will not have a material  effect on the
Company's consolidated financial position, liquidity or results of operations.

Note 2 - Segment information:

         The Company is a  vertically  integrated  producer of titanium  sponge,
melted  products  (ingot and slab) and a variety of mill products for aerospace,
industrial  and other  applications.  The Company's  production  facilities  are
located  principally  in the United States,  United Kingdom and France,  and its
products are sold throughout the world.  These worldwide  integrated  activities
comprise the Company's principal segment, "Titanium melted and mill products."

         In 1998,  the "Other"  segment  consisted  primarily  of the  Company's
titanium castings operations, which were combined in a joint venture during 1998
and subsequently sold in January 2000 (see Note 4). In 1999, the "Other" segment
consisted of the Company's nonintegrated joint ventures,  which investments have
been either sold or charged off due to an asset impairment.

                                      F-11
<PAGE>
         Sales,  operating income (loss),  inventory and receivables are the key
management  measures used to evaluate  segment  performance.  Segment  operating
income is defined as income before income taxes,  minority interest and interest
expense,  exclusive  of  certain  general  corporate  income and  expense  items
(including  dividends  and  interest  income).  Operating  income  (loss) of the
"Titanium melted and mill products"  segment includes  restructuring  charges of
$19.5  million,   $4.7  million  and  $2.8  million  in  1998,  1999  and  2000,
respectively.  In 2000, the operating loss of this segment  included special and
restructuring items of $9.5 million, consisting of $2.8 million of restructuring
charges, referred to above, $3.4 million of equipment-related impairment charges
and $3.3 million of environmental  remediation  charges.  Operating loss of this
segment in 2000 also includes a special  income item of $2.0 million  related to
the fourth quarter  termination of the Company's 1990 agreement to sell titanium
sponge to Union Titanium Sponge  Corporation  ("UTSC").  See Note 15.  Operating
income of the "Other" segment includes  restructuring charges of $4.5 million in
1998. In 1999, operating income of this segment includes $2.3 million of special
charges  associated with the write downs of the Company's  investment in certain
start up joint  ventures and a $.2 million  credit for the  reduction of a prior
year  restructuring  charge.  Restructuring  and other special  charges are more
fully described in Note 6.


                                      F-12
<PAGE>
<TABLE>
<CAPTION>

                                                                             Years Ended December 31,
                                                                 ----------------------------------------------------
                                                                    1998               1999               2000
                                                                 --------------  ---------------     ----------------
                                                                                  (In thousands)
<S>                                                                  <C>               <C>               <C>
Operating Segments:
   Net sales:
     Titanium melted and mill products                               $688,008          $480,029          $426,798
     Other                                                             22,605                 -                 -
     Eliminations                                                      (2,936)                -                 -
                                                               ----------------  ----------------    ----------------
                                                                     $707,677          $480,029          $426,798
                                                               ================   ===============    ================

   Titanium melted and mill products:
     Mill product net sales                                          $521,700          $376,200          $326,319
     Melted product net sales                                          66,785            35,500            47,366
     Other                                                             99,523            68,329            53,113
                                                               ----------------   ---------------    ----------------
                                                                     $688,008          $480,029          $426,798
                                                               ================   ===============    ================

   Mill product shipments:
     Volume (metric tons)                                              14,800            11,400            11,370
     Average price ($ per Kilogram)                                  $  35.25          $  33.00          $  28.70

   Melted product shipments:
     Volume (metric tons)                                               3,610             2,500             3,470
     Average price ($ per Kilogram)                                  $  18.50          $  14.20          $  13.65

   Operating income (loss):
     Titanium melted and mill products                               $ 87,341          $(27,746)         $(41,715)
     Other                                                             (4,636)           (3,687)               65
                                                                --------------- -----------------    ----------------
                                                                       82,705           (31,433)          (41,650)
   Dividends and interest income                                        6,303             6,034             6,154
   General corporate income (expense), net                               (243)           (1,246)               67
   Interest expense                                                    (2,916)           (7,093)           (7,704)
                                                                --------------- -----------------    -----------------
   Income (loss) before income taxes, minority
     Interest and extraordinary item                                 $ 85,849          $(33,738)         $(43,133)
                                                                ================   ===============    ================
   Depreciation and amortization:
     Titanium melted and mill products                               $ 31,602           $ 42,693         $ 41,942
     Other                                                                912                  -                -
                                                               ----------------    --------------    ----------------
                                                                     $ 32,514           $ 42,693         $ 41,942
                                                               ================    ==============    ================
   Capital expenditures:
     Titanium melted and mill products                               $115,103           $ 24,771         $ 11,182
     Other                                                                 52                  1                -
                                                               ----------------    --------------    ----------------
                                                                     $115,155           $ 24,772         $ 11,182
                                                               ================    ==============    ================
</TABLE>
                                      F-13
<PAGE>
<TABLE>
<CAPTION>
                                                                             Years Ended December 31,
                                                                    1998               1999               2000
                                                               ----------------    --------------    ----------------
                                                                                  (In thousands)
Inventories:
<S>                                                                 <C>                 <C>               <C>
     Titanium melted and mill products                              $225,803            $191,599          $148,384
     Other                                                               141                   -                 -
     Eliminations                                                        (64)                (64)                -
                                                               ----------------    --------------    ----------------
                                                                    $225,880            $191,535          $148,384
                                                               ================    ==============    ================
   Accounts receivable:
     Titanium melted and mill products                              $124,542            $105,654          $ 75,913
     Other                                                             1,556                 550                 -
                                                               ----------------    --------------    ----------------
                                                                    $126,098            $106,204          $ 75,913
                                                               ================    ==============    ================

   Investment in joint ventures:
     Titanium melted and mill products                             $ 22,044             $ 21,143          $ 18,136
     Other                                                           10,589                5,795                 -
                                                               ----------------    --------------    ----------------
                                                                   $ 32,633             $ 26,938          $ 18,136
                                                               ================    ==============    ================

   Equity in earnings (losses) of joint ventures:
     Titanium melted and mill products                             $  1,869             $   549           $   (865)
     Other                                                           (1,518)             (2,258)                 -
                                                               ----------------    --------------    ----------------
                                                                   $    351             $(1,709)          $   (865)
                                                               ================    ==============    ================

Geographic segments:
   Net sales - point of origin:
     United States                                                  $465,519           $365,652            $345,370
     United Kingdom                                                  217,709            160,765             139,599
     Other Europe                                                    109,347             89,433              74,432
     Eliminations                                                    (84,898)          (135,821)           (132,603)
                                                               ----------------   ---------------    ----------------
                                                                    $707,677           $480,029            $426,798
                                                               ================   ===============    ================
   Net sales - point of destination:
     United States                                                  $354,001           $239,797            $234,350
     Europe                                                          290,988            203,858             163,661
     Other                                                            62,688             36,374              28,787
                                                               ----------------   ---------------    ----------------
                                                                    $707,677           $480,029            $426,798
                                                               ================   ===============    ================
   Operating income (loss):
     United States                                                 $  45,760           $(31,636)           $(44,077)
     Europe                                                           36,945                203               2,427
                                                               ----------------   ---------------    ----------------
                                                                   $  82,705           $(31,433)          $ (41,650)
                                                               ================   ===============    ================

   Long-lived assets - property and equipment, net:
     United States                                                  $264,856           $246,744            $227,994
     United Kingdom                                                   78,731             81,607              69,212
     Other Europe                                                      7,636              5,414               4,924
                                                                ----------------   ---------------   ----------------
                                                                    $351,223           $333,765            $302,130
                                                                ================   ===============   ================

 </TABLE>

Export sales from U.S. based  operations  approximated  $81 million in 1998, $65
million in 1999 and $50 million in 2000.

                                      F-14
<PAGE>
         Geographic  segment  operating income of the U.S.  includes special and
restructuring  charges in 1998, 1999 and 2000 of $14.5 million, $3.2 million and
$2.1 million, respectively. Operating income of the Europe segment in 1998, 1999
and 2000 includes special charges of $9.5 million, $3.6 million and $.7 million,
respectively.

Note 3 - Business combinations:

         In April 1998, the Company  acquired  Loterios  S.p.A.,  a producer and
distributor,  based in Italy,  of titanium pipe and  fittings,  primarily to the
offshore oil and gas drilling and production  markets.  The cost of the Loterios
acquisition, accounted for by the purchase method, was approximately $19 million
in  cash.  No  additional  consideration  is  payable  in  connection  with  the
acquisition.  The results of  Loterios'  operations  have been  reflected in the
consolidated  financial  statements from the date of  acquisition.  Net sales in
1998 subsequent to the acquisition approximated $23 million.

Note 4 - Joint ventures:
<TABLE>
<CAPTION>

                                                                                           December 31,
                                                                                  --------------------------------
                                                                                      1999              2000
                                                                                  --------------    --------------
                                                                                          (In thousands)
Joint ventures:
<S>                                                                                   <C>               <C>
   ValTimet                                                                           $20,863           $17,719
   Wyman-Gordon Titanium Castings                                                       5,795                 -
   Other                                                                                  280               417
                                                                                  --------------    --------------
                                                                                      $26,938           $18,136
                                                                                  ==============    ==============
</TABLE>

         ValTimet,  is a manufacturer  of stainless  steel,  copper,  nickel and
welded titanium  tubing with operations in the United States,  France and China.
At December 31, 2000, ValTimet was owned 46% by TIMET and 54% by Valinox Welded,
a French  manufacturer  of welded  tubing.  During the years ended  December 31,
1998, 1999 and 2000, ValTimet reported sales of approximately $119 million,  $71
million  and $67  million,  respectively,  and net income of $4.1  million,  net
income of $.5 million and a net loss of $2.0 million,  respectively. At year end
1999 and 2000, ValTimet reported total assets of $57.8 million and $52.4 million
and equity of $29.9  million and $25.5  million,  respectively.  At December 31,
2000 the unamortized net difference between the Company's carrying amount of its
investment in ValTimet and its proportionate  share of ValTimet's net assets was
approximately  $6 million.  The net  difference is principally  attributable  to
goodwill and is being amortized over 15 years.

         In 1998, the Company completed a series of strategic  transactions with
Wyman-Gordon  Company.  The principal components were: (i) the Company exchanged
certain  of  its   titanium   castings   assets  and  $5  million  in  cash  for
Wyman-Gordon's  Millbury,  Massachusetts  vacuum arc remelting  facility,  which
produced  titanium  ingot;  (ii)  Wyman-Gordon  and the Company  combined  their
respective titanium castings  businesses into a new joint venture,  Wyman-Gordon
Titanium  Castings LLC, 80% owned by  Wyman-Gordon  and 20% by the Company;  and
(iii) the Company and Wyman-Gordon entered into a contract pursuant to which the
Company  expects  to  be  the  principal   supplier  of  titanium   material  to
Wyman-Gordon   through   2007.   The   Company   accounted   for  the   castings
business/melting  facility transaction at fair value, which approximated the $18
million net carrying value of the assets exchanged, and, accordingly, recognized
no gain on the  transaction.  The  Company  accounted  for its  interest  in the
castings joint venture by the equity method. Early in 2000, the Company sold its
interest in the castings  joint venture to  Wyman-Gordon  for  approximately  $7
million and recorded a pretax gain of approximately $1.2 million.

                                      F-15
<PAGE>
         TIMET's  strategy for  developing new markets and uses for titanium has
included  providing funds to third parties to potentially  prove out new uses of
titanium.  Other joint ventures consist principally of such investments.  During
the fourth quarter 1999, the Company  recorded a $2.3 million charge to earnings
for the write-down  associated with an impairment of the Company's investment in
certain start-up joint ventures.

Note 5 - Preferred securities:

       In October 1998, the Company purchased for cash $80 million of non-voting
preferred securities of Special Metals Corporation ("SMC"), a U.S.  manufacturer
of  wrought  nickel-based  superalloys  and  special  alloy long  products.  The
investment was made in conjunction with, and concurrent with, the acquisition by
SMC of the Inco Alloys International unit of Inco, Ltd. The preferred securities
accrue  dividends at the annual rate of 6.625%,  are  mandatorily  redeemable in
April  2006 and are  convertible  into SMC  common  stock at $16.50  per  share.
Dividends on the preferred securities had previously been deferred by SMC due to
limitations imposed by SMC's bank credit agreements. Aggregate accrued dividends
were $6.5 million and $8.1 million at December 31, 1999 and 2000,  respectively.
During 2000, SMC resumed the payment of dividends and the Company received three
quarterly  dividends  aggregating  $4.0 million.  In January  2001,  the Company
received an additional dividend payment of $1.3 million;  however,  there can be
no assurances  that TIMET will continue to receive regular  quarterly  dividends
during the remainder of 2001.

         The SMC  preferred  securities  are not  marketable  and,  accordingly,
quoted market prices are  unavailable.  The Company believes the carrying amount
of these securities to be recoverable and, therefore,  the preferred  securities
are recorded in the consolidated  financial  statements at cost. The Company has
estimated  the fair value of its preferred  securities,  using  discounted  cash
flow,  to  approximate  $80  million.   The  Company  periodically  reviews  the
recoverability  of its  investment  in the  securities.  In the event that TIMET
determines in the future that its investment in SMC is not recoverable, then the
Company would report an appropriate writedown at that time.

                                      F-16
<PAGE>
Note 6 - Restructuring and other special charges:

         During the 1998 to 2000 period, the Company  implemented plans designed
to address then  current  market and  operating  conditions,  which  resulted in
recognizing $24 million,  $4.5 million and $2.8 million of restructuring charges
in 1998,  1999 and 2000,  respectively.  The 1998 and 1999  plans  included  the
permanent closure or disposition of four plants,  permanent or temporary closure
of three  other  plants  and  termination  of an  aggregate  of 700  people,  or
approximately  23% of TIMET's worldwide  workforce prior to such  restructuring.
During 2000, the Company terminated  approximately 170 people,  primarily in its
manufacturing  operations,  as part of its  restructuring  plans.  In 2000,  the
Company recorded $2.8 million of net restructuring charges,  principally related
to personnel severance and benefits for terminated employees.  The components of
the 1998, 1999 and 2000 restructuring charges are summarized below.
<TABLE>
<CAPTION>
                                               1998                      1999                        2000
                                      ---------------------   -----------------------    ------------------------
                                             Segment                 Segment                      Segment
                                      ---------------------   -----------------------    ------------------------
                                      Titanium                 Titanium                   Titanium
                                       Melted                   Melted                     Melted
                                      and Mill                 and Mill                   and Mill
                                      Products      Other      Products      Other        Products       Other
                                      ----------    -------   -----------   --------    ------------    ---------
                                                                    (In millions)

<S>                                     <C>        <C>         <C>            <C>            <C>         <C>
Property and equipment                  $  7.1     $  2.6      $   .3         $  -           $ .3        $   -

Disposition of German subsidiary             -          -         2.0            -             .1            -
Pension and OPEB costs, net                5.7          -         (.1)           -              -            -
Personnel severance and benefits           5.3         .5         2.5            -            2.6            -
Other exit costs, principally
  related to leased facilities             1.4        1.4           -          (.2)           (.2)           -
                                      ----------    -------   -----------   --------    ------------    ---------

                                        $ 19.5     $  4.5       $ 4.7         $(.2)         $ 2.8        $   -
                                      ==========    =======   ===========   ========    ============    =========
</TABLE>
         Substantially all of the property and equipment charges relate to items
sold, scrapped or abandoned. Depreciation of equipment temporarily idled but not
impaired  was not  suspended.  The  disposition  of the  German  subsidiary  was
completed  in the second  quarter of 2000.  The pension and OPEB costs relate to
actuarial valuations of accelerated defined benefits of employees terminated and
curtailment of pension and OPEB liabilities.

         At December 31, 2000, accrued  restructuring costs consist primarily of
unpaid personnel  severance and benefits.  During 2000, payments of $.2 million,
$.7 million and $2.6 million were applied  against the accrued  costs related to
the 1998, 1999 and 2000 plans,  respectively.  The majority of the accrued costs
at December 31, 2000, are expected to be paid by mid-2001.

         Additionally,  in 1999,  the Company  recorded a $2.3  million  special
charge to earnings  associated with the write-downs of the Company's  investment
in certain  start-up  joint  ventures.  During  2000,  the Company  recorded net
special charges of $3.5 million, consisting of $3.4 million of equipment related
impairment charges; $3.3 million of environmental remediation charges; a special
income item of $2.0 million  related to the  termination  of the Company's  1990
agreement to sell titanium sponge to Union Titanium Sponge Corporation;  and the
$1.2 million gain on the sale of the Company's castings joint venture.

                                      F-17
<PAGE>
Note 7 - Inventories:
<TABLE>
<CAPTION>
                                                                             December 31,
                                                                   ---------------------------------
                                                                       1999               2000
                                                                   --------------    ---------------
                                                                            (In thousands)

<S>                                                                   <C>                <C>
Raw materials                                                         $  45,004          $  31,127
Work-in-process                                                          69,809             74,631
Finished products                                                        83,893             53,685
Supplies                                                                 18,329             14,991
                                                                   --------------    ---------------
                                                                        217,035            174,434
Less adjustment of certain
 inventories to LIFO basis                                               25,500             26,050
                                                                   --------------    ---------------

                                                                       $191,535           $148,384
                                                                   ==============    ===============
</TABLE>

Note 8 - Intangible and other noncurrent assets:
<TABLE>
<CAPTION>

                                                                        December 31,
                                                              ---------------------------------
                                                                  1999               2000
                                                              --------------    ---------------
                                                                       (In thousands)
<S>                                                              <C>                <C>
Intangible assets:
   Patents                                                       $  13,934          $  13,521
   Covenants not to compete                                          8,881              8,500
                                                              --------------    ---------------
                                                                    22,815             22,021
   Less accumulated amortization                                     9,679             12,452
                                                              --------------    ---------------
                                                                    13,136              9,569
   Intangible pension assets                                         3,190              3,689
                                                              --------------    ---------------

                                                                 $  16,326          $  13,258
                                                              ==============    ===============

Other noncurrent assets:
   Deferred financing costs                                      $   9,417          $   9,194
   Notes receivable from officers                                      489                544
   Prepaid pension cost                                                  -              1,359
   Other                                                             2,692              1,059
                                                              --------------    ---------------

                                                                 $  12,598          $  12,156
                                                              ==============    ===============
</TABLE>

                                      F-18
<PAGE>
Note 9 - Accrued liabilities:
<TABLE>
<CAPTION>
                                                                       December 31,
                                                              -------------------------------
                                                                  1999              2000
                                                              --------------    -------------
                                                                      (In thousands)

<S>                                                               <C>                <C>
OPEB cost                                                         $ 3,269           $ 3,129
Pension cost                                                        1,287             1,251
Other employee benefits                                            14,375            15,120
Deferred income                                                     9,295             2,558
Environmental costs                                                 1,238               818
Restructuring costs                                                 1,490             1,012
Taxes, other than income                                            1,598             3,593
Accrued dividends on Convertible Preferred Securities               1,111                 -
Other                                                               9,216             8,699
                                                              --------------    -------------

                                                                  $42,879           $36,180
                                                              ==============    =============
</TABLE>

         In 1999, the Company had customer orders for  approximately $16 million
of titanium  ingot for which the customer had not yet  determined the final mill
product specifications.  At the customer's request, the Company manufactured the
ingots and stored the material at the Company's  facilities.  As agreed with the
customer,  the  customer  was  billed  for and took title to the ingots in 1999,
however,  the  Company  retained an  obligation  to convert the ingots into mill
products  in the  future.  Accordingly,  the  revenue  and cost of sales on this
product  were not  recognized  in 1999.  During 2000,  approximately  72% of the
ingots were converted and shipped,  with the remaining  material  expected to be
shipped in 2001.  At December  31, 2000,  pretax  income of  approximately  $2.6
million from the remaining material stored at the Company's  facilities has been
deferred until the related sale is recorded.

Note 10 - Notes payable, long-term debt and capital lease obligations:
<TABLE>
<CAPTION>

                                                                       December 31,
                                                              --------------------------------
                                                                  1999              2000
                                                              --------------    --------------
                                                                      (In thousands)
Notes payable:
<S>                                                                <C>               <C>
   U.S. credit agreement                                           $     -           $19,893
   European credit agreements                                        9,635             4,219
                                                              --------------    --------------
                                                                   $ 9,635           $24,112
                                                              ==============    ==============

Long-term debt:
   Bank credit agreement - U.S.                                    $85,000           $     -
   Bank credit agreement - U.K.                                     21,867            20,263
   Other                                                               922               514
                                                              --------------    --------------
                                                                   107,789            20,777
   Less current maturities                                          85,364             1,824
                                                              --------------    --------------
                                                                   $22,425           $18,953
                                                              ==============    ==============


Capital lease obligations                                          $10,091           $ 8,829
   Less current maturities                                             315               187
                                                              --------------    --------------
                                                                   $ 9,776           $ 8,642
                                                              ==============    ==============
</TABLE>
<PAGE>
         Long-term bank credit agreements.  In 2000, the Company completed a new
$125 million,  three-year U.S. revolving credit agreement replacing its previous
U.S.  bank credit  facility.  Borrowings  under this  facility  are limited to a
formula-determined borrowing base derived from the value of accounts receivable,
inventory and  equipment.  This facility  requires the Company's U.S. daily cash
receipts to be used to reduce the  outstanding  borrowings.  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 limits additional indebtedness,  prohibits the payment of common stock
dividends,  and contains other  covenants  customary in lending  transactions of
this type. In addition,  the credit agreement prohibits the payment of dividends
on  TIMET's  Convertible  Preferred  Securities  if  "excess  availability,"  as
determined under the agreement,  is less than $25 million. At December 31, 2000,
the excess  availability,  as defined, was $83 million.  Borrowings  outstanding
under this U.S. facility are classified as a current liability.

         During 2000, the Company's U.K. subsidiary  increased  its U.K.  credit
agreement  from(pound)18 million ($29 million) to(pound)30 million ($48 million)
with its  existing  U.K.  lender.  Borrowings  under  the U.K.  facility  accrue
interest  at rates  that  vary  from  LIBOR  plus 1% to  LIBOR  plus  1.25%  and
borrowings are collateralized by accounts receivable, inventories, buildings and
equipment  of  the  U.K.  subsidiary.  This  facility  also  contains  covenants
customary in lending transactions of this type.

      Borrowings under the above U.S. and U.K. credit agreements at closing were
used to repay the $58 million in then-outstanding borrowings under the Company's
prior  U.S.  credit  agreement,  which was  terminated.  In 2000,  the  deferred
financing costs associated with the previous U.S.  facility were written off and
reflected  as an  extraordinary  item of $.9 million  after  taxes,  or $.03 per
share.

     The weighted average interest rate on borrowings outstanding under the U.S.
and U.K. credit agreements at December 31, 2000 was 9.1% and 7.4%, respectively.
As of December 31, 2000,  the Company had  approximately  $117 million of unused
borrowing availability under its U.S. and European credit agreements.

         Capital lease  obligations.  Certain of the Company's  U.K.  production
facilities are under thirty year leases  expiring in 2026. The U.K.  rentals are
subject to  adjustment  every five years  based on changes in certain  published
price indices. TIMET has guaranteed TIMET UK's obligations under its leases. The
Company's  French   subsidiary  leases  certain  machinery  and  equipment  from
Compagnie  Europeenne  du  Zirconium-CEZUS,  S.A.  ("CEZUS")  (the 30%  minority
shareholder)  under a ten year  agreement  expiring  in 2006.  Assets held under
capital  leases  included in buildings  were $9.4 million and $8.7 million,  and
assets  included in equipment were $1.3 million and $1.0 million at December 31,
1999 and 2000, respectively.  The related aggregate accumulated depreciation was
$1.7  million  and $1.9  million at December  31,  1999 and 2000,  respectively.
Aggregate maturities of long-term debt and capital lease obligations:
<PAGE>
<TABLE>
<CAPTION>
                                                                Capital            Long-term
                                                                Leases               Debt
                                                            ----------------    ----------------
                                                                      (In thousands)
<S>                                                            <C>                    <C>
Years ending December 31,
     2001                                                      $     984              $  1,824
     2002                                                            978                 1,669
     2003                                                            978                 6,856
     2004                                                            978                 1,490
     2005                                                            978                 8,938
     2006 and thereafter                                          17,693                     -
     Less amounts representing interest                          (13,760)                    -
                                                            ----------------    ----------------

                                                                $  8,829               $20,777
                                                            ================    ================
</TABLE>

Note 11 - Minority interest:

         Convertible Preferred Securities. In November 1996, TIMET Capital Trust
I (the  "Trust"),  a  wholly-owned  subsidiary of TIMET,  issued $201 million of
6.625%  Company-obligated  mandatorily  redeemable  preferred  securities and $6
million  of  common  securities.  TIMET  holds  all  of the  outstanding  common
securities  of the Trust.  The Trust used the  proceeds  from such  issuance  to
purchase  from the  Company  $207  million  principal  amount of TIMET's  6.625%
convertible   junior   subordinated   debentures  due  2026  (the  "Subordinated
Debentures").   TIMET's  guarantee  of  payment  of  the  Convertible  Preferred
Securities (in accordance with the terms thereof) and its obligations  under the
Trust documents constitute, in the aggregate, a full and unconditional guarantee
by the  Company  of the  Trust's  obligations  under the  Convertible  Preferred
Securities.  The sole assets of the Trust are the Subordinated  Debentures.  The
Convertible   Preferred  Securities  represent  undivided  beneficial  ownership
interests in the Trust, are entitled to cumulative preferred  distributions from
the Trust of 6.625% per annum, compounded quarterly, and are convertible, at the
option of the holder,  into TIMET  common  stock at the rate of 1.339  shares of
common stock per Convertible  Preferred  Security (an equivalent price of $37.34
per share), for an aggregate of approximately 5.4 million common shares if fully
converted.

         The Convertible  Preferred  Securities  mature December 2026 and do not
require  principal  amortization.   The  Convertible  Preferred  Securities  are
redeemable  at the  Company's  option,  currently at  approximately  104% of the
principal  amount  declining to 100%  subsequent to December 2006. The Company's
U.S. credit agreement  prohibits the payment of dividends on these securities if
"excess  availability,"  as  determined  under the  agreement,  is less than $25
million. In April 2000, the Company exercised its right to defer future dividend
payments on the  Convertible  Preferred  Securities  for a period of 10 quarters
(subject to possible  further  extension  for up to an  additional 10 quarters),
although  interest  will  continue to accrue at the coupon rate on the principal
and unpaid dividends.  The Company may consider resuming payment of dividends on
the Convertible  Preferred  Securities or purchase the securities if the outlook
for TIMET's results from operations improves substantially or a favorable result
in the  Boeing-related  litigation  is  achieved,  or both.  Since  the  Company
exercised  its right to defer  dividend  payments,  it is unable to, among other
things,  pay  dividends  on or reacquire  its capital  stock during the deferral
period. The fair value of the Convertible  Preferred Securities based on limited
market prices was approximately $57 million at December 31, 2000.

         Dividends on the Convertible  Preferred  Securities are reported in the
Consolidated  Statements of Operations  as minority  interest,  net of allocable
income tax benefit.  Accrued dividends on the Convertible  Preferred  Securities
are reflected as noncurrent  liabilities  in the  consolidated  balance sheet at
December 31, 2000.
<PAGE>
         Other.  Other minority interest relates  principally to TIMET Savoie, a
70% owned consolidated French subsidiary.  The Company has the right to purchase
from CEZUS,  the holder of the  remaining  30%  interest,  its interest in TIMET
Savoie for 30% of TIMET  Savoie's  equity  determined  under  French  accounting
principles  ($26.4 million at December 31,  2000,),  which amount is recorded as
minority  interest.  CEZUS has the right to sell its interest in TIMET Savoie to
the  Company  for 30% of TIMET  Savoie's  registered  capital  ($2.3  million at
December 31, 2000).

Note 12 - Stockholders' equity:

         Preferred  stock. The Company is authorized to issue one million shares
of preferred  stock.  The rights of preferred  stock as to, among other  things,
dividends,   liquidation,   redemption,   conversions,  and  voting  rights  are
determined by the Board of Directors.

      Common stock. The Company's U.S. credit agreement prohibits the payment of
common stock dividends (see Note 10).

         Restricted stock and common stock options. The Company's 1996 Long-Term
Performance Incentive Plan (the "Incentive Plan") provides for the discretionary
grant of restricted common stock, stock options,  stock appreciation  rights and
other incentive compensation to officers and other key employees of the Company.
Options generally vest over five years and expire ten years from date of grant.

      During 2000, the Company awarded 467,500 shares of TIMET restricted common
stock,  under the  Incentive  Plan,  to  certain  officers  and  employees.  The
restrictions  on the  stock  grants  lapse  ratably  on an annual  basis  over a
five-year  period.  Since holders of restricted  stock have all of the rights of
other common  stockholders,  subject to  forfeiture  unless  certain  periods of
employment are completed,  all such shares of restricted stock are considered to
be currently  issued and outstanding.  During 2000,  24,000 shares of restricted
stock  were  forfeited.  The market  value of the  restricted  stock  awards was
approximately  $2  million on the date of grant  ($4.375  per  share),  and this
amount has been  recorded  as deferred  compensation,  a separate  component  of
stockholders'  equity. The Company amortizes deferred compensation to expense on
a straight-line basis for each tranche of the award over the period during which
the restrictions lapse.  Compensation  expense recognized by the Company related
to restricted stock awards was nil in 1998 and 1999 and $.7 million in 2000.

         Additionally, a separate plan (the "Director Plan") provides for annual
grants to eligible nonemployee  directors of options to purchase 5,000 shares of
the Company's  common stock (1,500 prior to 1999) at a price equal to the market
price on the date of grant and to receive,  as partial payment of director fees,
annual  grants of 1,000  shares  of common  stock  (500  shares  prior to 2001).
Options granted to eligible directors vest in one year and expire ten years from
date of grant (five year expiration for grants prior to 1998).

         The weighted average remaining life of options  outstanding at December
31, 2000 was 7.2 years (1999 - 7.9 years).  At December 31, 1998,  1999 and 2000
options  to  purchase  approximately   199,000,   431,000  and  662,000  shares,
respectively,  were exercisable at average exercise prices of $25.89, $25.85 and
$25.75,  respectively.  Options to purchase 331,000 shares become exercisable in
2001. At December 31, 2000,  approximately  1.1 million  shares and 2,350 shares
were  available for future grant under the Incentive Plan and the Director Plan,
respectively.  In February  2001,  the Director Plan was amended to authorize an
additional 200,000 shares for future grants under such plan.
<PAGE>
         The following table  summarizes  information  about the Company's stock
options.
<TABLE>
<CAPTION>

                                                                        Amount
                                                                        payable                              Weighted
                                                     Exercise            upon             Weighted         average fair
                                                     price per         exercise           average            value at
                                      Shares           share          (thousands)      exercise price       grant date
                                    -----------    --------------    --------------    ---------------    ---------------

<S>                                 <C>              <C>               <C>                 <C>
Outstanding at December 31, 1997      820,000        $23.00-$34.00     $22,370             $27.28

 Granted:
  At market                           320,900         26.13-29.31        9,392              29.27              $14.08
  Above market                        142,000         32.31-35.31        4,802              33.81               12.79
Canceled                              (65,200)        23.00-35.31       (1,878)             28.80
                                    -----------    --------------    --------------    ---------------

Outstanding at December 31, 1998    1,217,700         23.00-35.31       34,686              28.48

Granted:
  At market                           433,000           7.38-7.97        3,445               7.96              $ 3.98
  Above market                        206,000           8.97-9.97        1,951               9.47                3.59
Canceled                             (118,500)         7.97-35.31       (3,023)             25.51
                                    -----------    --------------    --------------    ---------------

Outstanding at December 31, 1999    1,738,200          7.38-35.31       37,059              21.32

Granted:
  At market                            25,000                3.94           98               3.94              $ 1.99
  Above market                        250,000          7.00-11.00        2,150               8.60                1.53
Canceled                             (361,700)         7.97-35.31       (7,285)             20.14
                                    -----------    --------------    --------------    ---------------

Outstanding at December 31, 2000    1,651,500        $3.94-$35.31      $32,022             $19.39
                                    ===========    ==============    ==============    ===============
</TABLE>

         Weighted  average  fair values of options at grant date were  estimated
using the Black-Scholes model and assumptions listed below.
<TABLE>
<CAPTION>
Assumptions at date of grant:                     1998               1999              2000
                                              --------------    ---------------    --------------
<S>                                               <C>               <C>                <C>
     Expected life (years)                          6                 6                  6
     Risk-free interest rate                      5.56%             5.14%              4.95%
     Volatility                                    40%               45%                45%
     Dividend yield                                0%                0%                 0%
</TABLE>

         Had  stock-based   compensation  cost  been  determined  based  on  the
estimated fair values of options granted and recognized as compensation  expense
over the  vesting  period of the grants in  accordance  with SFAS No.  123,  the
Company's  net income and  earnings per share would have been reduced in 1998 by
$3.5 million and $.11 per share, respectively,  in 1999 by $3.1 million and $.10
per  share,  respectively,  and in 2000 by $2.0  million  and  $.06  per  share,
respectively.

<PAGE>
Note 13 - Income taxes:

         Summarized  below are (i) the components of income (loss) before income
taxes and  minority  interest  ("pretax  income  (loss)"),  (ii) the  difference
between the income tax expense  (benefit)  attributable  to pretax income (loss)
and the amounts that would be expected using the U.S.  federal  statutory income
tax rate of 35%,  (iii) the  components  of the  income  tax  expense  (benefit)
attributable   to  pretax  income  (loss),   and  (iv)  the  components  of  the
comprehensive tax provision (benefit).
<TABLE>
<CAPTION>

                                                                               Years Ended December 31,
                                                                   --------------------------------------------------
                                                                       1998              1999              2000
                                                                   --------------    --------------    --------------
                                                                                    (In thousands)
<S>                                                                    <C>              <C>               <C>
Pretax income (loss):
   U.S.                                                                $ 51,090         $ (30,485)        $ (42,830)
   Non-U.S.                                                              34,759            (3,253)             (303)
                                                                   --------------    --------------    --------------

                                                                       $ 85,849         $ (33,738)        $ (43,133)
                                                                   ==============    ==============    ==============

Expected income tax expense (benefit), at 35%                          $ 30,047         $ (11,809)        $ (15,097)
Non-U.S. tax rates                                                           41               893             1,121
U.S. state income taxes, net                                                472            (1,705)                8
Dividends received deduction                                               (218)           (1,382)           (1,367)
Export sales credit                                                        (979)                -                 -
Adjustment of deferred tax valuation allowance                                -             1,869                49
Other, net                                                                 (166)              113               189
                                                                   --------------    --------------    --------------

                                                                       $ 29,197         $ (12,021)        $ (15,097)
                                                                   ==============    ==============    ==============

Income tax expense (benefit):
   Current income taxes (benefit):
     U.S.                                                             $   4,617         $ (11,225)      $      (548)
     Non-U.S.                                                            11,408              (332)            2,696
                                                                   --------------    --------------    --------------
                                                                         16,025           (11,557)            2,148
                                                                   --------------    --------------    --------------

   Deferred income taxes (benefit):
     U.S.                                                                12,374            (1,850)          (15,612)
     Non-U.S.                                                               798             1,386            (1,633)
                                                                   --------------    --------------    --------------
                                                                         13,172              (464)          (17,245)
                                                                   --------------    --------------    --------------

                                                                       $ 29,197         $ (12,021)        $ (15,097)
                                                                   ==============    ==============    ==============

Comprehensive tax provision (benefit) allocable to:
   Pretax income (loss)                                                $ 29,197         $ (12,021)        $ (15,097)
   Minority interest - Convertible Preferred Securities                  (4,703)           (4,666)           (4,675)
   Extraordinary item                                                         -                 -              (470)
   Stockholders' equity, including amounts allocated
     to other comprehensive income                                       (3,520)              (55)             (798)
                                                                   --------------    --------------    --------------

                                                                       $ 20,974         $ (16,742)        $ (21,040)
                                                                   ==============    ==============    ==============
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                                                                 December 31,
                                                           ---------------------------------------------------------
                                                                     1999                           2000
                                                           --------------------------    ---------------------------
                                                            Assets       Liabilities      Assets       Liabilities
                                                           ----------    ------------    ----------    -------------
                                                                                (In millions)
<S>                                                        <C>            <C>            <C>             <C>
Temporary differences relating to net assets:
   Inventories                                             $    .2        $  (5.5)       $    .4         $ (5.2)
   Property and equipment, including software                    -          (30.7)            -           (30.0)
   Accrued OPEB cost                                          11.3              -            9.7              -
   Accrued liabilities and other deductible differences       17.3              -           12.3              -
   Other taxable differences                                     -           (9.8)            -            (8.2)
Tax loss and credit carryforwards                             13.1              -           40.4              -
Valuation allowance                                           (1.9)             -           (1.9)             -
                                                           ----------    ------------    ----------    -------------
Gross deferred tax assets (liabilities)                       40.0          (46.0)          60.9          (43.4)
Netting                                                      (28.1)          28.1          (32.7)          32.7
                                                           ----------    ------------    ----------    -------------
Total deferred taxes                                          11.9          (17.9)          28.2          (10.7)
Less current deferred taxes                                    2.3           (5.0)            .4           (1.1)
                                                           ----------    ------------    ----------    -------------
Net noncurrent deferred taxes                               $  9.6         $(12.9)         $27.8         $ (9.6)
                                                           ==========    ============    ==========    =============
</TABLE>

         The 1999  increase in the  valuation  allowance of $1.9 million  offset
deferred  taxes related to certain  capital losses and certain  non-U.S.  losses
that did not meet the "more likely than not" recognition criteria. There were no
material increases to the Company's valuation allowance during 2000.

         At December 31, 2000,  the Company  had,  for U.S.  federal  income tax
purposes,  net operating  loss  carryforwards  ("NOLs") of  approximately  $89.1
million,  $6.8 million which expire in 2010,  $19.9 million which expire in 2019
and $62.4 million  which expire in 2020.  At December 31, 2000,  the Company had
alternative  minimum tax ("AMT")  credit  carryforwards  of  approximately  $4.8
million,  which can be utilized to offset regular income taxes payable in future
years. The AMT credit  carryforward has an indefinite  carryforward  period.  At
December 31, 2000,  the Company had the equivalent of an $8.1 million NOL in the
United Kingdom and a $2.2 million NOL in Germany,  both of which have indefinite
carryforward periods.

Note 14 - Employee benefit plans:

         Variable  compensation  plans.  The  majority  of the  Company's  total
worldwide  employees,  including a  significant  portion of its domestic  hourly
employees,  participate  in  compensation  programs  which  provide for variable
compensation based upon the financial performance of the Company and, in certain
circumstances,  the individual  performance  of the employee.  The cost of these
plans  was $6  million,  $1  million  and $.9  million  in 1998,  1999 and 2000,
respectively.

         Defined  contribution  plans. All of the Company's  domestic hourly and
salaried  employees (60% of total worldwide  employees at December 31, 2000) are
eligible to  participate  in  contributory  savings plans with partial  matching
employer  contributions.  Company  matching  contributions  are based on Company
profitability for approximately 80% of eligible employees.  Approximately 42% of
the Company's total employees at December 31, 2000 also participate in a defined
contribution  pension plan with  contributions  based upon a fixed percentage of
the employee's  eligible  earnings.  The cost of these pension and savings plans
approximated $3 million in 1998 and $2 million in each of 1999 and 2000.
<PAGE>
         Defined benefit pension plans. The Company  maintains  contributory and
noncontributory  defined  benefit  pension  plans  covering  the majority of its
European  employees and a minority of its domestic  workforce.  Defined  pension
benefits  are  generally  based on years of service  and  compensation,  and the
related expense is based upon independent  actuarial  valuations.  The Company's
funding policy for U.S. plans is to contribute  annually amounts  satisfying the
funding  requirements of the Employee Retirement Income Security Act of 1974, as
amended.  Non-U.S.  defined  benefit pension plans are funded in accordance with
applicable statutory  requirements.  The U.S. defined benefit pension plans were
closed to new participants prior to 1996 and, in some cases, benefit levels have
been frozen.  The U.K.  defined  benefit plan was closed to new  participants in
1996.

         The rates used in  determining  the actuarial  present value of benefit
obligations  at December 31, 2000 were: (i) discount rates - 6% to 7.25% (1999 -
6% to 7.5%), and (ii) rates of increase in future compensation levels - 2% to 3%
(1999 - 3%). The expected long-term rates of return on assets used were 6% to 9%
(1999 - 7.5% to 9%). The benefit  obligations  are sensitive to changes in these
estimated rates and actual results may differ from the obligations  noted below.
At  December  31,  2000,  the  assets of the plans are  primarily  comprised  of
government  obligations,  corporate  stocks and bonds.  The funded status of the
Company's defined benefit pension plans is set forth below.

<PAGE>
<TABLE>
<CAPTION>
                                                                                        Years Ended December 31,
                                                                                    ---------------------------------
                                                                                        1999               2000
                                                                                    --------------    ---------------
                                                                                             (In thousands)
<S>                                                                                   <C>               <C>
Change in projected benefit obligations:
     Balance at beginning of year                                                     $ 152,292         $ 148,688
     Service cost                                                                         4,053             3,768
     Interest cost                                                                        8,939             9,182
     Plan amendments                                                                        977               917
     Curtailment gain                                                                      (103)              (38)
     Actuarial loss (gain)                                                               (5,353)            6,700
     Benefits paid                                                                       (8,917)           (8,528)
     Change in currency exchange rates                                                   (3,200)           (7,409)
                                                                                    --------------    ---------------

          Balance at end of year                                                      $ 148,688         $ 153,280
                                                                                    ==============    ===============


Change in plan assets:
     Fair value at beginning of year                                                   $133,100          $156,636
     Actual return on plan assets                                                        28,516             3,099
     Employer contribution                                                                5,534             5,936
     Plan participants' contributions                                                       811               759
     Benefits paid                                                                       (8,917)           (8,528)
     Change in currency exchange rates                                                   (2,408)           (8,215)
                                                                                    --------------    ---------------

          Fair value at end of year                                                    $156,636          $149,687
                                                                                    ==============    ===============

Funded status:
     Plan assets over (under) projected benefit obligations                          $    7,948        $   (3,593)
     Unrecognized:
          Actuarial loss (gain)                                                          (9,029)            6,777
          Prior service cost                                                              3,190             3,689
                                                                                    --------------    ---------------

          Total prepaid (accrued) pension cost                                       $    2,109        $    6,873
                                                                                    ==============    ===============

Amounts recognized in balance sheet:
     Intangible pension asset                                                        $    3,190             3,689
     Noncurrent prepaid pension cost                                                          -             1,359
     Current pension liability                                                           (1,287)           (1,251)
     Noncurrent pension liability                                                        (5,634)           (5,361)
     Accumulated other comprehensive income                                               5,840             8,437
                                                                                    --------------    ---------------

                                                                                     $    2,109        $    6,873
                                                                                    ==============    ===============

</TABLE>

<PAGE>
                  Selected  information related to the Company's defined benefit
pension plans that have accumulated  benefit obligations in excess of fair value
of plan assets is presented below.
<TABLE>
<CAPTION>

                                                                                              December 31,
                                                                                    ---------------------------------
                                                                                        1999               2000
                                                                                    --------------    ---------------
                                                                                             (In thousands)

<S>                                                                                      <C>               <C>
Projected benefit obligation                                                             $59,129           $63,611
Accumulated benefit obligation                                                            59,129            63,361
Fair value of plan assets                                                                 54,154            57,242
</TABLE>

         The components of the net periodic defined benefit pension cost are set
forth below.
<TABLE>
<CAPTION>
                                                                              Years Ended December 31,
                                                                ------------------------------------------------------
                                                                      1998               1999               2000
                                                                -----------------    --------------     --------------
                                                                                   (In thousands)

<S>                                                                   <C>                <C>                <C>
Service cost benefits earned                                          $ 5,462            $  4,053           $  3,768
Interest cost on projected benefit obligations                          9,519               8,939              9,182
Expected return on plan assets                                        (12,247)            (10,650)           (11,907)
Net amortization                                                       (2,030)                120                342
                                                                -----------------    --------------     --------------

   Net pension expense                                               $    704            $  2,462           $  1,385
                                                                =================    ==============     ==============
</TABLE>

         Postretirement  benefits  other than  pensions.  The  Company  provides
certain postretirement health care and life insurance benefits to certain of its
domestic  retired  employees.  The  Company  funds  such  benefits  as they  are
incurred,  net of any  contributions  by the retirees.  Under plans currently in
effect,  a majority of TIMET's active  domestic  employees would become eligible
for these benefits if they reach normal  retirement age while working for TIMET.
These plans have been revised to discontinue  employer-paid health care coverage
for future retirees once they become Medicare-eligible.

         The components of the periodic OPEB cost and change in the  accumulated
OPEB obligations are set forth below. The plan is unfunded and  contributions to
the plan during the year equal benefits paid. The rates used in determining  the
actuarial present value of the accumulated OPEB obligations at December 31, 2000
were:  (i) discount rate - 7.25% (1999 - 7.5%),  (ii) rate of increase in health
care  costs for the  following  period - 8.9%  (1999 - 9.2%) and (iii)  ultimate
health care trend rate  (achieved  in 2016) - 6.0% (1999 - 6.0 %). If the health
care cost trend rate was increased by one percentage  point for each year,  OPEB
expense  would  have  increased  approximately  $.2  million  in  2000,  and the
actuarial  present value of  accumulated  OPEB  obligations at December 31, 2000
would have increased approximately $2.7 million. A one percentage point decrease
would have a similar,  but opposite,  effect. The accrued OPEB cost is sensitive
to  changes in these  estimated  rates and actual  results  may differ  from the
obligations noted below.
<PAGE>
<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                                      -------------------------------
                                                                                          1999              2000
                                                                                      -------------     -------------
                                                                                              (In thousands)

Actuarial present value of accumulated OPEB obligations:
<S>                                                                                     <C>               <C>
   Balance at beginning of year                                                         $  22,637         $  24,186
   Service cost                                                                               252               176
   Interest cost                                                                            1,577             1,709
   Amendments                                                                              -                    364
   Actuarial loss                                                                           3,754               402
   Curtailment gain                                                                          (115)             (443)
   Benefits paid, net of participant contributions                                         (3,919)           (3,637)
                                                                                      -------------     -------------
   Balance at end of year                                                                  24,186            22,757
Unrecognized net actuarial loss                                                            (3,411)           (3,056)
Unrecognized prior service credits                                                          2,455             1,647
                                                                                      -------------     -------------
Total accrued OPEB cost                                                                    23,230            21,348
Less current portion                                                                        3,269             3,129
                                                                                      -------------     -------------

   Noncurrent accrued OPEB cost                                                         $  19,961         $  18,219
                                                                                      =============     =============
</TABLE>
<TABLE>
<CAPTION>


                                                                                  Years Ended December 31,
                                                                         --------------------------------------------
                                                                            1998           1999             2000
                                                                         -----------    ------------     ------------
                                                                                       (In thousands)

<S>                                                                          <C>            <C>              <C>
Service cost benefits earned                                                 $  326         $  252           $  176
Interest cost on accumulated OPEB obligations                                 1,553          1,577            1,709
Curtailment gain                                                                  -           (115)            (443)
Net amortization and deferrals                                                 (550)          (364)            (324)
                                                                         -----------    ------------     ------------

   Net OPEB expense                                                          $1,329         $1,350           $1,118
                                                                         ===========    ============     ============

</TABLE>

Note 15 - Related party transactions:

         During 1998 and 1999,  Tremont purchased shares of the Company's common
stock in market or private transactions,  which increased its ownership of TIMET
common  stock to 39% at December  31, 2000.  During  1999,  the Combined  Master
Retirement  Trust  ("CMRT"),  a trust  formed  by  Valhi,  Inc.  to  permit  the
collective  investment  by trusts that  maintain the assets of certain  employee
benefit plans adopted by Valhi and related companies,  purchased shares of TIMET
common stock in market  transactions.  At December 31, 2000, the CMRT held 8% of
TIMET's  common  stock.  At December  31,  2000,  subsidiaries  of Valhi held an
aggregate  of  approximately  80% of Tremont's  outstanding  common  stock,  and
Contran Corporation held, directly or through subsidiaries, approximately 93% of
Valhi's  outstanding  common stock.  Substantially all of Contran's  outstanding
voting stock is held by trusts  established for the benefit of certain  children
and grandchildren of Harold C. Simmons, of which Mr. Simmons is sole trustee. In
addition,  Mr. Simmons is the sole trustee of the CMRT and a member of the trust
investment  committee for the CMRT. Mr. Simmons may be deemed to control each of
Contran, Valhi, Tremont and TIMET.
<PAGE>
         Corporations  that may be deemed to be controlled by or affiliated with
Mr. Simmons  sometimes engage in (i)  intercorporate  transactions  with related
companies  such as  guarantees,  management  and expense  sharing  arrangements,
shared fee arrangements, joint ventures, partnerships,  loans, options, advances
of funds on open account,  and sales, leases and exchanges of assets,  including
securities  issued  by both  related  and  unrelated  parties  and  (ii)  common
investment and acquisition strategies,  business combinations,  reorganizations,
recapitalizations,  securities  repurchases,  and purchases and sales (and other
acquisitions  and  dispositions)  of  subsidiaries,  divisions or other business
units,  which  transactions have involved both related and unrelated parties and
have included  transactions  which  resulted in the  acquisition  by one related
party of a publicly-held  minority equity interest in another related party. The
Company  continuously  considers,  reviews and evaluates,  and understands  that
Contran,  Tremont  and  related  entities  consider,  review and  evaluate  such
transactions.  Depending  upon  the  business,  tax and  other  objectives  then
relevant,  it is possible  that the Company might be a party to one or more such
transactions in the future.

         It is the policy of the Company to engage in transactions  with related
parties on terms which are, in the opinion of the Company,  no less favorable to
the Company than could be obtained from unrelated parties.

         TIMET  supplies  titanium  strip product to ValTimet  under a long-term
contract as the preferred  supplier and supplied  casting ingot to  Wyman-Gordon
Titanium  Castings.  Sales to these joint ventures were $40 million in 1998, $19
million in 1999 and $22 million in 2000.  Receivables  from  related  parties at
December  31, 1999 relate  principally  to sales to these  joint  ventures,  and
principally  from ValTimet at December 31, 2000.  Early in 2000,  TIMET sold its
interest in the castings joint venture at a gain of $1.2 million.

         In connection  with the  construction  and financing of TIMET's  vacuum
distillation  process  ("VDP")  titanium  sponge plant,  UTSC  licensed  certain
technology  to TIMET in  exchange  for the right to acquire up to 20% of TIMET's
annual  production  capacity of VDP sponge at  agreed-upon  prices through early
1997 and higher formula-determined prices thereafter through 2008. The agreement
also obligated UTSC to pay certain amounts in the event that UTSC purchases were
below  contractual  volume  minimums.  In the fourth quarter of 2000,  UTSC paid
TIMET $2.0 million,  which was included in other operating income, in connection
with the termination of this agreement.

         The Company  has an  intercorporate  services  agreement  with  Tremont
whereby the Company provides certain management, financial and other services to
Tremont for approximately $.4 million, $.2 million and $.3 million in 1998, 1999
and 2000, respectively, subject to renewal for future years.

         The  Company  has  an   intercorporate   services   agreement  with  NL
Industries,  Inc., a majority-owned  subsidiary of Valhi. Under the terms of the
agreement, NL provides certain management, financial and other services to TIMET
for approximately $.3 million in each of 1998, 1999 and 2000.

<PAGE>
         The Company extends market-rate loans to certain officers pursuant to a
Board-approved  program to  facilitate  the  purchase  of Company  stock and its
Convertible  Preferred  Securities  and to pay  applicable  taxes on  shares  of
restricted Company stock as such shares vest. The loans are generally payable in
five annual installments beginning six years from date of loan and bear interest
at a rate tied to the Company's  borrowing rate, payable quarterly.  For certain
executive officers whose positions have been eliminated,  the Board has approved
the  deferral of interest  (to be added to principal  quarterly)  and  principal
payments  for a period of up to five years  commencing  on the date of each such
officer's  severance.  At December 31, 2000, the outstanding  balance of officer
notes receivable was approximately $.5 million.

         EWI  RE,  Inc.  arranges  for  and  brokers  certain  of the  Company's
insurance policies. Parties related to Contran own all of the outstanding common
stock of EWI.  Through  December 31,  2000,  a  son-in-law  of Harold C. Simmons
managed the operations of EWI.  Subsequent to December 31, 2000, such son-in-law
provides advisory services to EWI as requested by EWI. Consistent with insurance
industry  practices,  EWI receives a commission from the insurance  underwriters
for the policies  that it arranges or brokers.  The Company paid an aggregate of
approximately  $1.8 million,  $2.0 million and $2.4 million for such policies in
1998, 1999 and 2000,  respectively,  which amount principally  included premiums
for the insurance policies paid to third parties,  but also included commissions
paid to EWI. In the Company's  opinion,  the premiums  paid for these  insurance
policies are  reasonable  and similar to those the Company  could have  obtained
through  an  unrelated   insurance  broker.   The  Company  expects  that  these
relationships with EWI will continue in 2001.

Note 16 - Commitments and contingencies:

         Long-term  agreements.  The Company  entered into long-term  agreements
("LTA's")  in 1997,  1998 and  1999  with  certain  major  aerospace  customers,
including Boeing,  Rolls-Royce plc, United Technologies Corporation (and related
companies) and Wyman-Gordon Company, pursuant to which the Company expects to be
a major  supplier of  titanium  products to these  customers.  These  agreements
generally  provide  for (i) minimum  market  shares of the  customers'  titanium
requirements  (generally at least 70%) for extended  periods (nine to ten years)
and (ii) fixed or  formula-determined  prices  generally  for at least the first
five years.

         The LTA with Boeing requires Boeing to purchase a minimum percentage of
its and its  suppliers  titanium  requirements  from TIMET  commencing  in 1999.
Although  Boeing placed orders and accepted  delivery of certain volumes in 1999
and 2000, the level of orders was  significantly  below the  contractual  volume
requirements  for those years.  Boeing  informed the Company in 1999 that it was
unwilling to commit to the contract beyond the year 2000. The Company  presently
expects to receive less than the minimum contractual order volume from Boeing in
2001.

         In March 2000, the Company filed a lawsuit against Boeing in a Colorado
state court seeking  damages for Boeing's  repudiation  and breach of the Boeing
contract. TIMET's complaint seeks damages from Boeing that TIMET believes are in
excess of $600 million and a declaration  from the court of TIMET's rights under
the contract. In June 2000, Boeing filed its answer to TIMET's complaint denying
substantially  all of  TIMET's  allegations  and  making  certain  counterclaims
against TIMET.  TIMET believes such  counterclaims are without merit and intends
to vigorously  defend  against such claims.  The  litigation is in the discovery
phase with a trial date currently set for January 2002. The Company continues to
have discussions with Boeing about possible settlement of the matter.  There can
be no  assurance  that the  Company  will  achieve a  favorable  outcome to this
litigation.

         The Wyman-Gordon LTA was amended effective August 1, 2000 extending the
term of the  contract  to December  31,  2008 (for certain products).  Under
certain  conditions,  the contract may be further extended.
<PAGE>
         The Company has a 1997 LTA for the  purchase  of titanium  sponge.  The
sponge  contract runs through 2007,  with firm pricing  through 2002 (subject to
certain  possible  adjustments  and possible early  termination  in 2004).  This
contract  provides for annual purchases by the Company of 6,000 to 10,000 metric
tons. The parties  agreed to reduced  minimums of 1,000 metric tons for 2000 and
of 3,000  metric  tons for  2001.  The  Company  has no other  long-term  supply
agreements.

         Concentration  of credit  and  other  risks.  Substantially  all of the
Company's sales and operating  income are derived from  operations  based in the
U.S., the U.K. and France.  The majority of the Company's sales are to customers
in the  aerospace  industry  (including  airframe and engine  construction).  As
described above,  the Company has LTA's with certain major aerospace  customers,
including Boeing,  Rolls-Royce plc, United Technologies Corporation (and related
companies) and Wyman-Gordon  Company.  These agreements and others accounted for
approximately 44% and 50% of aerospace revenues in 1999 and 2000,  respectively.
During  1999  and  2000,   Precision  Castparts   Corporation  ("PCC")  acquired
Wyman-Gordon  Company and a forging company in the U.K. Sales to PCC and related
entities  aggregated  approximately 10% of the Company's net sales for 2000. The
Company's  ten largest  customers  accounted for about 40% of net sales in 1998,
about  30% of  net  sales  in  1999  and  about  50%  of  sales  in  2000.  Such
concentration  of customers may impact the Company's  overall exposure to credit
and other risks, either positively or negatively,  in that such customers may be
similarly affected by economic or other conditions.

         Operating leases.  The Company leases certain  manufacturing and office
facilities and various  equipment.  Most of the leases contain  purchase  and/or
various   term  renewal   options  at  fair  market  and  fair  rental   values,
respectively.  In most cases  management  expects  that, in the normal course of
business,  leases will be renewed or replaced by other leases.  Net rent expense
was approximately $5.0 million in 1998, $5.9 million in 1999 and $6.6 million in
2000.

         At December 31, 2000,  future  minimum  payments  under  noncancellable
operating  leases having an initial or remaining term in excess of one year were
as follows:
<TABLE>
<CAPTION>
                                                                                                         Amount
                                                                                                   -------------------
                                                                                                     (In thousands)

<S>                                                                                                      <C>
Years ending December 31,
   2001                                                                                                  $ 4,631
   2002                                                                                                    2,222
   2003                                                                                                    1,587
   2004                                                                                                      242
   2005                                                                                                      117
   2006 and thereafter                                                                                       459
                                                                                                   -------------------

                                                                                                         $ 9,258
                                                                                                   ===================
</TABLE>
<PAGE>
Environmental matters.

         BMI Complex. In the early 1990s, TIMET and certain other companies (the
"Steering  Committee  Companies") that currently have or formerly had operations
within  a  Henderson,  Nevada  industrial  complex  (the  "BMI  Complex")  began
environmental  assessments of the BMI Complex and each of the individual company
sites located within the BMI Complex pursuant to a series of consent  agreements
entered into with the Nevada Division of Environmental Protection ("NDEP"). Most
of this assessment work has now been completed,  although some of the assessment
work with respect to TIMET's property is continuing. In 1999, TIMET entered into
a  series  of  agreements  with  Basic  Management,   Inc.  (together  with  its
subsidiaries,  "BMI") and, in certain cases, other Steering Committee Companies,
pursuant  to which,  among other  things,  BMI  assumed  responsibility  for the
conduct of soils remediation activities on the properties described,  including,
subject to final NDEP approval,  the  responsibility to complete all outstanding
requirements  under the consent  agreements  with NDEP insofar as they relate to
the  investigation  and remediation of soils conditions on such properties.  BMI
also  agreed  to  indemnify  TIMET and the other  Steering  Committee  Companies
against certain future  liabilities  associated with any soils  contamination on
such  properties.  The  Company  contributed  $2.8  million  to the cost of this
remediation (which payment was charged against accrued liabilities). The Company
also agreed to convey to BMI, at no additional cost,  certain lands owned by the
Company  adjacent to its plant site (the "TIMET Pond  Property") 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  onto the TIMET Pond  Property  (BMI will pay 100% of the first
$15.9 million cost for this project,  and TIMET will  contribute 50% of the cost
in excess of $15.9 million, up to a maximum payment by TIMET of $2 million;  the
Company  does not  currently  expect to incur any cost in  connection  with this
project).  The  Company,  BMI and the other  Steering  Committee  Companies  are
continuing  investigation  with respect to certain  additional issues associated
with the properties  described above,  including any possible groundwater issues
at the TIMET Pond Property.

         The  Company  is  continuing  assessment  work with  respect to its own
active plant site. A preliminary study of certain groundwater remediation issues
at the  Company's  Henderson  operations  and other Company sites within the BMI
Complex (which sites do not include the above discussed TIMET Pond Property) was
completed   during  2000.  The  Company   accrued  $3.3  million  based  on  the
undiscounted cost estimates set forth in the study.  These expenses are expected
to be paid over a period of up to thirty years.

         Henderson facility.  In April 1998, the U. S. Environmental  Protection
Agency  ("EPA") filed a civil action  against TIMET (United States of America v.
Titanium  Metals  Corporation;  Civil Action No.  CV-S-98-682-HDM  (RLH),  U. S.
District  Court,  District of Nevada) in  connection  with an earlier  notice of
violation  alleging that TIMET violated several  provisions of the Clean Air Act
in connection with the start-up and operation of certain environmental equipment
at  TIMET's  Henderson,  Nevada  facility  during  the  early  to  mid-1990s.  A
settlement  agreement in this case was  approved by the court in February  2000,
pursuant  to which  TIMET will make cash  payments  totaling  approximately  $.4
million  from 2000 through  2002,  of which $.2 million is remaining at December
31, 2000. During 2000, TIMET completed the agreed-upon additional monitoring and
emissions controls at a capital cost of approximately $1.4 million.
<PAGE>
         At  December  31,  2000,  the  Company  had  accrued  an  aggregate  of
approximately $4 million  primarily for environmental  matters,  including those
discussed  above.  The  Company  records  liabilities  related to  environmental
remediation  obligations  when estimated  future  expenditures  are probable and
reasonably estimable.  Such accruals are adjusted as further information becomes
available  or  circumstances  change.  Estimated  future  expenditures  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 expenditures 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 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  alleges that several  female
employees at the  Company's  Henderson,  Nevada plant were the subject of sexual
harassment.  The Company  intends to vigorously  defend this action,  but in any
event does not presently  anticipate that any adverse outcome in this case would
be material to TIMET's consolidated financial position, results of operations or
liquidity.

Other.

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

         At the present  time,  the Company is aware of only a single ingot that
has  been  demonstrated  to  contain  tungsten  inclusions;   however,   further
investigation  may identify  other  material that has been  similarly  affected.
Until this  investigation  is completed,  the Company is unable to determine the
possible remedial steps that may be required and whether the Company might incur
any  material  liability  with  respect to this  matter.  The Company  currently
believes that it is unlikely that its insurance  policies will provide  coverage
for any costs that may be  associated  with this  matter.  However,  the Company
currently  intends  to seek full  recovery  from the  silicon  supplier  for any
liability the Company might incur in this matter,  although no assurances can be
given that the Company will  ultimately be able to recover all or any portion of
such amounts.  At December 31, 2000,  the Company had not recorded any liability
related to this matter. The amount of liability the Company may ultimately incur
related to this matter is not reasonably estimable at this time.

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

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

<PAGE>
 Note 17 - Quarterly results of operations (unaudited):
<TABLE>
<CAPTION>

                                                                                Quarters ended
                                                      --------------------------------------------------------------------
                                                         March 31           June 30          Sept. 30          Dec. 31
                                                      ----------------    -------------    --------------    -------------
                                                                     (In millions, except per share data)

<S>                                                      <C>               <C>              <C>               <C>
Year ended December 31, 2000:

   Net sales                                             $ 104.7           $ 108.8           $ 106.8          $ 106.5
   Operating loss                                          (18.4)             (9.5)             (7.7)            (6.2)
   Net income loss                                         (15.1)             (9.5)             (7.9)            (6.4)

   Basic and diluted loss per share:
     Before extraordinary item                           $  (.45)          $  (.30)          $  (.25)         $  (.20)
     Extraordinary item                                     (.03)                -                 -                -
                                                      ----------------    -------------    --------------    -------------
                                                         $  (.48)          $  (.30)          $  (.25)         $  (.20)
                                                      ================    =============    ==============    =============

Year ended December 31, 1999:

   Net sales                                             $ 134.1           $ 127.6           $ 112.7          $ 105.5
   Operating income (loss)                                  (1.4)              1.0              (7.8)           (23.2)
   Net loss                                                 (3.9)             (2.5)             (7.5)           (17.5)

   Basic and diluted loss per share                      $  (.12)          $  (.08)          $  (.24)         $  (.56)
</TABLE>

         Due to the timing of the  issuance and  repurchase  of common stock and
rounding  in  calculations,  the sum of  quarterly  earnings  per  share  may be
different than earnings per share for the full year.

Note 18 - Earnings per share:

         In 1998,  1999 and 2000,  the effect of the assumed  conversion  of the
Convertible Preferred Securities was antidilutive. Had the Convertible Preferred
Securities  not been  antidilutive,  diluted income would have been increased by
$8.8  million  in 1998 and $8.7  million in each of 1999 and 2000,  and  diluted
shares would have been increased by the 5.4 million shares in each of 1998, 1999
and 2000 issuable upon conversion.  Dilutive stock options of 22,000 in 1999 and
88,000 in 2000 were excluded from the calculation of diluted  earnings per share
because  their  effect would have been  antidilutive  due to the losses in those
years.  Stock options and restricted stock omitted from the denominator  because
they were antidilutive approximated 1.2 million in 1998, 1.7 million in 1999 and
2.1 million in 2000.


<PAGE>
                        REPORT OF INDEPENDENT ACCOUNTANTS
                         ON FINANCIAL STATEMENT SCHEDULE



To the Stockholders and Board of Directors of Titanium Metals Corporation:

         Our audits of the consolidated  financial statements referred to in our
report dated January 29, 2001, appearing in this 2000 Annual Report on Form 10-K
also included an audit of the financial  statement  schedule listed in the Index
on page F of this Form 10-K. In our opinion,  this financial  statement schedule
presents  fairly,  in all material  respects,  the information set forth therein
when read in conjunction with the related consolidated financial statements.





PricewaterhouseCoopers LLP


Denver, Colorado
January 29, 2001


                                       S-1
<PAGE>
<TABLE>
<CAPTION>


                           TITANIUM METALS CORPORATION

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                 (In thousands)

                                                                     Additions
                                                                      charged
                                                 Balance at        (credited) to                                       Balance
                                                 beginning           costs and                                          at end
                 Description                      of year             expenses         Deductions        Other         of year
----------------------------------------       --------------   ----------------   ----------------    -----------  ------------

Year ended December 31, 2000:

<S>                                                <C>             <C>               <C>                 <C>           <C>
   Allowance for doubtful accounts                 $  3,330        $      185        $     (365)(a)      $  (223)      $  2,927
                                               ==============   ================   ===============     ===========   ============
   Valuation allowance for deferred
     income taxes                                  $  1,869        $       49        $        -          $     -       $  1,918
                                               ==============   ================   ===============     ===========   ============
   Reserve for excess and slow
     moving inventories                            $ 14,518        $    2,305         $  (1,635)         $  (774)      $ 14,414
                                               ==============   ================   ===============     ===========   ============

Year ended December 31, 1999:

   Allowance for doubtful accounts                 $  1,932        $    1,628        $     (230)(a)      $     -       $  3,330
                                               ==============   ================   ===============     ===========   ============
   Valuation allowance for deferred
     income taxes                                  $      -        $    1,869        $        -          $     -       $  1,869
                                               ==============   ================   ===============     ===========   ============
   Reserve for excess and slow
     moving inventories                            $  6,520        $    5,077        $     (406)         $ 3,327 (b)   $ 14,518
                                               ==============   ================   ===============     ===========   ============
Year ended December 31, 1998:

   Allowance for doubtful accounts                 $  2,218        $       39        $     (325)(a)      $     -       $  1,932
                                               ==============   ================   ===============     ===========   ============
   Valuation allowance for deferred
     income taxes                                  $    373        $        -        $     (373)         $     -       $      -
                                               ==============   ================   ===============     ===========   ============
   Reserve for excess and slow
     moving inventories                            $  6,292        $      228        $        -          $     -       $  6,520
                                               ==============   ================   ===============     ===========   ============
</TABLE>
Notes
------------------
(a)      Amounts written off, less recoveries.
(b)      Adjustment for slow moving inventory previously carried at zero value.

                                       S-2