United Defense Receives $48.2M Contract Modification for Taiwan AAV7A1 RAM/RS Vehicle Upgrade Program

Contact:
Herb Muktarian
United Defense
herb.muktarian@udlp.com
(717) 225-8004

SANTA CLARA, CA - December 23, 2004 - United Defense Industries, Inc. (NYSE: UDI) has received a $48.2 million contract modification from the U.S. Marine Corps Systems Command for upgrades to AAV7A1 RAM/RS vehicles for Taiwan. This contract is a modification to a $64 million letter contract received in June 2003.

The upgrade program is a joint effort with the Marine Corps Logistics Command in Albany, Ga., under the direction of the Program Manager, Amphibious Assault Vehicle Systems, MARCORSYSCOM, in Quantico, Va. United Defense is remanufacturing government furnished AAV7A1 hulls to the RAM/RS (Reliability, Availability and Maintainability/Rebuild to Standard) configuration, and is providing material, support and test equipment, applique armor kits, litter kits, spares, contract engineering and technical training support. With the new modifications, the overall contract value is now $112.2 million.

The government furnished hulls are being remanufactured at United Defense's facility located at the Marine Corps depot in Albany, Ga. Part manufacturing, subassembly work and material purchasing will be done at United Defense facilities in York and Fayette, Pa., Aiken, S.C. and Anniston, Ala. Vehicles are being assembled by the Albany Depot, with deliveries scheduled for January through October 2005.

The Assault Amphibious Vehicle AAV7A1 RAM/RS systems provide improved mobility for transporting troops and cargo from ship to shore. The RAM/RS version was originally designed for the U.S. Marine Corps to include a more powerful turbocharged diesel engine and power train and a Bradley Fighting Vehicle suspension, providing greater durability and maintainability.

About United Defense
United Defense designs, develops and produces combat vehicles, artillery, naval guns, missile launchers and precision munitions used by the U.S. Department of Defense and allies worldwide, and provides non-nuclear ship repair, modernization and conversion to the U.S. Navy and other U.S. Government agencies. To learn more about United Defense, visit http://www.uniteddefense.com.

Forward-Looking Statements
Information in this release may involve guidance, expectations, beliefs, plans, intentions or strategies regarding the future. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to United Defense Industries, Inc., as of the date of the release, and we assume no obligation to update any such forward looking statements. The statements in this release are not guarantees of future performance and actual results could differ materially from our current expectations. Numerous factors could cause or contribute to such differences. Please refer to the Company's Annual Report on Form 10 K for the year ended December 31, 2003 as well as its Quarterly Report on Form 10 Q for the quarter ended September 30, 2004, and in our other reports filed from time to time with the Securities and Exchange Commission for a further discussion of the factors and risks associated with our business.