================================================================================

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                    -------

                                    FORM 10-Q



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



FOR QUARTER ENDED:  SEPTEMBER 30, 1999             COMMISSION FILE NO. 333-43619



                        UNITED DEFENSE INDUSTRIES, INC.
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)


      DELAWARE                                   52-2059782
(STATE OR JURISDICTION OF                      (I.R.S EMPLOYER
INCORPORATION OR ORGANIZATION)                IDENTIFICATION NUMBER)


                         GUARANTORS AND CO-REGISTRANTS

IRON HORSE INVESTORS, L.L.C,                      DELAWARE 52-2059783
UDLP HOLDINGS CORP.                               DELAWARE 52-2059780
UNITED DEFENSE, L.P.                              DELAWARE 54-1693796

                             ----------------------

                        1525 WILSON BOULEVARD, SUITE 700
                              ARLINGTON, VA 22209
                                 (703) 312-6100

          (Address and telephone number of principal executive offices
                     of each registrant and co-registrant)
       Registrant's telephone number, including area code (703) 312-6100



Indicate by checkmark 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 requirement for
the past 90 days. Yes [x] No [ ]

Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of November 8, 1999:


                                                       NO. OF         PAR
                                                       SHARES         VALUE
                                                       ------         -----

United Defense Industries, Inc..................... 18,042,524        $0.01
Iron Horse Investors, L.L.C. ......................      -NONE-
UDLP Holdings Corp.................................      1,000        $0.01
United Defense, L.P. ..............................      -NONE-

================================================================================
<PAGE>

<TABLE>
<CAPTION>

                          IRON HORSE INVESTORS, L.L.C.
                         UNITED DEFENSE INDUSTRIES, INC.

                                      INDEX
                                      -----

PART I - FINANCIAL INFORMATION                                                          PAGE
------------------------------                                                          ----
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Item 1 - Unaudited Consolidated Financial Statements -
              Iron Horse Investors, L.L.C.

          Unaudited Consolidated Balance Sheets as of December 31,
              1998 and September 30, 1999                                                1

          Unaudited Consolidated Statements of Operations for the
              Three Months Ended and for the Nine
              Months Ended September 30, 1998 and 1999                                   2

          Unaudited Consolidated Statement of Members' Capital
              for the Nine Months Ended September 30, 1999                               3

          Unaudited Consolidated Statements of Cash Flows
              for the Nine Months Ended September 30, 1998 and 1999                      4

          Notes to Unaudited Consolidated Financial Statements                           5-6

          Unaudited Consolidated Financial Statements -
              United Defense Industries, Inc.

          Unaudited Consolidated Balance Sheets as of
              December 31, 1998 and September 30, 1999                                   7

          Unaudited Consolidated Statements of Operations for the
              Three Months Ended and for the Nine
              Months Ended September 30, 1998 and 1999                                   8

          Unaudited Consolidated Statement of Stockholders' Equity
              for the Nine Months Ended September 30, 1999                               9

          Unaudited Consolidated Statements of Cash Flows
              for the Nine Months Ended September 30, 1998 and 1999                      10

          Notes to Unaudited Consolidated Financial Statements                           11-12

Item 2 - Management's Discussion and Analysis of the Results
              of Operations and Financial Condition                                      13-19

Item 3 - Quantitative and Qualitative Disclosures About Market Risk                      19


<PAGE>



PART II - OTHER INFORMATION

Item 1 - Legal Proceedings                                                               20

Item 4 - Security Holder Actions                                                         20-21

Item 6 - Exhibits and Reports on Form 8-K                                                21-22

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

<PAGE>

                          IRON HORSE INVESTORS, L.L.C.
                      UNAUDITED CONSOLIDATED BALANCE SHEETS

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

Assets                                                 DECEMBER 31, 1998      SEPTEMBER 30, 1999
                                                    ---------------------------------------------
Current assets:
<S>                                                              <C>                     <C>
     Cash and marketable securities                              $85,520                 $47,423
     Trade receivables                                            64,395                 104,768
     Inventories                                                 254,343                 234,773
     Other current assets                                          4,255                   7,548

                                                    ---------------------------------------------
  Total current assets                                           408,513                 394,512

Property, plant and equipment, net                               122,721                  88,459

Intangible assets, net                                           330,024                 280,516
Prepaid pension cost                                             123,912                 130,424
Prepaid postretirement benefit cost                                    0                   1,166
Other assets                                                       5,910                   4,485

                                                    ---------------------------------------------
Total assets                                                    $991,080                $899,562
                                                    =============================================

Liabilities and Capital
Current liabilities:
     Current portion of long-term debt                           $16,643                 $23,086
     Accounts payable, trade and other                            88,497                  43,634
     Advanced payments                                           258,395                 287,713
     Accrued and other liabilities                                75,832                  93,732

                                                    ---------------------------------------------
     Total current liabilities                                   439,367                 448,165

Long-term liabilities net of current portion:
    Accrued pension cost                                          12,807                  17,835
    Accrued postretirement benefit cost                            1,803                   1,102
    Long-term debt                                               490,343                 371,029
    Other liabilities                                             22,630                  36,995

                                                    ---------------------------------------------
Total liabilities                                                966,950                 875,126

Minority interest                                                  3,851                   3,892
Commitments and contingencies

Members' capital                                                  20,279                  20,544
                                                    ---------------------------------------------

Total liabilities and members' capital                          $991,080                $899,562
                                                    =============================================
</TABLE>


<PAGE>


                          IRON HORSE INVESTORS, L.L.C.
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                             THREE MONTHS             THREE MONTHS           NINE MONTHS            NINE MONTHS
                                                ENDED                    ENDED                  ENDED                  ENDED
                                          SEPTEMBER 30, 1998       SEPTEMBER 30, 1999     SEPTEMBER 30, 1998     SEPTEMBER 30, 1999
                                        -------------------------------------------------------------------------------------------
<S>                                         <C>                         <C>                       <C>                  <C>
Revenue:
     Sales                                  $289,643                    $315,626                  $921,313             $911,786

Costs and expenses:
     Cost of sales                           274,406                     260,955                   815,533              755,611
     Selling, general and
      administrative expenses                 43,610                      40,440                   130,419              124,072
     Research and development                  2,986                       2,241                     9,614                3,287
                                        --------------------------------------------------------------------------------------------
          Total expenses                     321,002                     303,636                   955,566              882,970

     Earnings related to investments
        in foreign affiliates                    427                         442                     5,877                1,082
                                        --------------------------------------------------------------------------------------------
Income (loss) from operations                (30,932)                     12,432                   (28,376)              29,898

Other income (expense):
     Interest income                             403                         205                       915                  927
     Interest expense                        (12,153)                     (8,252)                  (38,489)             (29,298)
                                        --------------------------------------------------------------------------------------------
Income (loss) before income taxes
and minority interest                        (42,682)                      4,385                   (65,950)               1,527
Provision for income taxes                     1,500                           0                     3,201                1,250
                                        --------------------------------------------------------------------------------------------
Income (loss) before minority interest       (44,182)                      4,385                   (69,151)                 277
Minority interest                              1,405                        (180)                    1,473                  (12)
                                        --------------------------------------------------------------------------------------------
Net income (loss)                           ($42,777)                     $4,205                  ($67,678)                $265
                                        ============================================================================================
</TABLE>

<PAGE>
                          IRON HORSE INVESTORS, L.L.C.
                        UNAUDITED CONSOLIDATED STATEMENT
                               OF MEMBERS' CAPITAL
                                 (IN THOUSANDS)


                                                                AMOUNT
                                                           ---------------

Balance, December 31, 1998                                        $20,279
Net income for the nine months ended September 30, 1999               265
                                                           ---------------
Balance, September 30, 1999                                       $20,544
                                                           ===============

<PAGE>

                          IRON HORSE INVESTORS, L.L.C.
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    NINE MONTHS                  NINE MONTHS
                                                                       ENDED                        ENDED
                                                                SEPTEMBER 30, 1998           SEPTEMBER 30, 1999
                                                              -------------------------------------------------------
OPERATING ACTIVITIES
<S>                                                                  <C>                              <C>
Net income (loss)                                                    ($67,678)                        $265
Adjustments to reconcile net income (loss) to cash
  provided by operating activities:
   Depreciation                                                        53,225                       46,774
   Amortization                                                        73,756                       59,983
   Minority interest                                                   (1,473)                          12
   Other                                                                2,652                        2,004
Changes in assets and liabilities:
   Trade receivables                                                   15,363                      (40,373)
   Inventories                                                         66,867                       19,570
   Other assets                                                         1,533                       (4,324)
   Prepaid pension cost                                                26,761                       (6,512)
   Prepaid postretirement benefit cost                                      -                       (1,166)
   Accounts payable, trade and other                                  (40,764)                     (44,863)
   Advanced payments                                                  (62,012)                      29,318
   Accrued and other liabilities                                       34,551                       32,266
   Accrued pension cost                                                (3,731)                       5,028
   Accrued post retirement benefits                                       (36)                        (701)
                                                              -------------------------------------------------------
Cash provided by operating activities                                  99,014                       97,281
                                                              -------------------------------------------------------

INVESTING ACTIVITIES
   Capital spending                                                   (18,311)                     (23,566)
   Disposal of property, plant and equipment                            3,116                        1,030
   Adjustment to purchase price of business                            16,074                            0
                                                              -------------------------------------------------------
Cash provided by (used in) investing activities                           879                      (22,536)
                                                              -------------------------------------------------------
FINANCING ACTIVITIES
   Payments on long-term debt                                         (65,815)                    (112,871)
   Proceeds from sale of common stock by subsidiary                     6,057                           29
                                                              -------------------------------------------------------
Cash used in financing activities                                     (59,758)                    (112,842)
                                                              -------------------------------------------------------

Increase (decrease) in cash and marketable securities                  40,135                      (38,097)
Cash and marketable securities, beginning of period                    35,623                       85,520
                                                              -------------------------------------------------------
Cash and marketable securities, end of period                         $75,758                      $47,423
                                                              =======================================================
</TABLE>


<PAGE>


                          Iron Horse Investors, L.L.C.

              Notes to Unaudited Consolidated Financial Statements

                               September 30, 1999


1.       BASIS OF PRESENTATION

The financial information presented as of any other date than December 31 has
been prepared from the books and records without audit. Financial information as
of December 31 has been derived from the audited financial statements of Iron
Horse Investors, L.L.C. (the "Company"), but does not include all the
disclosures required by generally accepted accounting principles. In the opinion
of management, the accompanying unaudited financial statements contain all
adjustments, consisting of only normal recurring adjustments, necessary to
present fairly the Company's financial position as of September 30, 1999, and
the results of its operations and cash flows for the periods ended September 30,
1999 and 1998. The results of operations are not necessarily indicative of the
results that may be expected for the year ending December 31, 1999. These
unaudited consolidated financial statements should be read in conjunction with
the financial statements and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998.

2.       COMMITMENTS AND CONTINGENCIES

Alliant Techsystems, Inc. ("Alliant"), a subcontractor to United Defense, L.P.
("UDLP") in connection with the Paladin howitzer prime contract, filed suit
against UDLP and its former owners in February 1998. Alliant seeks damages in an
unspecified amount on breach of contract and other theories. The dispute arises
out of a U.S. Army-directed termination for convenience in 1996 of certain
subcontract work, which until the time of termination had been performed by
another subcontractor. The case is currently scheduled for trial in March 2000.
Management does not believe that Alliant's suit will have a material adverse
impact on the Company.

In 1998 the Company was named as a defendant in two so-called qui tam cases
filed under the U.S. Civil False Claims Act (the "FCA") by present or former
employees of the Company's Armament Systems Division in Fridley, Minnesota. The
FCA, among other things, permits individuals to seek recovery, including treble
damages and additional civil penalties, of amounts which under certain
circumstances have been improperly claimed from the government by its
contractors, and provides that such plaintiffs may personally receive 15-30% of
any recovery obtained. Each case primarily alleges that the Company improperly
obtained payment under various government contracts by supplying components
which did not comply with applicable technical specifications. The Department of
Justice has declined to intervene in either case. The first case, UNITED STATES
EX REL. SEMAN AND SHUKLA V. UNITED DEFENSE, L.P., ET AL., case no. 97-1688 in
the U.S. District Court for the District of Minnesota, remains pending, and
pretrial discovery is underway. The second case, UNITED STATES EX REL. SHUKLA V.
UNITED DEFENSE, ET AL.,


<PAGE>

case no. 97-2414 in the U.S. District Court for the District of Minnesota, was
dismissed without prejudice by the court on August 2, 1999, and therefore may be
refiled under certain circumstances. Management does not believe that such
litigation will have a material adverse impact on the Company.


<PAGE>

                         United Defense Industries, Inc.
                      Unaudited Consolidated Balance Sheets

                                 (In thousands)

<TABLE>
<CAPTION>
Assets                                                December 31, 1998           September 30, 1999
                                                    -------------------------------------------------
<S>                                                             <C>                          <C>
Current assets:
     Cash and marketable securities                             $85,520                      $47,423
     Trade receivables                                           64,395                      104,768
     Inventories                                                254,343                      234,773
     Other current assets                                         4,255                        7,548

                                                    -------------------------------------------------
  Total current assets                                          408,513                      394,512

Property, plant and equipment, net                              122,721                       88,459

Intangible assets, net                                          330,024                      280,516
Prepaid pension cost                                            123,912                      130,424
Prepaid postretirement benefit cost                                   -                        1,166
Other assets                                                      4,571                        3,146

                                                    -------------------------------------------------
Total assets                                                   $989,741                     $898,223
                                                    =================================================

Liabilities and Equity
Current liabilities:
     Current portion of long-term debt                          $16,643                      $23,086
     Accounts payable, trade and other                           88,497                       43,634
     Advanced payments                                          258,395                      287,713
     Accrued and other liabilities                               75,832                       93,732

                                                    -------------------------------------------------
     Total current liabilities                                  439,367                      448,165

Long-term liabilities net of current portion:
    Accrued pension cost                                         12,807                       17,835
    Accrued postretirement benefit cost                           1,803                        1,102
    Long-term debt                                              490,343                      371,029
    Other liabilities                                            22,630                       36,995

                                                    -------------------------------------------------
Total liabilities                                               966,950                      875,126

Commitments and contingencies

Stockholders' Equity :
    Common Stock $.01 par value, 20,000,000
     authorized; 18,039,624 and 18,042,524
     issued and outstanding at December 31,
     1998 and September 30, 1999                                    180                          180
     Additional paid-in-capital                                 180,216                      180,245
     Stockholders' loans                                         (1,339)                      (1,339)
     Retained deficit                                          (156,266)                    (155,989)

                                                    -------------------------------------------------
     Total stockholders' equity                                  22,791                       23,097
                                                    -------------------------------------------------

Total liabilities and stockholders' equity                     $989,741                     $898,223
                                                    =================================================
</TABLE>

<PAGE>

                         United Defense Industries, Inc.
                 Unaudited Consolidated Statements of Operations

                                 (In thousands)
<TABLE>
<CAPTION>
                                              Three months          Three months          Nine months           Nine months
                                                 ended                  ended                ended                 ended
                                           September 30, 1998    September 30, 1999   September 30, 1998    September 30, 1999
                                          ----------------------------------------------------------------------------------------
<S>                                             <C>                   <C>                  <C>                   <C>
Revenue:
     Sales                                      $289,643              $315,626             $921,313              $911,786

Costs and expenses:
     Cost of sales                               274,406               260,955              815,533               755,611
     Selling, general and
      administrative expenses                     43,610                40,440              130,419               124,072
     Research and development                      2,986                 2,241                9,614                 3,287
                                          ----------------------------------------------------------------------------------------
          Total expenses                         321,002               303,636              955,566               882,970

     Earnings related to investments
        in foreign affiliates                        427                   442                5,877                 1,082
                                          ----------------------------------------------------------------------------------------
Income (loss) from operations                    (30,932)               12,432              (28,376)               29,898

Other income (expense):
     Interest income                                 403                   205                  915                   927
     Interest expense                            (12,153)               (8,252)             (38,489)              (29,298)
                                          ----------------------------------------------------------------------------------------
Income (loss) before taxes                       (42,682)                4,385              (65,950)                1,527
Provision for income taxes                         1,500                     0                3,201                 1,250
                                          ----------------------------------------------------------------------------------------
Net income (loss)                               ($44,182)               $4,385             ($69,151)                 $277
                                          ========================================================================================
</TABLE>


<PAGE>


                         United Defense Industries, Inc.
                        Unaudited Consolidated Statement
                             of Stockholders' Equity
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                   Additional
                                                      Common        Paid-In       Retained   Stockholders'
                                                       Stock        Capital       Deficit        Loans        Total
                                                   ----------------------------------------------------------------------

<S>               <C> <C>                                <C>       <C>           <C>            <C>           <C>
Balance, December 31, 1998                               $180      $180,216      ($156,266)     ($1,339)      $22,791

Sale of Common Stock                                                     29                                        29

Net income for the nine months ended
          September 30, 1999                                                           277                        277
                                                   ----------------------------------------------------------------------
Balance, September 30, 1999                              $180      $180,245      ($155,989)     ($1,339)      $23,097
                                                   ======================================================================

</TABLE>

<PAGE>

                         United Defense Industries, Inc.
                 Unaudited Consolidated Statements of Cash Flows

                                 (In thousands)
<TABLE>
<CAPTION>
                                                                          Nine months            Nine months
                                                                             ended                  ended
                                                                      September 30, 1998     September 30, 1999
                                                                  -------------------------------------------------
<S>                                                                     <C>                            <C>
Operating activities
Net income (loss)                                                       ($69,151)                        $277
Adjustments to reconcile net income (loss) to cash
  provided by operating activities:
   Depreciation                                                           53,225                       46,774
   Amortization                                                           73,756                       59,983
   Other                                                                   2,652                        2,004
Changes in assets and liabilities:
   Trade receivables                                                      15,363                      (40,373)
   Inventories                                                            66,867                       19,570
   Other assets                                                            1,533                       (4,324)
   Prepaid pension cost                                                   26,761                       (6,512)
   Prepaid postretirement benefit cost                                         -                       (1,166)
   Accounts payable, trade and other                                     (40,764)                     (44,863)
   Advanced payments                                                     (62,012)                      29,318
   Accrued and other liabilities                                          34,551                       32,266
   Accrued pension cost                                                   (3,731)                       5,028
   Accrued post retirement benefits                                          (36)                        (701)
                                                                  ------------------------------------------------
Cash provided by operating activities                                     99,014                       97,281
                                                                  ------------------------------------------------
Investing activities
   Capital spending                                                      (18,311)                     (23,566)
   Disposal of property, plant and equipment                               3,116                        1,030
   Adjustment to purchase price of business                               16,074                            0
                                                                  ------------------------------------------------
Cash provided by (used in) investing activities                              879                      (22,536)
                                                                  ------------------------------------------------
Financing activities
   Payments on long-term debt                                            (65,815)                    (112,871)
   Proceeds from sale of common stock by subsidiary                         6,057                           29
                                                                  ------------------------------------------------
Cash used in financing activities                                        (59,758)                    (112,842)
                                                                  ------------------------------------------------
Increase (decrease) in cash and marketable securities                     40,135                      (38,097)
Cash and marketable securities, beginning of period                       35,623                       85,520
                                                                  ------------------------------------------------
Cash and marketable securities, end of period                            $75,758                      $47,423
                                                                  ================================================
</TABLE>

<PAGE>

                         United Defense Industries, Inc.

              Notes to Unaudited Consolidated Financial Statements

                               September 30, 1999


1.       BASIS OF PRESENTATION

The financial information presented as of any other date than December 31 has
been prepared from the books and records without audit. Financial information as
of December 31 has been derived from the audited financial statements of United
Defense Industries, Inc. (the "Company"), but does not include all the
disclosures required by generally accepted accounting principles. In the opinion
of management, the accompanying unaudited financial statements contain all
adjustments, consisting of only normal recurring adjustments necessary to
present fairly the Company's financial position as of September 30, 1999 and the
results of its operations and cash flows for the periods ended September 30,
1999 and 1998. The results of operations are not necessarily indicative of the
results that may be expected for the year ending December 31, 1999. These
unaudited consolidated financial statements should be read in conjunction with
the financial statements and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998.

2.       COMMITMENTS AND CONTINGENCIES

Alliant Techsystems, Inc. ("Alliant"), a subcontractor to United Defense, L.P.
("UDLP") in connection with the Paladin howitzer prime contract, filed suit
against UDLP and its former owners in February 1988. Alliant seeks damages in an
unspecified amount on breach of contract and other theories. The dispute arises
out of a U.S. Army-directed termination for convenience in 1996 of certain
subcontract work, which until the time of termination had been performed by
another subcontractor. The case is currently scheduled for trial in March 2000.
Management does not believe that Alliant's suit will have a material adverse
impact on the Company.

In 1998 the Company was named as a defendant in two so-called qui tam cases
filed under the U.S. Civil False Claims Act (the "FCA") by present or former
employees of the Company's Armament Systems Division in Fridley, Minnesota. The
FCA, among other things, permits individuals to seek recovery, including treble
damages and additional civil penalties, of amounts which under certain
circumstances have been improperly claimed from the government by its
contractors, and provides that such plaintiffs may personally receive 15-30% of
any recovery obtained. Each case primarily alleges that the Company improperly
obtained payment under various government contracts by supplying components
which did not comply with applicable technical specifications. The Department of
Justice has declined to intervene in either case. The first case, UNITED STATES
EX REL. SEMAN AND SHUKLA V. UNITED DEFENSE, L.P., ET AL., case no. 97-1688 in
the U.S. District Court for the District of Minnesota, remains pending, and
pretrial discovery is underway. The second case, UNITED STATES EX REL. SHUKLA V.
UNITED DEFENSE, ET AL.,

<PAGE>

case no. 97-2414 in the U.S. District Court for the District of Minnesota, was
dismissed without prejudice by the court on August 2, 1999, and therefore may be
refiled under certain circumstances. Management does not believe that such
litigation will have a material adverse impact on the Company.




<PAGE>


                          IRON HORSE INVESTORS, L.L.C.
                         UNITED DEFENSE INDUSTRIES, INC.

                   ITEM 2. MANAGEMENT DISCUSSION AND ANYALYSIS
                   -------------------------------------------

              OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION
              ----------------------------------------------------

                               SEPTEMBER 30, 1999
                               ------------------


FORWARD-LOOKING STATEMENTS

Management's Discussion and Analysis of the Results of Operations and Financial
Condition contains forward-looking statements that are based on management's
expectations, estimates and the notes to the Company's unaudited financial
statements, projections and assumptions. Words such as "expects," "anticipates,"
"plans," "believes," "estimates," or variations of these words and similar
expressions are intended to identify forward-looking statements which include
but are not limited to projections of revenues, earnings, performance, cash
flows and contract awards. Forward-looking statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These statements are not guarantees of future performance and involve certain
risks and uncertainties which are difficult to predict. Therefore, actual future
results and trends may differ materially from those made in or suggested by any
forward-looking statements due to a variety of factors, including: the ability
of United Defense Industries, Inc. (the "Company") to design and implement key
technological improvements (such as, for example in the Crusader program) and to
execute its internal performance plans; performance issues with key suppliers
and subcontractors; developments with respect to contingencies such as legal
proceedings and environmental matters; labor negotiations; changing priorities
or reductions in the U.S. government defense budget; the performance of, and
political and other risks associated with, the Company's international
operations and joint ventures; termination of government contracts due to
unilateral government action and the impact of the "Year 2000" issue on the
Company and its customers and suppliers.

The following discussion and analysis should be read in conjunction with the
financial statements and related notes and the other financial information,
included elsewhere in this report, and with the Company's Annual Report on Form
10-K for the year ended December 31, 1998.

INTRODUCTION

In October 1997, Iron Horse Investors, L.L.C. ("Iron Horse") was funded with
$173 million of equity capital from Carlyle Investment Fund Partnerships, which
was invested in the Company. On October 6, 1997, the Company acquired (the
"Acquisition") directly or through its wholly owned subsidiary, UDLP Holdings
Corp., 100% of the partnership interests in United Defense, L.P. ("UDLP") for
$880.0 million from FMC Corporation ("FMC") and Harsco Corporation

<PAGE>

("Harsco"). This price was subsequently adjusted downward by $16.1 million to
reflect adjustment clauses in the Acquisition Agreement.

United Defense Industries, Inc. is the only asset of Iron Horse. Accordingly,
Management's Discussion and Analysis of the Results of Operations and Financial
Condition is the same for both Iron Horse and United Defense Industries, Inc.
The Company's subsidiary guarantors, UDLP Holdings Corp. and UDLP, are directly
or indirectly wholly owned by the Company and both such subsidiary guarantors
have guaranteed the Company's 8 3/4% Senior Subordinated Notes on a full,
unconditional, and joint and several basis. Any non-guarantor subsidiaries have
assets, equity, income and cash flows on an individual and combined basis less
than 3% of related amounts of the Company. Accordingly, separate financial
statements of those subsidiaries are not considered material or provided herein.

OVERVIEW

The Company is a leading supplier of tracked, armored combat vehicles and
weapons delivery systems to the U.S. Department of Defense ("DoD") and a number
of allied military forces worldwide. The Company's products include critical
elements of the U.S. military's tactical force structure. The Company had a firm
funded backlog of approximately $1.4 billion as of September 30, 1999, a
substantial majority of which is derived from sole-source, prime contracts.
Approximately 85% of the Company's sales for the first nine months of 1999 were
to the U.S. government, primarily to agencies of the DoD (excluding Foreign
Military Sales), or through subcontracts with other government contractors.

For a description of the Company's business and principal operating programs,
see the Form 10-K for the year ended December 31 1998.

There have been no material changes to the Company's major programs from those
described in the Company's Form 10-K other than additional funding as new
contracts are negotiated and awarded, and an eight to twelve month delay for the
completion of the current phase to the Crusader program.

During and subsequent to the three months ended September 30, 1999, in certain
public statements, senior officers in the U.S. Army have begun to express
significant interest in revising or augmenting the vehicles and equipment
utilized in one or more of its combat divisions. Because the Army has yet to
announce in certain public statements, senior officers in the any particular
proposal, solicitation, or budgetary plans, management is presently unable to
determine the nature or extent of the potential impact which such an equipment
reconfiguration might have on the Company. Management believes, however, that
any such equipment reconfiguration could have a potentially material impact on
the Company's results of operations, liquidity, and/or financial condition in
the future. If, for instance, the Army were to procure new quantities of the
Company's lighter tracked vehicles, such as the M113 product line and/or the M8
Armored Gun System, the impact could be favorable the Company. If, on the other
hand, the Army were to procure wheeled combat vehicles offered by the Company's
competitors, the impact could be unfavorable to the Company. Also, any decision
by the Army, to the extent reflected in

<PAGE>

Congressional authorizations and/or appropriations, to rebudget funds away from
the Company's existing programs, such as the Bradley and its derivatives and/or
the Crusader, in order to free up funding for new types of vehicles (whether
such vehicles were procured from the Company or instead from its competitors),
would tend to have an unfavorable impact on the Company.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1999 ("THREE MONTHS 1999") COMPARED TO THREE
MONTHS ENDED SEPTEMBER 30, 1998 ("THREE MONTHS 1998")

REVENUE. Revenue in the Three Months 1999 was $315.6 million, higher by $26.0
million, or 9.0%, from the Three Months 1998. The increase in 1999 was due to a
larger shipment of vertical launcher and gun systems, new deliveries of M9
armored combat earth movers, M88A2 tank recovery vehicle kits and upgrades of
AAV7 amphibious vehicles, partly offset by declines due to the completion of the
M113 shipments to Thailand, the wind down of the M109A6 Paladin production and
lower shipments of field artillery ammunition support vehicles.

GROSS PROFIT. Gross profit for the Three Months 1999 of $54.7 increased
considerably by $39.4 million or 258.8% from the Three Months 1998. The gain can
be attributed to the establishment of reserves for restructuring the Company's
Armament Systems Division and the write-off of unusable, capitalized software in
the Three months 1998, and lower depreciation and amortization costs related to
the Acquisition purchase price in 1999. This favorable profit was partially
offset by lower profit margins realized from the sale of vertical launchers and
gun systems and downward adjustment to contract profit estimates in the Three
Months 1999.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $40.4 million in the Three Months 1999, lower by
$3.2 million, or 7.3% from the Three Months 1998. The decrease was primarily due
to the lower amortization of goodwill and other intangible assets established as
part of the Acquisition.

RESEARCH AND DEVELOPMENT. Research and development costs were $2.2 million for
the Three Months 1999 which was $.7 million, or 24.9%, lower than the Three
Months in 1998. The drop in 1999 was primarily due to the reimbursement of R&D
costs to the Company for the development of an Advanced Gun System for the new
DD21 class ship.

INTEREST EXPENSE. Net interest expense was $8.0 million for the Three Months
1999 compared with $11.8 million for the Three Months 1998. The decline in
interest was the result of lower debt levels and lower interest rates on senior
bank debt.

NET INCOME. As a result of the foregoing, there was a net income of $4.4 million
in the Three Months 1999 compared with a net loss of $44.2 million for the Three
Months 1998.

Nine MONTHS ENDED SEPTEMBER 30, 1999 ("NINE MONTHS 1999") COMPARED TO NINE
MONTHS ENDED SEPTEMBER 30, 1998 ("NINE MONTHS 1998").
<PAGE>

REVENUE. Revenue of $911.8 million for the Nine Months 1999 was slightly lower
by $9.5 million, or 1.0%, compared with $921.3 million for the Nine Months 1998.
The decrease in revenue was due to the completion of self-propelled howitzer
shipments to Taiwan and Egypt and M113 shipments to Thailand and the wind down
of the Paladin program. The declines were partially offset by higher billings
for the Crusader program and vertical launcher systems, M9 armored combat
earthmovers, M88A2 tank recovery vehicle kits and upgrades of AAV7 amphibious
vehicles.

GROSS PROFIT. Gross profit increased $50.4 million, or 47.6% to $156.2 million
for the Nine Months 1999 versus the Nine Months 1998. The higher gross profit
can be attributed to the establishment of the reserves for the restructuring of
the Company's Armament Systems Division and the write-off of unusable
capitalized software in 1998 and the lower depreciation and amortization for
assets established in connection with the allocation of the purchase price for
the Acquisition and upward contract adjustments in 1999. This increase is
slightly offset by the decreased gross profit resulting from lower revenue.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $124.1 million in the Nine Months 1999, a decrease
of $6.3 million from the Nine Months 1998. The favorable variance is primarily
due to the lower amortization of goodwill and other intangible assets
established in conjunction with the Acquisition.

RESEARCH AND DEVELOPMENT. Research and development costs were $3.3 million for
the Nine Months 1999 which was $6.3 million, or 65.8%, lower than the Nine
Months in 1998. The drop in 1999 was due to the large reimbursement of R&D costs
to the Company for the development of an Advanced Gun System for the new DD21
class ship.

EARNINGS FROM FOREIGN AFFILIATES. Earnings from foreign affiliates were $1.1
million for the Nine Months 1999, down $4.8 million, or 81.6%, from the Nine
Months 1998. The decline was due to the establishment of a reserve for the
potential offset penalty for the joint venture in Turkey equivalent to dividends
received from the venture in the Nine Months 1999.

INTEREST EXPENSE. Net interest expense for the Nine Months 1999 was $28.4
million compared with $37.6 million for the Nine Months 1998. The decline in
interest expense was the result of lower debt levels and lower interest rates on
the senior bank debt.

NET INCOME. As a result of the foregoing, there was a net income of $.3 million
for the Nine Months 1999 compared with a net loss of $69.2 million for the Nine
Months 1998.


LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

During the Nine Months 1999, cash provided by operating activities was $97.3
million compared with $99.0 million for the Nine Months 1998. The following
explain the differences in cash flow generation for the two periods: (i) net
income plus depreciation and amortization was higher in 1999 primarily due to
the establishment of the reserves for restructuring costs and write-off of
<PAGE>


unusable capitalized assets at Armament Systems Division in 1998 and decreased
interest payments in 1999, (ii) higher receivables in 1999 resulted from higher
shipments of Bradley vehicles, upgrades of AAV7 amphibious vehicles and
deliveries of M88A2 tank recovery vehicle kits to Egypt, (iii) inventory net of
advance payments resulted in cash flow in 1999 of $48.9 million, which was
considerably better by $44.0 million from 1998 due to the conversion of most
contracts to a performance based payments approach from a cost incurred basis
partially offset by increased volume in inventory for the start up of Bradley
and M88A2 tank recovery vehicle programs, and (iv) prepaid pension in 1998 was
reduced representing the majority of a non-cash restructuring charge at Armament
Systems Division.

Cash used in investing activities was $22.5 million for the Nine Months 1999, up
by $23.4 million for the Nine Months 1998. The higher capital spending in 1999
is primarily for costs to install software for new integrated business systems.
The Nine Months 1998 included generation of $16.1 million from a downward
adjustment to the Acquisition purchase price.

Cash used for financing activities was principally related to pay down of $112.9
million of debt in the Nine Months 1999 compared with debt payments of $65.8
million in the Nine Months 1998.


IMPACT OF THE YEAR 2000 ("Y2K")

The Company continues to pursue its Y2K compliance program and is committing
extensive resources to overcome Y2K issues with the intent of minimizing or
eliminating disruption related to this potential computer problem. The Company
initially determined that all of its operating divisions would be affected by
this problem. Accordingly, a Company Y2K task force was established to provide
guidance, coordination, and oversight to all division efforts. The task force
promulgated a standard definition for Y2K compliance, a standard response to
customer and supplier inquiries and requests for information, a standard
certification letter and form for use with suppliers and business partners,
guidelines on documentation requirements, and standard Y2K language for new and
modified contracts. Each division is executing a Y2K program to identify, assess
and remediate Y2K problems. The approach is a five-phase strategy of awareness,
assessment, renovation, validation and implementation. Implementation for all
mission-critical systems is complete. Contingency and business recovery plans
were developed to address critical systems if unexpected failures occur.

The Company is tracking its state of readiness in terms of completion status
against the five-phase approach to remediation of Y2K problems. As of the third
quarter 1999, the overall completion status is 100% in Awareness, 100% in
Assessment, 100% in Renovation, 99% in Validation and 99% in Implementation.

In order to obviate Y2K problems, the Company expects to spend $30.5 million
repairing or replacing existing business and information technology computing
systems and assets with embedded systems. Through September 1999, the Company
has spent $30.0 million, or 98% of the estimated total spending requirement.
<PAGE>

The largest projects to resolve Y2K problems are the integrated business systems
projects being executed at the Company's two largest divisions, Armament Systems
Division and Ground Systems Division, both of which were completed in the second
quarter. Armament Systems Division installed a new manufacturing system that is
part of an Enterprise Resource Planning software package, but retained the
existing financial systems which were essentially already Y2K compliant. Ground
Systems Division remediated its legacy manufacturing and financial systems to be
Y2K compliant.

Although all divisions have completed significant assessments of internal
systems and assets with embedded systems, assessments will continue to occur
until the Year 2000. Systems inventories and disposition decisions will be
updated as part of the ongoing assessment.

All divisions continue to contact suppliers regarding their Y2K issues. A
standard request for certification was formulated and is being used by all
divisions as they continue to pursue Y2K certifications from active suppliers.
Procurement documents utilized by the Company will continue to include
requirements for Y2K compliance. Despite these efforts, the Company expects to
have only a limited understanding of the potential Y2K shortcomings of its many
suppliers, and will therefore be uncertain as to the full nature and extent of
the potential supplier-derived impact on the Company. The Company is concerned
that supplier Y2K problems could interrupt the flow of components and services
to the Company, which could in turn impair the Company's timely delivery under
its own customer contracts.

Product assessments indicate there are no known Y2K problems with products the
Company produces or sells. The Company continues to receive requests for
certifications or warranties from customers. In some cases, these requests
resulted in contract modifications or negotiations. In others, the Company had
to provide details on its Y2K compliance programs by responding to detailed
surveys.

The Company continues to monitor the Y2K compliance status of the Department of
Defense (DoD) payment offices. These offices have indicated that they are now
Y2K compliant. Because the Company's understanding of the ways in which the DoD
could experience Y2K difficulties is inherently limited, the Company is
uncertain as to the full nature and extent of the potential DoD-derived Y2K
impact on the Company. However, the Company is concerned that Y2K problems
affecting DoD financial administration functions could interrupt or delay the
orderly flow of payments to the Company under its DoD contracts. Because of the
Company's debt service obligations, any such interruption or delay could
adversely impact the Company's financial condition, and a payment interruption
of extraordinary magnitude and duration could result in the Company going into
default under its debt instruments.

As to other Y2K risks, to the extent that the Company's results depend upon
foreign sales, such results could also be adversely impacted by Y2K problems
that might beset the foreign customers of the Company or its foreign affiliates.
Many foreign governments appear to seriously lag the DoD in terms of assessing
and addressing Y2K problems. As a result, the Company does not expect to develop
an adequate understanding of potential foreign government
<PAGE>

Y2K problems. The Company's foreign affiliates have assessed their internal Y2K
situation and have determined some limited exposure due to non-compliant
internal systems. The foreign affiliates have indicated that they expect to
resolve non-compliance problems in time to avoid any material disruptions to
operations.

Management believes it is expending appropriate efforts in addressing the Y2K
issue so as not to incur disruptions to its business operations. However, there
is still uncertainty about the broader scope of the Y2K issue as it may affect
the Company and third parties that are critical to the Company's operations. For
example, lack of readiness by electrical and water utilities, financial
institutions, government agencies or other providers of general infrastructure
could pose significant impediments to the Company's ability to carry on its
normal operations in the area or areas so affected. In the event that the
Company is unable to complete its remedial actions as described above and is
unable to implement adequate contingency plans in the event that problems are
encountered, there could be a material adverse effect on the Company's business,
results of operations or financial condition.


             ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
                     ---------------------------------------------
                                   MARKET RISK
                                   ------------
                               SEPTEMBER 30, 1999
                               ------------------

In October 1997, the Company entered into a three year interest rate swap
agreement involving the exchange of floating rate interest payment obligations
for fixed rate interest payment obligations. The notional amount of this
interest rate swap agreement is $160 million. The Company entered into this
agreement as a hedge to manage interest costs and risks associated with
fluctuating interest rates. For additional information, see Note 12 to the
Consolidated Financial Statements of the Company's Annual Report on Form 10-K
for the year ended December 31, 1998. As of September 30, 1999, the Company has
debt totaling $394.1 million of which $194.1 million was subject to variable
interest rates.



<PAGE>



                                     PART II
                                     -------


                                OTHER INFORMATION
                                -----------------

                               SEPTEMBER 30, 1999
                               ------------------


ITEM 1.       LEGAL PROCEEDINGS
              -----------------

For a description of the Company's pending litigation with Alliant Techsystems,
Inc., please refer to the Company's Annual Report on Form 10-K for the year
ended December 31, 1998.

A description of two so-called qui tam cases previously filed against the
Company, U.S. ex rel. Shukla v. United Defense, L.P., et al., Civ. No. 97-2414
in the U.S. District Court for the District of Minnesota (the "Shukla case") and
U.S. ex rel. Seman and Shukla v. United Defense, et al., Civ. No. 97-1688 in the
U.S. District Court for the District of Minnesota (the "Seman case"), is set
forth in the Company's Annual Report on Form 10-K for the year ended December
31, 1998. For the three months ended September 30, 1999 there have been no
material developments in the Seman case, but the Shukla case was dismissed by an
amended order of the court on August 2, 1999. The Shukla case was dismissed
without prejudice and therefore may be refiled under certain circumstances.

ITEM 4.  SECURITY HOLDER ACTIONS
         -----------------------

On July 8, 1999 and without a meeting of the Company's stockholders, the holder
of 95.9% of the Company's common stock (17,300,000 shares) approved by written
consent employment agreements between the Company and certain of its executives,
including certain potential severance payments and benefits to such executives
that would otherwise be limited by Internal Revenue Code Section 280G. The
executives with whom the Company entered into such agreements are Thomas W.
Rabaut, President and Chief Executive Officer; Francis Raborn, Vice President
and Chief Financial Officer; Peter C. Woglom, Vice President and General
Manager, Ground Systems Division; Frederick M. Strader, Vice President and
General Manager, Armament Systems Division; Dennis A. Wagner, III, Vice
President, Business Development and Marketing; and David V. Kolovat, Vice
President, General Counsel, and Secretary. On August 6, 1999 the Company
provided an information package regarding the foregoing arrangements to its
remaining stockholders, and to date the Company has received written consents
from holders of an additional 2.9% of its common stock (524,012 shares) in favor
of such action, and none opposed.

On March 19, 1999 the Company held its annual stockholders' meeting. At such
meeting, two matters were approved, in each case by vote of all holders present,
representing 95.9% (17,300,000 shares) of the outstanding common stock of the
Company, with no shares abstaining or voted opposed. The Company did not solicit
proxies in connection with such meeting. The
<PAGE>

first matter consisted of the re-election of the board of directors, membership
as previously reported to the Commission and consisting of Messrs. Frank C.
Carlucci, Peter J. Clare, William E. Conway, Jr., Allan M. Holt, Robert M.
Kimmitt, Gen. J.H. Binford Peay, III (USA Ret.), Thomas W. Rabaut, Francis
Raborn, and Gen. John M. Shalikashvili (USA Ret.). The second matter consisted
of the approval of the United Defense Stock Option Plan, including options
granted thereunder and the possible acceleration of vesting and payments
thereunder which would otherwise be limited by Internal Revenue Code Section
280G.

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K
              --------------------------------

(a)           Exhibits

              Exhibit 2.1 - Purchase Agreement dated as of August 25, 1997 among
              FMC Corporation, Harsco Corporation, Harsco UDLP Corporation and
              Iron Horse Acquisition Corp. (a copy of the schedules to this
              agreement will be furnished supplementary upon the request of the
              Commission).*

              Exhibit 2.2 - Supplemental Agreement No. 1 to Purchase Agreement
              dated as of August 25, 1997 among FMC Corporation, Harsco
              Corporation, Harsco UDLP Corporation and Iron Horse Acquisition
              Corp.**

              Exhibit 3.1a - Certificate of Incorporation of Iron Horse
              Acquisition Corp. (n/k/a United Defense Industries, Inc.)*

              Exhibit 3.1b - Certificate of Amendment of Certificate of
              Incorporation Before Payment as Any Part of the Capital of Iron
              horse Acquisition Corp. (n/k/a United Defense Industries, Inc.)*

              Exhibit 3.1c - Certificate of Amendment of the Certificate of
              Incorporation of United Defense Industries, Inc.*

              Exhibit 3.1d - Certificate of Amendment of the Certificate of
              Incorporation of United Defense Industries, Inc.***

              Exhibit 3.2 - By-laws of United Defense Industries, Inc.*

              Exhibit 3.3 - Certificate of Incorporation of UDLP Holdings Corp*

              Exhibit 3.4 - By-laws of UDLP Holdings Corp.*

              Exhibit 3.5 - Amended and Restated Agreement of Limited
              Partnership of United Defense, L.P.*

              Exhibit 3.6 - Certificate of Amendment to Certificate of Limited
              Partnership of United Defense, L.P.*
<PAGE>

              Exhibit 3.7 - Certificate of Formation of Iron Horse Investors,
              L.L.C.*

              Exhibit 3.8 - Limited Liability Company Agreement of Iron Horse
              Investors, L.L.C.*

              * Incorporated by reference to the exhibits in the Company's
              Registration Statement of Form S-4 (333-43619) filed with the
              Securities and Exchange Commission on December 31, 1997.

              ** Incorporated by reference to the exhibits in the Company's
              Amendment No. 1 to Form S-4 (333-43619) filed with the Securities
              and Exchange Commission on February 6, 1998.

              *** Incorporated by reference to the exhibits in the Company's
              Registration Statement on Form S-8 (333-60207) filed with the
              Securities and Exchange Commission on July 30, 1998.

              Financial Data Schedule.

(b)           Reports on form 8-K

              None.


<PAGE>


SIGNATURE
---------


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




                                         By:      /s/ Francis Raborn
                                                  __________________
                                                  Francis Raborn
                                                  Principal Financial and
                                                  Accounting Officer
                                                  and Authorized Signatory


Date:      11/12/99
      __________________