<PAGE>

================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                   FORM 10-Q/A

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For Quarter Ended: September 30, 2001            Commission File No. 333-43619

                         UNITED DEFENSE INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)

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

                 Delaware                             52-2059782
      (State or other jurisdiction of              (I.R.S. Employer
     incorporation or organization)               Identification No.)

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

                        1525 Wilson Boulevard, Suite 700
                         Arlington, Virginia, 22209-2411
                                  (703)312-6100
         (Address and telephone number of principal executive offices of
                       Registrant and each Co-Registrant)


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


         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 the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. Common Stock
outstanding as of October 12, 2001.

<TABLE>
<CAPTION>
                                                                       No. of shares    Par Value
                                                                       -------------    ---------
<S>                                                                    <C>              <C>
        United Defense Industries, Inc. .........................      18,106,467        $0.01
 </TABLE>
================================================================================


<PAGE>

                         UNITED DEFENSE INDUSTRIES, INC.



Amendment
---------

     This amended report on Form 10-Q provides restated financial information
as described in Note 2 to the consolidated financial statements.


                                      INDEX

PART I  - FINANCIAL INFORMATION                                             PAGE
-------------------------------                                             ----

Item 1  - Unaudited Consolidated Financial Statements -
            United Defense Industries, Inc.

          Unaudited Consolidated Balance Sheets as of
            December 31, 2000 and September 30, 2001                         1

          Unaudited Consolidated Statements of Operations for the
            Three Months and Nine Months Ended September 30, 2000
            and 2001                                                         2

          Unaudited Consolidated Statement of Stockholders' Equity
            for the Nine Months Ended September 30, 2001                     3

          Unaudited Consolidated Statements of Cash Flows
            for the  Nine Months Ended September 30, 2000 and 2001           4

          Notes to Unaudited Consolidated Financial Statements              5-6

Item 2  - Management's Discussion and Analysis of the Results
            of Operations and Financial Condition                           7-12

Item 3  - Quantitative and Qualitative Disclosures about
            Market Risk                                                     13


PART II - OTHER INFORMATION
---------------------------

Item 1  - Legal Proceedings                                                 14

Item 6  - Exhibits and Reports on Form 8-K                                  14

SIGNATURE
---------

<PAGE>

                         United Defense Industries, Inc.
                      Unaudited Consolidated Balance Sheets

                                 (In thousands)

<TABLE>
<CAPTION>

Assets                                                              December 31, 2000         September 30, 2001
                                                                    --------------------------------------------
<S>                                                                 <C>                        <C>
Current assets:
     Cash and cash equivalents                                       $        113,357           $        120,240
     Trade receivables                                                        109,705                    119,429
     Inventories                                                              259,238                    348,183
     Other current assets                                                      13,083                     12,686
                                                                    --------------------------------------------
  Total current assets                                                        495,383                    600,538

Property, plant and equipment, net                                             80,775                     76,120

Intangible assets, net                                                        162,340                    147,460
Prepaid pension and postretirement benefit cost                               123,100                    126,684
Restricted cash                                                                23,528                     14,623
Other assets                                                                   10,694                      7,966
                                                                    --------------------------------------------
Total assets                                                         $        895,820           $        973,391
                                                                    ============================================

Liabilities and Stockholders' Equity
Current liabilities:
     Current portion of long-term debt                               $         23,086           $         27,650
     Accounts payable, trade and other                                         86,117                     87,012
     Advanced payments                                                        342,394                    395,969
     Accrued and other liabilities                                            104,168                     94,899
                                                                    --------------------------------------------
     Total current liabilities                                                555,765                    605,530

Long-term liabilities:
    Long-term debt net of current portion                                     246,491                    572,350
    Accrued pension and postretirement benefit cost                            28,515                     21,939
    Other liabilities                                                          23,148                     20,994
                                                                    --------------------------------------------
Total liabilities                                                             853,919                  1,220,813

Commitments and contingencies

Stockholders' Equity (Deficit):
    Common Stock $.01 par value, 20,000,000 shares authorized;
     18,036,667 and 18,106,467 issued and outstanding
     at December 31, 2000 and September 30, 2001, respectively                    180                        181
     Additional paid-in capital                                               180,031                          -
     Stockholders' loans                                                       (1,236)                         -
     Retained deficit                                                        (137,074)                  (243,268)
     Accumulated other comprehensive loss                                           -                     (4,335)
                                                                    --------------------------------------------
     Total stockholders' equity (deficit)                                      41,901                   (247,422)
                                                                    --------------------------------------------

Total liabilities and stockholders' equity (deficit)                 $        895,820           $        973,391
                                                                    ============================================
</TABLE>
See accompanying notes. Amounts are as restated (Note 2).

                                       1

<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, 2000   September 30,2001   September 30, 2000   September 30,2001
                                      -------------------------------------------------------------------------------------------
<S>                                   <C>                   <C>                 <C>                  <C>

Revenue:
     Sales                                 $ 303,283         $ 275,055              $ 867,426            $ 913,863

Costs and expenses:
     Cost of sales                           230,637           215,448                687,801              728,836
     Selling, general and
      administrative expenses                 41,782            52,589                129,681              131,140
     Research and development                  2,873             6,810                 12,287               16,418
                                      -------------------------------------------------------------------------------------------
          Total expenses                     275,292           274,847                829,769              876,394

Income from operations                        27,991               208                 37,657               37,469

Other income (expense):
     Earnings related to investments
        in foreign affiliates                   (557)            9,205                   (460)               9,187
     Interest income                             938             1,874                  2,672                4,621
     Interest expense                         (7,858)           (6,735)               (23,163)             (19,215)
                                      -------------------------------------------------------------------------------------------
Total other expense                           (7,477)            4,344                (20,951)              (5,407)


Income(loss) before income taxes              20,514             4,552                 16,706               32,062

Provision for income taxes                       421                12                  2,224                6,682
                                      -------------------------------------------------------------------------------------------
Income(loss) before extraordinary
  item                                        20,093             4,540                 14,482               25,380

Extraordinary item - net (loss)gain from
  early extinguishment of debt                     -           (22,599)                   680              (22,599)
                                      -------------------------------------------------------------------------------------------
Net income(loss)                           $  20,093         $ (18,059)             $  15,162            $   2,781
                                      ===========================================================================================
</TABLE>

See accompanying notes. Amounts are as restated (Note 2).


                                       2

<PAGE>


                         United Defense Industries, Inc.
                        Unaudited Consolidated Statement
                             of Stockholders' Equity

                                 (In thousands)
<TABLE>
<CAPTION>


                                                                                   Accumulated
                                                     Additional                       Other
                                         Common       Paid-In        Retained      Comprehensive    Stockholders'
                                          Stock       Capital         Deficit          Loss            Loans           Total
                                       --------------------------------------------------------------------------------------
<S>                                   <C>           <C>            <C>             <C>            <C>              <C>
Balance, December 31, 2000             $   180       $ 180,031      $(137,074)      $      -       $    (1,236)     $  41,901


Issuance of common stock                     1             697              -              -                 -            698

Payment of stockholders' loans               -               -              -              -             1,236          1,236

Cash dividends ($16 per share)               -        (180,728)      (108,975)             -                 -       (289,703)

Net foreign currency translation
    adjustment                               -               -              -         (2,108)                -         (2,108)


Cumulative effect of change in
     accounting principle-foreign
     currency hedges                         -               -              -           (951)                -           (951)

Change in fair value of foreign
     currency hedges                         -               -              -         (1,276)                -         (1,276)

Net income for the nine months
     ended September 30, 2001                -               -          2,781              -                 -          2,781
                                                                                                                     --------
Total comprehensive loss                                                                                               (1,554)

                                       --------------------------------------------------------------------------------------
Balance, September 30, 2001            $   181       $       -      $(243,268)      $ (4,335)      $         -      $(247,422)
                                       ======================================================================================
</TABLE>
See accompanying notes. Amounts are as restated (Note 2).

                                       3

<PAGE>

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

                                 (In thousands)

<TABLE>
<CAPTION>
                                                                         Nine months                Nine months
                                                                            ended                      ended
                                                                     September 30, 2000         September 30, 2001
                                                                     ---------------------------------------------

<S>                                                                    <C>                        <C>
Operating activities
Net income(loss)                                                       $     15,162               $      2,781
Adjustments to reconcile net income(loss) to cash
   provided by operating activities:
   Depreciation                                                              18,073                     15,797
   Amortization                                                              52,374                     36,947
   Amortization of financing costs                                            2,394                      3,183
   Net (gain) loss from early extinguishment of debt                           (680)                    22,599
Changes in assets and liabilities:
   Trade receivables                                                        (33,231)                    (9,724)
   Inventories                                                               27,486                    (88,945)
   Other assets                                                               4,892                      3,695
   Prepaid pension and postretirement benefit cost                           (5,299)                    (3,584)
   Accounts payable, trade and other                                        (19,534)                       895
   Advanced payments                                                        (20,525)                    53,575
   Accrued and other liabilities                                              5,655                    (13,981)
   Accrued pension and postretirement benefit cost                             (305)                    (6,576)
                                                                       ----------------------------------------
Cash provided by operating activities                                        46,462                     16,662
                                                                       ----------------------------------------

Investing activities
   Capital spending                                                         (11,717)                   (13,318)
   Disposal of property, plant and equipment                                    385                        289
   Purchase of Barnes & Reinecke, net of $1.2 million
     cash acquired                                                           (1,634)                         -
   Purchase of Bofors Weapon Systems, net of $35.2 million
     cash acquired                                                           14,007                          -
                                                                       ----------------------------------------
Cash provided by (used in) investing activities                               1,041                    (13,029)
                                                                       ----------------------------------------

Financing activities
   Payments on long-term debt                                               (73,299)                  (269,577)
   Proceeds from senior secured facility                                          -                    600,000
   Payment of premium on extinguishment of subordinated debt                      -                    (18,074)
   Payment of stockholders' loans                                                 -                      1,236
   Dividend payments                                                              -                   (289,703)
   Payments for financing cost                                                    -                    (19,222)
   Proceeds from sale of common stock                                            95                        698
   Repurchase of common stock                                                  (205)                         -
                                                                       ----------------------------------------
Cash (used in) provided by financing activities                             (73,409)                     5,358
                                                                       ----------------------------------------
Effect of exchange rate changes on cash                                           -                     (2,108)
                                                                       ----------------------------------------

(Decrease) increase in cash and cash equivalents                            (25,906)                     6,883
Cash and cash equivalents, beginning of period                               94,325                    113,357
                                                                       ----------------------------------------
Cash and cash equivalents, end of period                               $     68,419               $    120,240
                                                                       ========================================

</TABLE>

See accompanying notes. Amounts are as restated (Note 2).

                                       4

<PAGE>

                         United Defense Industries, Inc.

              Notes to Unaudited Consolidated Financial Statements

                               September 30, 2001

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 normal recurring adjustments
necessary to present fairly the Company's financial position as of September 30,
2001, and the results of its operations for the three and nine months ended
September 30, 2000 and 2001. The results of operations are not necessarily
indicative of the results that may be expected for the year ending December 31,
2001. 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/A for the year ended December 31, 2000.

2.   Reclassifications and Restatement

         The Company's previously reported financial statements for 1998 through
2001 have been restated to account for the Company's investment in a Turkish
joint venture under the equity method.

         The impact on operating results was as follows:

<TABLE>
<CAPTION>
                                                                 Three Months Ended       Nine Months Ended
                                                                    September 30,           September 30,
                                                                 -------------------     -------------------
                                                                    2000       2001        2000        2001
                                                                 --------     ------     --------     ------
<S>                                                              <C>          <C>        <C>          <C>
(Decrease) increase
Earnings related to investments in foreign affiliates........    $(1,523)     $9,147     $(3,136)     $2,770
Net (loss) income............................................     (1,015)      9,204     (2,100)      4,446
</TABLE>

         This change also resulted in certain reclassifications on the balance
sheet and income statement. The Company had previously separately reported
intangible assets related to the investment and an accrual related to a
potential offset obligation, which are now included in the investment account
within other assets on the balance sheet. On the income statement, certain
amortization costs included in selling, general and administrative expenses
related to the investment were reclassified to earnings related to investments
in foreign affiliates.



3.   Recapitalization

         In August 2001, the Company completed a recapitalization that included
a refinancing of all of the existing indebtedness. In connection with the
refinancing, the Company entered into a new senior secured credit facility
consisting of $600 million in term loans and a $200 million revolving credit
facility. The Company used a portion of the proceeds from the term loans to pay
a $289.7 million dividend to the holders of its common stock and expects to pay
an additional $100 million dividend to the holders of common stock. In addition,
a portion of the proceeds from the term loans was used to complete a tender
offer for the remaining $182.8 million outstanding principal amount of the 8.75%
senior subordinated notes due 2007. The Company also paid from the debt proceeds
$19.2 million of financing costs which have been deferred and $18.6 million of
performance bonuses, consulting and management fees which are included in costs
and expenses for the three and nine months ended September 30, 2001. The
extinguishment of the existing debt resulted in a net loss of $22.6 million,
reported as an extraordinary item, which consisted of an $18.1 million tender
premium paid to the debt holders and a write-off of $4.5 million in unamortized
financing costs.

         Outstanding borrowings on the new term loan facilities were $600
million at September 30, 2001. The facilities bear interest at variable rates
with a weighted average rate of 6.78% at September 30, 2001. These loans are due
through 2009 and provide for quarterly principal and interest payments.

                                       5


<PAGE>

         The revolving credit facility provides for loans and letters of credit
and matures in 2007. The Company has outstanding letters of credit under the
facility of $118 million at September 30, 2001. There was $82 million available
under the revolving credit facility at September 30, 2001. The Company is
obligated to pay a fee of 0.50% on the unused revolving credit facility.

         Amounts outstanding under the senior secured credit facility are
secured by a lien on all the assets of the Company and its domestic
subsidiaries.

         Mandatory prepayments and reductions of outstanding secured principal
amounts are required upon the occurrence of certain events. The senior credit
facility contains customary covenants restricting the incurrence of debt,
encumbrances on and sales of assets, limitations on mergers and certain
acquisitions, limitations on changes in control, certain restrictions on payment
of dividends, provision for the maintenance of certain financial ratios, and
various other financial covenants and restrictions. Under the terms of the
agreement, subject to certain restrictions, the Company is permitted to pay up
to an additional $100 million in dividends through February 28, 2002.

4.  Changes in Accounting Principle

         Effective January 1, 2001, the Company adopted SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," as amended. The
statement requires that an entity recognize all derivatives as either assets or
liabilities.

         The Company's subsidiary Bofors had forward exchange contracts with a
notional contract value of $14.4 million at December 31, 2000. These contracts
which were designated as cash flow hedges were entered into to hedge firm
commitments related to purchases or sales denominated in foreign currencies. The
fair value of the contracts was a liability of $0.95 million at December 31,
2000. The transition adjustment to implement this new standard on January 1,
2001, which is presented as a cumulative effect of change in accounting
principle, and the subsequent change in market value of $1.3 million for the
nine months ended September 30, 2001 were charged to accumulated other
comprehensive loss within stockholders' equity.

         In June 2001, the Financial Accounting Standards Board issued SFAS No.
141, "Business Combinations", and No. 142, "Goodwill and Other Intangible
Assets", (the "Statements") effective for fiscal years beginning after December
15, 2001. Under the new rules, goodwill will no longer be amortized but will be
subject to annual impairment tests in accordance with the Statements. Other
intangible assets will continue to be amortized over their useful lives.

         The Company will apply the new rules on accounting for goodwill and
other intangible assets beginning in the first quarter of 2002. Application of
the non-amortization provisions of the Statements is expected to result in an
increase in net income of approximately $4 million in 2002. During 2002, the
Company will perform the first of the required impairment tests of goodwill as
of January 1, 2002 and has not yet determined what the effect of these tests
will be on the earnings and financial position of the Company.

5.  Investments in Affiliated Companies

         The Company's investment in 51% owned foreign joint ventures in Turkey
and Saudi Arabia are accounted for by using the equity method because the
Company does not control the joint ventures although it has the ability to
exercise significant influence over their operating and financial policies.
Equity in earnings from these investments was $(0.5) million and $9.2 million
for the nine months ended September 30, 2000 and 2001. The following table
summarizes financial information for these joint ventures (in thousands):

<TABLE>
<CAPTION>
                                       Three months ended      Nine months ended
                                          September 30,          September 30,
                                       ------------------      -----------------
                                         2000      2001          2000     2001
                                       --------  --------      -------- --------
<S>                                    <C>       <C>           <C>      <C>
Sales...............................   $23,762   $ 5,080       $67,263  $54,365
Cost of sales.......................    19,008     3,935        53,037   34,512
Net income..........................    (1,100)   18,052          (902)  18,028
</TABLE>

6.  Turkey Joint Venture Offset Obligation

         The Company's joint venture in Turkey is required by agreement with its
customer to achieve a significant level of export sales by October 2002 (this
commitment is commonly referred to as an "offset" obligation) or pay a penalty
of 9% of the shortfall in required export sales which penalty could be as high
as $40 million. At December 31, 2000, the Company's equity accounting for the
joint venture assumed the joint venture would be obligated for approximately $30
million of the total penalty exposure.

         Export sales by the joint venture from a recently signed contract with
the government of Malaysia are expected to satisfy a significant portion of this
exposure. Consequently, the Company's equity in earnings was increased by
approximately $8.6 million during the three and nine months ended September 30,
2001 as a result of a reduction in the joint venture's expected offset
obligation. The reduction in the estimate of offset obligation resulted from
significant progress during 2001 on execution of the contract with Malaysia and
the receipt in September 2001 of written acknowledgement by the Turkish
government that sales made under that contract will qualify for satisfaction of
the offset obligation. At September 30, 2001, the Company's equity accounting
for the joint venture assumed the joint venture would be obligated for
approximately $3 million of the total penalty exposure of which the Company's
51% share would be approximately $2 million.



                                        6

<PAGE>

                           UNITED DEFENSE INDUSTRIES, INC.

                  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                           ------------------------------------
              OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION
              ----------------------------------------------------
                               September 30, 2001
                               ------------------

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, projections and assumptions. Words such as
"expects," "anticipates," "plans," "believes," "estimates," 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; and the termination of government contracts due to unilateral
government action.

         The following discussion and analysis should be read in conjunction
with the unaudited 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/A for the year ended December 31, 2000.


                                       7

<PAGE>

Introduction

         In October 1997, the Company's direct parent, Iron Horse Investors,
L.L.C. ("Iron Horse"), was funded from several partnerships controlled by The
Carlyle Group. The equity 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").

Overview

         The Company is a supplier of 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 $2.0 billion as of September 30, 2001, a
substantial majority of which is derived from sole-source, prime contracts.
Approximately 77% of the Company's sales for the first nine months of 2001 were
to the U.S. government, primarily to agencies of the DoD (excluding Foreign
Military Sales), or through subcontracts with other government contractors.

         Administration Defense Review. The Company believes that the
Administration may continue to review the Defense Department's principal
missions, priorities, and programs on an ongoing basis, but that any near-term
review was largely conducted with the September 30, 2001 announced completion
of the so-called Quadrennial Defense Review ("QDR"). As understood by the
Company, the QDR does not call for any significant changes in the principal
U.S. programs in which the Company participates. The Administration's FY02
budget also would not result in any significant change to the Company's
principal programs, but such result could be affected by the as-yet unknown
outcome of the FY02 appropriation legislation yet to be considered by Congress.
Finally, the Company is unable to predict whether the events of September 11,
2001 and ensuing military actions might result in some further review(s) of
U.S. defense missions, policies, and programs by the Administration and/or
Congress, nor what impact any such review(s) might have on the Company.

         The only material change to the Company's major programs from those
described in the Company's Form 10-K/A report, other than normal additional
funding as new contracts are negotiated and awarded, was the signing of a
multi-year contract to upgrade Bradley Fighting Vehicles for approximately $700
million over a three-year period.

         For a more detailed description of the Company's business and principal
operating programs, see the Form 10-K/A report for the year ended December 31,
2000.


                                       8

<PAGE>

Results of Operations

Three Months Ended September 30, 2001 Compared with Three Months Ended
September 30, 2000.

         Revenue. Revenue for the three months ended September 30, 2001 was
$275.1 million which was $28.2 million below the comparable period in 2000. The
main driver for the decline was lower sales of Bradley upgrades as customer
acceptance was changed to when the vehicle is fielded versus when production is
complete and there were less requirements for fielding in the third quarter of
2001. Also contributing to the decline was the shipment completion prior to the
three months ended September 30, 2001 of M88 kits to Egypt, MLRS vehicles to
Greece, kits for M113 carriers to the U.S. government, and the upgrade of naval
ordnance for Venezuela. The decline was partially offset by increased billings
for the Crusader and the DD21 destroyer development programs.

         Gross Profit. Gross profit for the three months ended September 30,
2001 was $59.6 million which was $13.0 million less than the same prior period
in 2000. The gross profit rate declined 2.3 points to 21.7% in the three month
period in 2001. The reduction in gross profit was related to the lower volume
discussed above, shipment of lower margin units in 2001 versus the prior year,
and favorable contract adjustments that occurred in 2000.

         Selling, general and administrative expenses. Selling , general and
administrative expenses were $52.6 million for the three months ended September
30, 2001 which was an increase of $10.8 million over the comparable period in
2000. Spending was higher due to having Bofors Defence for the full period, and
due to the payment of performance bonuses, consulting and management fees
totaling $18.6 million related to the recapitalization of the Company in August
2001. The increase was partially offset by reduced amortization of intangible
assets related to acquisitions and lower bid and proposal costs.

         Research and development. Research and development costs were up $3.9
million to $6.8 million for the three months ended September 30, 2001 over the
comparable period in 2000. The reasons for the increase are having Bofors
Defence for the full three month period, higher spending associated with the
new DD21 destroyer program, and the accounting for an "other transaction" type
of contract as research and development cost.


                                       9

<PAGE>

         Earnings from Foreign Affiliates. Earnings from foreign affiliates for
the three months ended September 30, 2001 were $9.2 million, a $9.8 million
increase from the prior year period. This increase was primarily due to
increased earnings from our joint venture in Turkey as a result of a positive
impact of $8.6 million from a reduction in the estimate of our joint venture's
offset reserve.

         Interest expense. Net interest expense was $4.9 million for the three
months ended September 30, 2001 or $2.1 million lower than the comparable
period in the prior year. The lower expense was the result of favorable interest
rates and higher cash balances available to generate income.

         Extraordinary item. During the three months ended September 30, 2001,
the Company had a charge of $22.6 million for the early liquidation of senior
subordinated notes in August 2001. The extraordinary item consisted of an $18.1
million tender premium paid to the debt holders and a write-off of $4.5 million
unamortized financing costs.

         Net income(loss). As a result of the foregoing, we had a net loss of
$18.1 million in the three month period ended September 30, 2001 compared with
net income of $20.1 million in the comparable period of 2000.

Nine Months Ended September 30, 2001 Compared with Nine Months Ended
September 30, 2000.

         Revenue. Our revenue for the nine months ended September 30, 2001 was
$913.9 million, an increase of $46.4 million, or 5.4% from the comparable 2000
period. Revenue for 2001 increased primarily as a result of the inclusion of
$68.7 million from Bofors Defence, which we acquired in September 2000, higher
billings of $38.3 million for the Crusader, increases in revenue for Advanced
Gun System development program and the Hercules tank recovery vehicle upgrade
program and increased shipments of vehicles and kits to foreign customers, such
as assault amphibious vehicles to Korea, self-propelled howitzers to Egypt and
armored personnel carriers to Canada. These increases were partially offset by
decreases in sales of upgrades of the Bradley family of vehicles, principally as
a result of the change in the timing of revenue recognition which relies upon
customer acceptance, and a reduction in shipments of co-production kits to
Egypt, amphibious assault vehicle kits to Spain, multiple launch rocket system
vehicles to Greece and kit sales to the U.S. Government. Under the recent
Bradley contract, customer acceptance is deferred until units are fielded by the
U.S. Army.

         Gross Profit. As a result of our increased sales, gross profit
increased $5.4 million, or 3.0%, to $185.0 million for the nine months ended
September 30, 2001. Our gross profit margin of 20.2% for the nine months ended
September 30, 2001 is slightly less than our 20.7% gross profit margin for the
comparable 2000 period, primarily as a result of the effects of LIFO accounting.

         Selling, General and Administrative Expenses. Our selling, general and
administrative expenses increased $1.5 million, or 1.1% to $131.1 million for
the nine months ended September 30, 2001. The increase is attributable to $11.8
million in expenses related to the inclusion of Bofors Defence for the entire
period, and $18.6 million in expenses incurred in connection with our August
2001 recapitalization, including performance bonuses of $11.1 million paid to
management and outside directors and consulting and management fees of $7.5
million, which includes $2.3 million paid to The Carlyle Group. These increases
were partially offset by reduced amortization of goodwill and other intangibles
of $15.1 million, and bid and proposal costs which were $10.8 million lower in
this period compared to the prior year period when we incurred significant costs
in connection with our unsuccessful bid for the Interim Armored Vehicle program.

         Research and Development. Research and development costs were $16.4
million for the nine months ended September 30, 2001, a $4.1 million, or 33.6%,
increase from the prior year period. This increase resulted from the inclusion
of $1.8 million of expenses for Bofors Defence for the entire 2001 period and
increased spending associated with missile launch systems, the Advanced Gun
System, work for the DD 21 destroyer program and on other technologies that we
believe will enhance our ability to compete for future programs.

         Earnings from Foreign Affiliates. Earnings from foreign affiliates for
the nine months ended September 30, 2001 were $9.2 million, a $9.6 million
increase from the prior year period. This increase was primarily due to $4.0
million of income representing our share of income recognized by our joint
venture in Saudi Arabia due to a change in estimated contract costs and fees
recorded by that joint venture and $5.2 million of increased earnings from our
joint venture in Turkey. This $5.2 million increase was due to a positive impact
of $8.6 million from a reduction in the estimate of our joint venture's offset
reserves, partially reduced by our share of the increase in our joint venture's
operating loss. See further discussion of our Turkish joint venture's offset
obligations in the notes to the consolidated financial statements.

         Net Interest Expense. Net interest expense for the nine months ended
September 30, 2001 was $14.6 million, a $5.9 million decline from the prior year
period. This decrease was the result of lower debt levels during the first seven
months of 2001, declines in interest rates and higher interest income on higher
average cash balances in 2001.

         Provision for Income Taxes. The provision for income taxes for the
nine months ended September 30, 2001 increased $4.5 million over the prior year
period, primarily as a result of increased taxes for the state of Pennsylvania
and to reflect a provision for Bofors Defense, partially offset by the reduction
in foreign sales corporation taxes due to the application of the new "FSC Repeal
and Extraterritorial Income Exclusion Act of 2000" to foreign sales.

         Extraordinary Item. During the nine months ended September 30, 2001, we
incurred a $22.6 million charge for the early retirement of our senior
subordinated notes in August 2001. This charge was taken in conjunction with the
recapitalization and was comprised of an $18.1 million tender premium paid to
the debt holders and a write-off of $4.5 million in unamortized finance charges.
During the same period in 2000, we had a $0.7 million extraordinary gain related
to the purchase of some of these subordinated notes for less than their
principal amount.

         Net Income. As a result of the foregoing, we had net earnings of $2.8
million, after an extraordinary loss of $22.6 million for the early retirement
of debt, for the nine months ended September 30, 2001, a $12.4 million decline
from the prior year period.

                                       10

<PAGE>

Liquidity, Capital Resources and Financial Condition

   Cash provided by operating activities was $16.7 million for the nine months
ended September 30, 2001, a decrease of $29.8 million from the prior year
period. The primary reason for this decrease was a significant build-up of
inventories net of increased advance payments associated with producing units
for several foreign customers, which we will ship in later periods.

   Cash used in investing activities was $13.0 million for the nine months
ended September 30, 2001, compared to $1.0 million of cash provided by
investing activities for the prior year period. Our principal use of cash in
investing activities is for capital equipment and software. Bofors Defence had
a significant cash balance when we acquired it, which resulted in positive cash
flows from investing activities in 2000.

   Cash provided by financing activities was $5.4 million for the nine months
ended September 30, 2001, compared to $73.4 million of cash used during the
2000 period. The net cash provided during 2001 is primarily the result of our
August 2001 refinancing of all of our indebtedness, offset by principal
repayments on that debt of $86.8 million prior to the refinancing. The primary
use of cash in 2000 was for debt repayments.


                                       11

<PAGE>

     In August 2001, we refinanced all of our existing indebtedness. In
connection with the refinancing, we entered into a new senior secured credit
facility, consisting of $600.0 million in term loans and a $200.0 million
revolving credit facility. Our new credit facility agreement requires mandatory
principal repayments of $5.7 million in 2001, $32.6 million in 2002 and $42.6
million per year from 2003 to 2006. These payments will reduce cash available
for other corporate purposes. We expect interest charges under the new financing
to be approximately $15 million in 2001. Interest charges in future years will
depend upon periodic fluctuations in LIBOR and our outstanding debt balances.
Although we cannot predict our future interest expense, we expect those charges
to be substantially in excess of those in 2000 and 2001.

   Our effective tax rate is substantially lower than the statutory tax rate
because of tax net operating losses generated in 1997 and 1998 which are being
utilized in subsequent years. We expect our tax payments will be lower than the
statutory tax rate on any income earned at least through the end of 2002.

   Based on our current level of operations and our anticipated growth, we
believe that our cash from operations, together with other available sources of
liquidity, including borrowings available under our revolving credit facility,
will be sufficient to fund our anticipated capital expenditures and required
payments of principal and interest on our debt for the foreseeable future. Our
growth and acquisition strategy, however, may require substantial additional
capital. We cannot assure you that we will be able to raise any necessary
additional funds through bank financing or the issuance of equity or debt
securities on terms acceptable to us, if at all. Any additional equity or
equity-convertible financing in the future may dilute your investment in the
company.


                                       12

<PAGE>


                         UNITED DEFENSE INDUSTRIES, INC.

             ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                     ----------------------------------------------
                                   MARKET RISK
                                   -----------

                               September 30, 2001

         Forward Currency Exchange Risk.

         We conduct some of our operations outside the U.S. in functional
currencies other than the U.S. dollar. To mitigate the risk associated with
fluctuating currencies on short term foreign currency-denominated transactions,
Bofors Defence (a wholly owned Swedish subsidiary) enters into foreign currency
forward exchange contracts. As of September 30, 2001, the net value of foreign
forward contracts was $6.5 million and the fair value of those contracts was
$4.3 million. We account for these contracts as hedges.

         We plan to enter into interest rate protection agreements to mitigate
risks associated with variable interest rate borrowings under our senior secured
credit facility. The interest rate protection agreements will provide protection
against increases in interest rates on borrowings.

         Borrowings under our senior secured credit facility are sensitive to
changes in interest rates. The weighted average interest rate on our borrowings
outstanding under the senior secured credit facility as of September 30, 2001
was 6.78% per annum.


                                       13

<PAGE>
                                     PART II
                                     -------
                                OTHER INFORMATION
                                -----------------
                               September 30, 2001

ITEM 1.   Legal Proceedings

              The Company is subject to claims and lawsuits arising in the
ordinary course of business. Management believes that the outcome of any such
proceedings to which the Company is a party will not have a material adverse
effect on the Company.

ITEM 6.       Exhibits and Reports on Form 8-K

(a)           Exhibits

              None.

(b)           Reports on Form 8-K

              None.

                                       14


<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


Dated:  December 12, 2001