United Defense to Be Prime Contractor for U.S. BONUS Munitions Programs; Technology Offers New Level of Precision and Lethality for U.S. Cannon Artillery.

MINNEAPOLIS -- United Defense Industries, Inc. (NYSE:UDI) announced today it has teamed with Bofors Defence AB and GIAT Industries to lead the 155-mm BONUS precision munitions program for the U.S. artillery munitions market.

BONUS brings to cannon artillery a precise, cost-effective method for destroying enemy armored and hard targets. It consists of a 155-mm spin-stabilized projectile that enhances cannon artillery precision by dispensing - during flight - two Sensor Fuzed Munition (SFM) submunitions that can attack and destroy tanks and other armored combat vehicles.

Under a teaming agreement signed with Bofors, of Karlskoga Sweden, and GIAT, of Versailles France, United Defense will serve as the prime contractor for the U.S.155-mm BONUS.

The BONUS system was developed by Bofors and GIAT and is now in serial production in both Sweden and France under multi-year production contracts. BONUS is the only cannon-fired precision munition currently in full rate production.

"Cannon artillery plays a critical role in supporting operations where precision is critical," said Keith Howe, vice president and general manager, United Defense Armament Systems Division. "BONUS is a proven system that offers that next level of precision and lethality to significantly improve cost-to-kill ratios on enemy targets, while minimizing collateral damage. BONUS is a proven technology that finally brings a cost effective, precision capability to cannon artillery, and provides 24-hour, all-weather fire support to the soldiers on the ground."

The latest version of BONUS, the BONUS Mark II (MK II), features a dual-mode sensor upgrade that brings significantly enhanced performance to the proven baseline BONUS system. The new BONUS sensor suite incorporates the baseline infrared sensor with a LADAR-based second sub-system. Upgraded dual-mode sensors for the BONUS submunition are entering the production stream now for deliveries in 2005.

"Fielded with the Swedish and French Armies, BONUS with its MK II upgrade's performance in testing has proven to be outstanding," said Howe. "We are pleased to lead this world class team in pursuit of the U.S. market. As a second-generation precision system, the BONUS MK II will provide unmatched cost effectiveness for America's fighting forces."

About United Defense Industries, Inc.

United Defense designs, develops and produces combat vehicles, artillery, naval guns, missile launchers and precision munitions used by the U.S. Department of Defense and allies worldwide, and provides non nuclear ship repair, modernization and conversion to the U.S. Navy and other U.S. Government agencies.

Forward Looking Statements

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