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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM 10-K
----------------

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999.

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) FOR THE
TRANSITION
PERIOD FROM TO

Commission file number: 1-4252

UNITED INDUSTRIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)

DELAWARE 95-2081809
(State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification No.)
Organization)

570 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
____(212) 752-8787____
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)

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

Name of Each Exchange
Title of Each Class on Which Registered

COMMON STOCK, $1.00 PAR VALUE NEW YORK STOCK EXCHANGE

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

NONE
(Title of Class)

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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /

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

Aggregate market value of the voting stock (which consists solely of shares
of Common Stock) held by non-affiliates of the registrant as of March 6, 2000,
computed by reference to the closing sale price of the registrant's Common Stock
on the New York Stock Exchange on such date: $93,047,518.

On March 6, 2000, the registrant had outstanding 12,373,638 shares of Common
Stock, par value $1.00 per share, which is the registrant's only class of common
stock.

DOCUMENTS INCORPORATED BY REFERENCE:

1. Certain portions of the registrant's Annual Report to Shareholders for the
fiscal year ended December 31, 1999 are incorporated by reference into Parts
I and II of this report.

2. Certain portions of the registrant's definitive Proxy Statement to be filed
pursuant to Regulation 14A of the Securities Exchange Act of 1934, as
amended, in connection with the Annual Meeting of Shareholders of the
registrant to be held on May 9, 2000 are incorporated by reference into Part
III of this report.

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PART I

FORWARD LOOKING INFORMATION

This Annual Report contains "forward looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward looking
statements are based on management's expectations, estimates, projections and
assumptions. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "estimates," and variations of such words and similar expressions
are intended to identify such forward looking statements which include, but are
not limited to, projections of revenues, earnings, segment performance, cash
flows and contract awards. These forward looking statements are subject to risks
and uncertainties which could cause the Company's actual results or performance
to differ materially from those expressed or implied in such statements. These
risks and uncertainties include, but are not limited to, the following: the
Company's successful execution of internal performance plans; performance issues
with key suppliers, subcontractors and business partners; legal proceedings;
product demand and market acceptance risks; the effect of economic conditions;
the impact of competitive products and pricing; product development,
commercialization and technological difficulties; capacity and supply
constraints or difficulties; legislative or regulatory actions impacting the
Company's energy segment and transportation business; changing priorities or
reductions in the U.S. government defense budget; contract continuation and
future contract awards; and U.S. and international military budget constraints
and determinations.

ITEM 1. BUSINESS

At December 31, 1999, the operations of United consist of three principal
business segments: defense, transportation and energy systems, principally
conducted through three wholly-owned subsidiaries.

DEFENSE

AAI CORPORATION

AAI Corporation ("AAI") is engaged in engineering, development and
manufacture in the following major areas: (1) training and simulation systems;
(2) automatic test equipment for electronic systems and components;
(3) unmanned aerial vehicle systems; (4) ordnance systems; and (5) mechanical
support systems for industrial, military, and marine applications. Since its
inception, AAI's business has been primarily in support of the U.S. Department
of Defense ("DOD"). Since 1990, the Company has emphasized diversification into
other markets to reduce its dependence on the DOD. The United States defense
budget has been significantly reduced in recent years and this trend is expected
to continue. In 1999 approximately 79% of the sales volume of AAI consisted of
research, development and production of military items under domestic defense
contracts compared to 70% in 1998. Certain of the contracts currently being
worked on by AAI involve testing systems for U.S. Navy aircraft, training
equipment for the U.S. Air Force and U.S. Navy, and weapons handling systems for
the U.S. Army. International defense contracts accounted for 5.6% of sales in
1999 as compared to 14% in 1998. These contracts generally related to unmanned
aerial vehicle systems and weapon training systems for foreign governments. The
balance of AAI's non-transportation business consists of work performed in the
non-defense markets, principally hydraulic test equipment.

Because of the variety of its activities, it is not possible to state
precisely the competitive position of AAI with respect to each of its product
lines. In the area of training and simulation systems, AAI is one of
approximately ten leading organizations developing equipment for the U.S.
Government. AAI's ability to obtain orders for training and simulation systems
is dependent principally on the ability, expertise and training of its employees
and the level of funding by the DOD and foreign military users. A number of
large and small companies produce automatic test equipment that compete with AAI
for

market share. In the area of weapons and munitions, AAI ranks among
approximately ten leading companies engaged in development work. However, AAI's
production activity in this field is less significant. AAI began development in
the Unmanned Aerial Vehicle ("UAV") business in 1986. The Company produces the
highly successful Pioneer Unmanned Aerial Vehicle employed by the United States
during Operation Desert Storm and in the conflicts in Somalia and Bosnia. In
addition, AAI has other UAV systems and products which it markets
internationally. AAI is one of several large and small competitors in this
field.

AAI's administrative offices and its principal manufacturing and engineering
facilities are located in Hunt Valley, Maryland.

SYMTRON SYSTEMS, INC.

Symtron Systems, Inc. ("Symtron") is a world leader in the development and
sale of advanced, computer controlled, gas-fueled, live-fire firefighter
training systems for public and private industry. Symtron started development of
these systems under an initial contract with the U.S. Army in 1978. Contingent
purchase price amounts were payable if certain pretax profits, as defined in the
purchase agreement, were earned for each of the years in the five year period
ended December 31, 1998. Included in general and administrative expenses in 1998
and 1997 are such contingent payments totaling $265,000 and $723,000,
respectively. The 1999 general and administrative expense includes $107,000 as
an adjustment of 1998 contingent payments. Symtron's 1999 sales consisted of
production for military and commercial customers. The main office and plant of
Symtron are located in Fair Lawn, New Jersey. In the international markets,
Symtron is faced with significant competition from several small firms.

ENERGY SYSTEMS

DETROIT STOKER COMPANY

Detroit Stoker Company ("Detroit Stoker") is a leading supplier of stokers
and related combustion equipment for the production of steam used in heating,
industrial processing and electric power generation around the world. Detroit
Stoker offers a full line of stokers for burning bituminous and lignite coals as
well as biomass, municipal solid waste and industrial by-products. Detroit
Stoker also provides auxiliary equipment and services including fuel feed and
ash removal systems, gas/oil burners and complete aftermarket services for its
products. Principal markets include Pulp and Paper, Public Utilities,
Independent Power Producers, Industrial manufacturing, Institutional and
Cogeneration facilities. The products of Detroit Stoker compete with those of
several other manufacturers. Competition is based on several factors including
price, features and performance.

Detroit Stoker's waste to energy technology is used extensively in both
public and private plants that generate steam and power from municipal waste.
Its solid fuel combustion technologies are particularly well suited for biomass
fuels that generate power from waste products such as bark, sugar cane, sawdust,
sunflower hulls, and poultry litter. The combustion of biomass fuels is gaining
worldwide popularity, as it does not contribute to global warming.

Detroit Stoker exports its products to Europe, Asia, South America and
Australia, and is a market leader in North America. Detroit Stoker's
globalization strategy is to further expand both its customer and supplier base
in each of these regions.

Detroit Stoker's administrative offices and its principal manufacturing
operations are located in Monroe, Michigan. Detroit Stoker also operates a
foundry through a subsidiary (Midwest Metallurgical Laboratory, Inc.) in
Marshall, Michigan. The foundry is engaged in the manufacture of grey and
ductile iron, stainless steel and special alloy iron castings that are
principally used in Detroit Stoker's products.

TRANSPORTATION

AAI Transportation Systems, a division of AAI, is engaged in the
manufacturing and integration of transit systems primarily for municipal
customers within the United States. Its products and services are focused in
overhaul, fabrication, assembly and systems integration.

Electric Transit, Inc. (ETI), a corporation owned 35% by AAI and 65% by
Skoda, a Czech Republic firm, has become one of the domestic market leaders in
manufacturing electric trolley buses. It has won contracts in both Dayton, Ohio
for the Miami Valley Regional Transit Authority and the city and county of San
Francisco, the only such contracts awarded in the United States since 1994. ETI
is an unconsolidated affiliate of AAI and accordingly, AAI records its equity
share of income or loss in ETI. Under these contracts which are valued at
$32 million and $174 million, respectively, AAI has received subcontracts of
$9.4 million and $54.4 million, respectively.

In addition to its electric trolley bus business, AAI performs overhaul and
remanufacturing work for a variety of transit customers and produces an
assortment of transit equipment including fabricated trucks for both heavy and
light railcars.

The products and services of Transportation Systems compete with those of
several other larger as well as smaller manufacturers. The main office and
operating facilities are located in Hunt Valley, Maryland.

For additional information concerning United's subsidiaries reference is
made to information set forth in the Letter to Shareholders contained in
United's 1999 Annual Report to Shareholders (the "Annual Report"), which letter
is incorporated herein by reference. Reference is also made to the information
set forth in the section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Annual Report, which
section is incorporated herein by reference.

GENERAL

EMPLOYEES

As of March 1, 2000 United and its subsidiaries had approximately 1,600
employees. Approximately 113 of these employees are represented by several
unions under contracts expiring between July 2000 and January 2001. United
considers its employee relationships to be satisfactory.

PATENTS

United and its subsidiaries own more than 100 United States patents relating
to various products, including stokers, marine equipment, ordnance and
electronic equipment and firefighter trainers. In addition, United has numerous
pending applications for patents. There is no assurance as to how many patents
will be issued pursuant to these pending applications. The applications relate
to a wide variety of fields, including automation control systems, ordnance
devices, and electronic developments. No patent is considered to be of material
importance to United.

RESEARCH AND DEVELOPMENT

During 1999, 1998 and 1997, the subsidiaries of United (exclusive of AAI)
expended approximately $117,000, $201,000 and $144,000, respectively, on the
development of new products and the improvement of existing products. All of the
programs and the funds to support such programs are sponsored by the subsidiary
involved. In addition to the above amount, AAI is engaged in research and
development primarily for the U.S. Government.

BACKLOG

The backlog of orders by industry segment at December 31, 1999 and 1998 was
as follows:

1999 1998
------------ ------------

Defense.......................................... $153,048,000 $146,634,000
Energy Systems................................... 4,750,000 9,334,000
Transportation................................... 135,018,000 53,860,000

Except for approximately $93,000,000, substantially all of the backlog
orders at December 31, 1999 are expected to be filled in 2000.

GOVERNMENT CONTRACTS

No single customer other than the U.S. Government, principally the
Department of Defense, accounted for 10% or more of net sales during the year.
Sales to the U.S. Government normally carry a lesser margin of profit than
commercial sales and may be subject to price redetermination under certain
circumstances. Contracts for such sales can be terminated for the convenience of
the U.S. Government.

FINANCIAL INFORMATION RELATING TO INDUSTRY SEGMENTS

For financial information with respect to industry segments of United,
reference is made to the information set forth in Note 12 of the Notes to
Financial Statements included in Item 8 of this Report, which Note is
incorporated herein by reference.

FOREIGN OPERATIONS AND EXPORT SALES

United and its subsidiaries have no significant foreign operations. During
1999, 1998 and 1997, export sales by United and its subsidiaries amounted to
approximately $42,120,000, $40,994,000 and $41,832,000, respectively.

ITEM 2. PROPERTIES

United maintains executive and administrative offices at leased premises at
570 Lexington Avenue, New York, N.Y., which lease expires in August 2008. The
following is a tabulation of the principal properties owned or leased by
United's subsidiaries as at March 24, 2000.

APPROXIMATE
AREA OWNED
LOCATION PRINCIPAL USE IN SQUARE FEET OR LEASED
- -------- ------------- -------------- ---------

1510 East First Street Machine shop, steel 194,910 floor Owned in fee
Monroe, MI fabrication, engineering and space on 14.4
sales facilities of Detroit acres of land
Stoker (East
Building)

1426 East First Street Assembly, shipping and 101,000 floor Owned in fee
Monroe, MI administrative facilities of space on 2.2
Detroit Stoker acres of land
(West
Building)

15290 Fifteen Mile Road Foundry, Midwest 59,386 floor Owned in fee
Marshall, MI Metallurgical space on 28.4
acres of land

2735 W Fifth Assembly and Administrative 59,000 Leased to
North Street Facility of AAI November 30, 2002
Summerville, SC

21945 Three Noch Road Office Space of AAI 1,100 Leased to
Lexington Park, MD May 31, 2000

562 A&B North Dixie Blvd. Office Space of AAI 6,000 Leased to
Radcliffe, KY July 31, 2000

Industry Lane Manufacturing, engineering 429,750 floor Owned in fee
Hunt Valley, MD and administrative space on 64
facilities of AAI acres of land

Clubhouse Road Manufacturing, engineering Leased to:
Hunt Valley, MD and administrative 153,727 10/31/2003
facilities of AAI 29,600 4/30/2005
48,090 4/30/2005
55,987 2/29/2005

1701 Pollitt Drive Administrative, engineering 30,000 Leased to
Fair Lawn, NJ and manufacturing facilities June 30, 2001
of Symtron

3200 Enterprise Street Manufacturing, engineering 131,544 Leased to
Brea, CA and administrative April 2009
facilities of ACL
Technologies

1213 Jefferson Davis Highway Office Space 2,200 Leased to
Arlington, VA 22202 February 28, 2001

For information with respect to obligations for lease rentals, see Note 9 to
the Financial Statements in the Annual Report, which Note is incorporated herein
by reference. United considers its properties to be suitable and adequate for
its present needs. The properties are being substantially utilized.

ITEM 3. LEGAL PROCEEDINGS

The Company, along with numerous other parties, has been named in five tort
actions in Maricopa County Superior Court relating to environmental matters
based on allegations partially related to a predecessor's operation of a small
facility at a site in the State of Arizona that manufactured semi-conductors
between 1959 and 1960. All such operations of the Company were sold by 1961.
These tort actions seek recovery for personal injury and property damage among
other damages based on exposure to solvents allegedly released at the site.

These suits allege that the plaintiffs have been exposed to contaminated
groundwater in the Phoenix/Scottsdale, Arizona area and suffer increased risk of
disease and other physical effects. They also assert property damages under
various theories; seek to have certain scientific studies performed concerning
health risks, preventative measures and long-term effects; and seek incidental
and consequential damages, punitive damages, and an injunction against actions
causing further exposures.

The Company reached an agreement to settle all of these matters with the
plaintiffs for, among other items, a cash payment of $4,250,000. The Superior
Court of Maricopa County has scheduled a hearing for final approval of the
settlement for March 14, 2000.

Detroit Stoker was notified in March 1992 by the Michigan Department of
Natural Resources ("MDNR") that it is a potentially responsible party in
connection with the clean-up of a former industrial landfill located in Port of
Monroe, Michigan. MDNR is treating the Port of Monroe landfill site as a
contaminated facility within the meaning of the Michigan Environmental Response
Act ("MERA"). Under MERA, if a release or a potential release of a discarded
hazardous substance is or may be injurious to the environment or to the public
health, safety, or welfare, MDNR is empowered to undertake or compel
investigation and response activities in order to alleviate any contamination
threat. Detroit Stoker intends to aggressively defend these claims. At this
time, no estimate can be made as to the amount or range of potential loss, if
any, to Detroit Stoker with respect to this action.

The Company is involved in various other lawsuits and claims, including
certain other environmental matters, arising out of the normal course of its
business. In the opinion of management, the ultimate amount of liability, if
any, under pending litigation, including claims described above, will not have a
materially adverse effect on the Company.

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

None.

EXECUTIVE OFFICERS OF THE REGISTRANT

Annual elections are held in May to elect officers for the ensuing year.
Interim elections are held as required. Except as otherwise indicated, each
executive officer has held his current position for the past five years.

AGE AT
DECEMBER
NAME POSITION, OFFICE 31, 1999
- ---- --------------------------------------------------------------- --------------

Richard R. Erkeneff* -- President of the Company (since October 1995) and 64
AAI (since November 1993).

Robert Worthing -- Vice President and General Counsel of the Company 54
(since July, 1995); General Counsel of AAI (since
April, 1992).

Susan Fein Zawel* -- Vice President, Corporate Communications and 45
Associate General Counsel (since June 1995),
Secretary (since May 1994) and Counsel (1992 to
1995) of the Company.

James H. Perry -- Vice President (since May 1998), Chief Financial 38
Officer (since October, 1995) and Treasurer (since
December 1994) of the Company.

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

* Member of the Company's Board of Directors

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS

Reference is made to the information set forth in Note 14 to the Financial
Statements included in Item 8 of this Report concerning dividends, stock prices,
stock listing and number of record holders, which information is incorporated
herein by reference.

ITEM 6. SELECTED FINANCIAL DATA

Reference is made to the information set forth in the sections entitled
"Five-Year Financial Data" in the Annual Report, which section is incorporated
herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Reference is made to the information set forth in the section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Annual Report, which section is incorporated herein by
reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Reference is made to the information regarding Quantitative and Qualitative
Disclosures About Market Risk contained in the section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Annual Report, which section is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The report of independent auditors and consolidated financial statements
included in the Annual Report are incorporated herein by reference.

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Reference is made to the information to be set forth in the section entitled
"Election of Directors" in the definitive proxy statement involving the election
of directors in connection with the Annual Meeting of Shareholders of United to
be held on May 9, 2000 (the "Proxy Statement"), which section (other than the
Compensation Committee Report and Performance Graph) is incorporated herein by
reference. The Proxy Statement will be filed with the Securities and Exchange
Commission not later than 120 days after December 31, 1999, pursuant to
Regulation 14A of the Securities Exchange Act of 1934, as amended.

The information required with respect to executive officers is set forth in
Part I of this report under the heading "Executive Officers of the Registrant,"
pursuant to Instruction 3 to paragraph (b) of Item 401 of Regulation S-K.

ITEM 11. EXECUTIVE COMPENSATION

Reference is made to the information to be set forth in the section entitled
"Election of Directors" in the Proxy Statement, which section (other than the
Compensation Committee Report and Performance Graph) is incorporated herein by
reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Reference is made to the information to be set forth in the section entitled
"Voting Rights" and "Security Ownership of Management" in the Proxy Statement,
which sections are incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

PART IV

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

(a) (1) and (2) - The response to this portion of Item 14 is submitted as a
separate section of this report entitled "List of
Financial Statements and Financial Statement Schedules".

(3) Exhibits:

(3)(a)- Restated Certificate of Incorporation of United (1).

(3)(b)- Amended and Restated By-Laws of United (3).

(10)(a)- United Industrial Corporation 1994 Stock Option Plan, as
amended (4).

(10)(b) United Industrial Corporation 1996 Stock Option Plan for
Nonemployee Directors (5).

(10)(c)- Purchase Agreement, dated January 18, 1994, between United
and Symtron Systems, Inc. (2).

(10)(d)- Revolving Line of Credit Loan Agreement, Term Loan Agreement
and Security Agreement dated as of June 11, 1997 (amending
and restating Credit Agreement dated as of October 13, 1994)
by and among First Union Commercial Corporation and the
Company, AAI Corporation, AAI Engineering Support, Inc., AAI
Systems Management, Inc., AAI/ACL Technologies, Inc.,
Detroit Stoker Company, Midwest Metallurgical Laboratory,
Inc., Neo Products Co., Symtron Systems, Inc., UIC-Del.
Corporation and AAI MICROFLITE Simulation International
Corporation (6).

(10)(e)- Pledge and Security Agreement dated as of October 13, 1994
by AAI in favor of the Agent (7).

(10)(f)- Pledge and Security Agreement dated as of October 13, 1994
by the Company in favor of the Agent (7).

(10)(g)- Security Agreement dated as of October 13, 1994 between AAI
and the Agent (7).

(10)(h)- Security Agreement dated as of October 13, 1994 between each
subsidiary of AAI, certain subsidiaries of the Company and
the Agent (7).

(10)(i)- Guaranty dated as of October 13, 1994 by the Company and
certain of its subsidiaries and by each subsidiary of AAI in
favor of the Agent (7).

(10)(j)- Employment Agreement, dated December 8, 1998, between United
and Richard R. Erkeneff (1).

(10)(k)- Employment Agreement, dated March 3, 2000, between United
and Susan Fein Zawel.

(10)(l)- Employment Agreement, dated March 3, 2000, between United
and Robert Worthing.

(10)(m)- Employment Agreement, dated March 3, 2000, between United
and James H. Perry.

(13)- United's 1999 Annual Report to Shareholders.

(21)- Subsidiaries of United.

(23)- Consent of Independent Auditors.

(27)- Financial Data Schedule.

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

(1) Incorporated by reference to United's Annual Report on Form 10-K for the
year ended December 31, 1998.

(2) Incorporated by reference to United's Annual Report on Form 10-K for the
year ended December 31, 1993, filed with the Securities and Exchange
Commission on March 31, 1994, File No. 1-4252.

(3) Incorporated by reference to United's Annual Report on Form 10-K for the
year ended December 31, 1995.

(4) Incorporated by reference to United's Registration Statement on Form S-8,
filed with the Securities and Exchange Commission on January 10, 1997.

(5) Incorporated by reference to United's Registration Statement on Form S-8
filed with the Securities and Exchange Commission on June 26, 1997.

(6) Incorporated by reference to United's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997.

(7) Incorporated by reference to United's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1994.

(b) - Reports on Form 8-K--United did not file any reports on Form 8-K
during the quarter ended December 31, 1999.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

UNITED INDUSTRIAL CORPORATION
(Registrant)

By: /s/ RICHARD R. ERKENEFF
------------------------------------------
Richard R. Erkeneff, President
Date: March 29, 2000

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

NAME
----

/s/ HAROLD S. GELB
------------------------------------------------
Harold S. Gelb March 29, 2000
Chairman of the Board and Director

/s/ JOSEPH S. SCHNEIDER
------------------------------------------------
Joseph S. Schneider March 29, 2000
Director

/s/ RICHARD R. ERKENEFF
------------------------------------------------
Richard R. Erkeneff March 29, 2000
President and
Chief Executive Officer and Director

/s/ EDWARD C. ALDRIDGE, JR.
------------------------------------------------
Edward C. Aldridge, Jr. March 29, 2000
Director

/s/ E. DONALD SHAPIRO
------------------------------------------------
E. Donald Shapiro March 29, 2000
Director

/s/ SUSAN FEIN ZAWEL
------------------------------------------------
Susan Fein Zawel March 29, 2000
Vice President and Director

/s/ JAMES H. PERRY
------------------------------------------------
James H. Perry
Vice President, Treasurer and March 29, 2000
Chief Financial Officer (Principal
Financial and Accounting Officer)

ANNUAL REPORT ON FORM 10-K
ITEM 14(A) (1) AND (2), (C) AND (D)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
CERTAIN EXHIBITS
FINANCIAL STATEMENT SCHEDULES

YEAR ENDED DECEMBER 31, 1999
UNITED INDUSTRIAL CORPORATION
NEW YORK, NEW YORK

Form 10-K--Item 14(a) (1) and (2)

UNITED INDUSTRIAL CORPORATION AND SUBSIDIARIES

List of Financial Statements and Financial Statement Schedules

The following consolidated financial statements of United Industrial
Corporation and subsidiaries, included in the annual report of the registrant to
its shareholders for the year ended December 31, 1999, are incorporated by
reference in Item 8:

Consolidated Balance Sheets--December 31, 1999 and 1998

Consolidated Statements of Operations--Years Ended December 31, 1999, 1998
and 1997

Consolidated Statements of Cash Flows--Years Ended December 31, 1999, 1998
and 1997

Notes to Financial Statements

The following consolidated financial statement schedule of United Industrial
Corporation and subsidiaries is included in Item 14(d):

Schedule II Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, therefore, have been omitted.

F-2

REPORT OF INDEPENDENT AUDITORS

We have audited the consolidated financial statements of United Industrial
Corporation and subsidiaries as of December 31, 1999 and 1998, and for each of
the three years in the period ended December 31, 1999, and have issued our
report thereon dated February 29, 2000. Our audits also included the financial
statement schedule listed in Item 14(d) of this Annual Report (Form 10-K). This
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

ERNST & YOUNG LLP

New York, New York
February 29, 2000

F-3

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

UNITED INDUSTRIAL CORPORATION AND SUBSIDIARIES

DECEMBER 31, 1999

COL. A COL. B COL. C COL. D COL. E
- ------------------------------- ---------- --------------------------- ----------- ----------
(1) (2)
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER ACCOUNTS DEDUCTIONS END OF
DESCRIPTION OF PERIOD EXPENSES (DESCRIBE) (DESCRIBE) PERIOD
- ------------------------------- ---------- ---------- -------------- ----------- ----------

Year ended December 31, 1999:
Deducted from asset accounts:
Allowance for doubtful
accounts..................... $ 235,000 $ 235,000
========== ==========
Product warranty liability..... $ 640,000 $5,000,000 $ 40,000 (A) $5,600,000
========== ========== =========== ==========
Year ended December 31, 1998:
Deducted from asset account:
Allowance for doubtful
accounts..................... $ 240,000 $ 5,000 (A) $ 235,000
========== =========== ==========
Product warranty liability..... $1,072,000 $432,000 (A) $ 640,000
========== =========== ==========
Year ended December 31, 1997:
Deducted from asset account:
Allowance for doubtful
accounts..................... $ 245,000 $ 5,000(A) $ 240,000
========== =========== ==========
Product warranty liability..... $ 579,000 $ 493,000 $1,072,000
========== ========== ==========

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(A) Reduction of valuation account.

EXHIBIT INDEX

EXHIBIT NO. PAGE
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(3)(a) -- Restated Certificate of Incorporation of United (1).

(3)(b) -- Amended and Restated By-Laws of United (3).

(10)(a) -- United Industrial Corporation 1994 Stock Option Plan, as
amended (4).

(10)(b) -- United Industrial Corporation 1996 Stock Option Plan for
Nonemployee
Directors (5).

(10)(c) -- Purchase Agreement, dated January 18, 1994, between United
and Symtron Systems, Inc. (2).

(10)(d) -- Revolving Line of Credit Loan Agreement, Term Loan Agreement
and Security Agreement dated as of June 11, 1997 (amending
and restating Credit Agreement dated as of October 13, 1994)
by and among First Union Commercial Corporation and the
Company, AAI Corporation, AAI Engineering Support, Inc., AAI
Systems Management, Inc., AAI/ACL Technologies, Inc.,
Detroit Stoker Company, Midwest Metallurgical Laboratory,
Inc., Neo Products Co., Symtron Systems, Inc., UIC-Del.
Corporation and AAI MICROFLITE Simulation International
Corporation (6).

(10)(e) -- Pledge and Security Agreement dated as of October 13, 1994
by AAI in favor of the Agent (7).

(10)(f) -- Pledge and Security Agreement dated as of October 13, 1994
by the Company in favor of the Agent (7).

(10)(g) -- Security Agreement dated as of October 13, 1994 between AAI
and the Agent (7).

(10)(h) -- Security Agreement dated as of October 13, 1994 between each
subsidiary of AAI, certain subsidiaries of the Company and
the Agent (7).

(10)(i) -- Guaranty dated as of October 13, 1994 by the Company and
certain of its subsidiaries and by each subsidiary of AAI in
favor of the Agent (7).

(10)(j) -- Employment Agreement dated December 8, 1998, between United
and Richard R. Erkeneff (1).

(10)(k) -- Employment Agreement, dated March 3, 2000, between United
and Susan Fein Zawel.

(10)(l) -- Employment Agreement, dated March 3, 2000, between United
and Robert Worthing.

(10)(m) -- Employment Agreement, dated March 3, 2000, between United
and James H. Perry.

(13) -- United's 1999 Annual Report to Shareholders.

(21) -- Subsidiaries of United.

(23) -- Consent of Independent Auditors.

(27) -- Financial Data Schedule.

EXHIBIT INDEX

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(1) Incorporated by reference to United's Annual Report on Form 10-K for the
year ended December 31, 1998.

(2) Incorporated by reference to United's Annual Report on Form 10-K for the
year ended December 31, 1993, filed with the Securities and Exchange
Commission on March 31, 1994, File No. 1-4252.

(3) Incorporated by reference to United's Annual Report on Form 10-K for the
year ended December 31, 1995.

(4) Incorporated by reference to United's Registration Statement on Form S-8,
filed with the Securities and Exchange Commission on January 10, 1997.

(5) Incorporated by reference to United's Registration Statement on Form S-8
filed with the Securities and Exchange Commission on June 26, 1997.

(6) Incorporated by reference to United's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997.

(7) Incorporated by reference to United's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1994.