United Auto Group, Inc. (Form: 8-K)

Roger Penske

Jim Davidson

Tony Pordon

Chairman
248-648-2400

Executive VP – Finance
201-325-3303

Vice President –
Investor Relations
248-648-2540

jdavidson@unitedauto.com

tpordon@unitedauto.com

Earnings Per Share Rises 17% to $0.56 Per Share
____________________________________________________________

BLOOMFIELD HILLS, MI, February 9, 2005 – United Auto Group, Inc. (NYSE: UAG), a FORTUNE 500 automotive specialty retailer, today announced a 30.1% rise in fourth quarter net income and its 23^rd consecutive quarter of record results. Fourth quarter results reflect an overall 19.2% increase in revenue, including continued strong same-store retail revenue growth of 7.6%. The same-store growth was highlighted by an 11.8% increase in service and parts revenue, driven by increases in units in operation and capacity increases at many locations. Same-store new and used vehicle retail revenue increased 5.8% and 7.8%, respectively, due primarily to increases at the Company’s foreign and luxury franchises. Same-store finance and insurance revenue increased 34.1%, including an 11.7% increase in the sale of traditional finance and insurance products complemented by $9.2 million of revenue earned under a multi-year arrangement to promote satellite radios. Total revenue for the quarter increased to $2.5 billion and net income increased to $26.1 million, or $0.56 per share, from $20.1 million, or $0.48 per share, in the prior year. Earnings per share reflect an 11.0% increase in weighted average shares outstanding.

For the year ended December 31, 2004, revenues increased 17.8% to $9.9 billion. Net income for the year increased 34.7% to $111.7 million, or $2.45 per share, from $82.9 million, or $2.00 per share, in the prior year. Full-year 2004 results include the $7.2 million after-tax gain ($0.16 per share) from the sale of an investment recorded in the second and third quarters. Excluding this gain, net income and earnings per share were $104.5 million and $2.29, respectively. Full-year results also include the $5.3 million after-tax gain ($0.11 per share) from a refund of UK consumption taxes and the $4.9 million of offsetting after-tax non-cash charges recorded in the third quarter ($0.11 per share). Prior year results include the effect of $5.0 million of after-tax non-recurring charges ($0.12 per share).

Commenting on the Company’s results, Chairman Roger Penske said, “We are delighted with the performance of our business in 2004. While the overall market remained challenging, our business achieved same-store retail revenue growth of 6.1%, including 7.6% in the fourth quarter. We are pleased that all four lines of our business showed strong same-store growth, including 12.1% growth in our high-margin service and parts operations as our investment in additional capacity continues to reap benefits. I am also particularly pleased with the strong results from our international operations, which generated 26.6% of our 2004 revenues, and enjoyed 22.4% same-store retail revenue growth during the year.”

Commenting further Penske said, “In 2005, we expect the overall retail market to remain competitive. With our strong brand mix and service capacity expansion program, we currently estimate same-store growth to be approximately 3% to 5% in 2005. We also expect to continue our selective acquisition program adding approximately $300 to $500 million in annualized revenues. These increases will be somewhat offset by the effect of rising interest rates on our business.” Based on these estimates, the Company is currently projecting earnings per share in the range of $2.32 to $2.39 for 2005. Earnings per share in the first quarter are expected to be in the range of $0.44 to $0.48. These estimates are based on an estimated average of 47.0 million shares outstanding.

UnitedAuto will host a conference call discussing financial results relating to fourth quarter 2004 on Wednesday, February 9, 2005 at 1:30 p.m. ET. To listen to the conference call, participants must dial (800) 553-5260 [International, please dial (612) 332-0802]. The call will also be simultaneously broadcast live over the Internet through the UnitedAuto website at www.unitedauto.com.

UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships, as well as from strategic acquisitions, operates 152 franchises in the United States and 101 franchises internationally, primarily in the United Kingdom. UnitedAuto dealerships sell new and used vehicles, and market a complete line of aftermarket automotive products and services. Statements in this press release involve forward-looking statements, including forward-looking statements regarding UnitedAuto’s future sales and earnings growth potential. Actual results may vary materially because of risks and uncertainties, including external factors such as interest rate fluctuations, changes in consumer spending and other factors over which management has no control. These forward-looking statements should be evaluated together with additional information about UnitedAuto’s business, markets, conditions and other uncertainties which could affect UnitedAuto’s future performance, which are contained in UnitedAuto’s Form 10-K for the year ended December 31, 2003 and its other filings with the Securities and Exchange Commission, and which are incorporated into this press release by reference. This press release speaks only as of its date and UnitedAuto disclaims any duty to update the information herein.

UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(Unaudited)


	Fourth Quarter
	2004			2003
New Vehicles	$	1,442,993		$	1,239,383
Used Vehicles		515,214			432,751
Finance and Insurance		66,875			46,873
Service and Parts		266,765			216,133
Fleet		26,215			16,364
Wholesale		176,012			141,702

Total Revenues		2,494,074			2,093,206
Cost of Sales		2,112,477			1,787,535

Gross Profit		381,597			305,671
SG&A Expenses		303,811			240,063
Depreciation and Amortization		9,927			8,392

Operating Income		67,859			57,216
Floor Plan Interest Expense		(13,184	)		(11,704	)
Other Interest Expense		(11,686	)		(10,629	)

Income from Continuing Operations Before Minority Interests and Income Tax Provision		42,989			34,883
Minority Interests		(556	)		(589	)
Income Tax Provision		(15,993	)		(13,779	)

Income from Continuing Operations		26,440			20,515
Loss from Discontinued Operations, Net of Tax		(325	)		(438	)

Net Income	$	26,115		$	20,077

Income from Continuing Operations Per Diluted Share	$	0.57		$	0.49

Diluted EPS	$	0.56		$	0.48

Diluted Weighted Average Shares Outstanding		46,689			42,059

UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(Unaudited)


	Twelve Months
	2004			2003
New Vehicles	$	5,683,368		$	4,947,931
Used Vehicles		2,127,497			1,808,507
Finance and Insurance		231,830			202,307
Service and Parts		1,008,519			815,039
Fleet		127,993			99,998
Wholesale		707,004			515,403

Total Revenues		9,886,211			8,389,185
Cost of Sales		8,436,153			7,171,332

Gross Profit		1,450,058			1,217,853
SG&A Expenses		1,144,207			955,021
Depreciation and Amortization		42,146			30,689

Operating Income		263,705			232,143
Floor Plan Interest Expense		(49,723	)		(42,697	)
Other Interest Expense		(42,973	)		(42,835	)
Other Income		11,469			—

Income from Continuing Operations Before Minority Interests and Income Tax Provision		182,478			146,611
Minority Interests		(2,047	)		(2,272	)
Income Tax Provision		(67,880	)		(57,916	)

Income from Continuing Operations		112,551			86,423
Loss from Discontinued Operations, Net of Tax		(864	)		(436	)

Income Before Cumulative Effect of Accounting Change		111,687			85,987
Cumulative Effect of Accounting Change		—			(3,058	)

Net Income	$	111,687		$	82,929

Income from Continuing Operations Per Diluted Share	$	2.47		$	2.09

Diluted EPS before Cumulative Effect of Accounting Change	$	2.45		$	2.08

Cumulative Effect of Accounting Change on Diluted EPS		—			($0.07	)

Diluted EPS	$	2.45		$	2.00

Diluted Weighted Average Shares Outstanding		45,613			41,434

UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts in Thousands)
(Unaudited)


	12/31/04		12/31/03
Assets
Cash and Cash Equivalents	$	11,061	$	13,076
Accounts Receivable, Net		382,098		346,367
Inventories		1,326,553		1,157,878
Other Current Assets		44,424		42,963

Total Current Assets		1,764,136		1,560,284
Property and Equipment, Net		414,718		366,070
Intangibles		1,247,210		1,083,166
Other Assets		87,117		89,007
Assets of Discontinued Operations		19,620		45,671

Total Assets	$	3,532,801	$	3,144,198

Liabilities and Stockholders’ Equity
Floor Plan Notes Payable	$	1,266,656	$	1,114,766
Accounts Payable and Accrued Expenses		413,685		352,480
Current Portion Long-Term Debt		11,367		8,540

Total Current Liabilities		1,691,708		1,475,786
Long-Term Debt		574,970		643,145
Other Long-Term Liabilities		179,116		167,540
Liabilities of Discontinued Operations		11,972		29,315

Total Liabilities		2,457,766		2,315,786
Stockholders’ Equity		1,075,035		828,412

Total Liabilities and Stockholders’ Equity	$	3,532,801	$	3,144,198


	Fourth Quarter						Twelve Months
	2004			2003			2004			2003
Units
New Retail Units		43,612			38,880			178,012			165,023
Used Retail Units		20,901			19,662			88,700			84,910

Total Retail Units		64,513			58,542			266,712			249,933

Same-Store Retail Revenue
New Vehicles	$	1,296,659		$	1,225,376		$	4,975,561		$	4,706,066
Used Vehicles		458,463			425,416			1,747,483			1,679,721
Finance and Insurance		62,397			46,518			209,777			194,409
Service and Parts		237,246			212,263			862,902			769,561

Total Same-Store Retail Revenue	$	2,054,765		$	1,909,573		$	7,795,723		$	7,349,757

Same-Store Retail Revenue Growth
New Vehicles		5.8	%		8.0	%		5.7	%		6.6	%
Used Vehicles		7.8	%		5.4	%		4.0	%		7.8	%
Finance and Insurance		34.1	%		6.6	%		7.9	%		12.7	%
Service and Parts		11.8	%		10.0	%		12.1	%		8.8	%
Revenue Mix
New Vehicles		57.9	%		59.2	%		57.5	%		59.0	%
Used Vehicles		20.7	%		20.7	%		21.5	%		21.6	%
Finance and Insurance		2.7	%		2.2	%		2.3	%		2.4	%
Service and Parts		10.7	%		10.3	%		10.2	%		9.7	%
Fleet		1.0	%		0.8	%		1.3	%		1.2	%
Wholesale		7.0	%		6.8	%		7.2	%		6.1	%
Retail Gross Margin — by Product
New Vehicles		8.8	%		8.6	%		8.6	%		8.4	%
Used Vehicles		8.6	%		8.5	%		8.8	%		9.1	%
Finance and Insurance		100.0	%		100.0	%		100.0	%		100.0	%
Service and Parts		54.4	%		53.7	%		53.9	%		53.4	%

Gross Profit per Transaction
New Vehicles	$	2,897		$	2,732		$	2,734		$	2,517
Used Vehicles		2,109			1,863			2,113			1,932
Finance and Insurance		1,037			801			870			809


	Fourth Quarter						Twelve Months
	2004			2003			2004			2003

Brand Mix:
Toyota/Lexus		21	%		23	%		22	%		22	%
BMW		14	%		15	%		15	%		14	%
Honda/Acura		13	%		10	%		11	%		12	%
Mercedes		10	%		11	%		10	%		10	%
General Motors		8	%		9	%		8	%		10	%
Ford Premier Group		8	%		8	%		8	%		8	%
Audi		6	%		4	%		4	%		3	%
Chrysler		4	%		6	%		5	%		6	%
Nissan/Infiniti		4	%		4	%		4	%		4	%
Ford		3	%		4	%		4	%		4	%
Other		9	%		6	%		9	%		7	%
Debt to Total Capital Ratio		35	%		44	%		35	%		44	%
Adjusted EBITDA (a)	$	64,602		$	53,904		$	267,597		$	220,135
Rent Expense	$	27,083		$	21,501		$	100,697		$	81,747

(a)

Adjusted EBITDA is defined as income from continuing operations before minority interests, income tax provision, other interest expense, depreciation and amortization. While Adjusted EBITDA should not be construed as a substitute for income from continuing operations or as a better measure of liquidity than cash flows from operating activities, each of which is determined in accordance with U.S. GAAP, it is included in this press release to provide additional information regarding the amount of cash our business is generating. This measure may not be comparable to similarly titled measures reported by other companies. Following is a reconciliation of income from continuing operations before minority interests and income tax provision and Adjusted EBITDA:


	Fourth Quarter				Twelve Months
	2004		2003		2004		2003
Income from continuing operations before minority interests and income tax provision	$	43.0	$	34.9	$	182.5	$	146.6
Other interest expense		11.7		10.6		43.0		42.8
Depreciation and amortization		9.9		8.4		42.1		30.7

Adjusted EBITDA	$	64.6	$	53.9	$	267.6	$	220.1


Delaware	1-12297	22-3086739
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)

2555 Telegraph Road, Bloomfield Hills, Michigan		48302
_________________________________ (Address of principal executive offices)		___________ (Zip Code)


	United Auto Group, Inc.

February 9, 2005	By:	Robert H. Kurnick, Jr.

		Name: Robert H. Kurnick, Jr.
		Title: Executive Vice President


Exhibit No.		Description

99.1		Press Release


Date of Report (Date of Earliest Event Reported):		February 9, 2005


Registrant’s telephone number, including area code:		248-648-2500