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UnitedAuto Reports Record Fourth Quarter and Year
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BLOOMFIELD HILLS, Mich., Feb 17, 2004 (BUSINESS WIRE) -- United Auto Group, Inc. (NYSE: UAG):

    --  Q4 Revenues Increase 18.4%

    --  Q4 Income Increases 44.1% to $20.1 Million

    --  Q4 Earnings Per Share Increases 41.2% to $0.48 Per Share

    --  Q4 Same-Store Retail Revenues Increase 7.1%

    --  Full Year Earnings Per Share Increases 16.3% to $2.07

    --  Company to Raise $119.4 Million by Issuing 4,050,000 New
        Shares In Private Placement

United Auto Group, Inc. (NYSE: UAG), a FORTUNE 500 automotive specialty retailer, today announced record results for the fourth quarter and full year 2003, including double digit growth in revenues, income and earnings per share.

Revenues for the fourth quarter increased 18.4% to a record $2.2 billion, driven by a 7.1% increase in same-store retail revenues. Importantly, the Company announced that same-store growth increased in each of its product lines, with new retail vehicle sales, used retail vehicle sales, service and parts sales, and finance and insurance revenues up 7.7%, 5.1%, 8.2% and 3.9%, respectively. Record income from continuing operations was $20.1 million and related earnings per share was $0.48, representing increases of 44.1% and 41.2%, respectively, before the effect of a $22.8 million ($13.6 million after-tax), or $0.33 per share, one-time charge recorded in fourth quarter 2002. Net income for the quarter increased to $20.1 million, or $0.48 per share, from $0.7 million, or $0.02 per share, in the prior year.

For the twelve months ended December 31, 2003, revenues increased 20.3% to a record $8.7 billion, driven by a 6.5% increase in same store retail revenues. Income from continuing operations was $85.7 million, up 16.9%, and related earnings per share grew 16.3% to $2.07. Net income was $82.9 million and earnings per share was $2.00. Net income for the twelve months includes the effect of a $3.1 million, or $0.07 per share, charge as a result of the cumulative effect of a change in accounting principle recorded in the first quarter in connection with the adoption of EITF 02-16, "Accounting by a Customer (including a Reseller) for Certain Consideration Received from a Vendor."

Chairman Roger Penske commented, "United Auto delivered another record setting quarter, our 19th consecutive quarter of reporting record results. During the past five years our industry leading same-store retail revenues have increased by an average of 7.9%, including a 7.2% increase in our high margin service and parts revenues. This sustained record of same-store sales growth, particularly in our parts and service operations, demonstrates the returns we are experiencing as a result of our continued investment in high quality franchises and world class facilities."

The Company also announced a definitive agreement to sell 4,050,000 shares of common stock to Mitsui & Co. Ltd. and Mitsui & Co. (U.S.A) in a private placement for approximately $119.4 million. The selling price of $29.49 per share is based on the average closing price of the Company's common stock over the 20 trading days preceding February 16, 2004. The transaction, which is subject to shareholder approval and other customary conditions, is expected to close by the end of the first quarter.

Commenting on the private placement transaction with Mitsui, Penske added, "The additional capital provided by this transaction strengthens our balance sheet by reducing our leverage, and provides funds for future acquisitions and selected capital investments."

Penske continued, "Today I am pleased to provide guidance relating to our 2004 operations. Prior to the transaction with Mitsui, we estimate earnings per share in the range of $2.28-$2.38 per share, based on an average 42.0 million shares outstanding. Adjusted to reflect the closing of the private placement, earnings per share are estimated to be in the range of $2.17-$2.27 per share, based on an average 45.0 million shares outstanding. For the first quarter of 2004, we expect earnings per share in the range of $0.43-$0.47 per share."

UnitedAuto will host a conference call discussing financial results relating to fourth quarter 2003 on Tuesday, February 17, 2004 at 2 P.M. Eastern time. To listen to the conference call, participants must dial (888) 428-4479 (International, please dial (612) 288-0318). 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 138 franchises in the United States and 83 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, earnings growth potential and issuance of common stock. 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, 2002 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. The securities expected to be sold to Mitsui will not be, and have not been, registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

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

                                                     Fourth Quarter
                                                ----------------------
                                                      2003       2002
                                                ----------------------
New Vehicles                                    $1,265,731 $1,084,676
Used Vehicles                                      441,516    370,747
Finance and Insurance                               47,932     43,141
Service and Parts                                  240,218    202,804
Fleet                                               21,271     17,537
Wholesale                                          145,551    107,533
                                                ----------------------
     Total Revenues                              2,162,219  1,826,438
Cost of Sales                                    1,850,740  1,561,807
                                                ----------------------
     Gross Profit                                  311,479    264,631
SG&A Expenses                                      246,135    236,696
Depreciation and Amortization                        8,620      6,337
                                                ----------------------
     Operating Income                               56,724     21,598
Floor Plan Interest Expense                        (11,916)    (9,424)
Other Interest Expense                             (10,632)   (10,618)
                                                ----------------------
     Income from Continuing Operations Before
      Minority
       Interests and Income Tax Provision           34,176      1,556
Minority Interests                                    (599)      (580)
Income Tax Provision                               (13,500)      (635)
                                                ----------------------
     Income from Continuing Operations              20,077        341
Income from Discontinued Operations, Net of Tax         --        311
                                                ----------------------
     Net Income                                    $20,077       $652
                                                ======================
Income from Continuing Operations Per Diluted
 Share                                               $0.48      $0.01
                                                ======================
Diluted EPS                                          $0.48      $0.02
                                                ======================
Diluted Weighted Average Shares Outstanding         42,059     41,037
                                                ======================

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


                                                    Twelve Months
                                                ----------------------
                                                      2003       2002
                                                ----------------------
New Vehicles                                    $5,052,529 $4,292,108
Used Vehicles                                    1,847,061  1,432,789
Finance and Insurance                              206,903    171,016
Service and Parts                                  920,454    754,330
Fleet                                              114,490    108,241
Wholesale                                          530,048    451,314
                                                ----------------------
     Total Revenues                              8,671,485  7,209,798
Cost of Sales                                    7,428,065  6,181,580
                                                ----------------------
     Gross Profit                                1,243,420  1,028,218
SG&A Expenses                                      980,011    830,231
Depreciation and Amortization                       31,583     21,547
                                                ----------------------
     Operating Income                              231,826    176,440
Floor Plan Interest Expense                        (43,527)   (34,875)
Other Interest Expense                             (42,847)   (38,300)
                                                ----------------------
     Income from Continuing Operations Before
      Minority
       Interests and Income Tax Provision          145,452    103,265
Minority Interests                                  (2,305)    (1,963)
Income Tax Provision                               (57,456)   (41,598)
                                                ----------------------
     Income from Continuing Operations              85,691     59,704
Income from Discontinued Operations, Net of Tax        296      2,537
                                                ----------------------
      Income Before Cumulative Effect of
       Accounting Change                            85,987     62,241
Cumulative Effect of Accounting Change (a)          (3,058)        --
                                                ----------------------
     Net Income                                    $82,929    $62,241
                                                ======================
Income from Continuing Operations Per Diluted
 Share                                               $2.07      $1.45
                                                ======================
Diluted EPS before Cumulative Effect of
 Accounting Change                                   $2.08      $1.51
                                                ======================
Cumulative Effect of Accounting Change on
 Diluted EPS                                        ($0.07)       $--
                                                ======================
Diluted EPS                                          $2.00      $1.51
                                                ======================
Diluted Weighted Average Shares Outstanding         41,434     41,161
                                                ======================

(a) Represents a cumulative accounting change resulting from the
    adoption of EITF 02-16, "Accounting by a Customer (including a
    Reseller) for Certain Consideration Received from a Vendor."

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

                                                  12/31/03   12/31/02
                                                ----------------------
Assets                                                     (unaudited)
Cash and Cash Equivalents                          $13,845    $10,641
Accounts Receivable, Net                           347,802    310,378
Inventories                                      1,183,868    942,732
Other Current Assets                                43,150     27,230
                                                ----------------------
     Total Current Assets                        1,588,665  1,290,981
Property and Equipment, Net                        371,326    306,234
Intangibles                                      1,087,052    973,342
Assets of Discontinued Operations                       --     53,085
Other Assets                                        90,138     66,672
                                                ----------------------
     Total Assets                               $3,137,181 $2,690,314
                                                ======================

Liabilities and Stockholders' Equity
Floor Plan Notes Payable                        $1,138,476   $882,100
Accounts Payable and Accrued Expenses              350,254    271,036
Current Portion Long-Term Debt                       8,574     14,979
                                                ----------------------
     Total Current Liabilities                   1,497,304  1,168,115
Long-Term Debt (a)                                 643,343    651,176
Other Long-Term Liabilities                        168,122    135,036
Liabilities of Discontinued Operations                  --     31,545
                                                ----------------------
     Total Liabilities                           2,308,769  1,985,872
Stockholders' Equity                               828,412    704,442
                                                ----------------------
     Total Liabilities and Stockholders' Equity $3,137,181 $2,690,314
                                                ======================

(a) Undrawn capacity under the Company's credit facilities amounted to
    approximately $423 million as of December 31, 2003.

                        UNITED AUTO GROUP, INC.
                             Selected Data

                                    Fourth                 Twelve
                                    Quarter                Months
                          --------------------------------------------
                                2003       2002       2003       2002
                          --------------------------------------------
Units
     New Retail Units         40,336     37,698    170,664    153,730
     Used Retail Units        20,422     18,638     88,316     73,944
                          --------------------------------------------
          Total Retail
           Units              60,758     56,336    258,980    227,674
                          ============================================

Same-Store Retail Revenue
     New Vehicles         $1,137,947 $1,056,132 $3,906,526 $3,687,920
     Used Vehicles           375,438    357,130  1,119,519  1,043,480
     Finance and Insurance    38,243     36,793    147,774    132,802
     Service and Parts       212,735    196,629    664,729    619,375
                          --------------------------------------------
       Total Same Store
        Retail Revenue    $1,764,366 $1,646,684 $5,838,548 $5,483,577
                          ============================================

Same-Store Retail Revenue
 Growth
     New Vehicles                7.7%     (1.2)%       5.9%       5.0%
     Used Vehicles               5.1%     (4.6)%       7.3%     (0.6)%
     Finance and Insurance       3.9%       9.3%      11.3%      10.4%
     Service and Parts           8.2%       7.5%       7.3%       5.9%

Revenue Mix
     New Vehicles               58.6%      59.4%      58.3%      59.5%
     Used Vehicles              20.4%      20.3%      21.3%      19.9%
     Finance and Insurance       2.2%       2.4%       2.4%       2.4%
     Service and Parts          11.1%      11.1%      10.6%      10.5%
     Fleet                       1.0%       1.0%       1.3%       1.5%
     Wholesale                   6.7%       5.8%       6.1%       6.2%

Retail Gross Margin - by
 Product
     New Vehicles                8.5%       8.6%       8.4%       8.5%
     Used Vehicles               8.5%       9.5%       9.1%       9.9%
     Finance and Insurance     100.0%     100.0%     100.0%     100.0%
     Service and Parts          49.3%      47.7%      48.3%      47.1%

Gross Profit per
 Transaction
     New Vehicles             $2,673     $2,466     $2,474     $2,366
     Used Vehicles             1,829      1,889      1,902      1,913
     Finance and Insurance       789        766        799        751

                        UNITED AUTO GROUP, INC.
                       Selected Data (Continued)

                                       Fourth Quarter   Twelve Months
                                    ----------------------------------
                                       2003    2002     2003     2002
                                    ----------------------------------
Brand Mix:
     Toyota/Lexus                        22%     22%      22%      24%
     BMW                                 14%     12%      13%      11%
     Mercedes                            11%     10%      10%       9%
     Honda/Acura                         10%     12%      11%      12%
     General Motors                      10%     13%      11%      13%
     Ford Premier Group                   8%      6%       8%       6%
     Chrysler                             7%      8%       7%       9%
     Nissan/Infiniti                      4%      4%       4%       5%
     Ford                                 4%      4%       4%       5%
     Other                               10%      9%      10%       6%

Debt to Total Capital Ratio              44%     49%      44%      49%

Adjusted EBITDA (a)                 $53,428 $18,511 $219,882 $163,112
Rent Expense                         22,210  18,622   84,342   63,924

(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
                                     ---------------------------------
                                        2003   2002     2003     2002
                                     ---------------------------------
Income from continuing operations
  before minority interests and
   income  tax
  provision                            $34.2   $1.6   $145.5  $ 103.3
Other interest expense                  10.6   10.6     42.8     38.3
Depreciation and amortization            8.6    6.3     31.6     21.5
                                     ---------------------------------
Adjusted EBITDA                        $53.4  $18.5   $219.9   $163.1
                                     =================================

SOURCE: United Auto Group, Inc.

CONTACT:          United Auto Group, Inc.
                  Roger Penske, 248-648-2400 
                  Jim Davidson, 201-325-3303              
                  jdavidson@unitedauto.com  
                  Investor Relations:        
                  Tony Pordon, 248-648-2540               
                  tpordon@unitedauto.com

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SOURCE: United Auto Group, Inc.