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

EX-99.1


Contact:	Jim Davidson	Tony Pordon

	Executive VP – Finance 201-325-3303	Senior VP – Investor Relations 248-648-2540

	jdavidson@unitedauto.com	tpordon@unitedauto.com

UNITEDAUTO REPORTS RECORD SECOND QUARTER RESULTS
____________________________________________________________

Total Revenues Increase 12%

Income From Continuing Operations Increases 15% to $36.6 Million
___________________________________________________________

Earnings Per Share From Continuing Operations Rise 15% to $0.39

Service and Parts Revenues Increase 17%
____________________________________________________________

BLOOMFIELD HILLS, MI, July 25, 2006 – United Auto Group, Inc. (NYSE: UAG), an international automotive retailer, today reported second quarter income from continuing operations of $36.6 million and related earnings per share of $0.39, representing increases of 15.2% and 14.7%, respectively, over the comparable period in 2005. Second quarter 2006 net income amounted to $36.8 million and related earnings per share was $0.39.

The Company’s revenue increased 11.8% to a record $2.9 billion during the second quarter. The revenue increase was driven by 2.9% same-store retail revenue growth, including same-store used vehicle revenue growth of 9.3% from the Company’s foreign nameplates. On an aggregate basis, same-store used vehicle revenues increased 8.5%.

UAG Chairman Roger Penske said, “UnitedAuto’s performance during the second quarter continues to highlight the strength of our brand portfolio and the continuing success of our investment strategy. Our overall service and parts revenue increased 17.3%, including 7.6% growth on a same-store basis, which contributed to a 20 basis-point increase in total gross margin to 15.2%.”

The improvement in the Company’s gross margin was due primarily to a 50 basis-point increase in service and parts from 10.4% to 10.9% of total revenues, coupled with a 36 basis-point increase in margin on service and parts revenues.

For the six months ended June 30, 2006, revenues increased 11.7 % to $5.6 billion. Income from continuing operations for the six months increased 12.7% to $62.6 million and related earnings per share increased 11.9% to $0.66 per share. Net income for the six months increased 8.6% to $60.9, or $0.64 per share, from $56.1 million, or $0.60 per share, in the prior year. Second quarter 2005 results include $1.2 million ($0.01 per share) of after tax charges relating to severance costs associated with cost saving initiatives in certain markets.

The Company currently projects earnings from continuing operations in the third quarter in the range of $0.37 to $0.40 per share, and continues to project earnings from continuing operations for the year in the range of $1.35 to $1.40 per share. Earnings per share projections are based on an average of 94.6 million estimated shares outstanding.

UnitedAuto will host a conference call discussing financial results relating to second quarter 2006 on Tuesday, July 25, 2006 at 2:00 p.m. ET. To listen to the conference call, participants must dial (866) 283-8246 [International, please dial (703) 639-1271]. The call will be simultaneously broadcast live over the Internet through the UnitedAuto website at www.unitedauto.com.

About UnitedAuto

United Auto Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 296 retail automotive franchises, representing 40 different brands, and 27 collision repair centers. UnitedAuto, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 173 franchises in 20 states and Puerto Rico and 123 franchises located outside the United States, primarily in the United Kingdom. UnitedAuto is a member of the Fortune 500 and Russell 1000 and has approximately 15,100 employees.

Statements in this press release involve forward-looking statements, including forward-looking statements regarding UnitedAuto’s future sales and earnings potential. Actual results may vary materially because of risks and uncertainties, including external factors such as interest rate fluctuations, changes in consumer spending, energy costs and other factors over which management has no control. These forward-looking statements should be evaluated together with additional information about UnitedAuto’s business, market conditions, and other uncertainties which could affect UnitedAuto’s future performance, which is contained in UnitedAuto’s Form 10-K for the year ended December 31, 2005, and its other filings with the Securities and Exchange Commission, and which is 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)


	Second Quarter
	2006			2005
Revenues:
New Vehicle	$	1,640,472		$	1,528,878
Used Vehicle		657,747			556,134
Finance and Insurance, Net		67,451			58,716
Service and Parts		319,827			272,641
Fleet and Wholesale Vehicle		246,250			205,254

Total Revenues		2,931,747			2,621,623
Cost of Sales:
New Vehicle		1,497,328			1,395,825
Used Vehicle		600,662			505,438
Service and Parts		143,820			123,596
Fleet and Wholesale Vehicle		245,800			204,838

Total Cost of Sales		2,487,610			2,229,697

Gross Profit		444,137			391,926
SG&A Expenses		345,385			305,546
Depreciation and Amortization		11,204			9,685

Operating Income		87,548			76,695
Floor Plan Interest Expense		(17,232	)		(13,142	)
Other Interest Expense		(11,495	)		(12,251	)

Income from Continuing Operations Before Minority Interests and Income Taxes		58,821			51,302
Income Taxes		(21,597	)		(18,925	)
Minority Interests		(636	)		(621	)

Income from Continuing Operations		36,588			31,756
Income from Discontinued Operations, Net of Tax		255			1,440

Net Income	$	36,843		$	33,196

Income from Continuing Operations Per Diluted Share	$	0.39		$	0.34

Diluted EPS	$	0.39		$	0.35

Diluted Weighted Average Shares Outstanding		94,636			94,082

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


	Six Months
	2006			2005
Revenues:
New Vehicle	$	3,126,314		$	2,881,209
Used Vehicle		1,237,747			1,075,082
Finance and Insurance, Net		126,952			112,563
Service and Parts		627,048			536,674
Fleet and Wholesale Vehicle		465,871			394,895

Total Revenues		5,583,932			5,000,423
Cost of Sales:
New Vehicle		2,853,123			2,629,237
Used Vehicle		1,127,973			976,809
Service and Parts		282,226			244,759
Fleet and Wholesale Vehicle		462,951			393,929

Total Cost of Sales		4,726,273			4,244,734

Gross Profit		857,659			755,689
SG&A Expenses		679,895			598,191
Depreciation and Amortization		21,782			19,206

Operating Income		155,982			138,292
Floor Plan Interest Expense		(32,123	)		(25,427	)
Other Interest Expense		(23,521	)		(23,671	)

Income from Continuing Operations Before Minority Interests and Income Taxes		100,338			89,194
Income Taxes		(36,710	)		(32,905	)
Minority Interests		(1,058	)		(764	)

Income from Continuing Operations		62,570			55,525
Income (Loss) from Discontinued Operations, Net of Tax		(1,636	)		563

Net Income	$	60,934		$	56,088

Income from Continuing Operations Per Diluted Share	$	0.66		$	0.59

Diluted EPS	$	0.64		$	0.60

Diluted Weighted Average Shares Outstanding		94,499			94,050

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


	6/30/06		12/31/05
Assets
Cash and Cash Equivalents	$	25,623	$	9,424
Accounts Receivable, Net		405,392		411,970
Inventories, Net		1,418,891		1,213,568
Other Current Assets		76,761		50,868
Assets Held for Sale		170,984		193,937

Total Current Assets		2,097,651		1,879,767
Property and Equipment, Net		505,592		423,224
Intangibles		1,358,641		1,207,554
Other Assets		101,982		83,628

Total Assets	$	4,063,866	$	3,594,173

Liabilities and Stockholders’ Equity
Floor Plan Notes Payable	$	991,692	$	837,045
Floor Plan Notes Payable – Non-Trade		319,189		330,240
Accounts Payable and Accrued Expenses		482,461		381,118
Current Portion Long-Term Debt		3,741		3,551
Liabilities Held for Sale		107,702		112,796

Total Current Liabilities		1,904,785		1,664,750
Long-Term Debt		716,018		576,690
Other Long-Term Liabilities		216,792		207,001

Total Liabilities		2,837,595		2,448,441
Stockholders’ Equity		1,226,271		1,145,732

Total Liabilities and Stockholders’ Equity	$	4,063,866	$	3,594,173

UNITED AUTO GROUP, INC.
Selected Data


	Second Quarter						Six Months
	2006			2005			2006			2005
Units
New Retail Units		49,472			46,589			93,602			87,605
Used Retail Units		23,577			20,872			44,704			40,851

Total Retail Units		73,049			67,461			138,306			128,456

Same-Store Retail Revenue
New Vehicles	$	1,518,823		$	1,520,879		$	2,866,926		$	2,840,158
Used Vehicles		597,032			550,507			1,128,366			1,052,351
Finance and Insurance, Net		62,858			58,161			117,880			110,389
Service and Parts		292,316			271,544			571,539			529,872

Total Same-Store Retail Revenue	$	2,471,029		$	2,401,091			4,684,711		$	4,532,770

Same-Store Retail Revenue Growth
New Vehicles		(0.1	%)		8.8	%		0.9	%		4.7	%
Used Vehicles		8.5	%		5.0	%		7.2	%		2.9	%
Finance and Insurance, Net		8.1	%		16.5	%		6.8	%		11.2	%
Service and Parts		7.6	%		9.0	%		7.9	%		8.0	%
Revenue Mix
New Vehicles		56.0	%		58.3	%		56.0	%		57.6	%
Used Vehicles		22.4	%		21.2	%		22.2	%		21.5	%
Finance and Insurance, Net		2.3	%		2.2	%		2.3	%		2.3	%
Service and Parts		10.9	%		10.4	%		11.2	%		10.7	%
Fleet and Wholesale		8.4	%		7.9	%		8.3	%		7.9	%
Gross Margin		15.2	%		15.0	%		15.4	%		15.1	%
Retail Gross Margin — by Product
New Vehicle		8.7	%		8.7	%		8.7	%		8.7	%
Used Vehicle		8.7	%		9.1	%		8.9	%		9.2	%
Service and Parts		55.0	%		54.7	%		55.0	%		54.4	%
Gross Profit per Transaction
New Vehicles	$	2,893		$	2,856		$	2,919		$	2,876
Used Vehicles		2,421			2,429			2,456			2,406
Finance and Insurance		923			870			918			876

UNITED AUTO GROUP, INC.
Selected Data (Continued)


	Second Quarter						Six Months
	2006			2005			2006			2005

Brand Mix:
Toyota/Lexus		21	%		22	%		21	%		22	%
BMW		16	%		15	%		16	%		15	%
Honda/Acura		16	%		15	%		16	%		15	%
DCX		11	%		12	%		11	%		12	%
Ford		10	%		9	%		11	%		9	%
Audi		7	%		7	%		7	%		7	%
General Motors		5	%		7	%		5	%		6	%
Porsche		4	%		4	%		4	%		4	%
Nissan/Infiniti		3	%		4	%		3	%		4	%
Other		7	%		5	%		6	%		6	%

Total Brand Mix:
Domestic (Detroit 3)		8	%		10	%		8	%		10	%
Foreign (incl. Premium)		92	%		90	%		92	%		90	%
Premium		59	%		58	%		60	%		58	%
Debt to Total Capital Ratio		37	%		34	%		37	%		34	%
Rent Expense	$	34,423		$	28,688		$	67,399		$	55,827


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.

July 25, 2006	By:	Shane M. Spradlin

		Name: Shane M. Spradlin
		Title: Vice President and Secretary


Exhibit No.		Description

99.1		Second Quarter 2006 Earnings Press Release


Date of Report (Date of Earliest Event Reported):		July 25, 2006


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