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Pennzoil-Quaker State Company Announces Change in Inventory Accounting Method

16 January 2001

Pennzoil-Quaker State Company Announces Change in Inventory Accounting Method

    HOUSTON, Jan. 16 Pennzoil-Quaker State Company
announced today that it has changed its inventory costing method from last-in-
first-out (LIFO) to moving average cost for all products previously on the
LIFO method, including motor oils.  The new method is expected to provide a
better matching of raw material costs to product selling prices, producing a
more accurate measure of operating results for the Company's businesses.  The
change will require the Company to restate its historical reported earnings.
Recurring earnings per share are expected to be reduced in pro forma 1998 to
24 cents from 48 cents, increased in 1999 to 61 cents from 49 cents, and
increased in the first nine months of 2000 by a total 17 cents.
    The Company expects to report recurring net income for the full-year 2000
in the range of 60 to 62 cents per share.  This estimate reflects the benefits
from the accounting change for the first nine months and a forecasted small
loss in the seasonally weak fourth quarter.  The consensus estimate for full-
year 2000, as of last Friday, was 66 cents per share.  Pennzoil-Quaker State
Company anticipates releasing fourth quarter and full year earnings on
February 15, 2001, and plans to host a conference call that same day.
    Pennzoil-Quaker State Company is a leading worldwide automotive consumer
products company, marketing over 1,300 products with 20 leading brands in more
than 50 countries.  The Company markets Pennzoil(R) and Quaker State(R) brand
motor oils, the number one and number two selling motor oils in the United
States.  Jiffy Lube, a wholly owned subsidiary of Pennzoil-Quaker State
Company, is the world's largest fast lube operator and franchiser.  For more
information about Pennzoil-Quaker State Company, visit its web site at
http://www.pennzoil-quakerstate.com/.