El Paso Books $1.28 Billion Noncash Charge for Accounting Change

El Paso (EPG Quote), along with Coastal, which the company recently acquired, took a $1.28 billion charge in the year 2000 because of an accounting change.

On Monday, the natural gas company said it was clarifying the charges taken as a part of the required Financial Accounting Standard No. 133, a new rule dealing with hedging activities and derivative instruments. The company said it implemented the rule as of Jan. 1.

El Paso said its portion of the charge was $821 million, while Coastal's part totaled $457 million. The charges are noncash items and don't affect reported earnings.

El Paso expects the combined charges to be reduced by between $500 million and $600 million as of March 31, with further reductions in the following quarters.

Shares of El Paso, which is based in Houston, gained 90 cents, or 1.5%, to $62.90 in recent New York Stock Exchange trading.