Aug. 7--EL PASO -- Western Refining is taking another hit from its 2007 acquisition of Giant Industries and its three oil refineries.

The El Paso company Thursday announced that it made an accounting adjustment to write off almost $300 million in goodwill tied to the Giant assets, which resulted in the company reporting a $307.3 million loss for the second quarter, or $4.20 a share.

The non-cash impairment charge does not affect Western's financial covenants or cash flow, the company reported.

The Giant acquisition also saddled the company with a billion-dollar-plus debt, which prompted it to issue bonds and more stock this year to reduce that debt.

Without the impairment charge, Western posted a second-quarter loss of $7.8 million, or 11 cents a share. Last year, it had a profit of $8.2 million, or 12 cents a share, in the April through June quarter.

The company's second-quarter sales declined by more than 52 percent compared with a year ago, to $1.6 billion.

The economic downturn has hurt the oil refining industry, and "like others, we have experienced a decline in our stock price," Chief Financial Officer Gary Dalke told analysts during a conference call Thursday. "As a result, our equity market capitalization fell below the net book value of our assets, including goodwill. When we performed our annual goodwill impairment test as dictated by current accounting rules, our tests indicated that all of our goodwill was impaired," and had to be taken off Western's books,

Dalke said. The write-off was all tied to the Giant acquisition, he said.

Goodwill represents a company's intangible assets, such as its customer base, reputation and potential future earnings.

The bottom line is that in the current economic conditions, the value of the Giant assets were overvalued on Western's books, and had to be reduced.

Many analysts didn't pay much attention to the impairment charge, and the company's stock increased 12 cents a share Thursday to $6.85 a share on the New York Stock Exchange. But Ann Kohler, an analyst for Caris & Co., a New York investment bank, said the impairment charge is a "big deal."

"It's significant because it impacts the (company) balance sheet and it takes a hit on stockholders' equity," Kohler said.

Western isn't the only oil refiner that's had to write off goodwill in recent months. Valero Energy Corp. and ConocoPhillips are two large refining companies that took big goodwill impairment losses last year, Kohler noted.