AOL TIME WARNER FILES RESTRUCTURING COSTS

AOL Time Warner estimates its post-merger restructuring will cost close to $1 billion, according to a Securities and Exchange Commission filing.

In the filing, AOL said it had a restructuring liability of $965 million in the first quarter, due to the cost of "exiting and consolidating activities" and terminating employees. Most of the liability is included in goodwill and will be—to use sexy accountant talk—amortized over time, rather than being itemized as a separate expense.

AOL said $565 million of the total restructuring costs "related to work-force reductions and represented employee-termination benefits." Another $12.95 went to that hilarious Dilbert page-a-day calendar. Executives said last January that the company would take a charge to reflect the costs of job cuts, as part of accounting adjustments related to the merger.

In addition, the company said the restructuring charge includes about $400 million largely due to "lease and contract-termination costs." Much of this cost is associated with the termination of leases on its chain of Warner Bros. stores, and safely relocating the home of Warner Bros. star Bugs Bunny.

AOL also wrote off $71 million of the merger-related costs in the first quarter, which was treated differently for accounting purposes and therefore doesn’t exist. Really. You never saw it, buddy. Keep walkin’.

The company hinted that total restructuring costs could be even higher in the end. It said the first-quarter estimate of the restructuring costs was based on management's current plans. The plans "may be broadened to include additional restructuring initiatives—and by that, we mean executive outings to Olympic Gardens—as management continues to evaluate the integration of the combined companies."