As we recently announced, our Board of Directors approved the Class C stock dividend to be issued on April 2. After issuance, each stockholder will have two shares for every one they held before -- which means a few things. First, and most obviously, we'll have twice as many shares outstanding as before the stock dividend. Second, our Q1 GAAP EPS will be half what we would otherwise report because our net earnings are divided into twice as many shares. (For comparison purposes, we will also report EPS for prior periods as if we had double the number of shares outstanding during those periods.)

Our non-GAAP EPS will be similarly affected by the Class C dividend issuance, but it will also be impacted by the expected sale of Motorola Mobile to Lenovo. This sale triggers "discontinued operations" accounting treatment. As we explained following the sale of Motorola Home last year, results from discontinued operations are required to be presented separately from the results of continuing operations, below net income from continuing operations. In short, our Q1 non-GAAP EPS will be affected by two separate changes: (1) having twice as many Google shares, and (2) moving Motorola Mobile to the "discontinued operations" line in our quarterly earnings release.

Posted by Amie Thuener, Chief Accountant (aka the voice of Opty)