Information on Our New Class of Shares
On January 29, 2014, our Board of Directors approved the issuance of the Class C dividend and has set a March 27 record date. The Class C dividend will have an April 2 issuance date, and we expect the shares to begin trading on April 3. We are excited to announce that the new Class C shares will trade under our historic stock ticker GOOG, while the Class A shares will trade under the new stock ticker GOOGL.
- March 27, 2014 – Record Date (to determine which stockholders are entitled to receive the Class C dividend)
- April 2, 2014 – Dividend Payment Date (one Class C share dividend issued for each share of existing Class A/Class B stock)
- April 3, 2014 – Anticipated First Date of Trading
Mechanics of Issuance
What ticker symbols will the stock classes have?
When the dividend is issued:
- the new Class C capital stock will trade on the NASDAQ Global Select Market under the original symbol GOOG
- Class A common stock will trade on the NASDAQ Global Select Market under the NEW symbol GOOGL
- Class B common stock will remain unlisted and will not be publicly traded.
How will these new shares be allocated to existing stockholders?
Each holder of Class A and Class B shares on the record date (March 27, 2014) will be entitled to receive shares of the new Class C capital stock on a one-for-one basis. For example, if an investor had 100 shares of Class A (GOOG) stock prior to the dividend issuance, he/she will have 100 shares of Class A (GOOGL) stock plus 100 shares of Class C (GOOG) stock after the dividend issuance.
If I am a retail investor, will I get any information on this split? What do I need to do?
On April 2nd, each holder of Class A and Class B shares will receive shares of the new Class C capital stock on a one-for-one basis. No action is necessary.
Impact to Google’s Financial Statements
Do you expect to take any accounting charge as a result of this dividend?
We are still finalizing our accounting treatment of the dividend but we do not expect there to be a material accounting charge, if any. Any updates will be posted to this website.
How and when will this start to impact the presentation of your financials? Will your EPS presentation change?
You can read more on the EPS presentation here.
Index Investor FAQs
What are the major indices that include Google stock?
S&P500, Nasdaq 100, Russell 1000 and MSCI Standard indices.
What class of shares will be included in S&P 500, the Nasdaq 100 and other indices?
How will the rebalancing of the S&P 500, the Nasdaq 100, etc. work?
FOR FRENCH SHAREHOLDERS:
Why was French tax withheld when the Class C shares were issued on April 2, 2014 to French individual taxpayers?
Some (but not all) French banks -- which held Google shares for French individual taxpayers -- withheld tax when the Class C shares were issued because the banks misinterpreted the transaction as a taxable dividend paid in shares. Google’s tax advisors believe that the Class C issuance is non-taxable in France.
Will French shareholders be entitled to a refund of the tax that was withheld?
Google shareholders who had French tax withheld on the issuance of Class C shares may seek a refund from the French bank that withheld tax. Alternatively, shareholders may seek a refund from the French tax authorities. Each shareholder should review the process and timing for such a refund with their advisor or tax office.
If shareholders in France wish to seek a refund from their bank or the French tax authorities, what legal grounds should they provide to support their refund claim?
Shareholders seeking a refund for tax withheld on the Class C distribution may reference the following French tax code sections to help clarify that the issuance of the Class C shares was not taxable income but rather an issuance of shares by reduction of retained earnings (an extract of the French tax code sections are provided below in English and original French version; the entire code sections are available on www.legifrance.gouv.fr):
- Section 112 - 7° of the French tax code, which provides that the following “is not taxable income: grant of shares as a result of incorporation of retained earnings into share capital.” “Ne sont pas considérés comme revenus distribués: l'attribution d'actions ou de parts sociales opérée en conséquence de l'incorporation de réserves au capital.”
- Section 121 – 1 of the French tax code, which provides that “for the application of section 120 [which considers as taxable income a list of payments made by foreign companies to their shareholders]…, the incorporation of retained earnings into the share capital does not constitute a taxable event.” “Pour l'application de l'article 120, l'incorporation de réserves par une société étrangère à son capital social ne constitue pas un fait générateur de l'impôt sur le revenu.”
Each shareholder should consult with their tax advisor regarding obtaining a refund.
FOR GERMAN SHAREHOLDERS:
Why was German tax withheld when the Class C shares were issued on April 2, 2014?
Most German banks withheld tax of 26.375% (without church tax) when the Class C shares were issued because they didn’t have sufficient information to determine that the Class C dividend was not a taxable transaction in Germany.
Will German shareholders be entitled to a refund of the tax that was withheld?
Google has approached the relevant parties in Germany to provide them with information in support of Class C being non-taxable. If the parties agree, we expect that the tax withheld will be refunded to German shareholders. We will update this site when we have further information.
Any tax commentary included in this communication was not intended or written to be used, and cannot be used, for the purpose of avoiding tax liabilities and/or penalties. You should consult your own tax advisor regarding tax consequences of the issuance of Class C shares that apply to your particular jurisdiction and circumstances.
What is the accounting impact of the issuance of the Class C shares?
The issuance of Class C shares resulted in a reduction of retained earnings and an increase in common stock. Thus, there was no change to the net equity of Google as a result of the Class C issuance.
Where can I find information related to cost basis allocation between Class C and Class A?
Please see Form 8937 that we filed with the IRS.
Where can I find more information about the terms of the settlement related to the Class C shareholder litigation?
Please see the final stipulation of the settlement that we filed with the SEC here.