Yandex N.V. (Form: 6-K, Received: 11/17/2023 10:47:14)

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

November 17, 2023

YANDEX N.V.

Schiphol Boulevard 165

1118 BG, Schiphol, the Netherlands.

Tel: +31 202 066 970

(Address, Including ZIP Code, and Telephone Number,

Including Area Code, of Registrant’s Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ⌧ Form 40-F ◻

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ◻

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ◻

EXPLANATORY NOTE

Filed as Exhibit 99.1 to this Report on Form 6-K is a copy of the unaudited condensed consolidated financial statements of Yandex N.V. as of and for the three and nine months ended September 30, 2023.

INCORPORATION BY REFERENCE

Exhibit 99.1 to this Report on Form 6-K shall be deemed to be incorporated by reference into the registration statements on Form S-8 (Nos. 333-177622 and 333-213317) and Form F-3ASR (No. 333-239391) of Yandex N.V. (including any prospectuses forming a part of such registration statements) and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	YANDEX N.V.


Date: November 17, 2023	By:	/s/ Alexander Balakhnin
		Alexander Balakhnin
		Chief Financial Officer

INDEX TO EXHIBITS

Exhibit No.

Description

99.1

Unaudited Condensed Consolidated Financial Statements of Yandex N.V. as of and for the three and nine months ended September 30, 2023

EXHIBIT 99.1

YANDEX N.V.

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


	Page
Unaudited Condensed Consolidated Balance Sheets as of December 31, 2022 and September 30, 2023	F-2
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2023	F-3
Unaudited Condensed Consolidated Statements of Comprehensive Income/(Loss) for the Three and Nine Months Ended September 30, 2022 and 2023	F-4
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2023	F-5
Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2023	F-7
Notes to the Unaudited Condensed Consolidated Financial Statements	F-9

F-1

YANDEX N.V.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions of Russian rubles (“RUB”) and U.S. dollars (“$”), except share and per share data)


		As of
	Notes	December 31, 2022*	September 30, 2023	September 30, 2023
		RUB	RUB	$
ASSETS
Cash and cash equivalents	4	83,131	85,411	876.8
Accounts receivable, less allowance for doubtful accounts of RUB 4,169 and RUB 6,147, respectively	4	58,014	69,345	711.9
Sales financing receivable		5,738	8,778	90.1
Prepaid expenses		16,968	25,588	262.6
Inventory		28,220	22,745	233.5
Funds receivable		8,290	10,839	111.3
VAT reclaimable		22,602	24,930	255.9
Other current assets	4	16,971	19,070	195.7
Total current assets		239,934	266,706	2,737.8
Property and equipment	6	127,706	164,744	1,691.2
Operating lease right-of-use assets	7	28,646	35,265	362.0
Intangible assets	8	31,766	35,493	364.3
Content assets	10	16,844	21,969	225.5
Goodwill	8	143,778	142,840	1,466.3
Equity method investments		2,118	1,160	11.9
Investments in non-marketable equity securities		6,746	9,033	92.7
Deferred tax assets		3,904	7,470	76.7
Other non-current assets	4	15,277	27,387	281.2
Total non-current assets		376,785	445,361	4,571.8
TOTAL ASSETS		616,719	712,067	7,309.6
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable, accrued and other liabilities	4	122,816	162,573	1,668.8
Debt, current portion	12	21,306	82,654	848.5
Income and non-income taxes payable	4	28,137	33,311	342.0
Deferred revenue		15,585	20,070	206.0
Total current liabilities		187,844	298,608	3,065.3
Debt, non-current portion	12	29,885	26,703	274.1
Deferred tax liabilities		5,473	8,501	87.3
Operating lease liabilities	7	17,609	24,576	252.3
Finance lease liabilities	7	21,185	26,184	268.8
Other accrued liabilities		16,545	25,507	261.8
Total non-current liabilities		90,697	111,471	1,144.3
Total liabilities		278,541	410,079	4,209.6
Commitments and contingencies	10,11
Shareholders’ equity:
Priority share: €1 par value; 1 share authorized, issued and outstanding		—	—	—
Ordinary shares: par value (Class A €0.01, Class B €0.10 and Class C €0.09); shares authorized (Class A: 500,000,000, Class B: 37,138,658 and Class C: 37,748,658); shares issued (Class A: 326,342,270, Class B: 35,698,674 and Class C: 10,000 and nil, respectively); shares outstanding (Class A: 325,783,607, Class B: 35,698,674, and Class C: nil)		282	282	2.9
Treasury shares at cost (Class A: 558,663)		(1,393)	(1,393)	(14.3)
Additional paid-in capital		119,464	84,997	872.5
Accumulated other comprehensive income		24,258	18,199	186.9
Retained earnings		173,697	199,887	2,051.9
Total equity attributable to Yandex N.V.		316,308	301,972	3,099.9
Noncontrolling interests		21,870	16	0.1
Total shareholders’ equity		338,178	301,988	3,100.0
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		616,719	712,067	7,309.6

* Derived from audited consolidated financial statements

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-2

YANDEX N.V.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions of Russian rubles and U.S. dollars, except share and per share data)


		Three months ended September 30,			Nine months ended September 30,
	Notes	2022	2023	2023	2022	2023	2023
		RUB	RUB	$	RUB	RUB	$
Revenues	4	133,163	204,769	2,102.0	356,921	550,539	5,651.5
Operating costs and expenses:
Cost of revenues⁽¹⁾		55,654	88,205	905.5	155,386	244,864	2,513.6
Product development⁽¹⁾		17,058	26,237	269.3	53,045	72,452	743.7
Sales, general and administrative⁽¹⁾		42,186	67,003	687.8	118,733	177,676	1,823.9
Depreciation and amortization		7,468	11,240	115.4	22,648	28,863	296.3
Goodwill impairment	8	—	—	—	—	1,136	11.7
Total operating costs and expenses		122,366	192,685	1,978.0	349,812	524,991	5,389.2
Income from operations		10,797	12,084	124.0	7,109	25,548	262.3
Interest income		1,127	1,289	13.2	3,526	3,612	37.1
Interest expense		(779)	(3,781)	(38.8)	(2,508)	(6,927)	(71.1)
Gain on restructuring of convertible debt		—	—	—	9,305	—	—
Effect of the News and Zen deconsolidation		38,051	—	—	38,051	—	—
Loss from equity method investments		(890)	(1,416)	(14.5)	(1,341)	(1,657)	(17.0)
Other income/(loss), net	4	4,053	7,209	74.0	(514)	22,086	226.6
Net income before income taxes		52,359	15,385	157.9	53,628	42,662	437.9
Income tax expense	9	6,818	7,704	79.1	13,068	14,565	149.5
Net income		45,541	7,681	78.8	40,560	28,097	288.4
Net income attributable to noncontrolling interests		(2,373)	—	—	(6,049)	(1,905)	(19.5)
Net income attributable to Yandex N.V.		43,168	7,681	78.8	34,511	26,192	268.9
Net income per Class A and Class B share:
Basic	2	116.38	20.71	0.21	94.02	70.63	0.73
Diluted	2	116.23	20.63	0.21	69.62	70.40	0.72
Weighted average number of Class A and Class B shares used in per share computation
Basic	2	370,925,704	370,834,420	370,834,420	367,071,728	370,837,699	370,837,699
Diluted	2	371,390,423	372,293,060	372,293,060	375,794,547	372,028,664	372,028,664

(1)	These balances exclude depreciation and amortization expenses, which are presented separately, and include share-based compensation expenses of:


Cost of revenues	169	172	1.8	449	513	5.3
Product development	3,771	3,370	34.6	11,237	9,839	101.0
Sales, general and administrative	2,523	2,350	24.1	7,537	6,839	70.2

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-3

YANDEX N.V.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(In millions of Russian rubles and U.S. dollars)


	Three months ended September 30,			Nine months ended September 30,
	2022	2023	2023	2022	2023	2023
	RUB	RUB	$	RUB	RUB	$
Net income	45,541	7,681	78.8	40,560	28,097	288.4
Foreign currency translation adjustment:
Foreign currency translation, net of tax of nil	(656)	(4,351)	(44.7)	6,197	(7,745)	(79.5)
Total other comprehensive income/(loss)	(656)	(4,351)	(44.7)	6,197	(7,745)	(79.5)
Total comprehensive income	44,885	3,330	34.1	46,757	20,352	208.9
Total comprehensive income attributable to noncontrolling interests	(2,442)	—	—	(5,860)	(1,865)	(19.1)
Total comprehensive income attributable to Yandex N.V.	42,443	3,330	34.1	40,897	18,487	189.8

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-4

YANDEX N.V.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of Russian rubles and U.S. dollars)


		Nine months ended September 30,
	Notes	2022	2023	2023
		RUB	RUB	$
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income		40,560	28,097	288.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment	6	17,279	20,995	215.5
Amortization of intangible assets	8	5,369	7,868	80.8
Amortization of content assets	10	6,677	6,347	65.2
Operating lease right-of-use assets reduction and the lease liability accretion	7	11,087	10,408	106.8
Amortization of debt discount and issuance costs		585	—	—
Share-based compensation expense (excluding cash settled awards of RUB 14,953 and RUB 10,718, respectively)		4,270	6,472	66.4
Deferred income tax expense/(benefit)		1,399	(52)	(0.5)
Foreign exchange gains	4	(11)	(22,378)	(229.7)
Loss from equity method investments		1,341	1,657	17.0
Effect of the News and Zen deconsolidation		(38,051)	—	—
Gain on restructuring of convertible debt		(9,305)	—	—
Impairment of long-lived assets		3,644	1,199	12.3
Provision for expected credit losses		1,769	3,488	35.8
Other		801	3,469	35.6
Changes in operating assets and liabilities excluding the effect of acquisitions:
Accounts receivable		(4,296)	(11,778)	(120.9)
Prepaid expenses		(5,129)	(6,007)	(61.7)
Inventory		(7,526)	2,453	25.2
Accounts payable, accrued and other liabilities and taxes payable	4	22,870	18,287	187.7
Deferred revenue		1,654	3,941	40.5
Other assets		568	1,776	18.2
VAT reclaimable		(1,983)	(1,459)	(15.0)
Funds receivable		1,658	(2,033)	(20.9)
Sales financing receivable		(1,785)	(4,068)	(41.8)
Content assets	10	(8,718)	(11,270)	(115.7)
Content liabilities		(1,440)	1,018	10.5
Net cash provided by operating activities		43,287	58,430	599.7
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of property and equipment and intangible assets		(30,296)	(52,031)	(534.1)
Purchase of assets to be leased		—	(12,806)	(131.5)
Acquisitions of businesses, net of cash acquired		(820)	—	—
Net cash acquired as a result of the News and Zen deconsolidation and the acquisition of Delivery Club		1,795	—	—
Proceeds from sale of marketable equity securities		5,859	—	—
Investments in term deposits		(3,235)	(6)	(0.1)
Maturities of term deposits		25,769	160	1.7
Loans granted		(169)	(3,300)	(33.8)
Proceeds from repayments of loans		—	(1,621)	(16.6)
Bank deposits and loans to customers		480	1,641	16.8
Other investing activities		(371)	874	9.0
Net cash used in investing activities		(988)	(67,089)	(688.6)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-5

YANDEX N.V.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In millions of Russian rubles and U.S. dollars)


		Nine months ended September 30,
	Notes	2022	2023	2023
		RUB	RUB	$
CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES:
Proceeds from issuance of debt	12	50,228	161,468	1,657.5
Repayment of debt	12	(49,364)	(103,581)	(1,063.3)
Repayments of overdraft borrowings		(2,940)	—	—
Purchase of non-redeemable noncontrolling interests	3	—	(57,337)	(588.6)
Payment of contingent consideration and holdback amount		(195)	(77)	(0.8)
Payment for finance leases		(1,154)	(2,327)	(23.9)
Bank deposits and liabilities		—	8,255	84.7
Other financing activities		(1,390)	(5,674)	(58.1)
Net cash provided by/(used in) financing activities		(4,815)	727	7.5
Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents		(15,866)	10,163	104.3
Net change in cash and cash equivalents, and restricted cash and cash equivalents		21,618	2,231	22.9
Cash and cash equivalents, and restricted cash and cash equivalents, beginning of period		79,398	84,440	866.8
Cash and cash equivalents, and restricted cash and cash equivalents, end of period		101,016	86,671	889.7

RECONCILIATION OF CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AND CASH EQUIVALENTS:
Cash and cash equivalents, beginning of period		79,274	83,131	853.4
Restricted cash and cash equivalents, beginning of period		124	1,309	13.4
Cash and cash equivalents, and restricted cash and cash equivalents, beginning of period		79,398	84,440	866.8
Cash and cash equivalents, end of period		99,866	85,411	876.8
Restricted cash and cash equivalents, end of period		1,150	1,260	12.9
Cash and cash equivalents, and restricted cash and cash equivalents, end of period		101,016	86,671	889.7

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes		6,989	12,546	128.8
Cash paid for acquisitions		1,031	—	—
Convertible notes coupon paid		439	—	—
Interest paid for finance leases		936	1,913	19.6
Interest paid on loans		463	4,748	48.7
Operating cash flows from operating leases		9,889	10,764	110.5
Non-cash operating activities:
Increase of right-of-use assets due to new operating lease and lease modification		4,627	16,557	170.0
Non-cash investing activities:
Acquired property and equipment and intangible assets not yet paid for		2,847	9,208	94.5
Non-cash financing activities:
Increase of right-of-use assets due to new finance lease and lease modification		5,199	8,758	89.9

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-6

Table of Contents

YANDEX N.V.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In millions of Russian rubles and U.S. dollars, except share and per share data)


	Three months ended September 30, 2022
	Priority Share		Ordinary Shares				Accumulated				Redeemable
	Issued and		Issued and		Treasury	Additional	Other		Non-		non-
	Outstanding		Outstanding		shares at	Paid-In	Comprehensive	Retained	controlling		controlling
	Shares	Amount	Shares	Amount	cost	Capital	Income	Earnings	interests	Total	interests
		RUB		RUB	RUB	RUB	RUB	RUB	RUB	RUB	RUB
Balance as of June 30, 2022	1	—	358,940,490	281	(1,393)	116,634	23,304	125,293	17,237	281,356	338
Share-based compensation expense	—	—	—	—	—	718	—	—	—	718	—
Restructuring of convertible debt	—	—	—	—	—	(596)	—	—	—	(596)	—
Issue of new shares	—	—	2,216,412	1	—	(1)	—	—	—	—	—
Foreign currency translation adjustment	—	—	—	—	—	—	(725)	—	69	(656)	—
Change in redemption value of redeemable noncontrolling interests	—	—	—	—	—	—	—	297	—	297	(297)
Net income	—	—	—	—	—	—	—	43,168	2,373	45,541	—
Other	—	—	—	—	—	—	—	1	—	1	—
Balance as of September 30, 2022	1	—	361,156,902	282	(1,393)	116,755	22,579	168,759	19,679	326,661	41

Three months ended September 30, 2023

Priority Share

Ordinary Shares

Accumulated

Issued and

Treasury

Additional

Other

Non-

Outstanding

shares at

Paid-In

Comprehensive

Retained

controlling

Shares

Amount

Shares

Amount

cost

Capital

Income

Earnings

interests

Total

RUB

Balance as of June 30, 2023

—

361,482,281

282

(1,393)

81,505

22,550

192,206

295,166

Share-based compensation expense

—

3,492

—

3,492

Foreign currency translation adjustment

—

(4,351)

—

(4,351)

Net income

—

7,681

—

7,681

Balance as of September 30, 2023

—

361,482,281

282

(1,393)

84,997

18,199

199,887

301,988

Balance as of September 30, 2023, $

—

2.9

(14.3)

872.5

186.9

2,051.9

0.1

3,100.0

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

F-7

YANDEX N.V.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In millions of Russian rubles and U.S. dollars, except share and per share data)


	Nine months ended September 30, 2022
	Priority Share		Ordinary Shares				Accumulated				Redeemable
	Issued and		Issued and		Treasury	Additional	Other		Non-		non-
	Outstanding		Outstanding		shares at	Paid-In	Comprehensive	Retained	controlling		controlling
	Shares	Amount	Shares	Amount	cost	Capital	Income	Earnings	interests	Total	interests
		RUB		RUB	RUB	RUB	RUB	RUB	RUB	RUB	RUB
Balance as of December 31, 2021	1	—	358,703,352	281	(2,728)	112,942	16,193	131,488	13,880	272,056	869
Effect of adoption of ASU 2020-06	—	—	—	—	—	(8,573)	—	2,511	—	(6,062)	—
Adjusted balance as of January 1, 2022	1	—	358,703,352	281	(2,728)	104,369	16,193	133,999	13,880	265,994	869
Share-based compensation expense	—	—	—	—	—	4,345	—	—	—	4,345	—
Issue of new shares	—	—	2,216,412	1	—	(1)	—	—	—	—	—
Exercise of share options	—	—	237,138	—	—	—	—	—	—	—	—
Tax withholding related to exercise of share awards	—	—	—	—	—	(25)	—	—	—	(25)	—
Reissue of shares for options exercised	—	—	—	—	1,335	(1,335)	—	—	—	—	—
Restructuring of convertible debt	—	—	—	—	—	9,345	—	—	—	9,345	—
Repurchase of share options	—	—	—	—	—	(5)	—	(105)	—	(110)	(474)
Change in redemption value of redeemable noncontrolling interests	—	—	—	—	—	—	—	354	—	354	(354)
Foreign currency translation adjustment	—	—	—	—	—	—	6,386	—	(189)	6,197	—
Net income	—	—	—	—	—	—	—	34,511	6,049	40,560	—
Other	—	—	—	—	—	62	—	—	(61)	1	—
Balance as of September 30, 2022	1	—	361,156,902	282	(1,393)	116,755	22,579	168,759	19,679	326,661	41


	Nine months ended September 30, 2023
	Priority Share		Ordinary Shares				Accumulated
	Issued and		Issued and		Treasury	Additional	Other		Non-
	Outstanding		Outstanding		shares at	Paid-In	Comprehensive	Retained	controlling
	Shares	Amount	Shares	Amount	cost	Capital	Income	Earnings	interests	Total
		RUB		RUB	RUB	RUB	RUB	RUB	RUB	RUB
Balance as of December 31, 2022	1	—	361,482,281	282	(1,393)	119,464	24,258	173,697	21,870	338,178
Share-based compensation expense	—	—	—	—	—	6,472	—	—	—	6,472
Transaction with Uber	—	—	—	—	—	(35,459)	1,646	—	(23,524)	(57,337)
Foreign currency translation adjustment	—	—	—	—	—	—	(7,705)	—	(40)	(7,745)
Net income	—	—	—	—	—	—	—	26,192	1,905	28,097
Other	—	—	—	—	—	(5,480)	—	(2)	(195)	(5,677)
Balance as of September 30, 2023	1	—	361,482,281	282	(1,393)	84,997	18,199	199,887	16	301,988
Balance as of September 30, 2023, $		—		2.9	(14.3)	872.5	186.9	2,051.9	0.1	3,100.0

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-8

Table of Contents

YANDEX N.V.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions of Russian rubles and U.S. dollars, except share and per share data)

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Yandex N.V., the parent company (the “Company”), together with its consolidated subsidiaries (collectively “Yandex” or the “Group”), is a technology company that builds intelligent products and services powered by machine learning and other technologies. Yandex is one of Europe's largest internet businesses and the leading search and ride-hailing provider in Russia.

Yandex N.V. was incorporated under the laws of the Netherlands in June 2004 and is the holding company of a number of subsidiaries globally.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. As such, the information included in these unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2023 should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report on Form 20-F for the year ended December 31, 2022.

In the opinion of the Company, the accompanying unaudited condensed financial statements contain all adjustments, which are of a normal recurring nature, necessary for a fair statement of its financial position as of
September 30, 2023, and its results of operations, comprehensive income/(loss), cash flows and change in equity for the periods presented. The condensed consolidated balance sheet as of December 31, 2022, was derived from the consolidated financial statements included in the Annual Report on Form 20-F for the year ended December 31, 2022.

The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the operating results expected for the year ending December 31, 2023 or any other future period. The potential risks and uncertainties that could cause actual results to differ from the operating results expected include, among others, geopolitical and macroeconomic developments affecting the Russian economy or the Group’s business, operations or governance; changes in the political, legal and/or regulatory environment; competitive pressures; changes in advertising patterns; changes in user preferences; technological developments; and the Group’s need to expend capital to accommodate the growth of the business in addition to other risks and uncertainties included under “Risk Factors” in the Group’s Annual Report on Form 20-F for the year ended December 31, 2022.

There have been no material changes in the Group’s significant accounting policies and estimates as compared to those described in the Group’s Annual Report on Form 20-F for the year ended December 31, 2022, except for an update of the accounting policy in relation to the net investment in the lease and liabilities under a reverse factoring program, as described below.

Investment in the finance lease consists of sales-type leases of cars and represents net unpaid rentals. The terms of the sales-type leases are from 2 to 5 years, with the possibility of early redemption and secured by the leased assets. The Group recognizes net investment in the lease and derecognizes the assets leased. Net investment in the lease is calculated as the aggregate of minimum lease payments net of reimbursable expenses, representing the amounts guaranteed by the lessee and any unguaranteed residual value (together - gross investment in the lease), discounted at the interest rate implicit in the lease. The interest rate implicit in the lease is the discount rate that, at the inception of the lease, causes the present value of the gross investment in the lease to be equal to the fair value of the leased assets. The difference between the gross investment in the lease and the net investment in the lease represents unearned finance income. Unearned finance income is recognized as finance lease income over the lease term in a manner that produces a constant rate of return on the net investment in the lease based on the implicit interest rate.

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YANDEX N.V.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

The Group established a reverse factoring program with certain banks whereby a bank acts as the Group’s paying agent and pays the Group’s suppliers and marketplace sellers on the date the payables are due. There are no assets pledged or other forms of guarantees provided as a security under the program. Liabilities under the reverse factoring programs are recorded:

in the accounts payable, accrued and other liabilities line in the unaudited condensed consolidated balance sheets (Note 4), if the program does not significantly extend payment terms beyond the normal terms agreed with other of the Group’s marketplace sellers that are not participating. The respective Group payments made under the program are reflected in cash flow from operating activities in the unaudited condensed consolidated statements of cash flows; and

in the debt line in the unaudited condensed consolidated balance sheets (Note 12), if the program significantly extends payment terms beyond the normal terms agreed with other of the Group’s suppliers and marketplace sellers that are not participating. The respective Group payments made under the program are reflected in cash flow from financing activities in the unaudited condensed consolidated statements of cash flows.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and amounts of revenues and expenses for the reporting period. The Group bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Convenience Translation

Translations of amounts from RUB into U.S. dollars for the convenience of the reader have been made at the exchange rate of RUB 97.4147 to $1.00, the exchange rate as of September 30, 2023 (except as otherwise stated). No representation is made that the RUB amounts could have been, or could be, converted into U.S. dollars at such rate. After the balance sheet date, the ruble has continued to experience a period of significant volatility.

Recently Adopted Accounting Pronouncements

In September 2022, the FASB issued ASU No. 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”, which requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose key terms of the programs. The standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The amendments in this ASU are effective for reporting periods beginning after December 15, 2022, except for the amendment on rollforward information, which is effective for periods beginning after December 15, 2023. The Group adopted the standard effective on January 1, 2023, without a significant impact on the unaudited condensed consolidated financial statements.

NET INCOME PER SHARE

Basic net income per Class A and Class B ordinary share for the three and nine months ended September 30, 2022 and 2023 is computed on the basis of the weighted average number of ordinary shares outstanding using the two class method. Basic net income per share is computed using the weighted average number of ordinary shares outstanding during the period and including vested restricted share units and shares that will be delivered as part of the restructuring of the Company’s convertible notes in June 2022. Diluted net income per ordinary share is computed using the dilutive effect of share-based awards calculated using the “treasury stock” method and the dilutive effect of convertible debt restructuring under the if-converted method.

The computation of the diluted net income per Class A share assumes the conversion of Class B shares, while the diluted net income per Class B share does not assume the conversion of those shares. The net income/(loss) per share amounts are the same for Class A and Class B shares because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. The number of share-based awards excluded from the diluted net income per ordinary share computation, because their effect was anti-dilutive for the three months ended September 30, 2022 and 2023, was 10,247,290 and 5,296,002, respectively and for the nine months ended September 30, 2022 and 2023, was 8,025,207 and 5,528,992, respectively.

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YANDEX N.V.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

In June 2022, the Group completed the repurchase of 93.2% in aggregate principal amount of the Group’s 0.75% convertible notes due to March 3, 2025 (the “Notes”) and accounted for the modification of all the Notes. The Group has to date repurchased more than 99% in aggregate principal amount of the Notes originally issued. Prior to the modification, the convertible debt is included in the calculation of diluted net income per share under the if-converted method.

The components of basic and diluted net income per share were as follows:


	Three Months ended September 30,
	2022		2023
	Class A	Class B	Class A	Class A	Class B	Class B
	RUB	RUB	RUB	$	RUB	$
Net income, allocated for basic	39,013	4,155	6,942	71.3	739	7.5
Reallocation of net income as a result of conversion of Class B to Class A shares	4,155	—	739	7.5	—	—
Reallocation of net income to Class B shares	—	(6)	—	—	(3)	—
Net income, allocated for diluted	43,168	4,149	7,681	78.8	736	7.5
Weighted average ordinary shares used in per share computation— basic	335,227,030	35,698,674	335,135,746	335,135,746	35,698,674	35,698,674