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

 

August 24, 2022

 

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 six months ended June 30, 2022.

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such registration statements) and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.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: August 24, 2022

By:

/s/ Svetlana Demyashkevich

 

 

Svetlana Demyashkevich

 

 

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 six months ended June 30, 2022


EXHIBIT 99.1

YANDEX N.V.

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Page

Unaudited Condensed Consolidated Balance Sheets as of December 31, 2021 and June 30, 2022

F-2

Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2022

F-3

Unaudited Condensed Consolidated Statements of Comprehensive Income/(Loss) for the Three and Six Months Ended June 30, 2021 and 2022

F-4

Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2022

F-5

Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2022

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)

d

As of

Notes

    

December 31,
2021*

    

June 30,
2022

    

June 30,
2022

RUB

RUB

$

ASSETS

Cash and cash equivalents

3

79,275

75,592

1,477.6

Term deposits

23,415

Investments in marketable equity securities

3

4,049

Accounts receivable, less allowance for doubtful accounts of RUB 2,716 and RUB 3,319, respectively

3

43,568

37,685

736.6

Inventory

9,587

15,823

309.3

Prepaid expenses

12,663

12,670

247.7

VAT reclaimable

13,498

12,701

248.3

Funds receivable, net

6,180

4,118

80.5

Other current assets

3

7,740

7,745

151.4

Total current assets

199,975

166,334

3,251.4

Goodwill

7

117,864

118,521

2,316.8

Property and equipment, net

5

98,325

107,291

2,097.2

Operating lease right-of-use assets

6

36,245

31,544

616.6

Intangible assets, net

7

22,359

18,929

370.0

Content assets, net

9

13,767

15,339

299.8

Equity method investments

3

9,425

6,489

126.8

Deferred tax assets

5,625

5,627

110.0

Long-term prepaid expenses

3,278

3,589

70.2

Other non-current assets

3

8,633

8,758

171.2

Total non-current assets

315,521

316,087

6,178.6

TOTAL ASSETS

515,496

482,421

9,430.0

LIABILITIES AND SHAREHOLDERS’ EQUITY

Accounts payable, accrued and other liabilities

3

81,555

77,478

1,514.4

Debt, current portion

11

2,940

23,358

456.6

Income and non-income taxes payable

3

16,196

20,555

401.8

Deferred revenue

10,415

10,783

210.8

Total current liabilities

111,106

132,174

2,583.6

Debt, non-current portion

11

85,835

26,438

516.8

Operating lease liabilities

6

24,642

20,672

404.1

Finance lease liabilities

6

15,350

15,612

305.2

Deferred tax liabilities

2,989

2,855

55.8

Other accrued liabilities

2,649

2,976

58.1

Total non-current liabilities

131,465

68,553

1,340.0

Total liabilities

242,571

200,727

3,923.6

Commitments and contingencies

9,10

Redeemable noncontrolling interests

869

338

6.6

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: 323,800,479, Class B: 35,698,674, and Class C: 10,000); shares outstanding (Class A: 323,004,678, and 323,241,816, respectively, Class B: 35,698,674 and Class C: nil)

281

281

5.5

Treasury shares at cost (Class A: 795,801 and 558,663, respectively)

(2,728)

(1,393)

(27.2)

Additional paid-in capital

112,942

116,634

2,279.9

Accumulated other comprehensive income

16,193

23,304

455.6

Retained earnings

131,488

125,293

2,449.1

Total equity attributable to Yandex N.V.

258,176

264,119

5,162.9

Noncontrolling interests

13,880

17,237

336.9

Total shareholders’ equity

272,056

281,356

5,499.8

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

    

515,496

482,421

9,430.0

* Derived from audited consolidated financial statements and adjusted for certain reclassifications (Note 3)

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 June 30,

Six months ended June 30,

Notes

2021

2022

2022

2021

2022

2022

    

    

RUB

    

RUB

$

RUB

    

RUB

    

$

Revenues

3

81,402

117,748

2,301.7

154,538

223,758

4,373.9

Operating costs and expenses:

Cost of revenues(1)

41,774

48,721

952.4

75,816

 

99,732

1,949.5

Product development(1)

11,234

16,826

328.9

22,243

 

35,987

703.4

Sales, general and administrative(1)

27,476

35,742

698.6

50,571

 

76,547

1,496.4

Depreciation and amortization

5,641

7,713

150.8

10,898

 

15,180

296.7

Total operating costs and expenses

86,125

109,002

2,130.7

159,528

 

227,446

4,446.0

Income/(loss) from operations

(4,723)

8,746

171.0

(4,990)

 

(3,688)

(72.1)

Interest income

3

1,180

1,037

20.3

2,357

 

2,399

46.9

Interest expense

(861)

(1,109)

(21.7)

(1,654)

 

(1,729)

(33.8)

Gain on restructuring of convertible debt

11

9,305

181.9

 

9,305

181.9

Loss from equity method investments

(5)

(86)

(1.7)

(6)

(451)

(8.8)

Other income/(loss), net

3

230

(6,105)

(119.4)

689

 

(4,567)

(89.3)

Net income/(loss) before income taxes

(4,179)

11,788

230.4

(3,604)

 

1,269

24.8

Income tax expense

 

8

485

3,732

72.9

4,280

 

6,250

122.2

Net income/(loss)

(4,664)

8,056

157.5

(7,884)

 

(4,981)

(97.4)

Net (income)/loss attributable to noncontrolling interests

785

(2,290)

(44.8)

1,028

 

(3,676)

(71.8)

Net income/(loss) attributable to Yandex N.V.

(3,879)

5,766

112.7

(6,856)

 

(8,657)

(169.2)

Net income/(loss) per Class A and Class B share:

Basic

 

2

(10.88)

15.54

0.30

(19.26)

 

(23.53)

(0.46)

Diluted

 

2

(10.88)

(7.03)

(0.14)

(19.26)

 

(45.86)

(0.90)

Weighted average number of Class A
and Class B shares used in per share computation

Basic

 

2

356,616,989

371,106,744

371,106,744

356,017,710

 

367,856,773

367,856,773

Diluted

 

2

356,616,989

376,105,159

376,105,159

356,017,710

 

370,832,165

370,832,165


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

Cost of revenues

    

126

 

129

2.5

250

 

280

5.5

Product development

 

2,592

 

3,926

76.7

6,034

 

7,466

145.9

Sales, general and administrative

 

2,144

 

2,440

47.8

4,382

 

5,014

98.0

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 June 30,

Six months ended June 30,

    

2021

2022

2022

2021

2022

2022

RUB

RUB

$

RUB

RUB

$

Net income/(loss)

(4,664)

8,056

157.5

(7,884)

(4,981)

(97.4)

Foreign currency translation, net of tax of nil

(2,031)

12,662

247.5

(1,372)

6,853

134.0

Total comprehensive income/(loss)

(6,695)

20,718

405.0

(9,256)

1,872

36.6

Total comprehensive (income)/loss attributable to noncontrolling interests

769

(2,061)

(40.3)

811

(3,418)

(66.8)

Total comprehensive income/(loss) attributable to Yandex N.V.

(5,926)

18,657

364.7

(8,445)

(1,546)

(30.2)

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)

Six months ended June 30,

    

Notes

2021

2022

2022

RUB

RUB

$

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:

Net loss

(7,884)

(4,981)

(97.4)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation of property and equipment

5

8,015

11,649

227.7

Amortization of intangible assets

7

2,883

3,531

69.0

Amortization of content assets

9

3,072

4,626

90.4

Operating lease right-of-use assets amortization and the lease liability accretion

5,030

7,711

150.7

Amortization of debt discount and issuance costs

11

1,036

585

11.4

Share-based compensation expense (excluding cash settled awards of nil and

12

10,666

3,552

69.4

RUB 9,208, respectively)

Deferred income tax expense/(benefit)

(4,065)

315

6.2

Foreign exchange losses

3

291

4,231

82.7

Loss from equity method investments

6

451

8.8

Gain on restructuring of convertible debt

11

(9,305)

(181.9)

Impairment of long-lived assets

3,644

71.2

Provision for expected credit losses

506

1,038

20.3

Other

180

481

9.5

Changes in operating assets and liabilities excluding the effect of acquisitions:

Accounts receivable, net

(2,982)

4,540

88.7

Prepaid expenses

(5,196)

(2,395)

(46.7)

Inventory

(1,988)

(6,065)

(118.6)

Accounts payable, accrued and other liabilities and non-income taxes payable

5,907

(1,108)

(21.6)

Deferred revenue

287

694

13.6

Other assets

(8,110)

185

3.6

Content assets

(7,547)

(6,199)

(121.2)

Content liabilities

3,581

(353)

(6.9)

Net cash provided by operating activities

3,688

16,827

328.9

CASH FLOWS PROVIDED BY/(USED IN) INVESTING ACTIVITIES:

Purchases of property and equipment and intangible assets

 

(17,244)

(25,687)

(502.1)

Acquisitions of businesses, net of cash acquired

 

(7,274)

(820)

(16.0)

Investments in marketable equity securities

(9,869)

Proceeds from sale of marketable equity securities

2,735

5,859

114.5

Investments in term deposits

(187,251)

(2,000)

(39.1)

Maturities of term deposits

170,608

25,769

503.6

Loans granted

(560)

(25)

(0.5)

Proceeds from repayments of loans

577

480

9.4

Other investing activities

(231)

(106)

(2.0)

Net cash provided by/(used in) investing activities

(48,509)

3,470

67.8

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)

Six months ended June 30,

    

Notes

2021

2022

2022

RUB

RUB

$

CASH FLOWS USED IN FINANCING ACTIVITIES:

Proceeds from exercise of share options

864

Repayment of convertible debt

11

(45,832)

(895.9)

Proceeds from issuance of debt

46,781

914.4

Payment of contingent consideration and holdback amount

(10)

(69)

(1.3)

Payment for finance leases

(202)

(719)

(14.1)

Payment of overdraft borrowings

(2,940)

(57.5)

Other financing activities

(1,240)

(1,156)

(22.5)

Net cash used in financing activities

(588)

(3,935)

(76.9)

Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents

877

(19,893)

(388.8)

Net change in cash and cash equivalents, and restricted cash and cash equivalents

(44,532)

(3,531)

(69.0)

Cash and cash equivalents, and restricted cash and cash equivalents, beginning of period

132,446

79,398

1,552.0

Cash and cash equivalents, and restricted cash and cash equivalents, end of period

87,914

75,867

1,483.0

RECONCILIATION OF CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AND CASH EQUIVALENTS:

Cash and cash equivalents, beginning of period

132,398

79,274

1,549.6

Restricted cash and cash equivalents, beginning of period

48

124

2.4

Cash and cash equivalents, and restricted cash and cash equivalents, beginning of period

132,446

79,398

1,552.0

Cash and cash equivalents, end of period

87,867

75,592

1,477.6

Restricted cash and cash equivalents, end of period

47

275

5.4

Cash and cash equivalents, and restricted cash and cash equivalents, end of period

87,914

75,867

1,483.0

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

Cash paid for income taxes

7,291

5,990

 

117.1

Cash paid for acquisitions

7,347

1,031

 

20.1

Convertible notes coupon paid

344

439

8.6

Interest paid for finance leases

157

561

11.0

Operating cash flows from operating leases

5,756

6,375

124.6

Non-cash operating activities:

Increase of right-of-use assets due to new operating lease and lease modification

15,888

3,217

62.9

Non-cash investing activities:

Acquired property and equipment and intangible assets not yet paid for

2,773

2,733

53.4

Non-cash financing activities:

Increase of right-of-use assets due to new finance lease and lease modification

4,378

1,322

25.8

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 June 30, 2021

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 March 31, 2021

    

1

    

    

355,995,773

    

279

(5)

167,836

18,381

143,229

20,004

 

349,724

1,859

Share-based compensation expense

 

4,862

4,862

Exercise of share options

 

1,384,570

228

228

Tax withholding related to exercise of share awards

(61)

(61)

Repurchase of share options

 

109

9

118

(105)

Foreign currency translation adjustment

(2,047)

16

(2,031)

Change in redemption value of redeemable noncontrolling interests

(29)

(29)

29

Net loss

(3,879)

(785)

(4,664)

Other

1

106

(2)

105

Balance as of June 30, 2021

1

357,380,343

280

(5)

173,080

16,332

139,330

19,235

348,252

1,783

Three months ended June 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 March 31, 2022

 

1

    

    

358,940,490

    

281

(1,393)

105,600

10,413

119,486

15,317

 

249,704

435

Share-based compensation expense

1,010

1,010

Convertible debt restructuring (Note 11)

 

9,941

9,941

Repurchase of share options

(58)

(12)

(70)

(44)

Foreign currency translation adjustment

12,891

(229)

12,662

Change in redemption value of redeemable noncontrolling interests

53

53

(53)

Net income

5,766

2,290

8,056

Other

141

(141)

Balance as of June 30, 2022

1

358,940,490

281

(1,393)

116,634

23,304

125,293

17,237

281,356

338

Balance as of June 30, 2022, $

 

5.5

(27.2)

2,279.9

455.6

2,449.1

336.9

5,499.8

6.6

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 (CONTINUED)

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

Six months ended June 30, 2021

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, 2020

    

1

354,210,532

278

(6)

160,857

17,923

145,789

20,094

344,935

3,167

Share-based compensation expense

 

10,828

10,828

Exercise of share options

 

3,169,811

856

856

Tax withholding related to exercise of share awards

(121)

(121)

Repurchase of share options

411

14

425

(976)

Foreign currency translation adjustment

(1,589)

217

(1,372)

Change in redemption value of redeemable noncontrolling interests

 

408

408

(408)

Net loss

(6,856)

(1,028)

(7,884)

Other

2

1

249

(2)

(25)

(48)

177

Balance as of June 30, 2021

 

1

357,380,343

280

(5)

173,080

16,332

139,330

19,235

348,252

1,783

Six months ended June 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 (Note 1)

(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

3,627

3,627

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)

Convertible debt restructuring (Note 11)

9,941

9,941

Repurchase of share options

(5)

(105)

(110)

(474)

Change in redemption value of redeemable noncontrolling interests

57

57

(57)

Foreign currency translation adjustment

7,111

(258)

6,853

Net (loss)/income

(8,657)

3,676

(4,981)

Other

62

(1)

(61)

Balance as of June 30, 2022

1

358,940,490

281

(1,393)

116,634

23,304

125,293

17,237

281,356

338

Balance as of June 30, 2022, $

 

5.5

(27.2)

2,279.9

455.6

2,449.1

336.9

5,499.8

6.6

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)

1.DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Yandex N.V., the parent company, together with its consolidated subsidiaries (collectively “Yandex” or the “Company”), 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 companies 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 and Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles 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 six months ended June 30, 2022 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, 2021.

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 June 30, 2022, 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, 2021, was derived from audited annual consolidated financial statements included in the Annual Report on Form 20-F for the year ended December 31, 2021 but does not contain all of the related footnote disclosures.

There have been no material changes in the Company’s significant accounting policies and estimates as compared to those described in the Company’s Annual Report on Form 20-F for the year ended December 31, 2021. Accounting policy in relation to the restructuring of convertible debt is described in Note 11.

The results for the three and six months ended June 30, 2022 are not necessarily indicative of the operating results expected for the year ending December 31, 2022 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 Company’s business, operations or governance; changes in the political, legal and/or regulatory environment; the impact of the ongoing COVID-19 pandemic and regulatory and business responses to that crisis; competitive pressures; changes in advertising patterns; changes in user preferences; technological developments; and the Company’s need to expend capital to accommodate the growth of the business.

The accompanying unaudited condensed consolidated financial statements were prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As described in Note 11, following the suspension of trading of the Company’s Class A shares on the Nasdaq Global Select Market for more than five trading days, the holders of the Company’s convertible notes due March 3, 2025 (the “Notes”) had the right to require the Company to redeem the Notes at par, and the Company did not have the funds available to redeem the Notes in full. These conditions raised substantial doubt about the Company’s ability to continue as a going concern which was disclosed in the Company’s unaudited condensed consolidated financial statements for the three months ended March 31, 2022. In June 2022 the Company restructured the terms of the Notes and entered into a purchase agreement with holders of 93.2% in aggregate principal amount of the Notes. The purchase was funded by external debt financing obtained, which repayable ratably over the next three years. The Company’s cash flow forecast taking into account this restructuring and the terms of the new debt financing indicate that the Company will have sufficient liquidity in the course of at least next twelve months. As a result of these events the substantial doubt about the Company’s ability to continue as a going concern no longer exists.

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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)

Use of Estimates

The preparation of unaudited condensed 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 unaudited condensed consolidated financial statements and amounts of revenues and expenses for the reporting period. The Company bases its estimates on historical experience and on various other assumptions, the results of which form the basis for making judgments about the carrying values of assets and liabilities, that are believed to be reasonable. These estimates are inherently subject to judgment and actual results could differ from those estimates.

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 51.1580 to $1.00, the exchange rate as of June 30, 2022 (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 been experiencing a period of significant volatility.

Reclassification

Certain reclassifications have been made to the consolidated balance sheet as of December 31, 2021 due to the separation of certain line items. The following table presents the impact of the reclassification on affected consolidated balance sheet line items as of December 31, 2021:

As of December 31, 2021

As previously reported

Reclassification

After
reclassification

Selected Balance Sheets Data:

    

RUB

RUB

RUB

Accounts payable, accrued and other liabilities

84,495

(2,940)

81,555

Debt, current portion

2,940

2,940

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021.

Prior to the adoption of ASU 2020-06, the Company separately accounted for the liability and equity components of the Company’s convertible notes due March 3, 2025. The value of the liability component as of the date of issuance was recognized at the present value of its cash flows using a discount rate of 3.059%, the Company's estimated borrowing rate at the date of the issuance for a similar debt instrument without the conversion feature. The value of the equity component as of the date of issuance was calculated by deducting the fair value of the liability component from the initial proceeds ascribed to the convertible debt instrument as a whole and was recorded as a debt discount. Debt discount was amortized using the effective interest method over the period from the origination date through the stated maturity date. The equity component was included in additional paid-in capital in the consolidated balance sheet as of December 31, 2021.

The Company adopted the standard effective January 1, 2022, using the modified retrospective method. The prior period consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. As a result of the adoption, the Company recorded a RUB 8,573 decrease in additional paid in capital from the derecognition of the equity component of the convertible debt, net of tax effects, a RUB 6,404 increase in the liability component from the derecognition of the debt discount and debt issuance cost associated with the equity component of the convertible debt, and a RUB 2,511 increase to the opening balance of retained earnings, representing the cumulative interest expense, net of tax effects, recognized related to the amortization of the conversion option of such convertible debt. The Company also wrote off the deferred tax liabilities in the amount of RUB 342 as well as increased the deferred tax assets and respective valuation allowance in the same amount of RUB 1,330 from the derecognition of the equity component (Note 8). As a result of the adoption, starting on January 1, 2022, interest expense is reduced as a result of accounting for the Notes as a single liability measured at its amortized cost.

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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)

Accordingly, the impact of the changes on affected consolidated balance sheet line items as of January 1, 2022 for the adoption of the ASU 2020-06 was as follows:

Balances as of December 31, 2021

Adjustments from
Adoption of ASU 2020-06

Balances as of
January 1, 2022

    

RUB

RUB

RUB

Convertible debt

85,835

6,404

92,239

Deferred tax liabilities

2,989

(342)

2,647

Additional paid-in capital

112,942

(8,573)

104,369

Retained earnings

131,488

2,511

133,999

Adoption of the ASU 2020-06 did not have a material effect on the diluted net income/(loss) per share.

2.NET INCOME/(LOSS) PER SHARE

Basic net income/(loss) per Class A and Class B ordinary share for the three and six months ended June 30, 2021 and 2022 is computed on the basis of the weighted average number of ordinary shares using the two class method. Basic net income/(loss) per share is computed using the weighted average number of ordinary shares during the period and including vested restricted share units and shares that will be delivered as part of the restructuring of the Notes (Note 11). Diluted net loss 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 loss per Class A share assumes the conversion of Class B shares, while the diluted net loss 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 loss per ordinary share computation, because their effect was anti-dilutive for the three months ended June 30, 2021 and 2022, was 17,635,737 and 15,105,542, respectively and for the six months ended June 30, 2021 and 2022, was 16,716,623 and 18,459,412, respectively.

In June 2022, the Company completed a purchase of 93.2% in aggregate principal amount of the Notes (Note 11). The convertible debt restructuring is included in the calculation of diluted net income per share under the if-converted method.

The components of basic and diluted net income/(loss) per share were as follows: