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such registration statements) and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.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



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,
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


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

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 June 30, 2023

 

1

    

    

361,482,281

    

282

(1,393)

81,505

22,550

192,206

16

 

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

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-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


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 (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.

2.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

Effect of:

 

Conversion of Class B to Class A shares

35,698,674

35,698,674

35,698,674

Share-Based Awards

464,719

1,458,640

1,458,640

Weighted average ordinary shares used in per share
computation—diluted

 

371,390,423

 

35,698,674

 

372,293,060

 

372,293,060

 

35,698,674

 

35,698,674

Net income per share attributable to ordinary shareholders:

Basic

 

116.38

 

116.38

 

20.71

 

0.21

 

20.71

 

0.21

Diluted

 

116.23

 

116.23