6-K - NBIS - Equibles

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 1 7 , 202 3

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, 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such registration statements) and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.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: August 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 six months ended June 30, 2023<br><br>

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 June 30, 2023	F-2
Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2023	F-3
Unaudited Condensed Consolidated Statements of Comprehensive Income/(Loss) for the Three and Six Months Ended June 30, 2022 and 2023	F-4
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2023	F-5
Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the Three and Six Months Ended June 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 SHEET****S

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


			As of
	Notes	****	December 31, 2022*	****	June 30, 2023	****	June 30, 2023
			RUB		RUB		$
ASSETS
Cash and cash equivalents	4		83,131		71,885		825.9
Trade accounts receivable, less allowance for doubtful accounts of RUB 4,169 and RUB 5,279, respectively	4		58,014		64,928		746.0
Sales financing receivable			5,738		5,720		65.7
Prepaid expenses			16,968		20,277		233.0
Inventory			28,220		23,519		270.2
Funds receivable			8,290		6,220		71.5
VAT reclaimable			22,602		24,829		285.3
Other current assets	4		16,971		20,750		238.4
Total current assets			239,934		238,128		2,736.0
Property and equipment	6		127,706		147,415		1,693.8
Operating lease right-of-use assets	7		28,646		28,847		331.4
Intangible assets	8		31,766		36,227		416.2
Content assets	10		16,844		18,856		216.7
Goodwill	8		143,778		142,784		1,640.6
Equity method investments			2,118		2,518		28.9
Investments in non-marketable equity securities			6,746		8,362		96.1
Deferred tax assets			3,904		6,436		73.9
Other non-current assets	4		15,277		22,402		257.4
Total non-current assets			376,785		413,847		4,755.0
TOTAL ASSETS			616,719		651,975		7,491.0
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable, accrued and other liabilities	4		122,816		139,970		1,608.2
Debt, current portion	12		21,306		68,764		790.1
Income and non-income taxes payable	4		28,137		31,124		357.6
Deferred revenue			15,585		18,482		212.4
Total current liabilities			187,844		258,340		2,968.3
Debt, non-current portion	12		29,885		23,883		274.4
Deferred tax liabilities			5,473		7,222		83.0
Operating lease liabilities	7		17,609		17,391		199.8
Finance lease liabilities	7		21,185		25,201		289.6
Other accrued liabilities			16,545		24,772		284.6
Total non-current liabilities			90,697		98,469		1,131.4
Total liabilities			278,541		356,809		4,099.7
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		3.2
Treasury shares at cost (Class A: 558,663)			(1,393)		(1,393)		(16.0)
Additional paid-in capital			119,464		81,505		936.5
Accumulated other comprehensive income			24,258		22,550		259.1
Retained earnings			173,697		192,206		2,208.4
Total equity attributable to Yandex N.V.			** 316,308**		295,150		3,391.2
Noncontrolling interests			21,870		16		0.1
Total shareholders’ equity			338,178		295,166		3,391.3
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			** 616,719**	****	651,975	****	7,491.0

* Derived from audited consolidated financial statements

All values are in Euros.

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		2022		2023	2023	2022		2023		2022
	****		****	RUB	****	RUB	$	RUB	****	RUB	****	$
Revenues		4		117,748		182,495	2,096.8	223,758		345,770		3,972.8
Operating costs and expenses:
Cost of revenues^(1)^				48,721		79,120	909.1	99,732		156,659		1,800.0
Product development^(1)^				16,826		23,911	274.7	35,987		46,215		531.0
Sales, general and administrative^(1)^				35,742		57,498	660.6	76,547		110,673		1,271.5
Depreciation and amortization				7,713		9,336	107.3	15,180		17,623		202.5
Goodwill impairment		8		—		1,136	13.1	—		1,136		13.1
Total operating costs and expenses				109,002		171,001	1,964.8	227,446		332,306		3,818.1
Income/(loss) from operations				8,746		11,494	132.0	(3,688)		13,464		154.7
Interest income				1,037		1,108	12.7	2,399		2,323		26.7
Interest expense				(1,109)		(1,973)	(22.7)	(1,729)		(3,146)		(36.1)
Gain on restructuring of convertible debt				9,305		—	—	9,305		—		—
Loss from equity method investments				(86)		(109)	(1.3)	(451)		(241)		(2.8)
Other income/(loss), net		4		(6,105)		9,020	103.8	(4,567)		14,877		170.9
Net income before income taxes				11,788		19,540	224.5	1,269		27,277		313.4
Income tax expense		9		3,732		4,909	56.4	6,250		6,861		78.8
Net income/(loss)				8,056		14,631	168.1	(4,981)		20,416		234.6
Net income attributable to noncontrolling interests				(2,290)		(402)	(4.6)	(3,676)		(1,905)		(21.9)
Net income/(loss) attributable to Yandex N.V.				5,766		14,229	163.5	(8,657)		18,511		212.7
Net income/(loss) per Class A and Class B share:
Basic		2		15.54		38.37	0.44	(23.53)		49.92		0.57
Diluted		2		(7.03)		38.23	0.44	(45.86)		49.74		0.57
Weighted average number of Class A <br>and Class B shares used in per share computation
Basic		2		371,106,744		370,823,163	370,823,163	367,856,773		370,839,366		370,839,366
Diluted		2		376,105,159		372,224,647	372,224,647	370,832,165		372,169,479		372,169,479

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

---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Cost of revenues				129		177		2.0		280		341		3.9
Product development				3,926		3,188		36.6		7,466		6,469		74.3
Sales, general and administrative				2,440		2,134		24.6		5,014		4,489		51.6

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 INCOM****E/(LOSS)

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


		Three months ended June 30,			Six months ended June 30,
	****	2022	2023	2023	2022	2023	2023
		RUB	RUB	$	RUB	RUB	$
Net income/(loss)		8,056	14,631	168.1	(4,981)	20,416	234.6
Foreign currency translation, net of tax of nil		12,662	(2,254)	(25.9)	6,853	(3,394)	(39.0)
Total comprehensive income		20,718	12,377	142.2	1,872	17,022	195.6
Total comprehensive income attributable to noncontrolling interests		(2,061)	(351)	(4.1)	(3,418)	(1,865)	(21.4)
Total comprehensive income/(loss) attributable to Yandex N.V.		** 18,657**	12,026	138.1	(1,546)	15,157	174.2

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 FLOW****S

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


			Six months ended June 30,
	****	Notes	2022	2023	2023
			RUB	RUB	$
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income/(loss)			(4,981)	20,416	234.6
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Depreciation of property and equipment		6	11,649	12,922	148.5
Amortization of intangible assets		8	3,531	4,701	54.0
Amortization of content assets		10	4,626	4,540	52.2
Operating lease right-of-use assets amortization and the lease liability accretion		7	7,711	6,794	78.1
Amortization of debt discount and issuance costs			585	—	—
Share-based compensation expense (excluding cash settled awards of RUB 9,208 and RUB 8,319, respectively)			3,552	2,980	34.2
Deferred income tax expense/(benefit)			315	(377)	(4.3)
Foreign exchange losses/(gains)		4	4,231	(14,878)	(170.9)
Loss from equity method investments			451	241	2.8
Gain on restructuring of convertible debt			(9,305)	—	—
Impairment of long-lived assets			3,644	1,199	13.8
Provision for expected credit losses			1,038	2,263	26.0
Other			481	806	9.2
Changes in operating assets and liabilities excluding the effect of acquisitions:
Accounts receivable			4,540	(6,999)	(80.4)
Prepaid expenses			(2,395)	(1,722)	(19.9)
Inventory			(6,065)	4,260	48.9
Accounts payable, accrued and other liabilities and non-income taxes payable		4	(1,108)	5,223	59.9
Deferred revenue			694	2,554	29.3
Other assets			(194)	(2,853)	(32.8)
VAT reclaimable			165	(956)	(11.0)
Funds receivable			949	2,413	27.7
Sales financing receivable			(735)	(977)	(11.2)
Content assets		10	(6,199)	(6,424)	(73.8)
Content liabilities			(353)	(57)	(0.7)
Net cash provided by operating activities			** 16,827**	36,069	414.2
CASH FLOWS PROVIDED BY/(USED IN) INVESTING ACTIVITIES:
Purchases of property and equipment and intangible assets			(25,687)	(25,169)	(289.2)
Purchase of assets to be leased			—	(8,589)	(98.7)
Acquisitions of businesses, net of cash acquired			(820)	—	—
Proceeds from sale of marketable equity securities			5,859	—	—
Investments in term deposits			(2,000)	(6)	(0.1)
Maturities of term deposits			25,769	160	1.8
Loans granted			(25)	(997)	(11.4)
Proceeds from repayments of loans			480	1,198	13.8
Other investing activities			(106)	181	2.1
Net cash provided by/(used in) investing activities			** 3,470**	(33,222)	(381.7)

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	2022	2023	2023
			RUB	RUB	$
CASH FLOWS USED IN FINANCING ACTIVITIES:
Proceeds from issuance of debt		12	46,781	81,681	938.5
Repayment of debt		12	(45,832)	(40,335)	(463.4)
Repayments of overdraft borrowings			(2,940)	—	—
Purchase of non-redeemable noncontrolling interests		3	—	(57,337)	(658.8)
Payment of contingent consideration and holdback amount			(69)	(77)	(0.9)
Payment for finance leases			(719)	(1,455)	(16.7)
Other financing activities			(1,156)	(5,674)	(65.1)
Net cash used in financing activities			(3,935)	(23,197)	(266.4)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents			(19,893)	8,531	98.2
Net change in cash and cash equivalents, and restricted cash and cash equivalents			(3,531)	(11,819)	(135.7)
Cash and cash equivalents, and restricted cash and cash equivalents, beginning of period			79,398	84,441	970.1
Cash and cash equivalents, and restricted cash and cash equivalents, end of period			75,867	72,622	834.4

RECONCILIATION OF CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AND CASH EQUIVALENTS:
Cash and cash equivalents, beginning of period			79,274	83,132	955.2
Restricted cash and cash equivalents, beginning of period			124	1,309	14.9
Cash and cash equivalents, and restricted cash and cash equivalents, beginning of period			79,398	84,441	970.1
Cash and cash equivalents, end of period			75,592	71,885	825.9
Restricted cash and cash equivalents, end of period			275	737	8.5
Cash and cash equivalents, and restricted cash and cash equivalents, end of period			75,867	72,622	834.4

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes			5,990	9,659	111.0
Cash paid for acquisitions			1,031	—	—
Convertible notes coupon paid			439	—	—
Interest paid for finance leases			561	1,220	14.0
Interest paid on loans			87	1,915	22.0
Operating cash flows from operating leases			6,375	7,168	82.4
Non-cash operating activities:
Increase of right-of-use assets due to new operating lease and lease modification			3,217	5,719	65.7
Non-cash investing activities:
Acquired property and equipment and intangible assets not yet paid for			2,733	11,826	135.9
Non-cash financing activities:
Increase of right-of-use assets due to new finance lease and lease modification			1,322	6,446	74.1

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’ EQUIT****Y

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


		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		—
Restructuring of convertible debt		—		—		—		—	—	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


	Three months ended June 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 March 31, 2023	1		—	****	361,482,281	****	282	(1,393)	120,171	23,107	177,977	23,384	****	343,528
Share-based compensation expense	—		—		—		—	—	2,273	—	—	—		2,273
Transaction with Uber (Note 3)	—		—		—		—	—	(35,459)	1,646	—	(23,524)		(57,337)
Foreign currency translation adjustment	—		—		—		—	—	—	(2,203)	—	(51)		(2,254)
Net income	—		—		—		—	—	—	—	14,229	402		14,631
Other	—		—		—		—	—	(5,480)	—	—	(195)		(5,675)
Balance as of June 30, 2023	1		—		361,482,281		282	(1,393)	81,505	22,550	192,206	16		295,166
Balance as of June 30, 2023,			—				3.2	(16.0)	936.5	259.1	2,208.4	0.1		3,391.3

All values are in US Dollars.

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)


		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		—		—		—		—		—		(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)		—		—	—		—		—
Restructuring of convertible debt		—		—		—		—		—		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


	Six months ended June 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	—		—		—	—	—	2,980	—	—	—		2,980
Transaction with Uber (Note 3)	—		—		—	—	—	(35,459)	1,646	—	(23,524)		(57,337)
Foreign currency translation adjustment	—		—		—	—	—	—	(3,354)	—	(40)		(3,394)
Net income	—		—		—	—	—	—	—	18,511	1,905		20,416
Other	—		—		—	—	—	(5,480)	—	(2)	(195)		(5,677)
Balance as of June 30, 2023	1		—		361,482,281	282	(1,393)	81,505	22,550	192,206	16		295,166
Balance as of June 30, 2023,			—			3.2	(16.0)	936.5	259.1	2,208.4	0.1		3,391.3

All values are in US Dollars.

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)

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 six months ended June 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 Group, 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, 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 six months ended June 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 accounting policy in relation to the net investment in the lease.

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 3 to 5 years, with the possibility of early redemption and secured by a collateral of the leased assets. The Group recognizes net investment in the lease and derecognizes the assets to be 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.

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 F-9

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)

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 87.0341 to $1.00, the exchange rate as of June 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 been experiencing 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/(LOSS) PER SHARE

Basic net income/(loss) per Class A and Class B ordinary share for the three and six months ended June 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/(loss) 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 convertible debt in June 2022. Diluted net income/(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 income/(loss) per Class A share assumes the conversion of Class B shares, while the diluted net income/(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 income/(loss) per ordinary share computation, because their effect was anti-dilutive for the three months ended June 30, 2022 and 2023, was 15,105,542 and 5,606,909, respectively and for the six months ended June 30, 2022 and 2023, was 18,459,412 and 5,610,944, respectively.

In June 2022, the Group completed a purchase 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 purchased 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.

F-10

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


	Three Months ended June 30,
	2022		2023
	Class A	Class B	Class A	Class A	Class B	Class B
	RUB	RUB	RUB		RUB	$
Net income, allocated for basic	5,211	555	12,859	147.8	1,370	15.7
Reallocation of net income as a result of conversion of Class B to Class A shares	555	—	1,370	15.7	—	—
Reallocation of net loss to Class B shares	—	(806)	—	—	(5)	—
Effect of convertible debt restructuring, net of tax	(8,405)	—	—	—	—	—
Dilution in Classifieds	(3)	—	—	—	—	—
Net (loss)/income, allocated for diluted	(2,642)	(251)	14,229	163.5	1,365	15.7
Weighted average ordinary shares used in per share<br>computation— basic	335,408,070	35,698,674	335,124,489	335,124,489	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	—	—
Incremental shares under the if-converted method	4,998,415	—	—	—	—	—
Share-Based Awards	—	—	1,401,484	1,401,484	—	—
Weighted average ordinary shares used in per share<br>computation—diluted	376,105,159	35,698,674	372,224,647	372,224,647	35,698,674	35,698,674
Net income/(loss) per share attributable to ordinary shareholders:
Basic	15.54	15.54	38.37	0.44	38.37	0.44
Diluted	(7.03)	(7.03)	38.23	0.44	38.23	0.44

All values are in US Dollars.


	Six Months ended June 30,
	2022		2023
	Class A	Class B	Class A	Class A	Class B	Class B
	RUB	RUB	RUB		RUB	$
Net (loss)/income, allocated for basic	(7,817)	(840)	16,729	192.2	1,782	20.5
Reallocation of net (loss)/income as a result of conversion of Class B to Class A shares	(840)	—	1,782	20.5	—	—
Reallocation of net loss to Class B shares	—	(797)	—	—	(6)	—
Effect of convertible debt restructuring, net of tax	(8,348)	—	—	—	—	—
Net (loss)/income, allocated for diluted	(17,005)	(1,637)	18,511	212.7	1,776	20.5
Weighted average ordinary shares used in per share	332,158,099	35,698,674	335,140,692	335,140,692	35,698,674	35,698,674
computation — basic
Effect of:
Conversion of Class B to Class A shares	35,698,674	—	35,698,674	35,698,674	—	—
Incremental shares under the if-converted method	2,975,392	—	—	—	—	—
Share-Based Awards	—	—	1,330,113	1,330,113	—	—
Weighted average ordinary shares used in	370,832,165	35,698,674	372,169,479	372,169,479	35,698,674	35,698,674
per share computation — diluted
Net (loss)/income per share attributable to ordinary shareholders:
Basic	(23.53)	(23.53)	49.92	0.57	49.92	0.57
Diluted	(45.86)	(45.86)	49.74	0.57	49.74	0.57

All values are in US Dollars.

3.	BUSINESS COMBINATIONS AND INVESTMENT TRANSACTIONS

Acquisition of Uber’s remaining interest in MLU B.V.

On April 21, 2023, the Company entered into an agreement (the “Agreement”) with Uber NL Holdings 1 B.V. (“Uber”), a subsidiary of Uber Technologies Inc., and on the same day acquired Uber’s entire remaining 29% interest in MLU B.V, a mobility joint venture, for consideration in cash of $702.5 (RUB 57,337 at the exchange rate as of the closing date). The Agreement superseded and was in lieu of the call option Uber granted to the Company under a Framework Agreement dated September 7, 2021. The call option was exercisable until September 7, 2023.

In order to account for the equity ownership changes contemplated by the transaction, the Group reduced the amount of the non-controlling interest and additional paid-in capital by RUB 23,524 and RUB 35,459, respectively, and increased the amount of the accumulated other comprehensive income by RUB 1,646. After the closing date, no earnings are allocated to the non-controlling interest.

F-11

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)

4.	UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DETAILS

Cash and Cash Equivalents

Cash and cash equivalents as of December 31, 2022 and June 30, 2023 consisted of the following:


	****	December 31, 2022	****	June 30, 2023	****	June 30, 2023
		RUB		RUB		$
Cash		48,682		30,875		354.7
Cash equivalents:
Bank deposits		34,346		40,945		470.4
Other cash equivalents		103		65		0.8
Total cash and cash equivalents		83,131		71,885		825.9

Current expected credit losses for cash, cash equivalents, term deposits, funds receivable and other financial assets were immaterial for the three and six months ended June 30, 2022 and 2023. All of the Group’s cash is held at financial institutions that management believes to be of high credit quality.

Allowance for current expected credit losses on trade receivables and net investment in the lease

Movements in the allowance for current expected credit losses on trade receivables for the three and six months ended June 30, 2022 and 2023 were as follows:


	Three months ended June 30,			Six months ended June 30,
	2022	2023	2023	2022	2023	2023
	RUB	RUB	$	RUB	RUB	$
Balance at the beginning of period	3,344	4,745	54.5	2,716	4,169	47.9
Current period allowance for expected credit losses	409	568	6.5	1,019	1,128	13.0
Write-off	(220)	(145)	(1.7)	(249)	(179)	(2.1)
Foreign exchange difference	(214)	111	1.4	(167)	161	1.9
Balance at the end of period	** 3,319**	5,279	60.7	3,319	5,279	60.7

The Group’s past due receivables exceeding one year were in the amount of RUB 3,543 ($40.7) as of June 30, 2023.

As of June 30, 2023, the Group has no net investment in the lease with past due status and, the period since origination of the leases is less than one year. The entire amount of net investment in the lease is subject to credit risk estimated on a portfolio basis of contracts with similar risk exposure. No significant expected credit loss was recognized as of June 30, 2023.

Other Current Assets

Other current assets as of December 31, 2022 and June 30, 2023 consisted of the following:


	****	December 31, 2022	****	June 30, 2023	****	June 30, 2023
		RUB		RUB		$
Prepaid income tax		3,328		5,986		68.8
Other receivables		7,588		5,921		68.0
Net investment in the lease		455		2,452		28.2
Loans granted		2,322		2,087		24.0
Contract assets		1,456		1,710		19.6
Investments in debt securities		305		987		11.3
Restricted cash		643		332		3.8
Prepaid other taxes		114		132		1.5
Interest receivable		77		109		1.4
Term deposits		154		—		—
Other		529		1,034		11.8
Total other current assets	****	16,971	****	20,750		238.4

F-12

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)

Other Non-current Assets

Other non-current assets as of December 31, 2022 and June 30, 2023 consisted of the following:


	****	December 31, 2022	****	June 30, 2023	****	June 30, 2023
		RUB		RUB		$
Loans granted		6,523		7,287		83.7
Net investment in the lease		979		7,127		81.9
Long-term prepaid expenses		3,998		3,748		43.1
Contract assets		1,292		1,404		16.1
Indemnification assets		1,031		1,121		12.9
Bank deposits and loans to customers		133		682		7.8
VAT reclaimable		603		599		6.9
Restricted cash		666		406		4.7
Other receivables		52		28		0.3
Total other non-current assets	****	15,277	****	22,402	****	257.4

Accounts Payable, Accrued and Other Liabilities

Accounts payable, accrued and other liabilities as of December 31, 2022 and June 30, 2023 comprised the following:


	****	December 31, 2022	****	June 30, 2023	****	June 30, 2023
		RUB		RUB		$
Trade accounts payable and accrued liabilities		72,635		75,668		869.5
Liabilities under the reverse factoring program		20,702		21,290		244.6
Salary and other compensation expenses payable/accrued to employees		11,424		21,644		248.7
Operating lease liabilities, current (Note 7)		10,963		11,232		129.0
Content liabilities		3,353		3,685		42.3
Finance lease liability, current (Note 7)		2,788		3,696		42.5
Bank deposits and liabilities		578		2,420		27.8
Accounts payable for acquisition of businesses		373		335		3.8
Total accounts payable, accrued and other liabilities	****	122,816	****	139,970	****	1,608.2

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 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 accrued under reverse factoring programs are included in the accounts payable, accrued and other liabilities line in the unaudited condensed consolidated balance sheets, because 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 Group’s payments made under the program are reflected in cash flow from operating activities in the unaudited condensed consolidated statements of cash flows.

Other Income/(loss), Net

Other income/(loss), net includes foreign exchange losses in the amount of RUB 5,903 and foreign exchange gains in the amount of RUB 8,954 ($102.9) for the three months ended June 30, 2022 and 2023, respectively, and losses of RUB 4,231 and gains of RUB 14,878 ($170.9) for the six months ended June 30, 2022 and 2023, respectively.

Income and non-income taxes payable

Income and non-income taxes payable in the unaudited condensed consolidated balance sheets include income taxes payable in the amount of RUB 2,511 and RUB 1,443 ($16.6) as of December 31, 2022 and June 30, 2023, respectively.

Revenues

Revenues in the unaudited condensed consolidated statements of operations includes revenues related to sales of goods in the amount of RUB 18,887 and RUB 29,821 ($342.6) for the three months ended June 30, 2022 and 2023, respectively, and in the amount of RUB 37,801 and RUB 62,875 ($722.4) for the six months ended June 30, 2022 and 2023, respectively.

F-13

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)

5.	FAIR VALUE MEASUREMENTS

The fair value of assets and liabilities as of December 31, 2022, and June 30, 2023, including those measured at fair value on a recurring basis and excluding those which fair value approximates carrying value, consisted of the following:


		As of December 31, 2022				As of June 30, 2023
		Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total	Total
		RUB	RUB	RUB	RUB	RUB	RUB	RUB	RUB	$
Assets:
Loans granted (Note 4)		—	9,067	—	9,067	—	9,173	—	9,173	105.4
	****	—	9,067	—	9,067	—	9,173	—	9,173	105.4
Liabilities:
Loans (Note 12)		—	—	46,134	46,134	—	—	93,327	93,327	1,072.3
	****	—	—	46,134	46,134	—	—	93,327	93,327	1,072.3

The carrying amount and the fair value of loans received and loans granted as of December 31, 2022, and June 30, 2023 were as follows:


	As of December 31, 2022		As of June 30, 2023
	Carrying amount	Fair value	Carrying amount			Fair value
	RUB	RUB	RUB	****		RUB	****	$
Assets:
Loans granted (Note 4)	8,845	9,067	9,374		107.7	9,173		105.4
	8,845	9,067	9,374		107.7	9,173		105.4
Liabilities:
Loans (Note 12)	50,669	46,134	92,002		1,057.2	93,327		1,072.3
	50,669	46,134	92,002		1,057.2	93,327		1,072.3

All values are in US Dollars.

There were no transfers of financial assets and liabilities between the levels of the fair value hierarchy for the six months ended June 30, 2022, and 2023.

6.	PROPERTY AND EQUIPMENT

Property and equipment, net of accumulated depreciation, as of December 31, 2022 and June 30, 2023 consisted of the following:


	****	December 31, 2022	****	June 30, 2023	****	June 30, 2023
		RUB		RUB		$
Servers and network equipment		98,446		120,019		1,378.9
Finance lease right-of-use assets		26,674		33,000		379.2
Land, land rights and buildings		19,096		21,698		249.3
Infrastructure systems		19,120		21,549		247.6
Office furniture and equipment		11,923		13,602		156.3
Other equipment		10,063		13,210		151.8
Leasehold improvements		4,507		4,871		56.0
Assets not yet in use		42,170		41,893		481.3
Total	****	231,999	****	269,842		3,100.4
Less: accumulated depreciation		(104,293)		(122,427)		(1,406.6)
Total property and equipment	****	127,706	****	147,415		1,693.8

Assets not yet in use primarily represent building construction, server and network equipment, infrastructure systems, other equipment and assets under installation, including related prepayments, and comprise the cost of the assets and other direct costs applicable to purchase and installation. Leasehold improvements included in assets not yet in use amounted to RUB 364 and RUB 871 ($10.0) as of December 31, 2022 and June 30, 2023, respectively.

Depreciation expenses related to property and equipment amounted to RUB 5,858 and RUB 6,741 ($77.5) for the three months ended June 30, 2022 and 2023, respectively, and RUB 11,649 and RUB 12,922 ($148.5) for the six months ended June 30, 2022 and 2023, respectively.

F-14

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)

7.	LEASES

Group as Lessee

The Group has operating leases for corporate offices, warehouses, sorting centers, cars and parking spots. The Group’s leases have remaining lease terms of 1 to 9 years, some of which include options to terminate the leases within 1 year.

The Group has finance leases for warehouses and cars. The Group’s leases have remaining lease terms of 1 to 18 years, some of which include options to terminate the leases within 1 year.

The components of lease expense comprise of the operating lease cost, which is disclosed in the unaudited condensed consolidated statements of cash flows, and the following costs:


		Three months ended June 30,			Six months ended June 30,
	****	2022	2023	2023	2022	2023	2023
		RUB	RUB	$	RUB	RUB	$
Total variable lease cost		345	21	0.2	682	100	1.2
Finance lease cost:
Amortization of right-of-use assets		448	750	8.6	863	1,419	16.3
Interest on lease liabilities		336	646	7.4	668	1,231	14.1
Total finance lease cost	****	784	1,396	16.0	1,531	2,650	30.4

Variable lease costs are mainly related to car leases for carsharing business and represent mileage-based payments.

Supplemental balance sheet information related to leases was as follows:


		December 31, 2022	June 30, 2023	June 30, 2023
		RUB	RUB	$
Operating leases	****
Operating lease right-of-use assets		28,646	28,847	331.4
Operating lease liabilities, current (Note 4)		10,963	11,232	129.0
Operating lease liabilities, non-current		17,609	17,391	199.8
Total operating lease liabilities		28,572	28,623	328.8

Finance lease liability, current (Note 4)		2,788	3,696	42.5
Finance lease liability, non-current		21,185	25,201	289.6
Total finance lease liabilities	****	23,973	28,897	332.1

Maturities of lease liabilities as of June 30, 2023 were as follows:


	Operating leases			Finance leases
	RUB		$	RUB		$
Remainder of 2023	7,127		81.9	3,185		36.6
2024	10,125		116.3	5,947		68.3
2025	5,965		68.5	8,086		92.9
2026	4,416		50.7	7,695		88.4
2027	2,641	****	30.3	4,658	****	53.5
Thereafter	2,891		33.3	10,150		116.7
Total lease payments	33,165		381.0	39,721		456.4
Less imputed interest	(4,542)		(52.2)	(10,824)		(124.3)
Total	28,623		328.8	28,897		332.1

F-15

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)

Information about weighted-average remaining lease term and weighted-average discount rate is presented below:


	Weighted average remaining lease term, years		Weighted average discount rate, %
	December 31, 2022	June 30, 2023	December 31, 2022	June 30, 2023
Operating leases	3.6	3.6	7.4%	7.6%
Finance leases	6.8	6.0	8.6%	9.0%

Sublease income is mainly represented by operating lease revenue.

As of June 30, 2023, the Group had additional operating leases that have not yet commenced of RUB 2,585 ($29.7). These operating leases will commence in August and September 2023 with lease terms of 5 to 7 years.

Group as Lessor

The Group leases cars through the Yandex Drive free-floating car-sharing service and other related services. These leases meet the criteria of ASC 842 Leases for classification as operating leases. The Group recognized operating lease revenue of RUB 2,785 and RUB 2,566 ($29.5) for the three months ended June 30, 2022 and 2023, respectively, and RUB 5,381 and 4,543 RUB ($52.2) for the six months ended June 30, 2022 and 2023, respectively, presented within the revenues line in the unaudited condensed consolidated statements of operations.

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 3 to 5 years, with the possibility of early redemption and secured by a collateral of the leased assets.

The future minimum rental payments receivable for net investment in the lease were as follows:


	****	June 30, 2023	****	June 30, 2023
		RUB		$
Remainder of 2023		1,879		21.6
2024		3,732		42.9
2025		3,622		41.6
2026		2,274		26.1
2027		815		9.4
Thereafter		90		1.0
Total undiscounted rental payments	****	12,412		142.6
Less: Unearned interest		(2,833)		(32.5)
Net investment in the lease	****	9,579		110.1

8.	GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill were as follows:


	Search and Portal	E-commerce, Mobility and Delivery	Plus and Entertainment	Classifieds	Other Business Units and Initiatives	Total	****	Total
	RUB	RUB	RUB	RUB	RUB	RUB		$

Balance as of December 31, 2021
Gross amount of goodwill	2,719	107,810	2,140	6,382	151	119,202
Accumulated impairment loss	—	(762)	(576)	—	—	(1,338)
	2,719	107,048	1,564	6,382	151	117,864

Acquisitions	—	1,101	—	—	—	1,101

Balance as of March 31, 2022
Gross amount of goodwill	2,719	108,911	2,140	6,382	151	120,303
Accumulated impairment loss	—	(762)	(576)	—	—	(1,338)
	2,719	108,149	1,564	6,382	151	118,965

F-16

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)


Foreign currency translation adjustment	—	(444)	—	—	—	(444)

Balance as of June 30, 2022
Gross amount of goodwill	2,719	108,467	2,140	6,382	151	119,859
Accumulated impairment loss	—	(762)	(576)	—	—	(1,338)
	2,719	107,705	1,564	6,382	151	118,521

Acquisitions	—	25,038	—	—	—	25,038
Foreign currency translation adjustment	—	219	—	—	—	219

Balance as of December 31, 2022
Gross amount of goodwill	2,719	133,724	2,140	6,382	151	145,116
Accumulated impairment loss	—	(762)	(576)	—	—	(1,338)
	2,719	132,962	1,564	6,382	151	143,778

Foreign currency translation adjustment	—	67	—	—	—	67

Balance as of March 31, 2023
Gross amount of goodwill	2,719	133,791	2,140	6,382	151	145,183
Accumulated impairment loss	—	(762)	(576)	—	—	(1,338)
	2,719	133,029	1,564	6,382	151	143,845

Foreign currency translation adjustment	—	75	—	—	—	75
Impairment loss	—	(1,136)	—	—	—	(1,136)

Balance as of June 30, 2023
Gross amount of goodwill	2,719	133,866	2,140	6,382	151	145,258	1,669.0
Accumulated impairment loss	—	(1,898)	(576)	—	—	(2,474)	(28.4)
	2,719	131,968	1,564	6,382	151	142,784	1,640.6

Intangible assets, net of amortization, as of December 31, 2022 and June 30, 2023 consisted of the following:


	****	As of December 31, 2022				As of June 30, 2023
		Gross	Less:	Net		Gross	Less:	Net	Net
		carrying	Accumulated	carrying		carrying	Accumulated	carrying	carrying
		amount	amortization	value		amount	amortization	value	value
		RUB	RUB	RUB		RUB	RUB	RUB	$
Acquisition-related intangible assets:
Trade names and domain names		13,430	(2,840)	10,590		11,287	(1,974)	9,313	107.0
Customer relationships		13,226	(3,834)	9,392		13,232	(4,566)	8,666	99.6
Content and software		8,387	(3,444)	4,943		8,148	(4,040)	4,108	47.2
Supplier relationships		215	(83)	132		215	(107)	108	1.2
Total acquisition-related intangible assets:		35,258	(10,201)	25,057		32,882	(10,687)	22,195	255.0
Other intangible assets:
Technologies and licenses		10,765	(5,799)	4,966		20,239	(7,671)	12,568	144.4
Assets not yet in use		1,743	—	1,743		1,464	—	1,464	16.8
Total other intangible assets:		12,508	(5,799)	6,709		21,703	(7,671)	14,032	161.2
Total intangible assets		47,766	(16,000)	31,766	****	54,585	(18,358)	36,227	416.2

F-17

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 following table represents the amortization expense of intangible assets for the three and six months ended June 30, 2022 and 2023:


		Three months ended June 30,			Six months ended June 30,
	****	2022	2023	2023	2022	2023		2023
		RUB	RUB	$	RUB	RUB		$
Acquisition-related intangible assets		855	1,692	19.4	1,707	2,834		32.6
Other intangible assets		1,000	903	10.4	1,824	1,867		21.5
Total amortization expense of intangible assets	****	1,855	2,595	29.8	3,531	4,701	****	54.0

Expected amortization expense of intangible assets held as of June 30, 2023 was as follows:


	Acquired	Purchased	Total
	intangible	technologies	intangible
	assets	and licenses	assets
	RUB	RUB	RUB	$
Remainder of 2023	1,970	2,741	4,711	54.1
2024	3,896	3,909	7,805	89.7
2025	3,489	2,935	6,424	73.8
2026	2,789	2,470	5,259	60.4
2027	2,019	502	2,521	29.0
Thereafter	8,033	11	8,044	92.4
Total	22,196	12,568	34,764	399.4

9.	INCOME TAX

Income taxes are computed in accordance with Russian Federation, Dutch and other national tax laws.

Yandex N.V. is incorporated in the Netherlands, and its taxable profits are subject to income tax at the rate of 25.8% for the three and six months ended June 30, 2022 and 2023.

The Group’s tax provision for income taxes for interim periods is determined based on the tax rate effective during that period. The amount of expected income tax expense that would result from applying the Dutch statutory income tax rate to income before income taxes reconciled to the reported amount of income tax expense for the three and six months ended June 30, 2022 and 2023 was as follows:


		Three months ended June 30,				Six months ended June 30,
		2022		2023	2023	2022		2023	2023
		RUB		RUB	$	RUB		RUB	$
Expected expense at Dutch statutory income tax rate of 25.8%		3,041		5,041	57.9	327		7,037	80.9
Effect of:
Non-deductible share-based compensation		1,676		1,419	16.3	3,292		2,915	33.5
Accrual of unrecognized tax benefit		52		589	6.8	70		1,091	12.5
Other expenses/(income) not deductible/(taxable) for tax purposes		(225)		1,610	18.5	623		2,842	32.7
Change in valuation allowances		65		1,656	19.0	1,890		3,512	40.4
Tax on inter-company dividends		509		993	11.4	1,023		1,640	18.8
Difference in foreign tax rates		(1,553)		(7,232)	(83.1)	(1,700)		(12,202)	(140.2)
Other		167		833	9.6	725		26	0.2
Income tax expense	****	3,732	****	4,909	56.4	6,250	****	6,861	78.8

F-18

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)

Movements in the valuation allowance for the three and six months ended June 30, 2022 and 2023 were as follows:


		Three months ended June 30,				Six months ended June 30,
		2022		2023	2023	2022		2023	2023
		RUB		RUB	$	RUB		RUB	$
Balance at the beginning of the period		(16,508)		(17,698)	(203.3)	(12,482)		(14,778)	(169.8)
Charged to expenses		(65)		(1,656)	(19.0)	(1,890)		(3,512)	(40.4)
Foreign currency translation adjustment		2,803		(954)	(11.0)	1,930		(1,432)	(16.5)
Effect of adoption of ASU 2020-06		—		—	—	(1,330)		—	—
Other		378		—	—	380		(586)	(6.7)
Balance at the end of the period	****	(13,392)	****	(20,308)	(233.3)	(13,392)	****	(20,308)	(233.4)

As of December 31, 2022 and June 30, 2023, the Group included accrued interest and penalties related to unrecognized tax benefits, totalling RUB 807 and RUB 1,342 ($15.4), respectively as a component of other accrued liabilities in the unaudited condensed consolidated balance sheets.

As of December 31, 2022 and June 30, 2023, RUB 5,463 and RUB 6,037 ($69.4), respectively, of unrecognized tax benefits, if recognized, would affect the effective tax rate. The Group does not anticipate significant increases or decreases in unrecognized income tax benefits over the next twelve months.

10.	CONTENT ASSETS

Content assets as of December 31, 2022 and June 30, 2023 consisted of the following:


		December 31, 2022	****	June 30, 2023	****	June 30, 2023
	****	RUB		RUB		$
Licensed content, net
Released licensed content, net		7,503		7,850		90.2
Advances for licensed content		1,723		2,113		24.3
Produced content, net
Released, less amortization		2,427		3,426		39.4
Completed and not released		757		611		7.0
In production and in development		4,434		4,856		55.8
Сontent assets		16,844		18,856		216.7

The following table represents the amortization of content assets:


		Three months ended June 30,			Six months ended June 30,
	****	2022	2023	2023	2022	2023		2023
		RUB	RUB	$	RUB	RUB		$
Licensed content		2,137	1,394	16.0	4,254	3,319		38.2
Produced content		187	766	8.8	372	1,221		14.0
Total amortization of content assets	****	2,324	2,160	24.8	4,626	4,540	****	52.2

During the six months ended June 30, 2023 the Group has entered into purchase commitments for streaming content with future payments, excluding value added tax, amounting to RUB 959 ($11.0) in 2023 and RUB 1,411 ($16.2) in 2024.

11.	COMMITMENTS AND CONTINGENCIES

Legal Proceedings

In the ordinary course of business, the Group is a party to various legal proceedings and subject to claims, certain of which relate to the alleged breach of certain contractual arrangements. The Group intends to vigorously defend any lawsuit and believes that the ultimate outcome of any pending litigation, other legal proceedings or other matters will not have any material adverse effect on the financial condition, results of operations or liquidity of the Group.

F-19

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)

As of December 31, 2022 and June 30, 2023, the Group recorded liabilities for all pending legal matters that were probable and reasonably estimable in the amount of RUB 726 and RUB 908 ($10.4) respectively.

As of December 31, 2022 and June 30, 2023, the Group was subject to various legal and regulatory matters that have arisen in the normal course of business. Related claims amounted to RUB 813 and RUB 264 ($3), respectively. The Group has not recognized a liability in respect of those claims because management does not believe that the Group has incurred a probable material loss by reason of any of those matters.

Environment and Current Economic Situation

The Group has principal operations in Russia, and smaller, early-stage businesses that operate internationally. Current geopolitical tensions and their impact on the Russian and global economy have created an exceptionally challenging environment for the Group’s business, team and shareholders.

These developments have adversely impacted (and may in the future materially adversely impact) the macroeconomic climate in Russia, resulting in volatility of the ruble, currency controls, materially increased interest rates and inflation and a potential contraction in consumer spending, as well as the withdrawal of foreign businesses and suppliers from the Russian market. In addition, laws or regulations may be adopted that may adversely affect the Group’s non-Russian shareholders and the value of the shares they hold in the Group. For additional details on the Group’s risk exposure, see the Annual Report on Form 20-F for the year ended December 31, 2022.

Taxes are subject to review and investigation by a number of authorities authorized by law to impose fines and penalties. Although the Group believes it has provided adequately for all tax liabilities based on its understanding of the tax legislation, the above factors may create tax risks for the Group. As of June 30, 2023, except for the unrecognized tax benefits described in Note 9, the Group accrued RUB 12,772 ($146.7) (RUB 10,913 as of December 31, 2022) for contingencies related to non-income taxes and fees, including penalties and interest of RUB 3,417 ($39.3) and RUB 2,439 as of June 30, 2023 and December 31, 2022, respectively, as a component of other accrued liabilities in the unaudited condensed consolidated balance sheets. Additionally, the Group has identified possible contingencies related to non-income taxes and fees, which were not accrued. Such contingencies could materialize and require the Group to pay additional amounts of tax. As of June 30, 2023, the Group estimated such contingencies related to non-income taxes and fees, including penalties and interest, to be up to approximately RUB 41,362 ($475.2) (RUB 25,232 as of December 31, 2022).

12.	DEBT

Debt as of December 31, 2022 and June 30, 2023 consisted of the following:


	****	December 31, 2022	****	As of June 30, 2023	****	As of June 30, 2023
		RUB		RUB		$

Loans		50,669		92,002		1,057.1
Convertible debt		522		645		7.4
Total debt		51,191		92,647		1,064.5
Less: current portion		(21,306)		(68,764)		(790.1)
Total debt, non-current portion	****	29,885		23,883	****	274.4

Loans

In 2022, the Group funded the cash component of the convertible notes primarily by means of a RUB-denominated commercial loan in the amount of RUB 49,885 maturing in June 2025. In June 2023, the Group partially repaid the loan in the amount of RUB 20,000.

In February 2023, the Group also signed a loan agreement. During the six months ended June 30, 2023, the Group received proceeds in the amount of RUB 80,000 and repaid RUB 20,000 under the loan agreement. As of June 30, 2023, the debt under the agreement amounted to RUB 46,000 maturing in 2023 and RUB 14,000 maturing in 2025-2028.

F-20

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)

13.	SHARE-BASED COMPENSATION

The Company has granted Share-Based Awards to employees of the Group pursuant to its 2016 Equity Incentive Plan (the “2016 Plan”).

Share-Based Compensation Expense

The following table summarizes information about recognized share-based compensation expenses:


	Three months ended June 30,			Six months ended June 30,
	2022	2023	2023	2022	2023	2023
	RUB	RUB	$	RUB	RUB	$
Restricted Share Units (“RSUs”)	4,259	4,708	54.1	9,267	9,279	106.6
Synthetic Options and Business Unit Equity Awards	1,840	564	6.5	2,415	1,577	18.1
RSUs in respect of the Self-Driving Group	91	103	1.2	208	195	2.2
Share options	79	81	0.9	274	154	1.8
Performance Share Units (“PSUs”)	226	12	0.1	596	23	0.3
Other	—	31	0.4	—	71	0.8
Total share ‑ based compensation expenses	6,495	5,499	63.2	12,760	11,299	129.8

Yandex N.V. Equity Incentive Plan

The following table summarizes information about non-vested share awards:


		Options					RSUs				PSUs
				Weighted					Weighted				Weighted
				Average					Average				Average
		Quantity		Grant Date			Quantity		Grant Date		Quantity		Grant Date
			****	Fair Value		****		****	Fair Value			****	Fair Value
Non-vested as of December 31, 2022		723,923		$	21.94		5,725,549		$	54.47	171,979		$	97.51
Vested	****	(65,000)			27.05		(33,015)			39.69	—			—
Forfeited		—			—		(137,661)			53.88	—			—
Cancelled		—			—		(2,761,297)			51.37	—			—
Non-vested as of June 30, 2023		658,923		$	21.44		2,793,576		$	57.74	171,979		$	97.51

In January 2023, the Company modified the terms of Yandex N.V. RSU awards and extended the program into 2023 to provide an opportunity for all holders of RSUs to exchange the portion of outstanding awards that would otherwise have vested in 2023 for cash bonuses. Equity awards in respect of an aggregate of approximately 2.7 million RSUs were exchanged. The replacement cash payments were payable in accordance with the original 2023 vesting schedules in respect of the exchanged RSUs. The exchange was accounted for as a modification of equity awards, resulting in additional share-based compensation expense of RUB 6,484 excluding tax effect, of which RUB 3,653 ($42.0) is recognized in the unaudited condensed consolidated statements of operations for the six months ended June 30, 2023. The accrued liability associated with the replacement cash payment in the amount of RUB 2,409 ($27.7) is included in accounts payable, accrued and other liabilities in the unaudited condensed consolidated balance sheet as of June 30, 2023.

As of June 30, 2023, there was RUB 18,129 ($208.3) of unamortized share-based compensation expense related to unvested share options, RSUs and PSUs which is expected to be recognized over a weighted average period of 2.27 years.

Synthetic Options Equity Incentive Plans and Business Unit Equity Awards

The Company granted share-based awards to the employees of several business units, comprised of a synthetic option awards in respect of the relevant business unit (“Synthetic Options”) and a linked RSU award. Synthetic Options entitle the participants to receive phantom or synthetic “shares” in the relevant business unit, which represent the participant’s right to an amount (the “Payout Amount”) based on the appreciation in value of the synthetic “shares” from the grant date to the vesting or exercise date. Such Payout Amounts are satisfied by the vesting of the linked RSU award, which are ultimately settled in the Company’s Class A shares. Generally, 25% of the Synthetic Options vest after one year, with the remaining vesting in equal amounts on the last day of each quarter over the following three years.

The Company also granted equity incentive awards under the 2016 Plan to the senior employees of certain

F-21

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)

business units, which entitle the participants to receive options to acquire redeemable depositary receipts of shares in the respective operating subsidiaries upon the satisfaction of defined vesting criteria (the “Business Unit Equity Awards”). The exercise price of the Business Unit Equity Awards is determined from time to time by the Board and the standard vesting schedule for Business Unit Equity Awards under the 2016 Plan is consistent with Share-Based Awards granted in the Company’s shares.

The following table summarizes information about non-vested share awards:


		Synthetic Options and Business Unit Equity Awards
				Weighted
				Average
		Quantity		Grant Date
				Fair Value
Non-vested as of December 31, 2022		1,991,383	RUB	3,405.1
Granted	****	668,176		1,960.3
Vested		(342,928)		2,870.8
Forfeited		(90,736)		5,689.7
Cancelled		(58,333)		9,870.2
Non-vested as of June 30, 2023		2,167,562	RUB	2,774.6

As of June 30, 2023, there was RUB 5,928 ($68.1) of unamortized share-based compensation expense related to unvested Synthetic Options and Business Unit Equity Awards which is expected to be recognized over a weighted average period of 2.77 years.

Self-Driving Group 2021 Equity Incentive Plan

Yandex Self-Driving Group B.V., a subsidiary of the Group (“SDG”), adopted the SDG 2021 Equity Incentive Plan (the “SDG Plan”) on February 11, 2021. Under the SDG Plan, SDG may grant equity-based awards, including restricted share unit awards, in respect of SDG. RSUs awarded under the SDG Plan entitle the holder to receive a fixed number of depositary receipts (“DRs”) representing Class A shares in SDG at no cost upon the satisfaction of certain time-based vesting criteria. On February 11, 2021, the Supervisory Board of SDG approved the grant of an aggregate of 2,132,749 SDG RSUs, representing a total of approximately 6.3% of the equity of Self-Driving Group on a fully diluted basis. Generally, SDG RSUs vest over a six-year period, 17% after one year, with the remaining vesting in equal amounts on the last day of each quarter over the following five years.

The following table summarizes information about non-vested share awards:


		SDG RSUs
		Quantity
Non-vested as of December 31, 2022		619,623
Vested		(175,297)
Non-vested as of June 30, 2023		444,326

As of June 30, 2023, the unamortized share-based compensation expense related to SDG B.V. RSUs is expected to be recognized over a weighted average period of 1.70 years.

14.	SEGMENT INFORMATION

The Group determined its operating segments based on how the chief operating decision maker (“CODM”) manages the business, allocate resources, makes operating decisions and evaluates operating performance. The Group determined the following operating and reportable segments: Search and Portal, E-commerce, Mobility and Delivery, Plus and Entertainment Services and Classifieds. The results of the Group’s remaining operating segments, including self-driving vehicles business (“Yandex SDG”), Zen (until it was divested from the Group on September 12, 2022), Yandex Cloud, Yandex Education, Devices and Alice, FinTech and number of other experiments, that do not meet quantitative or qualitative thresholds for disclosure, as well as unallocated corporate expenses, are combined into a final category defined as Other Business Units and Initiatives which is shown separately from the reportable segments and reconciling items.

Starting in 2023, the Group introduced the following changes to its segments compared to those presented within the notes to the consolidated financial statements for the year ended December 31, 2022, in order to better reflect

F-22

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 operational structure of the businesses:

●	the Group renamed the Devices business within Other Business Units and Initiatives segment to Devices and Alice;
●	the Group transferred the following services from the Search and Portal segment to the Other Business Units and Initiatives segment: Yandex 360 to Yandex Cloud, Alice voice assistance to Devices and Alice, and Yandex Pay and Yandex ID to FinTech; and
---	---
●	the Group transferred RouteQ from the Other Business Units and Initiatives segment to the Delivery services within the E-Commerce, Mobility and Delivery segment.
---	---

These changes have been applied retroactively to all periods presented.

Reportable segments derive revenues from the following services:

●	the Search and Portal segment includes Search, Geo, Weather and a number of other services offered in Russia, Belarus and Kazakhstan;
●	the E-commerce, Mobility and Delivery segment includes transactional online-to-offline (O2O) businesses, which consist of (i) the mobility businesses, including ride-hailing in Russia and other countries across CIS and EMEA, Yandex Drive, the car-sharing business for both B2C and B2B, and scooters; (ii) the E-commerce businesses in Russia and CIS, including Yandex Market, multi-category e-commerce marketplace, Yandex Lavka Russia, hyperlocal convenience store delivery service, and the grocery delivery services of Yandex Eats and Market Delivery (the service was earlier known as Delivery Club); and (iii) other O2O businesses, including Yandex Delivery, a last- and middle-mile logistics solution for individuals, enterprises and SMB (small and medium business); Yandex Eats and Market Delivery, a ready-to-eat delivery services from restaurants; Lavka Israel, a hyperlocal convenience store delivery service; and Yandex Fuel, a contactless payment service at gas stations, and several smaller experiments;
---	---
●	the Plus and Entertainment Services segment includes subscription service Yandex Plus, Yandex Music, Kinopoisk, Yandex Afisha and our production center Yandex Studio; and
---	---
●	the Classifieds segment includes Auto.ru, Yandex Realty, Yandex Rent and Yandex Travel
---	---

Operating segments of the Group may integrate products managed by other operating segments into their services, for which they pay royalties or other types of compensation. Such compensation represents intersegment transactions, which are included in revenues of the reportable segments presented below. The Group considers it to be impracticable to separately present revenues from external customers and intersegment transactions for each reportable segment as such information is not readily available and is not presented to the CODM.

The measures of the segments’ profits and losses that are used by the CODM to assess segment performance and decide how to allocate resources are presented below. Each segment’s assets and capital expenditures are not reviewed by the CODM.

F-23

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)


	****	Three months ended June 30,						Six months ended June 30,
		2022	****	2023	****	2023	****	2022	****	2023	****	2023
		RUB		RUB		$		RUB		RUB		$
Search and Portal:
Revenues		51,209		78,416		901.0		95,012		145,961		1,677.1
Adjusted EBITDA		29,441		41,011		471.2		49,002		75,724		870.0
E-commerce, Mobility and Delivery:
Revenues		56,732		94,951		1,091.0		111,926		183,426		2,107.5
Adjusted EBITDA		2,011		(6,119)		(70.3)		(6,434)		(16,919)		(194.4)
Plus and Entertainment:
Revenues	****	6,150		15,503		178.1		11,981		28,859		331.6
Adjusted EBITDA		(2,595)		1,800		20.7		(5,766)		1,574		18.1
Classifieds:
Revenues		2,568		5,573		64.0		4,979		10,011		115.0
Adjusted EBITDA		493		(46)		(0.5)		666		(163)		(1.9)
Other Business Units and Initiatives:
Revenues		10,868		14,891		171.1		18,673		29,077		334.1
Adjusted EBITDA		(3,704)		(12,302)		(141.3)		(10,651)		(23,358)		(268.4)
Total segment revenues:		127,527		209,334		2,405.2		242,571		397,334		4,565.3
Total segment adjusted EBITDA:		25,646		24,344		279.8		26,817		36,858		423.4
Eliminations:
Revenues		(9,779)		(26,839)		(308.4)		(18,813)		(51,564)		(592.5)
Adjusted EBITDA		48		402		4.6		148		682		7.8
Total:
Revenues from external customers		117,748		182,495		2,096.8		223,758		345,770		3,972.8
Adjusted EBITDA		25,694		24,746		284.4		26,965		37,540		431.2

The reconciliation between adjusted EBITDA and net income before income taxes for the three and six months ended June 30, 2022 and 2023 is as follows:


		Three months ended June 30,					Six months ended June 30,
		2022		2023		2023	2022		2023		2023
	****	RUB	****	RUB	****	$	RUB	****	RUB	****	$
Adjusted EBITDA		25,694		24,746		284.3	26,965		37,540		431.3
Less: depreciation and amortization		(7,713)		(9,336)		(107.3)	(15,180)		(17,623)		(202.5)
Less: share-based compensation expense		(6,495)		(2,506)		(28.8)	(12,760)		(5,043)		(57.9)
Less: one-off restructuring and other expenses		—		(211)		(2.4)	—		(211)		(2.4)
Less: reversal of compensation expense related to contingent consideration		—		—		—	27		—		—
Add: gain on restructuring of convertible debt		9,305		—		—	9,305		—		—
Add: interest income		1,037		1,108		12.7	2,399		2,323		26.7
Less: interest expense		(1,109)		(1,973)		(22.7)	(1,729)		(3,146)		(36.1)
Less: loss from equity method investments		(86)		(109)		(1.3)	(451)		(241)		(2.8)
Add: other income/(loss), net		(6,105)		9,020		103.8	(4,567)		14,877		170.9
Less: impairment of goodwill and other intangible assets		(2,740)		(1,199)		(13.8)	(2,740)		(1,199)		(13.8)
Net income before income taxes		11,788		19,540		224.5	1,269		27,277		313.4

15.	SUBSEQUENT EVENTS

New grants

In July 2023, the Company granted pursuant to the 2016 Plan 1,014,445 Synthetic Options in respect of the Group’s business units.

F-24