Ten states, however, have adopted their own laws that specify which patients, based on their income and family size, qualify for free or discounted care. Among them is Washington, where Providence is based. All hospitals in the state must provide free care for anyone who makes under 300 percent of the federal poverty level. For a family of four, that threshold is $83,250 a year.

In February, Bob Ferguson, the state’s attorney general, accused Providence of violating state law, in part by using debt collectors to pursue more than 55,000 patient accounts. The suit alleged that Providence wrongly claimed those patients owed a total of more than $73 million.

Providence, which is fighting the lawsuit, has said it will stop using debt collectors to pursue money from low-income patients who should qualify for free care in Washington.

But The Times found that the problems extend beyond Washington. In interviews, patients in California and Oregon who qualified for free care said they had been charged thousands of dollars and then harassed by collection agents. Many saw their credit scores ruined. Others had to cut back on groceries to pay what Providence claimed they owed. In both states, nonprofit hospitals are required by law to provide low-income patients with free or discounted care.

“I felt a little betrayed,” said Bev Kolpin, 57, who had worked as a sonogram technician at a Providence hospital in Oregon. Then she went on unpaid leave to have surgery to remove a cyst. The hospital billed her $8,000 even though she was eligible for discounted care, she said. “I had worked for them and given them so much, and they didn’t give me anything.” (The hospital forgave her debt only after a lawyer contacted Providence on Ms. Kolpin’s behalf.)

was a single room with four beds. The hospital charged patients $1 a day, not including extras like whiskey.

Patients rarely paid in cash, sometimes offering chickens, ducks and blankets in exchange for care.

At the time, hospitals in the United States were set up to do what Providence did — provide inexpensive care to the poor. Wealthier people usually hired doctors to treat them at home.

wrote to the Senate in 2005.

Some hospital executives have embraced the comparison to for-profit companies. Dr. Rod Hochman, Providence’s chief executive, told an industry publication in 2021 that “‘nonprofit health care’ is a misnomer.”

“It is tax-exempt health care,” he said. “It still makes profits.”

Those profits, he added, support the hospital’s mission. “Every dollar we make is going to go right back into Seattle, Portland, Los Angeles, Alaska and Montana.”

Since Dr. Hochman took over in 2013, Providence has become a financial powerhouse. Last year, it earned $1.2 billion in profits through investments. (So far this year, Providence has lost money.)

Providence also owes some of its wealth to its nonprofit status. In 2019, the latest year available, Providence received roughly $1.2 billion in federal, state and local tax breaks, according to the Lown Institute, a think tank that studies health care.

a speech by the Rev. Dr. Martin Luther King Jr.: “If it falls your lot to be a street sweeper, sweep streets like Michelangelo painted pictures.”

Ms. Tizon, the spokeswoman for Providence, said the intent of Rev-Up was “not to target or pressure those in financial distress.” Instead, she said, “it aimed to provide patients with greater pricing transparency.”

“We recognize the tone of the training materials developed by McKinsey was not consistent with our values,” she said, adding that Providence modified the materials “to ensure we are communicating with each patient with compassion and respect.”

But employees who were responsible for collecting money from patients said the aggressive tactics went beyond the scripts provided by McKinsey. In some Providence collection departments, wall-mounted charts shaped like oversize thermometers tracked employees’ progress toward hitting their monthly collection goals, the current and former Providence employees said.

On Halloween at one of Providence’s hospitals, an employee dressed up as a wrestler named Rev-Up Ricky, according to the Washington lawsuit. Another costume featured a giant cardboard dollar sign with “How” printed on top of it, referring to the way the staff was supposed to ask patients how, not whether, they would pay. Ms. Tizon said such costumes were “not the culture we strive for.”

financial assistance policy, his low income qualified him for free care.

In early 2021, Mr. Aguirre said, he received a bill from Providence for $4,394.45. He told Providence that he could not afford to pay.

Providence sent his account to Harris & Harris, a debt collection company. Mr. Aguirre said that Harris & Harris employees had called him repeatedly for weeks and that the ordeal made him wary of going to Providence again.

“I try my best not to go to their emergency room even though my daughters have gotten sick, and I got sick,” Mr. Aguirre said, noting that one of his daughters needed a biopsy and that he had trouble breathing when he had Covid. “I have this big fear in me.”

That is the outcome that hospitals like Providence may be hoping for, said Dean A. Zerbe, who investigated nonprofit hospitals when he worked for the Senate Finance Committee under Senator Charles E. Grassley, Republican of Iowa.

“They just want to make sure that they never come back to that hospital and they tell all their friends never to go back to that hospital,” Mr. Zerbe said.

The Everett Daily Herald, Providence forgave her bill and refunded the payments she had made.

In June, she got another letter from Providence. This one asked her to donate money to the hospital: “No gift is too small to make a meaningful impact.”

In 2019, Vanessa Weller, a single mother who is a manager at a Wendy’s restaurant in Anchorage, went to Providence Alaska Medical Center, the state’s largest hospital.

She was 24 weeks pregnant and experiencing severe abdominal pains. “Let this just be cramps,” she recalled telling herself.

Ms. Weller was in labor. She gave birth via cesarean section to a boy who weighed barely a pound. She named him Isaiah. As she was lying in bed, pain radiating across her abdomen, she said, a hospital employee asked how she would like to pay. She replied that she had applied for Medicaid, which she hoped would cover the bill.

After five days in the hospital, Isaiah died.

Then Ms. Weller got caught up in Providence’s new, revenue-boosting policies.

The phone calls began about a month after she left the hospital. Ms. Weller remembers panicking when Providence employees told her what she owed: $125,000, or about four times her annual salary.

She said she had repeatedly told Providence that she was already stretched thin as a single mother with a toddler. Providence’s representatives asked if she could pay half the amount. On later calls, she said, she was offered a payment plan.

“It was like they were following some script,” she said. “Like robots.”

Later that year, a Providence executive questioned why Ms. Weller had a balance, given her low income, according to emails disclosed in Washington’s litigation with Providence. A colleague replied that her debts previously would have been forgiven but that Providence’s new policy meant that “balances after Medicaid are being excluded from presumptive charity process.”

Ms. Weller said she had to change her phone number to make the calls stop. Her credit score plummeted from a decent 650 to a lousy 400. She has not paid any of her bill.

Susan C. Beachy and Beena Raghavendran contributed research.

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Where Online Hate Speech Can Bring the Police to Your Door

When the police pounded the door before dawn at a home in northwest Germany, a bleary-eyed young man in his boxer shorts answered. The officers asked for his father, who was at work.

They told him that his 51-year-old father was accused of violating laws against online hate speech, insults and misinformation. He had shared an image on Facebook with an inflammatory statement about immigration falsely attributed to a German politician. “Just because someone rapes, robs or is a serious criminal is not a reason for deportation,” the fake remark said.

The police then scoured the home for about 30 minutes, seizing a laptop and tablet as evidence, prosecutors said.

shot and killed by a neo-Nazi on the terrace of his house at close range, shocking the public to the depths of far-right extremism in the country and how online hate could lead to grave real-world violence.

Publicly displaying swastikas and other Nazi symbolism is illegal in Germany, as is denying or diminishing the significance of the Holocaust. Remarks considered to be inciting hatred are punishable with jail time. It is a crime to insult somebody in public.

passed a landmark law, the Network Enforcement Act, that forced Facebook and others to take down hate speech in as little as 24 hours of being notified or face fines.

Companies beefed up their content moderation efforts to comply, but many German policymakers said the law did not go far enough because it targeted companies rather than the individuals who were posting vile content. Hate speech and online abuse continued to spread after the law passed, as did the rise in far-right extremism.

The assassination of Mr. Lübcke represented a turning point, intensifying efforts to prosecute people who broke the speech laws online. And in the last year, the government adopted rules that made it easier to arrest those who target public figures online.

Daniel Holznagel, a former Justice Ministry official who helped draft the internet enforcement laws passed in 2017, compared the crackdown to going after copyright violators. He said people stopped illegally downloading music and movies as much after authorities began issuing fines and legal warnings.

“You can’t prosecute everyone, but it will have a big effect if you show that prosecution is possible,” said Mr. Holznagel, who is now a judge.

same kind of software used by the Federal Bureau of Investigation in the United States.

wavered about how to find the right balance with free expression.

In June, in the town of Kassel in central Germany, a 49-year-old man was on trial for comments made on Facebook that said Mr. Lübcke, the politician murdered in 2019, had “himself to blame.”

Dirk B., the defendant whose full name is being withheld because of Germany’s strict privacy laws, told a judge that the comments were taken out of context. His Facebook post, he said, had been about Mr. Lübcke’s refusal of police protection and that he had, in the same comments, expressed condolences for Mr. Lübcke’s family.

“This falls under the freedom of expression in our free democratic state,” the defendant said. He added that he would post the same thing again.

The judge disagreed. At the end of the two-hour hearing, she said he had effectively condoned Mr. Lübcke’s murder. He was ordered to pay a fine of €2,400.

Paula Haase contributed reporting from Kassel, Germany.

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CoreGiving Announces Second Annual CoreGiving Day

CHICAGO–(BUSINESS WIRE)–Today, CoreGiving announced that it will hold its second annual CoreGiving Day on Thursday, October 13, 2022. Blackstone and 14 of its real estate portfolio companies will join food banks across the U.S. to provide meals to those in need. On CoreGiving Day, more than 2,100 volunteers across 42 markets will spend their time on-site at food bank locations throughout the U.S.

CoreGiving was launched in 2016 to fight child hunger and, since its inception, has donated more than 25 million meals to 54 food banks. In 2021, CoreGiving raised $1.8 million for local food banks to provide nine million meals to children in need across 19 states. At last year’s inaugural CoreGiving Day, volunteers prepared over 150,000 meals across 24 different food bank sites.

“In 2021, one in eight U.S. households with children experienced food insecurity, highlighting the staggering scale of the problem,” said Luke J. Petherbridge, chairman and co-founder of CoreGiving and chief executive officer of Link Logistics. “CoreGiving is dedicated to combating the critical challenge of ending childhood hunger because every child deserves the opportunity to flourish. I am excited to build on the success of our efforts last year and look forward to participating in CoreGiving Day alongside thousands of volunteers across the country to make a positive impact in the communities where we operate.”

In 2022, CoreGiving has raised over $2.4 million and funded almost 13 million meals to date.

“CoreGiving’s mission is to provide our neighbors the food they need for a better tomorrow,” said Bridget O’Connell, executive director, CoreGiving. “Our goal for 2022 is to provide 14 million meals to hungry households and donate over 10,000 hours of hunger relief volunteer service. I am proud of the progress we have made thus far and all that we will accomplish on this year’s CoreGiving Day toward ending child hunger.”

To donate to CoreGiving or find more information on the organization, please visit www.coregiving.org.

About CoreGiving

CoreGiving is a 501c3 organization that was founded in 2016 to fight child hunger across the United States. CoreGiving has grown into a collaborative partnership made up of Blackstone portfolio companies including: April Housing (Los Angeles, CA), Beam Living (New York, NY), BioMed Realty (San Diego, CA), BRE Hotels & Resorts (New York, NY), Link Logistics (New York, NY), LivCor (Chicago, IL), Longview Senior Housing Advisors (Tampa, FL), Revantage (Chicago, IL), ShopCore Properties (Chicago, IL) and Simply Self Storage (Orlando, FL), that have joined forces to address food insecurity.

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As Moscow Begins Troop Call-Up, Some Men Flee the Country

Credit…Agence France-Presse — Getty Images

ISTANBUL — In just over 12 hours after he heard that Russian civilians could be pressed into military service in Ukraine, the young tour guide bought a plane ticket, changed money, bought a laptop, wrapped up his business, kissed his crying mother goodbye and boarded a plane to leave his country, with no idea when he would return.

Thursday morning, he walked into the cavernous arrival hall of the Istanbul International Airport carrying only a backpack and the address of a friend who had promised to put him up while he figured out what to do with his life.

“I was sitting and thinking about what I could die for, and I didn’t see any reason to die for the country,” said the tour guide, 23, who, like others interviewed for this article, declined to give his name for fear of reprisals.

Since President Vladimir V. Putin’s announcement on Wednesday of a new troop call-up, waves of Russian men who had previously thought they were safe from being forced to the front lines have realized they could not count on staying out of their country’s invasion of Ukraine.

Some have left the country in a rush, paying rising prices to catch flights to countries such as Armenia, Georgia, Montenegro and Turkey that allow them to enter without visas.

Aleksandr, a 37-year-old executive manager from Moscow, didn’t finish listening to Mr. Putin’s announcement on Wednesday. Instead, he started packing. Minutes later, he left his apartment and drove to the airport, looking for available tickets en route.

There were already none available for his preferred destinations, such as Istanbul, so he opted for Namangan, Uzbekistan, a city he had never heard of. He spent the afternoon at the airport near Moscow, hoping to get through passport control as soon as possible, fearing the border could close for reservists at any point.

“I realized that the stakes just were very high,” Aleksandr said in a phone interview from Namangan. “I was already ready for everything, that they would just turn me away at the border.” The plane, he said, was full of people like him — “stooped young men with laptops.” His neighboring passenger had never heard of Namangan before either.

Back in Moscow, Aleksandr’s wife was in shock. Suddenly, she was left alone with their three children. “I am horrified; my hopes that things might remain more or less OK have collapsed today,” she said.

Some of the Russian men arrived in Istanbul with huge roller bags, stuffed with clothing and other personal belongings they hoped would make it easier to set up a new life elsewhere. Others had left in a rush with small bags containing a few changes of clothes.

Many said they would not return home while the threat of conscription looms. But the suddenness of their departure meant that few have definite plans for what they would do next.

The tour guide, who is a reservist, said he had already arranged a temporary place to stay in Istanbul and that he hoped to improve his English and possibly work as a tour guide in Turkey.

A merchant mariner who gave his name only as Dmitriy, 26, said he would wait in Turkey until he found a new ship to work on. As soon as he had heard the news, “I decided that I needed to leave now,” he said.

Over the last 24 hours, his friends had been messaging and calling each other to explore their options and consulting Telegram channels where people share information about the conditions at Russian airports and border crossings. As airline tickets sold out, some Russian men were looking into driving to Georgia and Finland, according to numerous chats on Telegram.

The mariner said that most of his friends had stayed in Russia after the invasion of Ukraine, feeling that the war would not affect them much. But now, most of them were rushing to get out.

“Lots of people want to leave Russia now because they don’t want to fight for the opinion of one person,” he said, dismissing the invasion as a personal project of Mr. Putin.

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KB Home Reports 2022 Third Quarter Results

LOS ANGELES–(BUSINESS WIRE)–KB Home (NYSE: KBH) today reported results for its third quarter ended August 31, 2022.

“KB Home achieved record third quarter financial results, with substantial year-over-year growth in revenues, margins and diluted earnings per share,” said Jeffrey Mezger, Chairman, President and Chief Executive Officer. “Although we experienced a shortfall in deliveries relative to our expectation due to extended build times and ongoing supply chain constraints, which will also impact our 2022 fourth quarter, our results demonstrate our larger scale, excellent portfolio of communities and a healthy balance sheet.”

“The long-term outlook for the housing market remains favorable. However, the combination of rising mortgage interest rates, ongoing inflation and other macro concerns has caused many prospective buyers to pause on their homebuying decision. While we continue to navigate these uncertain conditions, we believe we are well positioned with our Built-to-Order business model and a significant backlog of over 10,700 homes, which we expect to deliver over the next three quarters, representing potential future housing revenues of approximately $5.3 billion.”

“We are being more selective with respect to land investments, as reflected in our significantly lower spend in the third quarter. At the same time, we continued to return capital to stockholders through additional share repurchases, along with our regular quarterly dividend. We intend to remain thoughtful in our capital allocation decisions, focused on driving returns to further increase long-term stockholder value,” concluded Mezger.

Three Months Ended August 31, 2022 (comparisons on a year-over-year basis)

Nine Months Ended August 31, 2022 (comparisons on a year-over-year basis)

Backlog and Net Orders (comparisons on a year-over-year basis)

Balance Sheet as of August 31, 2022 (comparisons to November 30, 2021)

Guidance

The Company is providing the following current guidance for its 2022 fourth quarter:

Conference Call

The conference call to discuss the Company’s 2022 third quarter earnings will be broadcast live TODAY at 2:00 p.m. Pacific Time, 5:00 p.m. Eastern Time. To listen, please go to the Investor Relations section of the Company’s website at kbhome.com.

About KB Home

KB Home is one of the largest and most recognized homebuilders in the United States and has built over 655,000 quality homes in our 65-year history. Today, KB Home operates in 47 markets from coast to coast. What sets KB Home apart is the exceptional personalization we offer our homebuyers—from those buying their first home to experienced buyers—allowing them to make their home uniquely their own, at a price that fits their budget. As the leader in energy-efficient homebuilding, KB Home was the first builder to make every home it builds ENERGY STAR® certified, a standard of energy performance achieved by fewer than 10% of new homes in America, and has built more ENERGY STAR certified homes than any other builder. An energy-efficient KB home helps lower the cost of ownership and is designed to be healthier, more comfortable and better for the environment than new homes without certification. We build strong, personal relationships with our customers so they have a real partner in the homebuying process. As a result, we have the distinction of being the #1 customer-ranked national homebuilder in third-party buyer satisfaction surveys. Learn more about how we build homes built on relationships by visiting kbhome.com.

Forward-Looking and Cautionary Statements

Certain matters discussed in this press release, including any statements that are predictive in nature or concern future market and economic conditions, business and prospects, our future financial and operational performance, or our future actions and their expected results are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations and projections about future events and are not guarantees of future performance. We do not have a specific policy or intent of updating or revising forward-looking statements. If we update or revise any such statement(s), no assumption should be made that we will further update or revise that statement(s) or update or revise any other such statement(s). Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. The most important risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to the following: general economic, employment and business conditions; population growth, household formations and demographic trends; conditions in the capital, credit and financial markets; our ability to access external financing sources and raise capital through the issuance of common stock, debt or other securities, and/or project financing, on favorable terms; the execution of any securities repurchases pursuant to our board of directors’ authorization; material and trade costs and availability, including building materials, especially lumber, and appliances; consumer and producer price inflation; changes in interest rates, including those set by the Federal Reserve, which the Federal Reserve has increased sharply in the past few quarters and signaled an intention to aggressively further increase this year and potentially beyond to moderate inflation, available in the capital markets or from financial institutions and other lenders, and applicable to mortgage loans; our debt level, including our ratio of debt to capital, and our ability to adjust our debt level and maturity schedule; our compliance with the terms of our revolving credit facility; volatility in the market price of our common stock; home selling prices, including our homes’ selling prices, increasing at a faster rate than consumer incomes; weak or declining consumer confidence, either generally or specifically with respect to purchasing homes; competition from other sellers of new and resale homes; weather events, significant natural disasters and other climate and environmental factors; any failure of lawmakers to agree on a budget or appropriation legislation to fund the federal government’s operations, and financial markets’ and businesses’ reactions to any such failure; government actions, policies, programs and regulations directed at or affecting the housing market (including the tax benefits associated with purchasing and owning a home, and the standards, fees and size limits applicable to the purchase or insuring of mortgage loans by government-sponsored enterprises and government agencies), the homebuilding industry, or construction activities; changes in existing tax laws or enacted corporate income tax rates, including those resulting from regulatory guidance and interpretations issued with respect thereto; changes in U.S. trade policies, including the imposition of tariffs and duties on homebuilding materials and products, and related trade disputes with and retaliatory measures taken by other countries; disruptions in world and regional trade flows, economic activity and supply chains due to the military conflict in Ukraine, including those stemming from wide-ranging sanctions the U.S. and other countries have imposed or may further impose on Russian business sectors, financial organizations, individuals and raw materials, the impact of which may, among other things, increase our operational costs, exacerbate building materials and appliance shortages and/or reduce our revenues and earnings; the adoption of new or amended financial accounting standards and the guidance and/or interpretations with respect thereto; the availability and cost of land in desirable areas and our ability to timely develop acquired land parcels and open new home communities; our warranty claims experience with respect to homes previously delivered and actual warranty costs incurred; costs and/or charges arising from regulatory compliance requirements or from legal, arbitral or regulatory proceedings, investigations, claims or settlements, including unfavorable outcomes in any such matters resulting in actual or potential monetary damage awards, penalties, fines or other direct or indirect payments, or injunctions, consent decrees or other voluntary or involuntary restrictions or adjustments to our business operations or practices that are beyond our current expectations and/or accruals; our ability to use/realize the net deferred tax assets we have generated; our ability to successfully implement our current and planned strategies and initiatives related to our product, geographic and market positioning, gaining share and scale in our served markets and in entering into new markets; our operational and investment concentration in markets in California; consumer interest in our new home communities and products, particularly from first-time homebuyers and higher-income consumers; our ability to generate orders and convert our backlog of orders to home deliveries and revenues, particularly in key markets in California; our ability to successfully implement our business strategies and achieve any associated financial and operational targets and objectives, including those discussed in this release or in other public filings, presentations or disclosures; income tax expense volatility associated with stock-based compensation; the ability of our homebuyers to obtain residential mortgage loans and mortgage banking services; the performance of mortgage lenders to our homebuyers; the performance of KBHS, our mortgage banking joint venture; information technology failures and data security breaches; an epidemic or pandemic (such as the outbreak and worldwide spread of COVID-19), and the control response measures that international (including China), federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it, which may (as with COVID-19) precipitate or exacerbate one or more of the above-mentioned and/or other risks, and significantly disrupt or prevent us from operating our business in the ordinary course for an extended period; and other events outside of our control. Please see our periodic reports and other filings with the Securities and Exchange Commission for a further discussion of these and other risks and uncertainties applicable to our business.

KB HOME

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months and Nine Months Ended August 31, 2022 and 2021

(In Thousands, Except Per Share Amounts – Unaudited)

 

 

Three Months Ended August 31,

Nine Months Ended August 31,

 

2022

 

2021

 

2022

 

2021

Total revenues

$

1,844,895

 

$

1,467,102

 

$

4,963,746

 

$

4,049,732

 

Homebuilding:

 

 

 

 

Revenues

$

1,838,888

 

$

1,461,896

 

$

4,947,868

 

$

4,035,939

 

Costs and expenses

 

(1,513,778

)

 

(1,291,967

)

 

(4,188,736

)

 

(3,589,014

)

Operating income

 

325,110

 

 

169,929

 

 

759,132

 

 

446,925

 

Interest income

 

192

 

 

144

 

 

267

 

 

1,038

 

Equity in loss of unconsolidated joint ventures

 

(100

)

 

(182

)

 

(387

)

 

(5

)

Loss on early extinguishment of debt

 

(3,598

)

 

(5,075

)

 

(3,598

)

 

(5,075

)

Homebuilding pretax income

 

321,604

 

 

164,816

 

 

755,414

 

 

442,883

 

Financial services:

 

 

 

 

Revenues

 

6,007

 

 

5,206

 

 

15,878

 

 

13,793

 

Expenses

 

(1,510

)

 

(1,234

)

 

(4,219

)

 

(3,687

)

Equity in income of unconsolidated joint ventures

 

128

 

 

5,409

 

 

20,083

 

 

18,423

 

Financial services pretax income

 

4,625

 

 

9,381

 

 

31,742

 

 

28,529

 

Total pretax income

 

326,229

 

 

174,197

 

 

787,156

 

 

471,412

 

Income tax expense

 

(70,900

)

 

(24,100

)

 

(186,900

)

 

(80,900

)

Net income

$

255,329

 

$

150,097

 

$

600,256

 

$

390,512

 

Earnings per share:

 

 

 

 

Basic

$

2.94

 

$

1.66

 

$

6.82

 

$

4.26

 

Diluted

$

2.86

 

$

1.60

 

$

6.63

 

$

4.11

 

Weighted average shares outstanding:

 

 

 

 

Basic

 

86,487

 

 

90,076

 

 

87,538

 

 

91,290

 

Diluted

 

88,857

 

 

93,264

 

 

90,075

 

 

94,512

 

KB HOME

CONSOLIDATED BALANCE SHEETS

(In Thousands – Unaudited)

 

 

August 31,

2022

November 30,

2021

Assets

 

 

Homebuilding:

 

 

Cash and cash equivalents

$

195,402

$

290,764

Receivables

 

344,659

 

304,191

Inventories

 

5,736,702

 

4,802,829

Investments in unconsolidated joint ventures

 

46,521

 

36,088

Property and equipment, net

 

86,219

 

76,313

Deferred tax assets, net

 

156,278

 

177,378

Other assets

 

108,286

 

104,153

 

 

6,674,067

 

5,791,716

Financial services

 

56,522

 

44,202

Total assets

$

6,730,589

$

5,835,918

 

 

 

Liabilities and stockholders’ equity

 

 

Homebuilding:

 

 

Accounts payable

$

450,451

$

371,826

Accrued expenses and other liabilities

 

755,248

 

756,905

Notes payable

 

2,031,192

 

1,685,027

 

 

3,236,891

 

2,813,758

Financial services

 

3,090

 

2,685

Stockholders’ equity

 

3,490,608

 

3,019,475

Total liabilities and stockholders’ equity

$

6,730,589

$

5,835,918

KB HOME

SUPPLEMENTAL INFORMATION

For the Three Months and Nine Months Ended August 31, 2022 and 2021

(In Thousands, Except Average Selling Price – Unaudited)

 

 

 

 

 

 

Three Months Ended August 31,

Nine Months Ended August 31,

 

2022

2021

2022

2021

Homebuilding revenues:

 

 

 

 

Housing

$

1,838,888

 

$

1,461,648

 

$

4,947,868

 

$

4,035,033

 

Land

 

 

 

248

 

 

 

 

906

 

Total

$

1,838,888

 

$

1,461,896

 

$

4,947,868

 

$

4,035,939

 

 

 

 

 

 

 

 

 

 

 

Homebuilding costs and expenses:

 

 

 

 

Construction and land costs

 

 

 

 

Housing

$

1,347,999

 

$

1,147,448

 

$

3,711,863

 

$

3,176,643

 

Land

 

2,541

 

 

194

 

 

2,541

 

 

926

 

Subtotal

 

1,350,540

 

 

1,147,642

 

 

3,714,404

 

 

3,177,569

 

Selling, general and administrative expenses

 

163,238

 

 

144,325

 

 

474,332

 

 

411,445

 

Total

$

1,513,778

 

$

1,291,967

 

$

4,188,736

 

$

3,589,014

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

Interest incurred

$

31,778

 

$

29,605

 

$

89,102

 

$

91,807

 

Interest capitalized

 

(31,778

)

 

(29,605

)

 

(89,102

)

 

(91,807

)

Total

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

Other information:

 

 

 

 

Amortization of previously capitalized interest

$

35,979

 

$

37,544

 

$

99,757

 

$

109,794

 

Depreciation and amortization

 

9,074

 

 

7,707

 

 

25,745

 

 

23,499

 

 

 

 

 

 

 

 

 

 

 

Average selling price:

 

 

 

 

West Coast

$

717,500

 

$

641,100

 

$

725,900

 

$

616,700

 

Southwest

 

436,600

 

 

375,300

 

 

424,400

 

 

363,000

 

Central

 

413,800

 

 

327,500

 

 

392,100

 

 

317,500

 

Southeast

 

375,500

 

 

302,700

 

 

363,200

 

 

295,600

 

Total

$

508,700

 

$

426,800

 

$

497,200

 

$

412,000

 

KB HOME

SUPPLEMENTAL INFORMATION

For the Three Months and Nine Months Ended August 31, 2022 and 2021

(Dollars in Thousands – Unaudited)

 

 

 

 

 

Three Months Ended August 31,

Nine Months Ended August 31,

 

2022

2021

2022

2021

Homes delivered:

 

 

 

 

West Coast

 

1,156

 

1,035

 

3,099

 

2,925

Southwest

 

737

 

626

 

1,938

 

1,875

Central

 

1,072

 

1,174

 

3,142

 

3,417

Southeast

 

650

 

590

 

1,773

 

1,576

Total

 

3,615

 

3,425

 

9,952

 

9,793

 

 

 

 

 

 

 

 

 

 

Net orders:

 

 

 

 

West Coast

 

520

 

1,078

 

2,702

 

3,538

Southwest

 

430

 

818

 

1,897

 

2,609

Central

 

573

 

1,382

 

3,317

 

4,272

Southeast

 

517

 

807

 

2,248

 

2,258

Total

 

2,040

 

4,085

 

10,164

 

12,677

 

 

 

 

 

 

 

 

 

 

Net order value:

 

 

 

 

West Coast

$

317,329

$

785,430

$

2,007,677

$

2,502,397

Southwest

 

191,868

 

350,806

 

860,677

 

1,059,425

Central

 

272,288

 

575,737

 

1,472,381

 

1,592,424

Southeast

 

197,484

 

297,219

 

916,722

 

760,851

Total

$

978,969

$

2,009,192

$

5,257,457

$

5,915,097

 

 

 

 

 

 

 

 

 

 

 

August 31, 2022

August 31, 2021

 

Homes

Value

Homes

Value

Backlog data:

 

 

 

 

West Coast

 

2,044

$

1,523,092

 

2,637

$

1,851,237

Southwest

 

2,153

 

948,761

 

2,255

 

902,451

Central

 

4,086

 

1,789,006

 

3,892

 

1,440,443

Southeast

 

2,473

 

1,000,455

 

1,910

 

648,336

Total

 

10,756

$

5,261,314

 

10,694

$

4,842,467

KB HOME

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In Thousands, Except Percentages – Unaudited)

This press release contains, and Company management’s discussion of the results presented in this press release may include, information about the Company’s adjusted housing gross profit margin, which is not calculated in accordance with generally accepted accounting principles (“GAAP”). The Company believes this non-GAAP financial measure is relevant and useful to investors in understanding its operations, and may be helpful in comparing the Company with other companies in the homebuilding industry to the extent they provide similar information. However, because it is not calculated in accordance with GAAP, this non-GAAP financial measure may not be completely comparable to other companies in the homebuilding industry and, thus, should not be considered in isolation or as an alternative to operating performance and/or financial measures prescribed by GAAP. Rather, this non-GAAP financial measure should be used to supplement the most directly comparable GAAP financial measure in order to provide a greater understanding of the factors and trends affecting the Company’s operations.

Adjusted Housing Gross Profit Margin

The following table reconciles the Company’s housing gross profit margin calculated in accordance with GAAP to the non-GAAP financial measure of the Company’s adjusted housing gross profit margin:

 

Three Months Ended August 31,

Nine Months Ended August 31,

 

2022

2021

2022

2021

Housing revenues

$

1,838,888

 

$

1,461,648

 

$

4,947,868

 

$

4,035,033

 

Housing construction and land costs

 

(1,347,999

)

 

(1,147,448

)

 

(3,711,863

)

 

(3,176,643

)

Housing gross profits

 

490,889

 

 

314,200

 

 

1,236,005

 

 

858,390

 

Add: Inventory-related charges (a)

 

5,923

 

 

6,701

 

 

6,830

 

 

11,222

 

Adjusted housing gross profits

$

496,812

 

$

320,901

 

$

1,242,835

 

$

869,612

 

Housing gross profit margin

 

26.7

%

 

21.5

%

 

25.0

%

 

21.3

%

Adjusted housing gross profit margin

 

27.0

%

 

22.0

%

 

25.1

%

 

21.6

%

(a)

Represents inventory impairment and land option contract abandonment charges associated with housing operations.

Adjusted housing gross profit margin is a non-GAAP financial measure, which the Company calculates by dividing housing revenues less housing construction and land costs excluding housing inventory impairment and land option contract abandonment charges (as applicable) recorded during a given period, by housing revenues. The most directly comparable GAAP financial measure is housing gross profit margin. The Company believes adjusted housing gross profit margin is a relevant and useful financial measure to investors in evaluating the Company’s performance as it measures the gross profits the Company generated specifically on the homes delivered during a given period. This non-GAAP financial measure isolates the impact that housing inventory impairment and land option contract abandonment charges have on housing gross profit margins, and allows investors to make comparisons with the Company’s competitors that adjust housing gross profit margins in a similar manner. The Company also believes investors will find adjusted housing gross profit margin relevant and useful because it represents a profitability measure that may be compared to a prior period without regard to variability of housing inventory impairment and land option contract abandonment charges. This financial measure assists management in making strategic decisions regarding community location and product mix, product pricing and construction pace.

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How the Car Market Is Shedding Light on a Key Inflation Question

In a recent speech pointedly titled “Bringing Inflation Down,” Lael Brainard, the Federal Reserve’s vice chair, zoomed in on the automobile market as a real-world example of a major uncertainty looming over the outlook for price increases: What will happen next with corporate profits.

Many companies have been able to raise prices beyond their own increasing costs over the past two years, swelling their profitability but also exacerbating inflation. That is especially true in the car market. While dealerships are paying manufacturers more for inventory, they have been charging customers even higher prices, sending their profits toward record highs.

Dealers could pull that off because demand has been strong and, amid disruptions in the supply of parts, there are too few trucks and sedans to go around. But — in line with its desire for the economy as a whole — the Fed is hoping both sides of that equation could be on the cusp of changing.

data, and several industry experts said they didn’t see a return to normal levels of output for years as supply problems continue. Prices are still increasing swiftly, and dealer profits remain sharply elevated with little sign of cracking.

Ford Motor said on Monday that it would spend $1 billion more on parts than it was planning to in the third quarter because some components had become more expensive and harder to find.

By contrast, the supply of used cars has rebounded after plunging in the pandemic, and prices have begun to depreciate at a wholesale level, where dealers buy their stock. But, so far, those dealers aren’t really passing those savings along to consumers. The price of a typical used car has stabilized around $28,000, up 9 percent from a year ago, based on Cox Automotive data. Official used-car inflation data is easing, but only slightly.

Why consumer used-car prices — and dealer profits — are taking time to moderate is something of a mystery. Jonathan Smoke, chief economist at Cox Automotive, said dealers might be basing their prices on what they paid earlier in the year, when costs were higher, for the cars sitting on their lots.

“Dealers are feeling it,” Mr. Smoke said of the price moderation. “But because they price their vehicles based on what they pay for them, the consumer isn’t seeing the price discounts yet.”

Some early instances of discounting are showing up. At the Buick and GMC dealership that Beth Weaver runs in Erie, Pa., demand for used cars has begun to slow down, and the business has sold a few vehicles at a loss.

rolling lockdowns in China.

The Fed could raise rates so much that it snuffs out demand, but given how much pent-up car-buying appetite exists, Mr. Murphy thinks it would take a lot.

“You probably would have to go farther on rates than they have so far, or even than they are expected to go,” he said. “There may be a point at which you have enough pain that you see a pause on demand.”

If demand continues to outstrip new-car supply and dealers continue to reap big profits, that could limit how quickly inflation will ease. If the mismatch is large enough for sellers to keep pushing up prices without losing customers, it could even continue to fuel inflation.

While the car market is just one industry, the uncertainty of its return to normal holds a few lessons for the Fed. For one thing, new-car production makes it clear that supply chain disruptions are improving but not gone.

More hopefully, the car industry could offer evidence that the laws of economics are likely to reassert themselves eventually. Used-car prices have at least stopped their ascent as inventory has grown, and experts say discounting is likely around the corner. If that happens, it could be evidence that companies won’t be able to keep prices and profits high indefinitely once supply catches up with demand.

But cars reinforce the prospect that the readjustment period could last a while.

Automakers are flirting with the idea of keeping production lower so there are fewer cars in the market and price cuts are less common. Mr. Smoke is skeptical that they will hold that line once it means ceding market share to competitors — but the process could take months or years.

“I’m hesitant to say that we won’t have discounting again,” Mr. Smoke said. “But it’s going to take a while to get back to that world.”

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A Welsh Village Embraces Its Bond With the Queen

ABERFAN, Wales — As the days count down to Queen Elizabeth II’s funeral on Monday, Gaynor Madgwick has been of two minds: Should she watch the ceremony from her home in South Wales or join the crowds in London to pay her respects in person?

Her brain says stay. Ms. Madgwick, 64, has feared crowds and confined spaces since an avalanche of slurry — a mixture of debris from a coal mine and water — cascaded down the hillside above her village of Aberfan in 1966. One of the worst civilian disasters in contemporary British history, the avalanche crushed the village school, killed 144 villagers, 116 of them children, and left Ms. Madgwick trapped, but alive, beneath the rubble.

Her heart says go. The queen built an unusually strong relationship with Aberfan, beginning in the days after that very disaster and extending through four visits the queen made to the village.

the death of Queen Elizabeth II — the ever-present backdrop to a century of dramatic social change — has felt like a rug snatched from beneath them, even if they never met or saw her.

reassessment of national identity that, in Wales, includes calls for an independent Welsh state.

Elizabeth arrived in Bonn on the first state visit by a British monarch to Germany in more than 50 years. The trip formally sealed the reconciliation between the two nations following the world wars.

Ms. Madgwick survived, her leg broken by a dislodged radiator. Her sister and brother, Marilyn and Carl, both died.

The scale of the disaster quickly made it a moment of national introspection and trauma, and the queen soon decided to visit.

One of the biggest regrets of her reign was that she did not go sooner, a leading aide later said, and some villagers say the eight-day delay rankled the community at the time. But today, the residents largely remember her arrival as a moving gesture of solidarity from someone they never expected to lay eyes on.

research published in the British Journal of Psychiatry.

Other wings of the British state angered the village by refusing to prosecute any coal industry officials for negligence. Successive governments also declined to cover the whole cost of removing other dangerous slurry tips near the village, forcing villagers to dip into donations intended for survivors, until they were finally fully reimbursed in 2007.

But the queen’s concern for Aberfan meant that she was seen as separate from the state’s indifference, despite being its titular head.

Elsewhere in Britain, people have debated whether the queen could really ever rise beyond politics, given the monarch’s interest in maintaining her own role in Britain’s political system. But in Aberfan, there was less doubt.

“There’s no political agenda there,” said Jeff Edwards, 64, the last child to be rescued from the rubble. “The queen is above all that.”

In Aberfan, most people expressed sympathy for her family and respect for her sense of duty. But there are those, particularly among young generations, who have had a more ambivalent response to the queen’s death.

For some, the accession of King Charles III — as well as the abrupt appointment of his son William to his former role of Prince of Wales — is more problematic.

“I should be Prince of Wales, I’m more Welsh than Charles or William,” said Darren Martin, 47, a gardener in the village, with a laugh. Of the queen, he said: “Don’t get me wrong, I admire the woman. But I do think the time has come for us in Wales to be ruled by our own people.”

The abruptness of the queen’s death was a psychological jolt that has prompted, in some, a rethinking of long-held norms and doctrines.

“If things can change drastically like that, why can’t things change here?” asked Jordan McCarthy, 21, another gardener in Aberfan. “I would like Welsh independence.”

Of a monarchy, he added: “Only if they’re born and raised in Wales — that’s the only king or queen I’ll accept.”

Generally, though, the mood in Aberfan has been one of quiet mourning and deference. The local library opened a book of condolence. Villagers gathered in the pub to watch the new king’s speeches and processions. Some left bouquets beside the tree planted by the queen.

On Monday night, a men’s choir, founded by grieving relatives half a century ago, gathered for their biweekly practice. Proud Welshmen, they were preparing for their next performance — singing songs and hymns, some of them in Welsh, on the sidelines of the Welsh rugby team’s upcoming game.

But halfway through, the choir’s president, Steve Beasley, stood up.

“We all know about the queen,” Mr. Beasley said. “Please stand up for a minute’s silence.”

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Will Smith’s ‘Emancipation’: What Will Apple Do?

Apple has a Will Smith problem.

Mr. Smith is the star of “Emancipation,” a film set during the Civil War era that Apple envisioned as a surefire Oscar contender when it wrapped filming earlier this year. But that was before Mr. Smith strode onto the stage at the Academy Awards in March and slapped the comedian Chris Rock, who had made a joke about Mr. Smith’s wife, Jada Pinkett Smith.

Mr. Smith, who also won best actor that night, has since surrendered his membership in the Academy of Motion Picture Arts & Sciences and has been banned from attending any Academy-related events, including the Oscar telecast, for the next decade.

Now Apple finds itself left with a $120 million unreleased awards-style movie featuring a star no longer welcome at the biggest award show of them all, and a big question: Can the film, even if it succeeds artistically, overcome the baggage that now accompanies Mr. Smith?

Variety reported in May, however, that the film’s release would be pushed into 2023.

rushed the stage and slapped Mr. Rock. Later in the show, Mr. Smith won the best actor award for his work in “King Richard.”

video on his YouTube channel in which he said he was “deeply remorseful” for his behavior and apologized directly to Mr. Rock and his family.

provided to Variety. When his appeal was measured again in July, (before he released his video apology) it dropped to a 24 from a 39, what Henry Schafer, executive vice president of the Q Scores Company, called a “precipitous decline.”

Apple has delayed films before. In 2019, the company pushed back the release of one of its first feature films, “The Banker,” starring Anthony Mackie and Samuel L. Jackson, after a daughter of one of the men whose life served as a basis of the film raised allegations of sexual abuse involving her family. The film was ultimately released in March 2020 after Apple said it reviewed “the information available to us, including the filmmakers’ research.”

Many in Hollywood are drawn to Apple for its willingness to spend handsomely to acquire prominent projects connected with established talent. But the company has also been criticized for its unwillingness to spend much to market those same projects. Two people who have worked with the company, and who spoke on condition of anonymity to discuss dealings with Apple, said it usually created just one trailer for a film — a frustrating approach for those who are accustomed to the traditional Hollywood way of producing multiple trailers aimed at different audiences. Apple prefers to rely on its Apple TV+ app and in-store marketing to attract audiences.

Yet those familiar with Apple’s thinking believe that even if it chooses to release “Emancipation” this year, it will not feature the film in its retail outlets like it did for “CODA,” which in March became the first movie from a streaming service to win best picture. That achievement, of course, was overshadowed by the controversy involving Mr. Smith.

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Ukraine’s Donbas, Where Putin Sowed the Seeds of War

CHASIV YAR, Ukraine — On a clear spring morning eight years ago, Oleksandr Khainus stepped outside his house to go to work at the town factory when he spotted new graffiti scrawled across his fence. “Glory to Russia,” vandals had written in angry black spray paint. “Putin,” another message said.

Mr. Khainus was perplexed. It was true that Chasiv Yar, the Rust Belt-like town where he has spent his entire life in a region called the Donbas, had long contained many conflicting opinions on its identity. Geographically, the Donbas was part of Ukraine, no question, but it was so close to Russia and so tied to it historically that many maintained that their true home really lay eastward.

“It was the type of stuff you’d argue about over the dinner table,” he said. “But nothing that anyone would get violent over.”

protests exploded. Armed separatists seized chunks of the Donbas right under the authorities’ noses. Two so-called People’s Republics were declared. Russian troops stormed in.

the most far-reaching war in generations. It was the Donbas that became Mr. Putin’s pretext for a full-scale invasion of Ukraine. And now it is heating up again.

masterful offensive in the Kharkiv region, in Ukraine’s northeast, where town after town fell without a shot. Now they are heading south. Columns of dark green military trucks and American-made rocket launchers are thundering down the long, straight highways into the Donbas. But they will have a much harder fight on their hands.

Wagner Group and close air cover because of the proximity to the Russian border. They can also rely on separatist fighters and a well-financed network of citizen-spies who relay secret information to the invaders, often with devastating consequences.

Viktor Yanukovych, Ukraine’s pro-Russia president, out of office. Mr. Yanukovych came from a Donbas steel town. In one stroke, Russia lost its ally and the Donbas elite its godfather. That is when the trouble started.

People flooded into the Donbas streets waving Russian flags. At first, said Alisa Sopova, a journalist for a Donbas newspaper at the time, “We were sure they were fake people brought in from Russia to pose for Russian TV.”

to speak so much Russian. A critical aspect of Ukrainian independence was reviving the Ukrainian language, marginalized during Soviet times. But those arguments were typically confined to social media posts or intellectual debates, until this moment.

“I’d go into the supermarket to buy some meat, and the shopkeeper tells me, ‘If you don’t speak Ukrainian, I’m not going to sell you any meat,’” Mr. Tsyhankov said. “I’ve been speaking Russian my whole life. How do you think that made me feel?”

done something similar in 2008 in South Ossetia and Abkhazia, two regions of Georgia, and before that the Russians had meddled in Moldova, backing the breakaway Transnistria region. The tools were generally the same: bankrolling pro-Russia political parties; deploying intelligence agents to foment protests; sowing disinformation through Russian TV.

Mr. Putin’s strategy was to turn strategic slices of the former Soviet Union into separatist hotbeds to hobble young nations like Georgia, Moldova and Ukraine, all struggling to break free from Moscow and move closer to Europe.

Under the Kremlin’s wing, Donbas’s separatists killed Ukrainian officials, took territory and declared the breakaway Donetsk People’s Republic and Luhansk People’s Republic. When Ukrainian forces rolled in to quell the rebellion, some residents saw them as occupiers. They spoke a different language, hailed from a different region, embraced a different culture — or so went the pro-Russia narrative. In some villages, babushkas lay down in the roads blocking Ukrainian tanks, officers said, and in one, an especially cunning babushka kept stealing the soldiers’ helmets.

“It was frustrating,” said Anatolii Mohyla, a Ukrainian military commander. “We’d come to liberate them and they’d give us the finger.”

Mr. Putin dispatched thousands of Russian troops to support the separatists, later saying he had been “forced to protect” the Russian-speaking population. Towns like Chasiv Yar were occupied by separatist fighters, then liberated by Ukrainian troops a few months later. By 2015, the heavy fighting had died down. But it was not like Mr. Putin forgot about the Donbas.

He upped the ante in 2021, saying, “Kyiv simply does not need the Donbas.” And on Feb. 21 of this year, three days before he invaded Ukraine, Mr. Putin accused the Ukrainian government of perpetrating a “genocide.” He justified the most cataclysmic war in decades by citing the very tensions he himself stoked.

In early April, the agricultural land around Chasiv Yar began to thaw. Mr. Khainus, the pro-Ukraine farmer, drove out to check a sunflower field. A Ukrainian military vehicle raced up. A soldier leaned out the window and fired an assault rifle, the bullets skipping up in the dirt. Mr. Khainus slammed on the brakes.

A Ukrainian commander he recognized, a man whom Mr. Khainus said he had complained about before, jumped out. The commander greeted him with a punch to the head, Mr. Khainus said, and then smashed him in the face with a rifle butt.

He does not remember much after that. He shared photographs of himself lying in a hospital bed with two black eyes. Military and law enforcement officials declined to comment.

Mr. Khainus remains a supporter of the military, saying, “One stupid person doesn’t represent the army.”

But, he added wryly: “It’s one thing to be a patriot in Kyiv. It’s another to be a patriot in the Donbas.”

At 9 p.m. on July 9, four cruise missiles slammed into a dormitory at the old ceramic plant. The buildings crumbled as if they were made out of sand. Viacheslav Boitsov, an emergency services official, said there were “no military facilities nearby.”

But according to Mr. Mohyla and Oleksandr Nevydomskyi, another Ukrainian military officer, Ukrainian soldiers were staying in that building. The night before, they said, a mysterious man was seen standing outside flashing light signals, most likely pinpointing the position.

The military calls such spies “correctors,” and they relay navigational information to the Russians to make missile and artillery strikes more precise. Ukrainian officials have arrested more than 20 and say correctors are often paid several hundred dollars after a target is hit. The strike in Chasiv Yar was one of the deadliest: 48 killed, including 18 soldiers, the officers said.

“For sure there are Russian agents in this town,” Mr. Mohyla said. “There might even be spies in our unit.”

Few in Chasiv Yar are confident that the town will stay in government hands.

Mr. Khainus said the Russians were steadily moving closer to his sunflower fields. About a week ago, a friend’s house was shelled. A day later, in an online messaging channel, separatist supporters said Mr. Khainus should be next, calling him a “hero” — adding an epithet.

Is he scared?

“Why should I be?” he said. “They’re nobodies.”

Mr. Tsyhankov, the retired dump truck driver nostalgic for the Soviet times, seemed pained by all of the bloodshed but did not blame the Russians or the separatists. “They’re doing the right thing,” he said. “They’re fighting for the Russian language and their territory.”

As he said goodbye, insisting that his guests take with them a jug of his homemade apple juice and some fresh green grapes, he shook his head at the enormity of it. “Why can’t we be friends with you guys, the Americans?” he asked. “Politics are keeping all of us hostage.”

Every night, the horizon in Chasiv Yar lights up with explosions. Ukrainian soldiers operate here almost as if they are on enemy territory, hiving themselves off from the public, watching their backs, traveling by night in long convoys of cars with the lights blacked out, the drivers wearing night vision goggles. According to separatist messaging channels, the Wagner mercenaries have reached the outskirts of Bakhmut, a major Donbas town. As for Soledar, it is now off limits to journalists, but volunteers there trying to rescue civilians say it is as deadly as ever.

People here used to describe the Donbas in simple terms like “beautiful,” “honest,” “unbreakable” and “free.”

Now it is destroyed, depopulated, sad and empty.

“It’s like the Rust Belt,” Ms. Sopova said. “It’s not needed anymore. All that industry is obsolete.”

Countless communities have risen in the Donbas. Many are now falling. Ms. Sopova glimpses a perhaps not so faraway future where the Donbas goes back to what it once was: a wild field.

Oleksandra Mykolyshyn contributed reporting.

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For Gen Z, TikTok Is the New Search Engine

When Ja’Kobi Moore decided to apply this year to a private high school in her hometown of New Orleans, she learned that she needed at least one letter of recommendation from a teacher. She had never asked for one, so she sought help.

“Teacher letter of recommendation,” she typed into TikTok’s search bar.

Ms. Moore, 15, scrolled TikTok’s app until she found two videos: one explaining how to ask teachers for a recommendation letter and the other showing a template for one. Both had been made by teachers and were easier to understand than a Google search result or YouTube video, said Ms. Moore, who is planning to talk to her teachers this month.

dance videos and pop music. But for Generation Z, the video app is increasingly a search engine, too.

TikTok’s powerful algorithm — which personalizes the videos shown to them based on their interactions with content — to find information uncannily catered to their tastes. That tailoring is coupled with a sense that real people on the app are synthesizing and delivering information, rather than faceless websites.

On TikTok, “you see how the person actually felt about where they ate,” said Nailah Roberts, 25, who uses the app to look for restaurants in Los Angeles, where she lives. A long-winded written review of a restaurant can’t capture its ambience, food and drinks like a bite-size clip can, she said.

TikTok’s rise as a discovery tool is part of a broader transformation in digital search. While Google remains the world’s dominant search engine, people are turning to Amazon to search for products, Instagram to stay updated on trends and Snapchat’s Snap Maps to find local businesses. As the digital world continues growing, the universe of ways to find information in it is expanding.

said at a technology conference in July.

Google has incorporated images and videos into its search engine in recent years. Since 2019, some of its search results have featured TikTok videos. In 2020, Google released YouTube Shorts, which shares vertical videos less than a minute long, and started including its content in search results.

TikTok, which is owned by the Chinese internet company ByteDance, declined to comment on its search function and products that may be in testing. It said it was “always thinking about new ways to add value to the community and enrich the TikTok experience.”

Doing a search on TikTok is often more interactive than typing in a query on Google. Instead of just slogging through walls of text, Gen Z-ers crowdsource recommendations from TikTok videos to pinpoint what they are looking for, watching video after video to cull the content. Then they verify the veracity of a suggestion based on comments posted in response to the videos.

This mode of searching is rooted in how young people are using TikTok not only to look for products and businesses, but also to ask questions about how to do things and find explanations for what things mean. With videos often less than 60 seconds long, TikTok returns what feels like more relevant answers, many said.

Alexandria Kinsey, 24, a communications and social media coordinator in Arlington, Va., uses TikTok for many search queries: recipes to cook, films to watch and nearby happy hours to try. She also turns to it for less typical questions, like looking up interviews with the actor Andrew Garfield and weird conspiracy theories.

elections, the war in Ukraine and abortion.

TikTok’s algorithm tends to keep people on the app, making it harder for them to turn to additional sources to fact-check searches, Ms. Tripodi added.

“You aren’t really clicking to anything that would lead you out of the app,” she said. “That makes it even more challenging to double-check the information you’re getting is correct.”

TikTok has leaned into becoming a venue for finding information. The app is testing a feature that identifies keywords in comments and links to search results for them. In Southeast Asia, it is also testing a feed with local content, so people can find businesses and events near them.

Building out search and location features is likely to further entrench TikTok — already the world’s most downloaded app for those ages 18 to 24, according to Sensor Tower — among young users.

TikTok “is becoming a one-stop shop for content in a way that it wasn’t in its earlier days,” said Lee Rainie, who directs internet and technology research at the Pew Research Center.

That’s certainly true for Jayla Johnson, 22. The Newtown, Pa., resident estimated that she watches 10 hours of TikTok videos a day and said she had begun using the app as a search engine because it was more convenient than Google and Instagram.

“They know what I want to see,” she said. “It’s less work for me to actually go out of my way to search.”

Ms. Johnson, a digital marketer, added that she particularly appreciated TikTok when she and her parents were searching for places to visit and things to do. Her parents often wade through pages of Google search results, she said, while she needs to scroll through only a few short videos.

“God bless,” she said she thinks. “You could have gotten that in seconds.”

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