With our eighth consecutive quarter of increased earnings per share, we continue to feel good about the turnaround momentum at Kmart.

With a planned IPO of BlueLight.com next year ... we are excited about the potential value of our holdings and the positive impact it will have on Kmart's value.

Kmart's sales for October were on plan despite softer apparel sales due to unseasonably warm weather during the latter half of the month. Sales volumes for the third quarter were near expectations. Categories showing particular strength for the month included home appliances and electronics, do-it-yourself, home decor, cosmetics and fragrances, consumables, stationery and pharmaceuticals.

Kmart's sales for the month were on plan and we are pleased with our progress in a number of key businesses.

Sales increases in our pharmacy, home fashions, health and beauty care, consumables and apparel areas, together with a substantial lift in gross margin rate, enabled Kmart to more than triple earnings per share in the quarter before the non-recurring charge.

While the precise outcome of the legal process remains to be seen, Kmart believes that, in light of Hechinger's filing, it is appropriate to take the charge at this time. Considering current market conditions, we anticipate that Kmart will be able to convert or sub-lease most, if not all, of these properties within a reasonable period after they are returned.