The presentation slides we are using during the call are available on our Web site at www.mosaicco.com. We will be making forward-looking statements during this conference call. The statements include but are not limited to statements about future financial and operating results. They are based upon management's beliefs and expectations as of today's date, January 5, 2011, and are subject to significant risks and uncertainties. Actual results may differ materially from those projected in the forward-looking statements.Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is included in our press release issued yesterday and in our reports filed with the Securities and Exchange Commission. This call is the property of Mosaic. Any distribution, transmission, broadcast or rebroadcast in any form without the expressed written consent of Mosaic is prohibited. Now I'll turn the call over to Larry. Larry Stranghoener Thank you Christine and happy new year everyone. It’s a great time to be the world’s leading producer of phosphate and potash. We are on track for an outstanding year in fiscal 2011. Our second quarter results reflect strong global phosphate and potash demand. We had a great North American fall application season with demand outstripping production and we see a continuation of this trend in coming months. We are executing against our strategic plans and delivering results. As you can see on Slide 3, this quarter we earned net income of $1 billion or $2.29 per share compared to 24 cents a year ago. This includes an after-tax gain of $570 million or $1.28 per share on the sale of our interest in Fosfertil. The gross proceeds from this sale were $1 billion. In addition, we generated $532 million in operating cash flow this quarter and funded $291 million of capital expenditures with the bulk of this going toward our potash expansions.
We also recently announced the redemption of the remaining $455 million aggregate principal amount of our 2014 senior notes. This transaction will close next week and was an opportunistic use of cash that offers significant interest savings. Our phosphates business segment had an exceptional quarter compared to both the year ago period as well as the first quarter of this year. As summarized on Slide 4, both sales volumes and the averaged realized DAP price exceeded the high end of our guidance ranges.We generated $402 million in operating earnings compared to $29 million a year ago. Over the first half of this fiscal year our phosphate segment operating earnings have outpaced potash earnings. The improvement in second quarter operating earnings compared to last year was primarily due to significantly higher selling prices and record sales volumes partially offset by higher sulfur and ammonia costs. Our phosphate segment generated a gross margin of 24% driven by strong sales volumes in North America and above average margins on blend products. Demand was strong in many markets during the quarter though we chose to sell more into North America, which contributed to a record level of shipments. This robust demand has drawn down phosphate finished goods inventories to record low levels in spite of high operating rates at our concentrate plants. While phosphate rock production was impacted by the temporary closure of our South Fort Meade mine, finished goods production has not been impacted and we expect to keep our concentrates plants running near capacity to meet expected North American spring demand. Our potash segment had a boost from the strong North American fall application season. Potash operating earnings were $252 million this quarter, up 67% compared to last year as highlighted on Slide 5. This improvement was primarily due to significantly improved sales volumes and the favorable effect of higher production rates partially offset by a decline in selling prices and an increase in Canadian resources taxes and royalties. Compared to the first quarter operating earnings improved 15% even though MLP production and cost per ton performance in the quarter were constrained by turn arounds that were postponed from the summer. Read the rest of this transcript for free on seekingalpha.com