##### 









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-Q



|  |                                                                                            
|- | -------------------------------------------------------------------------------------------
|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended
September 30, 2002

OR



|  |                                                                                             
|- | --------------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-10351

POTASH CORPORATION OF SASKATCHEWAN
INC.

(Exact name of registrant as specified in its
charter)


|                                             |  |                    
|-------------------------------------------- |  | -------------------
|Saskatchewan, Canada                         |  | N/A                
|(State or other jurisdiction of              |  | (I.R.S. Employer   
|incorporation or organization)               |  | Identification No.)
|                                            
|122  1st Avenue South                       |  | S7K 7G3            
|Saskatoon, Saskatchewan, Canada              |  | (Zip Code)         
|(Address of principal executive
    offices) |  |                    

306-933-8500

(Registrants telephone number, including
area code)


Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past 90 days.

YES x  NO o

APPLICABLE ONLY TO CORPORATE
ISSUERS:

Indicate
the number of shares outstanding of each of the issuers
classes of common stock, as of the latest practicable date.

As at
October 31, 2002, Potash Corporation of Saskatchewan Inc.
had 52,057,190 Common Shares outstanding.



---






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##### 



PART I.  FINANCIAL
INFORMATION



ITEM 1.  FINANCIAL
STATEMENTS


These interim consolidated financial statements
do not include all disclosures normally provided in annual
financial statements and should be read in conjunction with the
most recent annual financial statements. In managements
opinion, the unaudited financial information includes all
adjustments (consisting solely of normal recurring adjustments)
necessary to present fairly such information. Interim results
are not necessarily indicative of the results expected for the
fiscal year.

Potash Corporation of Saskatchewan
Inc.

Consolidated Statements of Income and Retained
Earnings

(in millions of US dollars)


(unaudited)


|                                           |         |                    |       |                   |  |      |       |      |  |   |         |      |  |   |         |      | 
|------------------------------------------ | ------- | ------------------ | ----- | ----------------- |  | ---- | ----- | ---- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                                           |         |                    |       |                  
|                                           |         | Three Months Ended |       | Nine Months Ended
|                                           |         | September 30       |       | September 30     
|                                           |         | 2002               |       | 2001              |  | 2002 |       | 2001
|                                          
|                                          
|Net sales                                  |         | $                  | 455.2 |                   |  | $    | 460.2 |      |  | $ | 1,405.7 |      |  | $ | 1,638.4 |     
|Cost of goods sold                         |         |                    | 382.2 |                   |  |      | 392.6 |      |  |   | 1,168.4 |      |  |   | 1,301.9 |     
|                                          
|Gross Margin                               |         |                    | 73.0  |                   |  |      | 67.6  |      |  |   | 237.3   |      |  |   | 336.5   |     
|                                          
|Selling and administrative                 |         |                    | 21.8  |                   |  |      | 23.9  |      |  |   | 68.6    |      |  |   | 72.8    |     
|Provincial mining and other taxes          |         |                    | 15.2  |                   |  |      | 17.8  |      |  |   | 55.2    |      |  |   | 54.3    |     
|Foreign exchange (gain) loss               |         |                    | (5.0  | )                 |  |      | (10.0 | )    |  |   | 5.9     |      |  |   | (10.8   | )   
|Other income                               |         |                    | (3.3  | )                 |  |      | (3.9  | )    |  |   | (16.2   | )    |  |   | (20.5   | )   
|                                          
|                                           |         |                    | 28.7  |                   |  |      | 27.8  |      |  |   | 113.5   |      |  |   | 95.8    |     
|                                          
|Operating Income                           |         |                    | 44.3  |                   |  |      | 39.8  |      |  |   | 123.8   |      |  |   | 240.7   |     
|Interest Expense                           |         |                    | 21.5  |                   |  |      | 22.4  |      |  |   | 62.5    |      |  |   | 58.4    |     
|                                          
|Income Before Income Taxes                 |         |                    | 22.8  |                   |  |      | 17.4  |      |  |   | 61.3    |      |  |   | 182.3   |     
|Income Taxes (Note 4)                      |         |                    | 8.3   |                   |  |      | 6.3   |      |  |   | 22.1    |      |  |   | 65.6    |     
|                                          
|Net Income                                 |         | $                  | 14.5  |                   |  | $    | 11.1  |      |  |   | 39.2    |      |  |   | 116.7   |     
|                                           |         |                    |       |                   |  |      |       |      |  |  
|Retained Earnings, Beginning of
    Period |         |                    |       |                   |  |      |       |      |  |   | 639.8   |      |  |   | 570.5   |     
|Dividends                                  |         |                    |       |                   |  |      |       |      |  |   | (39.0   | )    |  |   | (39.0   | )   
|                                          
|Retained Earnings, End of Period           |         |                    |       |                   |  |      |       |      |  | $ | 640.0   |      |  | $ | 648.2   |     
|                                          
|Net Income Per Share (Note 5)              |         |                    |       |                   |  |      |       |      |  |   |         |      |  |   |         |     
|                                           | Basic   |                    | $     | 0.28              |  |      | $     | 0.21 |  |   | $       | 0.75 |  |   | $       | 2.25 | 
|                                           | Diluted |                    | $     | 0.28              |  |      | $     | 0.21 |  |   | $       | 0.75 |  |   | $       | 2.24 | 
|                                          
|Dividends Per Share                        |         | $                  | 0.25  |                   |  | $    | 0.25  |      |  | $ | 0.75    |      |  | $ | 0.75    |     
|                                          

(See Notes to the Consolidated Financial
Statements)

2



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##### 



Potash Corporation of Saskatchewan
Inc.

Consolidated Statements of Financial
Position

(in millions of US dollars)


|                                                                                                                                                                               |                                      |               |         |              |  |   |         |       | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------ | ------------- | ------- | ------------ |  | - | ------- | ----- | 
|                                                                                                                                                                               |                                      | September 30, |         | December 31,
|                                                                                                                                                                               |                                      | 2002          |         | 2001        
|                                                                                                                                                                              
|                                                                                                                                                                              
|                                                                                                                                                                               |                                      | (unaudited)   |         |             
|Assets                                                                                                                                                                         |                                      |               |         |              |  |   |         |      
|Current Assets                                                                                                                                                                 |                                      |               |         |              |  |   |         |      
|                                                                                                                                                                               | Cash and cash equivalents            |               | $       | 74.4         |  |   | $       | 45.3  | 
|                                                                                                                                                                               | Accounts receivable                  |               |         | 262.2        |  |   |         | 256.7 | 
|                                                                                                                                                                               | Inventories (Note 3)                 |               |         | 476.5        |  |   |         | 481.1 | 
|                                                                                                                                                                               | Prepaid expenses                     |               |         | 36.5         |  |   |         | 36.5  | 
|                                                                                                                                                                              
|                                                                                                                                                                               |                                      |               | 849.6   |              |  |   | 819.6   |      
|Property, plant and equipment                                                                                                                                                  |                                      |               | 3,253.0 |              |  |   | 3,245.6 |      
|Goodwill                                                                                                                                                                       |                                      |               | 97.0    |              |  |   | 97.0    |      
|Other assets                                                                                                                                                                   |                                      |               | 483.3   |              |  |   | 435.1   |      
|                                                                                                                                                                              
|                                                                                                                                                                               |                                      | $             | 4,682.9 |              |  | $ | 4,597.3 |      
|                                                                                                                                                                              
|Liabilities                                                                                                                                                                    |                                      |               |         |              |  |   |         |      
|Current Liabilities                                                                                                                                                            |                                      |               |         |              |  |   |         |      
|                                                                                                                                                                               | Short-term debt                      |               | $       | 495.6        |  |   | $       | 501.1 | 
|                                                                                                                                                                               | Accounts payable and accrued charges |               |         | 331.6        |  |   |         | 271.4 | 
|                                                                                                                                                                               | Current portion of long-term debt    |               |         | 1.0          |  |   |         |      | 
|                                                                                                                                                                              
|                                                                                                                                                                               |                                      |               | 828.2   |              |  |   | 772.5   |      
|Long-term debt                                                                                                                                                                 |                                      |               | 1,022.6 |              |  |   | 1,013.7 |      
|Future income tax liability                                                                                                                                                    |                                      |               | 462.5   |              |  |   | 457.6   |      
|Accrued post-retirement/post-employment benefits                                                                                                                               |                                      |               | 190.8   |              |  |   | 177.3   |      
|Accrued reclamation costs                                                                                                                                                      |                                      |               | 80.1    |              |  |   | 83.0    |      
|Other non-current liabilities and deferred credits                                                                                                                             |                                      |               | 8.3     |              |  |   | 6.7     |      
|                                                                                                                                                                              
|                                                                                                                                                                               |                                      |               | 2,592.5 |              |  |   | 2,510.8 |      
|                                                                                                                                                                              
|Shareholders Equity                                                                                                                                                           |                                      |               |         |              |  |   |         |      
|Share Capital                                                                                                                                                                  |                                      |               | 1,186.2 |              |  |   | 1,182.5 |      
|Unlimited authorization of common shares without
    par value; issued and outstanding 52,050,590 and 51,952,482 at
    September 30, 2002 and December 31, 2001, respectively |                                      |               |         |              |  |   |         |      
|Contributed Surplus                                                                                                                                                            |                                      |               | 264.2   |              |  |   | 264.2   |      
|Retained Earnings                                                                                                                                                              |                                      |               | 640.0   |              |  |   | 639.8   |      
|                                                                                                                                                                              
|                                                                                                                                                                               |                                      |               | 2,090.4 |              |  |   | 2,086.5 |      
|                                                                                                                                                                              
|                                                                                                                                                                               |                                      | $             | 4,682.9 |              |  | $ | 4,597.3 |      
|                                                                                                                                                                              

(See Notes to the Consolidated Financial
Statements)

3



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##### 



Potash Corporation of Saskatchewan
Inc.

Consolidated Statements of Cash Flow

(in millions of US dollars)


(unaudited)


|                                                        |                                                            |                    |       |                   |   |      |       |       |   |   |        |       |   |   |        |        |  
|------------------------------------------------------- | ---------------------------------------------------------- | ------------------ | ----- | ----------------- | - | ---- | ----- | ----- | - | - | ------ | ----- | - | - | ------ | ------ | -
|                                                        |                                                            |                    |       |                  
|                                                        |                                                            | Three Months Ended |       | Nine Months Ended
|                                                        |                                                            | September 30       |       | September 30     
|                                                        |                                                            | 2002               |       | 2001              |   | 2002 |       | 2001 
|                                                       
|                                                       
|Operating activities                                    |                                                            |                    |       |                   |   |      |       |       |   |   |        |       |   |   |        |       
|Net income                                              |                                                            | $                  | 14.5  |                   |   | $    | 11.1  |       |   | $ | 39.2   |       |   | $ | 116.7  |       
|Items not affecting cash                                |                                                            |                    |       |                   |   |      |       |       |   |   |        |       |   |   |        |       
|                                                        | Depreciation and amortization                              |                    |       | 54.4              |   |      |       | 49.2  |   |   |        | 165.4 |   |   |        | 140.9  |  
|                                                        | Loss on disposal of assets                                 |                    |       | 0.3               |   |      |       | 0.3   |   |   |        | 0.6   |   |   |        | 0.2    |  
|                                                        | Foreign exchange on future income tax                      |                    |       | (6.9              | ) |      |       | (5.7  | ) |   |        | 0.4   |   |   |        | (7.0   | )
|                                                        | Provision for future income tax                            |                    |       | 1.6               |   |      |       | 4.7   |   |   |        | 4.4   |   |   |        | 49.2   |  
|                                                        | Provision for post-retirement/post-employment
    benefits |                    |       | 3.7               |   |      |       | (0.1  | ) |   |        | 13.6  |   |   |        | (0.6   | )
|                                                       
|                                                        |                                                            |                    | 67.6  |                   |   |      | 59.5  |       |   |   | 223.6  |       |   |   | 299.4  |       
|Changes in non-cash operating working
    capital       |                                                            |                    |       |                   |   |      |       |       |   |   |        |       |   |   |        |       
|                                                        | Accounts receivable                                        |                    |       | (14.2             | ) |      |       | 3.1   |   |   |        | (5.5  | ) |   |        | 37.1   |  
|                                                        | Inventories                                                |                    |       | (0.8              | ) |      |       | 10.5  |   |   |        | 4.6   |   |   |        | (59.7  | )
|                                                        | Prepaid expenses                                           |                    |       | 2.8               |   |      |       | 3.4   |   |   |        |      |   |   |        | (6.0   | )
|                                                        | Accounts payable and accrued charges                       |                    |       | 16.0              |   |      |       | (36.5 | ) |   |        | 22.8  |   |   |        | (187.7 | )
|                                                        | Current income taxes                                       |                    |       | 13.5              |   |      |       | 10.2  |   |   |        | 18.3  |   |   |        | (30.8  | )
|Accrued reclamation costs                               |                                                            |                    | (1.4  | )                 |   |      | 1.3   |       |   |   | (3.0   | )     |   |   | (2.6   | )     
|Other non-current liabilities and deferred credits      |                                                            |                    | 1.8   |                   |   |      | 1.0   |       |   |   | 1.9    |       |   |   | 0.7    |       
|                                                       
|Cash provided by operating
    activities               |                                                            |                    | 85.3  |                   |   |      | 52.5  |       |   |   | 262.7  |       |   |   | 50.4   |       
|                                                       
|Investing Activities                                    |                                                            |                    |       |                   |   |      |       |       |   |   |        |       |   |   |        |       
|Additions to property, plant and equipment              |                                                            |                    | (57.6 | )                 |   |      | (33.5 | )     |   |   | (151.1 | )     |   |   | (455.2 | )     
|Additions to other assets                               |                                                            |                    | (12.7 | )                 |   |      | (14.4 | )     |   |   | (51.6  | )     |   |   | (43.3  | )     
|                                                       
|Cash used in investing activities                       |                                                            |                    | (70.3 | )                 |   |      | (47.9 | )     |   |   | (202.7 | )     |   |   | (498.5 | )     
|                                                       
|Cash (deficiency) before financing
    activities       |                                                            |                    | 15.0  |                   |   |      | 4.6   |       |   |   | 60.0   |       |   |   | (448.1 | )     
|                                                       
|Financing Activities                                    |                                                            |                    |       |                   |   |      |       |       |   |   |        |       |   |   |        |       
|Proceeds from long-term obligations                     |                                                            |                    | 0.9   |                   |   |      |      |       |   |   | 11.2   |       |   |   | 600.0  |       
|Repayment of long-term obligations                      |                                                            |                    | (0.7  | )                 |   |      |      |       |   |   | (1.3   | )     |   |   |       |       
|Proceeds from (repayment of) short-term
    obligations |                                                            |                    | 39.1  |                   |   |      | 17.8  |       |   |   | (5.5   | )     |   |   | (154.0 | )     
|Dividends                                               |                                                            |                    | (12.9 | )                 |   |      | (13.0 | )     |   |   | (39.0  | )     |   |   | (39.0  | )     
|Issuance of shares                                      |                                                            |                    | 0.5   |                   |   |      | 0.4   |       |   |   | 3.7    |       |   |   | 2.5    |       
|                                                       
|Cash provided by (used in) financing
    activities     |                                                            |                    | 26.9  |                   |   |      | 5.2   |       |   |   | (30.9  | )     |   |   | 409.5  |       
|                                                       
|Increase (Decrease) in Cash and Cash
    Equivalents    |                                                            |                    | 41.9  |                   |   |      | 9.8   |       |   |   | 29.1   |       |   |   | (38.6  | )     
|Cash and Cash Equivalents, Beginning of
    Period      |                                                            |                    | 32.5  |                   |   |      | 51.6  |       |   |   | 45.3   |       |   |   | 100.0  |       
|                                                       
|Cash and Cash Equivalents, End of
    Period            |                                                            | $                  | 74.4  |                   |   | $    | 61.4  |       |   | $ | 74.4   |       |   | $ | 61.4   |       
|                                                       
|Supplemental cash flow disclosure                       |                                                            |                    |       |                   |   |      |       |       |   |   |        |       |   |   |        |       
|                                                        | Interest paid                                              |                    | $     | 1.5               |   |      | $     | 0.3   |   |   | $      | 43.4  |   |   | $      | 33.4   |  
|                                                        | Income taxes (refunded) paid                               |                    | $     | (7.3              | ) |      | $     | 2.8   |   |   | $      | 1.5   |   |   | $      | 52.2   |  
|                                                       

(See Notes to the Consolidated Financial
Statements)

4



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##### 



Potash Corporation of Saskatchewan
Inc.



Notes to the Consolidated Financial
Statements

(in millions of US dollars)


(unaudited)


1.   Significant Accounting
Policies

The companys accounting policies are in
accordance with accounting principles generally accepted in
Canada (Canadian GAAP). These policies are
consistent with accounting principles generally accepted in the
United States (US GAAP) except as outlined in
Note 9. The accounting policies used in preparing these
interim financial statements are consistent with those used in
the preparation of the annual financial statements, except as
disclosed in Note 2.

Basis of Presentation

The consolidated financial statements include the
accounts of Potash Corporation of Saskatchewan Inc. and its
principal operating subsidiaries (the company except
to the extent the context otherwise requires):

 PCS
Sales (Canada) Inc.

 PCS
Joint Venture, LP


 PCS
Sales (USA), Inc.


 PCS
Phosphate Company, Inc.


 PCS
Purified Phosphates


 White
Springs Agricultural Chemicals, Inc.


 PCS
Nitrogen, Inc.


 PCS
Nitrogen Fertilizer, L.P.


 PCS
Nitrogen Ohio, L.P.


 PCS
Nitrogen Limited


 PCS
Nitrogen Trinidad Limited


 PCS
Cassidy Lake Company


 PCS
Yumbes S.C.M. (Yumbes)


 PCS
Fosfatos do Brasil Ltda.


2.   Change in Accounting
Policy

The company has adopted the provisions of
section 3062 of the Canadian Institute of Chartered
Accountants Handbook Goodwill and Other Intangible
Assets. This pronouncement is being applied on a
prospective basis and requires that goodwill be subject to an
impairment test at least annually rather than be amortized. On
an annual basis, the adoption of this pronouncement will reduce
amortization expense by approximately $3.0 million
($0.75 million per quarter). The company has completed its
annual assessment of goodwill and there is no impairment.

The company has also adopted the provisions of
section 3870 of the Canadian Institute of Chartered
Accountants Handbook Stock-Based Compensation and Other
Stock-Based Payments. This pronouncement requires that all
non-employee stock-based compensation be accounted for using the
fair value method which would recognize the fair value of the
compensation cost in the financial statements. Employee
stock-based compensation must be accounted for using the fair
value method for plans that are direct awards of stock or that
call for settlement in cash or other assets. The companys
stock option plans are not this type and therefore the company
is not required to account for them using the fair value method.
As the exercise price of the stock options granted is the market
value the day immediately prior to the grant date, no
compensation cost is recorded. The adoption of this
pronouncement has not had any effect on the companys
results of operations or financial position for any of the
periods presented.

5



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##### 



3.   Inventories

|                       |  |               |       |              |  |   |       | 
|---------------------- |  | ------------- | ----- | ------------ |  | - | ----- | 
|                       |  | September 30, |       | December 31,
|                       |  | 2002          |       | 2001        
|                      
|                      
|                       |  | (unaudited)   |       |             
|Finished product       |  | $             | 153.8 |              |  | $ | 144.7 | 
|Materials and supplies |  |               | 118.7 |              |  |   | 113.9 | 
|Raw materials          |  |               | 45.8  |              |  |   | 65.6  | 
|Work in process        |  |               | 158.2 |              |  |   | 156.9 | 
|                      
|                       |  | $             | 476.5 |              |  | $ | 481.1 | 
|                      

4.   Income Taxes

The companys effective consolidated income
tax rate approximates 36 percent for all periods presented.

5.   Net Income Per
Share

Basic net income per share for the quarter is
calculated on the weighted average shares issued and outstanding
for the three months ended September 30, 2002 of 52,039,000
(2001  51,875,000). Basic net income per share for
the year-to-date is calculated on the weighted average shares
issued and outstanding for the nine months ended
September 30, 2002 of 52,006,000 (2001 
51,867,000). Diluted net income per share is calculated based on
the weighted average shares issued and outstanding during the
period, adjusted by the total of the additional common shares
that would have been issued assuming exercise of all stock
options with exercise prices at or below the average market
price for the period. Weighted average shares outstanding for
the diluted net income per share calculation for the quarter
were 52,262,000 (2001  52,166,000) and for the
year-to-date were 52,291,000 (2001  52,183,000).

6.   Segment
Information

The company has three reportable business
segments: potash, phosphate and nitrogen. These business
segments are differentiated by the chemical nutrient contained
in the product that each produces. Inter-segment net sales are
made under terms which approximate market prices. Potash segment
data for 2002 includes the Chilean nitrate operations which
commenced commercial production in February 2002.

|                              |  |                                       |       |           |  |          |       |            |  |              |       |  |  |   |     |  |  |   |       | 
|----------------------------- |  | ------------------------------------- | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- |  |  | - | --- |  |  | - | ----- | 
|                              |  |                                      
|                              |  | Three Months Ended September 30, 2002
|                              |  | (unaudited)                          
|                             
|                             
|                              |  | Potash                                |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                             
|                             
|Net sales  third party       |  | $                                     | 119.0 |           |  | $        | 159.9 |            |  | $            | 176.3 |  |  | $ |    |  |  | $ | 455.2 | 
|Inter-segment net sales       |  |                                       | 0.9   |           |  |          | 0.9   |            |  |              | 5.7   |  |  |   |    |  |  |   |      | 
|Gross margin                  |  |                                       | 48.1  |           |  |          | 8.5   |            |  |              | 16.4  |  |  |   |    |  |  |   | 73.0  | 
|Depreciation and amortization |  |                                       | 9.7   |           |  |          | 21.2  |            |  |              | 21.7  |  |  |   | 1.8 |  |  |   | 54.4  | 

|                              |  |                                       |       |           |  |          |       |            |  |              |       |   |  |   |     |  |  |   |       | 
|----------------------------- |  | ------------------------------------- | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- | - |  | - | --- |  |  | - | ----- | 
|                              |  |                                      
|                              |  | Three Months Ended September 30, 2001
|                              |  | (unaudited)                          
|                             
|                             
|                              |  | Potash                                |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                             
|                             
|Net sales  third party       |  | $                                     | 123.7 |           |  | $        | 145.9 |            |  | $            | 190.6 |   |  | $ |    |  |  | $ | 460.2 | 
|Inter-segment net sales       |  |                                       | 0.6   |           |  |          | 0.9   |            |  |              | 7.5   |   |  |   |    |  |  |   |      | 
|Gross margin                  |  |                                       | 57.7  |           |  |          | 10.0  |            |  |              | (0.1  | ) |  |   |    |  |  |   | 67.6  | 
|Depreciation and amortization |  |                                       | 8.0   |           |  |          | 18.4  |            |  |              | 21.5  |   |  |   | 1.3 |  |  |   | 49.2  | 

6



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##### 



|                              |  |                                      |       |           |  |          |       |            |  |              |       |  |  |   |     |  |  |   |         | 
|----------------------------- |  | ------------------------------------ | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- |  |  | - | --- |  |  | - | ------- | 
|                              |  |                                     
|                              |  | Nine Months Ended September 30, 2002
|                              |  | (unaudited)                         
|                             
|                             
|                              |  | Potash                               |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                             
|                             
|Net sales  third party       |  | $                                    | 422.8 |           |  | $        | 462.3 |            |  | $            | 520.6 |  |  | $ |    |  |  | $ | 1,405.7 | 
|Inter-segment net sales       |  |                                      | 5.2   |           |  |          | 4.8   |            |  |              | 17.3  |  |  |   |    |  |  |   |        | 
|Gross margin                  |  |                                      | 174.4 |           |  |          | 42.2  |            |  |              | 20.7  |  |  |   |    |  |  |   | 237.3   | 
|Depreciation and amortization |  |                                      | 36.1  |           |  |          | 58.0  |            |  |              | 65.4  |  |  |   | 5.9 |  |  |   | 165.4   | 

|                              |  |                                      |       |           |  |          |       |            |  |              |       |  |  |   |     |  |  |   |         | 
|----------------------------- |  | ------------------------------------ | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- |  |  | - | --- |  |  | - | ------- | 
|                              |  |                                     
|                              |  | Nine Months Ended September 30, 2001
|                              |  | (unaudited)                         
|                             
|                             
|                              |  | Potash                               |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                             
|                             
|Net sales  third party       |  | $                                    | 420.6 |           |  | $        | 498.8 |            |  | $            | 719.0 |  |  | $ |    |  |  | $ | 1,638.4 | 
|Inter-segment net sales       |  |                                      | 5.8   |           |  |          | 4.9   |            |  |              | 32.9  |  |  |   |    |  |  |   |        | 
|Gross margin                  |  |                                      | 191.3 |           |  |          | 48.6  |            |  |              | 96.6  |  |  |   |    |  |  |   | 336.5   | 
|Depreciation and amortization |  |                                      | 28.4  |           |  |          | 53.7  |            |  |              | 52.5  |  |  |   | 6.3 |  |  |   | 140.9   | 

7.   Plant Closures

Accruals associated with the previous years
plant closures are as follows:

|                                                        |  |          |      |        |  |          |   |               |  |   |   |  |  |   |      | 
|------------------------------------------------------- |  | -------- | ---- | ------ |  | -------- | - | ------------- |  | - | - |  |  | - | ---- | 
|                                                        |  | Balance  |      |        |  |          |   | Balance      
|                                                        |  | June 30, |      | Amount |  | Reserve  |   | September 30,
|                                                        |  | 2002     |      | Paid   |  | Utilized |   | 2002         
|                                                       
|                                                       
|Plant Closures                                          |  |          |      |        |  |          |   |               |  |   |   |  |  |   |      | 
|Non-cash parts inventory writedown                      |  | $        | 0.9  |        |  | $        |  |               |  | $ |  |  |  | $ | 0.9  | 
|Non-cash writedown of property, plant and
    equipment |  |          | 25.7 |        |  |          |  |               |  |   |  |  |  |   | 25.7 | 
|                                                       
|                                                        |  | $        | 26.6 |        |  | $        |  |               |  | $ |  |  |  | $ | 26.6 | 
|                                                       

8.   Pro Forma Stock
Compensation Expense

The company has two stock-based compensation
plans for which fair value accounting is not required. No
compensation expense has been recognized with respect to these
plans as the exercise price is the quoted market closing price
of the companys common shares on the last trading day
immediately preceding the date of the grant. Had compensation
expense for the companys plans been determined based on
the fair value at the grant dates for awards under the plans,
the companys net income and net income per share would
have been reduced to the pro forma amounts indicated below:

|                                               |  |              |      |              |  |      |      |      |  |   |      |  |  |   |       | 
|---------------------------------------------- |  | ------------ | ---- | ------------ |  | ---- | ---- | ---- |  | - | ---- |  |  | - | ----- | 
|                                               |  |              |      |             
|                                               |  | Three Months |      | Nine Months 
|                                               |  | Ended        |      | Ended       
|                                               |  | September 30 |      | September 30
|                                               |  | 2002         |      | 2001         |  | 2002 |      | 2001
|                                              
|                                              
|Net Income  as reported                       |  | $            | 14.5 |              |  | $    | 11.1 |      |  | $ | 39.2 |  |  | $ | 116.7 | 
|Net Income  pro forma                         |  | $            | 11.0 |              |  | $    | 7.7  |      |  | $ | 28.5 |  |  | $ | 106.5 | 
|                                              
|Basic Net Income Per Share  as reported       |  | $            | 0.28 |              |  | $    | 0.21 |      |  | $ | 0.75 |  |  | $ | 2.25  | 
|Basic Net Income Per Share  pro forma         |  | $            | 0.21 |              |  | $    | 0.15 |      |  | $ | 0.54 |  |  | $ | 2.05  | 
|                                              
|Diluted Net Income Per Share  as
    reported |  | $            | 0.28 |              |  | $    | 0.21 |      |  | $ | 0.75 |  |  | $ | 2.24  | 
|Diluted Net Income Per Share  pro forma       |  | $            | 0.21 |              |  | $    | 0.15 |      |  | $ | 0.54 |  |  | $ | 2.04  | 

7



---



##### 



In calculating the foregoing pro forma amounts,
the fair value of the options currently vesting was estimated as
of the date of grant using the Modified Black-Scholes
option-pricing model with the following weighted average
assumptions:

|                         |  |      |          |      |  |   |          | 
|------------------------ |  | ---- | -------- | ---- |  | - | -------- | 
|                         |  | 2001 |          | 2000
|                        
|                        
|Expected dividend        |  | $    | 1.00     |      |  | $ | 1.00     | 
|Expected volatility      |  |      | 32%      |      |  |   | 31%      | 
|Risk-free interest rate  |  |      | 4.54%    |      |  |   | 5.76%    | 
|Expected life of options |  |      | 8  years |      |  |   | 8  years | 
|Expected forfeitures     |  |      | 10%      |      |  |   | 10%      | 

9.   United States Generally
Accepted Accounting Principles

A description of certain significant differences
between Canadian GAAP and US GAAP follows:

Marketable securities:The companys investments in
Israel Chemicals Ltd. and Sociedad Quimica y Minera de Chile
S.A. (SQM) are stated at cost. US GAAP would
require that these investments be classified as
available-for-sale and be stated at market value with the
difference between market value and cost reported as Other
Comprehensive Income (OCI).

Property, plant and equipment and
goodwill:The net book value of
property, plant and equipment and goodwill under Canadian GAAP
is higher than under US GAAP, as provisions for asset
impairment in 1999 under Canadian GAAP were measured based on
the undiscounted cash flow from use together with the residual
value of the assets. Under US GAAP they were measured based on
fair value, which was lower than the undiscounted cash flow from
use together with the residual value of the assets.

Pre-operating costs:Operating costs incurred during the start-up phase of new
projects are deferred until commercial production levels are
reached, at which time they are amortized over the estimated
life of the project. US GAAP would require that these costs
be expensed as incurred.

Foreign currency translation
adjustment:The foreign currency
translation adjustment results from the restatement of prior
periods so that all periods presented are in the same reporting
currency. US GAAP requires that the comparative
Consolidated Statements of Income and the Consolidated
Statements of Cash Flow be translated using weighted average
exchange rates for the applicable periods. In contrast, the
Consolidated Statements of Financial Position are translated
using the exchange rates at the end of the applicable periods in
accordance with Canadian GAAP. The difference in these exchange
rates is what gives rise to the foreign currency translation
adjustment.

Derivative instruments and hedging
activities:The companys
derivative instruments which have not yet been settled are not
recognized in the consolidated financial statements and gains or
losses arising from settled hedging transactions are deferred as
a component of inventory until the product containing the hedged
item is sold, at which time both the natural gas purchase cost
and the related hedging deferral are recorded as cost of sales.
US GAAP would require that derivative instruments be
recorded at fair value in the balance sheet with the change in
fair value of instruments designated as cash flow hedges
recorded as OCI (see SFAS 133 Disclosures below).

Net sales:Sales are
recorded net of freight costs (less related revenues) and
transportation and distribution expenses. US GAAP would require
that net freight costs be included in cost of sales and
transportation and distribution expenses be reported as
operating expenses.

Comprehensive
income:Comprehensive income is not
recognized under Canadian GAAP. US GAAP would require the
recognition of comprehensive income.

Depreciation and
amortization:Depreciation and
amortization under Canadian GAAP is higher than under US GAAP,
as the net book values of property, plant and equipment and
goodwill under Canadian GAAP are higher than under US GAAP.

8



---



##### 



Provision for plant closures:The provision for plant closures under
Canadian GAAP in 2000 included severance expense, which was
accrued when management having the appropriate authority
approved the plan. US GAAP would require that severance not be
accrued until the plan was announced to the employees. Under US
GAAP severance was expensed as paid in 2001.

The application of US GAAP, as described
above, would have had the following approximate effects on net
income, net income per share, total assets and
shareholders equity:

|                                                       |                                  |                    |            |      |   |   |            |       |  
|------------------------------------------------------ | -------------------------------- | ------------------ | ---------- | ---- | - | - | ---------- | ----- | -
|                                                       |                                  |                   
|                                                       |                                  | Three Months Ended
|                                                       |                                  | September 30      
|                                                       |                                  | 2002               |            | 2001
|                                                      
|                                                      
|                                                       |                                  |                   
|                                                       |                                  | (unaudited)       
|Net income as reported  Canadian GAAP                 |                                  | $                  | 14.5       |      |   | $ | 11.1       |      
|Items increasing (decreasing) reported net income      |                                  |                    |            |      |   |   |            |      
|                                                       | Pre-operating costs              |                    |            | 0.4  |   |   |            | (13.4 | )
|                                                       | Depreciation and amortization    |                    |            | 2.1  |   |   |            | 2.4   |  
|                                                       | Income tax effect of above items |                    |            | (0.9 | ) |   |            | 2.9   |  
|                                                      
|Approximate net income  US GAAP                       |                                  | $                  | 16.1       |      |   | $ | 3.0        |      
|                                                      
|Weighted average shares outstanding 
    US GAAP      |                                  |                    | 52,039,000 |      |   |   | 51,875,000 |      
|                                                      
|Approximate basic net income per
    share  US GAAP   |                                  | $                  | 0.31       |      |   | $ | 0.06       |      
|                                                      
|Approximate diluted net income per
    share  US GAAP |                                  | $                  | 0.31       |      |   | $ | 0.06       |      
|                                                      

|                                                       |                                  |                   |            |      |   |   |            |       |  
|------------------------------------------------------ | -------------------------------- | ----------------- | ---------- | ---- | - | - | ---------- | ----- | -
|                                                       |                                  |                  
|                                                       |                                  | Nine Months Ended
|                                                       |                                  | September 30     
|                                                       |                                  | 2002              |            | 2001
|                                                      
|                                                      
|                                                       |                                  |                  
|                                                       |                                  | (unaudited)      
|Net income as reported  Canadian GAAP                 |                                  | $                 | 39.2       |      |   | $ | 116.7      |      
|Items increasing (decreasing) reported net income      |                                  |                   |            |      |   |   |            |      
|                                                       | Provision for plant closures     |                   |            |     |   |   |            | (9.0  | )
|                                                       | Pre-operating costs              |                   |            | 1.9  |   |   |            | (23.2 | )
|                                                       | Depreciation and amortization    |                   |            | 6.3  |   |   |            | 7.3   |  
|                                                       | Income tax effect of above items |                   |            | (2.9 | ) |   |            | 7.3   |  
|                                                      
|Approximate net income  US GAAP                       |                                  | $                 | 44.5       |      |   | $ | 99.1       |      
|                                                      
|Weighted average shares outstanding 
    US GAAP      |                                  |                   | 52,006,000 |      |   |   | 51,867,000 |      
|                                                      
|Approximate basic net income per
    share  US GAAP   |                                  | $                 | 0.86       |      |   | $ | 1.91       |      
|                                                      
|Approximate diluted net income per
    share  US GAAP |                                  | $                 | 0.85       |      |   | $ | 1.90       |      
|                                                      

|                                                        |                                                                  |               |         |              |   |   |         |        |  
|------------------------------------------------------- | ---------------------------------------------------------------- | ------------- | ------- | ------------ | - | - | ------- | ------ | -
|                                                        |                                                                  | September 30, |         | December 31,
|                                                        |                                                                  | 2002          |         | 2001        
|                                                       
|                                                       
|                                                        |                                                                  | (unaudited)   |         |             
|Total assets as reported  Canadian GAAP                |                                                                  | $             | 4,682.9 |              |   | $ | 4,597.3 |       
|Items increasing (decreasing) reported total
    assets |                                                                  |               |         |              |   |   |         |       
|                                                        | Available-for-sale security (unrealized holding
    (loss) gain) |               |         | (9.3         | ) |   |         | 34.9   |  
|                                                        | Fair value of natural gas hedging contracts                      |               |         | 52.2         |   |   |         | 8.9    |  
|                                                        | Property, plant and equipment                                    |               |         | (145.5       | ) |   |         | (151.8 | )
|                                                        | Pre-operating costs                                              |               |         | (62.2        | ) |   |         | (65.6  | )
|                                                        | Goodwill                                                         |               |         | (46.7        | ) |   |         | (46.7  | )
|                                                       
|Approximate total assets  US GAAP                      |                                                                  | $             | 4,471.4 |              |   | $ | 4,377.0 |       
|                                                       

9



---



##### 



|                                                                |                                                    |               |         |              |   |   |         |        |  
|--------------------------------------------------------------- | -------------------------------------------------- | ------------- | ------- | ------------ | - | - | ------- | ------ | -
|                                                                |                                                    | September 30, |         | December 31,
|                                                                |                                                    | 2002          |         | 2001        
|                                                               
|                                                               
|                                                                |                                                    | (unaudited)   |         |             
|Total shareholders equity as
    reported  Canadian GAAP      |                                                    | $             | 2,090.4 |              |   | $ | 2,086.5 |       
|Items increasing (decreasing) reported
    shareholders equity |                                                    |               |         |              |   |   |         |       
|                                                                | Accumulated other comprehensive income, net of tax |               |         | 32.7         |   |   |         | 29.8   |  
|                                                                | Pre-operating costs                                |               |         | (63.7        | ) |   |         | (65.6  | )
|                                                                | Provision for asset impairment                     |               |         | (218.0       | ) |   |         | (218.0 | )
|                                                                | Depreciation and amortization                      |               |         | 25.8         |   |   |         | 19.5   |  
|                                                                | Future income taxes                                |               |         | 63.8         |   |   |         | 66.7   |  
|                                                               
|Approximate shareholders equity 
    US GAAP                  |                                                    | $             | 1,931.0 |              |   | $ | 1,918.9 |       
|                                                               

New Accounting Pronouncements

Effective January 1, 2002, the company
adopted SFAS 141 Business Combinations. This
pronouncement requires the use of the purchase method of
accounting for business combinations. The adoption of this
pronouncement has not had a significant impact on the financial
position or results of operations of the company as the company
has accounted for all subsidiary acquisitions using the purchase
method.

Effective January 1, 2002, the company also
adopted SFAS 142 Goodwill and Other Intangible
Assets. This pronouncement is being applied on a
prospective basis and requires that goodwill be subject to an
impairment test at least annually rather than be amortized. On
an annual basis this pronouncement will reduce amortization
expense by approximately $2.0 million ($0.5 million
per quarter). The company has completed its annual assessment of
goodwill and there is no impairment.

The company has also adopted SFAS 144
Accounting for the Impairment or Disposal of Long-Lived
Assets, which supercedes SFAS 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of. SFAS 144 establishes a
single accounting for long-lived assets to be disposed of by
sale. The adoption of this pronouncement has not had any effect
on the companys results of operations or financial
position for any of the periods presented.

SFAS 133 Disclosures

The companys natural gas purchase strategy
is based on diversification of price for its total gas
requirements. Its objective is to acquire a reliable supply of
natural gas feedstock and fuel on a location adjusted, cost
competitive basis in a manner that minimizes volatility without
undue risk. It employs derivative instruments including futures,
swaps and option agreements in order to establish the cost on a
portion of its natural gas requirements. These instruments are
intended to hedge the future cost of the committed and
anticipated natural gas purchases primarily for its US nitrogen
plants. By company policy, the maximum period for these hedges
cannot exceed five years. The company uses these instruments to
reduce price risk, not for speculative purposes.

The company has designated its natural gas
derivative instruments as cash flow hedges. The gain or loss of
an effective cash flow hedge is deferred in OCI until such time
as the natural gas that it relates to is used in production, at
which time the gain or loss is reclassified from OCI to cost of
sales. In the third quarter of 2002, $3.9 million of gains
was recognized in cost of sales ($0.2 million gain on a
year-to-date basis). Of the deferred gains at the quarter end,
approximately $37.8 million will be reclassified to cost of
sales within the next twelve months.

10. Seasonality

The companys sales of fertilizer are
seasonal. Typically, the second quarter of the year is when
fertilizer sales will be highest, due to the North American
spring planting season. However, planting conditions and the
timing of customer purchases will vary each year and sales can
be expected to shift from one quarter to another.

11. Comparative Figures

Certain of the prior periods figures have
been reclassified to conform with the current periods
presentation.

10



---



##### 





|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS
    OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The narrative included under this
Managements Discussion and Analysis of Financial Condition
and Results of Operations has been prepared on a nutrient basis
with reference to the consolidated financial statements reported
under Canadian GAAP.

Overview

|                                        |  |                                 |       |                                |  |        |       |        |  |      |      |      |  |        |    |        |  |   |         |  |  |   |         |  |  |   |        |   |  |  |     |  
|--------------------------------------- |  | ------------------------------- | ----- | ------------------------------ |  | ------ | ----- | ------ |  | ---- | ---- | ---- |  | ------ | -- | ------ |  | - | ------- |  |  | - | ------- |  |  | - | ------ | - |  |  | --- | -
|                                        |  |                                 |       |                               
|                                        |  | Three Months Ended September 30 |       | Nine Months Ended September 30
|                                       
|                                       
|                                        |  | Dollar                          |       | %                              |  |        |       | Dollar |  | %   
|($ millions  except per share amounts) |  | 2002                            |       | 2001                           |  | Change |       | Change |  | 2002 |      | 2001 |  | Change |    | Change
|                                       
|                                       
|Net Sales                               |  | $                               | 455.2 |                                |  | $      | 460.2 |        |  | $    | (5.0 | )    |  |        | (1 | )      |  | $ | 1,405.7 |  |  | $ | 1,638.4 |  |  | $ | (232.7 | ) |  |  | (14 | )
|                                       
|Gross Margin                            |  | $                               | 73.0  |                                |  | $      | 67.6  |        |  | $    | 5.4  |      |  |        | 8  |        |  | $ | 237.3   |  |  | $ | 336.5   |  |  | $ | (99.2  | ) |  |  | (30 | )
|                                       
|Operating Income                        |  | $                               | 44.3  |                                |  | $      | 39.8  |        |  | $    | 4.5  |      |  |        | 11 |        |  | $ | 123.8   |  |  | $ | 240.7   |  |  | $ | (116.9 | ) |  |  | (49 | )
|                                       
|Net Income                              |  | $                               | 14.5  |                                |  | $      | 11.1  |        |  | $    | 3.4  |      |  |        | 31 |        |  | $ | 39.2    |  |  | $ | 116.7   |  |  | $ | (77.5  | ) |  |  | (66 | )
|                                       
|Net Income Per Share  Basic            |  | $                               | 0.28  |                                |  | $      | 0.21  |        |  | $    | 0.07 |      |  |        | 33 |        |  | $ | 0.75    |  |  | $ | 2.25    |  |  | $ | (1.50  | ) |  |  | (66 | )
|                                       
|Net Income Per Share  Diluted          |  | $                               | 0.28  |                                |  | $      | 0.21  |        |  | $    | 0.07 |      |  |        | 33 |        |  | $ | 0.75    |  |  | $ | 2.24    |  |  | $ | (1.49  | ) |  |  | (66 | )
|                                       

|                         |           |                                 |   |                                |  |              |   |              |   |          |  |      |  |           |  |           |  |  |   |       |  |  |   |       |  |  |  |    |  |  |  |    | 
|------------------------ | --------- | ------------------------------- | - | ------------------------------ |  | ------------ | - | ------------ | - | -------- |  | ---- |  | --------- |  | --------- |  |  | - | ----- |  |  | - | ----- |  |  |  | -- |  |  |  | -- | 
|                         |           |                                 |   |                               
|                         |           | Three Months Ended September 30 |   | Nine Months Ended September 30
|                        
|                        
|                         |           | 2002                            |   | 2001                           |  |              |   | 2002         |   | 2001    
|                         |           | % of                            |   | % of                           |  |              |   | % of         |   | % of    
|                         |           | Nutrient                        |   | Nutrient                       |  |              |   | Nutrient     |   | Nutrient
|($ millions)             |           | 2002                            |   | 2001                           |  | Net Sales(1) |   | Net Sales(1) |   | 2002     |  | 2001 |  | Net Sales |  | Net Sales
|                        
|                        
|Gross Margin by Nutrient |           |                                 |   |                                |  |              |   |              |   |          |  |      |  |           |  |           |  |  |   |       |  |  |   |       |  |  |  |    |  |  |  |   
|                         | Potash    |                                 | $ | 48.1                           |  |              | $ | 57.7         |   |          |  | 40   |  |           |  | 47        |  |  | $ | 174.4 |  |  | $ | 191.3 |  |  |  | 41 |  |  |  | 45 | 
|                        
|                         | Phosphate |                                 | $ | 8.5                            |  |              | $ | 10.0         |   |          |  | 5    |  |           |  | 7         |  |  | $ | 42.2  |  |  | $ | 48.6  |  |  |  | 9  |  |  |  | 10 | 
|                        
|                         | Nitrogen  |                                 | $ | 16.4                           |  |              | $ | (0.1         | ) |          |  | 9    |  |           |  |          |  |  | $ | 20.7  |  |  | $ | 96.6  |  |  |  | 4  |  |  |  | 13 | 
|                        



|    |                                                                   
|--- | ------------------------------------------------------------------
|(1) | Percentage of net sales is calculated on net
    sales by nutrient

The primary reason for the increase in
consolidated gross margin on a quarter-over-quarter basis was
that gross margin for the nitrogen segment increased
significantly due to improving conditions in that segment. On a
year-to-date basis, significantly lower nitrogen product prices
in the first nine months of 2002 as compared to last year more
than offset per unit cost savings due to lower natural gas
prices, resulting in lower gross margin.

Potash volumes in the third quarter were lower as
compared to the prior year in both the North American and
offshore markets. In addition, prices for offshore products
decreased. Potash per unit cost of sales (excluding nitrates)
increased due primarily to an increase in the number of shutdown
weeks (15.5 weeks in third quarter 2002 versus
11.1 weeks in the same period in 2001). On a year-to-date
basis, overall volumes were flat while prices were down. The
potash segment gross margin was also lower quarter-over-quarter
and year-over-year due principally to the inclusion of the
Chilean nitrate operation, which commenced commercial production
in February 2002.

In the third quarter, phosphate gross margin
benefited from firming fertilizer prices, but this benefit was
more than offset by increased per unit cost of sales due to
lower operating rates and higher per unit sulfur costs. On a
year-to-date basis, sales volumes are down primarily due to
lower DAP and liquid fertilizer offshore sales. Prices are up on
an overall basis. However, the benefit of increased prices was
more than offset by higher per unit costs of sales, resulting in
lower gross margin.

11



---



##### 



The weaker Canadian dollar contributed to an
exchange gain of $5.0 million in third quarter 2002,
compared to a gain of $10.0 million in last years
third quarter. Year-to-date in 2002 there was an exchange loss
of $5.9 million compared to a gain of $10.8 million in
the first nine months of 2001, a difference of
$16.7 million. The company has exposure to both the
Canadian dollar and the Brazilian real. Of the
2002 year-to-date exchange loss, $4.9 million relates
to the decline in the real. Generally, for each $.01 change in
the Canadian dollar there is expected to be an approximate
$1.2 million effect on the companys foreign exchange
gain/loss before tax. These gains/ losses are primarily non-cash
so net income is affected more than cash flow.

Other income on a year-over-year basis declined
primarily due to a $2.0 million provision recorded in the
second quarter of 2002 related to the Geismar EPA investigation
(see Part II  Other Information 
Legal Proceedings).

Potash

|              |                               |                                 |       |                    |  |                      |       |      |  |      |     |        |   |      |       |      |  |        |       |     |  |  |    |    |   |   |       |       |  |   |       |       |  |  |     |    |  
|------------- | ----------------------------- | ------------------------------- | ----- | ------------------ |  | -------------------- | ----- | ---- |  | ---- | --- | ------ | - | ---- | ----- | ---- |  | ------ | ----- | --- |  |  | -- | -- | - | - | ----- | ----- |  | - | ----- | ----- |  |  | --- | -- | -
|              |                               |                                
|              |                               | Three Months Ended September 30
|             
|             
|              |                               |                                 |       |                    |  |                     
|              |                               | Dollars (millions)              |       | Tonnes (thousands) |  | Average Price Per MT
|             
|             
|              |                               | %                               |       |                    |  | %                    |       |      |  | %   
|              |                               | 2002                            |       | 2001               |  | Change               |       | 2002 |  | 2001 |     | Change |   | 2002 |       | 2001 |  | Change
|             
|             
|Net Sales     |                               |                                 |       |                    |  |                      |       |      |  |      |     |        |   |      |       |      |  |        |       |     |  |  |    |    |   |   |       |       |  |   |       |       |  |  |     |   
|              | North American                |                                 | $     | 51.6               |  |                      | $     | 54.5 |  |      |     | (5     | ) |      |       | 676  |  |        |       | 717 |  |  |    | (6 | ) |   | $     | 76.37 |  |   | $     | 76.05 |  |  |     |   |  
|              | Offshore                      |                                 |       | 64.0               |  |                      |       | 69.2 |  |      |     | (8     | ) |      |       | 740  |  |        |       | 761 |  |  |    | (3 | ) |   | $     | 86.42 |  |   | $     | 90.93 |  |  |     | (5 | )
|             
|              |                               |                                 | 115.6 |                    |  |                      | 123.7 |      |  |      | (7  | )      |   |      | 1,416 |      |  |        | 1,478 |     |  |  | (4 | )  |   | $ | 81.62 |       |  | $ | 83.71 |       |  |  | (3  | ) 
|              | Other                         |                                 |       | 3.4                |  |                      |       |     |  |      |     |       |   |      |       |     |  |        |       |    |  |  |    |   |   |   |       |      |  |   |       |      |  |  |     |   |  
|             
|              |                               |                                 | 119.0 |                    |  |                      | 123.7 |      |  |      | (4  | )      |   |      | 1,416 |      |  |        | 1,478 |     |  |  | (4 | )  |   | $ | 84.04 |       |  | $ | 83.71 |       |  |  |    |   
|             
|Cost of Sales |                               |                                 |       |                    |  |                      |       |      |  |      |     |        |   |      |       |      |  |        |       |     |  |  |    |    |   |   |       |       |  |   |       |       |  |  |     |   
|              | Cash costs                    |                                 |       | 61.2               |  |                      |       | 58.0 |  |      |     | 6      |   |      |       |      |  |        |       |     |  |  |    |    |   |   | $     | 43.22 |  |   | $     | 39.24 |  |  |     | 10 |  
|              | Depreciation and Amortization |                                 |       | 9.7                |  |                      |       | 8.0  |  |      |     | 21     |   |      |       |      |  |        |       |     |  |  |    |    |   |   | $     | 6.85  |  |   | $     | 5.43  |  |  |     | 26 |  
|             
|              |                               |                                 | 70.9  |                    |  |                      | 66.0  |      |  |      | 7   |        |   |      |       |      |  |        |       |     |  |  |    |    |   | $ | 50.07 |       |  | $ | 44.67 |       |  |  | 12  |   
|             
|Gross Margin  |                               | $                               | 48.1  |                    |  | $                    | 57.7  |      |  |      | (17 | )      |   |      |       |      |  |        |       |     |  |  |    |    |   | $ | 33.97 |       |  | $ | 39.04 |       |  |  | (13 | ) 
|             

|              |                               |                                |       |                    |  |                      |       |       |  |      |    |        |   |      |       |       |  |        |       |       |  |  |   |    |   |   |       |       |  |   |       |       |  |  |    |    |  
|------------- | ----------------------------- | ------------------------------ | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | -- | ------ | - | ---- | ----- | ----- |  | ------ | ----- | ----- |  |  | - | -- | - | - | ----- | ----- |  | - | ----- | ----- |  |  | -- | -- | -
|              |                               |                               
|              |                               | Nine Months Ended September 30
|             
|             
|              |                               |                                |       |                    |  |                     
|              |                               | Dollars (millions)             |       | Tonnes (thousands) |  | Average Price Per MT
|             
|             
|              |                               | %                              |       |                    |  | %                    |       |       |  | %   
|              |                               | 2002                           |       | 2001               |  | Change               |       | 2002  |  | 2001 |    | Change |   | 2002 |       | 2001  |  | Change
|             
|             
|Net Sales     |                               |                                |       |                    |  |                      |       |       |  |      |    |        |   |      |       |       |  |        |       |       |  |  |   |    |   |   |       |       |  |   |       |       |  |  |    |   
|              | North American                |                                | $     | 167.2              |  |                      | $     | 180.6 |  |      |    | (7     | ) |      |       | 2,143 |  |        |       | 2,235 |  |  |   | (4 | ) |   | $     | 78.01 |  |   | $     | 80.82 |  |  |    | (3 | )
|              | Offshore                      |                                |       | 242.2              |  |                      |       | 240.0 |  |      |    | 1      |   |      |       | 2,852 |  |        |       | 2,728 |  |  |   | 4  |   |   | $     | 84.92 |  |   | $     | 87.94 |  |  |    | (3 | )
|             
|              |                               |                                | 409.4 |                    |  |                      | 420.6 |       |  |      | (3 | )      |   |      | 4,995 |       |  |        | 4,963 |       |  |  | 1 |    |   | $ | 81.96 |       |  | $ | 84.73 |       |  |  | (3 | ) 
|              | Other                         |                                |       | 13.4               |  |                      |       |      |  |      |    |       |   |      |       |      |  |        |       |      |  |  |   |   |   |   |       |      |  |   |       |      |  |  |    |   |  
|             
|              |                               |                                | 422.8 |                    |  |                      | 420.6 |       |  |      |   |        |   |      | 4,995 |       |  |        | 4,963 |       |  |  | 1 |    |   | $ | 84.64 |       |  | $ | 84.73 |       |  |  |   |   
|             
|Cost of Sales |                               |                                |       |                    |  |                      |       |       |  |      |    |        |   |      |       |       |  |        |       |       |  |  |   |    |   |   |       |       |  |   |       |       |  |  |    |   
|              | Cash costs                    |                                |       | 212.3              |  |                      |       | 200.9 |  |      |    | 6      |   |      |       |       |  |        |       |       |  |  |   |    |   |   | $     | 42.50 |  |   | $     | 40.48 |  |  |    | 5  |  
|              | Depreciation and Amortization |                                |       | 36.1               |  |                      |       | 28.4  |  |      |    | 27     |   |      |       |       |  |        |       |       |  |  |   |    |   |   | $     | 7.23  |  |   | $     | 5.70  |  |  |    | 27 |  
|             
|              |                               |                                | 248.4 |                    |  |                      | 229.3 |       |  |      | 8  |        |   |      |       |       |  |        |       |       |  |  |   |    |   | $ | 49.73 |       |  | $ | 46.18 |       |  |  | 8  |   
|             
|Gross Margin  |                               | $                              | 174.4 |                    |  | $                    | 191.3 |       |  |      | (9 | )      |   |      |       |       |  |        |       |       |  |  |   |    |   | $ | 34.91 |       |  | $ | 38.55 |       |  |  | (9 | ) 
|             

North American potash sales volumes were down as
compared to the third quarter of last year as the company opted
not to participate in some lower-priced sales, maintaining its
philosophy that price is more important than volumes. These
competitive pressures, in addition to a poor spring planting
season, resulted in lower North American sales volumes on a
year-over-year basis. Offshore sales volumes shifted from one
quarter to another this year. Third quarter 2002 sales volumes
were slightly lower than third quarter 2001, but were higher on
a year-to-date basis due to record sales in March of this year.

12



---



##### 



North American sales prices in the third quarter
of 2002 were flat as compared to third quarter 2001 as the
company maintained its prices at the expense of market share.
Prices decreased in the first nine months of 2002 as compared to
the first nine months of 2001 due to these competitive
pressures. In mid-September the company announced a $4 per short
ton increase in the North American price. Prices in the third
quarter in the offshore markets were slightly higher than the
trailing quarter but were down on a quarter-over-quarter and
year-over-year basis.

Total gross margin for the potash segment was
negatively affected by the inclusion of the Chilean nitrate
operations, which commenced commercial production in February
2002. The company continues to make modifications there to
increase production volumes and reduce costs as it brings this
new plant on stream.

Potash per unit cost of sales (excluding
nitrates) increased due primarily to an increase in the number
of shutdown weeks (15.5 weeks in third quarter 2002 versus
11.1 weeks in the same period in 2001). On a year-to-date
basis, per unit costs decreased 5 percent, primarily due to
lower natural gas costs and higher production tonnes.

Phosphate

|              |                               |                                 |       |                    |  |                      |       |       |  |      |     |        |   |      |     |      |  |        |     |     |  |  |   |    |  |   |        |        |  |   |        |        |  |  |     |     |  
|------------- | ----------------------------- | ------------------------------- | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | --- | ------ | - | ---- | --- | ---- |  | ------ | --- | --- |  |  | - | -- |  | - | ------ | ------ |  | - | ------ | ------ |  |  | --- | --- | -
|              |                               |                                
|              |                               | Three Months Ended September 30
|             
|             
|              |                               |                                 |       |                    |  |                     
|              |                               | Dollars (millions)              |       | Tonnes (thousands) |  | Average Price Per MT
|             
|             
|              |                               | %                               |       |                    |  | %                    |       |       |  | %   
|              |                               | 2002                            |       | 2001               |  | Change               |       | 2002  |  | 2001 |     | Change |   | 2002 |     | 2001 |  | Change
|             
|             
|Net Sales     |                               |                                 |       |                    |  |                      |       |       |  |      |     |        |   |      |     |      |  |        |     |     |  |  |   |    |  |   |        |        |  |   |        |        |  |  |     |    
|              | Fertilizer  liquids          |                                 | $     | 34.5               |  |                      | $     | 30.9  |  |      |     | 12     |   |      |     | 164  |  |        |     | 163 |  |  |   | 1  |  |   | $      | 210.46 |  |   | $      | 189.20 |  |  |     | 11  |  
|              | Fertilizer  solids           |                                 |       | 35.7               |  |                      |       | 25.0  |  |      |     | 43     |   |      |     | 239  |  |        |     | 220 |  |  |   | 9  |  |   | $      | 149.44 |  |   | $      | 113.75 |  |  |     | 31  |  
|              | Feed                          |                                 |       | 50.3               |  |                      |       | 46.5  |  |      |     | 8      |   |      |     | 219  |  |        |     | 193 |  |  |   | 13 |  |   | $      | 230.43 |  |   | $      | 241.24 |  |  |     | (4  | )
|              | Industrial                    |                                 |       | 39.4               |  |                      |       | 43.5  |  |      |     | (10    | ) |      |     | 131  |  |        |     | 130 |  |  |   | 1  |  |   | $      | 300.28 |  |   | $      | 335.05 |  |  |     | (10 | )
|             
|              |                               |                                 | 159.9 |                    |  |                      | 145.9 |       |  |      | 10  |        |   |      | 753 |      |  |        | 706 |     |  |  | 7 |    |  | $ | 212.52 |        |  | $ | 206.76 |        |  |  | 3   |    
|             
|Cost of Sales |                               |                                 |       |                    |  |                      |       |       |  |      |     |        |   |      |     |      |  |        |     |     |  |  |   |    |  |   |        |        |  |   |        |        |  |  |     |    
|              | Cash costs                    |                                 |       | 130.2              |  |                      |       | 117.5 |  |      |     | 11     |   |      |     |      |  |        |     |     |  |  |   |    |  |   | $      | 172.91 |  |   | $      | 166.43 |  |  |     | 4   |  
|              | Depreciation and Amortization |                                 |       | 21.2               |  |                      |       | 18.4  |  |      |     | 15     |   |      |     |      |  |        |     |     |  |  |   |    |  |   | $      | 28.32  |  |   | $      | 26.16  |  |  |     | 8   |  
|             
|              |                               |                                 | 151.4 |                    |  |                      | 135.9 |       |  |      | 11  |        |   |      |     |      |  |        |     |     |  |  |   |    |  | $ | 201.23 |        |  | $ | 192.59 |        |  |  | 4   |    
|             
|Gross Margin  |                               | $                               | 8.5   |                    |  | $                    | 10.0  |       |  |      | (15 | )      |   |      |     |      |  |        |     |     |  |  |   |    |  | $ | 11.29  |        |  | $ | 14.17  |        |  |  | (20 | )  
|             

|              |                               |                                |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |    |    |  
|------------- | ----------------------------- | ------------------------------ | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | --- | ------ | - | ---- | ----- | ---- |  | ------ | ----- | --- |  |  | --- | --- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | -- | -- | -
|              |                               |                               
|              |                               | Nine Months Ended September 30
|             
|             
|              |                               |                                |       |                    |  |                     
|              |                               | Dollars (millions)             |       | Tonnes (thousands) |  | Average Price Per MT
|             
|             
|              |                               | %                              |       |                    |  | %                    |       |       |  | %   
|              |                               | 2002                           |       | 2001               |  | Change               |       | 2002  |  | 2001 |     | Change |   | 2002 |       | 2001 |  | Change
|             
|             
|Net Sales     |                               |                                |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |    |   
|              | Fertilizer  liquids          |                                | $     | 99.3               |  |                      | $     | 107.8 |  |      |     | (8     | ) |      |       | 466  |  |        |       | 534 |  |  |     | (13 | ) |   | $      | 213.29 |  |   | $      | 201.84 |  |  |    | 6  |  
|              | Fertilizer  solids           |                                |       | 83.1               |  |                      |       | 109.9 |  |      |     | (24    | ) |      |       | 541  |  |        |       | 789 |  |  |     | (31 | ) |   | $      | 153.59 |  |   | $      | 139.23 |  |  |    | 10 |  
|              | Feed                          |                                |       | 159.8              |  |                      |       | 154.4 |  |      |     | 4      |   |      |       | 700  |  |        |       | 644 |  |  |     | 9   |   |   | $      | 228.13 |  |   | $      | 239.75 |  |  |    | (5 | )
|              | Industrial                    |                                |       | 120.1              |  |                      |       | 126.7 |  |      |     | (5     | ) |      |       | 391  |  |        |       | 383 |  |  |     | 2   |   |   | $      | 307.52 |  |   | $      | 330.97 |  |  |    | (7 | )
|             
|              |                               |                                | 462.3 |                    |  |                      | 498.8 |       |  |      | (7  | )      |   |      | 2,098 |      |  |        | 2,350 |     |  |  | (11 | )   |   | $ | 220.39 |        |  | $ | 212.24 |        |  |  | 4  |   
|             
|Cost of Sales |                               |                                |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |    |   
|              | Cash costs                    |                                |       | 362.1              |  |                      |       | 396.5 |  |      |     | (9     | ) |      |       |      |  |        |       |     |  |  |     |     |   |   | $      | 172.59 |  |   | $      | 168.72 |  |  |    | 2  |  
|              | Depreciation and Amortization |                                |       | 58.0               |  |                      |       | 53.7  |  |      |     | 8      |   |      |       |      |  |        |       |     |  |  |     |     |   |   | $      | 27.65  |  |   | $      | 22.84  |  |  |    | 21 |  
|             
|              |                               |                                | 420.1 |                    |  |                      | 450.2 |       |  |      | (7  | )      |   |      |       |      |  |        |       |     |  |  |     |     |   | $ | 200.24 |        |  | $ | 191.56 |        |  |  | 5  |   
|             
|Gross Margin  |                               | $                              | 42.2  |                    |  | $                    | 48.6  |       |  |      | (13 | )      |   |      |       |      |  |        |       |     |  |  |     |     |   | $ | 20.11  |        |  | $ | 20.68  |        |  |  | (3 | ) 
|             

Overall, the companys phosphate sales
volumes in North America increased 12 percent in the third
quarter of 2002 as compared to the third quarter last year, the
biggest gains being in liquid and solid fertilizers. During the
third quarter the company participated in the offshore solid
fertilizer market for the first time in over a year. Third
quarter offshore solid fertilizer sales volumes were flat as
compared to the third quarter last

13



---



##### 



year. Overall, feed volumes increased
13 percent quarter-over-quarter, primarily due to increased
offshore sales volumes to Mexico and increased sales from the
companys Brazilian feed plant. Feed sales on a
year-to-year comparison were also higher. Sales volumes of
industrial products were flat both on a quarter-over-quarter and
year-over-year basis.


Prices for solid fertilizers in the offshore
markets were up 32 percent in the third quarter of 2002 as
compared to third quarter 2001 and 19 percent on a
year-over-year basis. North American solid fertilizer prices,
although flat on a year-over-year basis, were up 27 percent
on a quarter-over-quarter basis. Overall, liquid fertilizer
prices also improved over both comparable periods. These price
improvements were primarily the result of stronger market
fundamentals. Feed prices during the quarter and on a
year-to-date basis were affected by competitive pressures.
Industrial prices were down quarter-over-quarter primarily due
to prior period contract adjustments with a major industrial
customer.

The average per unit cost of sulfur increased
11 percent from the trailing quarter and 55 percent on
a quarter-over-quarter comparison due to a very tight sulfur
market. A temporary sulfur shortage resulted in reduced
operating rates during the quarter. In addition, purified acid
plant operation problems, which have since been resolved,
increased costs in that area. These factors resulted in higher
per unit cost of sales during the quarter. Comparing
year-to-date 2002 with the comparable period in 2001, the
average per unit cost of sulfur was down slightly; however,
production tonnes declined 7 percent, leading to a
5 percent increase in per unit cost of sales.

Consistent with its strategy of using
high-quality ore with flexibility, the company opened its new
DFP (poultry phosphate feed) facility in North Carolina during
the quarter (completed on time and under budget) and continued
construction of its purified acid expansion, expected to start
up in March of 2003.

Nitrogen

|               |                               |                                 |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |    |   |   |        |        |  |   |        |        |  |  |     |     |  
|-------------- | ----------------------------- | ------------------------------- | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | --- | ------ | - | ---- | ----- | ---- |  | ------ | ----- | --- |  |  | --- | -- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | --- | --- | -
|               |                               |                                
|               |                               | Three Months Ended September 30
|              
|              
|               |                               |                                 |       |                    |  |                     
|               |                               | Dollars (millions)              |       | Tonnes (thousands) |  | Average Price Per MT
|              
|              
|               |                               | %                               |       |                    |  | %                    |       |       |  | %   
|               |                               | 2002                            |       | 2001               |  | Change               |       | 2002  |  | 2001 |     | Change |   | 2002 |       | 2001 |  | Change
|              
|              
|Net Sales      |                               |                                 |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |    |   |   |        |        |  |   |        |        |  |  |     |    
|               | Ammonia                       |                                 | $     | 58.6               |  |                      | $     | 69.7  |  |      |     | (16    | ) |      |       | 503  |  |        |       | 541 |  |  |     | (7 | ) |   | $      | 116.43 |  |   | $      | 128.74 |  |  |     | (10 | )
|               | Urea                          |                                 |       | 43.7               |  |                      |       | 37.4  |  |      |     | 17     |   |      |       | 314  |  |        |       | 284 |  |  |     | 10 |   |   | $      | 139.39 |  |   | $      | 131.80 |  |  |     | 6   |  
|               | Nitrogen Solutions            |                                 |       | 24.9               |  |                      |       | 23.5  |  |      |     | 6      |   |      |       | 284  |  |        |       | 283 |  |  |     |   |   |   | $      | 87.75  |  |   | $      | 82.93  |  |  |     | 6   |  
|               | Other                         |                                 |       | 37.4               |  |                      |       | 39.9  |  |      |     | (6     | ) |      |       | 616  |  |        |       | 600 |  |  |     | 3  |   |   | $      | 60.71  |  |   | $      | 66.49  |  |  |     | (9  | )
|              
|               |                               |                                 | 164.6 |                    |  |                      | 170.5 |       |  |      | (3  | )      |   |      | 1,717 |      |  |        | 1,708 |     |  |  | 1   |    |   | $ | 95.85  |        |  | $ | 99.78  |        |  |  | (4  | )  
|Purchased      |                               |                                 | 11.7  |                    |  |                      | 20.1  |       |  |      | (42 | )      |   |      | 95    |      |  |        | 161   |     |  |  | (41 | )  |   | $ | 123.13 |        |  | $ | 125.20 |        |  |  | (2  | )  
|              
|               |                               | $                               | 176.3 |                    |  | $                    | 190.6 |       |  |      | (8  | )      |   |      | 1,812 |      |  |        | 1,869 |     |  |  | (3  | )  |   | $ | 97.27  |        |  | $ | 101.96 |        |  |  | (5  | )  
|              
|Fertilizer     |                               | $                               | 69.8  |                    |  | $                    | 78.6  |       |  |      | (11 | )      |   |      | 672   |      |  |        | 761   |     |  |  | (12 | )  |   | $ | 103.99 |        |  | $ | 103.27 |        |  |  | 1   |    
|Non-fertilizer |                               |                                 | 106.5 |                    |  |                      | 112.0 |       |  |      | (5  | )      |   |      | 1,140 |      |  |        | 1,108 |     |  |  | 3   |    |   | $ | 93.31  |        |  | $ | 101.06 |        |  |  | (8  | )  
|              
|               |                               |                                 | 176.3 |                    |  |                      | 190.6 |       |  |      | (8  | )      |   |      | 1,812 |      |  |        | 1,869 |     |  |  | (3  | )  |   | $ | 97.27  |        |  | $ | 101.96 |        |  |  | (5  | )  
|              
|Cost of Sales  |                               |                                 |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |    |   |   |        |        |  |   |        |        |  |  |     |    
|               | Cash costs                    |                                 |       | 138.2              |  |                      |       | 169.2 |  |      |     | (18    | ) |      |       |      |  |        |       |     |  |  |     |    |   |   | $      | 76.27  |  |   | $      | 90.53  |  |  |     | (16 | )
|               | Depreciation and Amortization |                                 |       | 21.7               |  |                      |       | 21.5  |  |      |     |       |   |      |       |      |  |        |       |     |  |  |     |    |   |   | $      | 11.95  |  |   | $      | 11.50  |  |  |     | 4   |  
|              
|               |                               |                                 | 159.9 |                    |  |                      | 190.7 |       |  |      | (16 | )      |   |      |       |      |  |        |       |     |  |  |     |    |   | $ | 88.22  |        |  | $ | 102.03 |        |  |  | (14 | )  
|              
|Gross Margin   |                               | $                               | 16.4  |                    |  | $                    | (0.1  | )     |  |      |    |        |   |      |       |      |  |        |       |     |  |  |     |    |   | $ | 9.05   |        |  | $ | (0.07  | )      |  |  |    |    
|              

14



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##### 



|               |                               |                                |       |                    |  |                      |       |       |  |      |     |        |   |      |       |       |  |        |       |       |  |  |     |    |   |   |        |        |  |   |        |        |  |  |     |     |  
|-------------- | ----------------------------- | ------------------------------ | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | --- | ------ | - | ---- | ----- | ----- |  | ------ | ----- | ----- |  |  | --- | -- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | --- | --- | -
|               |                               |                               
|               |                               | Nine Months Ended September 30
|              
|              
|               |                               |                                |       |                    |  |                     
|               |                               | Dollars (millions)             |       | Tonnes (thousands) |  | Average Price Per MT
|              
|              
|               |                               | %                              |       |                    |  | %                    |       |       |  | %   
|               |                               | 2002                           |       | 2001               |  | Change               |       | 2002  |  | 2001 |     | Change |   | 2002 |       | 2001  |  | Change
|              
|              
|Net Sales      |                               |                                |       |                    |  |                      |       |       |  |      |     |        |   |      |       |       |  |        |       |       |  |  |     |    |   |   |        |        |  |   |        |        |  |  |     |    
|               | Ammonia                       |                                | $     | 164.7              |  |                      | $     | 260.0 |  |      |     | (37    | ) |      |       | 1,425 |  |        |       | 1,531 |  |  |     | (7 | ) |   | $      | 115.57 |  |   | $      | 169.87 |  |  |     | (32 | )
|               | Urea                          |                                |       | 146.0              |  |                      |       | 169.8 |  |      |     | (14    | ) |      |       | 1,125 |  |        |       | 991   |  |  |     | 14 |   |   | $      | 129.74 |  |   | $      | 171.29 |  |  |     | (24 | )
|               | Nitrogen Solutions            |                                |       | 62.6               |  |                      |       | 86.3  |  |      |     | (27    | ) |      |       | 761   |  |        |       | 781   |  |  |     | (3 | ) |   | $      | 82.36  |  |   | $      | 110.43 |  |  |     | (25 | )
|               | Other                         |                                |       | 111.6              |  |                      |       | 122.7 |  |      |     | (9     | ) |      |       | 1,816 |  |        |       | 1,688 |  |  |     | 7  |   |   | $      | 61.42  |  |   | $      | 72.66  |  |  |     | (15 | )
|              
|               |                               |                                | 484.9 |                    |  |                      | 638.8 |       |  |      | (24 | )      |   |      | 5,127 |       |  |        | 4,991 |       |  |  | 3   |    |   | $ | 94.58  |        |  | $ | 127.97 |        |  |  | (26 | )  
|Purchased      |                               |                                | 35.7  |                    |  |                      | 80.2  |       |  |      | (56 | )      |   |      | 299   |       |  |        | 513   |       |  |  | (42 | )  |   | $ | 119.04 |        |  | $ | 156.74 |        |  |  | (24 | )  
|              
|               |                               | $                              | 520.6 |                    |  | $                    | 719.0 |       |  |      | (28 | )      |   |      | 5,426 |       |  |        | 5,504 |       |  |  | (1  | )  |   | $ | 95.93  |        |  | $ | 130.65 |        |  |  | (27 | )  
|              
|Fertilizer     |                               | $                              | 218.9 |                    |  | $                    | 347.2 |       |  |      | (37 | )      |   |      | 2,155 |       |  |        | 2,444 |       |  |  | (12 | )  |   | $ | 101.62 |        |  | $ | 142.06 |        |  |  | (28 | )  
|Non-fertilizer |                               |                                | 301.7 |                    |  |                      | 371.8 |       |  |      | (19 | )      |   |      | 3,271 |       |  |        | 3,060 |       |  |  | 7   |    |   | $ | 92.18  |        |  | $ | 121.54 |        |  |  | (24 | )  
|              
|               |                               |                                | 520.6 |                    |  |                      | 719.0 |       |  |      | (28 | )      |   |      | 5,426 |       |  |        | 5,504 |       |  |  | (1  | )  |   | $ | 95.93  |        |  | $ | 130.65 |        |  |  | (27 | )  
|              
|Cost of Sales  |                               |                                |       |                    |  |                      |       |       |  |      |     |        |   |      |       |       |  |        |       |       |  |  |     |    |   |   |        |        |  |   |        |        |  |  |     |    
|               | Cash costs                    |                                |       | 434.5              |  |                      |       | 569.9 |  |      |     | (24    | ) |      |       |       |  |        |       |       |  |  |     |    |   |   | $      | 80.07  |  |   | $      | 103.54 |  |  |     | (23 | )
|               | Depreciation and Amortization |                                |       | 65.4               |  |                      |       | 52.5  |  |      |     | 25     |   |      |       |       |  |        |       |       |  |  |     |    |   |   | $      | 12.05  |  |   | $      | 9.56   |  |  |     | 26  |  
|              
|               |                               |                                | 499.9 |                    |  |                      | 622.4 |       |  |      | (20 | )      |   |      |       |       |  |        |       |       |  |  |     |    |   | $ | 92.12  |        |  | $ | 113.10 |        |  |  | (19 | )  
|              
|Gross Margin   |                               | $                              | 20.7  |                    |  | $                    | 96.6  |       |  |      | (79 | )      |   |      |       |       |  |        |       |       |  |  |     |    |   | $ | 3.81   |        |  | $ | 17.55  |        |  |  | (78 | )  
|              

Third quarter sales volumes of manufactured
products were flat as compared to the same quarter last year and
up slightly compared to the first nine months of 2001.
Non-fertilizer sales volumes increased over both the third
quarter of last year and first nine months, supported by better
industrial demand.

Ammonia sales prices were down on a
quarter-over-quarter basis and as compared to the trailing
quarter due to new Trinidad capacity that came on stream during
the quarter. Ammonia prices increased near the end of the
quarter as this additional capacity was absorbed into the
market. Nitrogen solution prices increased as compared to the
trailing quarter and the third quarter of 2001 in anticipation
of anti-dumping duties being levied on certain competitors
imported product. Prices for all nitrogen products were down on
a year-over-year basis as the price of natural gas has remained
at levels where it is still attractive for North American
competitors to produce, thereby putting pressure on prices.

Third quarter per unit cost of sales benefited
from the companys natural gas hedging program.
Depreciation and amortization increased both over last
years third quarter and on a year-to-date basis primarily
due to the depreciation of the Trinidad plants purchased in the
second quarter of last year and the amortization of deferred
charges. The average per-unit cost of natural gas was down
24 percent on a year-over-year basis. This was the
principal cause of the decrease in the per-unit cost of sales
compared to the prior year.

Expenses

|                                  |  |                    |      |                   |  |        |      |      |  |      |     |        |  |   |      |  |  |   |      |  |  |  |     |  
|--------------------------------- |  | ------------------ | ---- | ----------------- |  | ------ | ---- | ---- |  | ---- | --- | ------ |  | - | ---- |  |  | - | ---- |  |  |  | --- | -
|                                  |  |                    |      |                  
|                                  |  | Three Months Ended |      | Nine Months Ended
|                                  |  | September 30       |      | September 30     
|                                 
|                                 
|                                  |  | %                  |      |                   |  | %     
|($ millions)                      |  | 2002               |      | 2001              |  | Change |      | 2002 |  | 2001 |     | Change
|                                 
|                                 
|Selling and Administrative        |  | $                  | 21.8 |                   |  | $      | 23.9 |      |  |      | (9  | )      |  | $ | 68.6 |  |  | $ | 72.8 |  |  |  | (6  | )
|Provincial Mining and Other Taxes |  |                    | 15.2 |                   |  |        | 17.8 |      |  |      | (15 | )      |  |   | 55.2 |  |  |   | 54.3 |  |  |  | 2   |  
|Interest                          |  |                    | 21.5 |                   |  |        | 22.4 |      |  |      | (4  | )      |  |   | 62.5 |  |  |   | 58.4 |  |  |  | 7   |  
|Income Taxes                      |  |                    | 8.3  |                   |  |        | 6.3  |      |  |      | 32  |        |  |   | 22.1 |  |  |   | 65.6 |  |  |  | (66 | )

15



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##### 



Selling and administrative expenses decreased
both on a quarter-over-quarter and year-over-year basis due to
cost savings and the elimination of amortization of goodwill due
to the change in accounting policy (see Note 2 to the
unaudited consolidated financial statements).

The decrease in Provincial Mining and Other Taxes
on a quarter-over-quarter basis was primarily due to a
year-to-date adjustment to revise forecasted Saskatchewan-based
sales tonnes. On a year-to-date basis, the increase was
primarily due to a higher rate per tonne due to the utilization
of tax pools that were available in previous years.

Interest expense for the quarter was down as
compared to third quarter 2001 primarily due to lower interest
rates on short-term debt, but increased in the first nine months
of 2002 due to the issuance of $600.0 million of
7.75 percent ten-year notes under the companys shelf
registration in May 2001. These notes were only outstanding for
part of the first nine months of last year. Weighted average
long-term debt outstanding in the third quarter of 2002 was
$1,023.9 million (2001  $1,019.4 million)
with a weighted average interest rate of 7.4 percent
(2001  7.4 percent). Weighted average long-term
debt outstanding for the first nine months of 2002 was
$1,021.7 million (2001  $701.6 million)
with a weighted average interest rate of 7.4 percent
(2001  7.3 percent). The weighted average
interest rate on short-term debt outstanding in the third
quarter of 2002 was 2.1 percent (2001 
3.9 percent) and for the first nine months of 2002 was
2.1 percent (2001  4.9 percent).

The effective consolidated tax rate was
approximately 36 percent in all periods presented. The
current/ future tax split on a year-to-date basis approximates
80 percent current and 20 percent future
(25 percent current and 75 percent future in the first
nine months of 2001). The increase in the current portion of the
provision was primarily due to a higher proportion of earnings
in Canada.

ANALYSIS OF FINANCIAL CONDITION AND CASH
FLOW

|                                                |  |                    |       |                   |  |      |       |      |  |   |        |   |  |   |        |  
|----------------------------------------------- |  | ------------------ | ----- | ----------------- |  | ---- | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                |  |                    |       |                  
|                                                |  | Three Months Ended |       | Nine Months Ended
|                                                |  | September 30       |       | September 30     
|                                               
|                                               
|($ millions)                                    |  | 2002               |       | 2001              |  | 2002 |       | 2001
|                                               
|                                               
|Cash provided by operating activities           |  | $                  | 85.3  |                   |  | $    | 52.5  |      |  | $ | 262.7  |   |  | $ | 50.4   |  
|Cash used in investing activities               |  | $                  | (70.3 | )                 |  | $    | (47.9 | )    |  | $ | (202.7 | ) |  | $ | (498.5 | )
|Cash provided by (used in) financing activities |  | $                  | 26.9  |                   |  | $    | 5.2   |      |  | $ | (30.9  | ) |  | $ | 409.5  |  

The net increase in cash provided by operating
activities in the third quarter of 2002, as compared with third
quarter 2001, was primarily due to the repayment of the
companys natural gas counter-parties margin accounts
in 2001. This was also the case on a year-to-date basis.

The increase in cash used in investing activities
in the third quarter as compared to the third quarter of 2001
was due to the expansion of the purified acid plant at Aurora.
The reduction of cash used in investing activities on a
year-to-date comparative basis was primarily due to the buyout
of the Trinidad plant leases in May 2001 which resulted in
additions to property, plant and equipment of approximately
$384.0 million. Partially offsetting this in 2002 was the
companys additional investment of $23.0 million in
SQM and spending on the new DFP plant and expansion of the
purified acid plant at Aurora.

The increase in cash provided by financing
activities in the third quarter of 2002 as compared to 2001 was
primarily due to additional borrowing under the commercial paper
program in 2002. To finance the 2001 buyout of the Trinidad
leases and pay down short-term debt, the company issued
$600.0 million of 7.75 percent ten-year notes in May
2001. This was the primary reason for the reduction in cash
provided by financing activities in the first nine months of
2002. The company paid dividends of $12.9 million in the
third quarter of 2002 (2001  $13.0 million). The
company paid dividends of $39.0 million in the first nine
months of both 2002 and 2001.

The company has a syndicated credit facility
which provides for unsecured advances of up to
$650.0 million (less the amount of commercial paper
outstanding), none of which was outstanding at
September 30, 2002. In addition, the company has short-term
lines of credit for up to $149.2 million in

16



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##### 



borrowing (less letters of credit of
$14.4 million), of which $90.0 million was outstanding
at September 30, 2002. The company has a commercial paper
program of up to $500.0 million, of which
$405.6 million was outstanding at September 30, 2002.
The company may also issue up to an additional $1.0 billion
in unsecured debt securities under its effective U.S. shelf
registration statement.


The company believes that internally generated
cash flow, supplemented by borrowing from existing financing
sources, will be sufficient to meet the companys
anticipated capital expenditures and other cash requirements,
exclusive of any possible acquisitions, in the fourth quarter of
2002.

In light of low equity values in world capital
markets and current low interest rates, the company is
evaluating and will continue to evaluate its pension assets and
liabilities and the potential for increased pension
contributions and expense in future years.

CONTRACTUAL OBLIGATIONS AND OTHER
COMMITMENTS

|                                  |  |                    |       |              |  |              |       |       |  |   |         |  |  |   |         | 
|--------------------------------- |  | ------------------ | ----- | ------------ |  | ------------ | ----- | ----- |  | - | ------- |  |  | - | ------- | 
|                                  |  |                   
|                                  |  | Dollars (millions)
|                                 
|                                 
|                                  |  | 1 to 3 years       |       | 4 to 5 years |  | Over 5 years |       | Total
|                                 
|                                 
|Long-term debt                    |  | $                  | 6.5   |              |  | $            | 12.1  |       |  | $ | 1,005.0 |  |  | $ | 1,023.6 | 
|Operating Leases                  |  |                    | 116.9 |              |  |              | 72.2  |       |  |   | 155.3   |  |  |   | 344.4   | 
|Raw Material Purchase Commitments |  |                    | 306.3 |              |  |              | 186.9 |       |  |   | 725.4   |  |  |   | 1,218.6 | 
|Other                             |  |                    | 37.1  |              |  |              |      |       |  |   |        |  |  |   | 37.1    | 
|                                 
|Total                             |  | $                  | 466.8 |              |  | $            | 271.2 |       |  | $ | 1,885.7 |  |  | $ | 2,623.7 | 
|                                 

Long-term debt primarily consists of
$1.0 billion of notes payable that were issued under the
companys shelf registration statement, $12.7 million
Adjustable Rate Industrial Revenue and Pollution Control
Obligations, a net of $5.9 million under a back-to-back
loan arrangement and commitments of $5.0 million payable
over five years. The notes payable are unsecured. Of the notes
outstanding, $400.0 million bear interest at
7.125 percent and mature in 2007 and $600.0 million
bear interest at 7.75 percent and mature in 2011. There are
no sinking fund requirements. The notes are subject to certain
covenants and events of default, including an event of default
for acceleration of other debt in excess of $50.0 million.
The Adjustable Rate Industrial Revenue and Pollution Control
Obligations bear interest at varying rates, are secured by bank
letters of credit and have no sinking fund requirements.

Operating leases consist primarily of three
items. The first is railcars that are used to transport finished
goods and raw materials. These leases extend out to
approximately 2020. The second is the lease of port facilities
at the Port of Saint John for shipping New Brunswick potash
offshore. This lease runs until 2018. The third is the lease of
two vessels for transporting ammonia from Trinidad. These leases
extend to 2008. The operating lease amounts disclosed in the
above table are calculated as at December 31, 2001. There
have been no material changes since that date.

The company has long-term agreements for the
purchase of sulfur for use in the production of phosphoric acid.
These agreements provide for minimum purchase quantities and
prices based on market rates at the time of delivery. The
commitments included in the above table are based on the market
prices for the third quarter of 2002. The companys
Trinidad subsidiaries have entered into long-term natural gas
contracts with the National Gas Company of Trinidad. The
contracts provide for prices that vary with ammonia market
prices, escalating floor prices and minimum purchase quantities.
The commitments included in the above table are based on floor
prices and minimum purchase quantities.

The company also has a long-term agreement for
the purchase of phosphate rock used at the Geismar facility.
This agreement sets base price (less volume discounts) for the
first three years. Prices in subsequent years are subject to
renegotiation. The commitments included in the above table are
based on the expected purchase quantity and the set base prices
(less applicable discounts).

Other commitments represents a contractual
commitment for mining of nitrates which is in effect until 2005.

17



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##### 



LIQUIDITY

|                           |  |                    |         |                       |  |                    |       |  |  |   |         | 
|-------------------------- |  | ------------------ | ------- | --------------------- |  | ------------------ | ----- |  |  | - | ------- | 
|                           |  |                   
|                           |  | Dollars (millions)
|                          
|                          
|                           |  | Amount            
|                           |  | Total              |         | Amount Outstanding at |  | Available at      
|                           |  | Amount             |         | September 30, 2002    |  | September 30, 2002
|                          
|                          
|Syndicated Credit Facility |  | $                  | 650.0   |                       |  | $                  |      |  |  | $ | 244.4   | 
|Lines of Credit            |  |                    | 149.2   |                       |  |                    | 90.0  |  |  |   | 44.8    | 
|Commercial Paper           |  |                    | 500.0   |                       |  |                    | 405.6 |  |  |   | 94.4    | 
|U.S. Shelf Registration    |  |                    | 1,000.0 |                       |  |                    |      |  |  |   | 1,000.0 | 

The company has a syndicated credit facility,
renewable annually, which provides for unsecured advances. The
amount available is the total committed amount less the amount
of commercial paper outstanding. The lines of credit are also
renewable annually and the amount available is reduced by
outstanding letters of credit. Both the syndicated credit
facility and the lines of credit have financial and other
covenants which the company must comply with at each quarter
end. The company was in compliance with these covenants at
September 30, 2002.

The company also has a commercial paper program
of up to $500.0 million. Access to this source of
short-term financing depends primarily on the companys
rating by Dominion Bond Rating Service (DBRS) and
conditions in the money markets. The companys commercial
paper is currently rated by DBRS as R1 low which should allow
unrestricted access to the money markets.

The company may also issue up to an additional
$1.0 billion in unsecured debt securities under its
effective U.S. shelf registration statement.

FAIR VALUE OF GAS HEDGING CONTRACTS

In addition to physical spot and term purchases,
the company employs futures, swaps and option agreements to
establish the cost on a portion of its natural gas requirements.
These instruments are intended to hedge the future cost of the
committed and anticipated natural gas purchases primarily for
its US nitrogen plants. The maximum period for these hedges
cannot exceed five years, in accordance with current company
policy. The company uses these instruments to reduce price risk,
not for speculative or trading purposes.

The fair value of the companys gas hedging
contracts at September 30, 2002 was $52.2 million
($8.9 million at December 31, 2001). The
companys futures contracts are exchange-traded and fair
value was determined based on exchange prices. Swaps and option
agreements are traded in the over-the-counter market and fair
value was calculated based on a price that was converted to an
exchange-equivalent price.

RELATED PARTY TRANSACTIONS

The company sells potash from its Saskatchewan
mines for use outside of North America exclusively to Canpotex
Limited, a potash export, sales and marketing company owned in
equal shares by the three potash producers in the Province of
Saskatchewan. Sales to Canpotex are at prevailing market prices
and are settled on normal trade terms. PCS Yumbes is purchasing
potash from SQM at prevailing market prices and settled on
normal trade terms. Year-to-date purchases are
$14.7 million. PCS Yumbes has also entered into a
14 month contract with SQM to sell them 6,000 tonnes of
potassium nitrate per month at a negotiated price commencing in
November 2002. The company has no other significant related
party transactions.

CRITICAL ACCOUNTING POLICIES

The companys accounting policies are in
accordance with accounting principles generally accepted in
Canada. These differ in some respects from accounting principles
generally accepted in the United States. These differences are
explained and quantified in Note 9 of the unaudited
consolidated financial statements.

18



---



##### 



The accounting policies followed by the company
will affect the reported amount of assets, liabilities, revenues
and expenses (see the annual report for a discussion of the most
significant policies in determining the results of operations
and financial position). There has been no change in the period
to accounting policies that are most significant in determining
the results of operations and financial position. Other
accounting policy changes are disclosed in Note 2 to the
unaudited consolidated financial statements.

OUTLOOK

Looking forward, low world grain stocks and
rising crop prices are expected to increase acres planted and
application rates around the world. This should help support
product prices providing better market conditions for the spring
season. As a result, the company decided to restart its White
Springs DAP production entering 2003. This additional volume
represents less than 2 percent of world capacity and less
than 5 percent of US capacity. While DAP prices have
declined recently due to a competitor clearing out inventory
prior to the sale of a production facility, an expected pick-up
in fourth quarter orders from China and increased domestic
demand should help raise prices. The advantage of these higher
prices will likely be offset by higher ammonia and sulfur input
costs.

Nitrogen prices are expected to maintain their
upward momentum. Higher corn plantings in 2003 should increase
demand as corn is the largest nitrogen consumer. In addition,
nitrogen inventories remain low. TFI reported September industry
levels to be well below the five-year average (ammonia down
16 percent, urea down 13 percent and UAN down
48 percent). Between the US and Trinidad, the company is
85 percent hedged for its fourth quarter natural gas needs
at $1.92 per MMBtu, based on the fourth quarter forecast of
ammonia prices for the operations in Trinidad.

In potash, the company was able to implement a
price increase in the domestic market during the third quarter
that should be realized in the fourth quarter. However, much of
this will be absorbed by higher shutdown costs as the company
matches supply to demand. Contracts with offshore customers for
second-half 2002 were settled at levels consistent with the
first half of the year.

In light of these conditions, the company
believes that its earlier guidance of diluted net income per
share of $1.20 for 2002 is still achievable. This would provide
cash flow of $5.75 per diluted share.

FORWARD LOOKING STATEMENTS

Certain statements in this quarterly report on
Form 10-Q and this Managements Discussion and
Analysis of Financial Condition and Results of Operations,
including those in the Outlook section, relating to
the period after September 30, 2002, are forward-looking
statements subject to risks and uncertainties. A number of
factors could cause actual results to differ materially from
those expressed in the forward-looking statements, including,
but not limited to: fluctuation in supply and demand in
fertilizer, sulfur and petrochemical markets; changes in
competitive pressures, including pricing pressures; risks
associated with natural gas and other hedging activities;
changes in capital markets; changes in currency and exchange
rates; unexpected geological or environmental conditions;
imprecision in reserve estimates; the outcome of legal
proceedings; changes in government policy and regulation; and
acquisitions the company may undertake in the future. The
company sells to a diverse group of customers both by geography
and by end product. Market conditions will vary on a
quarter-over-quarter and year-over-year basis and sales can be
expected to shift from one period to another. The company
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise, except as otherwise
required by applicable law.

19



---



##### 



ITEM
3.     QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

The companys nitrogen operations are
significantly affected by the price of natural gas. The company
employs derivative commodity instruments related to a portion of
its natural gas requirements (primarily futures, swaps and
options) for the purpose of managing its exposure to commodity
price risk in the purchase of natural gas. Changes in the market
value of these derivative instruments have a high correlation to
changes in the spot price of natural gas. Gains or losses
arising from settled hedging transactions are deferred as a
component of inventory until the product containing the hedged
item is sold. Changes in the market value of open hedging
transactions are not recognized as they generally relate to
changes in the spot price of anticipated natural gas purchases.

A sensitivity analysis has been prepared to
estimate the companys market risk exposure arising from
derivative commodity instruments. The fair value of such
instruments is calculated by valuing each position using quoted
market prices. Market risk is estimated as the potential loss in
fair value resulting from a hypothetical 10 percent adverse
change in such prices. The results of this analysis indicate
that as of September 30, 2002 the companys estimated
derivative commodity instruments market risk exposure was
$18.2 million (2001  $19.5 million). Actual
results may differ from this estimate. Changes in the fair value
of such derivative instruments, with maturities in 2002 through
2007, will generally relate to changes in the spot price of
anticipated natural gas purchases.

The company also enters into forward exchange
contracts for the sole purpose of limiting its exposure to
exchange rate fluctuations relating to certain trade accounts.
Gains or losses resulting from foreign exchange contracts are
recognized at the time that the contracts are entered into and
are included in Other Income.

ITEM
4.     CONTROLS AND
PROCEDURES

Within the 90 days prior to the date of this
report, the company carried out an evaluation under the
supervision and with the participation of the companys
management, including the companys Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design
and operation of the companys disclosure controls and
procedures. Based upon and as of the date of that evaluation,
the Chief Executive Officer and Chief Financial Officer
concluded that the disclosure controls and procedures are
effective in all material respects to ensure that information
required to be disclosed in the reports the company files and
submits under the Exchange Act is recorded, processed,
summarized and reported as and when required.

Since the date of the companys most recent
evaluation, there were no significant changes in the
companys internal controls for financial reporting or in
other factors that could significantly affect such internal
controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.

20



---



##### 



PART II.     OTHER
INFORMATION



ITEM 1.     LEGAL
PROCEEDINGS


Geismar Facility
Investigation

On September 10, 2002, the companys
wholly owned subsidiary, PCS Nitrogen, Inc. agreed to
conclude the federal grand jury investigation and parallel state
investigations of its Geismar, Louisiana facility by pleading
guilty to one felony violation of the Clean Air Act in the
United States District Court for the Middle District of
Louisiana and one felony violation of analogous state law in
each of the Eighteenth and Twenty-third Judicial Districts of
the State of Louisiana. The company also agreed to pay a fine of
$1.75 million to the U.S. government and $125,000 to
each of the two state judicial districts. The amount of the
fines is covered by a provision recorded in the second quarter
of 2002.

The company entered a guilty plea in federal
court pursuant to a plea agreement with the federal government
and separately entered into plea agreements with each of the
prosecutors from the two judicial districts. The agreed upon
fines are subject to approval by the respective federal and
state trial courts at sentencing hearings which have not yet
been scheduled. In addition to the companys pleas, one
current and two former Geismar plant employees each have agreed
to plead guilty to one misdemeanor violation of state or federal
environmental laws.

ITEM 6.     EXHIBITS
AND REPORTS ON FORM 8-K

(a) EXHIBITS

|        |      |                         |  |                                                                                                                                                                                                                                                                                             
|------- | ---- | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |                        
|Number  |      | Description of Document
|        |      |                        
|        | 3(a) |                         |  | Articles of Continuance of the registrant dated
    May 15, 2002, incorporated by reference to
    Exhibit 3(a) to the registrants report on
    Form 10-Q for the quarterly period ended June 30, 2002
    (the Second Quarter 2002 Form 10-Q).                                         
|       
|        | 3(b) |                         |  | Bylaws of the registrant effective May 15,
    2002, incorporated by reference to Exhibit 3(a) to the
    Second Quarter 2002 Form 10-Q.                                                                                                                                                    
|       
|        | 4(a) |                         |  | Term Credit Agreement between The Bank of Nova
    Scotia and other financial institutions and the registrant dated
    September 25, 2001, incorporated by reference to
    Exhibit 4(a) to the registrants report on
    Form 10-Q for the quarterly period ended September 30,
    2001.
|       
|        | 4(b) |                         |  | Indenture dated as of June 16, 1997, between
    the registrant and The Bank of Nova Scotia Trust Company of New
    York, incorporated by reference to Exhibit 4(a) to the
    registrants report on Form 8-K dated June 18,
    1997.                                                    

The registrant hereby undertakes to file with the
Securities and Exchange Commission, upon request, copies of any
constituent instruments defining the rights of holders of
long-term debt of the registrant or its subsidiaries that have
not been filed herewith because the amounts represented thereby
are less than 10% of the total assets of the registrant and its
subsidiaries on a consolidated basis.

|        |       |                         |  |                                                                                                                                                                                                                                                                                                                       
|------- | ----- | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10(a) |                         |  | Sixth Voting Agreement dated April 22, 1978,
    between Central Canada Potash, Division of Noranda, Inc.,
    Cominco Ltd., International Minerals and Chemical Corporation
    (Canada) Limited, PCS Sales and Texasgulf Inc., incorporated by
    reference to Exhibit 10(f) to the F-1 Registration
    Statement.

21



---



##### 



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------- | ----- | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|       
|        | 10(b) |                         |  | Canpotex Limited Shareholders Seventh Memorandum
    of Agreement effective April 21, 1978, between Central
    Canada Potash, Division of Noranda Inc., Cominco Ltd.,
    International Minerals and Chemical Corporation (Canada)
    Limited, PCS Sales, Texasgulf Inc. and Canpotex Limited as
    amended by Canpotex S & P amending agreement dated
    November 4, 1987, incorporated by reference to
    Exhibit 10(g) to the F-1 Registration Statement.                                                                                      
|       
|        | 10(c) |                         |  | Producer Agreement dated April 21, 1978,
    between Canpotex Limited and PCS Sales, incorporated by
    reference to Exhibit 10(h) to the F-1 Registration
    Statement.                                                                                                                                                                                                                                                                                                                                                                             
|       
|        | 10(d) |                         |  | Canpotex/PCS Amending Agreement, dated with
    effect October 1, 1992, incorporated by reference to
    Exhibit 10(f) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                          
|       
|        | 10(e) |                         |  | Canpotex PCA Collateral Withdrawing/PCS Amending
    Agreement, dated with effect October 7, 1993,
    incorporated by reference to Exhibit 10(g) to the 1995
    Form 10-K.                                                                                                                                                                                                                                                                                                                                                                           
|       
|        | 10(f) |                         |  | Canpotex Producer Agreement amending agreement
    dated effective January 1, 1999, incorporated by reference
    to Exhibit 10(f) of the registrants report on
    Form 10-K for the year ended December 31, 2000 (the
    2000 Form 10-K).                                                                                                                                                                                                                                                                                                        
|       
|        | 10(g) |                         |  | Agreement of Limited Partnership of Arcadian
    Fertilizer, L.P. dated as of March 3, 1992 (form), and the
    related Certificate of Limited Partnership of Arcadian
    Fertilizer, L.P., filed with the Secretary of State of the State
    of Delaware on March 3, 1992 (incorporated by reference to
    Exhibits 3.1 and 3.2 to Arcadian Partners L.P.s
    Registration Statement on Form S-1 (File
    No. 33-45828)).                                                                                                                       
|       
|        | 10(h) |                         |  | Amendment to Agreement of Limited Partnership of
    Arcadian Fertilizer, L.P. and related Certificates of Limited
    Partnership of Arcadian Fertilizer, L.P. filed with the
    Secretary of State of the State of Delaware on March 6,
    1997 and November 26, 1997, incorporated by reference to
    Exhibit 10(f) to the registrants report on
    Form 10-K for the year ended December 31, 1998 (the
    1998 Form 10-K).                                                                                                                 
|       
|        | 10(i) |                         |  | Geismar Complex Services Agreement dated
    June 4, 1984, between Honeywell International, Inc. and
    Arcadian Corporation, incorporated by reference to
    Exhibit 10.4 to Arcadian Corporations Registration
    Statement on Form S-1 (File No. 33-34357).                                                                                                                                                                                                                                                                                     
|       
|        | 10(j) |                         |  | Esterhazy Restated Mining and Processing
    Agreement dated January 31, 1978, between International
    Minerals & Chemical Corporation (Canada) Limited and the
    registrants predecessor, incorporated by reference to
    Exhibit 10(e) to the F-1 Registration Statement.                                                                                                                                                                                                                                                                      
|       
|        | 10(k) |                         |  | Agreement dated December 21, 1990, between
    International Minerals & Chemical Corporation (Canada)
    Limited and the registrant, amending the Esterhazy Restated
    Mining and Processing Agreement dated January 31, 1978,
    incorporated by reference to Exhibit 10(p) to the
    registrants report on Form 10-K for the year ended
    December 31, 1990.                                                                                                                                                                                 
|       
|        | 10(l) |                         |  | Agreement effective August 27, 1998, between
    International Minerals & Chemical (Canada) Global Limited
    and the registrant, amending the Esterhazy Restated Mining and
    Processing Agreement dated January 31, 1978 (as amended),
    incorporated by reference to Exhibit 10(l) to the 1998
    Form 10-K.                                                                                                                                                                                                                                  
|       
|        | 10(m) |                         |  | Agreement effective August 31, 1998, among
    International Minerals & Chemical (Canada) Global
    Limited, International Minerals & Chemical (Canada)
    Limited Partnership and the registrant assigning the interest in
    the Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978 (as amended) held by International
    Minerals & Chemical (Canada) Global Limited to
    International Minerals & Chemical (Canada) Limited
    Partnership, incorporated by reference to Exhibit 10(m) to
    the 1998 Form 10-K.

22



---



##### 



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|       
|        | 10(n) |                         |  | Operating Agreement dated May 11, 1993,
    between BP Chemicals Inc. and Arcadian Ohio, L.P., as amended by
    the First Amendment to the Operating Agreement dated as of
    November 20, 1995, between BP Chemicals Inc. and
    Arcadian Ohio, L.P. (First Amendment), incorporated
    by reference to Exhibit 10.2 to Arcadian Partners
    L.P.s current report on Form 8-K for the report event
    dated May 11, 1993, except for the First Amendment which is
    incorporated by reference to Arcadian Corporations report
    on Form 10-K for the year ended December 31, 1995.
|       
|        | 10(o) |                         |  | Second Amendment to Operating Agreement between
    BP Chemicals, Inc. and Arcadian Ohio, L.P., dated as of
    November 25, 1996, incorporated by reference to
    Exhibit 10(k) of the registrants report on
    Form 10-K for the year ended December 31, 1997 (the
    1997 Form 10-K).                                                                                                                                                                                                                                                                                                   
|       
|        | 10(p) |                         |  | Manufacturing Support Agreement dated
    May 11, 1993, between BP Chemicals Inc. and Arcadian Ohio,
    L.P., incorporated by reference to Exhibit 10.3 to Arcadian
    Partners L.P.s current report on Form 8-K for the
    report event dated May 11, 1993.                                                                                                                                                                                                                                                                                                                                 
|       
|        | 10(q) |                         |  | First Amendment to Manufacturing Support
    Agreement between BP Chemicals, Inc. and Arcadian Ohio, L.P.,
    dated as of November 25, 1996, incorporated by reference to
    Exhibit 10(l) to the 1997 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                              
|       
|        | 10(r) |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Trinidad Ammonia Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(x) to the registrants report
    on Form 10-Q for the quarterly period ended
    June 30, 2001 (the Second Quarter 2001
    Form 10-Q).                                                                                                                                                                                                                                                   
|       
|        | 10(s) |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Nitrogen Leasing Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(y) to the Second Quarter 2001
    Form 10-Q.                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 10(t) |                         |  | Potash Corporation of Saskatchewan Inc. Stock
    Option Plan  Directors, as amended January 23,
    2001, incorporated by reference to Exhibit 10(bb) to the
    Second Quarter 2001 Form 10-Q.                                                                                                                                                                                                                                                                                                                                                                                                
|       
|        | 10(u) |                         |  | Potash Corporation of Saskatchewan Inc. Stock
    Option Plan  Officers and Employees, as amended
    January 23, 2001, incorporated by reference to
    Exhibit 10(aa) to the 2000 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                  
|       
|        | 10(v) |                         |  | Short-Term Incentive Plan of the registrant
    effective January 2000, incorporated by reference to
    Exhibit 10(z) to the registrants report on
    Form 10Q for the quarterly period ended
    March 31, 2000 (the First Quarter 2000
    Form 10-Q).                                                                                                                                                                                                                                                                                                                                    
|       
|        | 10(w) |                         |  | Long-Term Incentive Plan of the registrant
    effective January 2000, incorporated by reference to
    Exhibit 10(aa) to the Second Quarter 2000 Form 10-Q.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        | 10(x) |                         |  | Resolution and Forms of Agreement for
    Supplemental Retirement Income Plan, for officers and key
    employees of the registrant, incorporated by reference to
    Exhibit 10(o) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                       
|       
|        | 10(y) |                         |  | Amending Resolution and revised forms of
    agreement regarding Supplemental Retirement Income Plan of the
    registrant, incorporated by reference to Exhibit 10(x) to
    the registrants report on Form 10-Q for the quarterly
    period ended June 30, 1996.                                                                                                                                                                                                                                                                                                                             
|       
|        | 10(z) |                         |  | Amended and restated Supplemental Retirement
    Income Plan of the registrant and text of amendment to existing
    supplemental income plan agreements, incorporated by reference
    to Exhibit (mm) to the Third Quarter 2000 Form 10-Q.                                                                                                                                                                                                                                                                                                                                                     

23



---



##### 



|        |        |                         |  |                                                                                                                                                                                                                                                                                                                              
|------- | ------ | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|       
|        | 10(aa) |                         |  | Supplemental Retirement Plan for
    U.S. Executives dated effective January 1, 1999,
    incorporated by reference to Exhibit 10(aa) to the Second
    Quarter 2002 Form 10-Q.                                                                                                                                              
|       
|        | 10(bb) |                         |  | Forms of Agreement dated December 30, 1994,
    between the registrant and certain officers of the registrant,
    concerning a change in control of the registrant, incorporated
    by reference to Exhibit 10(p) to the 1995 Form 10-K.                                                                                   
|       
|        | 10(cc) |                         |  | Form of Agreement of Indemnification dated
    August 8, 1995, between the registrant and certain officers
    and directors of the registrant, incorporated by reference to
    Exhibit 10(q) to the 1995 Form 10-K.                                                                                                        
|       
|        | 10(dd) |                         |  | Resolution and Form of Agreement of
    Indemnification dated January 24, 2001, incorporated by
    reference to Exhibit 10(ii) to the 2000 Form 10-K.                                                                                                                                                                       
|       
|        | 10(ee) |                         |  | Chief Executive Officer Medical and Dental Plan,
    incorporated by reference to Exhibit 10(jj) to the 2000
    Form 10-K.                                                                                                                                                                                                  
|       
|        | 10(ff) |                         |  | Second Amended and Restated Membership Agreement
    dated January 1, 1995, among Phosphate Chemicals Export
    Association, Inc. and members of such association, including
    Texasgulf Inc., incorporated by reference to Exhibit 10(t)
    to the 1995 Form 10-K.                                                      
|       
|        | 10(gg) |                         |  | International Agency Agreement dated
    January 1, 1995, between Phosphate Chemicals Export
    Association, Inc. and Texasgulf Inc. establishing Texasgulf Inc.
    as exclusive marketing agent for such associations wet
    phosphatic materials, incorporated by reference to
    Exhibit 10(u) to the 1995 Form 10-K.
|       
|        | 10(hh) |                         |  | Royalty Agreement dated October 7, 1993, by
    and between the registrant and Rio Algom Limited, incorporated
    by reference to Exhibit 10(x) to the 1995 Form 10-K.                                                                                                                                                      
|       
|        | 10(ii) |                         |  | Form of Note relating to the Companys
    offering of $600,000,000 principal amount of 7 3/4% Notes
    due on May 31, 2011, incorporated by reference to
    Exhibit 4 to the registrants report on Form 8-K
    dated May 17, 2001.                                                                                      
|       
|        | 10(jj) |                         |  | Deferred Share Unit Plan for Non-Employee
    Directors, incorporated by reference to Exhibit 4.1 to the
    registrants Form S-8 (File No. 333-75742) filed
    December 21, 2001.                                                                                                                                         
|       
|        | 11     |                         |  | Statement re Computation of Per Share Earnings                                                                                                                                                                                                                                                                               

(b) REPORTS
ON FORM 8-K

On August 12, 2002, the company filed a
current report on Form 8-K, which included as an exhibit
the certification of the Chief Executive Officer and the Chief
Financial Officer in respect of the companys quarterly
report on Form 10-Q for the period ended June 30, 2002
required pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.

24



---



##### 



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.



| |                      
| | ---------------------
| | POTASH CORPORATION OF
| | SASKATCHEWAN INC.    

November 8, 2002

| |     |                      
| | --- | ---------------------
| | By: | /s/ JOHN L.M. HAMPTON

| |                                                         
| | --------------------------------------------------------
| |                                                         
| | John L.M. Hampton                                       
| | Senior Vice President, General Counsel and
    Secretary

November 8, 2002

| |     |                      
| | --- | ---------------------
| | By: | /s/ WAYNE R. BROWNLEE

| |                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------
| |                                                                                                                     
| | Wayne R. Brownlee                                                                                                   
| | Senior Vice President, Treasurer, and Chief
    Financial Officer 
     (Principal Financial and Accounting Officer)

25



---



##### 



CERTIFICATIONS

I, William J. Doyle, certify that:



|   |                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | I have reviewed this quarterly report on
    Form 10-Q of Potash Corporation of Saskatchewan Inc.;                                                                                                                                                                                                                                                
|  
|2. | Based on my knowledge, this quarterly report does
    not contain any untrue statement of a material fact or omit
    to state a material fact necessary to make the statements made,
    in light of the circumstances under which such statements
    were made, not misleading with respect to the period covered by
    this quarterly report;
|  
|3. | Based on my knowledge, the financial statements,
    and other financial information included in this quarterly
    report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   
|  
|4. | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and
    we have:                                                                                                         



| |                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the
    Evaluation Date;                                                                                                                            



|   |                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    



|   |                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | The registrants other certifying officers
    and I have indicated in this quarterly report whether or not
    there were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.



| |     |                     
| | --- | --------------------
| | By: | /s/ WILLIAM J. DOYLE

| |                                          
| | -----------------------------------------
| |                                          
| | William J. Doyle                         
| | President and Chief Executive
    Officer

Date: November 8, 2002

C-1



---



##### 



I, Wayne R. Brownlee, certify that:



|   |                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | I have reviewed this quarterly report on
    Form 10-Q of Potash Corporation of Saskatchewan Inc.;                                                                                                                                                                                                                                                
|  
|2. | Based on my knowledge, this quarterly report does
    not contain any untrue statement of a material fact or omit
    to state a material fact necessary to make the statements made,
    in light of the circumstances under which such statements
    were made, not misleading with respect to the period covered by
    this quarterly report;
|  
|3. | Based on my knowledge, the financial statements,
    and other financial information included in this quarterly
    report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   
|  
|4. | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and
    we have:                                                                                                         



| |                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the
    Evaluation Date;                                                                                                                            



|   |                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    



|   |                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | The registrants other certifying officers
    and I have indicated in this quarterly report whether or not
    there were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.



| |     |                      
| | --- | ---------------------
| | By: | /s/ WAYNE R. BROWNLEE

| |                                               
| | ----------------------------------------------
| |                                               
| | Wayne R. Brownlee                             
| | Senior Vice President, Treasurer and
    Chief
| | Financial Officer                             

Date: November 8, 2002

C-2



---



##### 



Pursuant to section 906 of the
Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of
Section 1350, Chapter 63 of Title 18, United
States Code), each of the undersigned officers of Potash
Corporation of Saskatchewan Inc. (the Company),
does hereby certify, to such officers knowledge, that:

The Quarterly Report on Form 10-Q for the
quarter ended September 30, 2002, of the Company fully
complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934 and information contained in
the Form 10-Q fairly presents, in all material respects,
the financial condition and results of operations of
the Company.

|                 |  |                                                                                                                                        
|---------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------
|November 8, 2002 |  | /s/ WILLIAM J. DOYLE                                                                                                                   
|                 |  | ------------------------------------------------
    William J. DoylePresident and Chief Executive Officer                             
|                
|November 8, 2002 |  | /s/ WAYNE R. BROWNLEE                                                                                                                  
|                 |  | ------------------------------------------------
    Wayne R. BrownleeSenior Vice President, Treasurer, and Chief
    Financial Officer

The foregoing certification is being furnished
solely pursuant to section 906 of the Sarbanes-Oxley Act of
2002 (subsections (a) and (b) of Section 1350,
Chapter 63 of Title 18, United States Code) and is not
being filed as part of the Form 10-Q or as a separate
disclosure document.

C-3



---



##### 



Exhibit Index

|        |      |                         |  |                                                                                                                                                                                                                                                                                             
|------- | ---- | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |                        
|Number  |      | Description of Document
|        |      |                        
|        | 3(a) |                         |  | Articles of Continuance of the registrant dated
    May 15, 2002, incorporated by reference to
    Exhibit 3(a) to the registrants report on
    Form 10-Q for the quarterly period ended June 30, 2002
    (the Second Quarter 2002 Form 10-Q).                                         
|       
|        | 3(b) |                         |  | Bylaws of the registrant effective May 15,
    2002, incorporated by reference to Exhibit 3(a) to the
    Second Quarter 2002 Form 10-Q.                                                                                                                                                    
|       
|        | 4(a) |                         |  | Term Credit Agreement between The Bank of Nova
    Scotia and other financial institutions and the registrant dated
    September 25, 2001, incorporated by reference to
    Exhibit 4(a) to the registrants report on
    Form 10-Q for the quarterly period ended September 30,
    2001.
|       
|        | 4(b) |                         |  | Indenture dated as of June 16, 1997, between
    the registrant and The Bank of Nova Scotia Trust Company of New
    York, incorporated by reference to Exhibit 4(a) to the
    registrants report on Form 8-K dated June 18,
    1997.                                                    

The registrant hereby undertakes to file with the
Securities and Exchange Commission, upon request, copies of any
constituent instruments defining the rights of holders of
long-term debt of the registrant or its subsidiaries that have
not been filed herewith because the amounts represented thereby
are less than 10% of the total assets of the registrant and its
subsidiaries on a consolidated basis.

|        |       |                         |  |                                                                                                                                                                                                                                                                                                                       
|------- | ----- | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10(a) |                         |  | Sixth Voting Agreement dated April 22, 1978,
    between Central Canada Potash, Division of Noranda, Inc.,
    Cominco Ltd., International Minerals and Chemical Corporation
    (Canada) Limited, PCS Sales and Texasgulf Inc., incorporated by
    reference to Exhibit 10(f) to the F-1 Registration
    Statement.





---



##### 



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------- | ----- | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|       
|        | 10(b) |                         |  | Canpotex Limited Shareholders Seventh Memorandum
    of Agreement effective April 21, 1978, between Central
    Canada Potash, Division of Noranda Inc., Cominco Ltd.,
    International Minerals and Chemical Corporation (Canada)
    Limited, PCS Sales, Texasgulf Inc. and Canpotex Limited as
    amended by Canpotex S & P amending agreement dated
    November 4, 1987, incorporated by reference to
    Exhibit 10(g) to the F-1 Registration Statement.                                                                                      
|       
|        | 10(c) |                         |  | Producer Agreement dated April 21, 1978,
    between Canpotex Limited and PCS Sales, incorporated by
    reference to Exhibit 10(h) to the F-1 Registration
    Statement.                                                                                                                                                                                                                                                                                                                                                                             
|       
|        | 10(d) |                         |  | Canpotex/PCS Amending Agreement, dated with
    effect October 1, 1992, incorporated by reference to
    Exhibit 10(f) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                          
|       
|        | 10(e) |                         |  | Canpotex PCA Collateral Withdrawing/PCS Amending
    Agreement, dated with effect October 7, 1993,
    incorporated by reference to Exhibit 10(g) to the 1995
    Form 10-K.                                                                                                                                                                                                                                                                                                                                                                           
|       
|        | 10(f) |                         |  | Canpotex Producer Agreement amending agreement
    dated effective January 1, 1999, incorporated by reference
    to Exhibit 10(f) of the registrants report on
    Form 10-K for the year ended December 31, 2000 (the
    2000 Form 10-K).                                                                                                                                                                                                                                                                                                        
|       
|        | 10(g) |                         |  | Agreement of Limited Partnership of Arcadian
    Fertilizer, L.P. dated as of March 3, 1992 (form), and the
    related Certificate of Limited Partnership of Arcadian
    Fertilizer, L.P., filed with the Secretary of State of the State
    of Delaware on March 3, 1992 (incorporated by reference to
    Exhibits 3.1 and 3.2 to Arcadian Partners L.P.s
    Registration Statement on Form S-1 (File
    No. 33-45828)).                                                                                                                       
|       
|        | 10(h) |                         |  | Amendment to Agreement of Limited Partnership of
    Arcadian Fertilizer, L.P. and related Certificates of Limited
    Partnership of Arcadian Fertilizer, L.P. filed with the
    Secretary of State of the State of Delaware on March 6,
    1997 and November 26, 1997, incorporated by reference to
    Exhibit 10(f) to the registrants report on
    Form 10-K for the year ended December 31, 1998 (the
    1998 Form 10-K).                                                                                                                 
|       
|        | 10(i) |                         |  | Geismar Complex Services Agreement dated
    June 4, 1984, between Honeywell International, Inc. and
    Arcadian Corporation, incorporated by reference to
    Exhibit 10.4 to Arcadian Corporations Registration
    Statement on Form S-1 (File No. 33-34357).                                                                                                                                                                                                                                                                                     
|       
|        | 10(j) |                         |  | Esterhazy Restated Mining and Processing
    Agreement dated January 31, 1978, between International
    Minerals & Chemical Corporation (Canada) Limited and the
    registrants predecessor, incorporated by reference to
    Exhibit 10(e) to the F-1 Registration Statement.                                                                                                                                                                                                                                                                      
|       
|        | 10(k) |                         |  | Agreement dated December 21, 1990, between
    International Minerals & Chemical Corporation (Canada)
    Limited and the registrant, amending the Esterhazy Restated
    Mining and Processing Agreement dated January 31, 1978,
    incorporated by reference to Exhibit 10(p) to the
    registrants report on Form 10-K for the year ended
    December 31, 1990.                                                                                                                                                                                 
|       
|        | 10(l) |                         |  | Agreement effective August 27, 1998, between
    International Minerals & Chemical (Canada) Global Limited
    and the registrant, amending the Esterhazy Restated Mining and
    Processing Agreement dated January 31, 1978 (as amended),
    incorporated by reference to Exhibit 10(l) to the 1998
    Form 10-K.                                                                                                                                                                                                                                  
|       
|        | 10(m) |                         |  | Agreement effective August 31, 1998, among
    International Minerals & Chemical (Canada) Global
    Limited, International Minerals & Chemical (Canada)
    Limited Partnership and the registrant assigning the interest in
    the Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978 (as amended) held by International
    Minerals & Chemical (Canada) Global Limited to
    International Minerals & Chemical (Canada) Limited
    Partnership, incorporated by reference to Exhibit 10(m) to
    the 1998 Form 10-K.





---



##### 



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|       
|        | 10(n) |                         |  | Operating Agreement dated May 11, 1993,
    between BP Chemicals Inc. and Arcadian Ohio, L.P., as amended by
    the First Amendment to the Operating Agreement dated as of
    November 20, 1995, between BP Chemicals Inc. and
    Arcadian Ohio, L.P. (First Amendment), incorporated
    by reference to Exhibit 10.2 to Arcadian Partners
    L.P.s current report on Form 8-K for the report event
    dated May 11, 1993, except for the First Amendment which is
    incorporated by reference to Arcadian Corporations report
    on Form 10-K for the year ended December 31, 1995.
|       
|        | 10(o) |                         |  | Second Amendment to Operating Agreement between
    BP Chemicals, Inc. and Arcadian Ohio, L.P., dated as of
    November 25, 1996, incorporated by reference to
    Exhibit 10(k) of the registrants report on
    Form 10-K for the year ended December 31, 1997 (the
    1997 Form 10-K).                                                                                                                                                                                                                                                                                                   
|       
|        | 10(p) |                         |  | Manufacturing Support Agreement dated
    May 11, 1993, between BP Chemicals Inc. and Arcadian Ohio,
    L.P., incorporated by reference to Exhibit 10.3 to Arcadian
    Partners L.P.s current report on Form 8-K for the
    report event dated May 11, 1993.                                                                                                                                                                                                                                                                                                                                 
|       
|        | 10(q) |                         |  | First Amendment to Manufacturing Support
    Agreement between BP Chemicals, Inc. and Arcadian Ohio, L.P.,
    dated as of November 25, 1996, incorporated by reference to
    Exhibit 10(l) to the 1997 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                              
|       
|        | 10(r) |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Trinidad Ammonia Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(x) to the registrants report
    on Form 10-Q for the quarterly period ended
    June 30, 2001 (the Second Quarter 2001
    Form 10-Q).                                                                                                                                                                                                                                                   
|       
|        | 10(s) |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Nitrogen Leasing Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(y) to the Second Quarter 2001
    Form 10-Q.                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 10(t) |                         |  | Potash Corporation of Saskatchewan Inc. Stock
    Option Plan  Directors, as amended January 23,
    2001, incorporated by reference to Exhibit 10(bb) to the
    Second Quarter 2001 Form 10-Q.                                                                                                                                                                                                                                                                                                                                                                                                
|       
|        | 10(u) |                         |  | Potash Corporation of Saskatchewan Inc. Stock
    Option Plan  Officers and Employees, as amended
    January 23, 2001, incorporated by reference to
    Exhibit 10(aa) to the 2000 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                  
|       
|        | 10(v) |                         |  | Short-Term Incentive Plan of the registrant
    effective January 2000, incorporated by reference to
    Exhibit 10(z) to the registrants report on
    Form 10Q for the quarterly period ended
    March 31, 2000 (the First Quarter 2000
    Form 10-Q).                                                                                                                                                                                                                                                                                                                                    
|       
|        | 10(w) |                         |  | Long-Term Incentive Plan of the registrant
    effective January 2000, incorporated by reference to
    Exhibit 10(aa) to the Second Quarter 2000 Form 10-Q.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        | 10(x) |                         |  | Resolution and Forms of Agreement for
    Supplemental Retirement Income Plan, for officers and key
    employees of the registrant, incorporated by reference to
    Exhibit 10(o) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                       
|       
|        | 10(y) |                         |  | Amending Resolution and revised forms of
    agreement regarding Supplemental Retirement Income Plan of the
    registrant, incorporated by reference to Exhibit 10(x) to
    the registrants report on Form 10-Q for the quarterly
    period ended June 30, 1996.                                                                                                                                                                                                                                                                                                                             
|       
|        | 10(z) |                         |  | Amended and restated Supplemental Retirement
    Income Plan of the registrant and text of amendment to existing
    supplemental income plan agreements, incorporated by reference
    to Exhibit (mm) to the Third Quarter 2000 Form 10-Q.                                                                                                                                                                                                                                                                                                                                                     





---



##### 



|        |        |                         |  |                                                                                                                                                                                                                                                                                                                              
|------- | ------ | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|       
|        | 10(aa) |                         |  | Supplemental Retirement Plan for
    U.S. Executives dated effective January 1, 1999,
    incorporated by reference to Exhibit 10(aa) to the Second
    Quarter 2002 Form 10-Q.                                                                                                                                              
|       
|        | 10(bb) |                         |  | Forms of Agreement dated December 30, 1994,
    between the registrant and certain officers of the registrant,
    concerning a change in control of the registrant, incorporated
    by reference to Exhibit 10(p) to the 1995 Form 10-K.                                                                                   
|       
|        | 10(cc) |                         |  | Form of Agreement of Indemnification dated
    August 8, 1995, between the registrant and certain officers
    and directors of the registrant, incorporated by reference to
    Exhibit 10(q) to the 1995 Form 10-K.                                                                                                        
|       
|        | 10(dd) |                         |  | Resolution and Form of Agreement of
    Indemnification dated January 24, 2001, incorporated by
    reference to Exhibit 10(ii) to the 2000 Form 10-K.                                                                                                                                                                       
|       
|        | 10(ee) |                         |  | Chief Executive Officer Medical and Dental Plan,
    incorporated by reference to Exhibit 10(jj) to the 2000
    Form 10-K.                                                                                                                                                                                                  
|       
|        | 10(ff) |                         |  | Second Amended and Restated Membership Agreement
    dated January 1, 1995, among Phosphate Chemicals Export
    Association, Inc. and members of such association, including
    Texasgulf Inc., incorporated by reference to Exhibit 10(t)
    to the 1995 Form 10-K.                                                      
|       
|        | 10(gg) |                         |  | International Agency Agreement dated
    January 1, 1995, between Phosphate Chemicals Export
    Association, Inc. and Texasgulf Inc. establishing Texasgulf Inc.
    as exclusive marketing agent for such associations wet
    phosphatic materials, incorporated by reference to
    Exhibit 10(u) to the 1995 Form 10-K.
|       
|        | 10(hh) |                         |  | Royalty Agreement dated October 7, 1993, by
    and between the registrant and Rio Algom Limited, incorporated
    by reference to Exhibit 10(x) to the 1995 Form 10-K.                                                                                                                                                      
|       
|        | 10(ii) |                         |  | Form of Note relating to the Companys
    offering of $600,000,000 principal amount of 7 3/4% Notes
    due on May 31, 2011, incorporated by reference to
    Exhibit 4 to the registrants report on Form 8-K
    dated May 17, 2001.                                                                                      
|       
|        | 10(jj) |                         |  | Deferred Share Unit Plan for Non-Employee
    Directors, incorporated by reference to Exhibit 4.1 to the
    registrants Form S-8 (File No. 333-75742) filed
    December 21, 2001.                                                                                                                                         
|       
|        | 11     |                         |  | Statement re Computation of Per Share Earnings