<PAGE>   1
 
================================================================================
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-Q
 
<TABLE>
<C>          <S>
    [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934
                        FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
 
                                             OR
   [   ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
             THE SECURITIES EXCHANGE ACT OF 1934
                               COMMISSION FILE NUMBER: 1-10351
</TABLE>
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
           (Exact name of the registrant as specified in its charter)
 
                              SASKATCHEWAN, CANADA
         (State or other jurisdiction of incorporation or organization)
 
                                      N/A
                      (I.R.S. employer identification no.)
 
                             122 - 1ST AVENUE SOUTH
                    SASKATOON, SASKATCHEWAN, CANADA S7K 7G3
                    (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 Section 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 [ ]
 
                     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 July 31, 1997
53,705,118 Common Shares.
 
================================================================================
<PAGE>   2
 
                         PART I.  FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
     These interim consolidated financial statements do not include all
disclosure normally provided in 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 THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED        SIX MONTHS ENDED
                                                            JUNE 30                  JUNE 30
                                                      --------------------    ----------------------
                                                        1997        1996         1997         1996
                                                      --------    --------    ----------    --------
<S>                                                   <C>         <C>         <C>           <C>
Net sales..........................................   $676,648    $352,369    $1,141,482    $719,240
Cost of goods sold.................................    492,496     262,056       842,303     521,523
                                                      --------    --------    ----------    --------
GROSS MARGIN.......................................    184,152      90,313       299,179     197,717
                                                      --------    --------    ----------    --------
Selling and administrative.........................     27,900      14,341        47,189      29,222
Provincial mining and other taxes..................     14,466       8,981        24,969      20,901
Other income.......................................    (12,928)     (7,375)      (18,206)    (13,894)
                                                      --------    --------    ----------    --------
                                                        29,438      15,947        53,952      36,229
                                                      --------    --------    ----------    --------
OPERATING INCOME...................................    154,714      74,366       245,227     161,488
INTEREST EXPENSE...................................     23,560      11,904        37,378      25,746
                                                      --------    --------    ----------    --------
INCOME BEFORE INCOME TAXES.........................    131,154      62,462       207,849     135,742
INCOME TAXES.......................................     34,174      10,064        54,504      19,666
                                                      --------    --------    ----------    --------
NET INCOME.........................................   $ 96,980    $ 52,398       153,345     116,076
                                                      ========    ========
RETAINED EARNINGS, BEGINNING OF PERIOD.............                              438,526     277,689
DIVIDENDS..........................................                              (27,843)    (23,853)
                                                                              ----------    --------
RETAINED EARNINGS, END OF PERIOD...................                           $  564,028    $369,912
                                                                               =========    ========
NET INCOME PER SHARE (NOTE 4)......................   $   1.81    $   1.15    $     3.02    $   2.55
                                                      ========    ========     =========    ========
DIVIDENDS PER SHARE (NOTE 5).......................   $   0.25    $   0.26    $     0.52    $   0.52
                                                      ========    ========     =========    ========
</TABLE>
 
              (See Notes to the Consolidated Financial Statements)
 
                                       I-1
<PAGE>   3
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                         (IN THOUSANDS OF U.S. DOLLARS)
 
<TABLE>
<CAPTION>
                                                                         JUNE 30,      DECEMBER 31,
                                                                           1997            1996    
                                                                        -----------    ------------
                                                                        (UNAUDITED)
<S>                                                                     <C>            <C>
                                      ASSETS
Current Assets
  Cash and cash equivalents..........................................   $    99,087     $       --
  Accounts receivable................................................       346,970        230,778
  Inventories (Note 3)...............................................       345,395        219,433
  Prepaid expenses...................................................        34,457         16,748
                                                                        -----------     ----------
                                                                            825,909        466,959
Property, plant and equipment........................................     2,974,728      1,978,692
Goodwill.............................................................       516,790          1,686
Other assets.........................................................       118,275         47,050
                                                                        -----------     ----------
                                                                        $ 4,435,702     $2,494,387
                                                                        ===========     ==========
                                    LIABILITIES
Current Liabilities
  Bank indebtedness..................................................   $        --     $    6,330
  Short-term debt....................................................       149,989             --
  Accounts payable and accrued charges...............................       326,857        180,008
  Current portion of long-term debt..................................            --          1,520
  Current obligations under capital leases...........................           300            300
                                                                        -----------     ----------
                                                                            477,146        188,158
Long-term debt.......................................................     1,269,700        618,800
Obligations under capital leases.....................................         1,018          1,163
Deferred income tax liability........................................       301,001         28,480
Accrued post-retirement/post-employment benefits.....................       121,097         95,460
Accrued reclamation costs............................................       126,113        146,512
Other non-current liabilities and deferred credits...................        32,988         10,318
                                                                        -----------     ----------
                                                                          2,329,063      1,088,891
                                                                        -----------     ----------
                               SHAREHOLDERS' EQUITY
Share Capital........................................................     1,206,125        630,484
Contributed Surplus..................................................       336,486        336,486
Retained Earnings....................................................       564,028        438,526
                                                                        -----------     ----------
                                                                          2,106,639      1,405,496
                                                                        -----------     ----------
                                                                        $ 4,435,702     $2,494,387
                                                                        ===========     ==========
</TABLE>
 
              (See Notes to the Consolidated Financial Statements)
 
                                       I-2
<PAGE>   4
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                           SIX MONTHS ENDED
                                                                               JUNE 30
                                                                       ------------------------
                                                                          1997          1996
                                                                       -----------    ---------
<S>                                                                    <C>            <C>
Operating Activities
  Net Income........................................................   $   153,345    $ 116,076
  Items not affecting cash
     Depreciation and amortization..................................        77,941       46,106
     (Gain) loss on disposal of property, plant and equipment.......        (1,288)         150
     Provision for deferred income taxes............................        37,412       10,521
     Provision for post-retirement/post-employment benefits.........         3,396        3,055
                                                                       -----------    ---------
                                                                           270,806      175,908
  Changes in non-cash operating working capital
     Accounts receivable............................................        29,127       13,219
     Inventories....................................................        32,125          311
     Prepaid expenses...............................................       (10,141)     (10,102)
     Accounts payable and accrued charges...........................       (75,110)     (31,569)
  Accrued reclamation costs.........................................       (20,399)        (750)
  Other non-current liabilities and deferred credits................         9,575       (8,059)
                                                                       -----------    ---------
          Cash provided by operating activities.....................       235,983      138,958
                                                                       -----------    ---------
Investing Activities
  Acquisition of Arcadian Corporation (Note 2)......................    (1,039,858)          --
  Additions to property, plant and equipment........................       (56,118)     (22,042)
  Proceeds on disposal of property, plant and equipment.............         7,503       22,497
  (Additions to) disposals of other assets..........................       (13,689)         881
                                                                       -----------    ---------
          Cash (used in) provided by investing activities...........    (1,102,162)       1,336
                                                                       -----------    ---------
          Cash (deficiency) before financing activities.............      (866,179)     140,294
                                                                       -----------    ---------
Financing Activities
  Proceeds from (repayment of) long-term obligations................       648,335     (151,519)
  Proceeds from short-term debt.....................................       149,989           --
  Repayment of note payable.........................................      (374,526)          --
  Dividends.........................................................       (27,843)     (23,853)
  Issuance of shares................................................       575,641        1,871
                                                                       -----------    ---------
          Cash provided by (used in) financing activities...........       971,596     (173,501)
                                                                       -----------    ---------
Increase (Decrease) in Cash.........................................       105,417      (33,207)
(Bank Indebtedness) Cash and Cash Equivalents, Beginning of
  Period............................................................        (6,330)      40,497
                                                                       -----------    ---------
Cash and Cash Equivalents, End of Period............................   $    99,087    $   7,290
                                                                        ==========    =========
Supplemental cash flow disclosure
  Interest paid.....................................................   $    31,831    $  26,583
  Income taxes paid.................................................   $    32,896    $  22,860
                                                                        ==========    =========
</TABLE>
 
              (See Notes to the Consolidated Financial Statements)
 
                                       I-3
<PAGE>   5
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
1.  SIGNIFICANT ACCOUNTING POLICIES
 
     The Company's accounting policies are in accordance with accounting
principles generally accepted in Canada. These policies are consistent with
accounting principles generally accepted in the United States except as outlined
in Note 7.
 
  Basis of Presentation
 
     The consolidated financial statements include the accounts of Potash
Corporation of Saskatchewan Inc. (PCS) and its operating subsidiaries (the
"Company" except to the extent the context otherwise requires):
 
        -- PCS Sales (Canada) Inc.
 
           -- PCS Sales (Iowa), Inc.
 
           -- PCS Sales (Indiana), Inc.
 
           -- Potash Corporation of Saskatchewan (Florida) Inc.
 
        -- Potash Corporation of Saskatchewan Transport Limited
 
        -- PCS Sales (USA), Inc.
 
        -- PCS Phosphate Company, Inc. (PCS Phosphate)
 
           -- Albright & Wilson Company (proportionately consolidated)
 
        -- White Springs Agricultural Chemicals, Inc.
 
        -- PCS Nitrogen, Inc. (PCS Nitrogen)
 
2.  ACQUISITION OF ARCADIAN CORPORATION
 
     On March 6, 1997, the Company acquired all of the outstanding shares of
Arcadian Corporation for cash of $555,145 and the issuance of 8,030,236 common
shares valued at $573,278. The cash consideration was financed by debt. Arcadian
Corporation is based in Memphis, Tennessee and is a producer of nitrogen and
nitrogen products. The acquisition was completed through the merger of Arcadian
Corporation into a wholly-owned subsidiary of PCS, PCS Nitrogen.
 
     The acquisition has been accounted for by the purchase method of accounting
and, accordingly, the results of operations of PCS Nitrogen have been included
in the consolidated financial statements from March 7, 1997. The excess of the
purchase price over the fair value of the net identifiable assets acquired of
$519,460 has been recorded as goodwill and is being amortized on a straight-line
basis over 40 years.
 
     Net assets acquired were:
 
<TABLE>
        <S>                                                                <C>
        Working capital.................................................   $  177,394
        Fixed assets and other assets...................................    1,075,850
        Goodwill........................................................      519,460
                                                                           ----------
                                                                            1,772,704
        Long-term debt and other long-term liabilities..................      644,281
                                                                           ----------
        Net assets acquired.............................................    1,128,423
        Less: Cash acquired.............................................       88,565
                                                                           ----------
        Net acquisition cost............................................   $1,039,858
                                                                           ==========
</TABLE>
 
                                       I-4
<PAGE>   6
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
2.  ACQUISITION OF ARCADIAN CORPORATION -- (CONTINUED)

     The following unaudited pro forma financial information presents the
combined results of operations of the Company and PCS Nitrogen as if the
acquisition had occurred at the beginning of the periods presented, after giving
effect to certain adjustments including amortization of goodwill, additional
depreciation expense, increased interest expense on debt related to the
acquisition, decreased interest expense and interest income due to debt retired
in connection with the acquisition, and related income tax effects.
 
     The consolidated financial statements and the pro forma amounts are based
on a preliminary allocation of the purchase price. However, changes to the
consolidated financial statements and pro forma amounts are expected as
evaluations of assets and liabilities are completed and additional information
becomes available. Accordingly, the final allocated values may differ from the
amounts set forth in the consolidated financial statements and below.
 
     The unaudited pro forma financial information is for informational purposes
only and is not necessarily indicative of the future results of operations of
the combined company or the results of operations that would have actually
occurred had the acquisition been in effect for the periods presented.
 
<TABLE>
<CAPTION>
                                                             SIX MONTHS ENDED JUNE 30
                                                           -----------------------------
                                                              1997               1996
                                                           ----------         ----------
                                                               (UNAUDITED PRO FORMA)
        <S>                                                <C>                <C>
        Net sales.......................................   $1,303,538         $1,309,247
        Operating income................................      275,573            322,092
        Net income......................................      168,856            199,623
        Net income per share............................   $     3.33         $     3.73
</TABLE>
 
3.  INVENTORIES
 
<TABLE>
<CAPTION>
                                                                 JUNE 30,    DECEMBER 31,
                                                                   1997          1996
                                                                 --------    ------------
        <S>                                                      <C>         <C>
        Finished product......................................   $159,367      $ 93,717
        Materials and supplies................................    117,542        73,912
        Raw materials.........................................     48,981        29,917
        Work in process.......................................     19,505        21,887
                                                                 --------      --------
                                                                 $345,395      $219,433
                                                                 ========      ========
</TABLE>                                                                      
 
4.  EARNINGS PER SHARE
 
     Earnings per share for the year-to-date are calculated on the weighted
average shares issued and outstanding during the six months ended June 30, 1997
of 50,770,000 (1996 -- 45,513,000). The weighted average shares issued and
outstanding during the second quarter of 1997 were 53,685,000 (1996 --
45,543,000).
 
5.  DIVIDENDS
 
     The Company declares its dividends in Canadian dollars.
 
                                       I-5
<PAGE>   7
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
6.  FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
 
     As a result of the acquisition of Arcadian Corporation, the Company now
employs certain derivative instruments for the purpose of establishing the cost
of a portion of its natural gas requirements (primarily futures, swaps and
options) thereby managing the exposure to commodity price risk in the purchase
of natural gas, the primary raw material used in the manufacture of ammonia.
These activities have been designated as hedging activities by the Company and
are accounted for as such. The Company hedges for both committed and anticipated
purchases of natural gas. The Company does not hold these instruments for
trading purposes.
 
     Gains or losses resulting from changes in the fair value of hedging
transactions which have not yet been settled are not recognized as they
generally relate to changes in the spot price of anticipated natural gas
purchases. 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. The Company regularly evaluates
its unrecognized or deferred gains and losses on these derivatives from a net
realizable value of inventory perspective and establishes appropriate reserves,
if necessary.
 
7.  UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
 
     A description of the accounting principles which differ significantly in
certain respects from generally accepted accounting principles in the United
States (US GAAP) follows:
 
     Earnings per share: In computing primary earnings per share, under US GAAP,
the stock options are included in the calculation to the extent that they are
exercisable.
 
     Deferred income taxes: Deferred tax assets have been recognized only to the
extent of reducing deferred tax liabilities. US GAAP would require that deferred
tax assets be recorded when their realization is more likely than not.
 
     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 included in operating expenses.
 
                                       I-6
<PAGE>   8
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
7.  UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES -- (CONTINUED)

     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:
 
<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED            SIX MONTHS ENDED
                                                   JUNE 30                      JUNE 30
                                           ------------------------     ------------------------
                                              1997          1996           1997          1996
                                           ----------    ----------     ----------    ----------
    <S>                                    <C>           <C>            <C>           <C>
    Net income as reported in the
      consolidated statements of income
      and retained earnings.............      $96,980       $52,398       $153,345      $116,076
    Item decreasing reported net income
      Deferred income taxes.............       (1,118)       (1,091)        (4,292)       (4,318)
                                              -------       -------       --------      --------
    Approximate net income -- US GAAP...      $95,862       $51,307       $149,053      $111,758
                                              =======       =======       ========      ========
    Weighted average shares
      outstanding -- US GAAP............   54,218,000    45,975,000     51,315,000    45,975,000
                                           ==========    ==========     ==========    ==========
    Net income per share -- US GAAP.....        $1.77         $1.12          $2.90         $2.43
                                                =====         =====          =====         =====
</TABLE>
 
<TABLE>
<CAPTION>
                                                                     JUNE 30,     DECEMBER 31,
                                                                       1997           1996
                                                                    ----------    ------------
    <S>                                                             <C>           <C>
    Total assets as reported in the consolidated statements of
      financial position.........................................   $4,435,702     $2,494,387
    Item increasing reported total assets
      Deferred income tax asset..................................       11,435         15,727
                                                                    ----------    ------------
    Approximate total assets -- US GAAP..........................   $4,447,137     $2,510,114
                                                                     =========     ==========
    Shareholders' equity as reported in the consolidated
      statements of financial position...........................   $2,106,639     $1,405,496
    Item increasing reported shareholders' equity
      Deferred income taxes......................................        7,090         11,382
                                                                    ----------    ------------
    Approximate shareholders' equity -- US GAAP..................   $2,113,729     $1,416,878
                                                                    ==========    ===========
</TABLE>
 
8.  COMPARATIVE FIGURES
 
     Certain of the prior period's comparative figures have been reclassified to
conform with the current period's presentation. Results for the first six months
of 1996 do not include the operations of PCS Nitrogen (formerly Arcadian
Corporation) acquired March 6, 1997.
 
                                       I-7
<PAGE>   9
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS
 
OVERVIEW
 
     With the exception of purchased product, nitrogen data for 1997 is only for
the period subsequent to the acquisition of PCS Nitrogen, Inc. (formerly
Arcadian Corporation).
 
     Net sales revenue and net income for the three months ended June 30, 1997,
improved 92 percent and 85 percent, respectively, over the same period in 1996.
Net income for the three months ended June 30, 1997, was $97.0 million
(1996 -- $52.4 million) on net sales of $676.6 million (1996 -- $352.4 million),
or $1.81 per share (1996 -- $1.15 per share). For the second quarter of 1997,
gross margin and operating income were $184.2 million and $154.7 million,
respectively, compared to a gross margin of $90.3 million and an operating
income of $74.4 million for the same period in 1996 (increases of 104 percent
and 108 percent, respectively).
 
     For the three months ended June 30, 1997, North American and offshore net
sales revenue were $501.8 million (1996 -- $204.4 million) and $174.8 million
(1996 -- $148.0 million), respectively. North American net sales revenue
represented 74 percent (1996 -- 58 percent) of total net sales revenue, whereas
offshore sales represented 26 percent of net sales revenue (1996 -- 42 percent).
 
     Net sales revenue for the second quarter of 1997 was $676.6 million, an
increase of $324.3 million or 92 percent over the same period in 1996. Potash,
phosphate and nitrogen net sales revenue for the quarter ended June 30, 1997
were $137.4 million (1996 -- $103.9 million), $246.9 million (1996 -- $222.1
million), and $292.3 million (1996 -- $26.4 million), respectively.
 
     Gross margins for the second quarter of 1997 increased $93.8 million or 104
percent over the same quarter in 1996. Gross margin for potash was $63.0
million, an increase of $16.7 million when compared to the same quarter of 1996.
Gross margin for phosphate and feed was $54.5 million, an increase of $11.3
million when compared to the second quarter of 1996. Of this $54.5 million gross
margin, 36 percent is attributable to liquid phosphate fertilizer products, 23
percent to solid phosphate fertilizer products, 27 percent to feed products and
14 percent to industrial products. Gross margin for manufactured nitrogen
products was $66.6 million of which 27 percent is attributable to urea, 34
percent to ammonia, 20 percent to nitrogen solutions and 19 percent to other
nitrogen products.
 
     The increase in net income of $44.6 million when comparing the second
quarters of 1997 and 1996 is attributable to: potash sales volumes were up 32
percent and the gross margin was up 36 percent; phosphate volumes were up 7
percent and increases in prices for liquid, feed and industrial products more
than compensated for the price decrease in DAP to result in a 26 percent
increase in phosphate gross margin; and a $66.6 million gross margin
contribution by nitrogen. These increases in gross margin were offset by:
additional nitrogen selling and administrative expenses of $9.3 million; $5.5
million of additional potash mining taxes resulting from the increased
profitability in those operations; $11.7 million additional interest expense
relating to the acquisition of the nitrogen operations and a $24.1 million
increase in the provision for income taxes as a result of increased income
before tax.
 
     Net sales and net income for the six months ended June 30, 1997 improved 59
percent and 32 percent, respectively, over the same period in 1996. Net income
for the six months ended June 30, 1997 was $153.3 million (1996 -- $116.1
million) on net sales of $1,141.5 million (1996 -- $719.2 million), or $3.02 per
share (1996 -- $2.55 per share). For the first six months of 1997, gross margin
and operating income were $299.2 million and $245.2 million, respectively,
compared to a gross margin of $197.7 million and operating income of $161.5
million for the same period in 1996 (increases of 51 percent and 52 percent,
respectively).
 
     For the six months ended June 30, 1997, North American and offshore net
sales revenue were $829.0 million (1996 -- $435.3 million) and $312.5 million
(1996 -- $283.9 million), respectively. North American net sales revenue
represented 73 percent (1996 -- 61 percent) of total net sales revenue, whereas
offshore sales represented 27 percent of net sales revenue (1996 -- 39 percent).
 
                                       I-8
<PAGE>   10
 
     Potash, phosphate and nitrogen net sales revenue for the first half of 1997
was $244.4 million (1996 -- $207.8 million), $470.6 million (1996 -- $446.2
million), and $426.5 million (1996 -- $65.2 million), respectively.
 
     Gross margins for the first six months of 1997 increased $101.5 million or
51 percent over the same period in 1996. Gross margin for potash products was
$110.3 million, an increase of $12.2 million when compared to the first half of
1996. Gross margin for phosphate products was $94.0 million, a decrease of $4.0
million when compared to the first half of 1996. Of this $94.0 million gross
margin, 54 percent is attributable to liquid and solid phosphate fertilizer
products, 32 percent to feed products and 14 percent to industrial products.
Gross margin for manufactured nitrogen products was $94.5 million of which 31
percent is attributable to urea, 29 percent to ammonia, 19 percent to nitrogen
solutions and 21 percent to other nitrogen products.
 
     The increase in net income of $37.3 million when comparing the first half
of 1997 with the first half of 1996 is attributable to: a 19 percent increase in
potash sales volumes and a 12 percent increase in the gross margin; a decrease
of 4 percent in the phosphate gross margin (although there was a 2 percent
increase in sales volumes and a 4 percent increase in prices these were offset
by increased mining costs) and a $93.2 million increase in the gross margin
contributed by nitrogen. This increase in gross margin was offset by: $13.3
million of nitrogen selling and administrative expense; a $4.1 million increase
in potash mining taxes; an $11.6 million increase in interest expense relating
to the acquisition of the nitrogen operations and a $34.8 million increase in
income taxes.
 
POTASH REVENUE
 
     Potash net sales revenue for the quarter ended June 30, 1997 increased by
$33.5 million or 32 percent as compared to the same period in 1996
(1997 -- $137.4 million; 1996 -- $103.9 million). Potash net sales revenue
represented 20 percent of consolidated net sales revenue. The Company sold 1.887
million tonnes of potash in the second quarter of 1997, compared to 1.430
million tonnes sold in the same period last year, an increase of .457 million
tonnes or 32 percent. Potash prices overall were flat for the second quarter of
1997 when compared to the second quarter of 1996. The gross margin for potash
products was $63.0 million (1996 -- $46.3 million) or 34 percent of the
consolidated gross margin.
 
     In the second quarter of 1997, North American and offshore potash sales
volumes increased 16 percent and 49 percent, respectively, over the same period
in 1996. Overall, potash pricing was flat when compared to the same period last
year. However, prices in the North American market were up 9 percent.
 
     North American net sales revenue from potash operations represented 41
percent of the potash net sales revenue of the Company during the second quarter
of 1997 (1996 -- 43 percent). In the second quarter of 1997, the increase in
North American potash sales volumes and the increase in North American prices
resulted in a $11.7 million increase in North American potash net sales revenue
over the same period in 1996. North American potash sales volumes for the second
quarter of 1997 increased .117 million tonnes (1997 -- .849 million tonnes;
1996 -- .732 million tonnes) compared to the second quarter of 1996.
 
     In the second quarter of 1997, offshore net sales revenue from potash
operations represented 59 percent of net potash sales revenue of the Company
(1996 -- 57 percent). In the second quarter of 1997, the increase in offshore
sales volumes and the decrease in overall offshore selling price resulted in a
$21.8 million increase in offshore potash net sales revenue over the same period
in 1996. In the offshore market, the Company sold 1.038 million potash tonnes
during the second quarter of 1997 (1996 -- .698 million tonnes), an increase of
49 percent. Of the 1.038 million tonnes, .759 million tonnes were sold through
Canpotex and the remaining .279 million tonnes were produced by PCS New
Brunswick and sold and delivered to offshore markets by PCS Sales.
 
     Potash net sales revenue for the first six months of 1997 increased by
$36.6 million or 18 percent as compared to the first six months of 1996
(1997 -- $244.4 million; 1997 -- $207.8 million). The Company sold 3.433 million
tonnes of potash in the first half of 1997, compared to 2.887 million tonnes
sold in the same period last year, an increase of .546 million tonnes or 19
percent. Potash prices overall were flat in the first half of 1997 as compared
to the first half of 1996.
 
                                       I-9
<PAGE>   11
 
     In the first six months of 1997, North American and offshore potash sales
volumes increased 16 percent and 21 percent, respectively, over the same period
in 1996. Potash prices decreased 6 percent in the offshore market; however,
price increases of 6 percent were realized in the domestic market.
 
     North American net sales revenue from potash operations represented 41
percent of the potash net sales revenue of the Company during this year's first
half. In the first half of 1997, the increase in North American potash sales
volumes and an increase in North American prices resulted in a $18.9 million
increase in North American potash net sales revenue over the same period in
1996. North American potash sales volumes for the first half of 1997 increased
 .217 million tonnes (1997 -- 1.538 million tonnes; 1996 -- 1.321 million tonnes)
compared to the first half of 1996.
 
     In the first half of 1997, offshore net sales revenue from potash
operations represented 59 percent of potash net sales revenue of the Company. In
the first half of 1997, the increase in offshore sales volumes and the decrease
in overall offshore selling price resulted in a $17.6 million increase in
offshore potash net sales revenue over the same period in 1996. In the offshore
market, the Company sold 1.895 million potash tonnes during the first half of
1997 (1996 -- 1.566 million tonnes), an increase of 21 percent. Of the 1.895
million tonnes, 1.493 million tonnes were sold through Canpotex (China purchased
over one million tonnes in the first half which is almost as much as it
purchased in all of last year) and the remaining .402 million tonnes were
produced by PCS New Brunswick and sold and delivered to offshore markets by PCS
Sales.
 
PHOSPHATE REVENUE
 
     Phosphate net sales revenue for the three months ended June 30, 1997 was
$246.9 million representing 36 percent of the consolidated net sales revenue.
The distribution of this revenue was as follows: liquid phosphate fertilizer
$83.3 million (34 percent); solid phosphate fertilizers $96.6 million (39
percent); animal feed $44.0 million (18 percent); industrial products $22.8
million (9 percent) and phosphate rock $.2 million. For the same quarter of 1996
net sales revenue was $222.0 million; liquid phosphate fertilizer $59.7 million
(27 percent); solid phosphate fertilizer $100.8 million (46 percent); animal
feed $41.4 million (19 percent) and industrial products $20.1 million (9
percent). Gross margin for phosphate products was $54.5 million or 30 percent of
consolidated gross margin.
 
     Second quarter net sales revenue from liquid and solid fertilizers was
$179.9 million (1996 -- $160.5 million) with sales volumes of .919 million
tonnes (1996 -- .814 million tonnes). Solid phosphate fertilizer (substantially
all DAP) accounted for 39 percent (1996 -- 45 percent) or $96.6 million (1996 --
$100.9 million) of the total phosphate net sales revenue. Compared to the second
quarter of 1996 the Company received higher prices for most of its phosphate
products (with the exception of DAP). Liquid fertilizer prices increased by 12
percent and volumes increased by 24 percent, resulting in additional net sales
revenue of $23.6 million over the second quarter of 1996 (mostly from the
addition of PCS Nitrogen's Geismar operations). Solid phosphate fertilizer
prices declined 9 percent as compared to the second quarter of 1996. However,
this was partially offset by a volume increase of 5 percent resulting in a
reduction of net sales revenue of $4.2 million compared to the second quarter of
1996.
 
     Net sales revenue from animal feed and industrial products during the
second quarter was $66.8 million (1996 -- $61.5 million) with sales volumes of
 .235 million tonnes (1996 -- .242 million tonnes). Although the Company gave up
market share in the animal feed area where volumes decreased 4 percent as
compared to the second quarter of 1996, recent price increases (11 percent as
compared to the second quarter of 1996) more than offset the volume lost. This
resulted in additional net sales revenue of $2.6 million. Industrial product
prices improved by 13 percent while maintaining sales volumes. The result was
additional net sales revenue of $2.7 million. Gross margin for feed and
industrial products improved over the same period a year ago.
 
     Phosphate net sales revenue for the six months ended June 30, 1997 was
$470.6 million representing 41 percent of the consolidated net sales revenue.
The distribution of this revenue was as follows: liquid phosphate fertilizer
$149.5 million (32 percent); solid phosphate fertilizer $180.9 million (38
percent); animal feed $94.6 million (20 percent); industrial products $44.3
million (10 percent) and phosphate rock $1.3 million. For the same six months of
1996 net sales revenue was $446.2 million; liquid phosphate fertilizer
 
                                      I-10
<PAGE>   12
 
$118.7 million (27 percent); solid phosphate fertilizer $192.1 million (43
percent); animal feed $90.9 million (20 percent); industrial products $41.3
million (10 percent) and phosphate rock $3.2 million. Gross margin for phosphate
was $94.0 million or 31 percent of consolidated gross margin.
 
     For the six months ended June 30, 1997 net sales revenue from liquid and
solid fertilizers was $330.4 million (1996 -- $310.8 million) with sales volumes
of 1.677 million tonnes (1996 -- 1.530 million tonnes). Solid phosphate
fertilizer (substantially all DAP) accounted for 38 percent (1996 -- 43 percent)
or $180.9 million (1996 -- $192.1 million) of the total phosphate net sales
revenue. Compared to the first six months of 1996 the Company received higher
prices for most of its phosphate products (with the exception of DAP). Liquid
fertilizer prices increased by 10 percent and sales volumes increased by 15
percent, resulting in additional net sales revenue of $30.9 million over the
first six months of 1996. Solid phosphate fertilizer prices declined 11 percent
as compared to the first six months of 1996. However, this was partially offset
by a volume increase of 6 percent resulting in a reduction of net sales revenue
of $11.2 million compared to the first six months of 1996.
 
     Net sales revenue from animal feed and industrial products during the first
six months was $138.9 million (1996 -- $132.2 million) with sales volumes of
 .490 million tonnes (1996 -- .518 million tonnes). Animal feed prices increased
9 percent and volumes decreased 5 percent as compared to the first six months of
1996. This resulted in additional net sales revenue of $3.6 million. Industrial
product prices improved by 17 percent while sales volumes decreased by 8
percent. The result was additional net sales revenue of $3.1 million. Gross
margin for feed products improved over the same period a year ago while the
margin for industrial products was substantially unchanged.
 
NITROGEN REVENUE
 
     During the second quarter of 1997 nitrogen net sales revenue was $292.3
million. Net sales revenue includes $40.6 million of purchased Russian ammonia
product and $5.5 million of other nitrogen products for resale. Manufactured
nitrogen net sales revenue for the three months ended June 30, 1997 was $246.2
million. The distribution of this revenue was as follows: ammonia $73.8 million
(30 percent); urea $65.9 million (27 percent); nitrogen solutions $67.2 million
(27 percent) and other nitrogen products $39.3 million (16 percent). Gross
margin for manufactured nitrogen products was $66.6 million (27 percent of
manufactured nitrogen net sales revenue).
 
     For the three months ended June 30, 1997 sales tonnes for manufactured
nitrogen products were as follows: ammonia .402 million tonnes; urea .360
million tonnes; nitrogen solutions .636 million tonnes and other nitrogen
products .294 million tonnes. Purchased nitrogen products sales tonnes for the
three months ended June 30, 1997 were .274 million tonnes.
 
     From the date of acquisition, nitrogen net sales revenue was $426.5
million. Net sales revenue includes $90.2 million of purchased Russian ammonia
product and $7.4 million of other nitrogen products for resale. The overall
gross margin was impacted negatively by sales of this low margin purchased
ammonia and by lower selling prices for ammonia, urea and nitrogen solutions.
Manufactured nitrogen net sales revenue for the four months ended June 30, 1997
was $328.9 million. The distribution of this revenue was as follows: ammonia
$88.7 million (27 percent); urea $100.1 million (31 percent); nitrogen solutions
$86.6 million (26 percent) and other nitrogen products $53.5 million (16
percent). Gross margin for manufactured nitrogen products was $94.5 million (29
percent of manufactured nitrogen net sales revenue).
 
     For the four months ended June 30, 1997 sales tonnes for manufactured
nitrogen products were as follows: ammonia .471 million tonnes; urea .541
million tonnes; nitrogen solutions .813 million tonnes and other nitrogen
products .395 million tonnes. Purchased nitrogen products sales tonnes for the
four months ended June 30, 1997 were .519 million tonnes.
 
     While China's import embargo on urea has resulted in pricing pressures in
the rest of the world, the Company continues to sell the majority of its North
American urea production to the more stable industrial market. In addition, U.S.
mid-west urea prices have not declined as much as U.S. gulf urea prices. Ammonia
 
                                      I-11
<PAGE>   13
 
prices were down when compared to the same quarter a year ago, but results were
supported by the Company's strategic plant locations in North America and its
favourable gas contracts with protected margins in Trinidad.
 
COST OF GOODS SOLD
 
     During the second quarter of 1997 the Company produced 1.687 million
potassium chloride (KCl) tonnes, a 12 percent increase from the 1.512 million
tonnes produced in the second quarter of 1996. During the second quarter of 1997
the Company produced .599 million phosphoric acid (P2O5) tonnes (1996 -- .507
million tonnes), an increase of 18 percent. Nitrogen production during the
second quarter of 1997 was .724 million nitrogen (N) tonnes.
 
     Potash unit cost of sales were favourably affected by higher production
volumes in the second quarter of 1997 compared to the same period in 1996.
 
     Phosphate unit cost of sales during the second quarter of 1997 decreased by
7 percent for solid fertilizer and 11 percent for feed products compared to the
same period in 1996. This was offset by increases of 16 percent and 12 percent
in the unit cost of sales of liquid fertilizer and industrial products,
respectively during the same period.
 
     Depreciation expense for the second quarter of 1997 was $48.0 million
compared to $22.8 million in 1996, an increase of $25.2 million or 111 percent.
The increase is largely attributable to additional depreciation of $20.5 million
from the acquired nitrogen operations.
 
     For the six months ended June 30, 1997, the Company produced 3.340 million
potassium chloride (KCl) tonnes, compared to 3.211 million tonnes in the first
half of 1996, an increase of .129 million tonnes (4 percent) compared to 1996.
For the six months ended June 30, 1997, the Company produced 1.121 million
phosphoric acid (P205) tonnes from its phosphate operations, compared to 1.020
million tonnes in 1996, an increase of .101 million tonnes. From the date of
acquisition, nitrogen production was .964 million (N) tonnes.
 
     Potash unit cost of sales increased by 4 percent in the first six months of
1997 compared to the same period in 1996 due in part to three additional
shutdown weeks.
 
     Phosphate unit cost of sales in the first six months of 1997 decreased by 5
percent for feed products as compared to the same period in the prior year.
However, this was offset by increases of 11 percent and 22 percent in the unit
cost of sales of liquid fertilizer and industrial products, respectively. These
increased costs, which were primarily caused by excessive moisture in the
overburden at Aurora, were reduced in the second quarter when compared to the
first quarter of 1997. The unit cost of sales of solid fertilizer remained
unchanged during the first six months of 1997 as compared to the same period in
1996.
 
     In nitrogen, U.S. natural gas market prices have increased each month since
the date of acquisition; however, PCS Nitrogen, through its natural gas hedging
program, has managed to keep its U.S. per unit natural gas cost relatively flat.
In addition, Trinidad's per unit natural gas cost has decreased 12% since the
date of acquisition. Trinidad's natural gas is purchased using a pricing formula
indexed to the market price of ammonia. The per unit natural gas cost included
in PCS Nitrogen's cost of sales increased approximately 7 percent from the same
period in 1996.
 
     Depreciation expense for the first half of 1997 was $78.0 million compared
to $46.1 million in 1996, an increase of $31.9 million or 69 percent. The
increase is largely attributable to $27.1 million additional depreciation from
the acquired nitrogen operations.
 
SELLING AND ADMINISTRATIVE
 
     Selling and administrative expenses during the second quarter of 1997 were
$27.9 million as compared to $14.3 million in 1996, an increase of $13.6
million. During the first half of 1997, selling and administrative expenses were
$47.2 million as compared to $29.2 million in 1996, an increase of $18.0
million. The increases are attributable to the acquisition of PCS Nitrogen and
to general increases in supplies, compensation and benefits.
 
                                      I-12
<PAGE>   14
 
PROVINCIAL MINING AND OTHER TAXES
 
     Saskatchewan's potash production tax is comprised of a base tax per tonne
of product sold and an additional tax based on mine-by-mine profits. The New
Brunswick division and the Saskatchewan divisions pay a provincial crown
royalty, which is accounted for under cost of goods sold.
 
     For the second quarter of 1997, Saskatchewan provincial mining and other
taxes were $14.5 million as compared to $9.0 million in the second quarter of
1996, an increase of 61 percent. Potash production tax for the second quarter of
1997 was $10.1 million compared to $5.8 million in the same period in 1996, an
increase of 74 percent. Corporate capital tax was $4.2 million in the second
quarter ended June 30, 1997 compared to $3.2 million in the same period in 1996,
an increase of 31 percent. For the first half of 1997, Saskatchewan provincial
mining and other taxes were $25.0 million as compared to $20.9 million in the
first half of 1996, an increase of 20 percent. Potash production tax for the
first half of 1997 was $16.9 million compared to $14.2 million in the same
period in 1996, an increase of 19 percent. Corporate capital tax was $8.0
million in the six months ended June 30, 1997 compared to $6.7 million in the
same period in 1996, an increase of 19 percent.
 
INTEREST EXPENSE
 
     For the second quarter of 1997, interest expense was $23.6 million as
compared to $11.9 million in the same period in 1996. For the first half of
1997, interest expense was $37.4 million as compared to $25.7 million in the
same period in 1996. The 1997 amount includes interest on the debt incurred with
the acquisition of PCS Nitrogen in March.
 
INCOME TAXES
 
     Income taxes in the second quarter of 1997 were $34.2 million, compared to
$10.1 million in the same period of 1996, an increase of $24.1 million. Income
taxes in the first half of 1997 were $54.5 million, compared to $19.7 million in
the same period of 1996, an increase of $34.8 million. The increase is largely
attributable to U.S. withholding taxes and deferred income tax relating to the
Company's acquired nitrogen operations. The tax rate applicable to the U.S.
operations for the first half of 1997 is approximately 25 percent of income
before taxes. This rate for 1996 was approximately 20 percent of income before
taxes.
 
ANALYSIS OF FINANCIAL CONDITION AND CASH FLOW
 
     Working capital for the first half of 1997 increased by $70.0 million. Cash
flow from operations was $236.0 million. Quick and current ratios were .93 and
1.73 at June 30, 1997, respectively. The Company paid down its debt by $161.5
million (of which $160.0 million was voluntary) and paid dividends of $27.8
million. At the end of the first half of 1997, the debt to capital ratio was at
40.3 percent and the interest coverage ratio was 6.6 to 1. The net debt to
market capitalization at June 30, 1997 was 29.1 percent.
 
OUTLOOK
 
     The statements in this "Management Discussion and Analysis" in this
"Outlook" section, relating to the period after June 30, 1997, are
forward-looking statements subject to uncertainties. The Company's financial
performance continues to be affected by fertilizer prices tied to the worldwide
state of supply and demand for potash, phosphate and nitrogen products,
agricultural commodity prices, government assistance programs, weather
conditions, exchange rates and trade policies of producing and consuming nations
which, among other things, are influenced by domestic political conditions. The
Company sells to a diverse group of customers both by geography and by end
product. Market conditions by country will vary on a year-over-year basis and
sales shift from one period to another.
 
     The rising world population and the demand for better diets in developing
nations will continue to drive consumption for fertilizer products over the
long-term. Over the short-term, there should be increased fertilizer usage over
the next few years as world grain stocks are critically low, and governments
around the world focus on food production. The Company expects to be an
important supplier to these markets. While the
 
                                      I-13
<PAGE>   15
 
consumption trend line is expected to continue to climb over the long-term,
there will be, at times, fluctuations in demand.
 
     North American potash, phosphate and nitrogen demand in fertilizer is
generally considered mature but is expected to fluctuate from year to year, as a
function of acres planted and application rates per acre which are influenced by
crop prices and weather. The North American agricultural market is expected to
have strong fall fertilizer demand which is expected to firm markets and support
prices in the second half of 1997. As approximately 40 percent of the Company's
phosphate and nitrogen gross margins comes from non-fertilizer markets, demand
for these products will be affected by domestic economic growth. The optimistic
outlook for continued strong domestic economic growth, if correct, supports the
industrial markets and should translate into increased demand for the Company's
upgraded products.
 
     Potash is expected to continue to perform well in both the domestic and
offshore markets. The Company has introduced an increase of $6 per ton in the
domestic market for mid-September following a strong spring season and previous
price increases. China, India and Brazil are expected to continue buying potash.
Lower offshore sales volumes in 1996 resulted in lower spot prices in Asian
markets. The strong volumes so far in 1997 should result in higher prices going
forward. Supply is tight on Canada's east coast where a competitor is currently
shut down for an unknown duration due to mine flooding.
 
     The near-term outlook for phosphate pricing is expected to remain
favourable as supply and demand are in reasonably good balance. Worldwide
phosphoric acid capacity utilization remains historically high. India is
importing MGA under a one-year record contract with major suppliers through
early 1998. Subsidies in India have brought it back into the market for DAP and
MGA. The government support for agriculture in China should continue to support
good demand for DAP. This, combined with the demand in India, is expected to
result in upward pricing pressure for DAP. The recent decline in ammonia input
costs should translate into improved DAP margins. In North America, projected
increased corn and wheat acreage is expected to support liquid and solid
phosphate fertilizer sales. Prices should benefit.
 
     Market prices for nitrogen fertilizer are expected to come under some
pressure as new capacity comes on stream. The urea market is influenced by
China. Earlier in 1997, China stopped importing urea which had a negative effect
on prices. It is unknown if China will reenter the urea market by year end. The
low urea price realizations in the agricultural markets are expected to be
offset to some degree by higher priced industrial markets for urea. The Company
expects that its strategic plant locations and sales to industrial customers
(both of which result in higher margins) and its favourable gas contracts in
Trinidad will continue to provide positive urea margins. In ammonia, the
strategic plant locations and favourable gas contracts will support margins. The
strong domestic economic outlook should support industrial sales. Nitrogen
solution prices are expected to remain below their record levels of one year
ago. The Company is reducing solution production at Wilmington to maximize
margins.
 
     U.S. farmers are expected to plant more wheat and corn in 1998 beginning
with winter wheat this fall. This should support strong demand for all three
nutrients. With record or near record yields in 1997, it is expected that there
will be an increase in the need for fertilizer as farmers look to replenish
depleted nutrient levels in the soil.
 
     PCS continues to operate its potash mines by matching production to sales
demand. Shutdowns at potash mines for inventory correction will influence potash
production costs on a quarter over quarter comparative basis. Sulphur and
ammonia prices have moderated and are expected to impact favourably upon
phosphate processing input costs for 1997. The Company manages its natural gas
costs through a combination of fixed price contracts, hedges and the Trinidad
gas contracts. As the most flexible producer, the Company will continue to
allocate its nitrogen and phosphate feed stock to production of the products
with the best margins.
 
     Capital expenditures in 1997 will exceed those in 1996 primarily due to the
acquired nitrogen operations. Plans for such expenditures are limited to
sustaining capital.
 
     The narrative, included under this Management Discussion and Analysis, has
been prepared with reference to the financial statements reported under Canadian
Generally Accepted Accounting Principles (GAAP).
 
                                      I-14
<PAGE>   16
 
                           PART II. OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
PCS NITROGEN LEGAL MATTERS
 
LAKE CHARLES PLANT
 
     In connection with a 1992 incident at PCS Nitrogen's Lake Charles plant,
the United States Occupational Safety and Health Administration ("OSHA")
proposed penalties totaling $4.35 million, based on multiplying the base penalty
for the alleged violation by the number of employees allegedly exposed in the
incident. On February 19, 1997, an administrative law judge of the Occupational
Safety and Health Review Commission issued a decision finding that PCS Nitrogen
had committed a willful violation of the federal Occupational Safety and Health
Act and assessing a penalty of $50,000. PCS Nitrogen has appealed the judge's
decision. In another phase of the OSHA litigation, on April 28, 1997, the United
States Court of Appeals for the Fifth Circuit held that OSHA may not multiply
the penalty for the violation by the number of employees allegedly exposed in
the incident. OSHA has not appealed that decision and it has become final.
Therefore any civil penalty ultimately paid will be no more than $70,000, the
maximum allowed under the Occupational Safety and Health Act for the alleged
violation.
 
     In September 1996, PCS Nitrogen's liability insurers negotiated preliminary
settlements of substantially all of the civil litigation arising from the Lake
Charles incident. The settlements, which in the aggregate are within the policy
limits of PCS Nitrogen's liability insurance, have been finalized and approved
by the court as to fairness. There remain three lawsuits pending in the United
States District Court for the Western District of Louisiana against PCS Nitrogen
arising from the incident, which were brought in July 1993 by former employees
at the Lake Charles plant who allege that they were wrongfully terminated
following the incident. Management and legal counsel believe that these lawsuits
are without merit, and that there will be no material adverse effect on the
Company upon their resolution.
 
SHAREHOLDER LITIGATION
 
     Following announcement of Arcadian Corporation's proposed business
combination with Freeport McMoRan Inc., five lawsuits were filed in the Court of
Chancery of the State of Delaware in New Castle County on behalf of a purported
class of all stockholders of Arcadian Corporation other than the defendants and
their affiliates against Arcadian Corporation and some or all of its directors.
PCS was named as an additional defendant in an amended complaint, but PCS was
not served process. The amended complaint alleged generally that the defendants
acted improperly in causing Arcadian Corporation to enter into the merger
agreement with PCS and PCS Nitrogen, and seeks an injunction preventing the
merger, unspecified monetary damages, and other relief.
 
     The defendants believe the lawsuit is without merit. Nevertheless, Arcadian
Corporation and the other defendants entered into a Stipulation and Agreement of
Compromise, Settlement and Release (the "Stipulation") with the plaintiffs
providing for the conditional settlement of the litigation. In so doing, the
defendants denied that they violated the law and agreed to settle the suit
solely to eliminate the burden and expense of any further litigation relating to
the merger. The Stipulation provides among other things that PCS will pay the
fees and expenses, if any, awarded by the court to the plaintiffs' counsel, up
to $450,000. The Stipulation also provides for, among other things, (a) the
dismissal of all claims asserted in the lawsuit with prejudice; and (b) the
release by the plaintiffs of any and all claims relating to the merger that they
may have against the defendants and related persons. The consummation of the
settlement is subject to certain conditions, including the approval of the
Stipulation by the Delaware court. The court has scheduled a hearing for
September 10, 1997 to determine whether the settlement should be approved.
 
FORMER ARCADIAN EXECUTIVE PROCEEDINGS
 
     On May 7, 1997, J. Douglas Campbell, Alfred L. Williams, Peter H. Kesser,
and David Alyea, former officers of Arcadian Corporation, filed lawsuits against
PCS in the United States District Court for the Western District of Tennessee.
The complaints allege that PCS breached employment agreements between
 
                                      II-1
<PAGE>   17
 
Arcadian and the officers and breached the related assumption agreement among
PCS, PCS Nitrogen, and Arcadian. In addition, Mr. Alyea's complaint names
Charles Childers, John Gugulyn, and John Hampton as additional defendants and
alleges that the defendants interfered with and conspired to interfere with his
employment agreement, and did not accurately state their intentions in entering
into the assumption agreement. The complaints of Mr. Campbell, Mr. Williams, Mr.
Kesser, and Mr. Alyea seek damages approximately in the amounts of $22.2
million, $6.2 million, $3.7 million, and $4.2 million, respectively. Each
complaint also seeks certain additional unspecified damages. The defendants have
responded to the lawsuits. Management of the Company, having consulted with
legal counsel, believes that the lawsuits will not have a material adverse
effect on the Company.
 
PORT AUTHORITY PROCEEDINGS
 
     On March 13, 1996, PCS Nitrogen, two other nitrogen producers, and up to 30
unidentified parties were named as defendants in a lawsuit filed in the name of
the Port Authority of New York and New Jersey (the "Port Authority") in New
Jersey state court. The lawsuit was actually filed by attorneys hired by the
Port Authority's subrogated insurance carriers. The Port Authority's insurers
are seeking to recover damages allegedly incurred as a result of the explosion
at the World Trade Center in New York City on February 26, 1993. The Port
Authority's insurers allege in their complaint that the two other named
defendants and one or more unidentified parties (as manufacturers of ammonium
nitrate), PCS Nitrogen and one or more unidentified parties (as producers of
urea), and one or more unidentified makers of nitric acid are liable under
various tort theories for unspecified property damages, business interruption
losses, lost rent and other damages allegedly incurred by the Port Authority as
a result of the World Trade Center explosion. The lawsuit was removed to federal
court in New Jersey. On February 7, 1997, the defendants filed a motion to
dismiss the suit for failure to state a claim upon which relief could be
granted. On July 29, 1997, the court requested the parties to brief the issue of
the court's subject matter jurisdiction over the case. PCS Nitrogen expects that
a ruling on the motion to dismiss will issue only after the court reviews the
jurisdictional issue. Although neither the Port Authority nor its subrogated
insurers have alleged or otherwise revealed the amount of damages sought from
PCS Nitrogen in the lawsuit, the Port Authority stated in an affidavit submitted
to the court in support of its motion to disqualify its insurers' counsel that
as of April 9, 1996, the Port Authority had submitted to its insurers claims
relating to the explosion totaling approximately $340 million, of which the
insurers had paid approximately $160 million. PCS Nitrogen is unaware of any
basis for liability and intends to vigorously defend the lawsuit.
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
 
     (a) Exhibits
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                   DESCRIPTION OF DOCUMENT
-------    -----------------------------------------------------------------------------------
<S>        <C>
 3(i)      Restated Articles of Incorporation of the registrant dated October 31, 1989, as
           amended May 11, 1995, incorporated by reference to Exhibit 3(i) to the registrant's
           report on Form 10-K for the year ended December 31, 1995 (the "1995 Form 10-K").

 3(ii)     Bylaws of the registrant dated March 2, 1995, incorporated by reference to Exhibit
           3(ii) to the 1995 Form 10-K.

 4(a)      Term Credit Agreement between The Bank of Nova Scotia and other financial
           institutions and the registrant dated October 4, 1996, incorporated by reference to
           Exhibit 4(b) to the registrant's Form S-4 (File No. 333-17841).

 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) 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.
</TABLE>
 
                                      II-2
<PAGE>   18
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                   DESCRIPTION OF DOCUMENT
-------    -----------------------------------------------------------------------------------
<S>        <C>
10(a)      Suspension Agreement concerning Potassium Chloride from Canada dated January 7,
           1988, among U.S. Department of Commerce, Potash Corporation of Saskatchewan,
           International Minerals and Chemical (Canada) Limited, Noranda, Inc. (Central Canada
           Potash Co.), Potash Company of America, a Division of Rio Algom Limited, S & P
           Canada, II (Kalium Chemicals), Cominco Ltd., Potash Company of Canada Limited,
           Agent for Denison-Potacan Potash Co. and Saskterra Fertilizers Ltd., incorporated
           by reference to Exhibit 10 (a) to the registrant's Form F-1 (File No. 33-31303)
           (the "F-1 Registration Statement").

10(b)      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.

10(c)      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(d)      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(e)      Agreement of Limited Partnership of Arcadian Fertilizer, L.P. (now PCS Nitrogen
           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(f)      Geismar Complex Services Agreement dated June 4, 1984, between Allied Corporation
           and Arcadian Corporation (incorporated by reference to Exhibit 10.4 to Registration
           Statement on Form S-1 (Registration No. 33-34357)).

10(g)      PCS Sales -- Saskterra Special Canpotex Entitlement effective June 13, 1990,
           incorporated by reference to Exhibit 10(n) to the registrant's Form S-1 (File No.
           33-36283).

10(h)      Canpotex/PCS Amending Agreement, dated with effect October 1, 1992, incorporated by
           reference to Exhibit 10(f) to the 1995 Form 10-K.

10(i)      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(j)      Esterhazy Restated Mining and Processing Agreement dated January 31, 1978, between
           International Minerals and 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)      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 ("Partners
           5/11/93 Report"), 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
           ("Arcadian 10-K")).

10(m)      Manufacturing Support Agreement dated May 11, 1993, between BP Chemicals Inc. and
           Arcadian Ohio, L. P. (incorporated by reference to Exhibit 10.3 to the Partners
           05/11/93 Report).

10(n)      Amended and Restated Agreement for Lease dated as of May 16, 1997, between Trinidad
           Ammonia Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
</TABLE>
 
                                      II-3
<PAGE>   19
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                   DESCRIPTION OF DOCUMENT
-------    -----------------------------------------------------------------------------------
<S>        <C>
10(o)      Amended and Restated Lease Agreement dated as of May 16, 1997, between Trinidad
           Ammonia Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(p)      Amended and Restated Agreement for Lease dated as of May 16, 1997, between Nitrogen
           Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(q)      Amended and Restated Lease Agreement dated as of May 16, 1997, between Nitrogen
           Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(r)      Amended and Restated Purchase Option Agreement dated as of May 16, 1997, between
           Nitrogen Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer
           Operations, Inc
10(s)      Amended and Restated Purchase Option Agreement dated as of May 16, 1997, between
           Trinidad Ammonia Company, Limited Partnership and PCS Nitrogen Fertilizer
           Operations, Inc.
10(t)      Agreement dated October 13, 1995 between the registrant and Charles E. Childers,
           incorporated by reference to Exhibit 10(j) to the 1995 Form 10-K.
10(u)      Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Unaffiliated
           Directors, incorporated by reference Exhibit 4(a) to the registrant's Form S-8
           (File No. 333-19215) (the "Form S-8").
10(v)      Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Officers and Key
           Employees, incorporated by reference to Exhibit 4(b) to the Form S-8.
10(w)      Short Term Incentive Plan of the registrant, as amended May 7, 1997.
10(x)      Long-Term Incentive Plan of the registrant, as amended May 7, 1997.
10(y)      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(z)      Supplemental Executive Retirement Plan of Arcadian Corporation (incorporated by
           reference to Exhibit 10.16 to the Arcadian S-4).
10(aa)     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(bb)     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(cc)     Employment Agreement between Arcadian Corporation and Gary E. Carlson, dated as of
           September 5, 1996, incorporated by reference to Exhibit 10(cc) to the registrant's
           report on Form 10-Q for the period ended March 31, 1997.
10(dd)     Deferred Compensation Plan, for certain officers of PCS Phosphate Company, Inc,
           incorporated by reference to Exhibit 10(r) to the 1995 Form 10-K.
10(ee)     Supplemental Retirement Benefits Plan, for eligible employees of PCS Phosphate
           Company, Inc., incorporated by reference to Exhibit 10(s) to the 1995 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. (now PCS Phosphate Company, 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. (now PCS Phosphate Company, 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)     General Partnership Agreement forming Albright & Wilson Company, dated July 29,
           1988 and amended January 31, 1995, between Texasgulf Inc. (now PCS Phosphate
           Company, Inc.) and Albright & Wilson Americas, Inc., incorporated by reference to
           Exhibit 10(v) to the 1995 Form 10-K.
</TABLE>
 
                                      II-4
<PAGE>   20
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                   DESCRIPTION OF DOCUMENT
-------    -----------------------------------------------------------------------------------
<S>        <C>
10(ii)     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(jj)     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 (the "Second Quarter 1996 Form 10-Q").
10(kk)     Employment Agreement dated May 16, 1996, by and between PCS Phosphate Company, Inc.
           and Thomas J. Wright, incorporated by reference to Exhibit 10(y) to the Second
           Quarter 1996 Form 10-Q.
10(ll)     Shareholders Rights Agreement dated November 10, 1994, as amended on March 28,
           1995, and May 4, 1995, and approved the shareholders on May 11, 1995, incorporated
           by reference to Exhibit 4(a) to the 1995 Form 10-K.
11         Statement re Computation of Per Share Earnings.
27         Financial Data Schedule.
</TABLE>
 
---------------
 
     (b) Reports on Form 8-K
 
     On May 16, 1997, the registrant amended its report on Form 8-K filed on
March 20, 1997 regarding the merger of Arcadian Corporation with and into PCS
Nitrogen, Inc., a wholly-owned subsidiary of the registrant.
 
     On June 11, 1997, the registrant filed a report on Form 8-K regarding the
status of its proposed acquisition of 51 percent of the outstanding shares of
Kali und Salz Beteiligungs AG.
 
     On June 18, 1997, the registrant filed a report on Form 8-K regarding its
entry into a terms agreement relating to the sale by the registrant of its
$400,000,000 aggregate principal amount 7.125% Notes due June 15, 2007.
 
                                      II-5
<PAGE>   21
 
                                   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.
 
<TABLE>
<S>                                            <C>
July 31, 1997                                            By: /s/ JOHN L.M. HAMPTON
                                               ----------------------------------------------
                                                             John L.M. Hampton
                                                 Senior Vice President, General Counsel and
                                                                 Secretary
 
July 31, 1997                                            By: /s/ BARRY E. HUMPHREYS
                                               ----------------------------------------------
                                                             Barry E. Humphreys
                                                 Sr. Vice President, Finance and Treasurer
                                                (Principal Financial and Accounting Officer)
</TABLE>
 
                                      II-6
<PAGE>   22
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                   DESCRIPTION OF DOCUMENT
-------    -----------------------------------------------------------------------------------
<S>        <C>
 3(i)      Restated Articles of Incorporation of the registrant dated October 31, 1989, as
           amended May 11, 1995, incorporated by reference to Exhibit 3(i) to the registrant's
           report on Form 10-K for the year ended December 31, 1995 (the "1995 Form 10-K").
 3(ii)     Bylaws of the registrant dated March 2, 1995, incorporated by reference to Exhibit
           3(ii) to the 1995 Form 10-K.
 4(a)      Term Credit Agreement between The Bank of Nova Scotia and other financial
           institutions and the registrant dated October 4, 1996, incorporated by reference to
           Exhibit 4(b) to the registrant's Form S-4 (File No. 333-17841).
 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) the
           registrant's report on Form 8-K dated June 18, 1997.
10(a)      Suspension Agreement concerning Potassium Chloride from Canada dated January 7,
           1988, among U.S. Department of Commerce, Potash Corporation of Saskatchewan,
           International Minerals and Chemical (Canada) Limited, Noranda, Inc. (Central Canada
           Potash Co.), Potash Company of America, a Division of Rio Algom Limited, S & P
           Canada, II (Kalium Chemicals), Cominco Ltd., Potash Company of Canada Limited,
           Agent for Denison-Potacan Potash Co. and Saskterra Fertilizers Ltd., incorporated
           by reference to Exhibit 10 (a) to the registrant's Form F-1 (File No. 33-31303)
           (the "F-1 Registration Statement").
10(b)      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.
10(c)      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(d)      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(e)      Agreement of Limited Partnership of Arcadian Fertilizer, L.P. (now PCS Nitrogen
           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(f)      Geismar Complex Services Agreement dated June 4, 1984, between Allied Corporation
           and Arcadian Corporation (incorporated by reference to Exhibit 10.4 to Registration
           Statement on Form S-1 (Registration No. 33-34357)).
10(g)      PCS Sales -- Saskterra Special Canpotex Entitlement effective June 13, 1990,
           incorporated by reference to Exhibit 10(n) to the registrant's Form S-1 (File No.
           33-36283).
10(h)      Canpotex/PCS Amending Agreement, dated with effect October 1, 1992, incorporated by
           reference to Exhibit 10(f) to the 1995 Form 10-K.
10(i)      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(j)      Esterhazy Restated Mining and Processing Agreement dated January 31, 1978, between
           International Minerals and 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.
</TABLE>
<PAGE>   23
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                   DESCRIPTION OF DOCUMENT
-------    -----------------------------------------------------------------------------------
<S>        <C>
10(l)      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 ("Partners
           5/11/93 Report"), 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
           ("Arcadian 10-K")).
10(m)      Manufacturing Support Agreement dated May 11, 1993, between BP Chemicals Inc. and
           Arcadian Ohio, L. P. (incorporated by reference to Exhibit 10.3 to the Partners
           05/11/93 Report).
10(n)      Amended and Restated Agreement for Lease dated as of May 16, 1997, between Trinidad
           Ammonia Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(o)      Amended and Restated Lease Agreement dated as of May 16, 1997, between Trinidad
           Ammonia Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(p)      Amended and Restated Agreement for Lease dated as of May 16, 1997, between Nitrogen
           Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(q)      Amended and Restated Lease Agreement dated as of May 16, 1997, between Nitrogen
           Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(r)      Amended and Restated Purchase Option Agreement dated as of May 16, 1997, between
           Nitrogen Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer
           Operations, Inc
10(s)      Amended and Restated Purchase Option Agreement dated as of May 16, 1997, between
           Trinidad Ammonia Company, Limited Partnership and PCS Nitrogen Fertilizer
           Operations, Inc.
10(t)      Agreement dated October 13, 1995 between the registrant and Charles E. Childers,
           incorporated by reference to Exhibit 10(j) to the 1995 Form 10-K.
10(u)      Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Unaffiliated
           Directors, incorporated by reference Exhibit 4(a) to the registrant's Form S-8
           (File No. 333-19215) (the "Form S-8").
10(v)      Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Officers and Key
           Employees, incorporated by reference to Exhibit 4(b) to the Form S-8.
10(w)      Short-Term Incentive Plan of the registrant, as amended May 7, 1997.
10(x)      Long-Term Incentive Plan of the registrant, as amended May 7, 1997.
10(y)      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(z)      Supplemental Executive Retirement Plan of Arcadian Corporation (incorporated by
           reference to Exhibit 10.16 to the Arcadian S-4).
10(aa)     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(bb)     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(cc)     Employment Agreement between Arcadian Corporation and Gary E. Carlson, dated as of
           September 5, 1996, incorporated by reference to Exhibit 10(cc) to the registrant's
           report on Form 10-Q for the period ended March 31, 1997.
10(dd)     Deferred Compensation Plan, for certain officers of PCS Phosphate Company, Inc,
           incorporated by reference to Exhibit 10(r) to the 1995 Form 10-K.
10(ee)     Supplemental Retirement Benefits Plan, for eligible employees of PCS Phosphate
           Company, Inc., incorporated by reference to Exhibit 10(s) to the 1995 Form 10-K.
</TABLE>
<PAGE>   24
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                   DESCRIPTION OF DOCUMENT
-------    -----------------------------------------------------------------------------------
<S>        <C>
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. (now PCS Phosphate Company, 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. (now PCS Phosphate Company, 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)     General Partnership Agreement forming Albright & Wilson Company, dated July 29,
           1988 and amended January 31, 1995, between Texasgulf Inc. (now PCS Phosphate
           Company, Inc.) and Albright & Wilson Americas, Inc., incorporated by reference to
           Exhibit 10(v) to the 1995 Form 10-K.
10(ii)     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(jj)     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 (the "Second Quarter 1996 Form 10-Q").
10(kk)     Employment Agreement dated May 16, 1996, by and between PCS Phosphate Company, Inc.
           and Thomas J. Wright, incorporated by reference to Exhibit 10(y) to the Second
           Quarter 1996 Form 10-Q.
10(ll)     Shareholders Rights Agreement dated November 10, 1994, as amended on March 28,
           1995, and May 4, 1995, and approved the shareholders on May 11, 1995, incorporated
           by reference to Exhibit 4(a) to the 1995 Form 10-K.
11         Statement re Computation of Per Share Earnings.
27         Financial Data Schedule.
</TABLE>