UNITED STATES SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549  Form 10-Q  ☑
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the
Quarterly Period Ended September 30, 2017 OR  ☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission
File Number 1-10351  Potash Corporation of Saskatchewan Inc. (Exact name of registrant as specified in its charter)  Canada

N/A(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)122  1st Avenue South
Saskatoon, Saskatchewan, Canada

S7K 7G3(Address of principal executive offices)

(Zip Code) 306-933-8500 (Registrants telephone number, including area code)  Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes  ☑    No  
☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web
site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files). Yes  ☐    No  ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth
company in Rule 12b-2 of the Exchange Act.  Large accelerated filer

☑



Accelerated filer


☐Non-accelerated filer

☐

(Do not check if a smaller reporting company)

Smaller reporting company


☐Emerging growth company


☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes  ☐    No  
☑ As at September 30, 2017, Potash Corporation of Saskatchewan Inc. had 840,163,998 Common Shares
outstanding.




---

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statements
of Income Unaudited

In millions of US dollars except as otherwise
noted Three Months EndedSeptember 30


Nine Months EndedSeptember 302017


2016


2017


2016Sales (Note 2)

$
1,234


$
1,136


$
3,466


$
3,398Freight, transportation and distribution


(172
)


(154
)


(421
)


(405
)Cost of goods sold


(832
)


(792
)


(2,292
)


(2,326
)Gross Margin


230



190



753



667Selling and administrative expenses


(56
)


(59
)


(154
)


(167
)Provincial mining and other taxes


(47
)


(31
)


(125
)


(88
)Share of earnings of equity-accounted investees


33



25



121



74Dividend income


5



8



17



24Impairment of
available-for-sale investment














(10
)Other (expenses) income (Note 3)


(30
)


5



(56
)


(4
)Operating Income


135



138



556



496Finance costs


(60
)


(55
)


(180
)


(161
)Income Before Income Taxes


75



83



376



335Income tax (expense) recovery (Note 4)


(22
)


(2
)


27



(58
)Net Income

$
53


$
81


$
403


$
277Net Income per ShareBasic

$
0.06


$
0.10


$
0.48


$
0.33Diluted

$
0.06


$
0.10


$
0.48


$
0.33Weighted Average Shares OutstandingBasic


840,137,000



839,570,000



840,037,000



838,661,000Diluted


840,301,000



840,045,000



840,202,000



839,376,000 (See Notes to the Condensed Consolidated Financial Statements)  LOGO

LOGO

LOGO  1

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




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Condensed Consolidated Statements of Comprehensive Income  Unaudited

In millions of US dollars Three Months Ended September 30


Nine Months Ended September 30(Net of related income taxes)

2017


2016


2017


2016Net Income

$
53


$
81


$
403


$
277Other comprehensive income (loss)Items that will not be reclassified to net income:Net actuarial loss on defined benefit plans 1














(103
)Items that have been or may be subsequently reclassified to net income:Available-for-sale
investments 2Net fair value gain (loss) during the period


35



15



128



(88
)Cash flow hedgesNet fair value loss during the period 3



(1
)


(5
)


(8
)


(2
)Reclassification to income of net loss 4


9



11



28



39Other


(1
)






2



2Other Comprehensive Income
(Loss)


42



21



150



(152
)Comprehensive
Income

$
95


$
102


$
553


$
125 1 Net of income taxes of $NIL (2016  $NIL) for the three months ended
September 30, 2017 and $NIL (2016  $60) for the nine months ended September 30, 2017. 2Available-for-sale investments are comprised of shares in Israel Chemicals Ltd. (ICL), Sinofert Holdings Limited (Sinofert) and other. 3 Cash flow hedges are comprised of natural gas derivative instruments and treasury lock derivatives and were
net of income taxes of $NIL (2016  $2) for the three months ended September 30, 2017 and $4 (2016  $NIL) for the nine months ended September 30, 2017. 4 Net of income taxes of $(4) (2016  $(6)) for the three months ended September 30, 2017 and $(15)
(2016  $(22)) for the nine months ended September 30, 2017. (See Notes to the Condensed Consolidated Financial Statements)   LOGO  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

2




---

Condensed Consolidated Statements of Cash Flow  Unaudited

In millions of US dollars  Three Months Ended September 30


Nine Months Ended September 302017


2016


2017


2016Operating ActivitiesNet income

$
53


$
81


$
403


$
277Adjustments to reconcile net income to cash provided by operating activities (Note 5)


237



166



532



631Changes in non-cash
operating working capital (Note 5)


3



48



(91
)


(1
)Cash provided by operating
activities


293



295



844



907Investing ActivitiesAdditions to property, plant and equipment


(170
)


(191
)


(431
)


(648
)Other assets and intangible assets






(1
)


(1
)


(10
)Cash used in investing
activities


(170
)


(192
)


(432
)


(658
)Financing ActivitiesFinance costs on long-term debt obligations










(1
)


(4
)(Repayment of) proceeds from short-term debt obligations


(39
)


115



(99
)


519Dividends


(84
)


(208
)


(248
)


(727
)Issuance of common shares










1



25Cash used in financing
activities


(123
)


(93
)


(347
)


(187
)Increase in Cash and Cash Equivalents






10



65



62Cash and Cash Equivalents, Beginning
of Period


97



143



32



91Cash and Cash Equivalents, End of
Period

$
97


$
153


$
97


$
153Cash and cash equivalents comprised of:Cash

$
31


$
48


$
31


$
48Short-term investments


66



105



66



105$
97


$
153


$
97


$
153 (See Notes to the Condensed Consolidated Financial Statements)  LOGO  3

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

Condensed Consolidated Statements of Changes in Equity  Unaudited

In millions of US dollars  Accumulated Other Comprehensive (Loss) IncomeShare
Capital


ContributedSurplus


Net
unrealized
gain (loss) onavailable-for-
sale investments


Net (loss)
gain on derivatives
designated as cash
flow hedges


Net
actuarial loss on
defined benefit
plans


Other


Total
Accumulated Other
Comprehensive (Loss)Income


RetainedEarnings


TotalEquity 1Balance  December 31, 2016

$
1,798


$
222


$
43


$
(60
)

$

2

$
(8
)

$
(25
)

$
6,204


$
8,199Net income






























403



403Other comprehensive income










128



20







2



150







150Dividends declared






























(252
)


(252
)Effect of share-based compensation including issuance of common shares


2



6



























8Shares issued for dividend reinvestment plan


5































5Balance  September 30,
2017

$
1,805


$
228


$
171


$
(40
)

$

2

$
(6
)

$
125


$
6,355


$
8,513Balance  December 31, 2015

$
1,747


$
230


$
77


$
(117
)

$

2

$
(10
)

$
(50
)

$
6,455


$
8,382Net income






























277



277Other comprehensive (loss) income










(88
)


37



(103
)


2



(152
)






(152
)Dividends declared






























(506
)


(506
)Effect of share-based compensation including issuance of common shares


35



(1
)


























34Shares issued for dividend reinvestment plan


13































13Transfer of net actuarial loss on defined benefit
plans


















103







103



(103
)


Balance  September 30, 2016

$
1,795


$
229


$
(11
)

$
(80
)

$

2

$
(8
)

$
(99
)

$
6,123


$
8,048 1 All equity transactions were attributable to common
shareholders. 2 Any amounts incurred during a period are closed out to retained earnings
at each period-end. Therefore, no balance exists at the beginning or end of period. (See Notes to the Condensed Consolidated Financial Statements)  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

4




---

Condensed Consolidated Statements of Financial Position  Unaudited

In millions of US dollars except as otherwise noted  As at

September 30,2017


December 31,2016AssetsCurrent assetsCash and cash equivalents

$
97


$
32Receivables


617



545Inventories (Note 6)


753



768Prepaid expenses and other current assets


55



491,522



1,394Non-current assetsProperty, plant and equipment


13,179



13,318Investments in equity-accounted investees


1,176



1,173Available-for-sale
investments


1,068



940Other assets


237



250Intangible assets


169



180Total Assets

$
17,351


$
17,255 (See Notes to the Condensed Consolidated Financial Statements)
 September 30,2017


December 31,2016LiabilitiesCurrent liabilitiesShort-term debt and current portion of long-term debt

$
785


$
884Payables and accrued charges


715



772Current portion of derivative instrument liabilities


35



411,535



1,697Non-current liabilitiesLong-term debt


3,709



3,707Derivative instrument liabilities


38



56Deferred income tax liabilities


2,375



2,463Pension and other post-retirement benefit liabilities


492



443Asset retirement obligations and accrued environmental costs


632



643Other non-current
liabilities and deferred credits


57



47Total Liabilities



8,838



9,056Shareholders EquityShare capital (Note 7)


1,805



1,798Contributed surplus


228



222Accumulated other comprehensive income (loss)


125



(25
)Retained earnings


6,355



6,204Total Shareholders
Equity


8,513



8,199Total Liabilities and
Shareholders Equity

$
17,351


$
17,255 (See Notes to the Condensed Consolidated Financial Statements)
   LOGO  5

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

Notes to the Condensed Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2017  Unaudited

In millions of US dollars except as otherwise
noted 1. Significant Accounting Policies Basis of Presentation  With its subsidiaries, Potash Corporation of Saskatchewan Inc. (PCS)  together known as
PotashCorp or the company except to the extent the context otherwise requires  forms a crop nutrient and related industrial and feed products company. These unaudited interim condensed consolidated financial statements
(interim financial statements) are based on International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS), and have been prepared in accordance with International Accounting
Standard (IAS) 34, Interim Financial Reporting. The accounting policies and methods of computation used in preparing these interim financial statements are consistent with those used in the preparation of the companys
2016 annual consolidated financial statements.
 These interim financial statements include the accounts of PCS and its subsidiaries; however, they do not include all
disclosures normally provided in annual consolidated financial statements and should be read in conjunction with the companys 2016 annual consolidated financial statements. In managements opinion, the interim financial statements include
all adjustments necessary to fairly present such information. Interim results are not necessarily indicative of the results expected for any other interim period or the fiscal year. These interim financial statements were authorized by the audit committee of the Board of Directors for issue on October 31, 2017.
   Standards, Amendments and
Interpretations Effective and Applied The International Accounting Standards Board (IASB) and International Financial Reporting Interpretations
Committee (IFRIC) have issued the following standards and amendments or interpretations to existing standards that were effective and applied by the company.  Standard

Description

ImpactAmendments to IAS 7, Statement of Cash Flows

Issued to require a reconciliation of the opening and closing liabilities that form part of an entitys financing activities, including both changes arising from cash flows and non-cash changes.

Adopted prospectively effective January 1, 2017, with required disclosures included in Note 5.Amendments to IAS 12,
Income Taxes

Issued to clarify the requirements on recognition of deferred tax assets for unrealized losses on debt instruments measured at fair value.

Adopted effective January 1, 2017, with no change to the companys interim financial statements. No changes are expected to the companys annual consolidated financial
statements.  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

6




---

Standards, Amendments and Interpretations Not Yet Effective and Not Applied The IASB and IFRIC have issued the following standards and amendments or interpretations to existing standards that were not yet effective and not applied as at
September 30, 2017. The company does not anticipate early adoption of these standards at this time.  Standard

Description

Expected Impact

Effective Date 1IFRS 15, Revenue From
Contracts With Customers

Issued to provide guidance on the recognition of revenue from contracts with customers, including multiple-element arrangements and transactions not previously addressed comprehensively and to
enhance disclosures about revenue.

Based on the companys preliminary assessment, the impact of the standard on the amount of revenue recognized in a year is not expected to be significant. While the financial impact of
the standard continues to be assessed, the company anticipates additional disclosures, including remaining performance obligations and anticipated timing of revenue recognition.

January 1, 2018, applied retrospectively with certain practical expedients available.IFRS 9, Financial
Instruments

Issued to replace IAS 39, providing guidance on the classification, measurement and disclosure of financial instruments and introducing a new hedge accounting model.

The company is reviewing the standard to determine the potential impact, if any.

January 1, 2018, applied retrospectively with certain exceptions.Amendments to IFRS 2,
Share-Based Payment

Issued to provide clarification on the classification and measurement of share-based transactions. Specifically, accounting for cash-settled share-based transactions, share-based payment
transactions with a net settlement feature and modifications of share-based payment transactions that change classification from cash-settled to equity settled.

The company is reviewing the standard to determine the potential impact, if any.

January 1, 2018, with the option of retrospective or prospective application.IFRS 16, Leases

Issued to supersede IAS 17, IFRIC 4, SIC-15 and SIC-27, providing the principles for the recognition,
measurement, presentation and disclosure of leases. Lessees will be required to recognize assets and liabilities for the rights and obligations created by leases. Lessors will continue to classify leases using a similar approach to that of the
superseded standards but with enhanced disclosure to improve information about a lessors risk exposure, particularly to residual value risk.

The company is reviewing the standard to determine the potential impact.

January 1, 2019, applied retrospectively with certain practical expedients available.IFRIC 23, Uncertainty Over Income Tax Treatments

Issued to provide guidance on recognition and measurement of uncertain income tax treatments.

The company is reviewing the standard to determine the potential impact, if any.

January 1, 2019, applied retrospectively with certain practical expedients available.IFRS 17, Insurance Contracts

Issued to replace IFRS 4, providing guidance for the recognition, measurement, presentation and disclosure of insurance contracts giving consideration to: substantive rights and obligations
arising from a contract, law or regulation; enforceable rights and obligations in a contract; and whether contracts are written, oral or implied by customary business practices.

Although the company does not underwrite insurance contracts, all significant contracts will be reviewed under the scope of the standard to determine the potential impact, if any.

January 1, 2021, applied retrospectively with certain practical expedients available. 1Effective date for annual periods beginning on or after the stated date.  7

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

2. Segment Information The company
has three reportable operating segments: potash, nitrogen and phosphate. These segments are differentiated by the chemical nutrient contained in the products that each produces. The accounting policies of the segments are the same as those described
in Note 1 and are measured in a manner consistent with that of the financial statements. Inter-segment sales are made under terms that approximate market value. The companys operating segments have been determined based on reports, used to
make strategic decisions, that are reviewed by the Chief Executive Officer, assessed to be the companys chief operating decision-maker.  Three Months Ended September 30, 2017Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales  third party

$
595


$
288


$
351


$



$
1,234Freight, transportation and distribution  third party


(85
)


(33
)


(54
)






(172
)Net sales  third party


510



255



297



Cost of goods sold  third party


(256
)


(240
)


(336
)






(832
)Margin (cost) on inter-segment sales 1






6



(6
)






Gross margin


254



21



(45
)






230Items included in cost of goods sold, selling and administrative expenses or other
expenses:Depreciation and amortization


(72
)


(47
)


(52
)


(9
)


(180
)Impairment of property, plant and equipment










(29
)






(29
)Assets


9,811



2,502



2,250



2,788



17,351Cash outflows for additions to property, plant and
equipment


56



70



43



1



170 1Inter-segment net sales were $15.  Three Months Ended September 30, 2016Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales  third party

$
453


$
333


$
350


$



$
1,136Freight, transportation and distribution  third party


(73
)


(28
)


(53
)






(154
)Net sales  third party


380



305



297



Cost of goods sold  third party


(274
)


(243
)


(275
)






(792
)Margin (cost) on inter-segment sales 1






7



(7
)






Gross margin


106



69



15







190Items included in cost of goods sold, selling and administrative expenses or other expenses:Depreciation and amortization


(59
)


(53
)


(53
)


(18
)


(183
)Assets


9,752



2,496



2,350



2,753



17,351Cash outflows for additions to property, plant and
equipment


94



44



54



(1
)


191 1Inter-segment net sales were $14.  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

8




---

Nine Months Ended September 30, 2017Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales  third party

$
1,485


$
1,047


$
934


$



$
3,466Freight, transportation and distribution  third party


(199
)


(97
)


(125
)






(421
)Net sales  third party


1,286



950



809



Cost of goods sold  third party


(659
)


(789
)


(844
)






(2,292
)Margin (cost) on inter-segment sales 1






25



(25
)






Gross margin


627



186



(60
)






753Items included in cost of goods sold, selling and administrative expenses or other expenses:Depreciation and amortization


(183
)


(144
)


(166
)


(27
)


(520
)Impairment of property, plant and equipment










(29
)






(29
)Assets


9,811



2,502



2,250



2,788



17,351Cash outflows for additions to property, plant and
equipment


137



143



145



6



431 1Inter-segment net sales were $54.  Nine Months Ended September 30, 2016Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales  third party

$
1,227


$
1,144


$
1,027


$



$
3,398Freight, transportation and distribution  third party


(196
)


(88
)


(121
)






(405
)Net sales  third party


1,031



1,056



906



Cost of goods sold  third party


(714
)


(777
)


(835
)






(2,326
)Margin (cost) on inter-segment sales 1






27



(27
)






Gross margin


317



306



44







667Items included in cost of goods sold, selling and administrative expenses or other expenses:Depreciation and amortization


(159
)


(159
)


(165
)


(35
)


(518
)Share of Canpotexs 2 Prince Rupert project
exit costs


(33
)














(33
)Termination benefit costs


(32
)














(32
)Impairment of property, plant and equipment










(27
)






(27
)Assets


9,752



2,496



2,350



2,753



17,351Cash outflows for additions to property, plant and
equipment


259



178



142



69



648 1Inter-segment net sales were $48. 2Canpotex Limited (Canpotex).  9

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




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3. Other (Expenses) Income  Three Months Ended September 30


Nine Months Ended September 302017


2016


2017


2016Foreign exchange (loss) gain

$
(14
)

$
5


$
(22
)

$
(14
)Proposed Transaction costs (Note 13)


(10
)






(33
)


Other (expenses) income


(6
)






(1
)


10$
(30
)

$
5


$
(56
)

$
(4
) 4. Income Tax (Expense) Recovery A separate
estimated average annual effective tax rate was determined for each taxing jurisdiction and applied individually to the interim period pre-tax income of each jurisdiction.  Three Months Ended September 30


Nine Months Ended September 302017


2016


2017


2016Income tax (expense) recovery

$
(22
)

$
(2
)

$
27


$
(58
)Actual effective tax rate on ordinary earnings


17%



16%



10%



20%Actual effective tax rate including discrete items


29%



2%



(7%
)


17%Discrete tax adjustments that impacted the tax rate

$
(9
)

$
11


$
67


$
11 Significant items to note include the following:  ·

The actual effective tax rate on ordinary earnings decreased for the nine months ended September 30, 2017 compared to the same period last year due to different weightings between jurisdictions, most notably a
decline in the United States partially offset by an increase in Canada.  ·

In the second quarter of 2017, a discrete deferred tax recovery of $68 was recorded as a result of a Saskatchewan income tax rate decrease. This decreased the actual effective tax rate including discrete items for the
nine months ended September 30, 2017 by 18 percentage points.  ·

In the second quarter of 2016, a $10 discrete non-tax deductible impairment of the companys
available-for-sale investment in Sinofert was recorded. This increased the actual effective tax rate including discrete items for the nine months ended
September 30, 2016 by one percentage point. Income tax balances within the condensed consolidated statements of financial position were comprised
of the following:  Income Tax Assets (Liabilities)

Statements of Financial Position Location

September 30,2017


December 31,2016Current income tax assetsCurrent

Receivables

$
29


$
41Non-current

Other assets


59



67Deferred income tax assets

Other assets


10



10Total income tax assets



$
98


$
118Current income tax liabilitiesCurrent

Payables and accrued charges

$
(2
)

$
(25
)Non-current

Other non-current liabilities and deferred credits


(48
)


(43
)Deferred income tax liabilities

Deferred income tax liabilities


(2,375
)


(2,463
)Total income tax liabilities



$
(2,425
)

$
(2,531
)  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

10




---

5. Consolidated Statements of Cash Flow  Three Months Ended September 30


Nine Months Ended September 302017


2016


2017


2016Reconciliation of cash provided by operating activitiesNet income

$
53


$
81


$
403


$
277Adjustments to reconcile net income to cash provided by operating activitiesDepreciation and amortization


180



183



520



518Impairment of property, plant and equipment


29







29



27Net distributed (undistributed) earnings of equity-accounted investees


1



(23
)


(1
)


21Impairment of
available-for-sale investment














10Share-based compensation


2



3



9



8(Recovery of) provision for deferred income tax


(3
)


6



(99
)


5Pension and other post-retirement benefits


17



8



50



36Asset retirement obligations and accrued environmental costs


1



(12
)


3



13Other long-term liabilities and miscellaneous


10



1



21



(7
)Subtotal of adjustments


237



166



532



631Changes in non-cash operating working
capitalReceivables


(126
)


(66
)


(88
)


79Inventories


72



63



14



20Prepaid expenses and other current assets


11



6



(3
)


9Payables and accrued charges


46



45



(14
)


(109
)Subtotal of changes in
non-cash operating working capital


3



48



(91
)


(1
)Cash provided by operating
activities

$
293


$
295


$
844


$
907Supplemental cash flow disclosureInterest paid

$
30


$
31


$
133


$
124Income taxes paid (recovered)

$
14


$
(3
)

$
67


$
43 The following is a summary of changes in liabilities arising from financing activities:  December 31,2016


Cash Flows 1


Non-cashChanges


September 30,2017Short-term debt and current portion of long-term debt
1

$
884


$
(99
)

$



$
785Long-term debt


3,707



(1
)


3



3,709Total liabilities from financing activities

$
4,591


$
(100
)

$
3


$
4,494 1 Cash inflows and cash outflows arising from short-term debt transactions are
presented on a net basis.  11

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

6. Inventories  September 30,2017


December 31,2016Finished products

$
217


$
269Intermediate products


201



174Raw materials


73



75Materials and supplies


262



250$
753


$
768 The following items affected cost of goods sold during the period:  Three Months Ended September 30


Nine Months Ended September 302017


2016


2017


2016Expensed inventories before the following items

$
756


$
739


$
2,101


$
2,038Reserves, reversals and writedowns of inventories


11



2



44



21$
767


$
741


$
2,145


$
2,059 The carrying amount of inventory recorded at net realizable value was $79 as at September 30, 2017 (December 31, 2016  $47),
with the remaining inventory recorded at cost. 7. Share Capital Authorized The company is authorized to issue an unlimited number of common shares without par value and an unlimited number of first preferred shares. The common shares are
not redeemable or convertible. The first preferred shares may be issued in one or more series with rights and conditions to be determined by the Board of Directors. No first preferred shares have been issued. Issued  Number of
Common Shares


ConsiderationBalance  December 31, 2016


839,790,379


$
1,798Issued under option plans


114,900



2Issued for dividend reinvestment plan


258,719



5Balance  September 30,
2017


840,163,998


$
1,805 Dividends Declared The company declared dividends
per share of $0.10 (2016  $0.10) during the three months ended September 30, 2017 and $0.30 (2016  $0.60) during the nine months ended September 30, 2017. Under the terms of the agreement governing the Proposed Transaction, as described in Note 13, the company is permitted to pay quarterly dividends up to but not in excess
of levels existing at the time of signing such agreement.  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

12




---

8. Share-Based Compensation During the three and nine months ended September 30, 2017, the company issued stock options and performance share units (PSUs) to eligible employees
under the 2016 Long-Term Incentive Plan (LTIP). Information on stock options and PSUs is summarized below:  LTIP


Expense for all employee share-based compensation plansUnitsGranted
in 2017


UnitsOutstandingas atSeptember 30, 2017


Three Months EndedSeptember 30


Nine Months EndedSeptember 302017


2016


2017


2016Stock options


1,482,829



4,503,104


$
1


$
2


$
6


$
8Share-settled PSUs


555,918



935,570



2



1



4



3Cash-settled PSUs


858,684



1,561,678



6



3



8



7$
9


$
6


$
18


$
18 Weighted average grant date fair value per unit for stock options and share-settled PSUs granted during 2017 was $4.36 and $19.93,
respectively.  Stock Options Under the LTIP, stock options generally vest and become exercisable on the third anniversary of the grant date, subject to continuous employment or retirement, and have a
maximum term of 10 years. The weighted average fair value of stock options granted was estimated as of the date of grant using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions:  Exercise price per option

$
18.71Expected annual dividend per share

$
0.40Expected volatility


29%Risk-free interest rate


1.67%Expected life of options


5.7 years
 Performance Share Units PSUs granted under the LTIP in 2017 vest based on the achievement of performance metrics, over three years, comprising 1) the relative ranking of the companys total
shareholder return compared with a specified peer group using a Monte Carlo simulation and 2) the outcome of the companys cash flow return on investment compared with its weighted average cost of capital. Compensation cost is measured based on
1) the grant date fair value of the units, adjusted for the companys best estimate of the outcome of non-market vesting conditions 1 at the end of
each period for share-settled PSUs and 2) period-end fair value of the awards for cash-settled PSUs. PSUs granted under the LTIP settle in shares for grantees who are subject to the companys share
ownership guidelines and in cash for all other grantees. 1 The companys cash flow return on
investment compared with its weighted average cost of capital is a non-market vesting condition as performance is not tied to the companys share price or relative share price.
   13

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




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9. Financial Instruments Fair Value Estimated fair values for financial instruments are designed to approximate amounts for which the instruments could be exchanged
in a current arms-length transaction between knowledgeable, willing parties. The valuation policies and procedures for financial reporting purposes are determined by the companys finance
department. Financial instruments included in the unaudited interim condensed consolidated statements of financial position are measured either at fair value or
amortized cost. The tables below explain the valuation methods used to determine the fair value of each financial instrument and its associated level in the fair value hierarchy.  Financial Instruments Measured at Fair Value

Fair Value MethodCash and cash equivalents

Carrying amount (approximation to fair value assumed due to short-term nature).Available-for-sale investments

Closing bid price of the common shares (Level 1) as at the statements of financial position dates.Foreign currency derivatives not traded in an active
market

Quoted forward exchange rates (Level 2) as at the statements of financial position dates.Natural gas swaps not traded in an active
market

A discounted cash flow model.11   Inputs included contractual cash flows based on prices for natural gas futures contracts, fixed prices and notional volumes specified by the swap contracts, the time value of money,
liquidity risk, the companys own credit risk (related to instruments in a liability position) and counterparty credit risk (related to instruments in an asset position). Futures contract prices used as inputs in the model were supported by
prices quoted in an active market and therefore categorized in Level 2.Financial Instruments Measured at Amortized Cost

Fair Value MethodReceivables, short-term debt and payables and
accrued charges

Carrying amount (approximation to fair value assumed due to short-term nature).Long-term debt senior notes

Quoted market prices (Level 1 or 2 depending on the market liquidity of the debt).Other long-term debt instruments

Carrying amount. Presented below is a comparison of the fair value of the companys senior notes to their carrying values.  September 30, 2017


December 31, 2016Carrying Amount ofLiability 1


Fair Value ofLiability


Carrying Amount ofLiability 1


Fair Value ofLiabilityLong-term debt senior notes

$
4,205


$
4,530


$
4,202


$
4,384 1
Includes net unamortized debt issue costs.  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

14




---

The following table presents the companys fair value hierarchy for financial assets and financial liabilities
carried at fair value on a recurring basis:  Fair Value Measurements atReporting Dates Using:CarryingAmount ofAsset (Liability)


Quoted Pricesin ActiveMarkets forIdentical Assets(Level 1)1


SignificantOtherObservable Inputs(Level 2)1,2September 30, 2017Derivative instrument assetsNatural gas derivatives

$
8


$



$
8Available-for-sale
investments 3


1,068



1,068



Derivative instrument liabilitiesNatural gas derivatives


(73
)






(73
)December 31, 2016Derivative instrument assetsNatural gas derivatives

$
6


$



$
6Available-for-sale
investments 3


940



940



Derivative instrument liabilitiesNatural gas derivatives


(97
)






(97
) 1
During the nine months ended September 30, 2017 and twelve months ended December 31, 2016, there were no transfers between Level 1 and Level 2. The companys policy is to recognize transfers at
the end of the reporting period. 2
During the nine months ended September 30, 2017 and twelve months ended December 31, 2016, there were no amounts categorized as Level 3. 3
Available-for-sale investments are comprised of shares in ICL, Sinofert and other.  10. Seasonality The companys
sales of fertilizer can be seasonal. Typically, fertilizer sales are highest in the second quarter of the year, due to the Northern Hemispheres spring planting season. However, planting conditions and the timing of customer purchases will vary
each year, and fertilizer sales can be expected to shift from one quarter to another. Feed and industrial sales are more evenly distributed throughout the year. 11. Contingencies and Other Matters Canpotex PCS is a shareholder in Canpotex, which markets Canadian potash offshore. Should any operating losses or other liabilities be incurred by Canpotex, the shareholders have
contractually agreed to reimburse it for such losses or liabilities in proportion to each shareholders productive capacity. Through September 30, 2017, there were no such operating losses or other liabilities. Mining Risk The risk of underground water inflows, as with most other
underground risks, is currently not insured.
 Legal and Other Matters The
company is engaged in ongoing site assessment and/or remediation activities at a number of facilities and sites, and anticipated costs associated with these matters are added to accrued environmental costs in the manner previously described in Note
18 to the companys 2016 annual consolidated financial statements. This includes matters related to investigation of potential brine migration at certain of the potash sites. The following environmental site assessment and/or remediation
matters have uncertainties that may not be fully reflected in the amounts accrued for those matters: Nitrogen and Phosphate  ·

The US Environmental Protection Agency (USEPA) has identified PCS Nitrogen, Inc. (PCS Nitrogen) as a
potentially responsible party at the Planters Property or Columbia Nitrogen site in Charleston, South Carolina (the Charleston Site). PCS Nitrogen is subject to a final judgment by the US District Court for the District of South Carolina
allocating 30 percent of the liability for response costs at the Charleston Site to PCS Nitrogen, as well as a proportional share of any costs that cannot be recovered from another responsible party. In December 2013, the USEPA issued an order
to PCS Nitrogen and four other respondents requiring them jointly and severally to conduct certain cleanup work at the Charleston Site and reimburse the USEPAs costs for overseeing that work. PCS Nitrogen is currently performing
   15

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

the work required by the USEPA order. The USEPA also has requested reimbursement of approximately $3 of previously incurred response costs. The ultimate amount of liability for PCS Nitrogen
depends upon, among other factors, the final outcome of litigation to impose liability on additional parties, the amount needed for remedial activities, the ability of other parties to pay and the availability of insurance.  ·

PCS Phosphate has been identified as a responsible party at the Ward Transformer Superfund Site in Raleigh, North Carolina (the Raleigh Site). In the past, PCS Phosphate worked with certain other responsible
parties to address PCB soil contamination at the Raleigh Site pursuant to an agreement with the USEPA. The response actions are nearly complete at an estimated cost of $80, including anticipated remaining work on the Raleigh Site. The USEPA also
sought remediation in certain downstream areas that are referred to as Operable Unit 1. PCS Phosphate signed a Consent Decree with the USEPA for Operable Unit 1 in September 2016 that is not expected to require PCS Phosphate to incur any
additional remediation costs. Litigation for the recovery of incurred cleanup costs was resolved through mediation and entry of the Consent Decree.  ·

In 1996, PCS Nitrogen Fertilizer, L.P. (PCS Nitrogen Fertilizer), then known as Arcadian Fertilizer, L.P., entered into a Consent Order (the Order) with the Georgia Environmental Protection
Division (GEPD) in conjunction with PCS Nitrogen Fertilizers acquisition of real property in Augusta, Georgia. Under the Order, PCS Nitrogen Fertilizer is required to perform certain activities to investigate and, if necessary,
implement corrective measures for substances in soil and groundwater. The investigation has proceeded and the results have been presented to the GEPD. Two interim corrective measures for substances in groundwater have been proposed by PCS Nitrogen
Fertilizer and approved by the GEPD. PCS Nitrogen Fertilizer is implementing the approved interim corrective measures, which may be modified by PCS Nitrogen Fertilizer from time to time, but it is unable to estimate with reasonable certainty the
total cost of its correction action obligations under the Order at this time. Based on current information and except for the uncertainties described
in the preceding paragraphs, the company does not believe that its future obligations with respect to these facilities and sites are reasonably likely to have a material adverse effect on its consolidated financial statements. Other legal matters with significant uncertainties include the following: Nitrogen and Phosphate  ·

The USEPA has an ongoing initiative to evaluate implementation within the phosphate industry of a particular exemption for mineral processing wastes under the hazardous waste program. In connection with this
industry-wide initiative, the USEPA conducted inspections at numerous phosphate operations and notified the
 company of alleged violations of the US Resource Conservation and Recovery Act (RCRA) at its plants in Aurora, North Carolina; Geismar, Louisiana; and White Springs, Florida. The
company has entered into RCRA 3013 Administrative Orders on Consent and has performed certain site assessment activities at all of these plants. At this time, the company does not know the scope of action, if any, that may be required. As to the
alleged RCRA violations, the company continues to participate in settlement discussions with the USEPA but is uncertain if any resolution will be possible without litigation, or, if litigation occurs, what the outcome would be. The company routinely
monitors public information about the impacts of the initiative on other industry members, and it regularly considers this information in establishing the appropriate asset retirement obligations and accruals.  ·

In August 2015, the USEPA finalized amendments to the hazardous air pollutant emission standards for phosphoric acid manufacturing and phosphate fertilizer production (Final Rule). The Final Rule includes
certain new requirements for monitoring and emissions that are infeasible for the company to satisfy in a timely manner. As a result, in October 2015, the company petitioned the USEPA to reconsider certain aspects of the Final Rule and separately
asked the US Court of Appeals for the District of Columbia Circuit to review the Final Rule. Subsequent to these requests, required emissions testing at our Aurora facility in 2016 indicated alleged exceedances of the mercury emission limits that
were established by the Final Rule. The company has communicated with the relevant agencies about this issue and supplemented its filings with the USEPA and the court to include reconsideration and review of the mercury emission limits. The facility
also entered into an agreed order with the North Carolina Department of Environmental Quality in November 2016 to resolve the alleged mercury exceedances and provide a plan and schedule for evaluating alternative compliance strategies. In September
2017, the USEPA issued amendments to the Final Rule to address certain monitoring requirements raised in the companys request for reconsideration. The company is evaluating the amendments, which do not address the mercury emission limits,
before determining whether to proceed with the court action, which is being held in abeyance pending the outcome of the USEPA reconsideration proceeding. Given the pending legal issues and the companys evaluation of alternative compliance
strategies, the resulting cost of compliance with the various provisions of the Final Rule cannot be predicted with reasonable certainty at this time. General  ·

The countries where we operate are parties to the Paris Agreement adopted in December 2015 pursuant to the United Nations
Framework Convention on Climate Change. Each country that is a party to the Paris Agreement submitted an Intended Nationally Determined Contribution (INDC) toward the control of greenhouse gas emissions. The impacts of these INDCs on the
companys operations cannot be determined with any certainty at this time. In October 2016, the Canadian
   PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

16




---

government announced a national plan to put a price of $10 per tonne on carbon emissions beginning in 2018 and increasing by $10 per tonne each year through 2022, to be implemented either through
a carbon tax or a cap and trade program at the election of each province. The Province of Saskatchewan is considering various alternative approaches to address the national plan. Other countries where the company operates have not at this time
announced similar regulatory plans that would appear to have a significant impact on company operations. The company is monitoring these developments and their future effect on its operations cannot be determined with certainty at this time. In addition, various other claims and lawsuits are pending against the company in the ordinary course of business. While it is not possible to
determine the ultimate outcome of such actions at this time, and inherent uncertainties exist in predicting such outcomes, it is the companys belief that the ultimate resolution of such actions is not reasonably likely to have a material
adverse effect on its consolidated financial statements. The breadth of the companys operations and the global complexity of tax regulations require
assessments of uncertainties and judgments in estimating the taxes it will ultimately pay. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions, outcomes of tax litigation and
resolution of disputes arising from federal, provincial, state and local tax audits. The resolution of these uncertainties and the associated final taxes may result in adjustments to the companys tax assets and tax liabilities. The company owns facilities that have been either permanently or indefinitely shut down. It expects to incur nominal annual expenditures for site security and other
maintenance costs at certain of these facilities. Should the facilities be dismantled, certain other shutdown-related costs may be incurred. Such costs are not expected to have a material adverse effect on the companys consolidated financial
statements and would be recognized and recorded in the period in which they are incurred.
 12. Related Party Transactions The
company sells potash from its Canadian mines for use outside Canada and the US exclusively to Canpotex. Sales are at prevailing market prices and are settled on normal trade terms. Sales to Canpotex for the three months ended September 30, 2017
were $289 (2016  $221) and the nine months ended September 30, 2017 were $763 (2016  $559). At September 30, 2017, $150 (December 31, 2016  $141) was owing from Canpotex. 13. Proposed Transaction with Agrium Inc. On
September 11, 2016, the company entered into an Arrangement Agreement with Agrium Inc. (Agrium) pursuant to which the company and Agrium have agreed to combine their businesses (the Proposed Transaction) in a merger of
equals transaction to be implemented by way of a plan of arrangement under the Canada Business Corporations Act. On November 3, 2016, the Proposed Transaction was overwhelmingly approved by shareholders of both companies. On November 7,
2016, the Ontario Superior Court of Justice issued a final order approving the Proposed Transaction. The companies have since received unconditional regulatory clearance in Canada, Brazil and Russia and conditional approval from India requiring
PotashCorps commitment to divest its minority shareholdings in Arab Potash Company (APC), ICL and Sociedad Quimica y Minera de Chile S.A. (SQM) within a period of 18 months from October 18, 2017. The regulatory
review and approval process continues in the U.S. and China. Upon the closing of the Proposed Transaction, the new parent company will be named Nutrien Ltd. (Nutrien). The Proposed Transaction is currently anticipated to be completed by
the end of the fourth quarter of 2017 and is subject to customary closing conditions, including remaining regulatory approvals. Upon the closing of the Proposed
Transaction, the company and Agrium will become indirect, wholly owned subsidiaries of Nutrien. PotashCorp shareholders will own approximately 52 percent of Nutrien, and Agrium shareholders will own approximately 48 percent.
   17

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations (in US dollars) The following discussion and analysis is the responsibility of management and is as at October 31, 2017. The Board of Directors (Board) carries out its
responsibility for review of this disclosure principally through its audit committee, comprised exclusively of independent directors. The audit committee reviews and, prior to its publication, approves this disclosure, pursuant to the authority
delegated to it by the Board. The term PCS refers to Potash Corporation of Saskatchewan Inc. and the terms we, us, our, PotashCorp and the company refer to PCS and, as
applicable, PCS and its direct and indirect subsidiaries as a group. Additional information relating to PotashCorp (which, except as otherwise noted, is not incorporated by reference herein), including our Annual Report on Form 10-K for the year ended December 31, 2016 (2016 Form 10-K), can be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. The company is a foreign
private issuer under the rules and regulations of the US Securities and Exchange Commission (the SEC); however, it currently files voluntarily on the SECs domestic forms. POTASHCORP AND OUR OPERATING ENVIRONMENT PotashCorp is
the worlds largest crop nutrient company by capacity, producing the three primary crop nutrients: potash (K), nitrogen (N) and phosphate (P) for use in the production of fertilizer, industrial and animal feed products. Our Canadian potash operations  the primary focus and namesake of our company  represent approximately one-fifth of
global capacity. To enhance our global footprint, we also have investments in four potash-related businesses in Latin America, the Middle East and Asia. We complement our potash assets with focused positions in nitrogen and phosphate. Detailed descriptions of our operating environments can be found on pages 18 and 19 (potash), 20 and 21 (nitrogen) and 22 and 23 (phosphate) in our 2016 Annual Integrated
Report (2016 AIR). GOVERNANCE In fulfilling its
oversight responsibilities, our Boards commitment to excellence in governance permeates our overall approach to business. Our Board fosters a culture that encourages us to uphold the highest ethical standards and strive for excellence in our
business practices in order to build long-term value for all our stakeholders.
 There have been no significant changes to how we approach governance from that described in our 2016 AIR (see pages 24
to 27). STRATEGY AND PERFORMANCE Creating superior
shareholder value is essential to ensure we can make plentiful possible for all our stakeholders. Strong and sustainable earnings growth  coupled with a premium valuation multiple  rewards our shareholders and, at the same time, allows
us to focus on our broader social and environmental responsibilities. Our seven strategic priorities determine where we focus our efforts to create long-term value for all those associated with our business. Our long-term objective is to create
superior shareholder value by: growing earnings and cash flow while minimizing volatility; protecting and enhancing a premium valuation multiple; and maintaining the trust and support of our stakeholders. Financially, we prioritize earnings growth and investment opportunities in potash, while complementing that business with other best-in-class assets. Our strategic priorities, depicted below and described in further detail along with key target metrics on pages 30 to 47 in our 2016 AIR, did not change through the third quarter of
2017.  LOGO
   PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

18




---

PENDING MERGER OF EQUALS WITH AGRIUM INC. During the third quarter of 2016, PotashCorp entered into an Arrangement Agreement (the Arrangement Agreement) with Agrium Inc. (Agrium) to combine their businesses (the
Proposed Transaction) in a merger of equals transaction to be implemented by way of a plan of arrangement under the Canada Business Corporations Act. During the third quarter of 2017, the Canadian Competition Bureau approved the Proposed
Transaction. In October 2017, a conditional approval was obtained from India requiring the companies commitment to divest three of PotashCorps minority shareholdings. From a regulatory standpoint, we continue to cooperate with the
various enforcement agencies in their reviews. We have received unconditional regulatory clearances in Canada, Brazil and Russia and a conditional approval from India. We continue to work on obtaining approval from China and the US.
 The creation of Nutrien Ltd. (Nutrien) pursuant to the Proposed Transaction is designed to: 1) bring together world-class
nutrient production assets and retail distribution, providing an integrated platform with multiple paths for growth; 2) create up to $500 million of annual run-rate operating synergies within 24
months of closing; 3) enhance financial flexibility through the use of a strong balance sheet and improved cash flows, enabling the support of growth initiatives and shareholder returns; and 4) leverage best-in-class leadership and governance through the combination of two experienced teams that are focused on creating long-term value. For further discussion of the Proposed Transaction, please refer to Note 13 of the financial statements in this Form 10-Q, our
Current Reports on Form 8-K and the documents filed therewith, filed with the SEC on September 12, 2016 and on October 6, 2016 and the various filings with Canadian provincial securities commissions,
including the joint information circular of PCS and Agrium dated October 3, 2016.
   RISK In our 2016 AIR, we provide an overview of our approach to risk (page 28), explain how we use a risk management-ranking methodology to assess the key risks specific to
our company (page 49) and provide a description of, management approach to, and any significant developments for, each key risk (pages 50 to 55). Our
risk-ranking matrix, in terms of residual severity of consequence and likelihood, is displayed below.  LOGO  19

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

Key risks with rankings unchanged from our 2016 AIR are as follows:  Risk

Risk
Ranking

Associated
Strategies1

Risk

Risk
Ranking

Associated
Strategies1Extreme loss

B

LOGO

International operations and non-operated investments

C

LOGOOffshore potash sales and distribution

B

LOGO

Safety, health and security

C

LOGOCompetitive supply

B

LOGO

Stakeholder support for our business plans

C

LOGOGlobal potash demand

B

LOGO

Sustaining growth

C

LOGOCyber security

C

LOGO

Trinidad natural gas supply

C

LOGOEnvironment

C

LOGO

Capital management

D

LOGO Key risk with ranking that has changed since our 2016 AIR is as follows:  Risk

Risk
Ranking

Associated
Strategies1

DevelopmentsRealization of asset values

C

LOGO

The overall risk ranking has increased from D to C. We expect to perform an assessment of certain aspects of our operations in the fourth quarter of 2017, the outcome of which could result in
us not being able to recover all or a portion of our investment in certain assets. 1 Brighter sections indicate the strategic priority (described on page 18 of
this Form 10-Q) impacted by the risk. Faded sections mean the strategic priority is not significantly affected by the risk.  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

20




---

KEY PERFORMANCE DRIVERS  PERFORMANCE COMPARED TO TARGETS Through our integrated value model, we set, evaluate and refine our targets to drive improvements that benefit all those impacted by our business. We demonstrate our
accountability by tracking and reporting our performance against targets related to each strategic priority set out on pages 32 to 47 in our 2016 AIR. A summary of our progress against selected strategic priorities and representative annual targets
is set out below.  Strategic Priority

Representative 2017 Annual Target

Performance to September 30, 2017Portfolio & Return Optimization

Exceed total shareholder return (TSR) performance for our sector and the DAXglobal Agribusiness Index.

PotashCorps TSR was 9 percent in the first nine months of 2017 compared to our sectors weighted average return based on market capitalization1 of 18 percent and the DAXglobal Agribusiness Index weighted average return (based on market capitalization) of 11 percent.Operational Excellence

Achieve a 95 percent ammonia reliability rate for our nitrogen division.

Our ammonia reliability rate was 94 percent for the first nine months of 2017.People Development

Maintain an annual employee turnover rate of 5 percent or less.

Employee turnover rate on an annualized basis for the first nine months of 2017 was 4 percent.Safety & Health Excellence

Achieve zero life-altering injuries at our sites.

There were no life-altering injuries at our sites during the first nine months of 2017.Reduce total site recordable injury rate to 0.75 (or lower) and total lost-time injury rate to 0.07 (or lower).

During the first nine months of 2017, total site recordable injury rate was 0.85 and total lost-time injury rate was 0.12.Environmental Excellence

By 2018, reduce environmental incidents (releases, permit excursions and spills) by 40 percent from 2014 levels.

Annualized total environmental incidents were down 67 percent through the first nine months of 2017 compared to 2014 annual levels. Compared to the first nine months of 2016, total
reportable incidents were down 65 percent. 1 TSRs are based on the currencies of the primary exchanges in which the
relevant shares are traded. PERFORMANCE OVERVIEW This discussion and analysis are based on the companys unaudited interim condensed consolidated financial statements included in Part I of this Quarterly Report on
Form 10-Q (financial statements in this Form 10-Q) based on International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS),
unless otherwise stated. All references to per-share amounts pertain to diluted net income per share. For an understanding of
trends, events, uncertainties and the effect of critical accounting estimates on our results and financial condition, this Form 10-Q should be read carefully, together with our 2016 AIR. REVISED ANNUAL EARNINGS GUIDANCE1 AND FIRST NINE MONTHS 2017 RESULTS  Revised Annual
Guidance1

First Nine MonthsActual ResultsEarnings per share

$  0.48  $  0.54

$  0.48 1 Revised on October 26, 2017.  21

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




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OVERVIEW OF ACTUAL RESULTS  Three Months Ended September 30


Nine Months Ended September 30Dollars (millions), except per-share amounts

2017


2016


Change


% Change


2017


2016


Change


% ChangeSales

$
1,234


$
1,136


$
98



9


$
3,466


$
3,398


$
68



2Gross margin


230



190



40



21



753



667



86



13Operating income


135



138



(3
)


(2
)


556



496



60



12Net income


53



81



(28
)


(35
)


403



277



126



45Net income per share  diluted


0.06



0.10



(0.04
)


(40
)


0.48



0.33



0.15



45Other comprehensive income (loss)


42



21



21



100



150



(152
)


302



n/m n/m = not meaningful  LOGO

LOGO  Earnings in the third quarter of 2017 were lower than the same period of 2016 due primarily to higher gross margin in
potash being more than offset by lower gross margins in nitrogen and phosphate, higher income tax expense and other expenses (other income in 2016). Earnings in the first nine months of 2017 were higher than the same period of 2016 due primarily to
higher gross margin in potash and income tax recovery in 2017, compared to income tax expenses in 2016, which more than offset lower gross margins in nitrogen and phosphate and higher other expenses relating to the Proposed Transaction. Global potash prices improved for the fifth consecutive quarter as agronomic need and affordability led to strong demand in all major markets. Shipments to China and
India accelerated following contract settlements early in the third quarter while deliveries to Latin America continued at a record pace. In North America, dealers worked to position product in anticipation of a strong fall application season,
leading to elevated shipment levels. In nitrogen, tighter market fundamentals late in the quarter supported a recovery in prices from multi-year lows. This was most
evident in urea markets, where seasonally strong demand and lower Chinese exports led to higher prices. Ammonia and UAN
 prices also strengthened, but remained volatile and well below 2016s third quarter levels, as new expansions began to ramp up, most notably in the US. Phosphate fertilizer markets witnessed moderate appreciation during the quarter, supported by stronger engagement from India and weather-related supply outages that
offset the impact of competition from increased Chinese exports. While prices for industrial products were relatively flat during the quarter, feed prices remained under pressure due to the impact of increased supply from offshore producers, keeping
them well below prior-year levels. Other comprehensive income for the third quarter of 2017 was primarily the result of an increase in the fair value of our
investment in Sinofert Holdings Limited (Sinofert) more than offsetting a decrease in the fair value of our investment in Israel Chemicals Ltd. (ICL). Other comprehensive income for the first nine months of 2017 was primarily the result of increases
in the fair values of our investments in ICL and Sinofert. Other comprehensive income for the third quarter of 2016 was primarily the result of increases in the fair value of our investments in ICL and Sinofert. Other comprehensive loss for the
first nine months of 2016 was primarily impacted by a net actuarial loss resulting from a remeasurement of our defined benefit plans and decreases in the fair value of our investments in ICL and Sinofert.
   PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

22




---

OPERATING SEGMENT REVIEW We report
our results (including gross margin) in three business segments: potash, nitrogen and phosphate as described in Note 2 to the financial statements in this Form 10-Q. Our reporting structure reflects how
we manage our business and how we classify our operations for planning and measuring performance. We include net sales in segment disclosures in the financial statements in this Form 10-Q pursuant to IFRS,
which require segmentation based upon our internal organization and reporting of revenue and profit measures. As a component of gross margin, net sales (and the related per-tonne amounts) are the primary
revenue measures we use and review in making decisions about operating matters on a business segment basis. These decisions include assessments about potash, nitrogen and phosphate performance and the resources to be allocated to these segments. We
also use net sales (and the related per-tonne amounts) for business planning and monthly forecasting. Net sales are calculated as sales revenues less freight, transportation and distribution expenses. Realized
prices refer to net sales prices. Our discussion of segment operating performance is set out below and includes nutrient product and/or market performance results,
where applicable, to give further insight into these results.  LOGO  23

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

POTASH PERFORMANCE FINANCIAL PERFORMANCE  Three Months Ended September 30Dollars (millions)


Tonnes (thousands)


Average per Tonne 12017


2016


% Change


2017


2016


% Change


2017


2016


% ChangeManufactured productNet salesNorth America

$
220


$
158



39



1,123



1,019



10


$
195


$
155



26Offshore


290



221



31



1,727



1,511



14


$
168


$
146



15510



379



35



2,850



2,530



13


$
179


$
150



19Cost of goods sold


(252
)


(269
)


(6
)













$
(89
)

$
(106
)


(16
)Gross margin


258



110



135














$
90


$
44



105Other miscellaneous and purchased product gross margin2


(4
)


(4
)


Gross Margin

$
254


$
106



140














$
89


$
42



112 1
Rounding differences may occur due to the use of whole dollars in per-tonne calculations. 2
Comprised of net sales $NIL (2016  $1 million) less cost of goods sold $4 million (2016  $5 million).  Nine Months Ended September 30Dollars (millions)


Tonnes (thousands)


Average per Tonne12017


2016


% Change


2017


2016


% Change


2017


2016


% ChangeManufactured productNet salesNorth America

$
518


$
463



12



2,633



2,647



(1
)

$
197


$
175



13Offshore


764



561



36



4,756



3,788



26


$
161


$
148



91,282



1,024



25



7,389



6,435



15


$
173


$
159



9Cost of goods sold


(641
)


(690
)


(7
)













$
(87
)

$
(107
)


(19
)Gross margin


641



334



92














$
86


$
52



65Other miscellaneous and purchased product gross margin 2


(14
)


(17
)


(18
)Gross Margin

$
627


$
317



98














$
85


$
49



73 1
Rounding differences may occur due to the use of whole dollars in per-tonne calculations. 2
Comprised of net sales $4 million (2016  $7 million) less cost of goods sold $18 million (2016  $24 million).  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

24




---

Potash gross margin variance was attributable to:  Three Months Ended
September 30 2017 vs. 2016


Nine Months Ended
September 30 2017 vs. 2016Change in
Prices/Costs








Change in
Prices/CostsDollars (millions)

Change inSales Volumes


Net Sales


Cost ofGoods Sold


Total


Change inSales Volumes


Net Sales


Cost ofGoods Sold


TotalManufactured productNorth America

$
8


$
42


$
26


$
76






$
(1
)

$
57


$
80


$
136Offshore


9



38



25



72







60



60



51



171Change in market mix


(3
)


3















7



(11
)


4



Total manufactured product

$
14


$
83


$
51


$
148






$
66


$
106


$
135


$
307Other miscellaneous and purchased product


































3Total













$
148


















$
310 Sales to major offshore markets by Canpotex1 were as follows:  Three Months Ended September 30


Nine Months Ended September 30Percentage of Sales Volumes





Percentage of Sales Volumes2017


2016


% Change


2017


2016


% ChangeOther Asian markets 2


26



32



(19
)


34



38



(11
)Latin America


30



35



(14
)


32



37



(14
)China


23



11



109



15



10



50India


14



19



(26
)


12



9



33Other markets


7



3



133



7



6



17100



100







100



100 1
Canpotex Limited (Canpotex). 2
All Asian markets except China and India.  25

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

The most significant contributors to the change in total gross margin were as follows (direction of arrows refers to
impact on gross margin while ●symbol is neutral):  Sales Volumes

Net Sales Prices

Cost of Goods SoldQuarter over Quarter

LOGO

Record sales volumes were driven by an anticipated strong fall application season in North America and
strong offshore shipments were led by increased demand in all key markets.

LOGO

Our average realized price increased as prices in all markets continued to strengthen due to strong
demand.

LOGO  LOGO

Costs were lower in 2017 due to improvements in our portfolio optimization effort, including a greater
share of production coming from our lower-cost mines, particularly Rocanville.  Costs
were also lower in 2017 due to annual maintenance at Allan being completed in the second quarter of 2017 compared to the third quarter in 2016 and due to a shorter shutdown at Rocanville than in 2016.Year over Year

LOGO  
●

Offshore volumes were higher as strong affordability and agronomic need supported stronger demand in all key markets.
 North American volumes were flat as demand remained strong similar to 2016.

LOGO   LOGO

Prices were higher due to strong demand supporting a continued recovery in most global markets.
 Offshore prices were also higher due to 2016 results reflecting the impact of our share of
Canpotexs project exit costs following its decision not to proceed with development of an export terminal in Prince Rupert, British Columbia.

LOGO  LOGO  LOGO

Costs were lower in 2017 due to improvements in our portfolio optimization effort, including a greater share of production coming
from our lower-cost mines, particularly Rocanville.  Costs were also lower in 2017 as the
first quarter of 2016 included costs associated with the indefinite suspension of potash operations at Picadilly. 
Offshore cost of goods sold variance was less positive than North America as a relatively higher percentage of products sold was produced at higher-cost
mines.  LOGO  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

26




---

NON-FINANCIAL PERFORMANCE The most significant contributors to the change in our non-financial performance highlights were as follows: QUARTER OVER QUARTER  LOGO  Production increased as a result of stronger demand, the completion of the Rocanville expansion and ramp up, and an
increase in our Canpotex sales entitlement.
 The eight recordable injuries in 2017, compared to 13 in 2016, resulted in a lower total recordable injury rate. There were two lost-time injuries in 2017, compared to none in 2016.
 There were no significant changes between 2016 and 2017.
 In 2017, we experienced no environmental incidents. In 2016, we experienced one release of oil/grease into a containment
pond and one wetland permit exceedance for topsoil. Waste, as defined in our 2016 AIR, increased quarter over quarter due primarily to the increase in production.
   27

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

YEAR OVER YEAR  LOGO  Production increased as a result of stronger demand, the completion of the Rocanville expansion and ramp up, and an
increase in our Canpotex sales entitlement.
 There were no significant changes to the total recordable injury rate between 2016 and 2017. There were four lost-time injuries in 2017, compared to two in 2016.
 There were no significant changes between 2016 and 2017.
 In 2017, we experienced two environmental incidents, consisting of two potash spills. In 2016, we experienced six
environmental incidents: two potash spills, one brine spill, one water release with high suspended solids, one oil/grease spill and one wetland permit exceedance for topsoil. Waste, as defined in our 2016 AIR, increased period over period due primarily to the increase in production.
   PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

28




---

NITROGEN PERFORMANCE FINANCIAL PERFORMANCE  Three Months Ended September 30Dollars (millions)


Tonnes (thousands)


Average per Tonne 12017


2016


% Change


2017


2016


% Change


2017


2016


% ChangeManufactured product 2Net salesAmmonia

$
108


$
145



(26
)


552



576



(4
)

$
195


$
252



(23
)Urea


62



66



(6
)


270



290



(7
)

$
230


$
226



2Solutions, nitric acid, ammonium nitrate


95



103



(8
)


751



700



7


$
127


$
148



(14
)265



314



(16
)


1,573



1,566






$
168


$
200



(16
)Cost of goods sold


(247
)


(248
)

















$
(157
)

$
(158
)


(1
)Gross margin


18



66



(73
)













$
11


$
42



(74
)Other miscellaneous and purchased product gross margin 3


3



3



Gross Margin

$
21


$
69



(70
)













$
13


$
44



(70
) 1
Rounding differences may occur due to the use of whole dollars in per-tonne calculations. 2
Includes inter-segment ammonia sales, comprised of: net sales $15 million, cost of goods sold $9 million and 46,000 sales tonnes (2016  net sales $13 million, cost of goods sold $7 million and
37,000 sales tonnes). Inter-segment profits are eliminated on consolidation. 3
Comprised of third-party and inter-segment sales, including: third-party net sales $5 million and cost of goods sold $2 million (2016  net sales $4 million and cost of goods sold $2 million)
and inter-segment sales $NIL and cost of goods sold $NIL (2016  net sales $1 million and cost of goods sold $NIL). Inter-segment sales are eliminated on consolidation.  Nine Months Ended September 30Dollars (millions)


Tonnes (thousands)


Average per Tonne 12017


2016


% Change


2017


2016


% Change


2017


2016


% ChangeManufactured product 2Net salesAmmonia

$
448


$
510



(12
)


1,700



1,720



(1
)

$
264


$
296



(11
)Urea


220



223



(1
)


883



857



3


$
250


$
260



(4
)Solutions, nitric acid, ammonium nitrate


311



355



(12
)


2,151



2,160






$
144


$
165



(13
)979



1,088



(10
)


4,734



4,737






$
207


$
230



(10
)Cost of goods sold


(803
)


(794
)


1














$
(170
)

$
(168
)


1Gross margin


176



294



(40
)













$
37


$
62



(40
)Other miscellaneous and purchased product gross margin 3


10



12



(17
)Gross Margin

$
186


$
306



(39
)













$
39


$
65



(40
) 1
Rounding differences may occur due to the use of whole dollars in per-tonne calculations. 2
Includes inter-segment ammonia sales, comprised of: net sales $54 million, cost of goods sold $29 million and 141,000 sales tonnes (2016  net sales $47 million, cost of goods sold $21 million
and 116,000 sales tonnes). Inter-segment profits are eliminated on consolidation. 3
Comprised of third-party and inter-segment sales, including: third-party net sales of $25 million and cost of goods sold $15 million (2016  net sales $15 million and cost of goods sold
$4 million) and inter-segment net sales of $NIL and cost of goods sold $NIL (2016  net sales $1 million and cost of goods sold $NIL). Inter-segment sales are eliminated on consolidation.  29

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

Nitrogen gross margin variance was attributable to:  Three Months Ended
September 30 2017 vs. 2016


Nine Months Ended
September 30 2017 vs. 2016Change in
Prices/Costs











Change in
Prices/CostsDollars (millions)

Change inSales Volumes


Net Sales


Cost ofGoods Sold


Total


Change inSales Volumes


Net Sales


Cost ofGoods Sold


TotalManufactured productAmmonia

$
(2
)

$
(30
)

$
7


$
(25
)





$
(2
)

$
(55
)

$
19


$
(38
)Urea


(2
)


3



(3
)


(2
)






1



(9
)


(5
)


(13
)Solutions, nitric acid, ammonium nitrate


5



(20
)


(10
)


(25
)






1



(43
)


(41
)


(83
)Hedge










4



4















16



16Change in product mix


(1
)


(3
)


4











(1
)






1



Total manufactured product

$



$
(50
)

$
2


$
(48
)





$
(1
)

$
(107
)

$
(10
)

$
(118
)Other miscellaneous and purchased product


































(2
)Total













$
(48
)

















$
(120
)  Three Months Ended September 30


Nine Months Ended September 30Sales Tonnes
(thousands)


Average Net Sales Price
per Tonne


Sales Tonnes
(thousands)


Average Net Sales Price
per Tonne2017


2016


2017


2016


2017


2016


2017


2016Fertilizer


605



542


$
176


$
187



1,897



1,755


$
215


$
229Industrial and Feed


968



1,024


$
164


$
208



2,837



2,982


$
202


$
2301,573



1,566


$
168


$
200



4,734



4,737


$
207


$
230 The most significant contributors to the change in total gross margin were as follows (direction of arrows refers to impact on gross
margin while ● symbol is neutral):  Sales Volumes

Net Sales Prices

Cost of Goods SoldQuarter over Quarter

●

There were no significant changes.

LOGO

Our average realized price declined due to lower realizations for ammonia and nitrogen solutions.

LOGO

Average costs, including our hedge position, for natural gas used as feedstock in production decreased 10 percent. Costs for
natural gas used as feedstock in Trinidad production fell 20 percent (contract price indexed, in part, to Tampa ammonia prices) while our US spot costs for natural gas increased 5 percent. Including losses on our hedge position, our US gas
prices were flat.LOGO

Prices for urea were up due to seasonally strong demand and lower Chinese exports.  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

30




---

Sales Volumes

Net Sales Prices

Cost of Goods SoldYear over Year

●

There were no significant changes.

LOGO

Our average realized price was impacted by lower benchmark pricing as a result of increased global supply. Pricing for urea did not fall as much as with other products mainly due to tighter supply and demand fundamentals relative to
the other products.

LOGO

Average costs, including our hedge position, for natural gas used as feedstock in production increased 2 percent. Costs for natural gas used as feedstock in Trinidad production fell 10 percent (contract price indexed, in
part, to Tampa ammonia prices) while our US spot costs for natural gas increased 34 percent. Including losses on our hedge position, our US gas prices increased 14 percent.LOGO

Ammonia cost of goods sold variance was positive due to lower natural gas costs in Trinidad more than offsetting higher natural gas costs in the US.  LOGO  31

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

NON-FINANCIAL PERFORMANCE The most significant contributors to the change in our non-financial performance highlights were as follows: QUARTER OVER QUARTER  LOGO  There were no significant changes between 2016 and 2017.
 There were no significant changes to the total recordable injury rate between 2016 and 2017. There was one lost-time injury in 2017, compared to none in 2016.
 The annualized employee turnover rate increased as a result of 10 departures in 2017 compared to seven departures in 2016.
 In 2017, we had one environmental incident, consisting of one ammonia release. In 2016, we had two environmental incidents,
consisting of one ammonia release and one NOx/nitric acid release event.
   PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

32




---

YEAR OVER YEAR  LOGO  There were no significant changes between 2016 and 2017.
 There were no significant changes between 2016 and 2017.
 The annualized employee turnover rate increased as a result of 24 departures in 2017 compared to 14 departures in 2016.
 In 2017, we had four environmental incidents, consisting of three ammonia releases and one organic nitrogen permit
exceedance. In 2016, we had six environmental incidents, consisting of three ammonia gas releases, one fluoride air permit exceedance, one urea solution spill and one NOx/nitric acid release event.
   33

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

PHOSPHATE PERFORMANCE FINANCIAL PERFORMANCE  Three Months Ended September 30Dollars (millions)


Tonnes (thousands)


Average per Tonne 12017


2016


% Change


2017


2016


% Change


2017


2016


% ChangeManufactured productNet salesFertilizer

$
174


$
168



4



559



537



4


$
311


$
313



(1
)Feed and Industrial


121



128



(5
)


250



232



8


$
486


$
554



(12
)295



296







809



769



5


$
365


$
385



(5
)Cost of goods sold


(340
)


(281
)


21














$
(420
)

$
(366
)


15Gross margin


(45
)


15



n/m














$
(55
)

$
19



n/mOther miscellaneous and purchased product gross margin 2










n/mGross Margin

$
(45
)

$
15



n/m














$
(56
)

$
20



n/m 1
Rounding differences may occur due to the use of whole dollars in per-tonne calculations. 2
Comprised of net sales $2 million (2016  $1 million) less cost of goods sold $2 million (2016  $1 million). n/m = not meaningful  Nine Months Ended September 30Dollars (millions)


Tonnes (thousands)


Average per Tonne 12017


2016


% Change


2017


2016


% Change


2017


2016


% ChangeManufactured productNet salesFertilizer

$
427


$
467



(9
)


1,275



1,248



2


$
335


$
374



(10
)Feed and Industrial


378



435



(13
)


763



750



2


$
496


$
580



(14
)805



902



(11
)


2,038



1,998



2


$
395


$
451



(12
)Cost of goods sold


(866
)


(860
)


1














$
(425
)

$
(430
)


(1
)Gross margin


(61
)


42



n/m














$
(30
)

$
21



n/mOther miscellaneous and purchased product gross margin 2


1



2



(50
)Gross Margin

$
(60
)

$
44



n/m














$
(29
)

$
22



n/m 1
Rounding differences may occur due to the use of whole dollars in per-tonne calculations. 2
Comprised of net sales $4 million (2016  $4 million) less cost of goods sold $3 million (2016  $2 million). n/m = not meaningful  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

34




---

Phosphate gross margin variance was attributable to:  Three Months Ended September 302017 vs. 2016


Nine Months Ended September 302017 vs. 2016Change inPrices/Costs








Change in
Prices/CostsDollars (millions)

Change inSales Volumes


Net Sales


Cost ofGoods Sold


Total


Change inSales Volumes


Net Sales


Cost ofGoods Sold


TotalManufactured productFertilizer

$
1


$
(2
)

$
(18
)

$
(19
)





$
1


$
(50
)

$
(14
)

$
(63
)Feed and Industrial


2



(17
)


(26
)


(41
)






1



(64
)


23



(40
)Change in product mix


(1
)


1



























Total manufactured product

$
2


$
(18
)

$
(44
)

$
(60
)





$
2


$
(114
)

$
9


$
(103
)Other miscellaneous and purchased product


































(1
)Total













$
(60
)

















$
(104
) The most significant contributors to the change in total gross margin were as follows (direction of arrows refers to impact on gross
margin while ●symbol is neutral):  Sales Volumes

Net Sales Prices

Cost of Goods SoldQuarter over Quarter

LOGO

Higher volumes of solid phosphate fertilizer from increased availability, more than offset lower volumes of liquid fertilizer.

LOGO

Our average realized price was down primarily due to lower prices for feed and industrial products which were impacted by increased supply from offshore producers.

LOGO

Feed and industrial cost of goods sold variance was negative due to an impairment of property, plant and equipment related to a feed product that
we will no longer produce.LOGO

Fertilizer cost of goods sold variance was negative mainly due to increased rock costs.LOGO

Favorable adjustments to our asset retirement obligations in 2016, primarily due to an increase in the relevant discount rates, did not recur in 2017.  35

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

Sales Volumes

Net Sales Prices

Cost of Goods SoldYear over Year

●

There were no significant changes.

LOGO

Our average realized price was down due to increased competitive supply and lower input costs.

LOGO

Sulfur costs were down 9 percent, decreasing our cost of goods sold.LOGO

Feed and industrial was positive as the increase in asset retirement obligations due to discount rate adjustments was lower than in 2016.LOGO

Fertilizer cost of goods sold variance was negative mainly due to increased rock costs.LOGO

Impairment of property, plant and equipment in 2017 (discussed on prior page) was slightly higher than the 2016 impairment of property, plant and equipment related to an industrial product we no longer produce.  LOGO  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

36




---

NON-FINANCIAL PERFORMANCE The most significant contributors to the change in our non-financial performance highlights were as follows: QUARTER OVER QUARTER  LOGO  There were no significant changes between 2016 and 2017.
 There were no significant changes in the total recordable injury rate between 2016 and 2017. In 2017, there were two lost-time injuries, compared to no lost-time injuries in 2016.
 The annualized employee turnover rate increased due to 13 departures in 2017 compared to 11 departures in 2016.
 In 2017, we experienced no environmental incidents. In 2016 there was one incident involving a slightly low-pH water release. In 2017 water consumption decreased due to increased rainfall at our White Springs facility compared to 2016
and a new water recycling project. Water consumption in 2016 was also higher as certain processes at our White Springs facility continued to need water even when product was not being manufactured.
   37

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

YEAR OVER YEAR  LOGO  There were no significant changes between 2016 and 2017.
 In 2017, there were 15 recordable injuries, including three lost-time injuries, compared to 21 recordable injuries and two
lost-time injuries in 2016.
 The annualized employee turnover rate increased due to 39 departures in 2017 compared to 30 departures in 2016.
 In 2017, we experienced no environmental incidents. In 2016, incidents were related to a release of higher suspended solids
in waste water, a release of ammonia to air, one permit exceedance for mercury and one slightly low-pH water release. There
were no significant changes in water consumption between 2016 and 2017.
   OTHER EXPENSES AND INCOME  Three Months Ended September 30





Nine Months Ended September 30Dollars (millions), except percentage amounts

2017


2016


Change


% Change





2017


2016


Change


% ChangeSelling and administrative expenses

$
(56
)

$
(59
)

$
3



(5
)





$
(154
)

$
(167
)

$
13



(8
)Provincial mining and other taxes


(47
)


(31
)


(16
)


52







(125
)


(88
)


(37
)


42Share of earnings of equity-accounted investees


33



25



8



32







121



74



47



64Dividend income


5



8



(3
)


(38
)






17



24



(7
)


(29
)Impairment of
available-for-sale investment


























(10
)


10



(100
)Other (expenses) income


(30
)


5



(35
)


n/m







(56
)


(4
)


(52
)


n/mFinance costs


(60
)


(55
)


(5
)


9







(180
)


(161
)


(19
)


12Income tax (expense) recovery


(22
)


(2
)


(20
)


n/m







27



(58
)


85



n/m n/m = not meaningful  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

38




---

The most significant contributors to the change in other expenses and income were as follows:  Quarter over Quarter

Year over YearProvincial Mining and Other Taxes



Provincial mining and other taxes increased primarily due to stronger potash prices and a higher proportion of forecasted annual gross margin earned as compared to the same
periods in 2016.Share of Earnings of Equity-Accounted Investees



The higher share of earnings of equity-accounted investees pertains primarily to SQM and APC.

Share of earnings of equity-accounted investees pertains primarily to SQM and APC. The increase was mainly due to higher earnings at SQM.Other (Expenses) Income



Other expenses in 2017 were primarily due to a foreign exchange loss and costs related to the Proposed Transaction. Other income in 2016 related to a foreign exchange gain.

Other expenses increased primarily due to costs related to the Proposed Transaction.Finance Costs



Interest rates on short-term debt have increased over the comparative periods due to increases in benchmark interest rates.LOGOIncome Tax (Expense) Recovery



Income tax expense increased from the same period in 2016 primarily due to the change in discrete tax adjustments.

The change in income tax was primarily due to a discrete $68 million deferred tax recovery recorded in the second quarter of 2017 as a result of a Saskatchewan income tax rate decrease. For the first nine months of 2017,
141 percent of the effective tax rate on the current years ordinary earnings pertained to current income taxes (2016 89 percent) and (41) percent related to deferred income taxes (2016  11 percent). The
decrease in the deferred portion is due to significantly lower forecasted annual earnings in the United States partially offset by higher earnings in Canada. EFFECTIVE TAX RATES AND DISCRETE ITEMSThree Months Ended September 30


Nine Months Ended September 30Dollars (millions), except percentage amounts

2017


2016


2017


2016Actual effective tax rate on ordinary earnings


17%



16%



10%



20%Actual effective tax rate including discrete items


29%



2%



(7%)



17%Discrete tax adjustments that impacted the tax rate

$
(9)


$
11


$
67


$
11  39

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

OTHER NON-FINANCIAL INFORMATION  Three Months Ended September 30


Nine Months Ended September 30Dollars (millions), except percentage amounts

2017


2016


Change


% Change


2017


2016


Change


% ChangeTaxes and royalties1

$
92


$
40


$
52



130


$
266


$
199


$
67



34 1
Includes tax and royalty amounts on an accrual basis calculated as: current income tax expense less investment tax credits and realized excess tax benefit related to share-based compensation plus potash production tax,
resource surcharge, royalties, municipal taxes and other miscellaneous taxes. The most significant contributors to the change in other non-financial information quarter over quarter and year over year were as follows:  Quarter over Quarter

Year over YearTaxes and Royalties

Taxes and royalties increased primarily due to higher current income tax expense caused by discrete current tax adjustments that resulted in an expense of $13 million in the third quarter
of 2017 compared to a recovery of $15 million in the same period in 2016. In addition, provincial mining and other taxes increased as a result of stronger potash prices and a higher proportion of forecasted annual gross margin earned as
compared to the same period in 2016.

Taxes and royalties increased primarily due to higher provincial mining and other taxes as a result of stronger potash prices and a higher proportion of forecasted annual gross margin earned
as compared to the same period in 2016. In addition, current income tax expense increased as a result of discrete current tax adjustments that resulted in an expense of $17 million in the first nine months of 2017 compared to a recovery of
$8 million in the same period in 2016. FINANCIAL CONDITION REVIEW STATEMENT OF FINANCIAL POSITION ANALYSIS  LOGO  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

40




---

The most significant contributors to the changes in our statements of financial position were as follows (direction of
arrows refers to increase or decrease):  Assets

LiabilitiesLOGO

Receivables increased primarily due to higher trade accounts receivable.

LOGO

Short-term debt decreased due to a decrease in our outstanding commercial paper.LOGO

Property, plant and equipment decreased as impairment charges related to phosphate assets and depreciation exceeded additions.

LOGO

Deferred income tax liabilities have decreased primarily due to a discrete deferred tax recovery as a result of a Saskatchewan income tax rate decrease.LOGO

Investments were impacted primarily by higher fair values of our available-for-sale investments in ICL and
Sinofert.EquityLOGO

Retained earnings were higher as a result of net income (discussed in more detail on page 22) exceeding dividends declared.LOGO

Accumulated other comprehensive loss changed to accumulated other comprehensive income primarily as a result of the net change in fair value of our available-for-sale investments noted above. As at September 30, 2017, $67 million (December 31, 2016  $21 million) of our cash and cash equivalents was held in
certain foreign subsidiaries. There are no current plans to repatriate the funds at September 30, 2017 in a manner that would result in tax consequences. LIQUIDITY AND CAPITAL RESOURCES CASH REQUIREMENTS CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS Our contractual obligations and other
commitments detailed on page 84 of our 2016 AIR summarize certain of our liquidity and capital resource requirements, excluding obligations that have original maturities of less than one year and planned (but not legally committed) capital
expenditures. There have been no significant changes to these contractual obligations and other commitments or to our planned capital expenditures during the first nine months of 2017. SOURCES AND USES OF CASH The companys cash flows from operating, investing and
financing activities are summarized in the following table:  Three Months Ended September 30





Nine Months Ended September 30Dollars (millions), except percentage amounts

2017


2016


Change


% Change





2017


2016


Change


% ChangeCash provided by operating activities

$
293


$
295


$
(2
)


(1
)





$
844


$
907


$
(63
)


(7
)Cash used in investing activities


(170
)


(192
)


22



(11
)






(432
)


(658
)


226



(34
)Cash used in financing activities


(123
)


(93
)


(30
)


32







(347
)


(187
)


(160
)


86Increase in Cash and Cash Equivalents

$



$
10


$
(10
)


(100
)





$
65


$
62


$
3



5  41

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

LOGO   LOGO   PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

42




---

The most significant contributors to the changes in cash flows were as follows:  Quarter over Quarter

Year over YearCash Provided by Operating Activities

Cash provided by operating activities was impacted by:
 Lower net income in 2017;
 Earnings from equity-accounted investees in 2017 compared to a loss in 2016;
 A non-cash impairment charge to property, plant and equipment; and
 Higher cash outflows from receivables in 2017.

Cash provided by operating activities was impacted by:
 Higher net income in 2017;
 A deferred income tax recovery in 2017 compared to a provision in 2016;
 Cash outflows from receivables in 2017 compared to inflows in 2016; and
 Lower cash outflows from payables and accrued charges in 2017.Cash Used in Investing Activities

Cash used in investing activities was primarily for additions to property, plant and equipment.Cash Used in Financing Activities

Cash used in financing activities in 2017 was largely the result of repayment of commercial paper and dividends paid. Cash used in financing activities in 2016 was largely the
result of dividends paid more than offsetting proceeds from the issuance of commercial paper. We believe that internally generated cash flow, supplemented by available borrowings under our existing financing sources, if necessary,
will be sufficient to meet our anticipated capital expenditures and other cash requirements for at least the next 12 months, inclusive of requirements relating to the Proposed Transaction and our working capital deficiency, but exclusive of any
possible acquisitions. At this time, we do not reasonably expect any presently known trend or uncertainty to affect our ability to access our potential sources of liquidity.  LOGO  43

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

CAPITAL STRUCTURE AND MANAGEMENT PRINCIPAL DEBT INSTRUMENTS  LOGO  1
The authorized aggregate amount under the companys commercial paper programs in Canada and the US is $2,500 million. The amounts available under the
commercial paper programs are limited to the availability of backup funds under the credit facility. Included in the amount outstanding and committed is $290 million of commercial paper. 2
Letters of credit committed. We also have an uncommitted $100 million letter of credit facility against which $43 million was issued at September 30,
2017. We use a combination of cash generated from operations and short-term and long-term debt to finance our operations. We typically pay floating
rates of interest on our short-term debt and credit facility and fixed rates on our senior notes. During the third quarter of 2017, we extended the maturity on our
$75 million short-term line of credit to August 2018 (from August 2017). There were no other significant changes to the nature of our outstanding commercial paper, credit facility, short-term line of credit and uncommitted letter of credit
facility described on page 87 in our 2016 AIR. As at September 30, 2017, interest rates on outstanding commercial paper ranged from 1.4 percent to 1.5 percent. (December 31, 2016  0.9 percent to 1.1 percent). The credit facility and line of credit have financial tests and covenants, including consequences of non-compliance, referenced on
page 87 of our 2016 AIR, with which we must comply at each quarter-end. We were in compliance with all covenants as at September 30, 2017 and at this time anticipate being in compliance with such
covenants through 2017. The accompanying table summarizes the limits and results of certain covenants:  Debt covenants at September 30
Dollars (millions), except ratio amounts

Limit


2017Debt-to-capital ratio 1

£
0.65



0.35Debt of subsidiaries

< $
1,000


$
Net book value of disposed assets

< $
4,314
2

$
2 1Debt-to-capital ratio = debt (short-term debt and current portion of long-term debt + long-term debt) / (debt + shareholders equity). This non-IFRS financial measure is a requirement of our debt covenants and should not be considered as a substitute for, nor superior to, measures of financial performance prepared in accordance with IFRS. 2 Limit is 25 percent of the prior years year-end total
assets.
 Our ability to access reasonably priced debt in the capital markets is dependent, in part, on the quality of our credit
ratings. We continue to maintain investment-grade credit ratings for our long-term debt. A downgrade of the credit rating of our long-term debt would increase the interest rates applicable to borrowings under our credit facility and our line of
credit. Commercial paper markets are normally a source of same-day cash for the company. Our access to the US commercial
paper market primarily depends on maintaining our current short-term credit ratings as well as general conditions in the money markets.  Long-Term Debt

Short-Term DebtRating (Outlook)

RatingSeptember 302017

December 312016

September 302017

December 312016Moodys

Baa1 (negative)

Baa1 (negative)

P-2

P-2Standard & Poors

BBB+ (negative)

BBB+ (stable)

A-21

A-21  1
S&P assigned a global commercial paper rating of A-2 but rated our commercial paper A-1 (low) on a Canadian scale. A security rating is not a recommendation to buy, sell or hold securities. Such rating may be subject to revision or withdrawal at any time by the respective credit
rating agency and each rating should be evaluated independently of any other rating. Our $4,250 million of senior notes were issued under US shelf registration
statements. If the Proposed Transaction is completed, a downgrade in the companys credit ratings below investment-grade would trigger a change in control offer under existing debt securities, except for the senior notes issued in 2016, and the
company would be required to make an offer to purchase all, or any part, of the senior notes at 101 percent of the $3,750 million outstanding principal amount of the senior notes to be repurchased, plus accrued and unpaid interest. For the first nine months of 2017, our weighted average cost of capital was 6.7 percent (2016  7.4 percent), of which 75 percent
represented the cost of equity (2016  75 percent). OUTSTANDING SHARE DATA  September 302017


December 312016Common shares issued and outstanding


840,163,998



839,790,379Options to purchase common shares outstanding


17,266,382



19,470,014Share-settled performance share units


935,570



602,740Number of share-settled compensation plans


9



10
   PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

44




---

OFF-BALANCE SHEET ARRANGEMENTS Off-balance sheet arrangements are described on page 88 of our 2016 AIR. We do not reasonably expect any presently known trend or
uncertainty to affect our ability to continue using these arrangements. Refer to Note 11 to the financial statements in this
 Form 10-Q for a contingency related to Canpotex. Refer to page 88 of our 2016 AIR for information pertaining to our guarantees and derivative
instruments. See cash requirements on page 41 of this Form 10-Q and our 2016 AIR for obligations related to operating leases and certain of our long-term raw materials agreements that contain fixed
price and/or volume components.
   QUARTERLY FINANCIAL HIGHLIGHTS  Dollars (millions), except
as otherwise noted

September 30,2017


June 30,2017


March 31,2017


December 31,2016


September 30,2016


June 30,2016


March 31,2016


December 31,2015Financial PerformanceSales

$
1,234


$
1,120


$
1,112


$
1,058


$
1,136


$
1,053


$
1,209


$
1,354Gross margin


230



255



268



163



190



243



234



386Net income


53



201



149



46



81



121



75



201Net income per share  basic 1


0.06



0.24



0.18



0.05



0.10



0.14



0.09



0.24Net income per share  diluted 1


0.06



0.24



0.18



0.05



0.10



0.14



0.09



0.24Non-Financial PerformanceTotal shareholder return percentage


19



(4
)


(5
)


12



2



(3
)


2



(15
)Employee turnover rate (annualized percentage)


4



4



4



3



3



4



3



3Total recordable injury rate


0.77



0.85



0.95



0.74



0.92



0.69



1.15



0.97Environmental incidents


1



3



2



1



5



3



9



8 1 Net income per share for each quarter has been computed based on the
weighted average number of shares issued and outstanding during the respective quarter, including the dilutive number of shares assumed for the diluted earnings per share computation; therefore, as the number of shares varies each period, quarterly
amounts may not add to the annual total. Refer to Note 10 to the financial statements in this Form 10-Q for information
pertaining to sales that can be seasonal. In the first quarter of 2016, earnings were impacted by a $27 million non-cash
impairment charge to property, plant and equipment in the phosphate segment. In the second quarter of 2016, earnings were impacted by $33 million in exit costs related to Canpotexs Prince Rupert terminal in the potash segment and a
$10 million non-cash impairment charge on our available-for-sale investment in Sinofert. In the fourth quarter of 2016,
earnings were impacted by a $20 million non-cash impairment charge to property, plant and equipment in the phosphate segment.  LOGO

LOGO  45

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




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OTHER FINANCIAL INFORMATION RELATED PARTY TRANSACTIONS Refer to Note 12 to the financial statements in this Form 10-Q for information pertaining to transactions with related parties. CRITICAL ACCOUNTING ESTIMATES There have been no material changes to our critical accounting policies in the first nine months of 2017. Certain of these policies, such as long-lived asset impairment,
derivative instruments, provisions and contingencies for asset retirement, environmental and other obligations, and capitalization and depreciation of property, plant and equipment, involve critical accounting estimates because they require us to
make subjective or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts could be reported under different conditions or using different assumptions, particularly in the current
market environment. We expect to perform an assessment of certain aspects of our operations in the fourth quarter of 2017, the outcome of which could result in us not being able to recover all or a portion of our investment in certain assets
disclosed in Notes 13 and 19 of our 2016 AIR. See page 35 of this Form 10-Q for a discussion of an impairment of specialized phosphate assets. Impairment sensitivities relating to cash-generating units in our phosphate segment are described on
page 89 of our 2016 AIR. We have discussed the development, selection and application of our key accounting policies, and the critical accounting estimates and
assumptions they involve, with the audit committee of the Board, and the committee reviewed the disclosures described in this Form 10-Q. RECENT ACCOUNTING CHANGES Refer to Note 1 to the financial statements in this
Form 10-Q for information on issued accounting pronouncements that will be effective in future periods and were effective in 2017. Information on the implementation of IFRS 15, Revenue From Contracts With
Customers and IFRS 16, Leases are described on page 89 of our 2016 AIR. OUTLOOK POTASH MARKET OUTLOOK We continue to see strong customer engagement in all key potash
markets and expect robust demand to continue into 2018. We have maintained our anticipated global shipment range for 2017 at 62-65 million tonnes and, with Canpotex now fully committed for the remainder of the year, we expect this years demand
to eclipse the previous record.
 In North America, demand continues to be robust as growers address nutrient needs and capitalize on strong affordability.
We expect total shipments to this market to approach the upper end of our 9.3-9.8 million tonnes range. With its substantial agronomic need and favorable crop
economics, we anticipate deliveries to Latin America will remain on pace to surpass those of 2016, with our full-year shipment total unchanged at 12.0-12.5 million tonnes. In China, we expect nutrient affordability will continue to drive strong consumption. We maintain our 2017 shipment estimate in the range of 15.5-16.5 million tonnes, a
potential record for this market. We continue to see an improving demand environment in India, supported by significant agronomic need, higher minimum support prices
and a favorable monsoon. We now expect deliveries for 2017 near the upper end of our guidance range of 4.0-4.5 million tonnes, an increase from 2016 levels. In Other Asian markets, we expect supportive palm oil prices and improved moisture conditions will support demand for the remainder of the year and are maintaining our
estimated shipment range of 9.0-9.5 million tonnes for the full year, above the 2016 total. FINANCIAL OUTLOOK With greater clarity on potash markets through the balance of the year, we have narrowed our guidance range for potash sales volumes, to 9.1-9.3 million tonnes, and for
gross margin, to $750-$800 million. In nitrogen, we expect markets to remain volatile in the fourth quarter and anticipate full-year gross margin will be
significantly weaker than in 2016. In phosphate, we expect challenging market fundamentals will continue to weigh on our realizations. With these factors in mind, and taking into consideration the third-quarter phosphate impairment charge, we have
lowered our combined nitrogen and phosphate gross margin range and now estimate $140-$190 million in 2017, trailing last years combined total. We now
anticipate our effective income tax rate to be in a negative range of 2-4 percent, primarily due to discrete tax adjustments. We have lowered the upper end of our
estimates for provincial mining and other taxes and now expect a range of 19-21 percent of potash gross margin for 2017. Further, we have lowered our range for selling and administrative expenses to $215-$225 million and increased our range for
finance costs to $230-$240 million.
   PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

46




---

We have raised the bottom end of our range for income from equity investments and now expect $180-$190 million, primarily
due to the strength of SQM earnings. Due to the recent strength of the Canadian dollar, we have revised our full-year foreign exchange rate assumption to CDN $1.30
per US dollar.
 Based on these factors, we have narrowed our full-year 2017 earnings guidance and now estimate $0.48-$0.54 per share.
Merger-related costs are now anticipated to be $0.08 per share, with $0.05 per share expected in the fourth quarter.
   LOGO  47

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




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FORWARD-LOOKING STATEMENTS Certain statements in this Quarterly Report on Form 10-Q, including, but not limited to, those in the Outlook
section of Managements Discussion and Analysis of Financial Condition and Results of Operations, contain forward-looking statements (within the meaning of the US Private Securities Litigation Reform Act of 1995 and
other US federal securities laws) or forward-looking information (within the meaning of applicable Canadian securities legislation) that relate to future events or our future financial performance. These statements can be identified by
expressions of belief, expectation or intention, as well as those statements that are not historical fact. These statements often contain words such as should, could, expect, may,
anticipate, forecast, believe, intend, estimates, plans and similar expressions. These statements are based on certain factors and assumptions as set forth in this Quarterly
Report on Form 10-Q, including with respect to: foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities, including the Proposed Transaction, and
effective tax rates. While the company considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are subject to risks and uncertainties that are
difficult to predict. The results or events set forth in forward-looking statements may differ materially from actual results or events. Several factors could cause our actual results or events to differ materially from those expressed in
forward-looking statements including, but not limited to, the following: a number of risks and uncertainties relating to the Proposed Transaction, including the failure to satisfy all required conditions, including required regulatory approvals, or
to satisfy or obtain waivers with respect to all other closing conditions in a timely manner and on favorable terms or at all; the occurrence of any event, change or other circumstances that could give rise to the termination of the Arrangement
Agreement; certain costs that we may incur in connection with the Proposed Transaction; certain restrictions in the Arrangement Agreement on our ability to take action outside the ordinary course of business without the consent of Agrium; the effect
of the pendency of the Proposed Transaction on our ability to retain customers, suppliers and personnel and on our operating future business and operations generally; risks related to diversion of management time from ongoing business operations due
to the Proposed Transaction; failure to realize the anticipated benefits of the Proposed Transaction and to successfully integrate Agrium and PotashCorp; the risk that our credit ratings may be downgraded or there may be adverse conditions in the
credit markets; any significant impairment of the carrying amount of certain of our assets; variations from our assumptions with respect to
 foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities, and effective tax rates; fluctuations in supply and demand in the fertilizer,
sulfur and petrochemical markets; changes in competitive pressures, including pricing pressures; risks and uncertainties related to any operating and workforce changes made in response to our industry and the markets we serve, including mine and
inventory shutdowns; adverse or uncertain economic conditions and changes in credit and financial markets; economic and political uncertainty around the world; changes in capital markets; the results of sales contract negotiations within major
markets; unexpected or adverse weather conditions; risks related to reputational loss; the occurrence of a major safety incident; inadequate insurance coverage for a significant liability; inability to obtain relevant permits for our operations;
catastrophic events or malicious acts, including terrorism; certain complications that may arise in our mining process, including water inflows; risks and uncertainties related to our international operations and assets; our ownership of non-controlling equity interests in other companies; our prospects to reinvest capital in strategic opportunities and acquisitions; risks associated with natural gas and other hedging activities; security risks
related to our information technology systems; imprecision in reserve estimates; costs and availability of transportation and distribution for our raw materials and products, including railcars and ocean freight; changes in, and the effects of,
government policies and regulations; earnings and the decisions of taxing authorities which could affect our effective tax rates; increases in the price or reduced availability of the raw materials that we use; our ability to attract, develop,
engage and retain skilled employees; strikes or other forms of work stoppage or slowdowns; rates of return on, and the risks associated with, our investments and capital expenditures; timing and impact of capital expenditures; the impact of further
innovation; adverse developments in pending or future legal proceedings or government investigations; and violations of our governance and compliance policies. A discussion of these risks and uncertainties and additional risks and uncertainties can
be found in our 2016 Form 10-K under the captions Forward-Looking Statements and Item 1ARisk Factors, and in our filings with the US Securities and Exchange Commission and
Canadian provincial securities commissions. As a result of these and other factors, there is no assurance that any of the events, circumstances or results anticipated by forward-looking statements included or incorporated by reference into this
Quarterly Report on Form 10-Q will occur or, if they do, of what impact they will have on our business, our performance, the results of our operations and our financial condition. Forward-looking statements
are given only as at the date of this report and the company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
   PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

48




---

Item 3. Quantitative and Qualitative Disclosures About Market Risk Market risk is the potential for loss from adverse changes in the market value of financial instruments. The level of market risk to which we are exposed varies depending
on the composition of our derivative instrument portfolio, as well as current and expected market conditions. A discussion of enterprise-wide risk management can be found in our 2016 AIR, pages 48 to 55. Price, foreign exchange and interest rate risks faced by the company and how we manage those risks are outlined in Notes 17 and 29 to the 2016 audited annual
consolidated financial statements and there were no significant changes as at September 30, 2017. PRICE RISK The carrying amount of our investments in ICL and Sinofert was $1,063 million at September 30, 2017 (December 31, 2016  $937 million). A
10 percent increase in the prices of these investments would increase other comprehensive income by $106 million, while a 10 percent decrease would reduce other comprehensive income by $106 million. At September 30, 2017,
this analysis assumed that price decreases would not represent an impairment. There were no substantial changes to the price sensitivities related to our natural gas
derivatives reported in Note 29 to the 2016 audited annual consolidated financial statements. As at September 30, 2017, the companys net exposure to
natural gas derivatives in the form of swaps was a notional amount of 31 million MMBtu (December 31, 2016  swaps was a notional amount of 46 million MMBtu) with maturities in 2017 through 2022. FOREIGN EXCHANGE RISK As at September 30, 2017, the company had entered into
foreign currency forward contracts to sell US dollars and receive Canadian dollars in the notional amount of
 $25 million (December 31, 2016  $21 million) at an average exchange rate of 1.2302 (December 31, 20161.3490) per US dollar with maturities in 2017. There were no
substantial changes to the foreign exchange sensitivities reported in Note 29 to the 2016 audited annual consolidated financial statements. INTEREST RATE RISK As at September 30, 2017, the company had no significant exposure to interest rate risk. Item 4. Controls and Procedures As of September 30, 2017, we carried
out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective
disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon that evaluation and as of September 30, 2017, the Chief Executive Officer and Chief Financial Officer concluded that the
disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports the company files and submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported as and when required and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. There has been no change in our internal control over financial reporting during the quarter ended September 30, 2017 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.
   49

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




---

PART II. OTHER INFORMATION  Item 1. Legal Proceedings For a
description of certain legal and environmental proceedings, see Note 11 to the unaudited interim condensed consolidated financial statements included in Part I of this Quarterly Report on Form 10-Q. Item 4. Other Information MINE SAFETY DISCLOSURES Safety is a fundamental core value and we are committed to providing a healthy and safe work environment for our employees, contractors and all others at our sites to
help meet our company-wide goal of achieving no harm to people. The operations at the companys Aurora, Weeping Water and White Springs facilities are subject
to the Federal Mine Safety and Health Act of 1977, as amended by the
 Mine Improvement and New Emergency Response Act of 2006, and the implementing regulations, which impose stringent health and safety standards on numerous aspects of mineral extraction and
processing operations, including the training of personnel, operating procedures, operating equipment and other matters. Our senior management is responsible for managing compliance with applicable government regulations, as well as implementing and
overseeing the elements of our safety program as outlined in our Safety, Health and Environment Manual. Section 1503(a) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (Section 1503(a)) requires us to include certain safety information in the periodic reports we file with the United States Securities and Exchange Commission. The information concerning mine safety
violations and other regulatory matters required by Section 1503(a) and Item 104 of Regulation S-K is included in Exhibit 95 to this Quarterly Report on
Form 10-Q.
   PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

50




---

Item 6. Exhibits (a) Exhibits  Incorporated By Reference
(File No. 001-10351, unless otherwise indicated)ExhibitNumber

Description of Document

Form

Filing Date/PeriodEnd Date

Exhibit Number(if different)2(a)

Arrangement Agreement, dated September 11, 2016, between Potash Corporation of Saskatchewan Inc. and Agrium Inc.

8-K

9/12/2016

2.13(a)

Articles of Continuance of the registrant dated May 15, 2002.

10-Q

6/30/20023(b)

General By-Law of the registrant, as amended through April 27, 2015.

8-K

4/27/2015

3(a)4(a)

Indenture dated as of February 
27, 2003, between the registrant and U.S. Bank National Association, as successor to The Bank of Nova Scotia Trust Company of New York.

10-K

12/31/2002

4(c)4(b)

Form of Note relating to the registrants $500,000,000 principal amount of 5.875% Notes due December 1, 2036.

8-K

11/30/2006

4(a)4(c)

Form of Note relating to the registrants $500,000,000 principal amount of 6.50% Notes due May 15, 2019.

8-K

5/1/2009

4(b)4(d)

Form of Note relating to the registrants $500,000,000 principal amount of 4.875% Notes due March 30, 2020.

8-K

9/25/2009

4(b)4(e)

Form of Note relating to the registrants $750,000,000 principal amount of 3.625% Notes due March 15, 2024.

8-K

3/7/2014

4(a)4(f)

Form of Note relating to the registrants $500,000,000 principal amount of 3.000% Notes due April 1, 2025.

8-K

3/26/2015

4(a)4(g)

Revolving Term Credit Facility Agreement between the Bank of Nova Scotia and other financial institutions and the registrant dated December 11,
 2009.

8-K

12/15/2009

4(a)4(h)

Revolving Term Credit Facility First Amending Agreement between the Bank of Nova Scotia and other financial institutions and the registrant
 dated September 23, 2011.

8-K

9/26/2011

4(a)4(i)

Revolving Term Credit Facility Second Amending Agreement between the Bank of Nova Scotia and other financial institutions and the registrant
 dated as of May 24, 2013.

8-K

5/28/2013

4(a)4(j)

Form of Note relating to the registrants $500,000,000 principal amount of 3.25% Notes due December 1, 2017.

8-K

11/29/2010

4(a)4(k)

Form of Note relating to the registrants $500,000,000 principal amount of 5.625% Notes due December 1, 2040.

8-K

11/29/2010

4(b)4(l)

Agreement of Resignation, Appointment and Acceptance, dated as of June 
25, 2013, by and among the registrant, The Bank of Nova Scotia Trust Company of New York and U.S. Bank National Association.

8-K

6/27/2013

4(a)4(m)

Revolving Term Credit Facility Third Amending Agreement between the Bank of Nova Scotia and other financial institutions and the registrant
 dated July 8, 2014.

10-Q

7/29/20144(n)

Revolving Term Credit Facility Fourth Amending Agreement between The Bank of Nova Scotia and other financial institutions and the registrant
 dated January 25, 2016.

8-K

1/29/2016

4(a)4(o)

Extension Agreement between The Bank of Nova Scotia and other financial institutions and the registrant dated June 27, 2016.

10-Q

8/3/20164(p)

Form of Note relating to the registrants $500,000,000 principal amount of 4.000% Notes due December 15, 2026.

8-K

12/6/2016

4(a)  51

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




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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.  Incorporated By Reference
(File No. 001-10351, unless otherwise indicated)ExhibitNumber

Description of Document

Form

Filing Date/PeriodEnd Date

Exhibit Number(if different)10(a)

Consolidated, Restated and Amended Canpotex Shareholders Agreement, Eighth Memorandum of Agreement dated January 
1, 2014 between Agrium Inc., Mosaic Canada Crop Nutrition, LP, by its general partner, 4379934 Canada Ltd., the registrant and Canpotex Limited.

10-K

12/31/201310(b)

Consolidated, Restated and Amended Producer Agreement, Eighth Memorandum of Agreement dated January 
1, 2014 between Canpotex Limited, Agrium Inc., Mosaic Canada Crop Nutrition, LP, by its general partner, 4379934 Canada Ltd. and the registrant.

10-K

12/31/201310(c)

First Amending Agreement dated January 
1, 2016, between Canpotex Limited, Agrium Inc., Mosaic Canada Crop Nutrition, LP, by its general partner, 4379934 Canada Ltd. and the registrant, to the Consolidated, Restated and Amended Producer Agreement Eighth Memorandum of Agreement dated January 1,
 2014.

10-Q

9/30/201610(d)

Second Amending Agreement dated December 
20, 2016, between Canpotex Limited, Agrium Inc., Mosaic Canada Crop Nutrition, LP, by its general partner, 4379934 Canada Ltd. and the registrant, to the Consolidated, Restated and Amended Producer Agreement Eighth Memorandum of Agreement dated January 1,
 2014.

10-Q

3/31/201710(e)

Short-Term Incentive Plan of the registrant effective January 1, 2000, as amended.

8-K

3/13/2012

10(a)10(f)

Resolution and Forms of Agreement for Supplemental Executive Retirement Income Plan, for officers and key employees of the registrant. (P)

10-K

12/31/1995

10(o)10(g)

Amending Resolution and revised forms of agreement regarding Supplemental Retirement Income Plan of the registrant.

10-Q

6/30/1996

10(x)10(h)

Amended and restated Supplemental Executive Retirement Income Plan of the registrant and text of amendment to existing supplemental income
 plan agreements.

10-Q

9/30/2000

10(mm)10(i)

Amendment, dated February 23, 2009, to the amended and restated Supplemental Executive Retirement Income Plan.

10-K

12/31/2008

10(r)10(j)

Amendment, dated December 29, 2010, to the amended and restated Supplemental Executive Retirement Income Plan.

10-K

12/31/2010

10(r)10(k)

Amended and restated Supplemental Executive Retirement Income Plan of the registrant, dated February 22, 2016.

10-K

12/31/2015

10(i)10(l)

Form of Letter of amendment to existing supplemental income plan agreements of the registrant.

10-K

12/31/2002

10(cc)10(m)

Amendment, dated February 23, 2009, to the amended and restated agreement, dated August 
2, 1996, between the registrant and Wayne R. Brownlee concerning the Supplemental Executive Retirement Income Plan.

10-K

12/31/2008

10(w)10(n)

Amendment, dated December 29, 2010, to the amended and restated agreement, dated August 
2, 1996, between the registrant and Wayne R. Brownlee concerning the Supplemental Executive Retirement Income Plan.

10-K

12/31/2010

10(z)10(o)

Supplemental Retirement Agreement dated December 24, 2008, between the registrant and Stephen F. Dowdle.

10-K

12/31/2011

10(bb)  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

52




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Incorporated By Reference
(File No. 001-10351, unless otherwise indicated)ExhibitNumber

Description of Document

Form

Filing Date/PeriodEnd Date

Exhibit Number(if different)10(p)

PCS Supplemental Retirement Plan for U.S Executives (as amended and restated and in effect as of January 1, 2016).

10-K

12/31/2015

10(n)10(q)

Forms of Agreement dated December 30, 1994, between the registrant and certain officers of the registrant. (P)

10-K

12/31/199510(r)

Form of Agreement of Indemnification dated August 8, 1995, between the registrant and certain officers and directors of the registrant. (P)

10-K

12/31/199510(s)

Resolution and Form of Agreement of Indemnification dated January 24, 2001.

10-K

12/31/2000

10(ii)10(t)

Resolution and Form of Agreement of Indemnification dated July 21, 2004.

10-Q

6/30/2004

10(ii)10(u)

Potash Corporation of Saskatchewan Inc. Deferred Share Unit Plan for Non-Employee Directors.

10-Q

3/31/2012

10(ll)10(v)

Potash Corporation of Saskatchewan Inc. 2007 Performance Option Plan and Form of Option Agreement.

10-Q

3/31/2007

10(ee)10(w)

Potash Corporation of Saskatchewan Inc. 2008 Performance Option Plan and Form of Option Agreement.

10-Q

3/31/2008

10(ff)10(x)

Potash Corporation of Saskatchewan Inc. 2009 Performance Option Plan and Form of Option Agreement.

10-Q

3/31/2009

10(mm)10(y)

Potash Corporation of Saskatchewan Inc. 2010 Performance Option Plan and Form of Option Agreement.

8-K

5/7/2010

10.110(z)

Potash Corporation of Saskatchewan Inc. 2011 Performance Option Plan and Form of Option Agreement.

8-K

5/13/2011

10(a)10(aa)

Potash Corporation of Saskatchewan Inc. 2012 Performance Option Plan and Form of Option Agreement.

8-K

5/18/2012

10(a)10(bb)

Potash Corporation of Saskatchewan Inc. 2013 Performance Option Plan and Form of Option Agreement.

8-K

5/17/2013

10(a)10(cc)

Potash Corporation of Saskatchewan Inc. 2014 Performance Option Plan and Form of Option Agreement.

8-K

5/16/2014

10(a)10(dd)

Potash Corporation of Saskatchewan Inc. 2015 Performance Option Plan and Form of Option Agreement.

8-K

5/13/2015

10(a)10(ee)

Potash Corporation of Saskatchewan Inc. 2016 Long-Term Incentive Plan.

8-K

5/11/2016

10.110(ff)

Potash Corporation of Saskatchewan Inc. 2016 Long-Term Incentive Plan  Form of Performance Share Unit Agreement (2016-2018 Phased Grant).

8-K

5/11/2016

10.210(gg)

Potash Corporation of Saskatchewan Inc. 2016 Long-Term Incentive Plan  Form of Performance Share Unit Agreement.

8-K

5/11/2016

10.310(hh)

Potash Corporation of Saskatchewan Inc. 2016 Long-Term Incentive Plan  Form of Option Agreement.

8-K

5/11/2016

10.410(ii)

Executive Employment Agreement, dated July 1, 2014, between registrant and Jochen E. Tilk.

10-K

9/30/2014

10(nn)10(jj)

PCS Supplemental Executive Retirement Plan for Canadian Executives.

10-K

12/31/2014

10(oo)10(kk)

CEO Multi-Year Incentive Plan.

10-K

12/31/2014

10(pp)10(ll)

Letter Agreement, dated January 13, 2016 and revised February 2, 2016, between registrant and G. David Delaney.

10-K

12/31/2015

10(gg)10(mm)

Short-Term Incentive Plan, dated February 22, 2016.

10-K

12/31/2015

10(hh)10(nn)

Form of Company Support Agreement.

8-K

9/12/2016

10.110(oo)

Form of Agrium Support Agreement.

8-K

9/12/2016

10.210(pp)

Form of Change in Control Agreement between the registrant and certain Canadian executives.

10-Q

9/30/2016

10(ll)  53

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q




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Incorporated By Reference
(File No. 001-10351, unless otherwise indicated)ExhibitNumber

Description of Document

Form

Filing Date/PeriodEnd Date

Exhibit Number(if different)10(qq)

Form of Change in Control Agreement, between the registrant and certain U.S. executives.

10-Q

9/30/2016

10(mm)10(rr)

Letter Agreement, dated January 20, 2016 and revised February 2, 2016, between registrant and Paul E. Dekok.

10-K

12/31/201631(a)

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31(b)

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.95

Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.(P)

Paper exhibits  PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q

54




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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.October 31, 2017

By:

/s/ Joseph PodwikaJoseph PodwikaSenior Vice President, General Counsel and SecretaryOctober 31, 2017

By:

/s/ Wayne R. BrownleeWayne R. BrownleeExecutive Vice President, Treasurer and Chief Financial
Officer (Principal Financial and Accounting Officer)  55

PotashCorp 2017 Third Quarter Quarterly Report on Form 10-Q