<PAGE>   1
 
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-Q
                            ------------------------
 
[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934
 
       FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
 
                                       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)
 
                            ------------------------
 
<TABLE>
<S>                                           <C>
             SASKATCHEWAN, CANADA                                  N/A
       (STATE OR OTHER JURISDICTION OF                       (I.R.S. EMPLOYER
        INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)
            122 - 1ST AVENUE SOUTH
           SASKATOON, SASKATCHEWAN                               S7K 7G3
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                     (ZIP CODE)
</TABLE>
 
                                  306-933-8500
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
 
                            ------------------------
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __
 
                     APPLICABLE ONLY TO CORPORATE ISSUERS:
 
     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. As at October 31, 1996
45,566,890 Shares.
 
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<PAGE>   2
 
PART I. FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
     These interim consolidated financial statements do not include all
disclosure normally provided in annual financial statements. In management's
opinion, the unaudited financial information includes all adjustments
(consisting solely of normal recurring adjustments) necessary to present fairly
such information. Interim results are not necessarily indicative of the results
expected for the fiscal year.
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
            CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED          NINE MONTHS ENDED
                                                    SEPTEMBER 30               SEPTEMBER 30
                                                ---------------------     -----------------------
                                                  1996         1995          1996          1995
                                                --------     --------     ----------     --------
<S>                                             <C>          <C>          <C>            <C>
Net sales.....................................  $342,148     $214,609     $1,061,388     $555,033
Cost of goods sold............................   251,193      152,408        766,931      334,362
                                                --------     --------     ----------     --------
Gross Margin..................................    90,955       62,201        294,457      220,671
                                                --------     --------     ----------     --------
Research and development......................       390          320            955          945
Selling and administrative....................    15,142       14,054         43,985       35,498
Provincial mining and other taxes.............     8,596        8,752         29,497       32,625
Other expense (income)........................       409       (2,079)        (7,886)      (6,519)
                                                --------     --------     ----------     --------
                                                  24,537       21,047         66,551       62,549
                                                --------     --------     ----------     --------
Operating Income..............................    66,418       41,154        227,906      158,122
Interest Expense..............................    11,038       13,821         36,784       26,265
                                                --------     --------     ----------     --------
Income Before Income Taxes....................    55,380       27,333        191,122      131,857
Income Taxes..................................     8,608        4,256         28,274        9,561
                                                --------     --------     ----------     --------
Net Income....................................  $ 46,772     $ 23,077        162,848      122,296
                                                ========     ========
Retained Earnings, Beginning of Period........                               277,689      164,037
Dividends.....................................                               (35,816)     (33,997)
                                                                          ----------     --------
Retained Earnings, End of Period..............                            $  404,721     $252,336
                                                                          ==========     ========
Net Income Per Share (Note 3).................  $   1.03     $   0.53     $     3.58     $   2.83
                                                ========     ========     ==========     ========
Dividends Per Share (Note 4)..................  $   0.26     $   0.27     $     0.79     $   0.79
                                                ========     ========     ==========     ========
</TABLE>
 
              (See Notes to the Consolidated Financial Statements)
 
                                        1
<PAGE>   3
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                         (IN THOUSANDS OF U.S. DOLLARS)
 
<TABLE>
<CAPTION>
                                                                                                                               
                                                                     SEPTEMBER 30,     DECEMBER 31,
                                                                         1996              1995
                                                                     -------------     -----------
                                                                     (UNAUDITED)
<S>                                                                  <C>               <C>
                                              ASSETS
Current Assets
  Cash and short-term deposits.....................................    $ 108,534        $   40,497
  Accounts receivable..............................................      175,300           223,377
  Inventories (Note 2).............................................      189,457           221,911
  Prepaid expenses.................................................       13,228            12,041
  Other current assets.............................................        3,987             3,315
                                                                      ----------        ----------
                                                                         490,506           501,141
Property, plant and equipment......................................    1,983,780         2,032,339
Other assets.......................................................       46,212            48,337
                                                                      ----------        ----------
                                                                      $2,520,498        $2,581,817
                                                                      ==========        ==========
                                            LIABILITIES
Current Liabilities
  Accounts payable and accrued charges.............................    $ 150,618        $  199,222
  Current portion of long-term debt................................       88,755           164,971
  Current obligations under capital leases.........................          265               870
                                                                      ----------        ----------
                                                                         239,638           365,063
Long-term debt.....................................................      638,465           711,585
Obligations under capital leases...................................        1,268             2,913
Deferred income tax liability......................................       19,478             4,743
Accrued post-retirement/post-employment benefits...................       96,042            89,570
Accrued reclamation costs..........................................      148,386           151,531
Other non-current liabilities and deferred credits.................        6,060            14,537
                                                                      ----------        ----------
                                                                       1,149,337         1,339,942
                                                                      ----------        ----------
                                       SHAREHOLDERS' EQUITY
Share Capital......................................................      629,954           627,700
Contributed Surplus................................................      336,486           336,486
Retained Earnings..................................................      404,721           277,689
                                                                      ----------        ----------
                                                                       1,371,161         1,241,875
                                                                      ----------        ----------
                                                                      $2,520,498        $2,581,817
                                                                      ==========        ==========
</TABLE>
 
              (See Notes to the Consolidated Financial Statements)
 
                                        2
<PAGE>   4
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                          NINE MONTHS ENDED
                                                                            SEPTEMBER 30
                                                                       -----------------------
                                                                         1996          1995
                                                                       ---------     ---------
<S>                                                                    <C>           <C>
Operating Activities
Net income...........................................................  $ 162,848     $ 122,296
Items not affecting cash
  Depreciation and amortization......................................     67,242        44,108
  Loss (gain) on disposal of property, plant and equipment...........        786            (7)
  Provision for deferred income taxes................................     14,735         1,576
  Provision for post-retirement/post-employment benefits.............      6,472           762
                                                                       ---------     ---------
                                                                         252,083       168,735
Changes in non-cash operating working capital
  Accounts receivable................................................     48,078       (35,727)
  Inventories........................................................     29,619        (4,705)
  Prepaid expenses...................................................     (1,188)          959
  Other current assets...............................................       (672)        7,579
  Accounts payable and accrued charges...............................    (48,604)       18,193
Accrued reclamation costs............................................     (3,147)       (1,448)
Other non-current liabilities and deferred credits...................     (8,477)         (888)
                                                                       ---------     ---------
Cash provided by operating activities................................    267,692       152,698
                                                                       ---------     ---------
Investing Activities
Additions to property, plant and equipment
  -- Acquisition of PCS Phosphate....................................         --      (812,226)
  -- Additions to property, plant and equipment......................    (37,101)      (14,335)
Proceeds on disposal of property, plant and equipment................     22,285           448
Disposals of (additions to) other assets.............................        309        (9,424)
                                                                       ---------     ---------
Cash used in investing activities....................................    (14,507)     (835,537)
                                                                       ---------     ---------
Cash (deficiency) before financing activities........................    253,185      (682,839)
                                                                       ---------     ---------
Financing Activities
(Repayment of) proceeds from long-term obligations...................   (151,586)      759,105
Proceeds from short-term debt........................................         --        22,947
Dividends............................................................    (35,816)      (33,997)
Issuance of shares...................................................      2,254         2,079
                                                                       ---------     ---------
Cash (used in) provided by financing activities......................   (185,148)      750,134
                                                                       ---------     ---------
Increase in Cash.....................................................     68,037        67,295
Cash, Beginning of Period............................................     40,497        16,576
                                                                       ---------     ---------
Cash, End of Period..................................................  $ 108,534     $  83,871
                                                                       =========     =========
Supplemental cash flow disclosure
  Interest paid......................................................  $  39,091     $  22,491
  Income taxes paid..................................................  $  24,419     $   9,375
</TABLE>
 
              (See Notes to the Consolidated Financial Statements)
 
                                        3
<PAGE>   5
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
 1. SIGNIFICANT ACCOUNTING POLICIES
 
     The Company's accounting policies are in accordance with accounting
principles generally accepted in Canada. These policies are consistent with
accounting principles generally accepted in the United States except as outlined
in Note 5.
 
  Basis of presentation
 
     The consolidated financial statements include the accounts of Potash
Corporation of Saskatchewan Inc. and its subsidiaries.
 
 2. INVENTORIES
 
<TABLE>
<CAPTION>
                                                             SEPTEMBER 30,     DECEMBER 31,
                                                                 1996              1995
                                                             -------------     ------------
        <S>                                                  <C>               <C>
        Finished product...................................    $  86,031         $115,491
        Materials and supplies.............................       70,335           66,708
        Raw materials......................................        9,142           11,954
        Work in process....................................       23,949           27,758
                                                                --------         --------
                                                               $ 189,457         $221,911
                                                                ========         ========
</TABLE>
 
 3. EARNINGS PER SHARE
 
     Year-to-date earnings per share are calculated on the weighted average
shares issued and outstanding during the nine months ended September 30, 1996 of
45,525,000 (1995 -- 43,202,000).
 
 4. DIVIDENDS
 
     The Company declares its dividends in Canadian dollars.
 
 5. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
 
     A description of the accounting principles which differ significantly in
certain respects from generally accepted accounting principles in the United
States (US GAAP) follows:
 
     Earnings per share: In computing primary earnings per share, under US GAAP,
the stock options are included in the calculation to the extent that they are
exercisable.
 
     Deferred income taxes: Deferred tax assets have been recognized only to the
extent of reducing deferred tax liabilities. US GAAP would require that deferred
tax assets be recorded when their realization is more likely than not.
 
                                        4
<PAGE>   6
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
     The application of US GAAP, as described above, would have had the
following approximate effects on net income, net income per share, total assets
and shareholders' equity:
 
<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED             NINE MONTHS ENDED
                                                  SEPTEMBER 30                  SEPTEMBER 30
                                            -------------------------     -------------------------
                                               1996           1995           1996           1995
                                            ----------     ----------     ----------     ----------
<S>                                         <C>            <C>            <C>            <C>
Net income as reported in the consolidated
  statements of income and retained
  earnings................................  $   46,772     $   23,077     $  162,848     $  122,296
Item decreasing reported net income
Deferred income taxes.....................       1,435             --          5,753             --
                                            ----------     ----------     ----------     ----------
Approximate net income -- US GAAP.........  $   45,337     $   23,077     $  157,095     $  122,296
                                            ==========     ==========     ==========     ==========
Weighted average shares outstanding -- US
  GAAP....................................  46,028,000     43,834,000     45,989,000     43,589,000
                                            ==========     ==========     ==========     ==========
Net income per share -- US GAAP...........  $     0.98     $     0.52     $     3.42     $     2.80
                                            ==========     ==========     ==========     ==========
</TABLE>
 
<TABLE>
<CAPTION>
                                                                     SEPTEMBER 30,     DECEMBER 31,
                                                                         1996              1995
                                                                     -------------     ------------
<S>                                                                  <C>               <C>
Total assets as reported in the consolidated statements of
  financial position...............................................   $ 2,520,498       $2,581,817
Item increasing reported total assets
Deferred income tax asset..........................................        12,845           18,598
                                                                       ----------       ----------
Approximate total assets -- US GAAP................................   $ 2,533,343       $2,600,415
                                                                       ==========       ==========
Shareholders' equity as reported in the consolidated statements of
  financial position...............................................   $ 1,371,161       $1,241,875
Item increasing reported shareholders' equity
Deferred income taxes..............................................        12,845           18,598
                                                                       ----------       ----------
Approximate shareholders' equity -- US GAAP........................   $ 1,384,006       $1,260,473
                                                                       ==========       ==========
</TABLE>
 
 6. COMPARATIVE FIGURES
 
     Certain of the prior period's comparative figures have been reclassified to
conform with the current period's presentation. Results for the first nine
months of 1995 do not include: (1) the results of White Springs which was
acquired October 31, 1995, and (2) the results of PCS Phosphate (formerly
Texasgulf Inc.) prior to April 10, 1995, the date of acquisition.
 
 7. PROPOSED ACQUISITIONS
 
     On September 2, 1996 the Company entered into a definitive agreement to
acquire Arcadian Corporation, subject to approval by Arcadian shareholders and
other conditions. For each share of common stock of Arcadian (approximately 45.5
million on a fully diluted basis) the price is expected to be U.S. $25 to $27
per share -- $12.25 in cash and the remainder in common shares of the Company at
an exchange ratio of 0.17713 of a share of the Company (subject to adjustment)
for a share of Arcadian.
 
     The Company is engaged in discussions with BASF AG to acquire for cash, a
51% interest in Kali und Salz AG (K&S AG). The holdings of K&S AG include a 51%
interest in Kali und Salz GmbH and a 50% interest in Potacan.
 
                                        5
<PAGE>   7
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
 
RESULTS OF OPERATIONS
 
OVERVIEW
 
     Third quarter and year-to-date September 30 results for 1995 do not include
(1) the results of White Springs, which was acquired October 31, 1995, and (2)
the results of PCS Phosphate (formerly Texasgulf Inc.) prior to April 10, 1995,
the date of acquisition.
 
     Net sales and net income for the three months ended September 30, 1996,
improved 59 percent and 103 percent, respectively, over the same period in 1995.
Net income for the three months ended September 30, 1996, was $46.8 million
(1995 -- $23.1 million) on net sales of $342.1 million (1995 -- $214.6 million),
or $1.03 per share (1995 -- $0.53 per share). For the third quarter of 1996,
gross margin and operating income were $91.0 million and $66.4 million,
respectively, compared to a gross margin of $62.2 million and an operating
income of $41.2 million for the same period in 1995 (increases of 46 percent and
61 percent, respectively).
 
     For the three months ended September 30, 1996, North American and offshore
net sales revenue were $202.9 million (1995 -- $101.2 million) and $139.2
million (1995 -- $113.4 million), respectively. North American net sales revenue
represented 59 percent (1995 -- 47 percent) of total net sales revenue, whereas
offshore sales represented 41 percent of net sales revenue (1995 -- 53 percent).
 
     Potash, phosphate and ammonia revenue for the quarter ended September 30,
1996 were $101.6 million (1995 -- $84.0 million), $217.4 million (1995 -- $130.6
million), and $23.1 million (1995 -- not applicable), respectively, an increase
of $17.6 million in potash revenue, an $86.8 million increase in phosphate
revenue and a $23.1 million increase in ammonia revenue, when compared to the
same period a year ago.
 
     Gross margins for the third quarter of 1996 increased $28.8 million or 46
percent over the same quarter in 1995. Gross margin for potash was $44.9
million, an increase of $3.3 million when compared to the same quarter of 1995.
Gross margins for phosphate fertilizer, feed, industrial and ammonia products
were $27.3 million (1995 -- $9.5 million), $12.3 million (1995 -- $9.7 million),
$6.1 million (1995 -- $1.3 million) and $0.4 million (1995 -- not applicable),
respectively. Domestic fertilizer sales were strong in both potash and phosphate
nutrients as customers purchased during the summer fill program in anticipation
of a good fall application period.
 
     The increase in net income of $23.7 million for the quarter ended September
30, 1996 is largely attributable to additional revenues from the phosphate
acquisitions, record third quarter potash sales volumes, improved phosphate
prices and lower interest expense. This was offset by an increase in cost of
goods sold, income taxes and selling and administrative expenses.
 
     Net sales and net income for the nine months ended September 30, 1996
improved 91 percent and 33 percent, respectively, over the same period in 1995.
Net income for the nine months ended September 30, 1996 was $162.8 million
(1995 -- $122.3 million) on net sales of $1,061.4 million (1995 -- $555.0
million), or $3.58 per share (1995 -- $2.83 per share). For the first nine
months of 1996, gross margin and operating income were $294.5 million and $227.9
million, respectively, compared to a gross margin of $220.7 million and
operating income of $158.1 million for the same period in 1995 (increases of 33
percent and 44 percent, respectively).
 
     For the nine months ended September 30, 1996, North American and offshore
net sales revenue were $638.2 million (1995 -- $246.1 million) and $423.2
million (1995 -- $309.0 million), respectively. North American net sales revenue
represented 60 percent (1995 -- 44 percent) of total net sales revenue, whereas
offshore sales represented 40 percent of net sales revenue (1995 -- 56 percent).
 
     Potash, phosphate and ammonia net sales revenue for the first nine months
of 1996 were $309.4 million (1995 -- $329.3 million), $663.5 million
(1995 -- $225.8 million), and $88.4 million (1995 -- not applicable),
respectively, a decrease of $19.8 million in potash net sales revenue, a $437.8
million increase in
 
                                        6
<PAGE>   8
 
phosphate net sales revenue and an $88.4 million increase in ammonia net sales
revenue, when compared to the same period a year ago.
 
     Gross margins for the first nine months of 1996 increased $73.8 million or
33 percent over the same period in 1995. Gross margin for potash was $148.7
million, a decrease of $31.9 million when compared to the first nine months of
1995. This decrease was more than offset by a gross margin of $145.8 million for
phosphate and ammonia. Of this $145.8 million gross margin, $91.9 million
(1995 -- $18.3 million) is attributable to phosphate fertilizer products, $32.1
million (1995 -- $12.9 million) is attributable to feed products, $19.7 million
(1995 -- $8.8 million) is attributable to industrial products, and $2.1 million
(1995 -- not applicable) is attributable to ammonia.
 
     The increase in net income of $40.6 million for the nine months ended
September 30, 1996, is largely attributable to additional revenues from the
phosphate acquisitions, improved phosphate prices and a decrease in Saskatchewan
provincial mining and other taxes. This was offset by an increase in interest
expense of $10.5 million relating to debt financing of $878.8 million incurred
to purchase PCS Phosphate and White Springs, a $432.6 million increase in cost
of sales, an $18.7 million increase in income taxes, and an increase in selling
and administrative expenses of $8.5 million.
 
     Although the Company had increased earnings in the first nine months of
1996 when compared to the same period in 1995, market conditions did not live up
to the expectations for the fertilizer industry in general. Inclement spring
weather put a damper on the domestic market, resulting in a delayed seeding and
harvest season. In the export market, large purchases at the end of 1995, and
subsidy issues resulted in fewer sales to China and India during the first nine
months of 1996 when compared to the first nine months of 1995. After a slow
start, shipments to Brazil picked up and have remained strong in 1996.
 
     The Company is engaged in discussions with BASF AG to acquire from BASF AG,
for cash, a 51 percent interest in the German publicly traded company, K&S AG.
The holdings of K&S AG include a 51 percent interest in Kali und Salz GmbH which
is the owner and operator of Germany's potash mines. The remaining 49 percent
interest in Kali und Salz GmbH is held by Beteiligungs-Management-Gesellschaft
Berlin mbH (BMGB), an agency of the German government. Potacan is a joint
venture between K&S AG and Enterprise Miniere et Chimique of Paris, France.
Potacan, through a subsidiary, owns and operates a potash mine near Sussex, New
Brunswick. The agreement of purchase and sale, if concluded, will be subject to
necessary regulatory approval.
 
     The Company and Arcadian Corporation (NYSE: ACA; ACA PRA) jointly announced
that they have entered into a definitive merger agreement. The Company is to
acquire all the outstanding common stock of Arcadian (approximately 45.5 million
shares on a fully diluted basis) at a price of U.S. $25 to U.S. $27 per share,
providing U.S. $12.25 per share in cash and the remainder in common stock of the
Company at an exchange of 0.17713 shares of the Company (subject to adjustment)
for every share of Arcadian.
 
     The merger agreement contemplates that Arcadian's outstanding shares of
Mandatorily Convertible Preferred Stock, Series A, will be converted into shares
of Arcadian common stock immediately prior to the merger date and will be
treated identically to all other shares of Arcadian common stock in the merger.
The merger agreement includes certain conditions, including, among other things,
the approval by the Arcadian stockholders. The terms of the transaction,
including the offering of the Company's common shares, will be set forth by
means of a proxy statement/prospectus.
 
POTASH REVENUE
 
     Potash net sales revenue for the quarter ended September 30, 1996 increased
by $17.6 million or 21 percent as compared to the same period in 1995
(1996 -- $101.6 million; 1995 -- $84.0 million). The Company sold 1.437 million
tonnes of potash in the third quarter of 1996, compared to 1.138 million tonnes
sold in the same period last year, an increase of .299 million tonnes or 26
percent. Potash prices decreased by 4 percent for the third quarter of 1996 when
compared to the third quarter of 1995.
 
     In the third quarter of 1996, North American and offshore potash sales
volumes increased 60 percent and 3 percent, respectively, over the same period
in 1995. Domestic customers bought mainly during the summer
 
                                        7
<PAGE>   9
 
prior to announced price increases. Exclusive of sales to another producer,
prices received from domestic customers were down slightly which is often the
case during a summer fill. Potash prices increased 5 percent in the offshore
market. There was a greater proportion of higher priced New Brunswick tonnes
sold in the export market compared to the same period a year ago. Price
realizations in the domestic market were down by 9 percent from the third
quarter a year ago.
 
     North American net sales revenue from potash operations represented 42
percent of the potash sales revenue of the Company during the third quarter of
1996 (1995 -- 35 percent). In the third quarter of 1996, the increase in North
American potash sales volumes and the decrease in North American prices resulted
in a $13.4 million increase in North American potash net sales revenue over the
same period in 1995. North American potash sales volumes for the third quarter
of 1996 increased .279 million tonnes (1996 -- .745 million tonnes; 1995 -- .466
million tonnes) compared to the third quarter of 1995. Sales volumes of .084
million tonnes to another producer increased North American volumes.
 
     In the third quarter of 1996, offshore net sales revenue from potash
operations represented 58 percent of potash net sales revenue of the Company
(1995 -- 65 percent). In the third quarter of 1996, the increase in offshore
sales volumes and the increase in overall offshore selling price resulted in a
$4.2 million increase in offshore potash net sales revenue over the same period
in 1995. In the offshore market, the Company sold .691 million potash tonnes
during the third quarter of 1996 (1995 -- .672 million tonnes), an increase of 3
percent. Of the .691 million tonnes, .502 million tonnes were sold through
Canpotex and the remaining .189 million tonnes were produced by PCS New
Brunswick and sold and delivered to offshore markets, such as Brazil, by PCS
Sales.
 
     Potash net sales revenue for the first nine months of 1996 decreased by
$19.9 million or 6 percent as compared to the first nine months of 1995
(1996 -- $309.4 million; 1995 -- $329.3 million). The Company sold 4.324 million
tonnes of potash in the first nine months of 1996, compared to 4.590 million
tonnes sold in the same period last year, a decrease of .266 million tonnes or 6
percent. Overall potash prices were flat in the first nine months of 1996 as
compared to the first nine months of 1995.
 
     In the first nine months of 1996, North American and offshore potash sales
volumes increased 20 percent and decreased 21 percent, respectively, over the
same period in 1995.
 
     North American net sales revenue from potash operations represented 40
percent of the potash net sales revenue of the Company during this year's first
nine months. In the first nine months of 1996, the increase in North American
potash sales volumes and a decrease in North American prices resulted in a $12.9
million increase in North American potash net sales revenue over the same period
in 1995. North American potash sales volumes for the first nine months of 1996
increased .346 million tonnes (1996 -- 2.066 million tonnes; 1995 -- 1.720
million tonnes) compared to the first nine months of 1995.
 
     In the first nine months of 1996, offshore net sales revenue from potash
operations represented 60 percent of potash net sales revenue of the Company. In
the first nine months of 1996, the decrease in offshore sales volumes and the
increase in overall offshore selling price resulted in a $32.7 million decrease
in offshore potash net sales revenue over the same period in 1995. In the
offshore market, the Company sold 2.257 million potash tonnes during the first
nine months of 1996 (1995 -- 2.870 million tonnes), a decrease of 21 percent. Of
the 2.257 million tonnes, 1.729 million tonnes were sold through Canpotex and
the remaining .528 million tonnes were produced by PCS New Brunswick and sold
and delivered to offshore markets.
 
PHOSPHATE REVENUE
 
     For the quarter ended September 30, 1996, phosphate net sales revenue was
$217.4 million; phosphate fertilizer $151.7 million (70 percent); non-fertilizer
products $63.6 million (29 percent); and phosphate rock $2.1 million (1
percent). For the same quarter in 1995 net sales revenue was $130.6 million;
phosphate fertilizer $83.4 million (64 percent); non-fertilizer products $45.2
million (35 percent); and phosphate rock $2.0 million (1 percent).
 
     During the third quarter of 1996, the Company sold .783 million tonnes of
phosphate fertilizer (.382 million tonnes in North America; .401 million tonnes
in the offshore market); .223 million tonnes of
 
                                        8
<PAGE>   10
 
non-fertilizer products (.205 million tonnes in North America; .018 million
tonnes in the offshore market); and .059 million tonnes of phosphate rock (.001
million tonnes in North America and the remaining .058 million tonnes in the
offshore market). For the comparable period in 1995, the Company sold .461
million tonnes of phosphate fertilizer (.156 million tonnes in North America;
 .305 million tonnes in the offshore market); .178 million tonnes of
non-fertilizer products (.155 million tonnes in North America; .023 million
tonnes in the offshore market); and .085 million tonnes of phosphate rock (.013
million tonnes in North America and the remaining .072 million tonnes in the
offshore market).
 
     For the third quarter of 1996, North American phosphate net sales revenue
accounted for $136.9 million (63 percent) of total phosphate net sales revenue
of $217.4 million. In the quarter ended September 30, 1996, 56 percent of the
Company's North American phosphate net sales revenue was earned from phosphate
fertilizer products which represented 65 percent of the Company's North American
phosphate sales volumes. Offshore sales accounted for 37 percent of total
phosphate product net sales revenue for the third quarter of 1996 and 44 percent
of volumes. In the quarter ended September 30, 1996, 92 percent of the Company's
offshore phosphate net sales revenue was earned from phosphate fertilizer
products which represented 84 percent of the Company's offshore phosphate sales
volumes.
 
     Third quarter 1996 net sales revenue from liquid and solid fertilizer was
$151.6 million (1995 -- $83.3 million) with sales volumes of .783 million tonnes
(1995 -- .461 million tonnes). Solid phosphate fertilizer (substantially all
DAP) accounted for 62 percent or $94.3 million of the total. Offshore net sales
revenue of DAP accounted for 57 percent of solid fertilizer net sales revenue
while North American net sales revenue of liquid fertilizer accounted for 59
percent of liquid fertilizer net sales revenue. The average net sales price for
liquid and solid fertilizer improved by 14 percent and 4 percent, respectively.
DAP prices were down for the third quarter of 1996 when compared to the second
quarter of 1996. Export liquid and solid fertilizer sales prices improved by 13
percent and 5 percent, respectively, compared to the same period a year ago.
North American liquid fertilizer sales prices improved 5 percent while solid
fertilizer sales prices increased slightly when compared to the same period in
1995.
 
     Net sales revenue from non-fertilizer products (animal feed and industrial)
during the quarter ended September 30, 1996, were $63.6 million (1995 -- $45.2
million) with sales volumes of .223 million tonnes (1995 -- .178 million
tonnes). For the third quarter of 1996, feed sales tonnage was .176 million
tonnes (1995 -- .120 million tonnes) with 10 percent sold offshore while the
remaining .047 million tonnes were industrial products sold to North American
customers. Feed product prices for the quarter ended September 30, 1996,
improved by 13 percent when compared to the same period a year ago. North
American industrial selling prices increased by 28 percent for the third quarter
of 1996 when compared to the same period in 1995.
 
     Phosphate net sales revenue for the nine months ended September 30, 1996
was $663.5 million. The distribution of this revenue was as follows: phosphate
fertilizer $462.4 million (70 percent); non-fertilizer products (animal feed and
industrial products) $195.8 million (29 percent); and phosphate rock $5.3
million (1 percent).
 
     During the nine months ended September 30, 1996, the Company sold 2.313
million tonnes of phosphate fertilizer (1.138 million tonnes in North America;
1.175 million tonnes in the offshore market); .741 million tonnes of
non-fertilizer products (.681 million tonnes in North America; .060 million
tonnes in the offshore market); and .166 million tonnes of phosphate rock (.003
million tonnes in North America and the remaining .163 million tonnes in the
offshore market). For the comparable period in 1995, the Company sold .761
million tonnes of phosphate fertilizer (.270 million tonnes in North America;
 .491 million tonnes in the offshore market); .334 million tonnes of
non-fertilizer products (.304 million tonnes in North America; .030 million
tonnes in the offshore market); and .187 million tonnes of phosphate rock (.024
million tonnes in North America and the remaining .163 million tonnes in the
offshore market).
 
     For the first nine months of 1996, North American phosphate net sales
revenue accounted for $426.1 million (64 percent) of total phosphate net sales
revenue of $663.5 million. In the nine months ended September 30, 1996, 57
percent of the Company's North American phosphate net sales revenue was earned
from phosphate fertilizer products which represented 62 percent of the Company's
North American phosphate sales volumes. Offshore sales accounted for 36 percent
of total phosphate product net sales revenue for the first
 
                                        9
<PAGE>   11
 
nine months of 1996 and 43 percent of volumes. In the nine months ended
September 30, 1996, 92 percent of the Company's offshore phosphate net sales
revenue was earned from phosphate fertilizer products which represented 84
percent of the Company's offshore phosphate sales volumes.
 
     For the first nine months of 1996 net sales revenue from liquid and solid
fertilizers was $462.4 million (1995 -- $136.5 million) with sales volumes of
2.313 million tonnes (1995 -- .761 million tonnes). Solid phosphate fertilizer
(substantially all DAP) accounted for 62 percent or $286.4 million of the total.
Offshore net sales revenue of DAP accounted for 56 percent of solid fertilizer
net sales revenue while North American net sales revenue of liquid fertilizer
accounted for 67 percent of liquid fertilizer net sales revenue. The average net
sales price for liquid and solid fertilizer improved by 13 percent and 10
percent, respectively. Export liquid and solid fertilizer sales prices improved
by 9 percent and 12 percent, respectively, compared to the same period a year
ago. North American liquid and solid fertilizer sales prices improved 4 percent
and 6 percent, respectively, when compared to the same period in 1995.
 
     Net sales revenue from animal feed and industrial products during the nine
months ended September 30, 1996, were $195.8 million (1995 -- $85.1 million)
with sales volumes of .741 million tonnes (1995 -- .334 million tonnes). For the
first nine months of 1996, feed sales tonnage was .569 million tonnes (1995 --
 .226 million tonnes) with 11 percent sold offshore while the remaining .173
million tonnes were industrial products (1995 -- .108 million tonnes) sold to
North American customers. Feed product prices for the nine months ended
September 30, 1996, improved by 8 percent when compared to the same period a
year ago. North American industrial selling prices increased by 8 percent for
the first nine months of 1996 when compared to the same period in 1995.
 
AMMONIA REVENUE
 
     For the quarter ended September 30, 1996, ammonia sales contributed $23.2
million to net sales revenue with sales volumes of .128 million tonnes. Ammonia
sales for the nine months ended September 30, 1996 contributed $88.4 million to
net sales revenue with sales volumes of .451 million tonnes.
 
COST OF GOODS SOLD
 
     During the third quarter of 1996 the Company produced .748 million
potassium chloride (KCl) tonnes, a 3 percent decrease from the .770 million
tonnes produced in the third quarter of 1995, due to lower demand. During the
third quarter of 1996 the Company produced .533 million phosphoric acid (P2O5)
tonnes (1995 -- .283 million tonnes), an increase of 88 percent, due principally
to the addition of White Springs.
 
     Shutdown weeks were similar but potash unit cost of sales increased by 6
percent in the third quarter of 1996 compared to the same period in 1995 as the
Company sold product from higher cost inventory produced during the second
quarter of 1996.
 
     In the third quarter of 1996, lower input cost for both sulfur and ammonia
reduced phosphate cost of goods sold as compared to the second quarter of 1996.
Lower feed costs were the result of improved operations at White Springs.
 
     Depreciation expense for the third quarter of 1996 was $21.1 million
compared to $11.1 million in 1995, an increase of $10 million or 90 percent. The
increase is a result of an increase of $9.2 million in depreciation expense from
the acquired phosphate operations. Depreciation expense for the potash
operations increased by $.8 million as a result of higher sales tonnage in the
third quarter of 1996 when compared to the same period in 1995.
 
     For the nine months ended September 30, 1996, the Company produced 3.959
million potassium chloride (KCl) tonnes, compared to 4.701 million tonnes in the
first nine months of 1995, a decrease of .742 million tonnes (16 percent)
compared to 1995. For the nine months ended September 30, 1996, the Company
produced 1.553 million phosphoric acid (P2O5) tonnes from its phosphate
operations, compared to .554 million tonnes in 1995.
 
                                       10
<PAGE>   12
 
     Potash unit cost of sales increased by 15 percent in the first nine months
of 1996 compared to the same period in 1995 due in part to 16.4 additional
shutdown weeks and a greater proportion of higher cost New Brunswick product in
the mix.
 
     Depreciation expense for the first nine months of 1996 was $67.2 million
compared to $44.1 million in 1995, an increase of $23.1 million or 52 percent.
The increase is a result of $26.7 million additional depreciation from the
acquired phosphate operations. Depreciation expense for the potash operations
decreased by $3.6 million as a result of additional shutdown weeks in the first
nine months of 1996 when compared to the same period in 1995.
 
SELLING AND ADMINISTRATIVE
 
     Selling and administrative expenses during the third quarter of 1996 were
$15.1 million as compared to $14.1 million in 1995, an increase of $1.0 million.
During the first nine months of 1996, selling and administrative expenses were
$44.0 million as compared to $35.5 million in 1995, an increase of $8.5 million.
The increase is attributable to the acquisitions of PCS Phosphate and White
Springs and to general increases in supplies, compensation and benefits.
 
PROVINCIAL MINING AND OTHER TAXES
 
     Saskatchewan's potash production tax is comprised of a base tax per tonne
of product sold and an additional tax based on mine-by-mine profits. The New
Brunswick division and the Saskatchewan divisions pay a provincial crown
royalty, which is accounted for under cost of goods sold.
 
     Increased profitability at certain of the mines increased the rate of taxes
paid to the Saskatchewan government but total taxes were reduced by lower prices
and potash sales volumes from Saskatchewan. For the third quarter of 1996,
Saskatchewan provincial mining and other taxes were $8.6 million as compared to
$8.8 million in the third quarter of 1995, a decrease of 2 percent. Potash
production tax for the third quarter of 1996 was $5.6 million compared to $6.4
million in the same period in 1995, a decrease of 12 percent. Saskatchewan
capital tax was $3.0 million in the third quarter ended September 30, 1996
compared to $2.4 million in the same period in 1995, an increase of 27 percent.
For the first nine months of 1996, Saskatchewan provincial mining and other
taxes were $29.5 million as compared to $32.6 million in the first nine months
of 1995, a decrease of 10 percent. Potash production tax for the first nine
months of 1996 was $19.8 million compared to $22.1 million in the same period in
1995, a decrease of 10 percent. Saskatchewan capital tax was $9.7 million in the
nine months ended September 30, 1996 compared to $10.5 million in the same
period in 1995, a decrease of 8 percent.
 
INTEREST EXPENSE
 
     For the third quarter of 1996, interest expense was $11.0 million as
compared to $13.8 million in the same period in 1995. For the first nine months
of 1996, interest expense was $36.8 million as compared to $26.3 million in the
same period in 1995. The 1996 amount includes the debt incurred with the
acquisition of the phosphate properties acquired last year in April and October
while the 1995 amount includes only the April acquisition.
 
INCOME TAXES
 
     Income taxes in the third quarter of 1996 were $8.6 million, compared to
$4.3 million in the same period of 1995, an increase of $4.3 million. Income
taxes in the first nine months of 1996 were $28.3 million, compared to $9.6
million in the same period of 1995, an increase of $18.7 million. The increase
is largely attributable to US withholding taxes, alternative minimum taxes and
deferred income tax, relating to the Company's acquired phosphate operations.
The tax rate applicable to the U.S. operations for the first nine months of 1996
and for the first nine months of 1995 is approximately 21 percent of income
before taxes.
 
                                       11
<PAGE>   13
 
ANALYSIS OF FINANCIAL CONDITION AND CASH FLOW
 
     Working capital for the first nine months of 1996 increased by $114.8
million. Cash flow from operations was $267.7 million. Quick and current ratios
were 1.18 and 2.05 at September 30, 1996 (.72 and 1.37 respectively at December
31, 1995). The Company paid down its debt by $151.6 million (of which $36.0
million was voluntary) and paid dividends of $35.8 million. At the end of the
first nine months of 1996, the debt to capital ratio was at 34.7 percent (41.5
percent at December 31, 1995) and the interest coverage ratio was 6.20:1 (6.02:1
at December 31, 1995). The net debt to market capitalization at September 30,
1996 was 18.6 percent (57.4 percent at December 31, 1995).
 
OUTLOOK
 
     The statements in this "Management Discussion and Analysis" in this
"Outlook" section, relating to the period after September 30, 1996, are
forward-looking statements subject to uncertainties. The Company's financial
performance continues to be affected by price, worldwide state of supply and
demand for potash and phosphate products, application rates, government
assistance programs, weather conditions, exchange rates and availability and
agricultural and trade policies of producing and consuming nations which, among
other things, are influenced by domestic political conditions. The Company sells
to a diverse group of customers both by geography and by end product. Market
conditions by country will vary on a year-over-year basis and sales shift from
one period to another.
 
     The rising world population and the demand for better diets in developing
nations are expected to continue to drive consumption for fertilizer products
over the long-term. Over the short-term, there should be increased fertilizer
usage over the next few years as world grain stocks are at historically low
levels, crop prices remain strong, and governments around the world focus on
food production. The Company expects to be an important supplier to these
markets. While the consumption trend line is expected to continue to climb over
the long-term, there will be, at times, fluctuations in demand.
 
     The long-term outlook for PCS products continues to be optimistic. In the
short term, the offshore DAP market is improving which should support increased
prices. Prices remain firm in liquid phosphates. The health of the DAP market
depends on continued shipments to China while phosphoric acid is influenced by
shipments to India, which remain on schedule. In Brazil, the phosphate market
has improved in the second half of 1996. Brazil has been a large purchaser in
the potash market in 1996 as well. Subsidy issues in China and India have
affected potash shipments there but both countries are using internal
inventories and the prospects for 1997 shipments are promising. The feed
phosphate business tends to be strongest in the winter months.
 
     PCS continues to operate its potash mines by matching production to sales
demand. Shutdowns at potash mines for inventory correction will influence potash
production costs on a quarter over quarter comparative basis. Natural gas costs
are expected to be reduced by approximately 15 percent in the Saskatchewan
operations based on existing contracts for 1996. Sulphur and ammonia prices have
moderated and are expected to impact favourably upon phosphate processing input
costs for 1996.
 
     Capital expenditures in 1996 will exceed those in 1995 primarily due to a
full year of phosphate ownership and operation. Plans for such expenditures are
limited to sustaining capital.
 
     The narrative, included under this Management Discussion and Analysis, has
been prepared with reference to the financial statements reported under Canadian
Generally Accepted Accounting Principles.
 
                                       12
<PAGE>   14
 
PART II. OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
CIVIL ANTITRUST COMPLAINTS
 
     In June, 1993, the Company and a wholly-owned subsidiary, Potash
Corporation of Saskatchewan Sales Limited, whose name has been changed to PCS
Sales (Canada) Inc. ("PCS Sales"), were served with a complaint relating to a
suit filed in the United States District Court for Minnesota against most North
American potash producers, including the Company. The complaint alleges a
conspiracy among the defendants to fix the price of potash purchased by the
plaintiffs as well as potash purchased by the members of a class of certain
purchasers proposed by the plaintiffs. The complaint seeks treble damages in an
unspecified amount and other relief. Similar complaints were filed in the United
States District Courts for the Northern District of Illinois and the Western
District of Virginia. On motion of the defendants, all of the complaints were
transferred and consolidated for pre-trial purposes in the United States
District Court for Minnesota. Amended complaints were filed in March and April
1994. On January 12, 1995, the Minnesota Federal Court granted the plaintiffs'
motion for class certification. The Company and PCS Sales filed a motion for
summary judgment on December 22, 1995. United States Magistrate Raymond L.
Erickson held oral argument on that motion on April 18, 1996. On September 13,
1996, Magistrate Judge Erickson issued a report recommending that the court
grant defendant's motion for summary judgment. That recommendation is currently
being considered by Judge Richard H. Kyle, who has scheduled a December 19, 1996
oral argument.
 
     Additional complaints were filed in the California and Illinois State
Courts on behalf of purported classes of indirect purchasers of potash in those
states. The Company moved to dismiss the California State Court lawsuit for lack
of personal jurisdiction and the court ruled that it does not have personal
jurisdiction over the Company but that it does have personal jurisdiction over
PCS Sales. The case remains at an early stage; no merits discovery has taken
place. The Illinois State Court dismissed the Illinois State Court complaint for
failure to state a cause of action. The Illinois plaintiff has appealed that
dismissal.
 
     Insofar as the allegations of wrongdoing relate to the Company, management
of the Company, having consulted with legal counsel, believes that the
allegations are without merit, that the Company has valid defences and that the
lawsuits will not have a material adverse effect on the Company.
 
ARCADIAN CORPORATION SHAREHOLDER LITIGATION
 
     Following the public announcement on August 7, 1996 of Arcadian
Corporation's execution of a letter of intent with Freeport-McMoRan Inc.
concerning a potential business combination, five lawsuits were filed in the
Court of Chancery of the State of Delaware in and for New Castle County on
behalf of a purported class of all stockholders of Arcadian Corporation other
than the defendants and their affiliates. Arcadian and some or all of its
directors (including one former director who was subsequently dismissed from the
lawsuits) were named as defendants in the lawsuits. On September 5, 1996,
following the public announcement of the Company's proposed acquisition of
Arcadian Corporation through a merger (the "Merger"), an amended complaint (the
"Amended Complaint") was filed in two of the five lawsuits. The Company is named
as an additional defendant in the Amended Complaint, but the Company has not yet
received service of process. The Amended Complaint alleges generally that the
defendants acted improperly in causing Arcadian Corporation to enter into a
merger agreement with the Company, and seeks an injunction preventing the
Merger, unspecified monetary damages and other relief. On September 16, 1996,
the court signed an order consolidating all five lawsuits and ordering that the
Amended Complaint serve as the complaint in the consolidated action. Arcadian
and its directors have agreed to respond formally to the Amended Complaint on or
before November 27, 1996. The defendants have stated that they intend to
vigorously defend the lawsuit.
 
BFI, INC. LITIGATION
 
     On May 20, 1995 a complaint was filed by Occidental Chemical Corporation
("Oxychem") against Bienville Forest Investments, Inc. ("BFI, Inc.") seeking
conveyance of 365 acres of land from BFI, Inc., pursuant to an option to
purchase reclaimed lands. BFI Inc. counterclaimed against Oxychem seeking
 
                                       13
<PAGE>   15
 
damages arising from alleged trespass, nuisance, interference with business
relationships and fraud. BFI Inc. also, requested that the court require Oxychem
to convey certain properties to BFI Inc. that had been previously deeded by BFI
Inc. to Oxychem. White Springs Agricultural Chemicals, Inc. ("White Springs")
moved to intervene as a party and the court granted the motion. BFI, Inc. has
argued that the option is unenforceable on grounds including: (i) the option
allegedly constitutes an unreasonable restraint on alienation or a violation of
the rule against perpetuities; and (ii) enforcement allegedly is barred by the
statute of limitations, by the doctrine of laches, or by estoppel. White Springs
has similar options with respect to approximately 25,000 additional acres of
land in which BFI, Inc., and/or its affiliates, has an interest. On August 22,
1996, White Springs, BFI, Inc. and Glawson Investments Corp., a BFI, Inc.
affiliate ("Glawson"), signed a Settlement Agreement and a Letter of Intent for
Operating Agreement. The agreements settle the dispute among the parties as to
current and future land ownership and use. The agreements also release White
Springs from claims occurring on or after November 1, 1995, but do not release
claims that occurred while Occidental Chemical Corporation owned White Springs.
Under the agreements, White Springs did not agree to release any of its rights
to mine on any property; however, White Springs agreed to release future rights
to purchase property in the Suwannee River mine area while acquiring the right
to immediately purchase property in the Swift Creek mine area and White Springs
agreed to exchange with BFI, Inc. and Glawson certain properties to make their
respective holdings more nearly contiguous.
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
 
     (a) Exhibits
 
<TABLE>
<CAPTION>
        EXHIBIT NUMBER                            DESCRIPTION OF DOCUMENT
        --------------     ---------------------------------------------------------------------
        <C>                <S>
               2(a)        Agreement and Plan of Merger dated September 2, 1996, by and among
                           the registrant, Arcadian Corporation and PCS Nitrogen, Inc.
               3(i)        Restated Articles of Incorporation of the registrant dated October
                           31, 1989, as amended May 11, 1995, incorporated by reference to the
                           registrant's report on Form 10-K for the year ended December 31, 1995
                           (the "Form 10-K").
               3(ii)       Bylaws of the registrant dated March 2, 1995, incorporated by
                           reference to the Form 10-K.
               4(a)        Non-revolving Term Credit Facilities Agreement between The Bank of
                           Nova Scotia and other financial institutions and the registrant dated
                           April 10, 1995, incorporated by reference to Exhibit 4(b) to the Form
                           10-K.
               4(b)        First Amending Agreement between The Bank of Nova Scotia and other
                           financial institutions and the registrant dated May 23, 1995,
                           incorporated by reference to Exhibit 4(c) to the registrant's report
                           on Form 10-Q for the quarterly period ended March 31, 1996 (the "Form
                           10-Q").
               4(c)        Second Amending Agreement between The Bank of Nova Scotia and other
                           financial institutions and the registrant dated October 18, 1995,
                           incorporated by reference to Exhibit 4(d) to the Form 10-Q.
             The registrant hereby undertakes to file with the Securities and Exchange
        Commission, upon request, copies of any constituent instruments defining the rights of
        holders of long-term debt of the registrant or its subsidiaries that have not been filed
        herewith because the amounts represented thereby are less than 10% of the total assets
        of the registrant and its subsidiaries on a consolidated basis.
</TABLE>
 
                                       14
<PAGE>   16
 
<TABLE>
<CAPTION>
        EXHIBIT NUMBER                            DESCRIPTION OF DOCUMENT
        --------------     ---------------------------------------------------------------------
        <C>                <S>
              10(a)        Suspension Agreement concerning Potassium Chloride from Canada dated
                           January 7, 1988, among U.S. Department of Commerce, Potash
                           Corporation of Saskatchewan, International Minerals and Chemical
                           (Canada) Limited, Noranda, Inc. (Central Canada Potash Co.), Potash
                           Company of America, a Division of Rio Algom Limited, S & P Canada, II
                           (Kalium Chemicals), Cominco Ltd., Potash Company of Canada Limited,
                           Agent for Denison-Potacan Potash Co. and Saskterra Fertilizers Ltd.,
                           incorporated by reference to the registrant's Form F-1 (File No.
                           33-31303) (the "F-1 Registration Statement").
              10(b)        Sixth Voting Agreement dated April 22, 1978, between Central Canada
                           Potash, Division of Noranda, Inc., Cominco Ltd., International
                           Minerals and Chemical Corporation (Canada) Limited, PCS Sales and
                           Texasgulf Inc., incorporated by reference to the F-1 Registration
                           Statement.
              10(c)        Canpotex Limited Shareholders Seventh Memorandum of Agreement
                           effective April 21, 1978, between Central Canada Potash, Division of
                           Noranda Inc., Cominco Ltd., International Minerals and Chemical
                           Corporation (Canada) Limited, PCS Sales, Texasgulf Inc. and Canpotex
                           Limited as amended by Canpotex S & P amending agreement dated
                           November 4, 1987, incorporated by reference to the F-1 Registration
                           Statement.
              10(d)        Producer Agreement dated April 21, 1978, between Canpotex Limited and
                           PCS Sales, incorporated by reference to the F-1 Registration
                           Statement.
              10(e)        PCS Sales -- Saskterra Special Canpotex Entitlement effective June
                           13, 1990, incorporated by reference to the registrant's Form S-1
                           (File No. 33-36283).
              10(f)        Canpotex/PCS Amending Agreement, dated with effect October 1, 1992,
                           incorporated by reference to the Form 10-K.
              10(g)        Canpotex PCA Collateral Withdrawing/PCS Amending Agreement, dated
                           with effect October 7, 1993, incorporated by reference to the Form
                           10-K.
              10(h)        Esterhazy Restated Mining and Processing Agreement dated January 31,
                           1978, between International Minerals and Chemical Corporation
                           (Canada) Limited and the registrant's predecessor, incorporated by
                           reference to the F-1 Registration Statement.
              10(i)        Agreement dated December 21, 1990, between International Minerals &
                           Chemical Corporation (Canada) Limited and the registrant, amending
                           the Esterhazy Restated Mining and Processing Agreement dated January
                           31, 1978, incorporated by reference to the registrant's report on
                           Form 10-K for the year ended December 31, 1990.
              10(j)        Agreement dated October 13, 1995 between the registrant and Charles
                           E. Childers, incorporated by reference to the Form 10-K.
              10(k)        Potash Corporation of Saskatchewan Inc. Stock Option
                           Plan -- Unaffiliated Directors, incorporated by reference to
                           post-effective amendment No. 5 ("Amendment No. 5") to the
                           registrant's Form S-8 (File No. 33-37855).
              10(l)        Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Officers
                           and Key Employees, incorporated by reference to Amendment No. 5.
              10(m)        Short Term Incentive Plan of the registrant, effective January 1,
                           1995.
              10(n)        Long-Term Incentive Plan of the registrant, as amended December 15,
                           1995, incorporated by reference to the Form 10-K.
</TABLE>
 
                                       15
<PAGE>   17
 
<TABLE>
<CAPTION>
        EXHIBIT NUMBER                            DESCRIPTION OF DOCUMENT
        --------------     ---------------------------------------------------------------------
        <C>                <S>
              10(o)        Resolution and Forms of Agreement for Supplemental Retirement Income
                           Plan, for officers and key employees of the registrant, incorporated
                           by reference to the Form 10-K.
              10(p)        Forms of Agreement dated December 30, 1994, between the registrant
                           and certain officers of the registrant, concerning a change in
                           control of the registrant, incorporated by reference to the Form
                           10-K.
              10(q)        Form of Agreement of Indemnification dated August 8, 1995, between
                           the registrant and certain officers and directors of the registrant,
                           incorporated by reference to the Form 10-K.
              10(r)        Deferred Compensation Plan, for certain officers of PCS Phosphate
                           Company, Inc, incorporated by reference to the Form 10-K.
              10(s)        Supplemental Retirement Benefits Plan, for eligible employees of PCS
                           Phosphate Company, Inc., incorporated by reference to the Form 10-K.
              10(t)        Second Amended and Restated Membership Agreement dated January 1,
                           1995, among Phosphate Chemicals Export Association, Inc. and members
                           of such association, including Texasgulf Inc. (now PCS Phosphate
                           Company, Inc.), incorporated by reference to the Form 10-K.
              10(u)        International Agency Agreement dated January 1, 1995, between
                           Phosphate Chemicals Export Association, Inc. and Texasgulf Inc. (now
                           PCS Phosphate Company, Inc.) establishing Texasgulf Inc. as exclusive
                           marketing agent for such association's wet phosphatic materials,
                           incorporated by reference to the Form 10-K.
              10(v)        General Partnership Agreement forming Albright & Wilson Company,
                           dated July 29, 1988 and amended January 31, 1995, between Texasgulf
                           Inc. (now PCS Phosphate Company, Inc.) and Albright & Wilson
                           Americas, Inc., incorporated by reference to the Form 10-K.
              10(w)        Royalty Agreement dated October 7, 1993, by and between the
                           registrant and Rio Algom Limited, incorporated by reference to the
                           Form 10-K.
              10(x)        Amending Resolution and revised forms of agreement regarding
                           Supplemental Retirement Income Plan of the registrant, incorporated
                           by reference to the registrant's report on Form 10-Q for the
                           quarterly period ended June 30, 1996 (the "Second Quarter Form
                           10-Q").
              10(y)        Employment Agreement dated May 16, 1996, by and between PCS Phosphate
                           Company, Inc. and Thomas J. Wright, incorporated by reference to the
                           Second Quarter Form 10-Q.
              10(z)        Shareholders Rights Agreement dated November 10, 1994, as amended on
                           March 28, 1995, and May 4, 1995, and approved by shareholders on May
                           11, 1995, incorporated by reference to the Form 10-K.
              11           Statement re Computation of Per Share Earnings.
              27           Financial Data Schedule.
</TABLE>
 
     (b) Reports on Form 8-K
 
     As of September 11, 1996, the registrant filed a report on Form 8-K
regarding its having entered into a definitive merger agreement under which it
agreed to acquire all of the outstanding common stock of Arcadian Corporation.
 
                                       16
<PAGE>   18
 
                                   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, 1996                          By:  /s/  CHARLES E. CHILDERS
                                             ------------------------------
                                               Charles E. Childers
                                               Chief Executive Officer


October 31, 1996                          By:  /s/  BARRY E. HUMPHREYS
                                             ------------------------------
                                               Barry E. Humphreys
                                               Sr. Vice President, 
                                               Finance and Treasurer
                                               (Principal Financial and 
                                               Accounting Officer)
 


                                       17
<PAGE>   19
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                             DESCRIPTION OF DOCUMENT
------     -----------------------------------------------------------------------
<S>        <C>                                                                      <C>
 2(a)      Agreement and Plan of Merger dated September 2, 1996, by and among the
           registrant, Arcadian Corporation and PCS Nitrogen, Inc.
 3(i)      Restated Articles of Incorporation of the registrant dated October 31,
           1989, as amended May 11, 1995, incorporated by reference to the
           registrant's report on Form 10-K for the year ended December 31, 1995
           (the "Form 10-K").
 3(ii)     Bylaws of the registrant dated March 2, 1995, incorporated by reference
           to the Form 10-K.
4(a)       Non-revolving Term Credit Facilities Agreement between The Bank of Nova
           Scotia and other financial institutions and the registrant dated April
           10, 1995, incorporated by reference to Exhibit 4(b) to the Form 10-K.
4(b)       First Amending Agreement between The Bank of Nova Scotia and other
           financial institutions and the registrant dated May 23, 1995,
           incorporated by reference to Exhibit 4(c) to the registrant's report on
           Form 10-Q for the quarterly period ended March 31, 1996 (the "Form
           10-Q").
4(c)       Second Amending Agreement between The Bank of Nova Scotia and other
           financial institutions and the registrant dated October 18, 1995,
           incorporated by reference to Exhibit 4(d) to the Form 10-Q.
 10(a)     Suspension Agreement concerning Potassium Chloride from Canada dated
           January 7, 1988, among U.S. Department of Commerce, Potash Corporation
           of Saskatchewan, International Minerals and Chemical (Canada) Limited,
           Noranda, Inc. (Central Canada Potash Co.), Potash Company of America, a
           Division of Rio Algom Limited, S & P Canada, II (Kalium Chemicals),
           Cominco Ltd., Potash Company of Canada Limited, Agent for
           Denison-Potacan Potash Co. and Saskterra Fertilizers Ltd., incorporated
           by reference to the registrant's Form F-1 (File No. 33-31303) (the "F-1
           Registration Statement").
 10(b)     Sixth Voting Agreement dated April 22, 1978, between Central Canada
           Potash, Division of Noranda, Inc., Cominco Ltd., International Minerals
           and Chemical Corporation (Canada) Limited, PCS Sales and Texasgulf
           Inc., incorporated by reference to the F-1 Registration Statement.
 10(c)     Canpotex Limited Shareholders Seventh Memorandum of Agreement effective
           April 21, 1978, between Central Canada Potash, Division of Noranda
           Inc., Cominco Ltd., International Minerals and Chemical Corporation
           (Canada) Limited, PCS Sales, Texasgulf Inc. and Canpotex Limited as
           amended by Canpotex S & P amending agreement dated November 4, 1987,
           incorporated by reference to the F-1 Registration Statement.
 10(d)     Producer Agreement dated April 21, 1978, between Canpotex Limited and
           PCS Sales, incorporated by reference to the F-1 Registration Statement.
 10(e)     PCS Sales -- Saskterra Special Canpotex Entitlement effective June 13,
           1990, incorporated by reference to the registrant's Form S-1 (File No.
           33-36283).
 10(f)     Canpotex/PCS Amending Agreement, dated with effect October 1, 1992,
           incorporated by reference to the Form 10-K.
 10(g)     Canpotex PCA Collateral Withdrawing/PCS Amending Agreement, dated with
           effect October 7, 1993, incorporated by reference to the Form 10-K.
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<S>        <C>                                                                      <C>
 10(h)     Esterhazy Restated Mining and Processing Agreement dated January 31,
           1978, between International Minerals and Chemical Corporation (Canada)
           Limited and the registrant's predecessor, incorporated by reference to
           the F-1 Registration Statement.
10(i)      Agreement dated December 21, 1990, between International Minerals &
           Chemical Corporation (Canada) Limited and the registrant, amending the
           Esterhazy Restated Mining and Processing Agreement dated January 31,
           1978, incorporated by reference to the registrant's report on Form 10-K
           for the year ended December 31, 1990.
10(j)      Agreement dated October 13, 1995 between the registrant and Charles E.
           Childers, incorporated by reference to the Form 10-K.
10(k)      Potash Corporation of Saskatchewan Inc. Stock Option Plan --
           Unaffiliated Directors, incorporated by reference to post-effective
           amendment No. 5 ("Amendment No. 5") to the registrant's Form S-8 (File
           No. 33-37855).
10(l)      Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Officers
           and Key Employees, incorporated by reference to Amendment No. 5.
10(m)      Short Term Incentive Plan of the registrant, effective January 1, 1995.
10(n)      Long-Term Incentive Plan of the registrant, as amended December 15,
           1995, incorporated by reference to the Form 10-K.
10(o)      Resolution and Forms of Agreement for Supplemental Retirement Income
           Plan, for officers and key employees of the registrant, incorporated by
           reference to the Form 10-K.
10(p)      Forms of Agreement dated December 30, 1994, between the registrant and
           certain officers of the registrant, concerning a change in control of
           the registrant, incorporated by reference to the Form 10-K.
10(q)      Form of Agreement of Indemnification dated August 8, 1995, between the
           registrant and certain officers and directors of the registrant,
           incorporated by reference to the Form 10-K.
10(r)      Deferred Compensation Plan, for certain officers of PCS Phosphate
           Company, Inc, incorporated by reference to the Form 10-K.
10(s)      Supplemental Retirement Benefits Plan, for eligible employees of PCS
           Phosphate Company, Inc., incorporated by reference to the Form 10-K.
10(t)      Second Amended and Restated Membership Agreement dated January 1, 1995,
           among Phosphate Chemicals Export Association, Inc. and members of such
           association, including Texasgulf Inc. (now PCS Phosphate Company,
           Inc.), incorporated by reference to the Form 10-K.
10(u)      International Agency Agreement dated January 1, 1995, between Phosphate
           Chemicals Export Association, Inc. and Texasgulf Inc. (now PCS
           Phosphate Company, Inc.) establishing Texasgulf Inc. as exclusive
           marketing agent for such association's wet phosphatic materials,
           incorporated by reference to the Form 10-K.
10(v)      General Partnership Agreement forming Albright & Wilson Company, dated
           July 29, 1988 and amended January 31, 1995, between Texasgulf Inc. (now
           PCS Phosphate Company, Inc.) and Albright & Wilson Americas, Inc.,
           incorporated by reference to the Form 10-K.
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NUMBER                             DESCRIPTION OF DOCUMENT
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<S>        <C>                                                                      <C>
10(w)      Royalty Agreement dated October 7, 1993, by and between the registrant
           and Rio Algom Limited, incorporated by reference to the Form 10-K.
10(x)      Amending Resolution and revised forms of agreement regarding
           Supplemental Retirement Income Plan of the registrant, incorporated by
           reference to the registrant's report on Form 10-Q for the quarterly
           period ended June 30, 1996 (the "Second Quarter Form 10-Q").
10(y)      Employment Agreement dated May 16, 1996, by and between PCS Phosphate
           Company, Inc. and Thomas J. Wright, incorporated by reference to the
           Second Quarter Form 10-Q.
10(z)      Shareholders Rights Agreement dated November 10, 1994, as amended on
           March 28, 1995, and May 4, 1995, and approved by shareholders on May
           11, 1995, incorporated by reference to the Form 10-K.
11         Statement re Computation of Per Share Earnings.
27         Financial Data Schedule.
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