UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
     FORM 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Quarterly Period Ended June 30, 2008ORo

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

S7K 7G3Saskatoon, Saskatchewan, Canada

(Zip Code)(Address of principal executive offices)   306-933-8500
 (Registrants telephone number, including area code)
    þ o
  12b-2
  Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2).
  o þ




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##### 





PART I.  FINANCIAL
    INFORMATION
  ITEM 1.
    FINANCIAL
    STATEMENTS  Potash
    Corporation of Saskatchewan Inc.
  Condensed
    Consolidated Statements of Financial Position
    (in millions of US dollars except share amounts)
    (unaudited)
  June 30,


December 31,2008


2007AssetsCurrent assetsCash and cash equivalents

$
269.9


$
719.5Accounts receivable


1,091.1



596.2Inventories (Note 2)


605.0



428.1Prepaid expenses and other current assets


57.0



36.7Current portion of derivative instrument assets


96.1



30.82,119.1



1,811.3Derivative instrument assets


285.8



104.2Property, plant and equipment


4,172.1



3,887.4Investments (Note 3)


5,020.9



3,581.5Other assets


262.0



210.7Intangible assets


22.8



24.5Goodwill


97.0



97.0$
11,979.7


$
9,716.6LiabilitiesCurrent liabilitiesShort-term debt

$
932.3


$
90.0Accounts payable and accrued charges


1,476.6



911.7Current portion of long-term debt


0.2



0.22,409.1



1,001.9Long-term debt


1,339.2



1,339.4Future income tax liability


1,237.9



988.1Accrued pension and other post-retirement benefits


254.0



244.8Accrued environmental costs and asset retirement obligations


125.0



121.0Other non-current liabilities and deferred credits


3.4



2.75,368.6



3,697.9Contingencies and Guarantees(Notes 15 and 16,
    respectively)Shareholders EquityShare capital (Note 5)


1,440.7



1,461.3Unlimited authorization of common shares without par value;
    issued and outstanding 306,596,987 and 316,411,209 at
    June 30, 2008 and December 31, 2007, respectivelyUnlimited authorization of first preferred shares; none
    outstandingContributed surplus


126.3



98.9Accumulated other comprehensive income


3,337.9



2,178.9Retained earnings


1,706.2



2,279.66,611.1



6,018.7$
11,979.7


$
9,716.6    2




---



##### 



Potash
    Corporation of Saskatchewan Inc.

    Condensed Consolidated Statements of Operations and Retained
    Earnings
    (in millions of US dollars except per-share amounts)
    (unaudited)
  Three Months Ended


Six Months EndedJune 30


June 302008


2007


2008


2007Sales(Note 9)

$
2,621.0


$
1,353.1


$
4,511.6


$
2,507.8Less: Freight


103.4



92.3



205.8



174.2Transportation and distribution


33.3



32.6



65.6



63.6Cost of goods sold


1,047.0



726.8



1,946.9



1,398.9Gross Margin


1,437.3



501.4



2,293.3



871.1Selling and administrative


79.7



73.5



126.9



114.1Provincial mining and other taxes


163.0



34.6



262.4



67.1Foreign exchange loss (gain)


1.9



39.5



(25.8
)


41.5Other income (Note 12)


(103.3
)


(68.5
)


(115.2
)


(82.2
)141.3



79.1



248.3



140.5Operating Income


1,296.0



422.3



2,045.0



730.6Interest Expense(Note 13)


15.7



20.8



26.9



46.3Income Before Income Taxes


1,280.3



401.5



2,018.1



684.3Income Taxes(Note 7)


375.2



115.8



547.0



200.6Net Income

$
905.1


$
285.7



1,471.1



483.7Retained Earnings, Beginning of Period










2,279.6



1,286.4Repurchase of Common Shares(Note 5)










(1,981.7
)


-Change in Accounting Policy










-



0.2Dividends










(62.8
)


(47.3
)Retained Earnings, End of Period









$
1,706.2


$
1,723.0Net Income Per Share(Note 8)Basic

$
2.91


$
0.91


$
4.70


$
1.53Diluted

$
2.82


$
0.88


$
4.54


$
1.50Dividends Per Share

$
0.10


$
0.10


$
0.20


$
0.15    3




---



##### 



Potash
    Corporation of Saskatchewan Inc.

    Condensed Consolidated Statements of Cash Flow
    (in millions of US dollars)
    (unaudited)
  Three Months Ended


Six Months EndedJune 30


June 302008


2007


2008


2007Operating ActivitiesNet income

$
905.1


$
285.7


$
1,471.1


$
483.7Adjustments to reconcile net income to cash provided by
    operating activitiesDepreciation and amortization


83.9



74.1



163.8



146.8Stock-based compensation


25.1



27.8



27.9



30.5(Gain) loss on disposal of property, plant and equipment and
    long-term investments


(6.9
)


5.5



(6.8
)


5.4Provision for auction rate securities


0.7



-



43.8



-Foreign exchange on future income tax


(4.6
)


23.4



(9.3
)


26.1Provision for future income tax


47.4



41.8



26.8



67.2Undistributed earnings of equity investees


(1.1
)


11.1



(24.5
)


(1.9
)(Gain) loss on derivative instruments


(1.9
)


0.9



(19.0
)


(5.4
)Other long-term liabilities


7.7



3.4



7.1



4.3Subtotal of adjustments


150.3



188.0



209.8



273.0Changes in non-cash operating working capitalAccounts receivable


(283.5
)


11.1



(494.9
)


(39.7
)Inventories


(106.2
)


26.7



(229.3
)


16.1Prepaid expenses and other current assets


0.8



11.9



(23.4
)


0.5Accounts payable and accrued charges


228.1



2.7



403.6



112.1Subtotal of changes in non-cash operating working capital


(160.8
)


52.4



(344.0
)


89.0Cash provided by operating activities


894.6



526.1



1,336.9



845.7Investing ActivitiesAdditions to property, plant and equipment


(237.9
)


(127.5
)


(434.4
)


(236.5
)Purchase of long-term investments


(89.6
)


-



(264.1
)


(9.7
)Proceeds from disposal of property, plant and equipment and
    long-term investments


9.3



1.0



9.6



1.3Other assets and intangible assets


(4.5
)


12.5



(8.5
)


10.7Cash used in investing activities


(322.7
)


(114.0
)


(697.4
)


(234.2
)Cash before financing activities


571.9



412.1



639.5



611.5Financing ActivitiesRepayment and issue costs of long-term debt obligations


(0.2
)


(400.2
)


(0.2
)


(403.6
)Proceeds from (repayment of) short-term debt obligations


828.9



(9.5
)


842.4



(71.3
)Dividends


(30.7
)


(15.6
)


(62.5
)


(31.3
)Repurchase of common shares


(1,476.6
)


-



(1,897.1
)


-Issuance of common shares


12.0



8.4



28.3



18.7Cash used in financing activities


(666.6
)


(416.9
)


(1,089.1
)


(487.5
)(Decrease) Increase in Cash and Cash Equivalents


(94.7
)


(4.8
)


(449.6
)


124.0Cash and Cash Equivalents, Beginning of Period


364.6



454.5



719.5



325.7Cash and Cash Equivalents, End of Period

$
269.9


$
449.7


$
269.9


$
449.7Cash and cash equivalents comprised of:Cash

$
42.5


$
2.6


$
42.5


$
2.6Short-term investments


227.4



447.1



227.4



447.1$
269.9


$
449.7


$
269.9


$
449.7Supplemental cash flow disclosureInterest paid

$
22.8


$
41.6


$
37.1


$
55.8Income taxes paid

$
227.1


$
37.0


$
385.6


$
69.1    4




---



##### 



Potash
    Corporation of Saskatchewan Inc.
    Condensed Consolidated Statements of Comprehensive Income
    (in millions of US dollars)
    (unaudited)
  Three Months Ended


Six Months EndedJune 30, 2008


June 30, 2008Before





Net of


Before





Net ofIncome


Income


Income


Income


Income


IncomeTaxes


Taxes


Taxes


Taxes


Taxes


TaxesNet income

$
1,280.3


$
375.2


$
905.1


$
2,018.1


$
547.0


$
1,471.1Other comprehensive incomeNet increase in unrealized gains on
    available-for-sale
    securities(1)


976.4



155.8



820.6



1,155.8



186.2



969.6Net gains on derivatives designated as cash flow
    hedges(2)


216.9



62.3



154.6



279.9



81.2



198.7Reclassification to income of net gains on cash flow
    hedges(2)


(11.8
)


(3.3
)


(8.5
)


(20.0
)


(5.8
)


(14.2
)Unrealized foreign exchange gains on translation of
    self-sustaining foreign operations


3.3



-



3.3



4.9



-



4.9Other comprehensive income


1,184.8



214.8



970.0



1,420.6



261.6



1,159.0Comprehensive income

$
2,465.1


$
590.0


$
1,875.1


$
3,438.7


$
808.6


$
2,630.1    Three Months Ended


Six Months EndedJune 30, 2007


June 30, 2007Before





Net of


Before





Net ofIncome


Income


Income


Income


Income


IncomeTaxes


Taxes


Taxes


Taxes


Taxes


TaxesNet income

$
401.5


$
115.8


$
285.7


$
684.3


$
200.6


$
483.7Other comprehensive incomeNet increase in unrealized gains on
    available-for-sale
    securities(1)


318.2



21.3



296.9



563.2



34.0



529.2Net (losses) gains on derivatives designated as cash flow
    hedges(2)


(4.2
)


(1.2
)


(3.0
)


30.9



9.3



21.6Reclassification to income of net gains on cash flow
    hedges(2)


(14.1
)


(4.3
)


(9.8
)


(31.3
)


(9.4
)


(21.9
)Unrealized foreign exchange gains on translation of
    self-sustaining foreign operations


0.3



-



0.3



4.9



-



4.9Other comprehensive income


300.2



15.8



284.4



567.7



33.9



533.8Comprehensive income

$
701.7


$
131.6


$
570.1


$
1,252.0


$
234.5


$
1,017.5   (1)
    
    Available-for-sale
    securities are comprised of shares in Israel Chemicals Ltd.,
    Sinofert Holdings Limited and investments in auction rate
    securities.(2)
    
    Cash flow hedges are comprised of
    natural gas derivative instruments.   5




---



##### 



Potash
    Corporation of Saskatchewan Inc.

    Condensed Consolidated Statement of Accumulated Other
    Comprehensive Income
    (in millions of US dollars)
    (unaudited)
  Net unrealized


Unrealizedgains on


foreign exchangeNet unrealized


derivatives


gains ongains on


designated as


self-sustainingavailable-for-sale


cash flow


foreign(Net of related income taxes)

securities


hedges


operations


TotalAccumulated other comprehensive income,
    December 31, 2007

$
2,098.7


$
73.5


$
6.7


$
2,178.9Increase for the six months ended
    June 30, 2008


969.6



184.5



4.9



1,159.0Accumulated other comprehensive income, June 30, 2008

$
3,068.3


$
258.0


$
11.6



3,337.9Retained Earnings, June 30, 2008














1,706.2Accumulated other comprehensive income and retained earnings,
    June 30, 2008













$
5,044.1    6




---



##### 



Potash
    Corporation of Saskatchewan Inc.
  Notes to
    the Condensed Consolidated Financial Statements
 For the Three and Six Months Ended June 30, 2008
 (in millions of US dollars except share, per-share,
    percentage and ratio amounts)
 (unaudited)
  1.
    Significant
    Accounting Policies  Basis
    of Presentation
      Change
    in Accounting Policy
  Inventories
    Recent
    Accounting Pronouncements
  Capital
    Disclosures
    Financial
    Instruments
   7




---



##### 



International
    Financial Reporting Standards
    Goodwill
    and Intangible Assets
    2.
    Inventories  June 30,


December 31,2008(1)


2007Finished products

$
341.3


$
186.6Intermediate products


99.0



70.7Raw materials


72.3



68.0Materials and supplies


92.4



102.8$
605.0


$
428.1   (1)
    
    See change in accounting policy
    (Note 1).    3.
    Investments     8




---



##### 



# Investments



Impacts ofConsidered

Impacts of

ImpairmentsOther-Than-

Impairments

Recorded inTemporarily

Recorded in

RetainedFair

Impaired (of 6

AOCI and

Earnings andValue

Total)

OCI

Net IncomeBalance, December 31, 2007

$
56.0



2


$
50.0


$
26.5Add: Recoveries in value of investments considered temporarily
    impaired at beginning of period


0.2







(0.2
)


-Less: Reductions in value of investments considered temporarily
    impaired at beginning of period


(1.5
)






1.5



-Less: Reductions in value of investments considered
    other-than-temporarily impaired at beginning of period


(11.6
)










11.6Transfer of investment impairments at end of period from
    temporarily impaired to other-than-temporarily impaired


-



2



(31.5
)


31.5Balance, March 31, 2008


43.1



4



19.8



69.6Add: Recoveries in value of investments considered temporarily
    impaired


1.0







(1.0
)


-Add: Recoveries in value of investments considered
    other-than-temporarily impaired


3.5







(3.5
)


-Less: Reductions in value of investments considered
    other-than-temporarily impaired


(0.7
)






-



0.7Balance, June 30, 2008

$
46.9



4


$
15.3


$
70.3      9




---



##### 



4.
    Financial
    Instruments and Related Risk Management    Credit
    Risk
    June 30, 2008Cash and cash equivalents

$
269.9Accounts receivable


1,091.1Derivative instrument assets


381.9Available-for-sale investmentsAuction rate securities


46.9       
    Acceptable minimum counterparty credit ratings relating to the
    natural gas and foreign currency derivative instrument assets,
    and cash and cash equivalents
    Daily counterparty settlement on natural gas derivative
    instruments based on prescribed credit thresholds
    Exposure thresholds by counterparty on cash and cash equivalents      12-18 months. and/or
 10




---



##### 



June 30,


December 31,2008


20071-15 days

$
40.6


$
36.716-30 days


3.4



4.131-60 days


1.3



0.9Greater than 60 days


0.5



2.6$
45.8


$
44.3     As At and For the


As At and For theSix Months Ended


Year EndedJune 30,


December 31,2008


2007Balance  beginning of period

$
5.9


$
4.7Provision for receivables impairment


1.1



1.9Receivables written off during the period as uncollectible


(0.1
)


(0.7
)Balance  end of period

$
6.9


$
5.9     Liquidity
    Risk
    June 30,
    2008(1)Total


Amount


Amount


AmountAmount


Outstanding


Committed


AvailableSyndicated credit
    facilities(1)

$
1,750.0


$
200.0


$
733.1(2
)

$
816.9Line of credit


75.0



-



22.7



52.3Commercial paper


750.0



733.1
(2)


-



16.9US shelf registrations


4,000.0



1,350.0



-



2,250.0
(3)   (1)
    
    Except for Syndicated credit
    facilities which are as of July 29, 2008. On July 29,
    2008, $250.0 of capacity was added to the facilities.(2)
    
    Per the terms of the agreements,
    the commercial paper outstanding or committed, as applicable, is
    based on the US dollar balance or equivalent thereof in lawful
    money of other currencies at the time of issue; therefore,
    subsequent changes in the exchange rate applicable to Canadian
    dollar denominated commercial paper have no impact on this
    balance. 11




---



##### 



(3)
    
    $400.0 of senior notes issued under
    one of the companys US shelf registration statements were
    repaid in full at maturity; no additional amount is available in
    respect of the principal of these senior notes.  364-day 364-day
    CarryingAmount ofLiability atJune 30,


Contractual


Within








Over2008


Cash Flows


1 year


1 to 3 years


3 to 5 years


5 yearsShort-term debt
    obligations(1)

$
932.3


$
936.8


$
936.8


$
-


$
-


$
-Accounts payable and accrued
    charges(2)


1,037.3



1,037.3



1,037.3



-



-



-Long-term debt
    obligations(1)


1,358.3



2,437.8



96.3



794.4



354.0



1,193.1Derivative financial instrument liabilitiesForeign currency forward contractsOutflow






441.5



441.5



-



-



-Inflow






(441.5
)


(441.5
)


-



-



-Natural gas non-hedging derivatives


0.2



0.2



0.2



-



-



-   (1)
    
    Contractual cash flows include
    contractual interest payments related to debt obligations.(2)
    
    Excludes taxes, deferred revenues
    and current portions of accrued environmental costs and asset
    retirement obligations and accrued pension and other
    post-retirement benefits. This also excludes derivative
    financial instrument liabilities which have been presented
    separately.  Market
    Risk
    Foreign
    Exchange Risk
   12




---



##### 



Foreign Exchange RiskCarrying Amount

5% increase

5% decreaseof Asset (Liability)

in US$

in US$at June 30,2008

Income

OCI

Income

OCICash and cash equivalents denominated in Canadian dollars

$
2.1


$
(0.1
)

$
-


$
0.1


$
-Accounts receivable denominated in Canadian dollars


17.9



(0.9
)


-



0.9



-Available-for-sale investmentsIsrael Chemical Ltd. denominated in New Israeli Shekels


3,007.2



-



(150.4
)


-



150.4Sinofert denominated in Hong Kong dollars


1,121.8



-



(56.1
)


-



56.1Short-term debt denominated in Canadian dollars


(177.9
)


8.9







(8.9
)Accounts payable denominated in Canadian dollars


(84.2
)


4.2



-



(4.2
)


-Derivative instruments 
    Foreign currency forward contracts


-



(21.9
)


-



21.9



-   Interest
    Rate Risk
     13




---



##### 



Interest Rate RiskCarrying Amount

1% decrease in

1% increase inof Asset (Liability)

interest rates

interest ratesat June 30,2008

Income

OCI

Income

OCIFixed rate instrumentsLong-term debt
    obligations(1)

$
(1,352.4
)

$
-


$
-


$
-


$
-Variable rate instrumentsCash and cash equivalents


269.9



(2.7
)


-



2.7



-Available-for-sale investmentsAuction rate securities


46.9



(1.3
)


-



1.3



-Long-term debt obligations


(5.9
)


0.1



-



(0.1
)


-Short-term debt obligations


(932.3
)


9.3



-



(9.3
)


-   (1)
    
    The company does not account for
    any fixed rate debt through income. Therefore, changes in
    interest rates will not affect income or OCI related to this
    debt.  Price
    Risk
        Price RiskCarrying Amount

10% decrease

10% increaseof Asset (Liability)

in prices

in pricesat June 30,2008

Income

OCI

Income

OCIDerivative instrumentsNatural gas hedging
    derivatives(1)(2)

$
381.9


$
-


$
(109.7
)

$
-


$
109.7Natural gas non-hedging derivatives


(0.2
)


(0.2
)


-



0.2



-Available-for-sale investmentsIntercorporate investments


4,129.0



-



(412.9
)


-



412.9Auction rate
    securities(3)


46.9



n/a



n/a



n/a



n/a   (1)
    
    All hedge relationships are assumed
    to be fully effective for purposes of this analysis; therefore,
    no proportion of a change in price is assumed to impact net
    income.(2)
    
    As at June 30, 2008, the
    company had natural gas derivatives qualifying for hedge
    accounting in the form of swaps which represented a notional
    amount of 110.9 million MMBtu with maturities in 2008
    through 2018.(3)
    
    Due to the current lack of an
    active market for these securities, price sensitivities are not
    determinable. 14




---



##### 



Supplemental
    Disclosures
    5.
    Share
    Repurchase      6.
    Capital
    Disclosures      June 30,


December 31,2008


2007Short-term debt

$
932.3


$
90.0Current portion of long-term debt


0.2



0.2Long-term debt


1,339.2



1,339.4Total debt


2,271.7



1,429.6Less: cash and cash equivalents


269.9



719.5Net debt


2,001.8



710.1Shareholders equity


6,611.1



6,018.7Less: accumulated other comprehensive income


3,337.9



2,178.9Adjusted shareholders equity


3,273.2



3,839.8Adjusted
    capital(1)

$
5,275.0


$
4,549.9   (1)
    
    Adjusted capital = (total debt
    − cash and cash equivalents) + (shareholders equity
    − accumulated other comprehensive income) 15




---



##### 



As At or For the12 Months EndedJune 30,


December 31,2008


2007Components of ratiosAdjusted EBITDA (twelve months ended)

$
3,281.5


$
1,906.3Net debt

$
2,001.8


$
710.1Adjusted interest expense (twelve months ended)

$
81.2


$
90.5Adjusted capital

$
5,275.0


$
4,549.9RatiosAdjusted EBITDA to adjusted interest
    expense(1)


40.4



21.1Net debt to adjusted
    EBITDA(2)


0.6



0.4Net debt to adjusted
    capital(3)


37.9%



15.6%   (1)
    
    Adjusted EBITDA to adjusted
    interest expense = adjusted EBITDA (twelve months ended) /
    adjusted interest expense (twelve months ended)(2)
    
    Net debt to adjusted EBITDA =
    (total debt − cash and cash equivalents) / adjusted EBITDA
    (twelve months ended)(3)
    
    Net debt to adjusted capital =
    (total debt − cash and cash equivalents) / (total debt
    − cash and cash equivalents + total shareholders
    equity − accumulated other comprehensive income)        Twelve














TwelveMonths Ended


Three Months Ended


Months EndedJune 30,


June 30,


March 31,


December 31,


September 30,


December 31,2008


2008


2008


2007


2007


2007Net income

$
2,091.0


$
905.1


$
566.0


$
376.8


$
243.1


$
1,103.6Income taxes


762.6



375.2



171.8



65.2



150.4



416.2Interest expense


49.3



15.7



11.2



9.7



12.7



68.7Depreciation and amortization


308.3



83.9



79.9



75.0



69.5



291.3Provision for auction rate securities


70.3



0.7



43.1



26.5



-



26.5Adjusted EBITDA

$
3,281.5


$
1,380.6


$
872.0


$
553.2


$
475.7


$
1,906.3   Twelve














TwelveMonths Ended


Three Months Ended


Months EndedJune 30,


June 30,


March 31,


December 31,


September 30,


December 31,2008


2008


2008


2007


2007


2007Interest expense

$
49.3


$
15.7


$
11.2


$
9.7


$
12.7


$
68.7Capitalized interest


31.9



10.5



8.4



7.3



5.7



21.8Adjusted interest expense

$
81.2


$
26.2


$
19.6


$
17.0


$
18.4


$
90.5  16




---



##### 



7.
    Income
    Taxes    
    A scheduled one and a half percentage point reduction in the
    Canadian federal income tax rate applicable to resource
    companies along with the elimination of the one percent surtax
    became effective at the beginning of 2008. In addition, there
    was an increase in permanent deductions in the US.
    As a result of the higher permanent deductions in the US, it was
    determined that the consolidated effective income tax rate for
    the 2008 year had decreased from 30 percent to
    29 percent. The impact of this change on the prior period
    was reflected during the second quarter.
    Future income tax assets were written down by $11.0 during the
    second quarter of 2008.
    During the first quarter of 2008, an income tax recovery of
    $42.0 was recorded that related to an increase in permanent
    deductions in the US from prior years.
    The $25.3 gain recognized in first-quarter 2008 as a result of
    the change in fair value of the forward purchase contract for
    shares in Sinofert was not taxable.  8.
    Net
    Income Per Share      9.
    Segment
    Information    Three Months Ended June 30, 2008Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales

$
1,194.5


$
644.5


$
782.0


$
-


$
2,621.0Freight


60.3



13.3



29.8



-



103.4Transportation and distribution


13.9



11.0



8.4



-



33.3Net sales  third party


1,120.3



620.2



743.8



-Cost of goods sold


233.9



410.2



402.9



-



1,047.0Gross margin


886.4



210.0



340.9



-



1,437.3Depreciation and amortization


24.0



22.3



35.7



1.9



83.9Inter-segment sales


-



40.6



10.5



-



-   17




---



##### 



Three Months Ended June 30, 2007Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales

$
510.2


$
481.2


$
361.7


$
-


$
1,353.1Freight


53.2



13.3



25.8



-



92.3Transportation and distribution


12.6



12.6



7.4



-



32.6Net sales  third party


444.4



455.3



328.5



-Cost of goods sold


184.0



311.1



231.7



-



726.8Gross margin


260.4



144.2



96.8



-



501.4Depreciation and amortization


21.0



21.6



29.7



1.8



74.1Inter-segment sales


-



26.1



1.0



-



-   Six Months Ended June 30, 2008Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales

$
1,990.7


$
1,225.7


$
1,295.2


$
-


$
4,511.6Freight


115.6



28.3



61.9



-



205.8Transportation and distribution


25.3



23.9



16.4



-



65.6Net sales  third party


1,849.8



1,173.5



1,216.9



-Cost of goods sold


448.8



778.1



720.0



-



1,946.9Gross margin


1,401.0



395.4



496.9



-



2,293.3Depreciation and amortization


46.8



44.9



68.3



3.8



163.8Inter-segment sales


-



82.6



14.7



-



-   Six Months Ended June 30, 2007Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales

$
890.7


$
900.8


$
716.3


$
-


$
2,507.8Freight


96.7



24.6



52.9



-



174.2Transportation and distribution


22.2



26.2



15.2



-



63.6Net sales  third party


771.8



850.0



648.2



-Cost of goods sold


337.2



574.5



487.2



-



1,398.9Gross margin


434.6



275.5



161.0



-



871.1Depreciation and amortization


38.9



43.3



59.3



5.3



146.8Inter-segment sales


-



59.1



1.9



-



-   10.
    Stock-Based
    Compensation    Expected dividend

$
0.40Expected volatility


34%Risk-free interest rate


3.30%Expected life of options


5.8 years  18




---



##### 



11.
    Pension
    and Other Post-Retirement Expenses  Three Months


Six MonthsEnded June 30


Ended June 30Defined Benefit Pension
    Plans

2008


2007


2008


2007Service cost

$
3.8


$
3.8


$
7.6


$
7.6Interest cost


10.0



9.1



20.0



18.2Expected return on plan assets


(12.8
)


(10.7
)


(25.8
)


(21.4
)Net amortization and change in valuation allowance


2.9



3.2



5.0



6.4Net expense

$
3.9


$
5.4


$
6.8


$
10.8   Three Months


Six MonthsEnded June 30


Ended June 30Other Post-Retirement
    Plans

2008


2007


2008


2007Service cost

$
1.4


$
1.5


$
2.8


$
2.9Interest cost


4.0



3.5



8.0



7.0Net amortization


0.2



0.1



0.3



0.3Net expense

$
5.6


$
5.1


$
11.1


$
10.2     12.
    Other
    Income  Three Months


Six MonthsEnded June 30


Ended June 302008


2007


2008


2007Share of earnings of equity investees

$
60.3


$
29.8


$
83.7


$
42.8Dividend income


33.7



38.7



33.7



38.7Gain on forward purchase contract for shares in Sinofert
    (Note 3)


-



-



25.3



-Other


10.0



-



16.3



0.7Provision for auction rate securities (Note 3)


(0.7
)


-



(43.8
)


-$
103.3


$
68.5


$
115.2


$
82.2   13.
    Interest
    Expense  Three Months


Six MonthsEnded June 30


Ended June 302008


2007


2008


2007Interest expense onShort-term debt

$
4.6


$
3.6


$
6.3


$
5.8Long-term debt


23.6



30.3



47.3



61.9Interest capitalized to property, plant and equipment


(10.5
)


(4.6
)


(18.9
)


(8.8
)Interest income


(2.0
)


(8.5
)


(7.8
)


(12.6
)$
15.7


$
20.8


$
26.9


$
46.3  19




---



##### 



14.
    Seasonality    15.
    Contingencies  Canpotex
    Mining
    Risk
    Investment
    in Arab Potash Company Ltd. (APC)
    Legal
    and Other Matters
    and/or
 20




---



##### 



21




---



##### 



and/or
        16.
    Guarantees   22




---



##### 



17.  Reconciliation
    of Canadian and United States Generally Accepted Accounting
    Principles
    (a) Long-term investments:
  (b) Property, plant and equipment and goodwill:
 23




---



##### 



(c) Depreciation and amortization:
  (d) Exploration costs:
  (e) Pre-operating costs: start-up start-up
  (f) Pension and other post-retirement benefits:
    (g) Foreign currency translation adjustment:
  (h) Offsetting of certain amounts:
  (i) Stock-based compensation:
   24




---



##### 



(j) Stripping costs
  (k) Income taxes related to the above adjustments:
  (l) Income tax consequences of stock-based employee
    compensation:
  (m) Income taxes related to uncertain income tax
    positions:
  (n) Cash flow statements:
 25




---



##### 



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


Six MonthsEnded June 30


Ended June 302008


2007


2008


2007Net income as reported  Canadian GAAP

$
905.1


$
285.7


$
1,471.1


$
483.7Items increasing (decreasing) reported net incomeDepreciation and amortization (c)


2.1



2.1



4.2



4.2Exploration costs (d)


-



-



(5.9
)


-Stock-based compensation (i)


1.5



0.8



3.5



1.0Stripping costs (j)


(2.8
)


(1.7
)


(3.5
)


(8.3
)Share of earnings of equity investees (a)


0.8



(0.6
)


0.2



(0.6
)Pension and other post-retirement benefits (f)


0.1



0.7



0.2



1.4Deferred income taxes relating to the above adjustments (k)


-



(9.5
)


0.1



0.6Income taxes related to US GAAP effective income tax rate (k, l)


-



(13.6
)


(3.2
)


(13.6
)Income taxes related to stock-based compensation (l)


(11.8
)


(4.7
)


(29.1
)


(8.0
)Income taxes related to uncertain income tax positions (m)


2.4



(1.0
)


6.1



(2.0
)Net income  US GAAP

$
897.4


$
258.2


$
1,443.7


$
458.4Basic weighted average shares
    outstanding  US GAAP


310,615,000



315,458,000



313,138,000



315,180,000Diluted weighted average shares outstanding  US GAAP


321,082,000



323,671,000



323,710,000



323,120,000Basic net income per share  US GAAP

$
2.89


$
0.82


$
4.61


$
1.45Diluted net income per share  US GAAP

$
2.79


$
0.80


$
4.46


$
1.42   June 30,


December 31,2008


2007Total assets as reported  Canadian GAAP

$
11,979.7


$
9,716.6Items increasing (decreasing) reported total assetsProperty, plant and equipment (b)


(97.0
)


(101.2
)Exploration costs (d)


(12.3
)


(6.4
)Stripping costs (j)


(36.2
)


(32.7
)Pension and other post-retirement benefits (f)


(71.9
)


(66.7
)Margin deposits associated with derivative instruments (h)


(213.6
)


-Investment in equity investees (a)


2.5



2.3Income tax asset related to uncertain income tax positions (m)


23.3



18.4Goodwill (b)


(46.7
)


(46.7
)Total assets  US GAAP

$
11,527.8


$
9,483.6   26




---



##### 



June 30,


December 31,2008


2007Total shareholders equity as reported  Canadian
    GAAP

$
6,611.1


$
6,018.7Items increasing (decreasing) reported shareholders equityAccumulated other comprehensive income, net of related income
    taxes, consisting of:Cumulative-effect adjustment in respect of uncertain income tax
    positions (m)


(1.2
)


(1.2
)Pension and other post-retirement benefits (f)


(89.1
)


(85.6
)Foreign currency translation adjustment (g)


(20.9
)


(20.9
)Foreign currency translation adjustment (g)


20.9



20.9Provision for asset impairment (b)


(218.0
)


(218.0
)Depreciation and amortization (c)


74.3



70.1Exploration costs (d)


(12.3
)


(6.4
)Stripping costs (j)


(36.2
)


(32.7
)Pension and other post-retirement benefits (f)


16.3



16.1Share of earnings of equity investees (a)


2.5



2.3Deferred income taxes relating to the above adjustments (k)


30.5



30.4Income taxes related to US GAAP effective income tax rate (k, l)


(33.5
)


(30.3
)Income taxes related to uncertain income tax positions (m)


20.6



14.5Cumulative-effect adjustment to retained earnings in respect of
    uncertain income tax positions (m)


85.7



85.7Shareholders equity  US GAAP

$
6,450.7


$
5,863.6   Six MonthsEnded June 302008


2007Net income  US GAAP

$
1,443.7


$
458.4Other comprehensive incomeNet increase in unrealized gains on available-for-sale securities


1,155.8



561.1Net gains on derivatives designated as cash flow hedges


279.9



30.9Reclassification to income of net gains on cash flow hedges


(20.0
)


(31.3
)Unrealized foreign exchange gains on translation of
    self-sustaining foreign operations


4.9



4.9Pension and other post-retirement benefits


(6.2
)


5.8Share of OCI of equity investees


-



(1.3
)Deferred income taxes related to other comprehensive income


(258.9
)


(35.5
)Other comprehensive income


1,155.5



534.6Comprehensive income  US GAAP

$
2,599.2


$
993.0   Supplemental
    US GAAP Disclosures
  Uncertainty
    in Income Taxes
    Balance at December 31, 2007

$
11.6Additions based on tax positions related to the current year


4.3Additions for tax positions of prior years


44.2Reductions for tax positions of prior years


(51.4
)Settlements


(3.2
)Balance at June 30, 2008

$
5.5  27




---



##### 



Recent
    Accounting Pronouncements
  Framework
    for Fair Value Measurement
      Level 1
    Values based on unadjusted quoted prices in active markets that
    are accessible at the measurement date for identical assets or
    liabilities.  Level 2
    Values based on quoted prices in markets that are not active or
    model inputs that are observable either directly or indirectly
    for substantially the full term of the asset or liability.  Level 3
    Values based on prices or valuation techniques that require
    inputs that are both unobservable and significant to the overall
    fair value measurement.      Fair Value Measurements at Reporting Date Using:Quoted Prices in

Significant Other

SignificantCarrying Amount

Active Markets for

Observable

Unobservableof Asset (Liability)

Identical Assets

Inputs

InputsDescription

at June 30, 2008

(Level 1)

(Level 2)

(Level 3)Derivative instrument assets (net of cash margin deposits held)

$
168.3


$
(213.6
)

$
-


$
381.9Available-for-sale securities


4,175.9



4,129.0



-



46.9Derivative instrument liabilities


(0.2
)


-



(0.2
)


-   DerivativeInstrument

Available-for-SaleFair Value Measurements Using Significant Unobservable Inputs
    (Level 3)

Assets

SecuritiesBeginning balance, December 31, 2007

$
127.7


$
56.0Total gains or (losses) (realized and unrealized) before income
    taxesIncluded in earnings


17.9



(43.8
)Included in other comprehensive income


261.9



34.7Purchases, sales, issuances and settlements


(25.6
)


-Transfers in and/or out of Level 3


-



-Ending balance, June 30, 2008

$
381.9


$
46.9Amount of total gains or (losses) for the period included in
    earnings attributable to the change in unrealized gains or
    losses relating to assets still held at the reporting date

$
(3.4
)

$
(43.8
)Gains and (losses) (realized and unrealized) included in
    earnings for the period are reported in:Cost of Goods Sold

$
17.9


$
-Other income


-



(43.8
)  28




---



##### 



Fair Value Option for Financial Assets and Financial
    Liabilities
    Offsetting of Certain Amounts
  No. FIN 39-1, FIN 39-1). FIN 39-1
  FIN 39-1 FIN 39-1
  Business
    Combinations
    Noncontrolling
    Interests in Consolidated Financial Statements
   29




---



##### 



Disclosures
    about Derivative Instruments and Hedging Activities
    The
    Hierarchy of Generally Accepted Accounting Principles
   30




---



##### 



ITEM 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K,
  POTASHCORP
    AND OUR BUSINESS ENVIRONMENT
        POTASHCORP
    VISION
      POTASHCORP
    STRATEGY
     31




---



##### 



KEY
    PERFORMANCE DRIVERS  PERFORMANCE COMPARED TO
    GOALS
    
    management will focus on the most important things, which will
    be reinforced by having the measurable, relevant results readily
    accessible;
    employees will understand and be able to effectively monitor
    their contribution to the achievement of corporate
    goals; and
    we will be even more effective in meeting our targets.    Representative


PerformanceGoal


2008 Annual
    Target


to June 30,
    2008Prevent harm to people.


Continue safety initiatives to reduce severity and lost-time
    injury rates to zero. Reduce recordable injury rates by
    15 percent from 2007 level. Reduce lost-time injury rates
    by 20 percent from 2007 level.


Recordable injury rate was 2.05, representing an increase of 6 percent for the first six months of 2008 compared to the 2007 annual level. As compared to the six months ended June 30, 2007, recordable injury rate increased 1 percent.Lost-time injury rate was 0.31, representing an increase of 54 percent for the first six months of 2008 compared to the 2007 annual level. As compared
to the six months ended June 30, 2007, lost-time injury rate increased 113 percent.To have no accidents and no damage to the environment.


Maintain energy usage per tonne of product produced at 2007
    levels.


Compared to the 2007 annual average, corporate-wide
    weighted-average energy usage (including natural gas,
    electricity and fuel oil) per tonne of product (as measured on a
    N basis for nitrogen,
    P2O5
    basis for phosphate and KCl basis for potash) was flat in the
    first six months of 2008.Reduce reportable releases and permit excursions by
    15 percent from 2007 levels.


Reportable release rate on an annualized basis declined
    33 percent while annualized permit excursions were down
    64 percent during the first six months of 2008 compared to
    2007 annual levels. Compared to the first six months of 2007,
    reportable releases were down 33 percent and permit
    excursions were flat.To meet the needs and expectations of our providers of capital.


Exceed total shareholder return for our sector and companies on
    the DJUSBM for 2008.


PotashCorps total shareholder return was 59 percent
    in the first six months of 2008, exceeding the DJUSBM return of
    10 percent and our sector average return of 57 percent.  32




---



##### 



FINANCIAL
    OVERVIEW
  Form 10-Q.
    Earnings
    Guidance
  28-29 percent.
  Overview
    of Actual Results
  Operations
  Three Months Ended June 30


Six Months Ended June 30Dollar


%








Dollar


%Dollars (millions)  except per-share amounts

2008


2007


Change


Change


2008


2007


Change


ChangeSales

$
2,621.0


$
1,353.1


$
1,267.9



94


$
4,511.6


$
2,507.8


$
2,003.8



80Freight


103.4



92.3



11.1



12



205.8



174.2



31.6



18Transportation and distribution


33.3



32.6



0.7



2



65.6



63.6



2.0



3Cost of goods sold


1,047.0



726.8



320.2



44



1,946.9



1,398.9



548.0



39Gross margin

$
1,437.3


$
501.4


$
935.9



187


$
2,293.3


$
871.1


$
1,422.2



163Operating income

$
1,296.0


$
422.3


$
873.7



207


$
2,045.0


$
730.6


$
1,314.4



180Net income

$
905.1


$
285.7


$
619.4



217


$
1,471.1


$
483.7


$
987.4



204Net income per share  basic

$
2.91


$
0.91


$
2.00



220


$
4.70


$
1.53


$
3.17



207Net income per share  diluted

$
2.82


$
0.88


$
1.94



220


$
4.54


$
1.50


$
3.04



203        33




---



##### 



Balance
    Sheet
    available-for-sale
 34




---



##### 



# InvestmentsConsidered



Impacts ofOther-Than-

Impacts of

ImpairmentsTemporarily

Impairments

Recorded inImpaired

Recorded in AOCI

Retained EarningsDollars (millions)

Fair Value

(of 6 Total)

and OCI

and Net IncomeBalance, December 31, 2007

$
56.0



2


$
50.0


$
26.5Add: Recoveries in value of investments considered temporarily
    impaired at beginning of period


0.2







(0.2
)


-Less: Reductions in value of investments considered temporarily
    impaired at beginning of period


(1.5
)






1.5



-Less: Reductions in value of investments considered
    other-than-temporarily impaired at beginning of period


(11.6
)






-



11.6Transfer of investment impairments at end of period from
    temporarily impaired to other-than-temporarily impaired


-



2



(31.5
)


31.5Balance, March 31, 2008


43.1



4



19.8



69.6Add: Recoveries in value of investments considered temporarily
    impaired


1.0







(1.0
)


-Add: Recoveries in value of investments considered
    other-than-temporarily impaired


3.5







(3.5
)


-Less: Reductions in value of investments considered
    other-than-temporarily impaired


(0.7
)






-



0.7Balance, June 30, 2008

$
46.9



4


$
15.3


$
70.3      35




---



##### 



Business
    Segment Review
    and/or
  Potash
  Three Months Ended June 30Dollars (millions)

Tonnes (thousands)

Average Price per
    Tonne(1)2008

2007

% Change

2008

2007

% Change

2008

2007

% ChangeSales

$
1,194.5


$
510.2



134Freight


60.3



53.2



13Transportation and distribution


13.9



12.6



10Net sales

$
1,120.3


$
444.4



152Manufactured productNet salesNorth American

$
437.5


$
190.9



129



1,086



1,051



3


$
403.03


$
181.62



122Offshore


680.8



251.1



171



1,633



1,762



(7
)

$
416.93


$
142.56



1921,118.3



442.0



153



2,719



2,813



(3
)

$
411.38


$
157.16



162Cost of goods sold


232.4



181.9



28














$
85.56


$
64.70



32Gross margin


885.9



260.1



241














$
325.82


$
92.46



252Other miscellaneous and purchased productNet sales


2.0



2.4



(17
)Cost of goods sold


1.5



2.1



(29
)Gross margin


0.5



0.3



67Gross Margin

$
886.4


$
260.4



240














$
326.00


$
92.57



252   36




---



##### 



Six Months Ended June 30Dollars (millions)

Tonnes (thousands)

Average Price per
    Tonne(1)2008

2007

% Change

2008

2007

% Change

2008

2007

% ChangeSales

$
1,990.7


$
890.7



123Freight


115.6



96.7



20Transportation and distribution


25.3



22.2



14Net sales

$
1,849.8


$
771.8



140Manufactured productNet salesNorth American

$
729.1


$
343.6



112



2,053



1,943



6


$
355.12


$
176.81



101Offshore


1,112.8



422.1



164



3,202



3,035



6


$
347.56


$
139.08



1501,841.9



765.7



141



5,255



4,978



6


$
350.51


$
153.81



128Cost of goods sold


444.1



333.2



33














$
84.52


$
66.93



26Gross margin


1,397.8



432.5



223














$
265.99


$
86.88



206Other miscellaneous and purchased productNet sales


7.9



6.1



30Cost of goods sold


4.7



4.0



18Gross margin


3.2



2.1



52Gross Margin

$
1,401.0


$
434.6



222














$
266.60


$
87.30



205   (1)
    
    Rounding differences may occur due
    to the use of whole dollars in per-tonne calculations.  Highlights
  
    Potash gross margins of $886.4 million for the second
    quarter and $1,401.0 million for the first half of 2008
    were more than triple those in the same respective periods in
    2007, reflecting the benefit of rising prices.
    As demand continued to exceed available supply in the quarter,
    PotashCorp and Canpotex, the offshore marketing company for
    Saskatchewan potash producers, shipped volumes to customers in
    North America and offshore, respectively, on an allocation
    basis. The expiration of contracts for seaborne potash to China
    at the end of 2007 and a delayed settlement of the 2008 contract
    until April resulted in reduced shipments to the worlds
    largest potash importer in the first half of 2008, leaving it
    3 million tonnes short of previously expected 2008 potash
    requirements. Rising demand in other markets more than offset
    this reduction and global demand remains unsatisfied. The tight
    conditions resulted in increased prices in all markets during
    the second quarter and first half of 2008.
    Inventories were reduced to historically low levels around the
    world. For example, reported North American producer inventories
    were 41 percent below the previous five-year average at the
    end of June, an extremely low level given upcoming summer
    maintenance shutdowns. By quarter-end, our inventories had
    declined to 315,000 tonnes, 58 percent below the same time
    last year and 53 percent below March 31, 2008 levels.
    We produced 2.4 million tonnes in the second quarter of
    2008 compared to 2.5 million tonnes in second-quarter 2007.
    In the first half of 2008 we produced 4.9 million tonnes
    compared to 4.8 million tonnes last year. Per-tonne cost of
    goods sold increased 32 percent (almost $21 per tonne)
    quarter over quarter and 26 percent (almost $18 per tonne)
    year over year, due to the impact of a stronger Canadian dollar,
    higher royalties and additional costs for brine inflow
    management at New Brunswick.
    Three-year contracts with unionized employees at each of Cory,
    Allan and Patience Lake expired on April 30, 2008, and
    through the course of negotiations, we have provided our best
    and final offer, which we believe is fair, reasonable and
    responsible. No settlement has yet been reached and, on
    July 21, 2008, these employees gave their respective
    bargaining units the authorization to strike. On July 23,
    each bargaining 37




---



##### 



unit served the company with a strike notice, which enables them
    to strike at any time following the expiration of 48 hours
    after the notice was served. In response to the strike notice,
    we served each bargaining unit a lockout notice, which enables
    us to lock these employees out at any time 48 hours after
    the notice was served. While we cannot predict the likelihood,
    form or timing of any work stoppage at these locations, we
    believe we have appropriate contingency plans in place.  Manufactured
    potash gross margin variance attributable to:
  Three Months Ended June 30



Six Months Ended June 30Dollars (millions)

2008 vs. 2007



2008 vs. 2007Change in



Total







Change in



TotalPrices/Costs



Manufactured







Prices/Costs



ManufacturedChange in







Potash



Change in







PotashSales






Cost of



Gross Margin



Sales







Cost of



Gross MarginVolumes



Net Sales


Goods Sold



Variance



Volumes



Net Sales



Goods Sold



VarianceManufactured productNorth American

$
5.1



$
240.1


$
(16.3
)


$
228.9



$
14.6



$
366.1



$
(30.7
)


$
350.0Offshore


(10.5
)



446.2



(38.8
)



396.9




16.0




667.5




(68.3
)



615.2Change in market mix


(2.9
)



2.9



-




-




(0.1
)



0.1




0.1




0.1Total

$
(8.3
)


$
689.2


$
(55.1
)


$
625.8



$
30.5



$
1,033.7



$
(98.9
)


$
965.3   Sales and
    Cost of Goods Sold
    
    Tight market conditions resulted in price increases. The
    offshore realized price almost tripled, as, since June 30,
    2007, Canpotex realized 10 price increases totaling
    approximately $520 per tonne to Brazil and eight increases
    totaling $465 per tonne to Southeast Asia. It also began to
    realize the $355 per tonne increase built into Indias new
    contract in March 2008, while the $400 per tonne increase in
    Chinas contract signed in April 2008 did not appear until
    late in the quarter because of limited available supply. The
    per-tonne North American realized price was up 122 percent
    as, since June 30, 2007, we realized five price increases
    totaling more than $330 per tonne. This includes the
    $80-per-short-ton increase established for March-May 2008
    deliveries while $150-$175 increases announced for June 1,
    2008 began to be realized. Prices in the North American market
    were $14 per tonne, or 3 percent, lower than offshore
    prices. This compares to North American prices that were $39 per
    tonne, or 27 percent, higher than offshore prices in the
    second quarter of 2007. Historically, higher prices have been
    realized in the North American market due, in part, to prices in
    offshore contracts lagging behind prices in the North American
    spot market and product mix, as North American customers prefer
    premium priced granular product versus standard product more
    typically consumed offshore. In the second quarter of this year,
    product shortage and fewer shipments to China has resulted in
    higher offshore prices with a greater percentage of spot sales
    than is traditionally the case, versus the North American market
    in which spot prices have been fixed for two to three months
    with somewhat lower price escalation.
    Sales volumes of 2.7 million tonnes were the second highest
    in our history, trailing only last years second quarter,
    when we entered the period with 1.1 million tonnes of
    inventory and therefore had more product to sell. By this
    quarter end, our inventories were a record-low 315,000 tonnes.
    North American customers continued to purchase available potash
    supply despite a weather-delayed spring season, pushing up sales
    volumes by 3 percent. Offshore sales volumes were down
    7 percent due to lack of available product. Canpotex
    shipments were down 3 percent though sales volumes to
    Brazil increased by 36 percent to 670,000 tonnes, to
    Southeast Asia by 49 percent to 825,000 tonnes and to India
    by 28 percent to 310,000 tonnes. Those countries consumed
    volumes made available by delays in the negotiation with China,
    which received only 150,000 tonnes (down 82 percent).
    Production levels were down 5 percent despite the reduction
    in shutdown weeks from 7 in second-quarter 2007 to 2 in 2008, as
    a result of poor ore recovery at one location. The impact of a
    stronger Canadian dollar 38




---



##### 



relative to the US dollar negatively impacted cost of goods sold
    by over $9 per tonne on all tonnes. Higher potash royalties
    included in cost of goods sold resulting from higher sales
    prices pushed up costs by $13.6 million ($5 per tonne) and
    brine inflow management costs at New Brunswick incrementally
    increased total cost by $11.3 million ($4 per tonne). The
    costs of brine inflow were attributed to production of potash
    that was mainly sold in the offshore market, contributing to the
    negative price component of the cost of goods sold variance
    being higher for the offshore market than for North America.    
    
    Offshore prices more than doubled as price increases in major
    markets were announced through 2007 and
    first-half
    2008. Canpotex implemented price increases in Brazil that
    totaled $150 per tonne through the first quarter of 2008, and
    effective June 1, 2008, the price increased to $750 per
    tonne. In India, a $50-per-tonne increase on imports took effect
    in the second quarter of 2007; an additional increase of $355
    per tonne is in effect from May 2008 to March 2009.
    Southeast Asian customers saw total price increases of $365-$375
    per tonne since first-half 2007, of which $200-$210 per tonne
    was effective June 1, 2008. Canpotex reached an agreement
    with Sinofert in China in February 2007 that provided for an
    increase of $5 per tonne on 2007 shipments. Limited shipments
    were made to China in the first half of 2008 as an agreement for
    2008 shipments was not reached until April. The 2008 agreement
    provides for an increase of $400 per tonne, though shipments
    under this contract did not commence until late in the second
    quarter due to limited available supply. In North America,
    PotashCorp fully realized the benefits of $30-, $50- and
    $80-per-short-ton price increases announced in late December
    2007, January 2008, and March 2008, respectively. An additional
    price increase of $165-$193 per tonne is in effect from June 1
    to August 31, 2008. Prices in the North American market
    were $8 per tonne, or 2 percent, higher than offshore
    prices. This compares to North American prices that were
    $38 per tonne, or 27 percent, higher than offshore
    prices in the first half of 2007. The reduction in the gap
    between the two markets from the first quarter of 2008 (when
    prices in the North American market were $26 per tonne, or
    9 percent, higher than offshore prices) reflects the shift
    that occurred in second-quarter 2008 as a greater percentage of
    spot sales are occurring in offshore markets at the same time as
    price escalation has been higher.
    Sales volumes rose in both the North American and offshore
    markets, despite the reduction in offshore sales volumes in the
    second quarter due to lack of available supply. Products were
    being sold on an allocation basis to all customers in the first
    half of 2008 as high demand, supported by high commodity prices,
    kept our inventories at historically low levels and led us to
    sell all the product we produced. Unlike previous years, global
    customers acted to secure supply rather than wait for China to
    set the bar with its annual price contract. This strong demand
    more than offset a 73 percent reduction in Canpotexs
    shipments to China which were 325,000 tonnes in 2008,
    representing 6 percent of its total sales volumes. Brazil
    was Canpotexs largest customer in 2008 taking
    25 percent of Canpotexs sales volumes or 1,280,000
    tonnes, while India took 700,000 tonnes or 13 percent. In
    2007, sales to Brazil, India and China represented
    20 percent, 10 percent and 26 percent of
    Canpotexs total sales volumes, respectively. In the first
    half of 2007, North American deliveries and the ability to move
    product to west coast export terminals was disrupted by a rail
    strike and inclement weather in Canada; during the same period
    in 2008 no such disruptions occurred. 39




---



##### 




    Production levels were flat as a 10 percent increase in
    first-quarter, resulting from no shutdown weeks incurred versus
    2 in the same period in 2007, was largely offset by the
    5 percent reduction in second-quarter. In total, 2 shutdown
    weeks were incurred compared to 9 in the first half of 2007. The
    impact of a stronger Canadian dollar relative to the US dollar
    negatively impacted cost of goods sold by almost $10 per tonne
    on all tonnes. Higher potash royalties included in cost of goods
    sold increased costs by $20.3 million ($4 per tonne). Brine
    inflow management costs at New Brunswick incrementally increased
    total cost by $27.1 million ($5 per tonne), though this was
    partially offset by lower costs at Esterhazy ($5.6 million
    or $1 per tonne). Since the costs of brine inflow were
    attributed to production of potash that was mainly sold in the
    offshore market, the negative price component of the cost of
    goods sold variance was higher for the offshore market than for
    North America.  Nitrogen
  Three Months Ended June 30Dollars (millions)

Tonnes (thousands)

Average Price per
    Tonne(1)2008

2007

% Change

2008

2007

% Change

2008

2007

% ChangeSales

$
644.5


$
481.2



34Freight


13.3



13.3



-Transportation and distribution


11.0



12.6



(13
)Net sales

$
620.2


$
455.3



36Manufactured productNet salesAmmonia

$
238.0


$
186.7



27



432



576



(25
)

$
551.09


$
323.85



70Urea


177.0



111.9



58



330



312



6


$
536.09


$
357.74



50Nitrogen solutions/Nitric acid/Ammonium nitrate


145.6



132.4



10



512



647



(21
)

$
284.38


$
204.88



39560.6



431.0



30



1,274



1,535



(17
)

$
440.04


$
280.66



57Cost of goods sold


355.4



291.4



22














$
278.97


$
189.72



47Gross margin


205.2



139.6



47














$
161.07


$
90.94



77Other miscellaneous and purchased productNet sales


59.6



24.3



145Cost of goods sold


54.8



19.7



178Gross margin


4.8



4.6



4Gross Margin

$
210.0


$
144.2



46














$
164.84


$
93.94



75   40




---



##### 



Six Months Ended June 30Dollars (millions)

Tonnes (thousands)

Average Price per
    Tonne(1)2008

2007

% Change

2008

2007

% Change

2008

2007

% ChangeSales

$
1,225.7


$
900.8



36Freight


28.3



24.6



15Transportation and distribution


23.9



26.2



(9
)Net sales

$
1,173.5


$
850.0



38Manufactured productNet salesAmmonia

$
478.6


$
356.1



34



906



1,096



(17
)

$
528.24


$
324.74



63Urea


308.9



225.8



37



627



651



(4
)

$
492.88


$
346.72



42Nitrogen solutions/Nitric acid/Ammonium nitrate


276.3



218.8



26



1,067



1,125



(5
)

$
258.87


$
194.64



331,063.8



800.7



33



2,600



2,872



(9
)

$
409.15


$
278.78



47Cost of goods sold


682.0



535.1



27














$
262.30


$
186.30



41Gross margin


381.8



265.6



44














$
146.85


$
92.48



59Other miscellaneous and purchased productNet sales


109.7



49.3



123Cost of goods sold


96.1



39.4



144Gross margin


13.6



9.9



37Gross Margin

$
395.4


$
275.5



44














$
152.08


$
95.93



59   (1)
    
    Rounding differences may occur due
    to the use of whole dollars in per-tonne calculations.  Highlights
  
    In a strong pricing environment underpinned by high world energy
    prices and heavy global agricultural demand, our nitrogen
    segment generated a record $210.0 million of gross margin
    in the quarter. This is 46 percent higher than the
    $144.2 million generated in the same quarter last year, and
    13 percent more than the previous record of
    $185.4 million generated in the first quarter of this year.
    For the first six months of 2008, nitrogen gross margin of
    $395.4 million was 44 percent ahead of the same period
    in 2007.
    Strong fundamentals led to realized price increases in all major
    nitrogen products quarter over quarter and year over year.
    Higher global costs for oil and natural gas supported higher
    product prices and generally restricted movement of products to
    regions relatively close to their source of production.
    Driven by higher US gas markets and significantly higher Tampa
    ammonia prices to which our Trinidad natural gas is primarily
    indexed, our total average gas cost in the quarter including
    hedging gains was $7.74 per MMBtu and $7.23 per MMBtu in the
    first half. These costs were up 76 percent from last
    years second quarter and 64 percent from last
    years first half.
    Our Trinidad facility generated $91.8 million
    (44 percent) of nitrogen gross margin in the quarter and
    $187.8 million (47 percent) for the first half, even
    with volumes significantly reduced by a major plant outage. Our
    US operations, which are primarily geographically insulated from
    Gulf imports, contributed $106.3 million in gross margin
    for the quarter and $187.8 million for the first six
    months, while hedging gains added $11.9 million and
    $19.8 million during these periods, respectively.
    Transportation and distribution costs declined in the second
    quarter and first half of 2008 despite increased overall sales
    volumes, as sales volumes of ammonia, for which per-tonne
    transportation and distribution costs are highest, were down. 41




---



##### 



Manufactured
    nitrogen gross margin variance attributable to:
  Three Months Ended June 30



Six Months Ended June 30Dollars (millions)

2008 vs. 2007



2008 vs. 2007Change in



Total







Change in



TotalPrices/Costs



Manufactured







Prices/Costs



ManufacturedChange in







Nitrogen



Change in







NitrogenSales






Cost of



Gross Margin



Sales







Cost of



Gross MarginVolumes



Net Sales


Goods Sold



Variance



Volumes



Net Sales



Goods Sold



VarianceManufactured ProductAmmonia

$
(26.8
)


$
98.2


$
(45.7
)


$
25.7



$
(37.9
)


$
184.1



$
(85.6
)


$
60.6Urea


(1.1
)



59.5



(28.3
)



30.1




(9.5
)



91.6




(41.3
)



40.8Solutions, NA, AN


(7.3
)



38.2



(19.8
)



11.1




(3.0
)



68.5




(40.3
)



25.2Hedge


-




-



(2.2
)



(2.2
)



-




-




(11.5
)



(11.5
)Change in market mix


(6.5
)



6.8



0.6




0.9




5.6




(5.1
)



0.6




1.1Total

$
(41.7
)


$
202.7


$
(95.4
)


$
65.6



$
(44.8
)


$
339.1



$
(178.1
)


$
116.2   Sales and
    Cost of Goods Sold
    
    Strong world demand for agricultural and industrial nitrogen and
    higher global natural gas costs drove up realized ammonia prices
    by 70 percent from last years second quarter though
    only 9 percent from the trailing quarter. Such factors also
    contributed to an increase in urea prices, which rose
    50 percent from the second quarter of 2007 and
    21 percent from first-quarter 2008. Global nitrogen and
    phosphate supply was impacted in the second quarter by China,
    the worlds largest urea exporter and second-largest
    phosphate exporter in 2007. China introduced a 35 percent
    tax on phosphate and nitrogen exports during the first quarter
    to protect its domestic supply, and then raised it to
    135 percent effective from April 20 to September 30,
    2008. While higher global costs for oil and natural gas
    supported higher product prices and generally restricted product
    movement to regions relatively close to the source of
    production, the Chinese export tax immediately and significantly
    drove world urea prices higher. The higher prices for other
    nitrogen fertilizers pushed nitrogen solutions prices up
    44 percent, which contributed $22.5 million to the
    gross margin increase.
    Ammonia sales volumes fell by 25 percent due to reduced
    product availability resulting from a
    53-day
    maintenance shutdown at our Trinidad 04 plant. Urea sales
    volumes rose 6 percent as the negative impact of the
    delayed 2008 spring season was outweighed by the effect of
    significantly lower offshore imports that reduced pressure on
    sales from North American producers. The combination of the late
    spring and restricted availability of production inputs led to a
    31 percent drop in nitrogen solutions volumes.
    The 47 percent increase in per-tonne cost of goods sold was
    primarily attributable to higher natural gas costs which, on the
    average, were 76 percent higher than the second quarter of
    2007. Higher Tampa and NOLA ammonia prices, to which a portion
    of our Trinidad natural gas cost is indexed, increased our
    Trinidad gas costs 89 percent. As the natural gas industry
    continued to become more global, nitrogen producers in regions
    that had benefited from lower-cost gas, including Russia and
    Ukraine, faced higher input costs, raising the floor price for
    nitrogen globally. Natural gas costs also continued to rise in
    the US. As a result, our US natural gas costs rose
    45 percent. Gains from our US natural gas hedging
    activities declined $2.2 million. The price variance in
    ammonia, and to a lesser extent urea, was significantly higher
    than other nitrogen products, due to a higher proportion of the
    costs coming from Trinidad, which not only experienced the
    higher cost of an extended maintenance shutdown but also
    experienced higher gas costs (89 percent increase) due to
    higher indexed prices. Other products experienced a
    45 percent increase in gas costs in the US. 42




---



##### 




    Strong world demand for agricultural and industrial nitrogen and
    higher global natural gas costs drove up realized prices in all
    major product categories through both the first and second
    quarters. Prices 38 percent higher for solutions
    contributed $36.6 million to the gross margin increase,
    while nitric acid and ammonium nitrate prills, where prices rose
    37 percent and 23 percent, respectively, contributed
    $16.4 million and $15.5 million, respectively, to the
    gross margin increase.
    Ammonia sales volumes were 17 percent below last year as
    Trinidad sales were reduced by approximately 240,000 tonnes due
    to required plant maintenance. This decline was partially offset
    as our US plants sold approximately 50,000 additional tonnes as
    we tried to maximize production volumes to meet demand. Urea
    sales volumes were down 4 percent as lower first-quarter
    sales (when less inventory was available to sell following a
    strong sales push in the fourth quarter of last year) more than
    offset the second-quarter increase resulting from stronger
    demand versus 2007 when more sales were shifted into the first
    quarter. Sales volumes for nitrogen solutions were down
    8 percent, as the second-quarter decline more than offset
    the 37 percent first-quarter increase seen as we continued
    to use our Geismar facility, which we restarted during the first
    quarter of 2007 on an opportunistic basis using purchased
    ammonia and carbon dioxide, to meet increasing US demand for
    liquids.
    Our average natural gas costs were 64 percent higher than
    the first 6 months of last year, contributing to the
    41 percent increase in per-tonne cost of goods sold. Our
    natural gas costs in Trinidad increased 80 percent while
    our US natural gas spot costs increased 32 percent. Gains
    from our US natural gas hedging activities declined
    $11.5 million.
    The price variance in ammonia was significantly higher than in
    urea and other nitrogen products, due to a higher proportion of
    ammonia sales attributable to our Trinidad production
    (72 percent in the first half of 2008 and 81 percent
    in the first half of 2007) compared to urea sales
    (49 percent in the first half of 2008 and 55 percent
    in first half 2007) while a higher proportion of our other
    nitrogen products sales are attributable to US production. 43




---



##### 



Phosphate
  Three Months Ended June 30Dollars (millions)

Tonnes (thousands)

Average Price per
    Tonne(1)2008

2007

% Change

2008

2007

% Change

2008

2007

% ChangeSales

$
782.0


$
361.7



116Freight


29.8



25.8



16Transportation and distribution


8.4



7.4



14Net sales

$
743.8


$
328.5



126Manufactured productNet salesFertilizer  liquids

$
128.8


$
47.0



174



190



184



3


$
679.76


$
255.91



166Fertilizer  solids


355.0



137.1



159



370



349



6


$
960.63


$
392.41



145Feed


139.9



63.5



120



183



204



(10
)

$
762.31


$
310.43



146Industrial


105.2



68.7



53



166



186



(11
)

$
633.50


$
369.89



71728.9



316.3



130



909



923



(2
)

$
802.20


$
342.56



134Cost of goods sold


391.8



222.0



76














$
431.35


$
240.39



79Gross margin


337.1



94.3



257














$
370.85


$
102.17



263Other miscellaneous and purchased productNet sales


14.9



12.2



22Cost of goods sold


11.1



9.7



14Gross margin


3.8



2.5



52Gross Margin

$
340.9


$
96.8



252














$
375.03


$
104.88



258   Six Months Ended June 30Dollars (millions)

Tonnes (thousands)

Average Price per
    Tonne(1)2008

2007

% Change

2008

2007

% Change

2008

2007

% ChangeSales

$
1,295.2


$
716.3



81Freight


61.9



52.9



17Transportation and distribution


16.4



15.2



8Net sales

$
1,216.9


$
648.2



88Manufactured productNet salesFertilizer  liquids

$
223.7


$
109.7



104



449



435



3


$
498.44


$
252.13



98Fertilizer  solids


531.3



257.5



106



637



776



(18
)

$
834.31


$
331.67



152Feed


235.4



126.2



87



397



411



(3
)

$
592.62


$
306.59



93Industrial


196.4



131.9



49



358



359



-


$
548.48


$
367.95



491,186.8



625.3



90



1,841



1,981



(7
)

$
644.67


$
315.56



104Cost of goods sold


696.4



469.7



48














$
378.29


$
237.01



60Gross margin


490.4



155.6



215














$
266.38


$
78.55



239Other miscellaneous and purchased productNet sales


30.1



22.9



31Cost of goods sold


23.6



17.5



35Gross margin


6.5



5.4



20Gross Margin

$
496.9


$
161.0



209














$
269.91


$
81.27



232   (1)
    
    Rounding differences may occur due
    to the use of whole dollars in per-tonne calculations. 44




---



##### 



Highlights
  
    Substantially higher prices drove second-quarter phosphate gross
    margin to a record $340.9 million, 252 percent higher
    than the $96.8 million generated in the same quarter last
    year. Gross margin of $496.9 million in first-half 2008 was
    209 percent higher than in the first six months of 2007 and
    has already exceeded the full-year record of $432.8 million
    set last year.
    After Chinas export tax (introduced during the first
    quarter and raised in April) constricted world phosphate supply,
    it tightened further in May when a severe earthquake struck
    Sichuan Province, which produces 11 percent of Chinas
    phosphate rock and a significant amount of related downstream
    fertilizer, feed and industrial products. Moreover, phosphate
    producers without an integrated supply of phosphate rock
    continued to be affected by rising costs for key inputs. The
    tight supply and rising costs for key inputs contributed to
    significant price increases for downstream phosphate products.
    The impact of higher prices, which were seen in every major
    product category, was most evident for PotashCorp in
    manufactured solid fertilizers which generated
    $191.7 million in gross margin in the second quarter and
    $277.0 million in the first half of 2008, almost quadruple
    its contribution in the same respective periods last year.
    Manufactured liquid fertilizers added $54.9 million to
    gross margin in the second quarter and $74.9 million in the
    first six months of 2008. Manufactured feed and industrial
    products contributed $70.7 million and $19.8 million
    to quarterly gross margin, respectively, and $103.3 million
    and $35.2 million, respectively, to gross margin in the
    first-half.  Manufactured
    phosphate gross margin variance attributable to:
  Three Months Ended June 30



Six Months Ended June 30Dollars (millions)


2008 vs. 2007



2008 vs. 2007Change in



Total







Change in



TotalPrices/Costs



Manufactured







Prices/Costs



ManufacturedChange in







Phosphate



Change in







PhosphateSales







Cost of



Gross Margin



Sales







Cost of



Gross MarginVolumes



Net Sales



Goods Sold



Variance



Volumes



Net Sales



Goods Sold



VarianceManufactured productFertilizer  liquids


$
0.5



$
80.3



$
(38.7
)


$
42.1



$
2.2



$
110.6



$
(66.2
)


$
46.6Fertilizer  solids



(3.4
)



219.1




(75.6
)



140.1




(25.3
)



320.0




(88.5
)



206.2Feed



(4.3
)



82.8




(25.6
)



52.9




(3.2
)



113.6




(38.3
)



72.1Industrial



(3.0
)



43.7




(40.8
)



(0.1
)



1.3




64.6




(63.8
)



2.1Change in market mix



5.8




(5.7
)



7.7




7.8




3.2




(3.0
)



7.6




7.8Total


$
(4.4
)


$
420.2



$
(173.0
)


$
242.8



$
(21.8
)


$
605.8



$
(249.2
)


$
334.8   Sales
    and Cost of Goods Sold
    
    Strong global demand and higher input costs contributed to an
    increase in solid fertilizer realized prices to $961 per tonne
    in the second quarter, 145 percent above the same quarter
    last year and 46 percent higher than in the trailing
    quarter. The price of rock from Morocco rose to $350 
    $400 per tonne, compared to $190 in the first quarter of 2008
    and $56 in last years second quarter. Due to our
    multi-year Morrocan rock contract, however, our rock costs for
    our Geismar plant were unchanged from the prior year. Delivered
    sulfur prices rose to $800 per tonne or higher in China and
    India, while US molten sulfur prices increased approximately
    $200 to $400 per long ton from the first quarter of 2008. While
    significant, pricing gains were not as substantial for our other
    phosphate businesses, which have historically benefited from
    contract pricing in weaker markets. Liquid fertilizer prices
    rose 166 percent, largely the result of a Phosphate
    Chemical Export Association, Inc. (PhosChem)
    contract with India signed at $1,985 per phosphoric acid
    (P2O5)
    tonne for selected second-quarter shipments versus $566 per
    P2O5
    tonne under the previous contract. North American liquid prices
    did not yet fully reflect the rising value of
    P2O5,
    as these sales are 45




---



##### 



primarily contracted on a fertilizer-year basis. Feed prices
    were up 146 percent following $250 per-short-ton increases
    on each of April 1 and May 1, 2008. Realized prices for
    industrial products, which have several contracts with pricing
    that will not reset until early 2009, rose 71 percent.  
    Strong offshore demand raised solid fertilizer sales volumes by
    6 percent. This demand was driven by India, which increased
    its DAP purchases from PhosChem by 225 percent, or almost
    500,000 tonnes. Our share of this increase more than offset a
    57,000 tonne decline in our North American sales volumes because
    of the delayed spring season. Despite weather conditions, liquid
    fertilizer volumes rose 3 percent. Feed phosphate sales
    volumes were down 10 percent due primarily to current
    weakness in the US beef, pork and poultry industries, while
    industrial sales volumes were 11 percent lower due to a
    scheduled plant turnaround and our decision to divert more
    P2O5
    to higher-margin liquid products.
    Rising costs for key inputs continued to have a major impact.
    Sulfur costs increased four-fold and negatively impacted the
    change in gross margin by $118.0 million while a
    54 percent increase in ammonia prices further negatively
    impacted the gross margin change (particularly, solid
    fertilizers) by $15.6 million. In addition, phosphate rock
    costs were up 18 percent as a result of temporary mill
    issues encountered at Aurora and low mine recovery rates at
    White Springs. The price component of the cost of goods sold
    variance was highest for solids primarily due to the relatively
    higher proportion of volumes for solids versus liquids, feed and
    industrial, which more than offset the higher concentration of
    phosphoric acid (and the related high cost of sulfur dominating
    the higher cost) in any of the other products groups.    
    
    Strong demand and higher input costs drove up phosphate realized
    prices throughout the first half of 2008. As a result, price
    increases were seen in all major product categories.
    Solid phosphate fertilizer sales volumes were 18 percent
    below those in last years first half despite the
    6 percent increase seen in the second quarter, largely as a
    result of lower beginning inventories and the delayed spring
    season which reduced first-quarter sales volumes by
    27 percent.
    The price variance in cost of goods sold had an unfavorable
    impact as input costs rose significantly. A 291 percent
    increase in sulfur reduced gross margin by $177.2 million,
    and ammonia prices that were 42 percent higher reduced
    gross margin (particularly, solid fertilizers) by a further
    $27.6 million. Temporary mill issues encountered at Aurora
    and low mine recovery rates at White Springs increased costs
    further. Cost of goods sold for all product groups was
    predominantly affected by the large increases in sulfur prices
    while volume variances were generally small since volumes were
    comparable. 46




---



##### 



Expenses
    and Other Income
  Three Months Ended June 30


Six Months Ended June 30Dollar


%








Dollar


%Dollars (millions)

2008


2007


Change


Change


2008


2007


Change


ChangeSelling and administrative

$
79.7


$
73.5


$
6.2



8


$
126.9


$
114.1


$
12.8



11Provincial mining and other taxes


163.0



34.6



128.4



371



262.4



67.1



195.3



291Foreign exchange loss (gain)


1.9



39.5



(37.6
)


(95
)


(25.8
)


41.5



(67.3
)


n/mOther income


103.3



68.5



34.8



51



115.2



82.2



33.0



40Interest expense


15.7



20.8



(5.1
)


(25
)


26.9



46.3



(19.4
)


(42
)Income taxes


375.2



115.8



259.4



224



547.0



200.6



346.4



173   n/m = not meaningful
         47




---



##### 



Three Months Ended June 30


Six Months Ended June 30%











%Dollars (millions)  except percentage amounts

2008


2007


Change


Change


2008


2007


Change


ChangeLong-term debt obligations, including current portionWeighted average outstanding

$
1,358.4


$
1,723.9


$
(365.5)



(21
)

$
1,358.5


$
1,728.8


$
(370.3)



(21
)Weighted average interest rate


6.5%



6.6%



(0.1)%



(2
)


6.5%



6.7%



(0.2)%



(3
)Short-term debt obligationsWeighted average outstanding

$
399.2


$
92.7


$
306.5



331


$
246.0


$
102.1


$
143.9



141Weighted average interest rate


2.8%



5.4%



(2.6)%



(48
)


3.1%



5.5%



(2.4)%



(44
)       
    A scheduled one and a half percentage point reduction in the
    Canadian federal income tax rate applicable to resource
    companies along with the elimination of the one percent surtax
    became effective at the beginning of 2008. In addition, there
    was an increase in permanent deductions in the US.
    As a result of the higher permanent deductions in the US, it was
    determined that the consolidated effective income tax rate for
    the 2008 year had decreased from 30 percent to
    29 percent. The impact of this change on the prior period
    was reflected during the second quarter.
    Future income tax assets were written down by $11.0 million
    during the second quarter of 2008.
    During the first quarter of 2008, an income tax recovery of
    $42.0 million was recorded that related to an increase in
    permanent deductions in the US from prior years.
    The $25.3 million gain recognized in first-quarter 2008 as
    a result of the change in fair value of the forward purchase
    contract for shares in Sinofert was not taxable.   48




---



##### 



LIQUIDITY
    AND CAPITAL RESOURCES
  Cash
    Requirements
    Contractual
    Obligations and Other Commitments
  Payments Due By PeriodDollars (millions)Total


Within 1 year


1 to 3 years


3 to 5 years


Over 5 yearsLong-term debt obligations

$
1,358.3


$
0.2


$
602.2


$
255.9


$
500.0Estimated interest payments on long-term debt obligations


1,079.5



96.1



192.2



98.1



693.1Operating leases


698.1



102.3



176.4



148.1



271.3Purchase obligations


1,320.3



506.7



367.4



177.0



269.2Other commitments


76.4



25.2



24.0



7.5



19.7Other long-term liabilities


1,554.7



83.8



83.2



60.9



1,326.8Total

$
6,087.3


$
814.3


$
1,445.4


$
747.5


$
3,080.1   Long-term
    Debt
        Operating
    Leases
   49




---



##### 



Purchase
    Obligations
        Other
    Commitments
    Other
    Long-term Liabilities
      Capital
    Expenditures
    ramp-up
  2-million-tonne-per-year
     50




---



##### 



2-million-tonne ramp-up
  ramp-up
      Investment
    Risk  Liquidity
  Investments
    in Auction Rate Securities
    August 6, 2008

May 9, 2008

February 28, 2008Credit

Credit



Credit

CreditCredit Rating,

Credit Rating,



Rating,

Rating,



Rating,

Rating,Agency 1

Agency 2

Face Value

Agency 1

Agency 2

Face Value

Agency 1

Agency 2

Face ValueAaa


AAA


$
5.0



Aaa



AAA


$
53.3



Aaa



AAA


$
87.7AAA


AAA, C/W



20.0



Aaa, C/W



AAA



34.4



Aaa, C/W



AAA, C/W



25.0AAA


A



28.3



A3, C/W



B



25.0



Baa3



AAA, C/W



19.8Ba1, C/W


BBB



25.0



Baa3



B



19.8B2, C/W


AAA



34.4Ca


B, C/W



19.8  C/W = on Credit Watch with negative
    implications
   51




---



##### 



Sources
    and Uses of Cash
    Three Months Ended June 30


Six Months Ended June 30$


%








$


%Dollars (millions)

2008


2007


Change


Change


2008


2007


Change


ChangeCash provided by operating activities

$
894.6


$
526.1


$
368.5



70


$
1,336.9


$
845.7


$
491.2



58Cash (used in) investing activities


(322.7
)


(114.0
)


(208.7
)


183



(697.4
)


(234.2
)


(463.2
)


198Cash (used in) financing activities


(666.6
)


(416.9
)


(249.7
)


60



(1,089.1
)


(487.5
)


(601.6
)


123     June 30,


December 31,Dollars (millions)  except ratio amounts

2008


2007


Change


% ChangeCurrent assets

$
2,119.1


$
1,811.3


$
307.8



17Current liabilities

$
(2,409.1
)

$
(1,001.9
)

$
(1,407.2
)


140Working capital

$
(290.0
)

$
809.4


$
(1,099.4
)


n/mCurrent ratio


0.88



1.81



(0.93
)


(51
)  n/m = not meaningful
     52




---



##### 




    During the first three months of 2008, $173.7 million was
    paid to settle the companys forward purchase contract for
    shares of Sinofert. During the second quarter of 2008, the
    company purchased an additional 102,128,000 shares in
    Sinofert for a total cost of $76.4 million. Net of the
    ownership interest dilution that resulted from the issuance of
    shares of Sinofert, the acquisitions increased the
    companys ownership interest in Sinofert to approximately
    21 percent. During the first three months of 2007,
    $9.7 million was paid to settle outstanding amounts related
    to the December 2006 purchase of additional shares in SQM.
    Our spending on property, plant and equipment was
    $237.9 million in the second quarter of 2008 and
    $434.4 million in the first six months of 2008, an increase
    of $110.4 million and $197.9 million compared to the
    same periods in 2007, respectively. Approximately
    76 percent (2007  52 percent) of our
    consolidated capital expenditures for the second quarter related
    to the potash segment and 69 percent (2007 
    55 percent) related to the potash segment in the first six
    months of 2008.  10-year
    Principal
    Debt Instruments
  June 30,
    2008(1)Total


Amount


Amount


AmountDollars (millions)

Amount


Outstanding


Committed


AvailableSyndicated credit
    facilities(1)

$
1,750.0


$
200.0


$
733.1
(2)

$
816.9Line of credit


75.0



-



22.7



52.3Commercial paper


750.0



733.1
(2)


-



16.9US shelf registrations


4,000.0



1,350.0



-



2,250.0
(3)   (1)
    
    Except for Syndicated credit
    facilities which are as of July 29, 2008. On July 29,
    2008, $250.0 million of capacity was added to the facilities.(2)
    
    Per the terms of the agreement, the
    commercial paper outstanding or committed, as applicable, is
    based on the US dollar balance or equivalent thereof in lawful
    money of other currencies at the time of issue; therefore,
    subsequent changes in the exchange rate applicable to Canadian
    dollar denominated commercial paper have no impact on this
    balance.(3)
    
    $400.0 million of senior notes
    issued under one of the companys US shelf registration
    statements were repaid in full at maturity; no additional amount
    is available in respect of the principal of these senior notes. 53




---



##### 



364-day
        Outstanding
    Share Data
    Off-Balance
    Sheet Arrangements
   54




---



##### 



Guarantee
    Contracts
  Form 10-Q
  Derivative
    Instruments
    Long-term
    Fixed Price Contracts
    QUARTERLY
    FINANCIAL HIGHLIGHTS
  Dollars (millions)  except

June 30,

March 31,


December 31,

September 30,

June 30,

March 31,


December 31,

September 30,per-share amounts

2008

2008


2007

2007

2007

2007


2006

2006Sales

$
2,621.0


$
1,890.6



$
1,431.4


$
1,295.0


$
1,353.1


$
1,154.7



$
1,022.9


$
953.5Gross margin


1,437.3



856.0




535.0



475.1



501.4



369.7




299.3



245.8Net income


905.1



566.0




376.8



243.1



285.7



198.0




186.0



145.2Net income per share  basic


2.91



1.79




1.19



0.77



0.91



0.63




0.59



0.47Net income per share  diluted


2.82



1.74




1.16



0.75



0.88



0.62




0.58



0.46       RELATED
    PARTY TRANSACTIONS
    CRITICAL
    ACCOUNTING ESTIMATES
  Form 10-Q.
   55




---



##### 



RECENT
    ACCOUNTING CHANGES
  Form 10-Q
  International
    Financial Reporting Standards
          
    Scoping and diagnostic phase  This phase involves
    performing a high-level impact assessment to identify key areas
    that may be impacted by the transition to IFRSs. As a result of
    these procedures the potentially affected areas are ranked as
    high, medium or low priority.
    Impact analysis, evaluation and design phase  In this
    phase, each area identified from the scoping and diagnostic
    phase will be addressed in order of descending priority, with
    project teams established as deemed necessary. This phase
    involves specification of changes required to existing
    accounting policies, information systems and business processes,
    together with an analysis of policy alternatives allowed under
    IFRSs and development of draft IFRSs financial statement content.
    Implementation and review phase  This phase includes
    execution of changes to information systems and business
    processes, completing formal authorization processes to approve
    recommended accounting policy changes and training programs
    across the companys finance and other staff, as necessary.
    It will culminate in the collection of financial information
    necessary to compile IFRSs-compliant financial statements,
    embedding IFRSs in business processes, elimination of any
    unnecessary data collection processes and audit committee
    approval of IFRSs financial statements. Implementation also
    involves delivery of further training to staff as revised
    systems begin to take effect. 56




---



##### 



Impairment
    of Assets
      Employee
    Benefits
   57




---



##### 



Share-Based
    Payments
    Provisions
    (Including Asset Retirement Obligations)
      Income
    Taxes
    RISK
    MANAGEMENT
    and/or
  Form 10-K.
   58




---



##### 



OUTLOOK
          per-acre per-acre
 59




---



##### 



catch-up fertilizer-year-based catch-up
  28-30 percent, 15-18 percent
   60




---



##### 



FORWARD-LOOKING
    STATEMENTS
  Form 10-Q, Form 10-Q, Form 10-K
  ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Form 10-Q.
  ITEM 4.
    CONTROLS
    AND PROCEDURES  Securities Exchange Act of 1934
   61




---



##### 



PART II.
    OTHER INFORMATION
  ITEM 2.
    ISSUER
    PURCHASE OF EQUITY SECURITIES    (c) Total Number of


(d) MaximumShares Purchased as


Number of Shares(a) Total Number


(b) Average


Part of Publicly


that May Yet Beof Shares


Price Paid


Announced


Purchased UnderPeriod

Purchased


per
    Share(1)


Programs


the ProgramsApril 1, 2008  April 30, 2008


1,300,000


$
189.8262



4,698,800



11,121,200May 1, 2008  May 31, 2008


3,556,700


$
193.5636



8,255,500



7,564,500June 1, 2008  June 30, 2008


2,600,000


$
223.3511



10,855,500



4,964,500Total


7,456,700


$
203.2983



10,855,500



4,964,500   (1)
    
    Average price paid per share
    includes cash paid for commissions.(2)
    
    On January 23, 2008, the
    company announced that its Board of Directors had approved an
    open market repurchase program of approximately 5 percent
    of the companys outstanding common shares, or
    approximately 15.82 million shares, through a normal course
    issuer bid. Purchasing under the program commenced on
    January 31, 2008 and may continue until January 30,
    2009.  ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS  (a)
    on May 8, 2008, the Company held an annual and special
    meeting (the Meeting) of its shareholders.  (b)
    At the Meeting, the Companys shareholders voted upon each
    of the following proposed director nominees with the results of
    the voting set forth opposite the name of each such nominee.  FOR


AGAINST


WITHHELD*William J. Doyle


247,434,803



0



643,797John W. Estey


247,461,133



0



617,467Wade Fetzer III


247,445,676



0



632,924Charles S. Hoffman


247,269,159



0



809,441Dallas J. Howe


247,422,339



0



656,261Alice D. Laberge


247,491,170



0



587,430Keith G. Martell


247,465,454



0



613,146Jeffrey J. McCaig


247,305,523



0



773,077Mary Mogford


247,481,723



0



596,877Paul J. Schoenhals


247,404,111



0



674,489E. Robert Stromberg, Q.C.


244,393,697



0



3,684,903Elena Viyella de Paliza


244,417,664



0



3,660,936         (*)
 62




---



##### 



ITEM 6.
    EXHIBITS  (a)
    EXHIBITS  Incorporated By
    ReferenceExhibit





Filing Date/Number

Description of
    Document

Form

Period End Date3(a)


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

10-Q


6/30/20023(b)


Bylaws of the registrant effective May 15, 2002.

10-Q


6/30/20024(a)


Term Credit Agreement between The Bank of Nova Scotia and other
    financial institutions and the registrant dated
    September 25, 2001.

10-Q


9/30/20014(b)


Syndicated Term Credit Facility Amending Agreement between The
    Bank of Nova Scotia and other financial institutions and the
    registrant dated as of September 23, 2003.

10-Q


9/30/20034(c)


Syndicated Term Credit Facility Second Amending Agreement
    between The Bank of Nova Scotia and other financial institutions
    and the registrant dated as of September 21, 2004.

8-K


9/21/20044(d)


Syndicated Term Credit Facility Third Amending Agreement between
    The Bank of Nova Scotia and other financial institutions and the
    registrant dated as of September 20, 2005.

8-K


9/22/20054(e)


Syndicated Term Credit Facility Fourth Amending Agreement
    between The Bank of Nova Scotia and other financial institutions
    and the registrant dated as of September 27, 2006.

10-Q


9/30/20064(f)


Syndicated Term Credit Facility, Fifth Amending Agreement
    between the Bank of Nova Scotia and other financial institutions
    and the registrant dated as of October 19, 2007.

8-K


10/22/20074(g)


Indenture dated as of June 16, 1997, between the registrant
    and The Bank of Nova Scotia Trust Company of New York.

8-K


6/18/19974(h)


Indenture dated as of February 27, 2003, between the
    registrant and The Bank of Nova Scotia Trust Company of New
    York.

10-K


12/31/20024(i)


Form of Note relating to the registrants offering of
    $600,000,000 principal amount of 7.75% Notes due
    May 31, 2011.

8-K


5/17/20014(j)


Form of Note relating to the registrants offering of
    $250,000,000 principal amount of 4.875% Notes due
    March 1, 2013.

8-K


2/28/20034(k)


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

8-K


11/29/20064(l)


Revolving Term Credit Facility Agreement between the Bank of
    Nova Scotia and other financial institutions and the registrant
    dated as of May 29, 2008.

8-K


6/2/20084(m)


Revolving Term Credit Facility Amending Agreement between the
    Bank of Nova Scotia and other financial institutions and the
    registrant dated as of July 29, 2008.  63




---



##### 



Incorporated By
    ReferenceFiling Date/Number

Description of
    Document

Form

Period End Date10
(a)

Sixth Voting Agreement dated April 22, 1978, between
    Central Canada Potash, Division of Noranda, Inc., Cominco Ltd.,
    International Minerals and Chemical Corporation (Canada)
    Limited, PCS Sales and Texasgulf Inc.

F-1
    (File No.
    33-31303)

9/28/198910
(b)

Canpotex Limited Shareholders Seventh Memorandum of Agreement
    effective April 21, 1978, between Central Canada Potash,
    Division of Noranda Inc., Cominco Ltd., International Minerals
    and Chemical Corporation (Canada) Limited, PCS Sales, Texasgulf
    Inc. and Canpotex Limited as amended by Canpotex S&P
    amending agreement dated November 4, 1987.

F-1
    (File No.
    33-31303)

9/28/198910
(c)

Producer Agreement dated April 21, 1978, between Canpotex
    Limited and PCS Sales.

F-1
    (File No.
    33-31303)

9/28/198910
(d)

Canpotex/PCS Amending Agreement, dated as of October 1,
    1992.

10-K

12/31/199510
(e)

Canpotex PCA Collateral Withdrawing/PCS Amending Agreement,
    dated as of October 7, 1993.

10-K

12/31/199510
(f)

Canpotex Producer Agreement amending agreement dated as of
    January 1, 1999.

10-K

12/31/200010
(g)

Canpotex Producer Agreement amending agreement dated as of
    July 1, 2002.

10-Q

6/30/200410
(h)

Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978, between International
    Minerals & Chemical Corporation (Canada) Limited and
    the registrants predecessor.

F-1
    (File No.
    33-31303)

9/28/198910
(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.

10-K

12/31/199010
(j)

Agreement effective August 27, 1998, between International
    Minerals & Chemical (Canada) Global Limited and the
    registrant, amending the Esterhazy Restated Mining and
    Processing Agreement dated January 31, 1978 (as amended).

10-K

12/31/199810
(k)

Agreement effective August 31, 1998, among International
    Minerals & Chemical (Canada) Global Limited,
    International Minerals & Chemical (Canada) Limited
    Partnership and the registrant assigning the interest in the
    Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978 (as amended) held by International
    Minerals & Chemical (Canada) Global Limited to
    International Minerals & Chemical (Canada) Limited
    Partnership.

10-K

12/31/199810
(l)

Potash Corporation of Saskatchewan Inc. Stock Option
    Plan  Directors, as amended.

10-K

12/31/2006 64




---



##### 



Incorporated By
    ReferenceFiling Date/Number

Description of
    Document

Form

Period End Date10
(m)

Potash Corporation of Saskatchewan Inc. Stock Option
    Plan  Officers and Employees, as amended.

10-K

12/31/200610
(n)

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

10-K

12/31/200710
(o)

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

10-K

12/31/199510
(p)

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

10-Q

6/30/199610
(q)

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

10-Q

9/30/200610
(r)

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

10-K

12/31/200210
(s)

Amended and restated agreement dated February 20, 2007,
    between the registrant and William J. Doyle concerning the
    Supplemental Retirement Income Plan.

10-K

12/31/200610
(t)

Supplemental Retirement Benefits Plan for U.S. Executives dated
    effective January 1, 1999.

10-Q

6/30/200210
(u)

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

10-K

12/31/199510
(v)

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

10-K

12/31/199510
(w)

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

10-K

12/31/200010
(x)

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

10-Q

6/30/200410
(y)

Chief Executive Officer Medical and Dental Benefits.

10-K

12/31/200410
(z)

Second Amended and Restated Membership Agreement dated
    January 1, 1995, among Phosphate Chemicals Export
    Association, Inc. and members of such association, including
    Texasgulf Inc.

10-K

12/31/199510
(aa)

International Agency Agreement dated effective December 15,
    2006, between Phosphate Chemicals Export Association, Inc. and
    PCS Sales (USA), Inc.

10-K

12/31/200610
(bb)

Deferred Share Unit Plan for Non-Employee Directors, as amended.

10-Q

3/31/200810
(cc)

Potash Corporation of Saskatchewan Inc. 2005 Performance Option
    Plan and Form of Option Agreement, as amended.

10-K

12/31/200610
(dd)

Potash Corporation of Saskatchewan Inc. 2006 Performance Option
    Plan and Form of Option Agreement, as amended.

10-K

12/31/200610
(ee)

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

10-Q

3/31/2007 65




---



##### 



Incorporated By
    ReferenceFiling Date/Number

Description of
    Document

Form

Period End Date10
(ff)

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

10-Q

3/31/200810
(gg)

Medium Term Incentive Plan of the registrant effective January
    2006.

10-K

12/31/200511


Statement re Computation of Per Share Earnings.31
(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.  66




---



##### 



SIGNATURES
    
   By:
    /s/  Joseph
    Podwika   Senior Vice President, General Counsel and Secretary
     By:
    /s/  Wayne
    R. Brownlee   Executive Vice President, Treasurer and
 Chief Financial Officer
 (Principal Financial and Accounting Officer)
 67




---



##### 



EXHIBIT
    INDEX
  Incorporated By
    ReferenceExhibit





Filing Date/Number

Description of
    Document

Form

Period End Date3(a)


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

10-Q


6/30/20023(b)


Bylaws of the registrant effective May 15, 2002.

10-Q


6/30/20024(a)


Term Credit Agreement between The Bank of Nova Scotia and other
    financial institutions and the registrant dated
    September 25, 2001.

10-Q


9/30/20014(b)


Syndicated Term Credit Facility Amending Agreement between The
    Bank of Nova Scotia and other financial institutions and the
    registrant dated as of September 23, 2003.

10-Q


9/30/20034(c)


Syndicated Term Credit Facility Second Amending Agreement
    between The Bank of Nova Scotia and other financial institutions
    and the registrant dated as of September 21, 2004.

8-K


9/21/20044(d)


Syndicated Term Credit Facility Third Amending Agreement between
    The Bank of Nova Scotia and other financial institutions and the
    registrant dated as of September 20, 2005.

8-K


9/22/20054(e)


Syndicated Term Credit Facility Fourth Amending Agreement
    between The Bank of Nova Scotia and other financial institutions
    and the registrant dated as of September 27, 2006.

10-Q


9/30/20064(f)


Syndicated Term Credit Facility, Fifth Amending Agreement
    between the Bank of Nova Scotia and other financial institutions
    and the registrant dated as of October 19, 2007.

8-K


10/22/20074(g)


Indenture dated as of June 16, 1997, between the registrant
    and The Bank of Nova Scotia Trust Company of New York.

8-K


6/18/19974(h)


Indenture dated as of February 27, 2003, between the
    registrant and The Bank of Nova Scotia Trust Company of New
    York.

10-K


12/31/20024(i)


Form of Note relating to the registrants offering of
    $600,000,000 principal amount of 7.75% Notes due
    May 31, 2011.

8-K


5/17/20014(j)


Form of Note relating to the registrants offering of
    $250,000,000 principal amount of 4.875% Notes due
    March 1, 2013.

8-K


2/28/20034(k)


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

8-K


11/29/20064(l)


Revolving Term Credit Facility Agreement between the Bank of
    Nova Scotia and other financial institutions and the registrant
    dated as of May 29, 2008.

8-K


6/2/20084(m)


Revolving Term Credit Facility Amending Agreement between the
    Bank of Nova Scotia and other financial institutions and the
    registrant dated as of July 29, 2008.  68




---



##### 



Incorporated By
    ReferenceFiling Date/Number

Description of
    Document

Form

Period End Date10
(a)

Sixth Voting Agreement dated April 22, 1978, between
    Central Canada Potash, Division of Noranda, Inc., Cominco Ltd.,
    International Minerals and Chemical Corporation (Canada)
    Limited, PCS Sales and Texasgulf Inc.

F-1
    (File No.
    33-31303)

9/28/198910
(b)

Canpotex Limited Shareholders Seventh Memorandum of Agreement
    effective April 21, 1978, between Central Canada Potash,
    Division of Noranda Inc., Cominco Ltd., International Minerals
    and Chemical Corporation (Canada) Limited, PCS Sales, Texasgulf
    Inc. and Canpotex Limited as amended by Canpotex S&P
    amending agreement dated November 4, 1987.

F-1
    (File No.
    33-31303)

9/28/198910
(c)

Producer Agreement dated April 21, 1978, between Canpotex
    Limited and PCS Sales.

F-1
    (File No.
    33-31303)

9/28/198910
(d)

Canpotex/PCS Amending Agreement, dated as of October 1,
    1992.

10-K

12/31/199510
(e)

Canpotex PCA Collateral Withdrawing/PCS Amending Agreement,
    dated as of October 7, 1993.

10-K

12/31/199510
(f)

Canpotex Producer Agreement amending agreement dated as of
    January 1, 1999.

10-K

12/31/200010
(g)

Canpotex Producer Agreement amending agreement dated as of
    July 1, 2002.

10-Q

6/30/200410
(h)

Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978, between International
    Minerals & Chemical Corporation (Canada) Limited and
    the registrants predecessor.

F-1
    (File No.
    33-31303)

9/28/198910
(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.

10-K

12/31/199010
(j)

Agreement effective August 27, 1998, between International
    Minerals & Chemical (Canada) Global Limited and the
    registrant, amending the Esterhazy Restated Mining and
    Processing Agreement dated January 31, 1978 (as amended).

10-K

12/31/199810
(k)

Agreement effective August 31, 1998, among International
    Minerals & Chemical (Canada) Global Limited,
    International Minerals & Chemical (Canada) Limited
    Partnership and the registrant assigning the interest in the
    Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978 (as amended) held by International
    Minerals & Chemical (Canada) Global Limited to
    International Minerals & Chemical (Canada) Limited
    Partnership.

10-K

12/31/199810
(l)

Potash Corporation of Saskatchewan Inc. Stock Option
    Plan  Directors, as amended.

10-K

12/31/2006 69




---



##### 



Incorporated By
    ReferenceFiling Date/Number

Description of
    Document

Form

Period End Date10
(m)

Potash Corporation of Saskatchewan Inc. Stock Option
    Plan  Officers and Employees, as amended.

10-K

12/31/200610
(n)

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

10-K

12/31/200710
(o)

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

10-K

12/31/199510
(p)

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

10-Q

6/30/199610
(q)

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

10-Q

9/30/200610
(r)

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

10-K

12/31/200210
(s)

Amended and restated agreement dated February 20, 2007,
    between the registrant and William J. Doyle concerning the
    Supplemental Retirement Income Plan.

10-K

12/31/200610
(t)

Supplemental Retirement Benefits Plan for U.S. Executives dated
    effective January 1, 1999.

10-Q

6/30/200210
(u)

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

10-K

12/31/199510
(v)

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

10-K

12/31/199510
(w)

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

10-K

12/31/200010
(x)

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

10-Q

6/30/200410
(y)

Chief Executive Officer Medical and Dental Benefits.

10-K

12/31/200410
(z)

Second Amended and Restated Membership Agreement dated
    January 1, 1995, among Phosphate Chemicals Export
    Association, Inc. and members of such association, including
    Texasgulf Inc.

10-K

12/31/199510
(aa)

International Agency Agreement dated effective December 15,
    2006, between Phosphate Chemicals Export Association, Inc. and
    PCS Sales (USA), Inc.

10-K

12/31/200610
(bb)

Deferred Share Unit Plan for Non-Employee Directors, as amended.

10-Q

3/31/200810
(cc)

Potash Corporation of Saskatchewan Inc. 2005 Performance Option
    Plan and Form of Option Agreement, as amended.

10-K

12/31/200610
(dd)

Potash Corporation of Saskatchewan Inc. 2006 Performance Option
    Plan and Form of Option Agreement, as amended.

10-K

12/31/200610
(ee)

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

10-Q

3/31/2007 70




---



##### 



Incorporated By
    ReferenceFiling Date/Number

Description of
    Document

Form

Period End Date10
(ff)

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

10-Q

3/31/200810
(gg)

Medium Term Incentive Plan of the registrant effective January
    2006.

10-K

12/31/200511


Statement re Computation of Per Share Earnings.31
(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.  71