##### 









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-Q



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

For the Quarterly Period Ended June 30,
2002

OR



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

Commission File Number 1-10351

POTASH CORPORATION OF SASKATCHEWAN
INC.

(Exact name of registrant as specified in its
charter)


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

306-933-8500

(Registrants telephone number, including
area code)


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

YES x  NO o

APPLICABLE ONLY TO CORPORATE
ISSUERS:

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

As at July 31,
2002, Potash Corporation of Saskatchewan Inc. (the
Company) had 52,032,975 Common Shares outstanding.



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##### 



PART I.  FINANCIAL
INFORMATION



ITEM 1.  FINANCIAL
STATEMENTS


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

Potash Corporation of Saskatchewan
Inc.

Consolidated Statements of Income and Retained
Earnings

(in millions of US dollars)


(unaudited)


|                                           |         |                    |       |                  |  |      |       |      |  |   |       |      |  |   |         |      | 
|------------------------------------------ | ------- | ------------------ | ----- | ---------------- |  | ---- | ----- | ---- |  | - | ----- | ---- |  | - | ------- | ---- | 
|                                           |         |                    |       |                 
|                                           |         | Three Months Ended |       | Six Months Ended
|                                           |         | June 30            |       | June 30         
|                                           |         | 2002               |       | 2001             |  | 2002 |       | 2001
|                                          
|                                          
|Net sales                                  |         | $                  | 489.5 |                  |  | $    | 575.8 |      |  | $ | 950.5 |      |  | $ | 1,178.2 |     
|Cost of goods sold                         |         |                    | 402.8 |                  |  |      | 443.0 |      |  |   | 786.2 |      |  |   | 909.2   |     
|                                          
|Gross Margin                               |         |                    | 86.7  |                  |  |      | 132.8 |      |  |   | 164.3 |      |  |   | 269.0   |     
|                                          
|Selling and administrative                 |         |                    | 24.0  |                  |  |      | 23.5  |      |  |   | 46.8  |      |  |   | 48.9    |     
|Provincial mining and other taxes          |         |                    | 20.3  |                  |  |      | 21.7  |      |  |   | 40.0  |      |  |   | 36.5    |     
|Foreign exchange loss (gain)               |         |                    | 11.4  |                  |  |      | 8.4   |      |  |   | 10.9  |      |  |   | (0.7    | )   
|Other income                               |         |                    | (7.6  | )                |  |      | (5.2  | )    |  |   | (12.9 | )    |  |   | (16.6   | )   
|                                          
|                                           |         |                    | 48.1  |                  |  |      | 48.4  |      |  |   | 84.8  |      |  |   | 68.1    |     
|                                          
|Operating Income                           |         |                    | 38.6  |                  |  |      | 84.4  |      |  |   | 79.5  |      |  |   | 200.9   |     
|Interest Expense                           |         |                    | 20.0  |                  |  |      | 20.1  |      |  |   | 41.0  |      |  |   | 36.0    |     
|                                          
|Income Before Income Taxes                 |         |                    | 18.6  |                  |  |      | 64.3  |      |  |   | 38.5  |      |  |   | 164.9   |     
|Income Taxes (Note 4)                      |         |                    | 6.7   |                  |  |      | 21.2  |      |  |   | 13.8  |      |  |   | 59.4    |     
|                                          
|Net Income                                 |         | $                  | 11.9  |                  |  | $    | 43.1  |      |  |   | 24.7  |      |  |   | 105.5   |     
|                                           |         |                    |       |                  |  |      |       |      |  |  
|Retained Earnings, Beginning
    of Period |         |                    |       |                  |  |      |       |      |  |   | 639.8 |      |  |   | 570.5   |     
|Dividends                                  |         |                    |       |                  |  |      |       |      |  |   | (26.1 | )    |  |   | (25.9   | )   
|                                          
|Retained Earnings, End
    of Period       |         |                    |       |                  |  |      |       |      |  | $ | 638.4 |      |  | $ | 650.1   |     
|                                          
|Net Income Per Share (Note 5)              |         |                    |       |                  |  |      |       |      |  |   |       |      |  |   |         |     
|                                           | Basic   |                    | $     | 0.23             |  |      | $     | 0.83 |  |   | $     | 0.47 |  |   | $       | 2.04 | 
|                                           | Diluted |                    | $     | 0.23             |  |      | $     | 0.83 |  |   | $     | 0.47 |  |   | $       | 2.02 | 
|                                          
|Dividends Per Share                        |         | $                  | 0.25  |                  |  | $    | 0.25  |      |  | $ | 0.50  |      |  | $ | 0.50    |     
|                                          

(See Notes to the Consolidated Financial
Statements)

2



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##### 



Potash Corporation of Saskatchewan
Inc.

Consolidated Statements of Financial
Position

(in millions of US dollars)


|                                                                                                                                                                          |                                      |             |         |              |  |   |         |       | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | ----------- | ------- | ------------ |  | - | ------- | ----- | 
|                                                                                                                                                                          |                                      | June 30,    |         | December 31,
|                                                                                                                                                                          |                                      | 2002        |         | 2001        
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          |                                      | (unaudited) |         |             
|Assets                                                                                                                                                                    |                                      |             |         |              |  |   |         |      
|Current Assets                                                                                                                                                            |                                      |             |         |              |  |   |         |      
|                                                                                                                                                                          | Cash and cash equivalents            |             | $       | 32.5         |  |   | $       | 45.3  | 
|                                                                                                                                                                          | Accounts receivable                  |             |         | 248.0        |  |   |         | 256.7 | 
|                                                                                                                                                                          | Inventories (Note 3)                 |             |         | 475.7        |  |   |         | 481.1 | 
|                                                                                                                                                                          | Prepaid expenses                     |             |         | 39.3         |  |   |         | 36.5  | 
|                                                                                                                                                                         
|                                                                                                                                                                          |                                      |             | 795.5   |              |  |   | 819.6   |      
|Property, plant and equipment                                                                                                                                             |                                      |             | 3,239.9 |              |  |   | 3,245.6 |      
|Goodwill                                                                                                                                                                  |                                      |             | 97.0    |              |  |   | 97.0    |      
|Other assets                                                                                                                                                              |                                      |             | 480.8   |              |  |   | 435.1   |      
|                                                                                                                                                                         
|                                                                                                                                                                          |                                      | $           | 4,613.2 |              |  | $ | 4,597.3 |      
|                                                                                                                                                                         
|Liabilities                                                                                                                                                               |                                      |             |         |              |  |   |         |      
|Current Liabilities                                                                                                                                                       |                                      |             |         |              |  |   |         |      
|                                                                                                                                                                          | Short-term debt                      |             | $       | 456.5        |  |   | $       | 501.1 | 
|                                                                                                                                                                          | Accounts payable and accrued charges |             |         | 301.9        |  |   |         | 271.4 | 
|                                                                                                                                                                          | Current portion of long-term debt    |             |         | 1.0          |  |   |         |      | 
|                                                                                                                                                                         
|                                                                                                                                                                          |                                      |             | 759.4   |              |  |   | 772.5   |      
|Long-term debt                                                                                                                                                            |                                      |             | 1,022.3 |              |  |   | 1,013.7 |      
|Future income tax liability                                                                                                                                               |                                      |             | 467.7   |              |  |   | 457.6   |      
|Accrued post-retirement/post-employment benefits                                                                                                                          |                                      |             | 187.2   |              |  |   | 177.3   |      
|Accrued reclamation costs                                                                                                                                                 |                                      |             | 81.4    |              |  |   | 83.0    |      
|Other non-current liabilities and deferred credits                                                                                                                        |                                      |             | 6.9     |              |  |   | 6.7     |      
|                                                                                                                                                                         
|                                                                                                                                                                          |                                      |             | 2,524.9 |              |  |   | 2,510.8 |      
|                                                                                                                                                                         
|Shareholders Equity                                                                                                                                                      |                                      |             |         |              |  |   |         |      
|Share Capital                                                                                                                                                             |                                      |             | 1,185.7 |              |  |   | 1,182.5 |      
|Unlimited authorization of common shares without
    par value; issued and outstanding 52,032,975 and 51,952,482 at
    June 30, 2002 and December 31, 2001, respectively |                                      |             |         |              |  |   |         |      
|Contributed Surplus                                                                                                                                                       |                                      |             | 264.2   |              |  |   | 264.2   |      
|Retained Earnings                                                                                                                                                         |                                      |             | 638.4   |              |  |   | 639.8   |      
|                                                                                                                                                                         
|                                                                                                                                                                          |                                      |             | 2,088.3 |              |  |   | 2,086.5 |      
|                                                                                                                                                                         
|                                                                                                                                                                          |                                      | $           | 4,613.2 |              |  | $ | 4,597.3 |      
|                                                                                                                                                                         

(See Notes to the Consolidated Financial
Statements)

3



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##### 



Potash Corporation of Saskatchewan
Inc.

Consolidated Statements of Cash Flow

(in millions of US dollars)


(unaudited)


|                                                    |                                                            |                    |       |                  |   |      |        |        |   |   |        |       |   |   |        |        |  
|--------------------------------------------------- | ---------------------------------------------------------- | ------------------ | ----- | ---------------- | - | ---- | ------ | ------ | - | - | ------ | ----- | - | - | ------ | ------ | -
|                                                    |                                                            |                    |       |                 
|                                                    |                                                            | Three Months Ended |       | Six Months Ended
|                                                    |                                                            | June 30            |       | June 30         
|                                                    |                                                            | 2002               |       | 2001             |   | 2002 |        | 2001  
|                                                   
|                                                   
|Operating activities                                |                                                            |                    |       |                  |   |      |        |        |   |   |        |       |   |   |        |       
|Net income                                          |                                                            | $                  | 11.9  |                  |   | $    | 43.1   |        |   | $ | 24.7   |       |   | $ | 105.5  |       
|Items not affecting cash                            |                                                            |                    |       |                  |   |      |        |        |   |   |        |       |   |   |        |       
|                                                    | Depreciation and amortization                              |                    |       | 57.7             |   |      |        | 49.1   |   |   |        | 111.0 |   |   |        | 94.4   |  
|                                                    | Loss (gain) on disposal of assets                          |                    |       | 0.3              |   |      |        | 0.9    |   |   |        | 0.3   |   |   |        | (0.1   | )
|                                                    | Foreign exchange on future income tax                      |                    |       | 7.3              |   |      |        | 5.1    |   |   |        | 7.3   |   |   |        | (1.4   | )
|                                                    | Provision for future income tax                            |                    |       | 1.3              |   |      |        | 21.6   |   |   |        | 2.8   |   |   |        | 44.5   |  
|                                                    | Provision for post-retirement/post-employment
    benefits |                    |       | 4.1              |   |      |        | 4.0    |   |   |        | 9.9   |   |   |        | (0.5   | )
|                                                   
|                                                    |                                                            |                    | 82.6  |                  |   |      | 123.8  |        |   |   | 156.0  |       |   |   | 242.4  |       
|Changes in non-cash operating working
    capital   |                                                            |                    |       |                  |   |      |        |        |   |   |        |       |   |   |        |       
|                                                    | Accounts receivable                                        |                    |       | 32.3             |   |      |        | 29.9   |   |   |        | 8.7   |   |   |        | 34.0   |  
|                                                    | Inventories                                                |                    |       | (1.5             | ) |      |        | 3.2    |   |   |        | 5.4   |   |   |        | (70.1  | )
|                                                    | Prepaid expenses                                           |                    |       | 5.4              |   |      |        | 3.3    |   |   |        | (2.8  | ) |   |        | (9.4   | )
|                                                    | Accounts payable and accrued charges                       |                    |       | (13.8            | ) |      |        | (134.7 | ) |   |        | 6.8   |   |   |        | (154.6 | )
|                                                    | Current income taxes                                       |                    |       | 3.8              |   |      |        | (28.7  | ) |   |        | 4.8   |   |   |        | (40.9  | )
|Accrued reclamation costs                           |                                                            |                    | (0.2  | )                |   |      | 0.1    |        |   |   | (1.6   | )     |   |   | (0.6   | )     
|Other non-current liabilities and deferred credits  |                                                            |                    | 0.7   |                  |   |      | 0.3    |        |   |   | 0.1    |       |   |   | (0.2   | )     
|                                                   
|Cash provided by (used in) operating
    activities |                                                            |                    | 109.3 |                  |   |      | (2.8   | )      |   |   | 177.4  |       |   |   | 0.6    |       
|                                                   
|Investing Activities                                |                                                            |                    |       |                  |   |      |        |        |   |   |        |       |   |   |        |       
|Additions to property, plant and equipment          |                                                            |                    | (63.4 | )                |   |      | (405.8 | )      |   |   | (93.5  | )     |   |   | (421.7 | )     
|Additions to other assets                           |                                                            |                    | (29.4 | )                |   |      | (25.0  | )      |   |   | (38.9  | )     |   |   | (31.6  | )     
|                                                   
|Cash used in investing activities                   |                                                            |                    | (92.8 | )                |   |      | (430.8 | )      |   |   | (132.4 | )     |   |   | (453.3 | )     
|                                                   
|Cash (deficiency) before financing
    activities   |                                                            |                    | 16.5  |                  |   |      | (433.6 | )      |   |   | 45.0   |       |   |   | (452.7 | )     
|                                                   
|Financing Activities                                |                                                            |                    |       |                  |   |      |        |        |   |   |        |       |   |   |        |       
|Proceeds from long-term obligations                 |                                                            |                    | 0.3   |                  |   |      | 600.0  |        |   |   | 10.3   |       |   |   | 600.0  |       
|Repayment of long-term obligations                  |                                                            |                    | (0.6  | )                |   |      |       |        |   |   | (0.6   | )     |   |   |       |       
|Repayment of short-term obligations                 |                                                            |                    | (64.0 | )                |   |      | (216.2 | )      |   |   | (44.6  | )     |   |   | (172.0 | )     
|Dividends                                           |                                                            |                    | (13.1 | )                |   |      | (12.9  | )      |   |   | (26.1  | )     |   |   | (25.9  | )     
|Issuance of shares                                  |                                                            |                    | 2.6   |                  |   |      | 0.3    |        |   |   | 3.2    |       |   |   | 2.2    |       
|                                                   
|Cash (used in) provided by financing
    activities |                                                            |                    | (74.8 | )                |   |      | 371.2  |        |   |   | (57.8  | )     |   |   | 404.3  |       
|                                                   
|Decrease in Cash and Cash
    Equivalents           |                                                            |                    | (58.3 | )                |   |      | (62.4  | )      |   |   | (12.8  | )     |   |   | (48.4  | )     
|Cash and Cash Equivalents, Beginning
    of Period  |                                                            |                    | 90.8  |                  |   |      | 114.0  |        |   |   | 45.3   |       |   |   | 100.0  |       
|                                                   
|Cash and Cash Equivalents, End
    of Period        |                                                            | $                  | 32.5  |                  |   | $    | 51.6   |        |   | $ | 32.5   |       |   | $ | 51.6   |       
|                                                   
|Supplemental cash flow disclosure                   |                                                            |                    |       |                  |   |      |        |        |   |   |        |       |   |   |        |       
|                                                    | Interest paid                                              |                    | $     | 39.8             |   |      | $      | 22.9   |   |   | $      | 42.0  |   |   | $      | 33.1   |  
|                                                    | Income taxes paid                                          |                    |       | 3.1              |   |      |        | 20.6   |   |   |        | 8.8   |   |   |        | 49.4   |  

(See Notes to the Consolidated Financial
Statements)

4



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##### 



Potash Corporation of Saskatchewan
Inc.

Notes to the Consolidated Financial
Statements

(in millions of US dollars)


(unaudited)


1.   Significant Accounting
Policies

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

Basis of Presentation

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

 PCS
Sales (Canada) Inc.

 PCS
Joint Venture, LP


 PCS
Sales (USA), Inc.


 PCS
Phosphate Company, Inc.


 PCS
Purified Phosphates


 White
Springs Agricultural Chemicals, Inc.


 PCS
Nitrogen, Inc.


 PCS
Nitrogen Fertilizer, L.P.


 PCS
Nitrogen Ohio, L.P.


 PCS
Nitrogen Limited


 PCS
Nitrogen Trinidad Limited


 PCS
Cassidy Lake Company


 PCS
Yumbes S.C.M. (Yumbes)


 PCS
Fosfatos do Brasil Ltda.


2.   Change in Accounting
Policy

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

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

5



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##### 



3.   Inventories

|                       |  |             |       |              |  |   |       | 
|---------------------- |  | ----------- | ----- | ------------ |  | - | ----- | 
|                       |  | June 30,    |       | December 31,
|                       |  | 2002        |       | 2001        
|                      
|                      
|                       |  | (unaudited) |       |             
|Finished product       |  | $           | 158.8 |              |  | $ | 144.7 | 
|Materials and supplies |  |             | 117.0 |              |  |   | 113.9 | 
|Raw materials          |  |             | 47.5  |              |  |   | 65.6  | 
|Work in process        |  |             | 152.4 |              |  |   | 156.9 | 
|                      
|                       |  | $           | 475.7 |              |  | $ | 481.1 | 
|                      

4.   Income Taxes

The companys effective consolidated income
tax rate for the second quarter of 2002 approximates
36 percent (2001  33 percent, due to a
cumulative year-to-date adjustment made in second quarter 2001).
The effective consolidated income tax rate for 2002 year-to-date
approximates 36 percent (2001  36 percent).

5.   Net Income Per
Share

Basic net income per share for the quarter is
calculated on the weighted average shares issued and outstanding
for the three months ended June 30, 2002 of 52,018,000
(2001  51,865,000). Basic net income per share for
the year-to-date is calculated on the weighted average shares
issued and outstanding for the six months ended June 30,
2002 of 51,989,000 (2001  51,862,000). Diluted net
income per share is calculated based on the weighted average
shares issued and outstanding during the period, adjusted by the
total of the additional common shares that would have been
issued assuming exercise of all share options with exercise
prices at or below the average market price for the period.
Weighted average shares outstanding for the diluted net
income per share calculation for the quarter were 52,391,000
(2001  52,149,000) and for the year-to-date were
52,304,000 (2001  52,192,000).

6.   Segment
Information

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

|                              |  |                                  |       |           |  |          |       |            |  |              |       |  |  |   |     |  |  |   |       | 
|----------------------------- |  | -------------------------------- | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- |  |  | - | --- |  |  | - | ----- | 
|                              |  |                                 
|                              |  | Three Months Ended June 30, 2002
|                              |  | (unaudited)                     
|                             
|                             
|                              |  | Potash                           |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                             
|                             
|Net sales  third party       |  | $                                | 163.1 |           |  | $        | 147.3 |            |  | $            | 179.1 |  |  | $ |    |  |  | $ | 489.5 | 
|Inter-segment net sales       |  |                                  | 1.8   |           |  |          | 1.8   |            |  |              | 6.9   |  |  |   |    |  |  |   |      | 
|Gross margin                  |  |                                  | 69.9  |           |  |          | 12.0  |            |  |              | 4.8   |  |  |   |    |  |  |   | 86.7  | 
|Depreciation and amortization |  |                                  | 14.9  |           |  |          | 18.6  |            |  |              | 21.9  |  |  |   | 2.3 |  |  |   | 57.7  | 

|                              |  |                                  |       |           |  |          |       |            |  |              |       |  |  |   |     |  |  |   |       | 
|----------------------------- |  | -------------------------------- | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- |  |  | - | --- |  |  | - | ----- | 
|                              |  |                                 
|                              |  | Three Months Ended June 30, 2001
|                              |  | (unaudited)                     
|                             
|                             
|                              |  | Potash                           |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                             
|                             
|Net sales  third party       |  | $                                | 171.3 |           |  | $        | 170.9 |            |  | $            | 233.6 |  |  | $ |    |  |  | $ | 575.8 | 
|Inter-segment net sales       |  |                                  | 2.6   |           |  |          | 2.6   |            |  |              | 11.6  |  |  |   |    |  |  |   |      | 
|Gross margin                  |  |                                  | 80.5  |           |  |          | 16.3  |            |  |              | 36.0  |  |  |   |    |  |  |   | 132.8 | 
|Depreciation and amortization |  |                                  | 11.0  |           |  |          | 16.6  |            |  |              | 16.7  |  |  |   | 4.8 |  |  |   | 49.1  | 

6



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##### 



|                              |  |                                |       |           |  |          |       |            |  |              |       |  |  |   |     |  |  |   |       | 
|----------------------------- |  | ------------------------------ | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- |  |  | - | --- |  |  | - | ----- | 
|                              |  |                               
|                              |  | Six Months Ended June 30, 2002
|                              |  | (unaudited)                   
|                             
|                             
|                              |  | Potash                         |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                             
|                             
|Net sales  third party       |  | $                              | 303.8 |           |  | $        | 302.4 |            |  | $            | 344.3 |  |  | $ |    |  |  | $ | 950.5 | 
|Inter-segment net sales       |  |                                | 4.3   |           |  |          | 3.9   |            |  |              | 11.6  |  |  |   |    |  |  |   |      | 
|Gross margin                  |  |                                | 126.3 |           |  |          | 33.7  |            |  |              | 4.3   |  |  |   |    |  |  |   | 164.3 | 
|Depreciation and amortization |  |                                | 26.4  |           |  |          | 36.8  |            |  |              | 43.7  |  |  |   | 4.1 |  |  |   | 111.0 | 

|                              |  |                                |       |           |  |          |       |            |  |              |       |  |  |   |     |  |  |   |         | 
|----------------------------- |  | ------------------------------ | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- |  |  | - | --- |  |  | - | ------- | 
|                              |  |                               
|                              |  | Six Months Ended June 30, 2001
|                              |  | (unaudited)                   
|                             
|                             
|                              |  | Potash                         |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                             
|                             
|Net sales  third party       |  | $                              | 296.8 |           |  | $        | 352.8 |            |  | $            | 528.6 |  |  | $ |    |  |  | $ | 1,178.2 | 
|Inter-segment net sales       |  |                                | 5.2   |           |  |          | 4.0   |            |  |              | 25.4  |  |  |   |    |  |  |   |        | 
|Gross margin                  |  |                                | 133.6 |           |  |          | 38.6  |            |  |              | 96.8  |  |  |   |    |  |  |   | 269.0   | 
|Depreciation and amortization |  |                                | 20.4  |           |  |          | 35.2  |            |  |              | 31.1  |  |  |   | 7.7 |  |  |   | 94.4    | 

7.   Plant Closures

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

|                                                        |  |           |      |        |  |          |   |          |  |   |   |  |  |   |      | 
|------------------------------------------------------- |  | --------- | ---- | ------ |  | -------- | - | -------- |  | - | - |  |  | - | ---- | 
|                                                        |  | Balance   |      |        |  |          |   | Balance 
|                                                        |  | March 31, |      | Amount |  | Reserve  |   | June 30,
|                                                        |  | 2002      |      | Paid   |  | Utilized |   | 2002    
|                                                       
|                                                       
|Plant Closures                                          |  |           |      |        |  |          |   |          |  |   |   |  |  |   |      | 
|Non-cash parts inventory writedown                      |  | $         | 0.9  |        |  | $        |  |          |  | $ |  |  |  | $ | 0.9  | 
|Non-cash writedown of property, plant
    and equipment |  |           | 25.7 |        |  |          |  |          |  |   |  |  |  |   | 25.7 | 
|                                                       
|                                                        |  | $         | 26.6 |        |  | $        |  |          |  | $ |  |  |  | $ | 26.6 | 
|                                                       

8.   Pro Forma Stock
Compensation Expense

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

|                                               |  |               |      |               |  |      |      |      |  |   |      |  |  |   |       | 
|---------------------------------------------- |  | ------------- | ---- | ------------- |  | ---- | ---- | ---- |  | - | ---- |  |  | - | ----- | 
|                                               |  |               |      |              
|                                               |  | Three Months  |      | Six Months   
|                                               |  | Ended June 30 |      | Ended June 30
|                                               |  | 2002          |      | 2001          |  | 2002 |      | 2001
|                                              
|                                              
|Net Income  as reported                       |  | $             | 11.9 |               |  | $    | 43.1 |      |  | $ | 24.7 |  |  | $ | 105.5 | 
|Net Income  pro forma                         |  | $             | 8.3  |               |  | $    | 39.7 |      |  | $ | 17.5 |  |  | $ | 98.8  | 
|Basic Net Income Per Share  as reported       |  | $             | 0.23 |               |  | $    | 0.83 |      |  | $ | 0.47 |  |  | $ | 2.04  | 
|Basic Net Income Per Share  pro forma         |  | $             | 0.16 |               |  | $    | 0.77 |      |  | $ | 0.34 |  |  | $ | 1.90  | 
|Diluted Net Income Per Share  as
    reported |  | $             | 0.23 |               |  | $    | 0.83 |      |  | $ | 0.47 |  |  | $ | 2.02  | 
|Diluted Net Income Per Share  pro forma       |  | $             | 0.16 |               |  | $    | 0.76 |      |  | $ | 0.33 |  |  | $ | 1.89  | 

7



---



##### 



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

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

9.   United States Generally
Accepted Accounting Principles

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

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

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

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

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

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

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

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

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

8



---



##### 



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

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

|                                                       |                                  |                    |            |      |   |   |            |      |  
|------------------------------------------------------ | -------------------------------- | ------------------ | ---------- | ---- | - | - | ---------- | ---- | -
|                                                       |                                  |                   
|                                                       |                                  | Three Months Ended
|                                                       |                                  | June 30           
|                                                       |                                  | 2002               |            | 2001
|                                                      
|                                                      
|                                                       |                                  |                   
|                                                       |                                  | (unaudited)       
|Net income as reported  Canadian GAAP                 |                                  | $                  | 11.9       |      |   | $ | 43.1       |     
|Items increasing (decreasing) reported net
    income  |                                  |                    |            |      |   |   |            |     
|                                                       | Provision for plant closures     |                    |            |     |   |   |            | (2.3 | )
|                                                       | Pre-operating costs              |                    |            | 1.5  |   |   |            | (6.1 | )
|                                                       | Depreciation and amortization    |                    |            | 2.1  |   |   |            | 2.4  |  
|                                                       | Income tax effect of above items |                    |            | (1.2 | ) |   |            | 1.4  |  
|                                                      
|Approximate net income  US GAAP                       |                                  | $                  | 14.3       |      |   | $ | 38.5       |     
|                                                      
|Weighted average shares outstanding 
    US GAAP      |                                  |                    | 52,018,000 |      |   |   | 51,865,000 |     
|                                                      
|Approximate basic net income per
    share  US GAAP   |                                  | $                  | 0.27       |      |   | $ | 0.74       |     
|                                                      
|Approximate diluted net income per
    share  US GAAP |                                  | $                  | 0.27       |      |   | $ | 0.74       |     
|                                                      

|                                                       |                                  |                  |            |      |   |   |            |      |  
|------------------------------------------------------ | -------------------------------- | ---------------- | ---------- | ---- | - | - | ---------- | ---- | -
|                                                       |                                  |                 
|                                                       |                                  | Six Months Ended
|                                                       |                                  | June 30         
|                                                       |                                  | 2002             |            | 2001
|                                                      
|                                                      
|                                                       |                                  |                 
|                                                       |                                  | (unaudited)     
|Net income as reported  Canadian GAAP                 |                                  | $                | 24.7       |      |   | $ | 105.5      |     
|Items increasing (decreasing) reported net
    income  |                                  |                  |            |      |   |   |            |     
|                                                       | Provision for plant closures     |                  |            |     |   |   |            | (9.0 | )
|                                                       | Pre-operating costs              |                  |            | 1.5  |   |   |            | (9.8 | )
|                                                       | Depreciation and amortization    |                  |            | 4.2  |   |   |            | 4.8  |  
|                                                       | Income tax effect of above items |                  |            | (2.0 | ) |   |            | 4.4  |  
|                                                      
|Approximate net income  US GAAP                       |                                  | $                | 28.4       |      |   | $ | 95.9       |     
|                                                      
|Weighted average shares outstanding 
    US GAAP      |                                  |                  | 51,989,000 |      |   |   | 51,862,000 |     
|                                                      
|Approximate basic net income per
    share  US GAAP   |                                  | $                | 0.55       |      |   | $ | 1.85       |     
|                                                      
|Approximate diluted net income per
    share  US GAAP |                                  | $                | 0.54       |      |   | $ | 1.84       |     
|                                                      

|                                                        |                                                           |             |         |              |   |   |         |        |  
|------------------------------------------------------- | --------------------------------------------------------- | ----------- | ------- | ------------ | - | - | ------- | ------ | -
|                                                        |                                                           | June 30,    |         | December 31,
|                                                        |                                                           | 2002        |         | 2001        
|                                                       
|                                                       
|                                                        |                                                           | (unaudited) |         |             
|Total assets as reported  Canadian GAAP                |                                                           | $           | 4,613.2 |              |   | $ | 4,597.3 |       
|Items increasing (decreasing) reported total
    assets |                                                           |             |         |              |   |   |         |       
|                                                        | Available-for-sale security (unrealized holding
    gain) |             |         | 12.3         |   |   |         | 34.9   |  
|                                                        | Fair value of natural gas hedging contracts               |             |         | 49.4         |   |   |         | 8.9    |  
|                                                        | Property, plant and equipment                             |             |         | (147.6       | ) |   |         | (151.8 | )
|                                                        | Pre-operating costs                                       |             |         | (64.1        | ) |   |         | (65.6  | )
|                                                        | Goodwill                                                  |             |         | (46.7        | ) |   |         | (46.7  | )
|                                                       
|Approximate total assets  US GAAP                      |                                                           | $           | 4,416.5 |              |   | $ | 4,377.0 |       
|                                                       

9



---



##### 



|                                                                |                                                        |             |         |              |   |   |         |        |  
|--------------------------------------------------------------- | ------------------------------------------------------ | ----------- | ------- | ------------ | - | - | ------- | ------ | -
|                                                                |                                                        | June 30,    |         | December 31,
|                                                                |                                                        | 2002        |         | 2001        
|                                                               
|                                                               
|                                                                |                                                        | (unaudited) |         |             
|Total shareholders equity as
    reported  Canadian GAAP      |                                                        | $           | 2,088.3 |              |   | $ | 2,086.5 |       
|Items increasing (decreasing) reported
    shareholders equity |                                                        |             |         |              |   |   |         |       
|                                                                | Accumulated other comprehensive income, net
    of tax |             |         | 43.6         |   |   |         | 29.8   |  
|                                                                | Pre-operating costs                                    |             |         | (64.1        | ) |   |         | (65.6  | )
|                                                                | Provision for asset impairment                         |             |         | (218.0       | ) |   |         | (218.0 | )
|                                                                | Depreciation and amortization                          |             |         | 23.7         |   |   |         | 19.5   |  
|                                                                | Future income taxes                                    |             |         | 64.7         |   |   |         | 66.7   |  
|                                                               
|Approximate shareholders equity 
    US GAAP                  |                                                        | $           | 1,938.2 |              |   | $ | 1,918.9 |       
|                                                               

New Accounting Pronouncements

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

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

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

SFAS 133 Disclosures

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

The company has designated its natural gas
derivative instruments as cash flow hedges. The gain or loss of
an effective cash flow hedge is deferred in OCI until such time
as the natural gas that it relates to is used in production, at
which time the gain or loss is reclassified from OCI to cost of
sales. In the second quarter of 2002, $5.8 million of gains
was recognized in cost of sales ($3.7 million loss on a
year-to-date basis). Of the deferred gains at the quarter end,
approximately $27.9 million will be reclassified to cost of
sales within the next twelve months.

10. Seasonality

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

11. Comparative Figures

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

10



---



##### 





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

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

Overview

|                                        |  |                            |       |                          |  |        |       |        |  |      |       |      |  |        |     |        |  |   |       |  |  |   |         |  |  |   |        |   |  |  |     |  
|--------------------------------------- |  | -------------------------- | ----- | ------------------------ |  | ------ | ----- | ------ |  | ---- | ----- | ---- |  | ------ | --- | ------ |  | - | ----- |  |  | - | ------- |  |  | - | ------ | - |  |  | --- | -
|                                        |  |                            |       |                         
|                                        |  | Three Months Ended June 30 |       | Six Months Ended June 30
|                                       
|                                       
|                                        |  | Dollar                     |       | %                        |  |        |       | Dollar |  | %   
|($ millions  except per share amounts) |  | 2002                       |       | 2001                     |  | Change |       | Change |  | 2002 |       | 2001 |  | Change |     | Change
|                                       
|                                       
|Net Sales                               |  | $                          | 489.5 |                          |  | $      | 575.8 |        |  | $    | (86.3 | )    |  |        | (15 | )      |  | $ | 950.5 |  |  | $ | 1,178.2 |  |  | $ | (227.7 | ) |  |  | (19 | )
|                                       
|Gross Margin                            |  | $                          | 86.7  |                          |  | $      | 132.8 |        |  | $    | (46.1 | )    |  |        | (35 | )      |  | $ | 164.3 |  |  | $ | 269.0   |  |  | $ | (104.7 | ) |  |  | (39 | )
|                                       
|Operating Income                        |  | $                          | 38.6  |                          |  | $      | 84.4  |        |  | $    | (45.8 | )    |  |        | (54 | )      |  | $ | 79.5  |  |  | $ | 200.9   |  |  | $ | (121.4 | ) |  |  | (60 | )
|                                       
|Net Income                              |  | $                          | 11.9  |                          |  | $      | 43.1  |        |  | $    | (31.2 | )    |  |        | (72 | )      |  | $ | 24.7  |  |  | $ | 105.5   |  |  | $ | (80.8  | ) |  |  | (77 | )
|                                       
|Net Income Per Share  Basic            |  | $                          | 0.23  |                          |  | $      | 0.83  |        |  | $    | (0.60 | )    |  |        | (72 | )      |  | $ | 0.47  |  |  | $ | 2.04    |  |  | $ | (1.57  | ) |  |  | (77 | )
|                                       
|Net Income Per Share  Diluted          |  | $                          | 0.23  |                          |  | $      | 0.83  |        |  | $    | (0.60 | )    |  |        | (72 | )      |  | $ | 0.47  |  |  | $ | 2.02    |  |  | $ | (1.55  | ) |  |  | (77 | )
|                                       

|                             |           |                            |   |                          |  |           |   |           |  |          |  |      |  |           |  |           |  |  |   |       |  |  |   |       |  |  |  |    |  |  |  |    | 
|---------------------------- | --------- | -------------------------- | - | ------------------------ |  | --------- | - | --------- |  | -------- |  | ---- |  | --------- |  | --------- |  |  | - | ----- |  |  | - | ----- |  |  |  | -- |  |  |  | -- | 
|                             |           |                            |   |                         
|                             |           | Three Months Ended June 30 |   | Six Months Ended June 30
|                            
|                            
|                             |           | 2002                       |   | 2001                     |  |           |   | 2002      |  | 2001    
|                             |           | % of                       |   | % of                     |  |           |   | % of      |  | % of    
|                             |           | Nutrient                   |   | Nutrient                 |  |           |   | Nutrient  |  | Nutrient
|($ millions)                 |           | 2002                       |   | 2001                     |  | Net Sales |   | Net Sales |  | 2002     |  | 2001 |  | Net Sales |  | Net Sales
|                            
|                            
|Gross Margin by Nutrient (1) |           |                            |   |                          |  |           |   |           |  |          |  |      |  |           |  |           |  |  |   |       |  |  |   |       |  |  |  |    |  |  |  |   
|                             | Potash    |                            | $ | 69.9                     |  |           | $ | 80.5      |  |          |  | 43   |  |           |  | 47        |  |  | $ | 126.3 |  |  | $ | 133.6 |  |  |  | 42 |  |  |  | 45 | 
|                            
|                             | Phosphate |                            | $ | 12.0                     |  |           | $ | 16.3      |  |          |  | 8    |  |           |  | 10        |  |  | $ | 33.7  |  |  | $ | 38.6  |  |  |  | 11 |  |  |  | 11 | 
|                            
|                             | Nitrogen  |                            | $ | 4.8                      |  |           | $ | 36.0      |  |          |  | 3    |  |           |  | 15        |  |  | $ | 4.3   |  |  | $ | 96.8  |  |  |  | 1  |  |  |  | 18 | 
|                            



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

The primary reason for the reduction in
consolidated gross margin was that gross margin for the nitrogen
segment decreased significantly on a quarter-over-quarter and
year-over-year basis. Significantly lower natural gas prices in
the first half of 2002 as compared to last year resulted in
higher operating rates. Additional production, coupled with poor
spring planting conditions, led to pressure on domestic nitrogen
prices. However, lower natural gas prices also resulted in a
reduction of the nitrogen per unit cost of sales.

The potash segment gross margin is lower due to
the inclusion of the Chilean nitrate operation, which commenced
commercial production in February 2002. Potash sales prices and
volumes were fairly stable. On a per unit basis potash cost of
sales (excluding nitrates) has decreased due to lower natural
gas costs.

Phosphate gross margin benefited from firming
prices, but this benefit was largely offset by increased per
unit cost of sales due to lower production volumes and use of
high-cost inventoried phosphate rock.

Foreign exchange continued to be volatile. Over
the long-term, for each $.01 change in the Canadian dollar there
will be approximately a $1.2 million dollar effect on the
companys foreign exchange gain/loss before tax. These
gains/losses are primarily non-cash so net income is affected
more than cash flow.

11



---



##### 



Potash

|              |                               |                            |       |                    |  |                      |       |       |  |      |     |        |   |      |       |       |  |        |       |       |  |  |    |    |   |   |       |       |  |   |       |       |  |  |    |    |  
|------------- | ----------------------------- | -------------------------- | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | --- | ------ | - | ---- | ----- | ----- |  | ------ | ----- | ----- |  |  | -- | -- | - | - | ----- | ----- |  | - | ----- | ----- |  |  | -- | -- | -
|              |                               |                           
|              |                               | Three Months Ended June 30
|             
|             
|              |                               |                            |       |                    |  |                     
|              |                               | Dollars (millions)         |       | Tonnes (thousands) |  | Average Price Per MT
|             
|             
|              |                               | %                          |       |                    |  | %                    |       |       |  | %   
|              |                               | 2002                       |       | 2001               |  | Change               |       | 2002  |  | 2001 |     | Change |   | 2002 |       | 2001  |  | Change
|             
|             
|Net Sales     |                               |                            |       |                    |  |                      |       |       |  |      |     |        |   |      |       |       |  |        |       |       |  |  |    |    |   |   |       |       |  |   |       |       |  |  |    |   
|              | North American                |                            | $     | 59.0               |  |                      | $     | 66.9  |  |      |     | (12    | ) |      |       | 737   |  |        |       | 804   |  |  |    | (8 | ) |   | $     | 80.06 |  |   | $     | 83.19 |  |  |    | (4 | )
|              | Offshore                      |                            |       | 98.8               |  |                      |       | 104.4 |  |      |     | (5     | ) |      |       | 1,177 |  |        |       | 1,201 |  |  |    | (2 | ) |   | $     | 83.92 |  |   | $     | 86.98 |  |  |    | (4 | )
|             
|              |                               |                            |       | 157.8              |  |                      |       | 171.3 |  |      |     | (8     | ) |      |       | 1,914 |  |        |       | 2,005 |  |  |    | (5 | ) |   | $     | 82.44 |  |   | $     | 85.46 |  |  |    | (4 | )
|             
|              | Other                         |                            |       | 5.3                |  |                      |       |      |  |      |     |       |   |      |       |      |  |        |       |      |  |  |    |   |   |   |       |      |  |   |       |      |  |  |    |   |  
|             
|              |                               |                            | 163.1 |                    |  |                      | 171.3 |       |  |      | (5  | )      |   |      | 1,914 |       |  |        | 2,005 |       |  |  | (5 | )  |   | $ | 85.22 |       |  | $ | 85.46 |       |  |  |   |   
|             
|Cost of Sales |                               |                            |       |                    |  |                      |       |       |  |      |     |        |   |      |       |       |  |        |       |       |  |  |    |    |   |   |       |       |  |   |       |       |  |  |    |   
|              | Cash costs                    |                            |       | 78.3               |  |                      |       | 79.8  |  |      |     | (2     | ) |      |       |       |  |        |       |       |  |  |    |    |   |   | $     | 40.91 |  |   | $     | 39.80 |  |  |    | 3  |  
|              | Depreciation and Amortization |                            |       | 14.9               |  |                      |       | 11.0  |  |      |     | 35     |   |      |       |       |  |        |       |       |  |  |    |    |   |   | $     | 7.78  |  |   | $     | 5.48  |  |  |    | 42 |  
|             
|              |                               |                            | 93.2  |                    |  |                      | 90.8  |       |  |      | 3   |        |   |      |       |       |  |        |       |       |  |  |    |    |   | $ | 48.69 |       |  | $ | 45.28 |       |  |  | 8  |   
|             
|Gross Margin  |                               | $                          | 69.9  |                    |  | $                    | 80.5  |       |  |      | (13 | )      |   |      |       |       |  |        |       |       |  |  |    |    |   | $ | 36.53 |       |  | $ | 40.18 |       |  |  | (9 | ) 
|             

|              |                               |                          |       |                    |  |                      |       |       |  |      |    |        |   |      |       |       |  |        |       |       |  |  |   |    |   |   |       |       |  |   |       |       |  |  |    |    |  
|------------- | ----------------------------- | ------------------------ | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | -- | ------ | - | ---- | ----- | ----- |  | ------ | ----- | ----- |  |  | - | -- | - | - | ----- | ----- |  | - | ----- | ----- |  |  | -- | -- | -
|              |                               |                         
|              |                               | Six Months Ended June 30
|             
|             
|              |                               |                          |       |                    |  |                     
|              |                               | Dollars (millions)       |       | Tonnes (thousands) |  | Average Price Per MT
|             
|             
|              |                               | %                        |       |                    |  | %                    |       |       |  | %   
|              |                               | 2002                     |       | 2001               |  | Change               |       | 2002  |  | 2001 |    | Change |   | 2002 |       | 2001  |  | Change
|             
|             
|Net Sales     |                               |                          |       |                    |  |                      |       |       |  |      |    |        |   |      |       |       |  |        |       |       |  |  |   |    |   |   |       |       |  |   |       |       |  |  |    |   
|              | North American                |                          | $     | 115.6              |  |                      | $     | 126.1 |  |      |    | (8     | ) |      |       | 1,468 |  |        |       | 1,518 |  |  |   | (3 | ) |   | $     | 78.77 |  |   | $     | 83.07 |  |  |    | (5 | )
|              | Offshore                      |                          |       | 178.1              |  |                      |       | 170.7 |  |      |    | 4      |   |      |       | 2,111 |  |        |       | 1,968 |  |  |   | 7  |   |   | $     | 84.39 |  |   | $     | 86.78 |  |  |    | (3 | )
|             
|              |                               |                          | 293.7 |                    |  |                      | 296.8 |       |  |      | (1 | )      |   |      | 3,579 |       |  |        | 3,486 |       |  |  | 3 |    |   | $ | 82.09 |       |  | $ | 85.17 |       |  |  | (4 | ) 
|             
|              | Other                         |                          |       | 10.1               |  |                      |       |      |  |      |    |       |   |      |       |      |  |        |       |      |  |  |   |   |   |   |       |      |  |   |       |      |  |  |    |   |  
|             
|              |                               |                          | 303.8 |                    |  |                      | 296.8 |       |  |      | 2  |        |   |      | 3,579 |       |  |        | 3,486 |       |  |  | 3 |    |   | $ | 84.88 |       |  | $ | 85.17 |       |  |  | (4 | ) 
|             
|Cost of Sales |                               |                          |       |                    |  |                      |       |       |  |      |    |        |   |      |       |       |  |        |       |       |  |  |   |    |   |   |       |       |  |   |       |       |  |  |    |   
|              | Cash costs                    |                          |       | 151.1              |  |                      |       | 142.8 |  |      |    | 6      |   |      |       |       |  |        |       |       |  |  |   |    |   |   | $     | 42.22 |  |   | $     | 40.98 |  |  |    | 3  |  
|              | Depreciation and Amortization |                          |       | 26.4               |  |                      |       | 20.4  |  |      |    | 29     |   |      |       |       |  |        |       |       |  |  |   |    |   |   | $     | 7.37  |  |   | $     | 5.85  |  |  |    | 26 |  
|             
|              |                               |                          | 177.5 |                    |  |                      | 163.2 |       |  |      | 9  |        |   |      |       |       |  |        |       |       |  |  |   |    |   | $ | 49.59 |       |  | $ | 46.83 |       |  |  | 6  |   
|             
|Gross Margin  |                               | $                        | 126.3 |                    |  | $                    | 133.6 |       |  |      | (5 | )      |   |      |       |       |  |        |       |       |  |  |   |    |   | $ | 35.29 |       |  | $ | 38.34 |       |  |  | (8 | ) 
|             

North American potash sales volumes were down as
compared to the second quarter of last year primarily due to
poor spring planting conditions. Offshore sales volumes to China
and Brazil were slightly lower than second quarter 2001. North
American sales prices decreased in the second quarter of 2002 as
compared to 2001 but have increased 3 percent over the
trailing quarter. The company believes that North American
competitors seeking higher cash flow attempted to sell more
potash tonnes to capitalize on its profitability. The company
maintained its philosophy that price is more important than
volumes, sacrificing some market share. Prices in the offshore
market were under pressure during the quarter.

On a year-to-date basis, offshore sales volumes
are still ahead of last year, due to record sales in March of
this year which more than offset the slight reduction in second
quarter sales volume.

Total gross margin for the potash segment was
also negatively affected by the inclusion of the Chilean nitrate
operations, which commenced commercial production in February
2002. The Yumbes property continued to experience some startup
problems, which the company expects to resolve by year-end.
Nitrate prices continue to be depressed compared to levels seen
in the late 1990s.

Potash per unit cost of sales (excluding
nitrates) decreased on both a quarter-over-quarter and
year-over-year basis, primarily due to lower natural gas prices.
Increased production tonnes and decreased

12



---



##### 



shutdown weeks (18 weeks in the first half
of this year as compared to 25 in the first half of
2001) principally offset the impact of the stronger Canadian
dollar.


Phosphate

|              |                               |                            |       |                    |  |                      |       |       |  |      |     |        |   |      |     |      |  |        |     |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |    |    |  
|------------- | ----------------------------- | -------------------------- | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | --- | ------ | - | ---- | --- | ---- |  | ------ | --- | --- |  |  | --- | --- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | -- | -- | -
|              |                               |                           
|              |                               | Three Months Ended June 30
|             
|             
|              |                               |                            |       |                    |  |                     
|              |                               | Dollars (millions)         |       | Tonnes (thousands) |  | Average Price Per MT
|             
|             
|              |                               | %                          |       |                    |  | %                    |       |       |  | %   
|              |                               | 2002                       |       | 2001               |  | Change               |       | 2002  |  | 2001 |     | Change |   | 2002 |     | 2001 |  | Change
|             
|             
|Net Sales     |                               |                            |       |                    |  |                      |       |       |  |      |     |        |   |      |     |      |  |        |     |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |    |   
|              | Fertilizer  liquids          |                            | $     | 28.7               |  |                      | $     | 34.1  |  |      |     | (16    | ) |      |     | 132  |  |        |     | 171 |  |  |     | (22 | ) |   | $      | 216.70 |  |   | $      | 199.85 |  |  |    | 8  |  
|              | Fertilizer  solids           |                            |       | 22.6               |  |                      |       | 42.8  |  |      |     | (47    | ) |      |     | 145  |  |        |     | 298 |  |  |     | (51 | ) |   | $      | 156.19 |  |   | $      | 143.64 |  |  |    | 9  |  
|              | Feed                          |                            |       | 55.0               |  |                      |       | 52.0  |  |      |     | 6      |   |      |     | 238  |  |        |     | 221 |  |  |     | 8   |   |   | $      | 231.38 |  |   | $      | 235.26 |  |  |    | (2 | )
|              | Industrial                    |                            |       | 41.0               |  |                      |       | 42.0  |  |      |     | (2     | ) |      |     | 133  |  |        |     | 128 |  |  |     | 4   |   |   | $      | 308.47 |  |   | $      | 327.39 |  |  |    | (6 | )
|             
|              |                               |                            | 147.3 |                    |  |                      | 170.9 |       |  |      | (14 | )      |   |      | 648 |      |  |        | 818 |     |  |  | (21 | )   |   | $ | 227.40 |        |  | $ | 208.94 |        |  |  | 9  |   
|             
|Cost of Sales |                               |                            |       |                    |  |                      |       |       |  |      |     |        |   |      |     |      |  |        |     |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |    |   
|              | Cash costs                    |                            |       | 116.7              |  |                      |       | 138.0 |  |      |     | (15    | ) |      |     |      |  |        |     |     |  |  |     |     |   |   | $      | 180.18 |  |   | $      | 168.70 |  |  |    | 7  |  
|              | Depreciation and Amortization |                            |       | 18.6               |  |                      |       | 16.6  |  |      |     | 12     |   |      |     |      |  |        |     |     |  |  |     |     |   |   | $      | 28.70  |  |   | $      | 20.30  |  |  |    | 41 |  
|             
|              |                               |                            | 135.3 |                    |  |                      | 154.6 |       |  |      | (12 | )      |   |      |     |      |  |        |     |     |  |  |     |     |   | $ | 208.88 |        |  | $ | 189.00 |        |  |  | 11 |   
|             
|Gross Margin  |                               | $                          | 12.0  |                    |  | $                    | 16.3  |       |  |      | (26 | )      |   |      |     |      |  |        |     |     |  |  |     |     |   | $ | 18.52  |        |  | $ | 19.94  |        |  |  | (7 | ) 
|             

|              |                               |                          |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |   |    |  
|------------- | ----------------------------- | ------------------------ | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | --- | ------ | - | ---- | ----- | ---- |  | ------ | ----- | --- |  |  | --- | --- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | - | -- | -
|              |                               |                         
|              |                               | Six Months Ended June 30
|             
|             
|              |                               |                          |       |                    |  |                     
|              |                               | Dollars (millions)       |       | Tonnes (thousands) |  | Average Price Per MT
|             
|             
|              |                               | %                        |       |                    |  | %                    |       |       |  | %   
|              |                               | 2002                     |       | 2001               |  | Change               |       | 2002  |  | 2001 |     | Change |   | 2002 |       | 2001 |  | Change
|             
|             
|Net Sales     |                               |                          |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |   |   
|              | Fertilizer  liquids          |                          | $     | 64.8               |  |                      | $     | 76.9  |  |      |     | (16    | ) |      |       | 301  |  |        |       | 371 |  |  |     | (19 | ) |   | $      | 214.83 |  |   | $      | 207.41 |  |  |   | 4  |  
|              | Fertilizer  solids           |                          |       | 47.4               |  |                      |       | 84.9  |  |      |     | (44    | ) |      |       | 302  |  |        |       | 569 |  |  |     | (47 | ) |   | $      | 156.88 |  |   | $      | 149.06 |  |  |   | 5  |  
|              | Feed                          |                          |       | 109.4              |  |                      |       | 107.9 |  |      |     | 1      |   |      |       | 482  |  |        |       | 451 |  |  |     | 7   |   |   | $      | 227.09 |  |   | $      | 239.12 |  |  |   | (5 | )
|              | Industrial                    |                          |       | 80.8               |  |                      |       | 83.1  |  |      |     | (3     | ) |      |       | 260  |  |        |       | 253 |  |  |     | 3   |   |   | $      | 311.18 |  |   | $      | 328.87 |  |  |   | (5 | )
|             
|              |                               |                          | 302.4 |                    |  |                      | 352.8 |       |  |      | (14 | )      |   |      | 1,345 |      |  |        | 1,644 |     |  |  | (18 | )   |   | $ | 224.80 |        |  | $ | 214.59 |        |  |  | 5 |   
|             
|Cost of Sales |                               |                          |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |   |   
|              | Cash costs                    |                          |       | 231.9              |  |                      |       | 279.0 |  |      |     | (17    | ) |      |       |      |  |        |       |     |  |  |     |     |   |   | $      | 172.41 |  |   | $      | 169.71 |  |  |   | 2  |  
|              | Depreciation and Amortization |                          |       | 36.8               |  |                      |       | 35.2  |  |      |     | 5      |   |      |       |      |  |        |       |     |  |  |     |     |   |   | $      | 27.32  |  |   | $      | 21.41  |  |  |   | 28 |  
|             
|              |                               |                          | 268.7 |                    |  |                      | 314.2 |       |  |      | (14 | )      |   |      |       |      |  |        |       |     |  |  |     |     |   | $ | 199.73 |        |  | $ | 191.12 |        |  |  | 5 |   
|             
|Gross Margin  |                               | $                        | 33.7  |                    |  | $                    | 38.6  |       |  |      | (13 | )      |   |      |       |      |  |        |       |     |  |  |     |     |   | $ | 25.07  |        |  | $ | 23.47  |        |  |  | 7 |   
|             

Prices in the North American markets were stable
as compared to last years second quarter and the first
quarter of this year, although they lagged behind prices
realized on a year-over-year basis. North American prices have
not reflected the increased prices that have been seen in the
offshore markets.

Data for the industrial products for the quarter
and year-to-date include hydrofluosilicic acid (HFSA),
a high-volume, lower-priced product previously included in
Other Income. Without the inclusion of this product, industrial
volumes were down 3 percent from last years second
quarter and prices were flat, indicating pricing strength in
spite of volume pressures.

Feed prices were down as compared to second
quarter 2001 but up 4 percent from this years first
quarter as offshore competition has eased. The company intends
to open its new DFP plant in the third quarter of 2002,
reinforcing the companys phosphate diversification
strategy.

With the exception of solid fertilizers
(primarily DAP), the companys phosphate sales volumes in
North America have increased slightly or remained stable. The
sales volumes of solid fertilizers were particularly affected by
the poor spring planting season. During the first half of the
year, the company continued to forgo liquid and solid fertilizer
sales in the offshore markets due to the low prices prevalent
there. The company continues to assess the market as to the
appropriate time to bring unutilized capacity back into
production.

13



---



##### 



Offshore sales volumes of feed increased
significantly in the second quarter of this year as compared to
the second quarter last year due to increased sales to Mexico
and increased sales from the companys Brazilian
feed plant.


Lower production and use of high-cost inventoried
rock raised phosphate production costs. This rock, from an area
where dredging costs were incurred, has now been substantially
absorbed and costs should improve going forward. Completion of
the transition into this area should also reduce
work-in-progress inventory over the next 18 months. The
input cost of sulfur and ammonia decreased in the first half as
compared to the first six months of 2001. On a
quarter-over-quarter basis the input cost of ammonia decreased
but sulfur increased.

Nitrogen

|               |                               |                            |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |     |     |  
|-------------- | ----------------------------- | -------------------------- | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | --- | ------ | - | ---- | ----- | ---- |  | ------ | ----- | --- |  |  | --- | --- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | --- | --- | -
|               |                               |                           
|               |                               | Three Months Ended June 30
|              
|              
|               |                               |                            |       |                    |  |                     
|               |                               | Dollars (millions)         |       | Tonnes (thousands) |  | Average Price Per MT
|              
|              
|               |                               | %                          |       |                    |  | %                    |       |       |  | %   
|               |                               | 2002                       |       | 2001               |  | Change               |       | 2002  |  | 2001 |     | Change |   | 2002 |       | 2001 |  | Change
|              
|              
|Net Sales      |                               |                            |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |     |    
|               | Ammonia                       |                            | $     | 57.5               |  |                      | $     | 91.3  |  |      |     | (37    | ) |      |       | 457  |  |        |       | 571 |  |  |     | (20 | ) |   | $      | 125.80 |  |   | $      | 160.02 |  |  |     | (21 | )
|               | Urea                          |                            |       | 54.6               |  |                      |       | 52.2  |  |      |     | 5      |   |      |       | 434  |  |        |       | 316 |  |  |     | 37  |   |   | $      | 125.82 |  |   | $      | 165.01 |  |  |     | (24 | )
|               | Nitrogen Solutions            |                            |       | 20.9               |  |                      |       | 23.3  |  |      |     | (10    | ) |      |       | 263  |  |        |       | 176 |  |  |     | 50  |   |   | $      | 79.45  |  |   | $      | 132.74 |  |  |     | (40 | )
|               | Other                         |                            |       | 35.7               |  |                      |       | 42.3  |  |      |     | (16    | ) |      |       | 614  |  |        |       | 571 |  |  |     | 7   |   |   | $      | 58.11  |  |   | $      | 74.00  |  |  |     | (21 | )
|              
|               |                               |                            | 168.7 |                    |  |                      | 209.1 |       |  |      | (19 | )      |   |      | 1,768 |      |  |        | 1,634 |     |  |  | 8   |     |   | $ | 95.41  |        |  | $ | 127.98 |        |  |  | (25 | )  
|Purchased      |                               |                            | 10.4  |                    |  |                      | 24.5  |       |  |      | (58 | )      |   |      | 87    |      |  |        | 164   |     |  |  | (47 | )   |   | $ | 119.46 |        |  | $ | 149.83 |        |  |  | (20 | )  
|              
|               |                               | $                          | 179.1 |                    |  | $                    | 233.6 |       |  |      | (23 | )      |   |      | 1,855 |      |  |        | 1,798 |     |  |  | 3   |     |   | $ | 96.54  |        |  | $ | 129.98 |        |  |  | (26 | )  
|              
|Fertilizer     |                               | $                          | 80.0  |                    |  | $                    | 110.1 |       |  |      | (27 | )      |   |      | 770   |      |  |        | 773   |     |  |  |    |     |   | $ | 103.98 |        |  | $ | 142.50 |        |  |  | (27 | )  
|Non-fertilizer |                               |                            | 99.1  |                    |  |                      | 123.5 |       |  |      | (20 | )      |   |      | 1,085 |      |  |        | 1,025 |     |  |  | 6   |     |   | $ | 91.26  |        |  | $ | 120.52 |        |  |  | (24 | )  
|              
|               |                               |                            | 179.1 |                    |  |                      | 233.6 |       |  |      | (23 | )      |   |      | 1,855 |      |  |        | 1,798 |     |  |  | 3   |     |   | $ | 96.54  |        |  | $ | 129.98 |        |  |  | (26 | )  
|              
|Cost of Sales  |                               |                            |       |                    |  |                      |       |       |  |      |     |        |   |      |       |      |  |        |       |     |  |  |     |     |   |   |        |        |  |   |        |        |  |  |     |    
|               | Cash costs                    |                            |       | 152.4              |  |                      |       | 180.9 |  |      |     | (16    | ) |      |       |      |  |        |       |     |  |  |     |     |   |   | $      | 82.14  |  |   | $      | 100.61 |  |  |     | (18 | )
|               | Depreciation and Amortization |                            |       | 21.9               |  |                      |       | 16.7  |  |      |     | 31     |   |      |       |      |  |        |       |     |  |  |     |     |   |   | $      | 11.81  |  |   | $      | 9.29   |  |  |     | 27  |  
|              
|               |                               |                            |       | 174.3              |  |                      |       | 197.6 |  |      |     | (12    | ) |      |       |      |  |        |       |     |  |  |     |     |   |   | $      | 93.95  |  |   | $      | 109.90 |  |  |     | (15 | )
|              
|Gross Margin   |                               | $                          | 4.8   |                    |  | $                    | 36.0  |       |  |      | (87 | )      |   |      |       |      |  |        |       |     |  |  |     |     |   | $ | 2.59   |        |  | $ | 20.08  |        |  |  | (87 | )  
|              

|               |                               |                          |       |                    |  |                      |       |       |  |      |     |        |   |      |       |       |  |        |       |       |  |  |     |    |   |   |        |        |  |   |        |        |  |  |     |     |  
|-------------- | ----------------------------- | ------------------------ | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | --- | ------ | - | ---- | ----- | ----- |  | ------ | ----- | ----- |  |  | --- | -- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | --- | --- | -
|               |                               |                         
|               |                               | Six Months Ended June 30
|              
|              
|               |                               |                          |       |                    |  |                     
|               |                               | Dollars (millions)       |       | Tonnes (thousands) |  | Average Price Per MT
|              
|              
|               |                               | %                        |       |                    |  | %                    |       |       |  | %   
|               |                               | 2002                     |       | 2001               |  | Change               |       | 2002  |  | 2001 |     | Change |   | 2002 |       | 2001  |  | Change
|              
|              
|Net Sales      |                               |                          |       |                    |  |                      |       |       |  |      |     |        |   |      |       |       |  |        |       |       |  |  |     |    |   |   |        |        |  |   |        |        |  |  |     |    
|               | Ammonia                       |                          | $     | 106.1              |  |                      | $     | 190.4 |  |      |     | (44    | ) |      |       | 922   |  |        |       | 990   |  |  |     | (7 | ) |   | $      | 115.10 |  |   | $      | 192.35 |  |  |     | (40 | )
|               | Urea                          |                          |       | 102.3              |  |                      |       | 132.3 |  |      |     | (23    | ) |      |       | 812   |  |        |       | 707   |  |  |     | 15 |   |   | $      | 126.02 |  |   | $      | 187.16 |  |  |     | (33 | )
|               | Nitrogen Solutions            |                          |       | 37.7               |  |                      |       | 62.8  |  |      |     | (40    | ) |      |       | 476   |  |        |       | 498   |  |  |     | (4 | ) |   | $      | 79.15  |  |   | $      | 126.04 |  |  |     | (37 | )
|               | Other                         |                          |       | 74.2               |  |                      |       | 82.7  |  |      |     | (10    | ) |      |       | 1,199 |  |        |       | 1,088 |  |  |     | 10 |   |   | $      | 61.84  |  |   | $      | 76.07  |  |  |     | (19 | )
|              
|               |                               |                          | 320.3 |                    |  |                      | 468.2 |       |  |      | (32 | )      |   |      | 3,409 |       |  |        | 3,283 |       |  |  | 4   |    |   | $ | 93.94  |        |  | $ | 142.64 |        |  |  | (34 | )  
|Purchased      |                               |                          | 24.0  |                    |  |                      | 60.4  |       |  |      | (60 | )      |   |      | 205   |       |  |        | 352   |       |  |  | (42 | )  |   | $ | 117.15 |        |  | $ | 171.09 |        |  |  | (32 | )  
|              
|               |                               | $                        | 344.3 |                    |  | $                    | 528.6 |       |  |      | (35 | )      |   |      | 3,614 |       |  |        | 3,635 |       |  |  | (1  | )  |   | $ | 95.26  |        |  | $ | 145.40 |        |  |  | (34 | )  
|              
|Fertilizer     |                               | $                        | 149.1 |                    |  | $                    | 268.6 |       |  |      | (44 | )      |   |      | 1,483 |       |  |        | 1,683 |       |  |  | (12 | )  |   | $ | 100.55 |        |  | $ | 159.61 |        |  |  | (37 | )  
|Non-fertilizer |                               |                          | 195.2 |                    |  |                      | 260.0 |       |  |      | (25 | )      |   |      | 2,131 |       |  |        | 1,952 |       |  |  | 9   |    |   | $ | 91.58  |        |  | $ | 133.15 |        |  |  | (31 | )  
|              
|               |                               |                          | 344.3 |                    |  |                      | 528.6 |       |  |      | (35 | )      |   |      | 3,614 |       |  |        | 3,635 |       |  |  | (1  | )  |   | $ | 95.26  |        |  | $ | 145.40 |        |  |  | (34 | )  
|              
|Cost of Sales  |                               |                          |       |                    |  |                      |       |       |  |      |     |        |   |      |       |       |  |        |       |       |  |  |     |    |   |   |        |        |  |   |        |        |  |  |     |    
|               | Cash costs                    |                          |       | 296.3              |  |                      |       | 400.7 |  |      |     | (26    | ) |      |       |       |  |        |       |       |  |  |     |    |   |   | $      | 81.98  |  |   | $      | 110.23 |  |  |     | (26 | )
|               | Depreciation and Amortization |                          |       | 43.7               |  |                      |       | 31.1  |  |      |     | 41     |   |      |       |       |  |        |       |       |  |  |     |    |   |   | $      | 12.10  |  |   | $      | 8.56   |  |  |     | 41  |  
|              
|               |                               |                          | 340.0 |                    |  |                      | 431.8 |       |  |      | (21 | )      |   |      |       |       |  |        |       |       |  |  |     |    |   | $ | 94.08  |        |  | $ | 118.79 |        |  |  | (21 | )  
|              
|Gross Margin   |                               | $                        | 4.3   |                    |  | $                    | 96.8  |       |  |      | (96 | )      |   |      |       |       |  |        |       |       |  |  |     |    |   | $ | 1.18   |        |  | $ | 26.61  |        |  |  | (96 | )  
|              

14



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##### 



The nitrogen story revolves around natural gas
prices. In first-half 2001, nitrogen prices benefited from the
spike in natural gas prices at the end of the previous year. In
the first half of 2002, North American gas prices have remained
at levels that are attractive for competitors to produce. The
resulting oversupply has driven product prices and gross margins
downward. While ammonia prices were down quarter-over-quarter
and year-over-year, they were up from the trailing quarter,
reflecting higher gas prices.

Urea and nitrogen solutions sales volumes were up
quarter-over-quarter as farmers switched from ammonia due to wet
field conditions. Urea prices (down 24 percent
quarter-over-quarter) were negatively affected by prior capacity
additions. The biggest negative was in UAN prices, which were
down 40 percent from the same quarter in 2001. In response,
the company shut down its UAN production at Geismar at the
beginning of April and did not restart it until the end
of June.

Overall, nitrogen sales volumes were comparable
to the same quarter last year and flat as compared to the first
half of 2001. Purchased products sales volumes decreased on a
quarter-over-quarter and year-over-year basis as the company
replaced purchases with production from its own facilities.

Non-fertilizer sales volumes increased from
57 percent of total sales volumes in second quarter 2001 to
59 percent this quarter, while non-fertilizer sales
revenues increased from 53 percent to 55 percent over
the same period. On a year-over-year basis, non-fertilizer sales
volumes increased from 54 percent of total sales volumes to
59 percent and non-fertilizer revenues increased
from 49 to 57 percent.

The average per-unit cost of natural gas
decreased 22 percent on a quarter-over-quarter basis and
32 percent on a year-over-year basis. It was flat as
compared to the trailing quarter. This is the principal cause of
the decrease in the per-unit cost of sales compared to prior
quarterly and year-to-date periods.

Expenses

|                                  |  |                    |      |                  |  |        |      |      |  |      |     |        |  |   |      |  |  |   |      |  |  |  |     |  
|--------------------------------- |  | ------------------ | ---- | ---------------- |  | ------ | ---- | ---- |  | ---- | --- | ------ |  | - | ---- |  |  | - | ---- |  |  |  | --- | -
|                                  |  |                    |      |                 
|                                  |  | Three Months Ended |      | Six Months Ended
|                                  |  | June 30            |      | June 30         
|                                 
|                                 
|                                  |  | %                  |      |                  |  | %     
|($ millions)                      |  | 2002               |      | 2001             |  | Change |      | 2002 |  | 2001 |     | Change
|                                 
|                                 
|Selling and Administrative        |  | $                  | 24.0 |                  |  | $      | 23.5 |      |  |      | 2   |        |  | $ | 46.8 |  |  | $ | 48.9 |  |  |  | (4  | )
|Provincial Mining and Other Taxes |  |                    | 20.3 |                  |  |        | 21.7 |      |  |      | (6  | )      |  |   | 40.0 |  |  |   | 36.5 |  |  |  | 10  |  
|Interest                          |  |                    | 20.0 |                  |  |        | 20.1 |      |  |      |    |        |  |   | 41.0 |  |  |   | 36.0 |  |  |  | 14  |  
|Income Taxes                      |  |                    | 6.7  |                  |  |        | 21.2 |      |  |      | (68 | )      |  |   | 13.8 |  |  |   | 59.4 |  |  |  | (77 | )

Selling and administrative expenses were
marginally higher on a quarter-over-quarter basis and have
decreased in the first six months of this year as compared to
the first six months of 2001 due to cost savings. In addition,
there was no amortization of goodwill this year due to the
change in accounting policy (see Note 2 to the unaudited
consolidated financial statements).

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

Interest expense for the quarter was flat as
compared to second quarter 2001 but increased in the first half
of 2002 due to the issuance of $600.0 million of
7.75 percent ten-year notes under the companys shelf
registration in May 2001. These notes were only outstanding for
part of the first six months of last year. Weighted average
long-term debt outstanding in the second quarter of 2002 was
$1,023.5 million (2001  $666.0 million)
with a weighted average interest rate of 7.4 percent
(2001  7.2 percent). Weighted average long-term
debt outstanding for the first six months of 2002 was $1,020.2
million (2001  $542.6 million) with a weighted
average interest rate of 7.4 percent (2001 
7.2 percent). The weighted average interest rate on
short-term debt outstanding in the second quarter of 2002 was
2.2 percent (2001  4.7 percent) and for the
first half of 2002 was 2.2 percent (2001 
5.3 percent).

15



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##### 



The effective consolidated tax rate for the
second quarter and first half of 2002 was 36 percent. In
2001, the rate for the second quarter was lower than this due to
a cumulative adjustment made in the second quarter to reduce the
effective rate from 38 percent to 36 percent (relating
to corporate restructuring in conjunction with the refinancing
of the Trinidad plant leases). The current/future tax split on a
year-to-date basis approximates 80 percent current and
20 percent future (25 percent current and
75 percent future in the first half of 2001). The increase
in the current portion of the provision was primarily due to a
higher proportion of earnings in Canada where the company is
subject to current taxes.

ANALYSIS OF FINANCIAL CONDITION AND CASH
FLOW

|                                                    |  |                    |       |                  |  |      |        |      |  |   |        |   |  |   |        |  
|--------------------------------------------------- |  | ------------------ | ----- | ---------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                    |  |                    |       |                 
|                                                    |  | Three Months Ended |       | Six Months Ended
|                                                    |  | June 30            |       | June 30         
|                                                   
|                                                   
|($ millions)                                        |  | 2002               |       | 2001             |  | 2002 |        | 2001
|                                                   
|                                                   
|Cash provided by (used in)
    operating activities |  | $                  | 109.3 |                  |  | $    | (2.8   | )    |  | $ | 177.4  |   |  | $ | 0.6    |  
|Cash used in investing activities                   |  | $                  | (92.8 | )                |  | $    | (430.8 | )    |  | $ | (132.4 | ) |  | $ | (453.3 | )
|Cash (used in) provided by
    financing activities |  | $                  | (74.8 | )                |  | $    | 371.2  |      |  | $ | (57.8  | ) |  | $ | 404.3  |  

The net increase in cash provided by operating
activities in the second quarter of 2002, as compared with
second quarter 2001, was primarily due to the repayment of the
companys natural gas counter parties margin accounts in
2001 offset by lower net income in 2002. This was also the case
on a year-to-date basis. Depreciation and amortization increased
over both last years second quarter and first half
primarily due to the depreciation of the Trinidad plants
purchased in the second quarter of last year and the
amortization of deferred charges.

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

To finance the 2001 buyout of the Trinidad leases
and pay down short-term debt, the company issued
$600.0 million of 7.75 percent ten-year notes in May
2001. This is the primary reason for the reduction in cash
provided by financing activities in the second quarter and first
six months of 2002. The company paid dividends of
$13.1 million in the second quarter of 2002
(2001  $12.9 million). On a year-to-date basis
the company paid dividends of $26.1 million (2001 
$25.9 million).

The company has a syndicated credit facility
which provides for unsecured advances of up to
$650.0 million (less the amount of commercial paper
outstanding), none of which was outstanding at June 30,
2002. In addition, the company has short-term lines of credit
for up to $149.8 million in borrowing (less letters of
credit of $15.2 million), of which $90.0 million was
outstanding at June 30, 2002. The company has a commercial
paper program of up to $500.0 million, of which
$366.5 million was outstanding at June 30, 2002.

The company may also issue up to an additional
$1.0 billion in unsecured debt securities under a new
US shelf registration statement effective
June 5, 2002.

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

16



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##### 



CONTRACTUAL OBLIGATIONS AND OTHER
COMMITMENTS

|                                  |  |                    |       |              |  |              |       |       |  |   |         |  |  |   |         | 
|--------------------------------- |  | ------------------ | ----- | ------------ |  | ------------ | ----- | ----- |  | - | ------- |  |  | - | ------- | 
|                                  |  |                   
|                                  |  | Dollars (millions)
|                                 
|                                 
|                                  |  | 1 to 3 years       |       | 4 to 5 years |  | Over 5 years |       | Total
|                                 
|                                 
|Long-term debt                    |  | $                  | 6.2   |              |  | $            | 12.1  |       |  | $ | 1,005.0 |  |  | $ | 1,023.3 | 
|Operating Leases                  |  |                    | 116.9 |              |  |              | 72.2  |       |  |   | 155.3   |  |  |   | 344.4   | 
|Raw Material Purchase Commitments |  |                    | 301.4 |              |  |              | 185.2 |       |  |   | 725.0   |  |  |   | 1,211.6 | 
|                                 
|                                  |  | $                  | 424.5 |              |  | $            | 269.5 |       |  | $ | 1,885.3 |  |  | $ | 2,579.3 | 
|                                 

Long-term debt primarily consists of
$1.0 billion of notes payable that were issued under the
companys initial shelf registration statement,
$13.3 million Adjustable Rate Industrial Revenue and
Pollution Control Obligations, a net of $5.0 million under
a back-to-back loan arrangement and commitments of
$5.0 million payable over five years. The notes payable are
unsecured. Of the notes outstanding, $400.0 million bear
interest at 7.125 percent and mature in 2007 and
$600.0 million bear interest at 7.75 percent and
mature in 2011. There are no sinking fund requirements. The
notes are subject to certain covenants and events of default,
including an event of default for acceleration of other debt in
excess of $50.0 million. The Adjustable Rate Industrial
Revenue and Pollution Control Obligations bear interest at
varying rates, are secured by bank letters of credit and have no
sinking fund requirements.

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

The company has long-term agreements for the
purchase of sulfur for use in the production of phosphoric acid.
These agreements provide for minimum purchase quantities and
prices based on market rates at the time of delivery. The
commitments included in the above table are based on the market
prices for the second quarter of 2002. The companys
Trinidad subsidiaries have entered into long-term natural gas
contracts with the National Gas Company of Trinidad. The
contracts provide for prices that vary with ammonia market
prices, escalating floor prices and minimum purchase quantities.
The commitments included in the above table are based on floor
prices and minimum purchase quantities. The company also has a
long-term agreement for the purchase of phosphate rock used at
the Geismar facility. This agreement sets base price (less
volume discounts) for the first three years. Prices in
subsequent years are subject to renegotiation. The commitments
included in the above table are based on the expected purchase
quantity and the set base prices (less
applicable discounts).

LIQUIDITY

|                           |  |                    |       |               |  |                |       |  |  |   |       | 
|-------------------------- |  | ------------------ | ----- | ------------- |  | -------------- | ----- |  |  | - | ----- | 
|                           |  |                   
|                           |  | Dollars (millions)
|                          
|                          
|                           |  | Total              |       | Available at  |  | Outstanding at
|                           |  | Commitment         |       | June 30, 2002 |  | June 30, 2002 
|                          
|                          
|Syndicated Credit Facility |  | $                  | 650.0 |               |  | $              | 283.5 |  |  | $ |      | 
|Lines of Credit            |  |                    | 149.1 |               |  |                | 134.6 |  |  |   | 90.0  | 
|Commercial Paper           |  |                    | 500.0 |               |  |                | 500.0 |  |  |   | 366.5 | 

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

17



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##### 



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

The company may also issue up to an additional
$1.0 billion in unsecured debt securities under a new
US shelf registration statement effective
June 5, 2002.

FAIR VALUE OF GAS HEDGING CONTRACTS

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

The fair value of the companys gas hedging
contracts at June 30, 2002 was $49.4 million
($8.9 million at December 31, 2001). The
companys futures contracts are exchange-traded and fair
value was determined based on exchange prices. Swaps and option
agreements are traded in the over-the-counter market and fair
value was calculated based on a price that was converted to an
exchange-equivalent price.

RELATED PARTY TRANSACTIONS

The company sells potash from its Saskatchewan
mines for use outside of North America exclusively to Canpotex
Limited, a potash export, sales and marketing company owned in
equal shares by the three potash producers in the Province of
Saskatchewan. Sales to Canpotex are at prevailing market prices
and are settled on normal trade terms. The company has no other
significant related party transactions.

CRITICAL ACCOUNTING POLICIES

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

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

OUTLOOK

While the North American domestic season was
disappointing and fertilizer products remained under pressure,
there are some positive basic fundamentals: ending inventories
of almost all agricultural products continued to come down.
According to the USDAs June 30, 2002 report, the
stocks-to-use ratio of world grains is expected to be
20 percent, the lowest in two decades. Coarse grain
inventories are expected to be 17.5 percent, the lowest in
a quarter-century. Continued deterioration in the domestic corn
crop is expected to reduce these ratios further.

The Potash and Phosphate Institute reports that
43 percent of North American soil samples show low or
medium values in potassium, which should encourage good fall
application rates. This, along with increased third-quarter
shutdowns, upward trending pricing and indications of higher
international demand, should help keep potash stable.

The company continues to operate its potash mines
by matching production to anticipated sales demand. The company
is currently planning more shutdown weeks in the third quarter
of 2002 as compared to third quarter 2001. Production costs are
also affected by the strength of the Canadian dollar, natural
gas costs and sourcing of product sales.

18



---



##### 



DAP demand is currently surpassing supply with
heavy exports and increased domestic demand. The Fertilizer
Institute inventory numbers at the end of June 2002 show DAP at
34 percent below the five-year average, which is supporting
prices. In liquids, demand has exceeded production in the last
two years, substantially reducing field inventories and
supporting prices. The companys new DFP feed plant, with
the lowest costs in North America, will come on stream in the
third quarter reinforcing the companys phosphate
diversification strategy.

Natural gas costs, the biggest determinant in
nitrogen prices, are projected to be higher in the second half
of the year. With its US natural gas supply substantially
hedged and access to cheap gas in Trinidad, the company benefits
in a high-cost gas environment.

There is also the potential for higher gas costs
in Russia, if market-related pricing becomes a precursor to that
country joining the WTO. This could have the effect of lowering
Russian nitrogen exports to the US, tightening supply/demand.
Industrial nitrogen demand is showing signs of strengthening due
to low interest rates and consumer demand. All of these factors,
along with an expected increase in US DAP production, would help
nitrogen markets.

While there are numerous positive indicators,
they have not yet transpired and based on current market
conditions, the company expects third-quarter 2002 earnings to
be in the range of $0.20 per share and annual earnings to be in
the range of $1.20 per share. However, given the
unpredictability of world currency, natural gas prices and
weather, results may differ from current expectations.

FORWARD LOOKING STATEMENTS

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

19



---



##### 



ITEM
3.     QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

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

A sensitivity analysis has been prepared to
estimate the companys market risk exposure arising from
derivative commodity instruments. The fair value of such
instruments is calculated by valuing each position using quoted
market prices. Market risk is estimated as the potential loss in
fair value resulting from a hypothetical 10 percent adverse
change in such prices. The results of this analysis indicate
that as of June 30, 2002 the companys estimated
derivative commodity instruments market risk exposure was
$20.8 million (2001  $26.3 million). Actual
results may differ from this estimate. Changes in the fair value
of such derivative instruments, with maturities in 2002 through
2007, will generally relate to changes in the spot price of
anticipated natural gas purchases.

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

20



---



##### 



PART II.     OTHER
INFORMATION



ITEM 1.     LEGAL
PROCEEDINGS


Geismar Facility
Investigation

On May 11 and May 12, 1999,
representatives of the EPA, Federal Bureau of Investigation, and
other state and local agencies (governmental
agencies) executed a search warrant issued by the United
States District Court for the Middle District of Louisiana on
the Geismar facility in connection with a grand jury
investigation. In executing the search warrant, the governmental
agencies seized documents and electronic media, performed
environmental sampling, and interviewed Geismar facility
employees and contract employees. In addition, the governmental
agencies have contacted current and former Geismar facility and
Company employees in connection with the investigation. The
Company has also been served with grand jury subpoenas
requesting documents and other information from the Geismar
facility and PCS Nitrogens headquarters. The grand jury
investigation is continuing and, in May 2001, the Company
learned that the targets of the investigation include the
Company and certain current and former employees, including
individuals with current and/or previous management
responsibility for the Companys nitrogen operations. The
Company is also conducting its own internal investigation. The
Company is currently engaged in discussions with representatives
of the governmental agencies seeking an overall resolution to
the matters under investigation. The Company cannot predict at
this time what may result from the governments
investigation or whether any such result would have a material
adverse effect on the Company.

ITEM 4.     SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS



|    |                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | On May 9, 2002, the Company held an annual
    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 |            | WITHHELD
|                          |  |     |            |         
|Frederick J. Blesi        |  |     | 40,830,357 |          |  |  | 41,738 | 
|Douglas J. Bourne         |  |     | 40,825,253 |          |  |  | 46,842 | 
|William J. Doyle          |  |     | 40,830,314 |          |  |  | 41,781 | 
|Wade Fetzer III           |  |     | 40,830,624 |          |  |  | 41,471 | 
|Dallas J. Howe            |  |     | 40,831,111 |          |  |  | 40,984 | 
|Jeffrey J. McCaig         |  |     | 40,837,529 |          |  |  | 34,566 | 
|Mary Mogford              |  |     | 40,834,559 |          |  |  | 37,536 | 
|Donald E. Phillips        |  |     | 40,826,818 |          |  |  | 45,277 | 
|Paul J. Schoenhals        |  |     | 40,836,803 |          |  |  | 35,292 | 
|E. Robert Stromberg, Q.C. |  |     | 40,831,107 |          |  |  | 40,988 | 
|Jack G. Vicq              |  |     | 40,831,431 |          |  |  | 40,664 | 
|Thomas J. Wright          |  |     | 40,831,358 |          |  |  | 40,737 | 



|    |                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | The Companys shareholders also voted upon
    the appointment of the firm of Deloitte & Touche, LLP,
    the present auditors, as the Companys auditors, to hold
    office until the next annual meeting of the Companys
    shareholders; the results of the vote were: 40,677,964 shares
    for, 176,140 shares against and 15,312 shares withheld.
|   
|(d) | In addition, the Companys shareholders also
    voted upon the continuance of the corporation under the Canada
    Business Corporations Act and related matters; the results of
    the vote were: 39,310,972 shares for, 11,020 shares against
    and 18,161 shares withheld (1,529,263 broker non-votes).                                            

ITEM 5.     OTHER
INFORMATION

None.

21



---



##### 



ITEM 6.     EXHIBITS
AND REPORTS ON FORM 8-K

(a) EXHIBITS

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

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

|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10(a) |                         |  | Sixth Voting Agreement dated April 22, 1978,
    between Central Canada Potash, Division of Noranda, Inc.,
    Cominco Ltd., International Minerals and Chemical Corporation
    (Canada) Limited, PCS Sales and Texasgulf Inc., incorporated by
    reference to Exhibit 10(f) to the F-1 Registration
    Statement.                                                                                                                                           
|       
|        | 10(b) |                         |  | Canpotex Limited Shareholders Seventh Memorandum
    of Agreement effective April 21, 1978, between Central
    Canada Potash, Division of Noranda Inc., Cominco Ltd.,
    International Minerals and Chemical Corporation (Canada)
    Limited, PCS Sales, Texasgulf Inc. and Canpotex Limited as
    amended by Canpotex S & P amending agreement dated
    November 4, 1987, incorporated by reference to
    Exhibit 10(g) to the F-1 Registration Statement.
|       
|        | 10(c) |                         |  | Producer Agreement dated April 21, 1978,
    between Canpotex Limited and PCS Sales, incorporated by
    reference to Exhibit 10(h) to the F-1 Registration
    Statement.                                                                                                                                                                                                                                                                                       
|       
|        | 10(d) |                         |  | Canpotex/PCS Amending Agreement, dated with
    effect October 1, 1992, incorporated by reference to
    Exhibit 10(f) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                                                    
|       
|        | 10(e) |                         |  | Canpotex PCA Collateral Withdrawing/PCS Amending
    Agreement, dated with effect October 7, 1993, incorporated
    by reference to Exhibit 10(g) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                         
|       
|        | 10(f) |                         |  | Canpotex Producer Agreement amending agreement
    dated effective January 1, 1999, incorporated by reference
    to Exhibit 10(f) of the registrants report on
    Form 10-K for the year ended December 31, 2000 (the
    2000 Form 10-K).                                                                                                                                                                                                                  
|       
|        | 10(g) |                         |  | Agreement of Limited Partnership of Arcadian
    Fertilizer, L.P. dated as of March 3, 1992 (form), and the
    related Certificate of Limited Partnership of Arcadian
    Fertilizer, L.P., filed with the Secretary of State of the State
    of Delaware on March 3, 1992 (incorporated by reference to
    Exhibits 3.1 and 3.2 to Arcadian Partners L.P.s
    Registration Statement on Form S-1
    (File No. 33-45828)).                                 

22



---



##### 



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|       
|        | 10(h) |                         |  | Amendment to Agreement of Limited Partnership of
    Arcadian Fertilizer, L.P. and related Certificates of Limited
    Partnership of Arcadian Fertilizer, L.P. filed with the
    Secretary of State of the State of Delaware on March 6,
    1997 and November 26, 1997, incorporated by reference to
    Exhibit 10(f) to the registrants report on
    Form 10-K for the year ended December 31, 1998 (the
    1998 Form 10-K).                                                                                                                                                           
|       
|        | 10(i) |                         |  | Geismar Complex Services Agreement dated
    June 4, 1984, between Honeywell International, Inc. and
    Arcadian Corporation, incorporated by reference to
    Exhibit 10.4 to Arcadian Corporations Registration
    Statement on Form S-1 (File No. 33-34357).                                                                                                                                                                                                                                                                                                                               
|       
|        | 10(j) |                         |  | Esterhazy Restated Mining and Processing
    Agreement dated January 31, 1978, between International
    Minerals & Chemical Corporation (Canada) Limited and
    the registrants predecessor, incorporated by reference to
    Exhibit 10(e) to the F-1 Registration Statement.                                                                                                                                                                                                                                                                                                                
|       
|        | 10(k) |                         |  | Agreement dated December 21, 1990, between
    International Minerals & Chemical Corporation (Canada)
    Limited and the registrant, amending the Esterhazy Restated
    Mining and Processing Agreement dated January 31, 1978,
    incorporated by reference to Exhibit 10(p) to the
    registrants report on Form 10-K for the year ended
    December 31, 1990.                                                                                                                                                                                                                           
|       
|        | 10(l) |                         |  | Agreement effective August 27, 1998, between
    International Minerals & Chemical (Canada) Global
    Limited and the registrant, amending the Esterhazy Restated
    Mining and Processing Agreement dated January 31, 1978 (as
    amended), incorporated by reference to Exhibit 10(l) to the
    1998 Form 10-K.                                                                                                                                                                                                                                                                            
|       
|        | 10(m) |                         |  | Agreement effective August 31, 1998, among
    International Minerals & Chemical (Canada) Global
    Limited, International Minerals & Chemical (Canada) Limited
    Partnership and the registrant assigning the interest in the
    Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978 (as amended) held by International
    Minerals & Chemical (Canada) Global Limited to International
    Minerals & Chemical (Canada) Limited Partnership,
    incorporated by reference to Exhibit 10(m) to the 1998
    Form 10-K.                                          
|       
|        | 10(n) |                         |  | Operating Agreement dated May 11, 1993,
    between BP Chemicals Inc. and Arcadian Ohio, L.P., as
    amended by the First Amendment to the Operating Agreement dated
    as of November 20, 1995, between BP Chemicals Inc. and
    Arcadian Ohio, L.P. (First Amendment), incorporated
    by reference to Exhibit 10.2 to Arcadian Partners
    L.P.s current report on Form 8-K for the report event
    dated May 11, 1993, except for the First Amendment which is
    incorporated by reference to Arcadian Corporations report
    on Form 10-K for the year ended December 31, 1995.
|       
|        | 10(o) |                         |  | Second Amendment to Operating Agreement between
    BP Chemicals, Inc. and Arcadian Ohio, L.P., dated as of
    November 25, 1996, incorporated by reference to
    Exhibit 10(k) of the registrants report on
    Form 10-K for the year ended December 31, 1997 (the
    1997 Form 10-K).                                                                                                                                                                                                                                                                                                   
|       
|        | 10(p) |                         |  | Manufacturing Support Agreement dated
    May 11, 1993, between BP Chemicals Inc. and Arcadian
    Ohio, L.P., incorporated by reference to Exhibit 10.3 to
    Arcadian Partners L.P.s current report on Form 8-K
    for the report event dated May 11, 1993.                                                                                                                                                                                                                                                                                                                                 
|       
|        | 10(q) |                         |  | First Amendment to Manufacturing Support
    Agreement between BP Chemicals, Inc. and Arcadian Ohio,
    L.P., dated as of November 25, 1996, incorporated by
    reference to Exhibit 10(l) to the 1997 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                              
|       
|        | 10(r) |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Trinidad Ammonia Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(x) to the registrants report
    on Form 10-Q for the quarterly period ended June 30,
    2001 (the Second Quarter 2001 Form 10-Q).                                                                                                                                                                                                                                                       

23



---



##### 



|        |        |                         |  |                                                                                                                                                                                                                                                                                                                              
|------- | ------ | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|       
|        | 10(s)  |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Nitrogen Leasing Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(y) to the Second Quarter 2001
    Form 10-Q.                                                                             
|       
|        | 10(t)  |                         |  | Potash Corporation of Saskatchewan Inc. Stock
    Option Plan  Directors, as amended January 23,
    2001, incorporated by reference to Exhibit 10(y) to the
    Second Quarter 2001 Form 10-Q.                                                                                                                             
|       
|        | 10(u)  |                         |  | Potash Corporation of Saskatchewan Inc. Stock
    Option Plan  Officers and Employees, as amended
    January 23, 2001, incorporated by reference to
    Exhibit 10(aa) to the 2000 Form 10-K.                                                                                                                              
|       
|        | 10(v)  |                         |  | Short-Term Incentive Plan of the registrant
    effective January 2000, incorporated by reference to
    Exhibit 10(z) to the registrants report on
    Form 10-Q for the quarterly period ended March 31,
    2000 (the First Quarter 2000 Form 10-Q).                                                                   
|       
|        | 10(w)  |                         |  | Long-Term Incentive Plan of the registrant
    effective January 2000, incorporated by reference to
    Exhibit 10(aa) to the Second Quarter 2000 Form 10-Q.                                                                                                                                                                 
|       
|        | 10(x)  |                         |  | Resolution and Forms of Agreement for
    Supplemental Retirement Income Plan, for officers and key
    employees of the registrant, incorporated by reference to
    Exhibit 10(o) to the 1995 Form 10-K.                                                                                                                   
|       
|        | 10(y)  |                         |  | Amending Resolution and revised forms of
    agreement regarding Supplemental Retirement Income Plan of the
    registrant, incorporated by reference to Exhibit 10(x) to
    the registrants report on Form 10-Q for the quarterly
    period ended June 30, 1996.                                                         
|       
|        | 10(z)  |                         |  | Amended and restated Supplemental Retirement
    Income Plan of the registrant and text of amendment to existing
    supplemental income plan agreements, incorporated by reference
    to Exhibit (mm) to the Third Quarter 2000 Form 10-Q.                                                                                 
|       
|        | 10(aa) |                         |  | Supplemental Retirement Plan for
    U.S. Executives dated effective January 1, 1999.                                                                                                                                                                                                                                        
|       
|        | 10(bb) |                         |  | Forms of Agreement dated December 30, 1994,
    between the registrant and certain officers of the registrant,
    concerning a change in control of the registrant, incorporated
    by reference to Exhibit 10(p) to the 1995 Form 10-K.                                                                                   
|       
|        | 10(cc) |                         |  | Form of Agreement of Indemnification dated
    August 8, 1995, between the registrant and certain officers
    and directors of the registrant, incorporated by reference to
    Exhibit 10(q) to the 1995 Form 10-K.                                                                                                        
|       
|        | 10(dd) |                         |  | Resolution and Form of Agreement of
    Indemnification dated January 24, 2001, incorporated by
    reference to Exhibit 10(ii) to the 2000 Form 10-K.                                                                                                                                                                       
|       
|        | 10(ee) |                         |  | Chief Executive Officer Medical and Dental Plan,
    incorporated by reference to Exhibit 10(jj) to the 2000
    Form 10-K.                                                                                                                                                                                                  
|       
|        | 10(ff) |                         |  | Second Amended and Restated Membership Agreement
    dated January 1, 1995, among Phosphate Chemicals Export
    Association, Inc. and members of such association, including
    Texasgulf Inc., incorporated by reference to Exhibit 10(t)
    to the 1995 Form 10-K.                                                      
|       
|        | 10(gg) |                         |  | International Agency Agreement dated
    January 1, 1995, between Phosphate Chemicals Export
    Association, Inc. and Texasgulf Inc. establishing Texasgulf Inc.
    as exclusive marketing agent for such associations wet
    phosphatic materials, incorporated by reference to
    Exhibit 10(u) to the 1995 Form 10-K.
|       
|        | 10(hh) |                         |  | Royalty Agreement dated October 7, 1993, by
    and between the registrant and Rio Algom Limited,
    incorporated by reference to Exhibit 10(x) to the 1995
    Form 10-K.                                                                                                                                                  

24



---



##### 



|        |        |                         |  |                                                                                                                                                                                                                                        
|------- | ------ | ----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|       
|        | 10(ii) |                         |  | Form of Note relating to the Companys
    offering of $600,000,000 principal amount of 7 3/4% Notes
    due on May 31, 2011, incorporated by reference to
    Exhibit 4 to the registrants report on Form 8-K
    dated May 17, 2001.
|       
|        | 10(jj) |                         |  | Deferred Share Unit Plan for Non-Employee
    Directors, incorporated by reference to Exhibit 4.1 to the
    registrants Form S-8 (File No. 333-75742)
    filed December 21, 2001.                                                   
|       
|        | 11     |                         |  | Statement re Computation of Per Share Earnings                                                                                                                                                                                         

(b) REPORTS
ON FORM 8-K

There were no reports on form 8-K filed by
the registrant during the quarterly period covered by
this Report.

25



---



##### 



SIGNATURES

Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.



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

August 9, 2002

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

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

August 9, 2002

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

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

26



---



##### 



Exhibit Index

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

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

|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10(a) |                         |  | Sixth Voting Agreement dated April 22, 1978,
    between Central Canada Potash, Division of Noranda, Inc.,
    Cominco Ltd., International Minerals and Chemical Corporation
    (Canada) Limited, PCS Sales and Texasgulf Inc., incorporated by
    reference to Exhibit 10(f) to the F-1 Registration
    Statement.                                                                                                                                           
|       
|        | 10(b) |                         |  | Canpotex Limited Shareholders Seventh Memorandum
    of Agreement effective April 21, 1978, between Central
    Canada Potash, Division of Noranda Inc., Cominco Ltd.,
    International Minerals and Chemical Corporation (Canada)
    Limited, PCS Sales, Texasgulf Inc. and Canpotex Limited as
    amended by Canpotex S & P amending agreement dated
    November 4, 1987, incorporated by reference to
    Exhibit 10(g) to the F-1 Registration Statement.
|       
|        | 10(c) |                         |  | Producer Agreement dated April 21, 1978,
    between Canpotex Limited and PCS Sales, incorporated by
    reference to Exhibit 10(h) to the F-1 Registration
    Statement.                                                                                                                                                                                                                                                                                       
|       
|        | 10(d) |                         |  | Canpotex/PCS Amending Agreement, dated with
    effect October 1, 1992, incorporated by reference to
    Exhibit 10(f) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                                                    
|       
|        | 10(e) |                         |  | Canpotex PCA Collateral Withdrawing/PCS Amending
    Agreement, dated with effect October 7, 1993, incorporated
    by reference to Exhibit 10(g) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                         
|       
|        | 10(f) |                         |  | Canpotex Producer Agreement amending agreement
    dated effective January 1, 1999, incorporated by reference
    to Exhibit 10(f) of the registrants report on
    Form 10-K for the year ended December 31, 2000 (the
    2000 Form 10-K).                                                                                                                                                                                                                  
|       
|        | 10(g) |                         |  | Agreement of Limited Partnership of Arcadian
    Fertilizer, L.P. dated as of March 3, 1992 (form), and the
    related Certificate of Limited Partnership of Arcadian
    Fertilizer, L.P., filed with the Secretary of State of the State
    of Delaware on March 3, 1992 (incorporated by reference to
    Exhibits 3.1 and 3.2 to Arcadian Partners L.P.s
    Registration Statement on Form S-1
    (File No. 33-45828)).                                 





---



##### 



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|       
|        | 10(h) |                         |  | Amendment to Agreement of Limited Partnership of
    Arcadian Fertilizer, L.P. and related Certificates of Limited
    Partnership of Arcadian Fertilizer, L.P. filed with the
    Secretary of State of the State of Delaware on March 6,
    1997 and November 26, 1997, incorporated by reference to
    Exhibit 10(f) to the registrants report on
    Form 10-K for the year ended December 31, 1998 (the
    1998 Form 10-K).                                                                                                                                                           
|       
|        | 10(i) |                         |  | Geismar Complex Services Agreement dated
    June 4, 1984, between Honeywell International, Inc. and
    Arcadian Corporation, incorporated by reference to
    Exhibit 10.4 to Arcadian Corporations Registration
    Statement on Form S-1 (File No. 33-34357).                                                                                                                                                                                                                                                                                                                               
|       
|        | 10(j) |                         |  | Esterhazy Restated Mining and Processing
    Agreement dated January 31, 1978, between International
    Minerals & Chemical Corporation (Canada) Limited and
    the registrants predecessor, incorporated by reference to
    Exhibit 10(e) to the F-1 Registration Statement.                                                                                                                                                                                                                                                                                                                
|       
|        | 10(k) |                         |  | Agreement dated December 21, 1990, between
    International Minerals & Chemical Corporation (Canada)
    Limited and the registrant, amending the Esterhazy Restated
    Mining and Processing Agreement dated January 31, 1978,
    incorporated by reference to Exhibit 10(p) to the
    registrants report on Form 10-K for the year ended
    December 31, 1990.                                                                                                                                                                                                                           
|       
|        | 10(l) |                         |  | Agreement effective August 27, 1998, between
    International Minerals & Chemical (Canada) Global
    Limited and the registrant, amending the Esterhazy Restated
    Mining and Processing Agreement dated January 31, 1978 (as
    amended), incorporated by reference to Exhibit 10(l) to the
    1998 Form 10-K.                                                                                                                                                                                                                                                                            
|       
|        | 10(m) |                         |  | Agreement effective August 31, 1998, among
    International Minerals & Chemical (Canada) Global
    Limited, International Minerals & Chemical (Canada) Limited
    Partnership and the registrant assigning the interest in the
    Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978 (as amended) held by International
    Minerals & Chemical (Canada) Global Limited to International
    Minerals & Chemical (Canada) Limited Partnership,
    incorporated by reference to Exhibit 10(m) to the 1998
    Form 10-K.                                          
|       
|        | 10(n) |                         |  | Operating Agreement dated May 11, 1993,
    between BP Chemicals Inc. and Arcadian Ohio, L.P., as
    amended by the First Amendment to the Operating Agreement dated
    as of November 20, 1995, between BP Chemicals Inc. and
    Arcadian Ohio, L.P. (First Amendment), incorporated
    by reference to Exhibit 10.2 to Arcadian Partners
    L.P.s current report on Form 8-K for the report event
    dated May 11, 1993, except for the First Amendment which is
    incorporated by reference to Arcadian Corporations report
    on Form 10-K for the year ended December 31, 1995.
|       
|        | 10(o) |                         |  | Second Amendment to Operating Agreement between
    BP Chemicals, Inc. and Arcadian Ohio, L.P., dated as of
    November 25, 1996, incorporated by reference to
    Exhibit 10(k) of the registrants report on
    Form 10-K for the year ended December 31, 1997 (the
    1997 Form 10-K).                                                                                                                                                                                                                                                                                                   
|       
|        | 10(p) |                         |  | Manufacturing Support Agreement dated
    May 11, 1993, between BP Chemicals Inc. and Arcadian
    Ohio, L.P., incorporated by reference to Exhibit 10.3 to
    Arcadian Partners L.P.s current report on Form 8-K
    for the report event dated May 11, 1993.                                                                                                                                                                                                                                                                                                                                 
|       
|        | 10(q) |                         |  | First Amendment to Manufacturing Support
    Agreement between BP Chemicals, Inc. and Arcadian Ohio,
    L.P., dated as of November 25, 1996, incorporated by
    reference to Exhibit 10(l) to the 1997 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                              
|       
|        | 10(r) |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Trinidad Ammonia Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(x) to the registrants report
    on Form 10-Q for the quarterly period ended June 30,
    2001 (the Second Quarter 2001 Form 10-Q).                                                                                                                                                                                                                                                       





---



##### 



|        |        |                         |  |                                                                                                                                                                                                                                                                                                                              
|------- | ------ | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|       
|        | 10(s)  |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Nitrogen Leasing Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(y) to the Second Quarter 2001
    Form 10-Q.                                                                             
|       
|        | 10(t)  |                         |  | Potash Corporation of Saskatchewan Inc. Stock
    Option Plan  Directors, as amended January 23,
    2001, incorporated by reference to Exhibit 10(y) to the
    Second Quarter 2001 Form 10-Q.                                                                                                                             
|       
|        | 10(u)  |                         |  | Potash Corporation of Saskatchewan Inc. Stock
    Option Plan  Officers and Employees, as amended
    January 23, 2001, incorporated by reference to
    Exhibit 10(aa) to the 2000 Form 10-K.                                                                                                                              
|       
|        | 10(v)  |                         |  | Short-Term Incentive Plan of the registrant
    effective January 2000, incorporated by reference to
    Exhibit 10(z) to the registrants report on
    Form 10-Q for the quarterly period ended March 31,
    2000 (the First Quarter 2000 Form 10-Q).                                                                   
|       
|        | 10(w)  |                         |  | Long-Term Incentive Plan of the registrant
    effective January 2000, incorporated by reference to
    Exhibit 10(aa) to the Second Quarter 2000 Form 10-Q.                                                                                                                                                                 
|       
|        | 10(x)  |                         |  | Resolution and Forms of Agreement for
    Supplemental Retirement Income Plan, for officers and key
    employees of the registrant, incorporated by reference to
    Exhibit 10(o) to the 1995 Form 10-K.                                                                                                                   
|       
|        | 10(y)  |                         |  | Amending Resolution and revised forms of
    agreement regarding Supplemental Retirement Income Plan of the
    registrant, incorporated by reference to Exhibit 10(x) to
    the registrants report on Form 10-Q for the quarterly
    period ended June 30, 1996.                                                         
|       
|        | 10(z)  |                         |  | Amended and restated Supplemental Retirement
    Income Plan of the registrant and text of amendment to existing
    supplemental income plan agreements, incorporated by reference
    to Exhibit (mm) to the Third Quarter 2000 Form 10-Q.                                                                                 
|       
|        | 10(aa) |                         |  | Supplemental Retirement Plan for
    U.S. Executives dated effective January 1, 1999.                                                                                                                                                                                                                                        
|       
|        | 10(bb) |                         |  | Forms of Agreement dated December 30, 1994,
    between the registrant and certain officers of the registrant,
    concerning a change in control of the registrant, incorporated
    by reference to Exhibit 10(p) to the 1995 Form 10-K.                                                                                   
|       
|        | 10(cc) |                         |  | Form of Agreement of Indemnification dated
    August 8, 1995, between the registrant and certain officers
    and directors of the registrant, incorporated by reference to
    Exhibit 10(q) to the 1995 Form 10-K.                                                                                                        
|       
|        | 10(dd) |                         |  | Resolution and Form of Agreement of
    Indemnification dated January 24, 2001, incorporated by
    reference to Exhibit 10(ii) to the 2000 Form 10-K.                                                                                                                                                                       
|       
|        | 10(ee) |                         |  | Chief Executive Officer Medical and Dental Plan,
    incorporated by reference to Exhibit 10(jj) to the 2000
    Form 10-K.                                                                                                                                                                                                  
|       
|        | 10(ff) |                         |  | Second Amended and Restated Membership Agreement
    dated January 1, 1995, among Phosphate Chemicals Export
    Association, Inc. and members of such association, including
    Texasgulf Inc., incorporated by reference to Exhibit 10(t)
    to the 1995 Form 10-K.                                                      
|       
|        | 10(gg) |                         |  | International Agency Agreement dated
    January 1, 1995, between Phosphate Chemicals Export
    Association, Inc. and Texasgulf Inc. establishing Texasgulf Inc.
    as exclusive marketing agent for such associations wet
    phosphatic materials, incorporated by reference to
    Exhibit 10(u) to the 1995 Form 10-K.
|       
|        | 10(hh) |                         |  | Royalty Agreement dated October 7, 1993, by
    and between the registrant and Rio Algom Limited,
    incorporated by reference to Exhibit 10(x) to the 1995
    Form 10-K.                                                                                                                                                  





---



##### 



|        |        |                         |  |                                                                                                                                                                                                                                        
|------- | ------ | ----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|       
|        | 10(ii) |                         |  | Form of Note relating to the Companys
    offering of $600,000,000 principal amount of 7 3/4% Notes
    due on May 31, 2011, incorporated by reference to
    Exhibit 4 to the registrants report on Form 8-K
    dated May 17, 2001.
|       
|        | 10(jj) |                         |  | Deferred Share Unit Plan for Non-Employee
    Directors, incorporated by reference to Exhibit 4.1 to the
    registrants Form S-8 (File No. 333-75742)
    filed December 21, 2001.                                                   
|       
|        | 11     |                         |  | Statement re Computation of Per Share Earnings