##### Table of Contents









UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q


|   |  |                                                                                             
|-- |  | --------------------------------------------------------------------------------------------
|þ  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|  
|   |  | For the Quarterly Period Ended September 30, 2005                                           
|  
|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
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)

|                                         |  |           
|---------------------------------------- |  | ----------
|122  1st Avenue South                   |  |           
|Saskatoon, Saskatchewan, Canada          |  | S7K 7G3   
|(Address of principal executive offices) |  | (Zip Code)

306-933-8500


(Registrants telephone number, including area code)




þ o




þ o




o þ














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TABLE OF CONTENTS



|                                                                                             |  |  |  |  |  |  |  | 
|-------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|PART I.FINANCIAL INFORMATION                                                                
|ITEM 1.FINANCIAL STATEMENTS                                                                 
|Condensed Consolidated Statements of Financial Position                                     
|Condensed Consolidated Statements of Operations and Retained Earnings                       
|Condensed Consolidated Statements of Cash Flow                                              
|ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|ITEM 4.CONTROLS AND PROCEDURES                                                              
|PART II.OTHER INFORMATION                                                                   
|ITEM 1.LEGAL PROCEEDINGS                                                                    
|ITEM 2.ISSUER PURCHASE OF EQUITY SECURITIES                                                 
|SIGNATURES                                                                                  
|Statement Re Computation of Per Share Earnings                                              
|Certification of CEO Pursuant to Section 302                                                
|Certification of CFO Pursuant to Section 302                                                
|Certification Pursuant to Section 906                                                       



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##### Table of Contents






PART I.       FINANCIAL
INFORMATION





ITEM 1.       FINANCIAL
STATEMENTS


Potash Corporation of Saskatchewan Inc.







Condensed Consolidated Statements of Financial Position


(in millions of US dollars except share amounts)


(unaudited)


|                                                                |                                                                                                                                                                                  |               |         |              |  |   |         |       | 
|--------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ------- | ------------ |  | - | ------- | ----- | 
|                                                                |                                                                                                                                                                                  | September 30, |         | December 31,
|                                                                |                                                                                                                                                                                  | 2005          |         | 2004        
|                                                               
|Assets                                                          |                                                                                                                                                                                  |               |         |              |  |   |         |      
|Current assets                                                  |                                                                                                                                                                                  |               |         |              |  |   |         |      
|                                                                | Cash and cash equivalents                                                                                                                                                        |               | $       | 328.0        |  |   | $       | 458.9 | 
|                                                                | Accounts receivable                                                                                                                                                              |               |         | 416.6        |  |   |         | 352.6 | 
|                                                                | Inventories (Note 3)                                                                                                                                                             |               |         | 432.3        |  |   |         | 396.8 | 
|                                                                | Prepaid expenses and other current assets                                                                                                                                        |               |         | 49.2         |  |   |         | 35.3  | 
|                                                               
|                                                                |                                                                                                                                                                                  |               | 1,226.1 |              |  |   | 1,243.6 |      
|                                                               
|Property, plant and equipment                                   |                                                                                                                                                                                  |               | 3,173.4 |              |  |   | 3,098.9 |      
|Other assets (Note 4)                                           |                                                                                                                                                                                  |               | 844.7   |              |  |   | 650.2   |      
|Intangible assets                                               |                                                                                                                                                                                  |               | 35.6    |              |  |   | 37.1    |      
|Goodwill                                                        |                                                                                                                                                                                  |               | 97.0    |              |  |   | 97.0    |      
|                                                               
|                                                                |                                                                                                                                                                                  | $             | 5,376.8 |              |  | $ | 5,126.8 |      
|                                                               
|                                                               
|Liabilities                                                    
|Current liabilities                                             |                                                                                                                                                                                  |               |         |              |  |   |         |      
|                                                                | Short-term debt                                                                                                                                                                  |               | $       | 94.7         |  |   | $       | 93.5  | 
|                                                                | Accounts payable and accrued charges                                                                                                                                             |               |         | 840.8        |  |   |         | 599.9 | 
|                                                                | Current portion of long-term debt                                                                                                                                                |               |         | 10.2         |  |   |         | 10.3  | 
|                                                               
|                                                                |                                                                                                                                                                                  |               | 945.7   |              |  |   | 703.7   |      
|                                                               
|Long-term debt                                                  |                                                                                                                                                                                  |               | 1,257.8 |              |  |   | 1,258.6 |      
|Future income tax liability                                     |                                                                                                                                                                                  |               | 534.3   |              |  |   | 499.4   |      
|Accrued post-retirement/post-employment benefits                |                                                                                                                                                                                  |               | 214.1   |              |  |   | 193.4   |      
|Accrued environmental costs and asset retirement obligations    |                                                                                                                                                                                  |               | 84.7    |              |  |   | 81.2    |      
|Other non-current liabilities and deferred credits              |                                                                                                                                                                                  |               | 19.3    |              |  |   | 4.9     |      
|                                                               
|                                                                |                                                                                                                                                                                  |               | 3,055.9 |              |  |   | 2,741.2 |      
|                                                               
|                                                               
|Contingencies and Guarantees(Notes 15 and 16,
    respectively) |                                                                                                                                                                                  |               |         |              |  |   |         |      
|Shareholders Equity                                            |                                                                                                                                                                                  |               |         |              |  |   |         |      
|Share capital (Note 5)                                          |                                                                                                                                                                                  |               | 1,425.7 |              |  |   | 1,408.4 |      
|                                                                | Unlimited authorization of common shares without par value;
    issued and outstanding 107,145,871 and 110,630,503 at
    September 30, 2005 and December 31, 2004, respectively |               |         |              |  |   |         |       | 
|                                                                | Unlimited authorization of first preferred shares; none
    outstanding                                                                                                          |               |         |              |  |   |         |       | 
|Contributed surplus (Note 5)                                    |                                                                                                                                                                                  |               |        |              |  |   | 275.7   |      
|Retained earnings (Note 5)                                      |                                                                                                                                                                                  |               | 895.2   |              |  |   | 701.5   |      
|                                                               
|                                                                |                                                                                                                                                                                  |               | 2,320.9 |              |  |   | 2,385.6 |      
|                                                               
|                                                                |                                                                                                                                                                                  | $             | 5,376.8 |              |  | $ | 5,126.8 |      
|                                                               



2



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##### Table of Contents



Potash Corporation of Saskatchewan Inc.







Condensed Consolidated Statements of Operations and Retained
Earnings


(in millions of US dollars except per-share amounts)


(unaudited)


|                                                    |         |                    |       |                   |  |      |       |      |  |   |         |      |  |   |         |      | 
|--------------------------------------------------- | ------- | ------------------ | ----- | ----------------- |  | ---- | ----- | ---- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                                                    |         | Three Months Ended |       | Nine Months Ended
|                                                    |         | September 30       |       | September 30     
|                                                    |         | 2005               |       | 2004              |  | 2005 |       | 2004
|                                                   
|Sales(Note 10)                                      |         | $                  | 938.0 |                   |  | $    | 815.7 |      |  | $ | 2,916.7 |      |  | $ | 2,377.8 |     
|Less: Freight                                       |         |                    | 59.9  |                   |  |      | 51.2  |      |  |   | 194.5   |      |  |   | 178.2   |     
|Transportation
    and distribution                 |         |                    | 29.8  |                   |  |      | 23.6  |      |  |   | 90.8    |      |  |   | 77.9    |     
|Cost of
    goods sold                              |         |                    | 568.8 |                   |  |      | 551.5 |      |  |   | 1,748.6 |      |  |   | 1,637.6 |     
|                                                   
|Gross Margin                                        |         |                    | 279.5 |                   |  |      | 189.4 |      |  |   | 882.8   |      |  |   | 484.1   |     
|                                                   
|Selling and administrative                          |         |                    | 31.8  |                   |  |      | 32.2  |      |  |   | 116.0   |      |  |   | 83.8    |     
|Provincial mining and other taxes                   |         |                    | 28.8  |                   |  |      | 23.1  |      |  |   | 111.4   |      |  |   | 67.5    |     
|Provision for PCS Yumbes S.C.M. (Note 7)            |         |                    |      |                   |  |      |      |      |  |   |        |      |  |   | 5.9     |     
|Foreign exchange loss                               |         |                    | 24.4  |                   |  |      | 20.1  |      |  |   | 12.4    |      |  |   | 2.0     |     
|Other income (Note 13)                              |         |                    | (20.4 | )                 |  |      | (19.1 | )    |  |   | (54.3   | )    |  |   | (35.2   | )   
|                                                   
|                                                    |         |                    | 64.6  |                   |  |      | 56.3  |      |  |   | 185.5   |      |  |   | 124.0   |     
|                                                   
|Operating Income                                    |         |                    | 214.9 |                   |  |      | 133.1 |      |  |   | 697.3   |      |  |   | 360.1   |     
|Interest Expense                                    |         |                    | 20.4  |                   |  |      | 20.8  |      |  |   | 61.7    |      |  |   | 63.8    |     
|                                                   
|Income Before Income Taxes                          |         |                    | 194.5 |                   |  |      | 112.3 |      |  |   | 635.6   |      |  |   | 296.3   |     
|Income Taxes(Note 8)                                |         |                    | 64.2  |                   |  |      | 37.1  |      |  |   | 209.8   |      |  |   | 97.8    |     
|                                                   
|Net Income                                          |         | $                  | 130.3 |                   |  | $    | 75.2  |      |  |   | 425.8   |      |  |   | 198.5   |     
|                                                    |         |                    |       |                   |  |      |       |      |  |  
|Retained Earnings, Beginning of Period              |         |                    |       |                   |  |      |       |      |  |   | 701.5   |      |  |   | 462.8   |     
|Premium Paid on Repurchase of Common Shares(Note 5) |         |                    |       |                   |  |      |       |      |  |   | (182.9  | )    |  |   |        |     
|Dividends                                           |         |                    |       |                   |  |      |       |      |  |   | (49.2   | )    |  |   | (43.2   | )   
|                                                   
|Retained Earnings, End of Period                    |         |                    |       |                   |  |      |       |      |  | $ | 895.2   |      |  | $ | 618.1   |     
|                                                   
|Net Income Per Share(Note 9)                        |         |                    |       |                   |  |      |       |      |  |   |         |      |  |   |         |     
|                                                    | Basic   |                    | $     | 1.20              |  |      | $     | 0.69 |  |   | $       | 3.88 |  |   | $       | 1.85 | 
|                                                    | Diluted |                    | $     | 1.17              |  |      | $     | 0.68 |  |   | $       | 3.79 |  |   | $       | 1.82 | 
|                                                   
|Dividends Per Share                                 |         | $                  | 0.15  |                   |  | $    | 0.15  |      |  | $ | 0.45    |      |  | $ | 0.40    |     
|                                                   



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Potash Corporation of Saskatchewan Inc.







Condensed Consolidated Statements of Cash Flow


(in millions of US dollars)


(unaudited)


|                                                                                 |                                                           |                    |        |                   |   |      |       |       |   |   |        |       |   |   |       |       |  
|-------------------------------------------------------------------------------- | --------------------------------------------------------- | ------------------ | ------ | ----------------- | - | ---- | ----- | ----- | - | - | ------ | ----- | - | - | ----- | ----- | -
|                                                                                 |                                                           | Three Months Ended |        | Nine Months Ended
|                                                                                 |                                                           | September 30       |        | September 30     
|                                                                                 |                                                           | 2005               |        | 2004              |   | 2005 |       | 2004 
|                                                                                
|Operating Activities                                                             |                                                           |                    |        |                   |   |      |       |       |   |   |        |       |   |   |       |      
|Net income                                                                       |                                                           | $                  | 130.3  |                   |   | $    | 75.2  |       |   | $ | 425.8  |       |   | $ | 198.5 |      
|                                                                                
|Adjustments to reconcile net income to cash provided by
    operating activities |                                                           |                    |        |                   |   |      |       |       |   |   |        |       |   |   |       |      
|                                                                                 | Depreciation and amortization                             |                    |        | 59.0              |   |      |       | 55.6  |   |   |        | 181.0 |   |   |       | 179.2 |  
|                                                                                 | Stock-based compensation                                  |                    |        | 1.7               |   |      |       | 2.8   |   |   |        | 25.7  |   |   |       | 8.4   |  
|                                                                                 | Loss (gain) on disposal of long-term assets               |                    |        | 0.2               |   |      |       | (0.3  | ) |   |        | 5.7   |   |   |       | (0.6  | )
|                                                                                 | Foreign exchange on future income tax                     |                    |        | 14.0              |   |      |       | 13.6  |   |   |        | 10.0  |   |   |       | 5.8   |  
|                                                                                 | Provision for future income tax                           |                    |        | 6.4               |   |      |       | 9.9   |   |   |        | 21.0  |   |   |       | 34.2  |  
|                                                                                 | Share of earnings of equity investees                     |                    |        | (16.8             | ) |      |       | (12.0 | ) |   |        | (43.3 | ) |   |       | (19.7 | )
|                                                                                 | Dividends received from equity investees                  |                    |        | 6.5               |   |      |       |      |   |   |        | 18.6  |   |   |       | 4.6   |  
|                                                                                 | Provision for PCS Yumbes S.C.M.                           |                    |        |                  |   |      |       |      |   |   |        |      |   |   |       | 5.9   |  
|                                                                                 | Other long-term liabilities                               |                    |        | 3.6               |   |      |       | (4.2  | ) |   |        | 22.6  |   |   |       | 1.7   |  
|                                                                                
|                                                                                 | Subtotal of adjustments                                   |                    |        | 74.6              |   |      |       | 65.4  |   |   |        | 241.3 |   |   |       | 219.5 |  
|                                                                                
|                                                                                 | Changes in non-cash operating working capital             |                    |        |                   |   |      |       |       |   |   |        |       |   |   |       |       |  
|                                                                                 | Accounts receivable                                       |                    |        | (42.8             | ) |      |       | (18.7 | ) |   |        | (70.8 | ) |   |       | (9.1  | )
|                                                                                 | Inventories                                               |                    |        | (43.5             | ) |      |       | 13.4  |   |   |        | (33.9 | ) |   |       | 16.5  |  
|                                                                                 | Prepaid expenses and other current assets                 |                    |        | (14.7             | ) |      |       | (18.5 | ) |   |        | (14.2 | ) |   |       | (11.6 | )
|                                                                                 | Accounts payable and accrued charges                      |                    |        | 212.2             |   |      |       | 51.8  |   |   |        | 231.8 |   |   |       | 71.9  |  
|                                                                                
|                                                                                 | Subtotal of changes in non-cash operating working capital |                    |        | 111.2             |   |      |       | 28.0  |   |   |        | 112.9 |   |   |       | 67.7  |  
|                                                                                
|Cash provided by operating activities                                            |                                                           |                    | 316.1  |                   |   |      | 168.6 |       |   |   | 780.0  |       |   |   | 485.7 |      
|                                                                                
|Investing Activities                                                             |                                                           |                    |        |                   |   |      |       |       |   |   |        |       |   |   |       |      
|Additions to property, plant and equipment                                       |                                                           |                    | (120.6 | )                 |   |      | (43.9 | )     |   |   | (251.9 | )     |   |   | (93.3 | )    
|Investment in Arab Potash Company (APC)                                        |                                                           |                    |       |                   |   |      |      |       |   |   | (18.6  | )     |   |   |      |      
|Investment in Israel Chemicals Ltd. (ICL)                                      |                                                           |                    |       |                   |   |      |      |       |   |   | (74.9  | )     |   |   |      |      
|Investment in Sinochem Hong Kong Holdings Limited                                |                                                           |                    | (97.4  | )                 |   |      |      |       |   |   | (97.4  | )     |   |   |      |      
|Proceeds from disposal of long-term assets                                       |                                                           |                    | 0.6    |                   |   |      | 0.5   |       |   |   | 9.0    |       |   |   | 1.2   |      
|Proceeds from sale of shares of PCS Yumbes S.C.M.                                |                                                           |                    |       |                   |   |      |      |       |   |   | 5.2    |       |   |   |      |      
|Other assets and intangible assets                                               |                                                           |                    | 4.7    |                   |   |      | 0.3   |       |   |   | 4.6    |       |   |   | 4.6   |      
|                                                                                
|Cash used in investing activities                                                |                                                           |                    | (212.7 | )                 |   |      | (43.1 | )     |   |   | (424.0 | )     |   |   | (87.5 | )    
|                                                                                
|Cash before financing activities                                                 |                                                           |                    | 103.4  |                   |   |      | 125.5 |       |   |   | 356.0  |       |   |   | 398.2 |      
|                                                                                
|Financing Activities                                                             |                                                           |                    |        |                   |   |      |       |       |   |   |        |       |   |   |       |      
|Repayment of long-term debt obligations                                          |                                                           |                    | (0.3   | )                 |   |      | (0.2  | )     |   |   | (0.9   | )     |   |   | (0.7  | )    
|Proceeds from (repayment of) short-term debt obligations                         |                                                           |                    | 1.4    |                   |   |      | 3.5   |       |   |   | 1.2    |       |   |   | (81.3 | )    
|Dividends                                                                        |                                                           |                    | (16.2  | )                 |   |      | (12.8 | )     |   |   | (49.4  | )     |   |   | (39.8 | )    
|Repurchase of common shares                                                      |                                                           |                    | (213.5 | )                 |   |      |      |       |   |   | (530.9 | )     |   |   |      |      
|Issuance of common shares                                                        |                                                           |                    | 29.9   |                   |   |      | 58.2  |       |   |   | 93.1   |       |   |   | 99.6  |      
|                                                                                
|Cash (used in) provided by financing activities                                  |                                                           |                    | (198.7 | )                 |   |      | 48.7  |       |   |   | (486.9 | )     |   |   | (22.2 | )    
|                                                                                
|(Decrease) Increase in Cash and Cash Equivalents                                 |                                                           |                    | (95.3  | )                 |   |      | 174.2 |       |   |   | (130.9 | )     |   |   | 376.0 |      
|Cash and Cash Equivalents, Beginning of Period                                   |                                                           |                    | 423.3  |                   |   |      | 206.5 |       |   |   | 458.9  |       |   |   | 4.7   |      
|                                                                                
|Cash and Cash Equivalents, End of Period                                         |                                                           | $                  | 328.0  |                   |   | $    | 380.7 |       |   | $ | 328.0  |       |   | $ | 380.7 |      
|                                                                                
|Supplemental cash flow disclosure                                                |                                                           |                    |        |                   |   |      |       |       |   |   |        |       |   |   |       |      
|                                                                                 | Interest paid                                             |                    | $      | 14.1              |   |      | $     | 11.4  |   |   | $      | 54.8  |   |   | $     | 55.0  |  
|                                                                                 | Income taxes paid                                         |                    | $      | 19.0              |   |      | $     | 6.8   |   |   | $      | 126.4 |   |   | $     | 22.1  |  
|                                                                                



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##### Table of Contents



Potash Corporation of Saskatchewan Inc.


Notes to the Condensed Consolidated Financial Statements


For the Three and Nine Months Ended September 30,
2005


(in millions of US dollars except share and per-share
amounts)


(unaudited)




|   |                                
|-- | -------------------------------
|1. | Significant Accounting Policies



| |                      
| | ---------------------
| | Basis of Presentation







| |                            
| | ---------------------------
| | Principles of Consolidation





























| |                                 
| | --------------------------------
| | Recent Accounting Pronouncements



| |                                                                   
| | ------------------------------------------------------------------
| | Comprehensive Income, Equity, Financial Instruments and
    Hedges





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Financial assets will be classified as either held-to-maturity,
    held-for-trading or available-for-sale. Held-to-maturity
    classification will be restricted to fixed maturity instruments
    that the company intends and is able to hold to maturity and
    will be accounted for at amortized cost. Held-for-trading
    instruments will be recorded at fair value with realized and
    unrealized gains and losses reported in net

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | income. The remaining financial assets will be classified as
    available-for-sale. These will be recorded at fair value with
    unrealized gains and losses reported in a new category of the
    Consolidated Statements of Financial Position under
    shareholders equity called other comprehensive income
    (OCI); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Derivatives will be classified as held-for-trading unless
    designated as hedging instruments. All derivatives, including
    embedded derivatives that must be separately accounted for, will
    be recorded at fair value on the Consolidated Statement of
    Financial Position. For derivatives that hedge the changes in
    fair value of an asset or liability, changes in the
    derivatives fair value will be reported in net income and
    be substantially offset by changes in the fair value of the
    hedged asset or liability attributable to the risk being hedged.
    For derivatives that hedge variability in cash flows, the
    effective portion of the changes in the derivatives fair
    value will be initially recognized in OCI and the ineffective
    portion will be recorded in net income. The amounts temporarily
    recorded in OCI will subsequently be reclassified to net income
    in the periods when net income is affected by the variability in
    the cash flows of the hedged item.



2.   Change in Accounting Policy




| |                                            
| | -------------------------------------------
| | Consolidation of Variable Interest Entities



3.   Inventories


|                       |  |               |       |              |  |   |       | 
|---------------------- |  | ------------- | ----- | ------------ |  | - | ----- | 
|                       |  | September 30, |       | December 31,
|                       |  | 2005          |       | 2004        
|                      
|Finished product       |  | $             | 206.7 |              |  | $ | 181.8 | 
|Materials and supplies |  |               | 98.6  |              |  |   | 97.7  | 
|Raw materials          |  |               | 46.0  |              |  |   | 50.3  | 
|Work in process        |  |               | 81.0  |              |  |   | 67.0  | 
|                      
|                       |  | $             | 432.3 |              |  | $ | 396.8 | 
|                      

4.   Other Assets




6



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##### Table of Contents





5.   Share Repurchase






6.   Plant Shutdowns  2003






|                                          |  |             |       |             |  |   |       | 
|----------------------------------------- |  | ----------- | ----- | ----------- |  | - | ----- | 
|                                          |  | Cumulative  |       | Total Costs
|                                          |  | Costs       |       | Expected   
|                                          |  | Incurred to |       | to be      
|                                          |  | Date        |       | Incurred   
|                                         
|Nitrogen Segment                          |  |             |       |             |  |   |       | 
|Employee termination and related benefits |  | $           | 4.8   |             |  | $ | 4.8   | 
|Writedown of parts inventory              |  |             | 12.4  |             |  |   | 12.4  | 
|Asset impairment charges                  |  |             | 101.6 |             |  |   | 101.6 | 
|Other related exit costs                  |  |             |      |             |  |   | 10.3  | 
|                                         
|                                          |  | $           | 118.8 |             |  | $ | 129.1 | 
|                                         

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##### Table of Contents



7.   Provision for PCS Yumbes
S.C.M.  2004




8.   Income Taxes




9.   Net Income Per Share






10. Segment Information




|                                |  |                                       |       |           |  |          |       |            |  |              |       |  |  |   |     |  |  |   |       | 
|------------------------------- |  | ------------------------------------- | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- |  |  | - | --- |  |  | - | ----- | 
|                                |  | Three Months Ended September 30, 2005
|                                |  | Potash                                |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                               
|Sales                           |  | $                                     | 313.4 |           |  | $        | 291.9 |            |  | $            | 332.7 |  |  | $ |    |  |  | $ | 938.0 | 
|Freight                         |  |                                       | 30.6  |           |  |          | 20.4  |            |  |              | 8.9   |  |  |   |    |  |  |   | 59.9  | 
|Transportation and distribution |  |                                       | 8.5   |           |  |          | 10.3  |            |  |              | 11.0  |  |  |   |    |  |  |   | 29.8  | 
|Net sales  third party         |  |                                       | 274.3 |           |  |          | 261.2 |            |  |              | 312.8 |  |  |   |    |  |  |   |       | 
|Cost of goods sold              |  |                                       | 106.7 |           |  |          | 229.0 |            |  |              | 233.1 |  |  |   |    |  |  |   | 568.8 | 
|Gross margin                    |  |                                       | 167.6 |           |  |          | 32.2  |            |  |              | 79.7  |  |  |   |    |  |  |   | 279.5 | 
|Depreciation and amortization   |  |                                       | 14.6  |           |  |          | 23.8  |            |  |              | 18.1  |  |  |   | 2.5 |  |  |   | 59.0  | 
|Inter-segment sales             |  |                                       | 0.5   |           |  |          | 2.5   |            |  |              | 26.2  |  |  |   |    |  |  |   |      | 

8



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|                                |  |                                       |       |           |  |          |       |            |  |              |       |  |  |   |     |  |  |   |       | 
|------------------------------- |  | ------------------------------------- | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- |  |  | - | --- |  |  | - | ----- | 
|                                |  | Three Months Ended September 30, 2004
|                                |  | Potash                                |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                               
|Sales                           |  | $                                     | 251.8 |           |  | $        | 257.7 |            |  | $            | 306.2 |  |  | $ |    |  |  | $ | 815.7 | 
|Freight                         |  |                                       | 23.0  |           |  |          | 19.7  |            |  |              | 8.5   |  |  |   |    |  |  |   | 51.2  | 
|Transportation and distribution |  |                                       | 5.6   |           |  |          | 8.8   |            |  |              | 9.2   |  |  |   |    |  |  |   | 23.6  | 
|Net sales  third party         |  |                                       | 223.2 |           |  |          | 229.2 |            |  |              | 288.5 |  |  |   |    |  |  |   |       | 
|Cost of goods sold              |  |                                       | 102.4 |           |  |          | 228.6 |            |  |              | 220.5 |  |  |   |    |  |  |   | 551.5 | 
|Gross margin                    |  |                                       | 120.8 |           |  |          | 0.6   |            |  |              | 68.0  |  |  |   |    |  |  |   | 189.4 | 
|Depreciation and amortization   |  |                                       | 13.4  |           |  |          | 21.3  |            |  |              | 18.5  |  |  |   | 2.4 |  |  |   | 55.6  | 
|Inter-segment sales             |  |                                       | 1.0   |           |  |          | 3.3   |            |  |              | 20.8  |  |  |   |    |  |  |   |      | 

|                                |  |                                      |         |           |  |          |       |            |  |              |         |  |  |   |     |  |  |   |         | 
|------------------------------- |  | ------------------------------------ | ------- | --------- |  | -------- | ----- | ---------- |  | ------------ | ------- |  |  | - | --- |  |  | - | ------- | 
|                                |  | Nine Months Ended September 30, 2005
|                                |  | Potash                               |         | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                               
|Sales                           |  | $                                    | 1,067.1 |           |  | $        | 847.7 |            |  | $            | 1,001.9 |  |  | $ |    |  |  | $ | 2,916.7 | 
|Freight                         |  |                                      | 105.3   |           |  |          | 60.2  |            |  |              | 29.0    |  |  |   |    |  |  |   | 194.5   | 
|Transportation and distribution |  |                                      | 27.1    |           |  |          | 27.2  |            |  |              | 36.5    |  |  |   |    |  |  |   | 90.8    | 
|Net sales  third party         |  |                                      | 934.7   |           |  |          | 760.3 |            |  |              | 936.4   |  |  |   |    |  |  |   |         | 
|Cost of goods sold              |  |                                      | 367.6   |           |  |          | 689.0 |            |  |              | 692.0   |  |  |   |    |  |  |   | 1,748.6 | 
|Gross margin                    |  |                                      | 567.1   |           |  |          | 71.3  |            |  |              | 244.4   |  |  |   |    |  |  |   | 882.8   | 
|Depreciation and amortization   |  |                                      | 51.0    |           |  |          | 69.9  |            |  |              | 52.7    |  |  |   | 7.4 |  |  |   | 181.0   | 
|Inter-segment sales             |  |                                      | 4.9     |           |  |          | 11.4  |            |  |              | 74.7    |  |  |   |    |  |  |   |        | 

|                                |  |                                      |       |           |  |          |       |            |  |              |       |  |  |   |     |  |  |   |         | 
|------------------------------- |  | ------------------------------------ | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- |  |  | - | --- |  |  | - | ------- | 
|                                |  | Nine Months Ended September 30, 2004
|                                |  | Potash                               |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                               
|Sales                           |  | $                                    | 791.9 |           |  | $        | 712.2 |            |  | $            | 873.7 |  |  | $ |    |  |  | $ | 2,377.8 | 
|Freight                         |  |                                      | 97.7  |           |  |          | 51.5  |            |  |              | 29.0  |  |  |   |    |  |  |   | 178.2   | 
|Transportation and distribution |  |                                      | 26.8  |           |  |          | 21.5  |            |  |              | 29.6  |  |  |   |    |  |  |   | 77.9    | 
|Net sales  third party         |  |                                      | 667.4 |           |  |          | 639.2 |            |  |              | 815.1 |  |  |   |    |  |  |   |         | 
|Cost of goods sold              |  |                                      | 358.5 |           |  |          | 633.8 |            |  |              | 645.3 |  |  |   |    |  |  |   | 1,637.6 | 
|Gross margin                    |  |                                      | 308.9 |           |  |          | 5.4   |            |  |              | 169.8 |  |  |   |    |  |  |   | 484.1   | 
|Depreciation and amortization   |  |                                      | 50.2  |           |  |          | 63.2  |            |  |              | 58.7  |  |  |   | 7.1 |  |  |   | 179.2   | 
|Inter-segment sales             |  |                                      | 4.6   |           |  |          | 9.8   |            |  |              | 64.9  |  |  |   |    |  |  |   |        | 

11. Stock-based Compensation






9



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|                                                                                                                                                         |  |   |                    |   |                    |   |      |   |      |   |       |   |  |   |       |   | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------------------ | - | ------------------ | - | ---- | - | ---- | - | ----- | - |  | - | ----- | - | 
|                                                                                                                                                         |  |   | Three Months       |   | Nine Months       
|                                                                                                                                                         |  |   | Ended September 30 |   | Ended September 30
|                                                                                                                                                         |  |   | 2005               |   | 2004               |   | 2005 |   | 2004
|                                                                                                                                                        
|Net income  as reported                                                                                                                                 |  | $ | 130.3              |   |                    | $ | 75.2 |   |      | $ | 425.8 |   |  | $ | 198.5 |  
|Add: Stock-based employee compensation expense included in
    reported net income, net
    of related tax effects                                       |  |   | 1.1                |   |                    |   | 2.2  |   |      |   | 17.2  |   |  |   | 6.6   |  
|Less: Total stock-based employee compensation expense
    determined under fair
    value based method for all option awards, net of related tax effects |  |   | (1.1               | ) |                    |   | (3.2 | ) |      |   | (17.2 | ) |  |   | (9.6  | )
|                                                                                                                                                        
|Net income  pro
    forma(1)                                                                                                                            |  | $ | 130.3              |   |                    | $ | 74.2 |   |      | $ | 425.8 |   |  | $ | 195.5 |  
|                                                                                                                                                        



|    |                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Compensation expense under the fair value method is recognized
    over the vesting period of the related stock options.
    Accordingly, the pro forma results of applying this method may
    not be indicative of future results.

|                             |             |  |   |      |  |  |   |      |  |  |   |      |  |  |   |      | 
|---------------------------- | ----------- |  | - | ---- |  |  | - | ---- |  |  | - | ---- |  |  | - | ---- | 
|Basic net income per share   |             |  |   |      |  |  |   |      |  |  |   |      |  |  |   |     
|                             | As reported |  | $ | 1.20 |  |  | $ | 0.69 |  |  | $ | 3.88 |  |  | $ | 1.85 | 
|                             | Pro forma   |  | $ | 1.20 |  |  | $ | 0.69 |  |  | $ | 3.88 |  |  | $ | 1.82 | 
|                            
|Diluted net income per share |             |  |   |      |  |  |   |      |  |  |   |      |  |  |   |     
|                             | As reported |  | $ | 1.17 |  |  | $ | 0.68 |  |  | $ | 3.79 |  |  | $ | 1.82 | 
|                             | Pro forma   |  | $ | 1.17 |  |  | $ | 0.67 |  |  | $ | 3.79 |  |  | $ | 1.79 | 



|                         |  |  |  |               |  |      |           |      |  |   |         |  |  |   |         | 
|------------------------ |  |  |  | ------------- |  | ---- | --------- | ---- |  | - | ------- |  |  | - | ------- | 
|                         |  |  |  | Year of Grant
|                         |  |  |  | 2005          |  | 2003 |           | 2002
|                        
|Expected dividend        |  |  |  |               |  | $    | 0.60      |      |  | $ | 0.50    |  |  | $ | 0.50    | 
|Expected volatility      |  |  |  |               |  |      | 28%       |      |  |   | 27%     |  |  |   | 32%     | 
|Risk-free interest rate  |  |  |  |               |  |      | 3.86%     |      |  |   | 4.06%   |  |  |   | 4.13%   | 
|Expected life of options |  |  |  |               |  |      | 6.5 years |      |  |   | 8 years |  |  |   | 8 years | 



12. Post-Retirement/Post-Employment Expenses


|                               |  |                    |      |                    |  |      |      |      |  |   |       |   |  |   |       |  
|------------------------------ |  | ------------------ | ---- | ------------------ |  | ---- | ---- | ---- |  | - | ----- | - |  | - | ----- | -
|                               |  | Three Months       |      | Nine Months       
|                               |  | Ended September 30 |      | Ended September 30
|Defined Benefit Pension Plans  |  | 2005               |      | 2004               |  | 2005 |      | 2004
|                              
|Service cost                   |  | $                  | 3.4  |                    |  | $    | 3.5  |      |  | $ | 10.4  |   |  | $ | 10.5  |  
|Interest cost                  |  |                    | 7.8  |                    |  |      | 7.5  |      |  |   | 23.4  |   |  |   | 22.5  |  
|Expected return on plan assets |  |                    | (9.5 | )                  |  |      | (8.4 | )    |  |   | (27.9 | ) |  |   | (25.2 | )
|Net amortization               |  |                    | 1.9  |                    |  |      | 1.1  |      |  |   | 4.9   |   |  |   | 3.3   |  
|                              
|Net expense                    |  | $                  | 3.6  |                    |  | $    | 3.7  |      |  | $ | 10.8  |   |  | $ | 11.1  |  
|                              

|                            |  |                    |     |                    |  |      |      |      |  |   |      |  |  |   |      | 
|--------------------------- |  | ------------------ | --- | ------------------ |  | ---- | ---- | ---- |  | - | ---- |  |  | - | ---- | 
|                            |  | Three Months       |     | Nine Months       
|                            |  | Ended September 30 |     | Ended September 30
|Other Post-Retirement Plans |  | 2005               |     | 2004               |  | 2005 |      | 2004
|                           
|Service cost                |  | $                  | 1.4 |                    |  | $    | 1.1  |      |  | $ | 4.2  |  |  | $ | 3.9  | 
|Interest cost               |  |                    | 3.3 |                    |  |      | 3.0  |      |  |   | 9.9  |  |  |   | 10.0 | 
|Net amortization            |  |                    | 0.4 |                    |  |      | (0.3 | )    |  |   | 1.2  |  |  |   | 0.5  | 
|                           
|Net expense                 |  | $                  | 5.1 |                    |  | $    | 3.8  |      |  | $ | 15.3 |  |  | $ | 14.4 | 
|                           

10



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|    |             
|--- | ------------
|13. | Other Income

|                                      |  |                    |      |                    |  |      |      |      |  |   |      |  |  |   |      | 
|------------------------------------- |  | ------------------ | ---- | ------------------ |  | ---- | ---- | ---- |  | - | ---- |  |  | - | ---- | 
|                                      |  | Three Months       |      | Nine Months       
|                                      |  | Ended September 30 |      | Ended September 30
|                                      |  | 2005               |      | 2004               |  | 2005 |      | 2004
|                                     
|Share of earnings of equity investees |  | $                  | 16.8 |                    |  | $    | 12.0 |      |  | $ | 43.3 |  |  | $ | 19.7 | 
|Dividend income                       |  |                    | 6.1  |                    |  |      | 5.7  |      |  |   | 9.2  |  |  |   | 7.9  | 
|Other                                 |  |                    | (2.5 | )                  |  |      | 1.4  |      |  |   | 1.8  |  |  |   | 7.6  | 
|                                     
|                                      |  | $                  | 20.4 |                    |  | $    | 19.1 |      |  | $ | 54.3 |  |  | $ | 35.2 | 
|                                     

14. Seasonality




15. Contingencies


Canpotex




Mining Risk




Investment in APC




Legal and Other Matters




11



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##### Table of Contents

















12



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##### Table of Contents





16. Guarantees










13



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##### Table of Contents









|    |                                                                                          
|--- | -----------------------------------------------------------------------------------------
|17. | Reconciliation of Canadian and United States Generally
    Accepted Accounting Principles



(a) Long-term investments:




(b) Property, plant and equipment and goodwill:


(c) Depreciation and amortization:


(d) Asset retirement obligations:


(e) Post-retirement and post-employment benefits:




(f) Foreign currency translation adjustment:


14



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##### Table of Contents





(g) Derivative instruments and hedging activities:


(h) Comprehensive income:


(i) Income taxes related to the above adjustments:


(j) Income tax consequences of stock-based employee
compensation:


15



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##### Table of Contents





|                                                                  |  |          |       |           |  |              |       |               |  |          |       |           |  |   |      |  |  |   |      |  |  |   |      | 
|----------------------------------------------------------------- |  | -------- | ----- | --------- |  | ------------ | ----- | ------------- |  | -------- | ----- | --------- |  | - | ---- |  |  | - | ---- |  |  | - | ---- | 
|                                                                  |  | June 30, |       | March 31, |  | December 31, |       | September 30, |  | June 30, |       | March 31,
|                                                                  |  | 2005     |       | 2005      |  | 2004         |       | 2004          |  | 2004     |       | 2004     
|                                                                 
|Net income as previously reported  US GAAP                       |  | $        | 166.1 |           |  | $            | 132.9 |               |  | $        | 101.7 |           |  | $ | 76.6 |  |  | $ | 74.0 |  |  | $ | 54.1 | 
|Net income as restated  US GAAP                                  |  |          | 164.6 |           |  |              | 122.1 |               |  |          | 91.8  |           |  |   | 73.2 |  |  |   | 72.8 |  |  |   | 52.7 | 
|Diluted net income per share as previously reported 
    US GAAP |  |          | 1.48  |           |  |              | 1.16  |               |  |          | 0.90  |           |  |   | 0.69 |  |  |   | 0.68 |  |  |   | 0.50 | 
|Diluted net income per share as restated  US GAAP                |  |          | 1.46  |           |  |              | 1.07  |               |  |          | 0.81  |           |  |   | 0.66 |  |  |   | 0.67 |  |  |   | 0.49 | 



(k) Cash flow statements:


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


|                                                          |                                                        |                    |             |                    |   |         |             |         |   |   |             |       |   |   |             |      |  
|--------------------------------------------------------- | ------------------------------------------------------ | ------------------ | ----------- | ------------------ | - | ------- | ----------- | ------- | - | - | ----------- | ----- | - | - | ----------- | ---- | -
|                                                          |                                                        | Three Months       |             | Nine Months       
|                                                          |                                                        | Ended September 30 |             | Ended September 30
|                                                          |                                                        | 2005               |             | 2004(1)            |   | 2005(1) |             | 2004(1)
|                                                         
|Net income as reported  Canadian GAAP                    |                                                        | $                  | 130.3       |                    |   | $       | 75.2        |         |   | $ | 425.8       |       |   | $ | 198.5       |     
|Items increasing or decreasing reported net income        |                                                        |                    |             |                    |   |         |             |         |   |   |             |       |   |   |             |     
|                                                          | Cash flow hedge ineffectiveness                        |                    |             | 0.5                |   |         |             |        |   |   |             | 1.5   |   |   |             |     |  
|                                                          | Depreciation and amortization                          |                    |             | 2.1                |   |         |             | 2.1     |   |   |             | 6.3   |   |   |             | 6.3  |  
|                                                          | Accretion of asset retirement obligations              |                    |             |                   |   |         |             |        |   |   |             |      |   |   |             | 3.3  |  
|                                                          | Share of earnings of equity investees                  |                    |             | 3.7                |   |         |             |        |   |   |             | 3.7   |   |   |             |     |  
|                                                          | Deferred income taxes related to the above adjustments |                    |             | (2.0               | ) |         |             | (0.7    | ) |   |             | (3.7  | ) |   |             | (3.4 | )
|                                                          | Income taxes related to stock-based compensation       |                    |             | (4.8               | ) |         |             | (3.4    | ) |   |             | (17.1 | ) |   |             | (6.0 | )
|                                                         
|Net income  US GAAP                                      |                                                        | $                  | 129.8       |                    |   | $       | 73.2        |         |   | $ | 416.5       |       |   | $ | 198.7       |     
|                                                         
|Basic weighted average shares outstanding 
    US GAAP   |                                                        |                    | 108,164,000 |                    |   |         | 108,232,000 |         |   |   | 109,623,000 |       |   |   | 107,325,000 |     
|                                                         
|Diluted weighted average shares outstanding 
    US GAAP |                                                        |                    | 111,102,000 |                    |   |         | 111,174,000 |         |   |   | 112,460,000 |       |   |   | 109,340,000 |     
|                                                         
|Basic net income per share  US GAAP                      |                                                        | $                  | 1.20        |                    |   | $       | 0.68        |         |   | $ | 3.80        |       |   | $ | 1.85        |     
|                                                         
|Diluted net income per share  US GAAP                    |                                                        | $                  | 1.17        |                    |   | $       | 0.66        |         |   | $ | 3.70        |       |   | $ | 1.82        |     
|                                                         



|    |                            
|--- | ---------------------------
|(1) | Restated as per Note 17(j).

16



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##### Table of Contents



|                                                    |                                                                   |               |         |              |   |   |         |        |  
|--------------------------------------------------- | ----------------------------------------------------------------- | ------------- | ------- | ------------ | - | - | ------- | ------ | -
|                                                    |                                                                   | September 30, |         | December 31,
|                                                    |                                                                   | 2005          |         | 2004        
|                                                   
|Total assets as reported  Canadian GAAP            |                                                                   | $             | 5,376.8 |              |   | $ | 5,126.8 |       
|Items increasing (decreasing) reported total assets |                                                                   |               |         |              |   |   |         |       
|                                                    | Inventory                                                         |               |         | 2.3          |   |   |         | (3.0   | )
|                                                    | Other current assets                                              |               |         | 4.1          |   |   |         | 2.6    |  
|                                                    | Available-for-sale securities (unrealized holding gain)           |               |         | 339.3        |   |   |         | 161.7  |  
|                                                    | Fair value of derivative instruments                              |               |         | 251.7        |   |   |         | 66.5   |  
|                                                    | Property, plant and equipment                                     |               |         | (120.2       | ) |   |         | (126.5 | )
|                                                    | Post-retirement and post-employment benefits                      |               |         | 11.7         |   |   |         | 11.7   |  
|                                                    | Intangible asset relating to additional minimum pension liability |               |         | 9.6          |   |   |         | 9.6    |  
|                                                    | Investment in equity investees                                    |               |         | 4.8          |   |   |         |       |  
|                                                    | Goodwill                                                          |               |         | (46.7        | ) |   |         | (46.7  | )
|                                                   
|Total assets  US GAAP                              |                                                                   | $             | 5,833.4 |              |   | $ | 5,202.7 |       
|                                                   

|                                                                |                                                                         |               |         |              |   |   |         |        |  
|--------------------------------------------------------------- | ----------------------------------------------------------------------- | ------------- | ------- | ------------ | - | - | ------- | ------ | -
|                                                                |                                                                         | September 30, |         | December 31,
|                                                                |                                                                         | 2005          |         | 2004        
|                                                               
|Total shareholders equity as reported  Canadian
    GAAP      |                                                                         | $             | 2,320.9 |              |   | $ | 2,385.6 |       
|Items increasing (decreasing) reported shareholders
    equity |                                                                         |               |         |              |   |   |         |       
|                                                                | Accumulated other comprehensive income, net of related income
    taxes |               |         | 344.3        |   |   |         | 96.8   |  
|                                                                | Foreign currency translation adjustment                                 |               |         | 20.9         |   |   |         | 20.9   |  
|                                                                | Provision for asset impairment                                          |               |         | (218.0       | ) |   |         | (218.0 | )
|                                                                | Depreciation and amortization                                           |               |         | 51.1         |   |   |         | 44.8   |  
|                                                                | Cash flow hedge ineffectiveness                                         |               |         | 4.1          |   |   |         | 2.6    |  
|                                                                | Post-retirement and post-employment benefits                            |               |         | 11.7         |   |   |         | 11.7   |  
|                                                                | Share of earnings of equity investees                                   |               |         | 3.7          |   |   |         |       |  
|                                                                | Deferred income taxes relating to the above adjustments                 |               |         | 26.7         |   |   |         | 30.4   |  
|                                                               
|Shareholders equity  US GAAP                                  |                                                                         | $             | 2,565.4 |              |   | $ | 2,374.8 |       
|                                                               

|                               |                                                                              |                   |       |         |   |   |       |       |  
|------------------------------ | ---------------------------------------------------------------------------- | ----------------- | ----- | ------- | - | - | ----- | ----- | -
|                               |                                                                              | Nine Months Ended
|                               |                                                                              | September 30     
|                               |                                                                              | 2005(1)           |       | 2004(1)
|                              
|Net income  US GAAP           |                                                                              | $                 | 416.5 |         |   | $ | 198.7 |      
|                              
|Other comprehensive income     |                                                                              |                   |       |         |   |   |       |      
|                               | Change in unrealized holding gain on available-for-sale
    securities       |                   |       | 177.6   |   |   |       | 51.4  |  
|                               | Change in gains and losses on derivatives designated as cash
    flow hedges |                   |       | 226.7   |   |   |       | 65.5  |  
|                               | Reclassification to income of gains and losses on cash flow
    hedges       |                   |       | (36.1   | ) |   |       | (34.3 | )
|                               | Share of other comprehensive income of equity investees                      |                   |       | 1.1     |   |   |       |      |  
|                               | Deferred income taxes related to other comprehensive income                  |                   |       | (121.8  | ) |   |       | (27.2 | )
|                              
|                               | Other comprehensive income, net of related income taxes                      |                   |       | 247.5   |   |   |       | 55.4  |  
|                              
|Comprehensive income  US GAAP |                                                                              | $                 | 664.0 |         |   | $ | 254.1 |      
|                              



|    |                            
|--- | ---------------------------
|(1) | Restated as per Note 17(j).

17



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##### Table of Contents





|                                                                        |  |               |       |              |  |   |       |  
|----------------------------------------------------------------------- |  | ------------- | ----- | ------------ |  | - | ----- | -
|                                                                        |  | September 30, |       | December 31,
|                                                                        |  | 2005          |       | 2004        
|                                                                       
|Unrealized gains and losses on available-for-sale securities            |  | $             | 225.7 |              |  | $ | 106.7 |  
|Gains and losses on derivatives designated as cash flow hedges          |  |               | 175.1 |              |  |   | 47.4  |  
|Share of accumulated other comprehensive income of equity
    investees |  |               | 0.8   |              |  |   |      |  
|Additional minimum pension liability                                    |  |               | (36.4 | )            |  |   | (36.4 | )
|Foreign currency translation adjustment                                 |  |               | (20.9 | )            |  |   | (20.9 | )
|                                                                       
|Accumulated other comprehensive income  US GAAP                        |  | $             | 344.3 |              |  | $ | 96.8  |  
|                                                                       

Supplemental US GAAP Disclosures


Recent Accounting Pronouncements








18



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##### Table of Contents









Available-for-Sale Security




Stock-based Compensation




19



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##### Table of Contents



|                                                                                                                                                                           |  |                    |       |                    |  |         |      |         |  |   |       |   |  |   |       |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ----- | ------------------ |  | ------- | ---- | ------- |  | - | ----- | - |  | - | ----- | -
|                                                                                                                                                                           |  | Three Months       |       | Nine Months       
|                                                                                                                                                                           |  | Ended September 30 |       | Ended September 30
|                                                                                                                                                                           |  | 2005               |       | 2004(2)            |  | 2005(2) |      | 2004(2)
|                                                                                                                                                                          
|Net income  as reported under US GAAP                                                                                                                                     |  | $                  | 129.8 |                    |  | $       | 73.2 |         |  | $ | 416.5 |   |  | $ | 198.7 |  
|Add: Stock-based employee compensation
    expense      included in
    reported net income, net of
    related      tax effects                                           |  |                    | 1.1   |                    |  |         | 2.2  |         |  |   | 17.2  |   |  |   | 6.6   |  
|Less: Total stock-based employee compensation
    expense      determined under
    fair value based method for
    all      option awards, net of
    related tax effects |  |                    | (1.1  | )                  |  |         | (3.2 | )       |  |   | (17.2 | ) |  |   | (9.6  | )
|                                                                                                                                                                          
|Net income  pro forma under
    US GAAP(1)                                                                                                                                |  | $                  | 129.8 |                    |  | $       | 72.2 |         |  | $ | 416.5 |   |  | $ | 195.7 |  
|                                                                                                                                                                          



|    |                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Compensation expense under the fair value method is recognized
    over the vesting period of the related stock options.
    Accordingly, the pro forma results of applying this method may
    not be indicative of future results.
|   
|(2) | Restated as per Note 17(j).                                                                                                                                                                                                         

|                                           |             |  |   |      |  |  |   |      |  |  |   |      |  |  |   |      | 
|------------------------------------------ | ----------- |  | - | ---- |  |  | - | ---- |  |  | - | ---- |  |  | - | ---- | 
|Basic net income per share under US GAAP   |             |  |   |      |  |  |   |      |  |  |   |      |  |  |   |     
|                                           | As reported |  | $ | 1.20 |  |  | $ | 0.68 |  |  | $ | 3.80 |  |  | $ | 1.85 | 
|                                           | Pro forma   |  | $ | 1.20 |  |  | $ | 0.67 |  |  | $ | 3.80 |  |  | $ | 1.82 | 
|Diluted net income per share under US GAAP |             |  |   |      |  |  |   |      |  |  |   |      |  |  |   |     
|                                           | As reported |  | $ | 1.17 |  |  | $ | 0.66 |  |  | $ | 3.70 |  |  | $ | 1.82 | 
|                                           | Pro forma   |  | $ | 1.17 |  |  | $ | 0.65 |  |  | $ | 3.70 |  |  | $ | 1.79 | 

Derivative Instruments and Hedging Activities


Cash Flow Hedges




Fair Value Hedges




18. Comparative Figures






20



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##### Table of Contents








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



POTASHCORP AND OUR BUSINESS ENVIRONMENT








POTASHCORP VISION






POTASHCORP STRATEGY






21



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##### Table of Contents



KEY PERFORMANCE DRIVERS  PERFORMANCE COMPARED TO
GOALS






|  |                                                                                                                                    
|- | -----------------------------------------------------------------------------------------------------------------------------------
| | management will focus on the most important things, which will
    be reinforced by having the relevant results readily accessible;
| | employees will understand and be able to effectively monitor
    their contribution to the achievement of corporate goals; and     
| | we will be even more effective in meeting our targets.                                                                             



|                                                                                                          |  |                                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 
|--------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|                                                                                                         
|                                                                                                          |  | Representative                                                                                                             |  | Performance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | 
|Goal                                                                                                      |  | 2005 Annual Target                                                                                                         |  | to September 30, 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 
|                                                                                                         
|To continue to outperform our sector and other basic materials
    companies in total shareholder return. |  | Exceed total shareholder return performance for our sector and
    companies on the DJBMI for 2005 and three-year average. |  | PotashCorps total shareholder return in the third quarter
    of 2005 was -2 percent, below the DJBMI return of
    4 percent as well as our sector average return of 18
    percent for the same quarter. Our 13-percent return for the nine
    months ended September 30, 2005 exceeded the DJBMI of
    1 percent, though not our sector average of
    46 percent. Our three-year average return of
    205 percent significantly exceeds the DJBMI three-year
    average return of 56 percent, but is below our sector
    average of 315 percent. |  | 
|                                                                                                         
|To remain the leader and preferred supplier of potash, phosphate
    and nitrogen products worldwide.     |  | Increase potash sales volumes by 5 percent at
    25 percent higher realized prices.                                       |  | Potash sales volumes decreased 6 percent, while realized
    prices were 36 percent higher in the third quarter of 2005
    compared to third-quarter 2004. Year over year potash sales
    volumes increased 1 percent at 45 percent higher
    realized prices. Compared to the 2004 annual average, realized
    prices increased 38 percent during the nine months ended
    September 30, 2005.                                                                                                                                                       |  | 
|                                                                                                         
|To be the low-cost supplier in our industry.                                                              |  | Achieve rock costs at Aurora and White Springs 5 percent
    below 2004.                                                   |  | Rock costs at Aurora decreased 3 percent while White
    Springs increased 1 percent during the third quarter of
    2005 compared to the corresponding period in 2004. On a
    year-over-year basis, rock costs decreased 2 percent at
    Aurora and increased 2 percent at White Springs. Compared
    to the 2004 annual average, Aurora and White Springs rock costs
    have decreased 2 and 1 percent, respectively.                                                                                                                               |  | 
|                                                                                                         
|To move closer to our goal of no harm to people, no accidents,
    no damage to the environment.          |  | Reduce recordable and lost-time injury rates by 10 percent.                                                                |  | Cumulative recordable and lost-time injury rates at the end of
    each of first three quarters of 2005 were as follows:
     March 31, 2005: 2.55 and 0.40, respectively
     June 30, 2005: 2.20 and 0.32, respectively
     September 30, 2005: 2.33 and 0.27,
    respectively
    as compared to the targets of 1.72 and 0.20, respectively.                                                                                                                                                                                                       |  | 
|                                                                                                         

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##### Table of Contents



FINANCIAL OVERVIEW






Earnings Guidance




Overview of Actual Results


Operations


|                                              |  |                                 |       |                                |  |        |       |        |  |      |       |      |  |        |    |        |  |   |         |  |  |   |         |  |  |   |       |  |  |  |     | 
|--------------------------------------------- |  | ------------------------------- | ----- | ------------------------------ |  | ------ | ----- | ------ |  | ---- | ----- | ---- |  | ------ | -- | ------ |  | - | ------- |  |  | - | ------- |  |  | - | ----- |  |  |  | --- | 
|                                              |  | Three Months Ended September 30 |       | Nine Months Ended September 30
|                                             
|                                              |  | Dollar                          |       | %                              |  |        |       | Dollar |  | %   
|(Dollars millions  except per-share amounts) |  | 2005                            |       | 2004                           |  | Change |       | Change |  | 2005 |       | 2004 |  | Change |    | Change
|                                             
|Sales                                         |  | $                               | 938.0 |                                |  | $      | 815.7 |        |  | $    | 122.3 |      |  |        | 15 |        |  | $ | 2,916.7 |  |  | $ | 2,377.8 |  |  | $ | 538.9 |  |  |  | 23  | 
|Freight                                       |  |                                 | 59.9  |                                |  |        | 51.2  |        |  |      | 8.7   |      |  |        | 17 |        |  |   | 194.5   |  |  |   | 178.2   |  |  |   | 16.3  |  |  |  | 9   | 
|Transportation and distribution               |  |                                 | 29.8  |                                |  |        | 23.6  |        |  |      | 6.2   |      |  |        | 26 |        |  |   | 90.8    |  |  |   | 77.9    |  |  |   | 12.9  |  |  |  | 17  | 
|Cost of goods sold                            |  |                                 | 568.8 |                                |  |        | 551.5 |        |  |      | 17.3  |      |  |        | 3  |        |  |   | 1,748.6 |  |  |   | 1,637.6 |  |  |   | 111.0 |  |  |  | 7   | 
|                                             
|Gross margin                                  |  | $                               | 279.5 |                                |  | $      | 189.4 |        |  | $    | 90.1  |      |  |        | 48 |        |  | $ | 882.8   |  |  | $ | 484.1   |  |  | $ | 398.7 |  |  |  | 82  | 
|                                             
|Operating income                              |  | $                               | 214.9 |                                |  | $      | 133.1 |        |  | $    | 81.8  |      |  |        | 61 |        |  | $ | 697.3   |  |  | $ | 360.1   |  |  | $ | 337.2 |  |  |  | 94  | 
|                                             
|Net income                                    |  | $                               | 130.3 |                                |  | $      | 75.2  |        |  | $    | 55.1  |      |  |        | 73 |        |  | $ | 425.8   |  |  | $ | 198.5   |  |  | $ | 227.3 |  |  |  | 115 | 
|                                             
|Net income per share  basic                  |  | $                               | 1.20  |                                |  | $      | 0.69  |        |  | $    | 0.51  |      |  |        | 74 |        |  | $ | 3.88    |  |  | $ | 1.85    |  |  | $ | 2.03  |  |  |  | 110 | 
|                                             
|Net income per share  diluted                |  | $                               | 1.17  |                                |  | $      | 0.68  |        |  | $    | 0.49  |      |  |        | 72 |        |  | $ | 3.79    |  |  | $ | 1.82    |  |  | $ | 1.97  |  |  |  | 108 | 
|                                             





23



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##### Table of Contents









Balance Sheet










24



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Business Segment Review




Potash


|                                |                        |                                 |       |                    |  |                      |       |       |  |      |    |          |   |      |       |       |  |          |       |       |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |    | 
|------------------------------- | ---------------------- | ------------------------------- | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | -- | -------- | - | ---- | ----- | ----- |  | -------- | ----- | ----- |  |  | -- | --- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | -- | -- | 
|                                |                        | Three Months Ended September 30
|                               
|                                |                        | Dollars (millions)              |       | Tonnes (thousands) |  | Average per Tonne(1)
|                               
|                                |                        | 2005                            |       | 2004               |  | % Change             |       | 2005  |  | 2004 |    | % Change |   | 2005 |       | 2004  |  | % Change
|                               
|Sales                           |                        | $                               | 313.4 |                    |  | $                    | 251.8 |       |  |      | 24 |          |   |      |       |       |  |          |       |       |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |   
|Freight                         |                        |                                 | 30.6  |                    |  |                      | 23.0  |       |  |      | 33 |          |   |      |       |       |  |          |       |       |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |   
|Transportation and distribution |                        |                                 | 8.5   |                    |  |                      | 5.6   |       |  |      | 52 |          |   |      |       |       |  |          |       |       |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |   
|                               
|                                |                        | $                               | 274.3 |                    |  | $                    | 223.2 |       |  |      | 23 |          |   |      |       |       |  |          |       |       |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |   
|                               
|Net Sales                       |                        |                                 |       |                    |  |                      |       |       |  |      |    |          |   |      |       |       |  |          |       |       |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |   
|                                | North American         |                                 | $     | 120.6              |  |                      | $     | 62.8  |  |      |    | 92       |   |      |       | 714   |  |          |       | 557   |  |  |    | 28  |   |   | $      | 169.08 |  |   | $      | 112.83 |  |  |    | 50 | 
|                                | Offshore               |                                 |       | 151.9              |  |                      |       | 150.1 |  |      |    | 1        |   |      |       | 1,075 |  |          |       | 1,346 |  |  |    | (20 | ) |   | $      | 141.28 |  |   | $      | 111.55 |  |  |    | 27 | 
|                               
|                                |                        |                                 | 272.5 |                    |  |                      | 212.9 |       |  |      | 28 |          |   |      | 1,789 |       |  |          | 1,903 |       |  |  | (6 | )   |   | $ | 152.34 |        |  | $ | 111.92 |        |  |  | 36 |   
|                                | Miscellaneous products |                                 |       | 1.8                |  |                      |       | 10.3  |  |      |    | (83      | ) |      |       |      |  |          |       |      |  |  |    |    |   |   |        |       |  |   |        |       |  |  |    |   | 
|                               
|                                |                        |                                 | 274.3 |                    |  |                      | 223.2 |       |  |      | 23 |          |   |      | 1,789 |       |  |          | 1,903 |       |  |  | (6 | )   |   | $ | 153.33 |        |  | $ | 117.29 |        |  |  | 31 |   
|Cost of goods sold              |                        |                                 | 106.7 |                    |  |                      | 102.4 |       |  |      | 4  |          |   |      |       |       |  |          |       |       |  |  |    |     |   | $ | 59.64  |        |  | $ | 53.81  |        |  |  | 11 |   
|                               
|Gross margin                    |                        | $                               | 167.6 |                    |  | $                    | 120.8 |       |  |      | 39 |          |   |      |       |       |  |          |       |       |  |  |    |     |   | $ | 93.69  |        |  | $ | 63.48  |        |  |  | 48 |   
|                               

|                                |                        |                                |         |                    |  |                      |       |       |  |      |    |          |   |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |    |    | 
|------------------------------- | ---------------------- | ------------------------------ | ------- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | -- | -------- | - | ---- | ----- | ----- |  | -------- | ----- | ----- |  |  | - | -- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | -- | -- | 
|                                |                        | Nine Months Ended September 30
|                               
|                                |                        | Dollars (millions)             |         | Tonnes (thousands) |  | Average per Tonne(1)
|                               
|                                |                        | 2005                           |         | 2004               |  | % Change             |       | 2005  |  | 2004 |    | % Change |   | 2005 |       | 2004  |  | % Change
|                               
|Sales                           |                        | $                              | 1,067.1 |                    |  | $                    | 791.9 |       |  |      | 35 |          |   |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |    |   
|Freight                         |                        |                                | 105.3   |                    |  |                      | 97.7  |       |  |      | 8  |          |   |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |    |   
|Transportation and distribution |                        |                                | 27.1    |                    |  |                      | 26.8  |       |  |      | 1  |          |   |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |    |   
|                               
|                                |                        | $                              | 934.7   |                    |  | $                    | 667.4 |       |  |      | 40 |          |   |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |    |   
|                               
|Net Sales                       |                        |                                |         |                    |  |                      |       |       |  |      |    |          |   |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |    |   
|                                | North American         |                                | $       | 405.2              |  |                      | $     | 254.4 |  |      |    | 59       |   |      |       | 2,608 |  |          |       | 2,458 |  |  |   | 6  |   |   | $      | 155.36 |  |   | $      | 103.51 |  |  |    | 50 | 
|                                | Offshore               |                                |         | 520.7              |  |                      |       | 379.6 |  |      |    | 37       |   |      |       | 3,904 |  |          |       | 3,986 |  |  |   | (2 | ) |   | $      | 133.39 |  |   | $      | 95.25  |  |  |    | 40 | 
|                               
|                                |                        |                                | 925.9   |                    |  |                      | 634.0 |       |  |      | 46 |          |   |      | 6,512 |       |  |          | 6,444 |       |  |  | 1 |    |   | $ | 142.19 |        |  | $ | 98.40  |        |  |  | 45 |   
|                                | Miscellaneous products |                                |         | 8.8                |  |                      |       | 33.4  |  |      |    | (74      | ) |      |       |      |  |          |       |      |  |  |   |   |   |   |        |       |  |   |        |       |  |  |    |   | 
|                               
|                                |                        |                                | 934.7   |                    |  |                      | 667.4 |       |  |      | 40 |          |   |      | 6,512 |       |  |          | 6,444 |       |  |  | 1 |    |   | $ | 143.54 |        |  | $ | 103.57 |        |  |  | 39 |   
|Cost of goods sold              |                        |                                | 367.6   |                    |  |                      | 358.5 |       |  |      | 3  |          |   |      |       |       |  |          |       |       |  |  |   |    |   | $ | 56.45  |        |  | $ | 55.63  |        |  |  | 1  |   
|                               
|Gross margin                    |                        | $                              | 567.1   |                    |  | $                    | 308.9 |       |  |      | 84 |          |   |      |       |       |  |          |       |       |  |  |   |    |   | $ | 87.09  |        |  | $ | 47.94  |        |  |  | 82 |   
|                               



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

25



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##### Table of Contents



Highlights




| |   |                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Tight global potash supply resulted in higher realized prices
    for PotashCorp compared to the corresponding periods in the
    prior year for both the third quarter and first nine months of
    2005, contributing the majority of the change in gross margin.
    According to IFA statistics, overall world demand for potash was
    up 3.6 percent for the first six months of 2005.
|
| |  | Gross margin as a percentage of net sales increased to
    61 percent, a 13-percent improvement quarter over quarter
    and consistent with our 2005 second-quarter results.                                                                                                                                                                                                                
|
| |  | We produced 1.7 million tonnes in the third quarter of 2005
    and ended the period with total inventories of approximately
    440,000 tonnes, down 100,000 tonnes from levels at the end of
    the second quarter of this year. North American potash
    inventories ended the quarter at 22 percent below their
    five-year average.                                                 

Sales and Cost of Goods Sold






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Realized price increases in the North American market
    contributed $38.3 million to the increase while higher
    prices in the offshore market added an additional
    $31.2 million. North American realized prices rose
    50 percent, or $56 per tonne, as all announced price
    increases are now being realized. Offshore prices climbed $30
    per tonne largely due to price increases in India and
    40 percent lower ocean freight rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Prices in the North American market were $28 per tonne, or
    20 percent, higher than offshore prices. The gap between
    the two markets is due to offshore customers purchasing under
    long-term contracts that lag behind North American spot-market
    increases. The difference also reflects product mix, as North
    American customers prefer granular products that command a
    premium over standard products, which are more typically
    consumed offshore.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | North American potash sales volumes rose 28 percent, but
    were mostly offset by a 21-percent decline in our offshore
    potash sales volumes supplied to Canpotex Limited
    (Canpotex), the offshore marketing agent for
    Saskatchewan potash producers. In North America, Saskatchewan
    competitors were product-constrained, enabling PotashCorp to
    increase its market share in North America by 25 percent.
    Shipments by Canpotex declined as adverse weather conditions in
    Southeast Asia, including both drought and flooding, hurt
    consumption. The strengthening of the Brazilian real relative to
    the US dollar accompanied by lower soybean prices reduced
    margins for Brazilian farmers and limited their credit
    availability, leading to fewer acres being planted and in turn a
    decrease in imports. In addition, China made significant
    purchases earlier in the year which led to lower third-quarter
    2005 sales volumes there. These decreases were partially offset
    by higher shipments to India and a rise in shipments to other
    Latin American countries resulting from strong demand.
|
| |  | Higher cost of goods sold negatively impacted the change in
    gross margin as natural gas costs climbed. This rise in natural
    gas raised the cash cost of potash production by $0.70 per
    tonne. Further, a stronger Canadian dollar negatively impacted
    cost of goods sold by more than $4.00 per tonne.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Higher realized prices for offshore sales contributed
    $161.4 million, $140.3 million of which represented
    higher realized prices on sales to Canpotex while a further
    $21.1 million was realized on offshore sales from the
    companys New Brunswick operation. Higher North American
    realized prices contributed $130.4 million to the increase,
    as price increases announced through the year were realized.

26



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##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | As Saskatchewan competitors were product-constrained throughout
    the year, PotashCorp increased its market share in North America
    by 14 percent and as a result, higher North American sales
    volumes added to gross margin. These increases were partially
    offset by a decrease in offshore sales volumes which negatively
    impacted gross margin, largely due to a decline in sales volumes
    to Brazil. While Canpotex sales to India and China rose due to
    demand growth, these were partially offset by a decline in sales
    volumes to Indonesia, Vietnam and Brazil.
|
| |  | The company produced 6.5 million tonnes as the expansion at
    Rocanville and additional shifts at Lanigan and Allan increased
    production from 5.9 million tonnes in the first nine months
    of 2004, resulting in higher operating efficiencies. Costs on a
    per-tonne basis were slightly higher however as a result of
    higher energy costs and a stronger Canadian dollar. The Canadian
    dollar, which strengthened in the first nine months of 2005
    compared to the same period last year, negatively impacted cost
    of goods sold by over $3.25 per tonne.             

Phosphate


|                                |                      |                                 |       |                    |  |                      |       |      |  |      |     |          |  |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |     |    | 
|------------------------------- | -------------------- | ------------------------------- | ----- | ------------------ |  | -------------------- | ----- | ---- |  | ---- | --- | -------- |  | ---- | ----- | ---- |  | -------- | ----- | --- |  |  | -- | --- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | --- | -- | 
|                                |                      | Three Months Ended September 30
|                               
|                                |                      | Dollars (millions)              |       | Tonnes (thousands) |  | Average per Tonne(1)
|                               
|                                |                      | 2005                            |       | 2004               |  | % Change             |       | 2005 |  | 2004 |     | % Change |  | 2005 |       | 2004 |  | % Change
|                               
|Sales                           |                      | $                               | 291.9 |                    |  | $                    | 257.7 |      |  |      | 13  |          |  |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |     |   
|Freight                         |                      |                                 | 20.4  |                    |  |                      | 19.7  |      |  |      | 4   |          |  |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |     |   
|Transportation and distribution |                      |                                 | 10.3  |                    |  |                      | 8.8   |      |  |      | 17  |          |  |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |     |   
|                               
|                                |                      | $                               | 261.2 |                    |  | $                    | 229.2 |      |  |      | 14  |          |  |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |     |   
|                               
|Net Sales                       |                      |                                 |       |                    |  |                      |       |      |  |      |     |          |  |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |     |   
|                                | Fertilizer  liquids |                                 | $     | 58.0               |  |                      | $     | 38.9 |  |      |     | 49       |  |      |       | 266  |  |          |       | 194 |  |  |    | 37  |   |   | $      | 217.93 |  |   | $      | 200.73 |  |  |     | 9  | 
|                                | Fertilizer  solids  |                                 |       | 86.3               |  |                      |       | 85.7 |  |      |     | 1        |  |      |       | 369  |  |          |       | 439 |  |  |    | (16 | ) |   | $      | 233.77 |  |   | $      | 194.97 |  |  |     | 20 | 
|                                | Feed                 |                                 |       | 52.9               |  |                      |       | 49.5 |  |      |     | 7        |  |      |       | 198  |  |          |       | 232 |  |  |    | (15 | ) |   | $      | 266.82 |  |   | $      | 213.52 |  |  |     | 25 | 
|                                | Industrial           |                                 |       | 60.4               |  |                      |       | 52.5 |  |      |     | 15       |  |      |       | 174  |  |          |       | 156 |  |  |    | 12  |   |   | $      | 347.51 |  |   | $      | 337.11 |  |  |     | 3  | 
|                               
|                                |                      |                                 | 257.6 |                    |  |                      | 226.6 |      |  |      | 14  |          |  |      | 1,007 |      |  |          | 1,021 |     |  |  | (1 | )   |   | $ | 255.81 |        |  | $ | 221.94 |        |  |  | 15  |   
|                                | Miscellaneous        |                                 |       | 3.6                |  |                      |       | 2.6  |  |      |     | 38       |  |      |       |     |  |          |       |    |  |  |    |    |   |   |        |       |  |   |        |       |  |  |     |   | 
|                               
|                                |                      | $                               | 261.2 |                    |  | $                    | 229.2 |      |  |      | 14  |          |  |      | 1,007 |      |  |          | 1,021 |     |  |  | (1 | )   |   | $ | 259.35 |        |  | $ | 224.54 |        |  |  | 16  |   
|Cost of goods sold              |                      |                                 | 229.0 |                    |  |                      | 228.6 |      |  |      |    |          |  |      |       |      |  |          |       |     |  |  |    |     |   | $ | 227.37 |        |  | $ | 223.95 |        |  |  | 2   |   
|                               
|Gross margin                    |                      | $                               | 32.2  |                    |  | $                    | 0.6   |      |  |      | n/m |          |  |      |       |      |  |          |       |     |  |  |    |     |   | $ | 31.98  |        |  | $ | 0.59   |        |  |  | n/m |   
|                               

|                                |                      |                                |       |                    |  |                      |       |       |  |      |     |          |  |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |     |    | 
|------------------------------- | -------------------- | ------------------------------ | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | --- | -------- |  | ---- | ----- | ----- |  | -------- | ----- | ----- |  |  | - | -- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | --- | -- | 
|                                |                      | Nine Months Ended September 30
|                               
|                                |                      | Dollars (millions)             |       | Tonnes (thousands) |  | Average per Tonne(1)
|                               
|                                |                      | 2005                           |       | 2004               |  | % Change             |       | 2005  |  | 2004 |     | % Change |  | 2005 |       | 2004  |  | % Change
|                               
|Sales                           |                      | $                              | 847.7 |                    |  | $                    | 712.2 |       |  |      | 19  |          |  |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |     |   
|Freight                         |                      |                                | 60.2  |                    |  |                      | 51.5  |       |  |      | 17  |          |  |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |     |   
|Transportation and distribution |                      |                                | 27.2  |                    |  |                      | 21.5  |       |  |      | 27  |          |  |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |     |   
|                               
|                                |                      | $                              | 760.3 |                    |  | $                    | 639.2 |       |  |      | 19  |          |  |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |     |   
|                               
|Net Sales                       |                      |                                |       |                    |  |                      |       |       |  |      |     |          |  |      |       |       |  |          |       |       |  |  |   |    |   |   |        |        |  |   |        |        |  |  |     |   
|                                | Fertilizer  liquids |                                | $     | 151.0              |  |                      | $     | 100.4 |  |      |     | 50       |  |      |       | 687   |  |          |       | 473   |  |  |   | 45 |   |   | $      | 219.73 |  |   | $      | 212.04 |  |  |     | 4  | 
|                                | Fertilizer  solids  |                                |       | 260.3              |  |                      |       | 243.1 |  |      |     | 7        |  |      |       | 1,163 |  |          |       | 1,221 |  |  |   | (5 | ) |   | $      | 223.74 |  |   | $      | 199.04 |  |  |     | 12 | 
|                                | Feed                 |                                |       | 163.6              |  |                      |       | 137.6 |  |      |     | 19       |  |      |       | 651   |  |          |       | 645   |  |  |   | 1  |   |   | $      | 251.36 |  |   | $      | 213.25 |  |  |     | 18 | 
|                                | Industrial           |                                |       | 175.1              |  |                      |       | 150.6 |  |      |     | 16       |  |      |       | 505   |  |          |       | 455   |  |  |   | 11 |   |   | $      | 346.91 |  |   | $      | 331.34 |  |  |     | 5  | 
|                               
|                                |                      |                                | 750.0 |                    |  |                      | 631.7 |       |  |      | 19  |          |  |      | 3,006 |       |  |          | 2,794 |       |  |  | 8 |    |   | $ | 249.50 |        |  | $ | 226.09 |        |  |  | 10  |   
|                                | Miscellaneous        |                                |       | 10.3               |  |                      |       | 7.5   |  |      |     | 37       |  |      |       |      |  |          |       |      |  |  |   |   |   |   |        |       |  |   |        |       |  |  |     |   | 
|                               
|                                |                      | $                              | 760.3 |                    |  | $                    | 639.2 |       |  |      | 19  |          |  |      | 3,006 |       |  |          | 2,794 |       |  |  | 8 |    |   | $ | 252.93 |        |  | $ | 228.75 |        |  |  | 11  |   
|Cost of goods sold              |                      |                                | 689.0 |                    |  |                      | 633.8 |       |  |      | 9   |          |  |      |       |       |  |          |       |       |  |  |   |    |   | $ | 229.21 |        |  | $ | 226.82 |        |  |  | 1   |   
|                               
|Gross margin                    |                      | $                              | 71.3  |                    |  | $                    | 5.4   |       |  |      | n/m |          |  |      |       |       |  |          |       |       |  |  |   |    |   | $ | 23.72  |        |  | $ | 1.93   |        |  |  | n/m |   
|                               



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



27



---



##### Table of Contents



Highlights




| |   |                                                                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The hurricanes which struck the US Gulf region disrupted
    production of phosphate products, reinforcing an already tight
    supply situation in the US market place. This contributed
    to price increases in phosphate fertilizers. Increasing prices
    for feed reflected previously posted price announcements.
|
| |  | Higher sulfur and ammonia raw material input costs pushed up
    phosphate fertilizer prices, protecting product margins. The
    industrys sulfur and ammonia costs were impacted by the
    hurricanes as availability of each was limited.                                                                            
|
| |  | Higher-valued industrial phosphate represented almost half of
    phosphate gross margin at $15.2 million for the third
    quarter of 2005 and 62 percent for the first nine months of
    the year.                                                                                                                     

Sales and Cost of Goods Sold






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Tight supply led to significant price increases in most product
    categories, favorably impacting net sales by $36.4 million.
    The realized price of solid fertilizers jumped 20 percent
    ($39 per tonne) as a result of recent industry production
    curtailments tightening supply, and contributed
    $13.5 million to the net sales increase. In feed, the
    company benefited from tighter North American supplies and
    higher North American prices, resulting in a net sales increase
    of $10.8 million. Phosphate fertilizers have benefited from
    strong demand resulting in liquid fertilizer realized prices
    adding $9.2 million to gross margin. Price increases in the
    Indian market were a major contributor to overall favorable
    offshore price realizations, but higher prices in the North
    American market were also achieved.                                                    
|
| |  | Sales volumes were relatively flat, though there was a marked
    change in product mix. Liquid fertilizer sales volumes were
    37 percent higher as India increased purchases. These were
    more than offset by declines in solid fertilizer and feed sales
    volumes. Solid fertilizer volumes dropped 16 percent
    largely because of slower sales to Brazil. In feed, volumes were
    down 15 percent due to a decrease in demand and an increase
    in imports.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Cost of goods sold per tonne increased as higher raw material
    input costs more than offset the positive effect of operating
    rate efficiencies and change in product mix. The company
    benefited from operating rate efficiencies as
    P2O5 production levels increased 16
    percent. Cost of feed sales decreased as savings were gained
    from a product mix shift from dical/monocal to Black SPA, for
    which the cost is lower, and from production rationalization
    decisions and efficiencies. Cost of solid fertilizer sales
    increased, primarily due to the 4 percent higher per tonne
    average ammonia cost unfavorably impacting gross margin by
    $1.1 million. An increase in sulfur costs, which
    unfavorably impacted cost of goods sold by $1.6 million,
    and other reductions in period costs realized in third-quarter
    2004, contributed to the increase in cost of goods sold.





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Price improvements in all categories added $74.8 million,
    the largest growth being attributable to solid fertilizer
    volumes which benefited from tight supply causing realized
    prices to increase, and feed volumes where the company has
    profited from a growing offshore market and tightening supply
    due to industry curtailments that occurred during 2004
    (contributing $25.0 million and $24.9 million to the
    increase, respectively). Realized prices 4 percent higher
    at volumes 45 percent higher for liquid fertilizer products
    equated to an additional $13.1 million and
    $37.7 million, respectively, in net sales while industrial
    phosphate sales volumes grew 11 percent, adding
    $13.6 million to net sales as a result of strong market
    demand.
|
| |  | Cost of goods sold rose $55.2 million, largely attributable
    to the 8-percent increase in sales volume. A 10-percent increase
    in P2O5 production levels allowed the
    company to benefit from operating rate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

28



---



##### Table of Contents



| |  |                                                                                                                                                                                                               
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | efficiencies; however, year over year changes in asset
    retirement obligations negatively impacted gross margin, as did
    7 percent higher ammonia prices which reduced gross margin
    by $5.1 million.

Nitrogen


|                                |                                                   |                                 |       |                    |  |                      |       |       |  |      |    |          |   |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |    | 
|------------------------------- | ------------------------------------------------- | ------------------------------- | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | -- | -------- | - | ---- | ----- | ---- |  | -------- | ----- | --- |  |  | -- | --- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | -- | -- | 
|                                |                                                   | Three Months Ended September 30
|                               
|                                |                                                   | Dollars (millions)              |       | Tonnes (thousands) |  | Average per Tonne(1)
|                               
|                                |                                                   | 2005                            |       | 2004               |  | % Change             |       | 2005  |  | 2004 |    | % Change |   | 2005 |       | 2004 |  | % Change
|                               
|Sales                           |                                                   | $                               | 332.7 |                    |  | $                    | 306.2 |       |  |      | 9  |          |   |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |   
|Freight                         |                                                   |                                 | 8.9   |                    |  |                      | 8.5   |       |  |      | 5  |          |   |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |   
|Transportation and distribution |                                                   |                                 | 11.0  |                    |  |                      | 9.2   |       |  |      | 20 |          |   |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |   
|                               
|                                |                                                   | $                               | 312.8 |                    |  | $                    | 288.5 |       |  |      | 8  |          |   |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |   
|                               
|Net Sales                       |                                                   |                                 |       |                    |  |                      |       |       |  |      |    |          |   |      |       |      |  |          |       |     |  |  |    |     |   |   |        |        |  |   |        |        |  |  |    |   
|                                | Ammonia                                           |                                 | $     | 104.6              |  |                      | $     | 104.7 |  |      |    |         |   |      |       | 375  |  |          |       | 392 |  |  |    | (4  | ) |   | $      | 278.60 |  |   | $      | 266.96 |  |  |    | 4  | 
|                                | Urea                                              |                                 |       | 100.8              |  |                      |       | 72.2  |  |      |    | 40       |   |      |       | 356  |  |          |       | 324 |  |  |    | 10  |   |   | $      | 283.04 |  |   | $      | 222.72 |  |  |    | 27 | 
|                                | Nitrogen solutions/ Nitric acid/ Ammonium nitrate |                                 |       | 66.0               |  |                      |       | 55.8  |  |      |    | 18       |   |      |       | 441  |  |          |       | 419 |  |  |    | 5   |   |   | $      | 149.61 |  |   | $      | 133.49 |  |  |    | 12 | 
|                                | Purchased                                         |                                 |       | 34.4               |  |                      |       | 49.4  |  |      |    | (30      | ) |      |       | 118  |  |          |       | 204 |  |  |    | (42 | ) |   | $      | 291.95 |  |   | $      | 241.90 |  |  |    | 21 | 
|                               
|                                |                                                   |                                 | 305.8 |                    |  |                      | 282.1 |       |  |      | 8  |          |   |      | 1,290 |      |  |          | 1,339 |     |  |  | (4 | )   |   | $ | 237.05 |        |  | $ | 210.68 |        |  |  | 13 |   
|                                | Miscellaneous                                     |                                 |       | 7.0                |  |                      |       | 6.4   |  |      |    | 9        |   |      |       |     |  |          |       |    |  |  |    |    |   |   |        |       |  |   |        |       |  |  |    |   | 
|                               
|                                |                                                   | $                               | 312.8 |                    |  | $                    | 288.5 |       |  |      | 8  |          |   |      | 1,290 |      |  |          | 1,339 |     |  |  | (4 | )   |   | $ | 242.43 |        |  | $ | 215.52 |        |  |  | 12 |   
|                               
|                                | Fertilizer                                        |                                 | $     | 131.5              |  |                      | $     | 102.8 |  |      |    | 28       |   |      |       | 524  |  |          |       | 476 |  |  |    | 10  |   |   | $      | 250.88 |  |   | $      | 216.04 |  |  |    | 16 | 
|                                | Non-fertilizer                                    |                                 |       | 181.3              |  |                      |       | 185.7 |  |      |    | (2       | ) |      |       | 766  |  |          |       | 863 |  |  |    | (11 | ) |   | $      | 236.65 |  |   | $      | 215.24 |  |  |    | 10 | 
|                               
|                                |                                                   |                                 | 312.8 |                    |  |                      | 288.5 |       |  |      | 8  |          |   |      | 1,290 |      |  |          | 1,339 |     |  |  | (4 | )   |   | $ | 242.43 |        |  | $ | 215.52 |        |  |  | 12 |   
|Cost of goods sold              |                                                   |                                 | 233.1 |                    |  |                      | 220.5 |       |  |      | 6  |          |   |      |       |      |  |          |       |     |  |  |    |     |   | $ | 180.65 |        |  | $ | 164.74 |        |  |  | 10 |   
|                               
|Gross margin                    |                                                   | $                               | 79.7  |                    |  | $                    | 68.0  |       |  |      | 17 |          |   |      |       |      |  |          |       |     |  |  |    |     |   | $ | 61.78  |        |  | $ | 50.78  |        |  |  | 22 |   
|                               

|                                |                                                   |                                |         |                    |  |                      |       |       |  |      |    |          |   |      |       |       |  |          |       |       |  |  |   |     |   |   |        |        |  |   |        |        |  |  |    |    | 
|------------------------------- | ------------------------------------------------- | ------------------------------ | ------- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | -- | -------- | - | ---- | ----- | ----- |  | -------- | ----- | ----- |  |  | - | --- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | -- | -- | 
|                                |                                                   | Nine Months Ended September 30
|                               
|                                |                                                   | Dollars (millions)             |         | Tonnes (thousands) |  | Average per Tonne(1)
|                               
|                                |                                                   | 2005                           |         | 2004               |  | % Change             |       | 2005  |  | 2004 |    | % Change |   | 2005 |       | 2004  |  | % Change
|                               
|Sales                           |                                                   | $                              | 1,001.9 |                    |  | $                    | 873.7 |       |  |      | 15 |          |   |      |       |       |  |          |       |       |  |  |   |     |   |   |        |        |  |   |        |        |  |  |    |   
|Freight                         |                                                   |                                | 29.0    |                    |  |                      | 29.0  |       |  |      |   |          |   |      |       |       |  |          |       |       |  |  |   |     |   |   |        |        |  |   |        |        |  |  |    |   
|Transportation and distribution |                                                   |                                | 36.5    |                    |  |                      | 29.6  |       |  |      | 23 |          |   |      |       |       |  |          |       |       |  |  |   |     |   |   |        |        |  |   |        |        |  |  |    |   
|                               
|                                |                                                   | $                              | 936.4   |                    |  | $                    | 815.1 |       |  |      | 15 |          |   |      |       |       |  |          |       |       |  |  |   |     |   |   |        |        |  |   |        |        |  |  |    |   
|                               
|Net Sales                       |                                                   |                                |         |                    |  |                      |       |       |  |      |    |          |   |      |       |       |  |          |       |       |  |  |   |     |   |   |        |        |  |   |        |        |  |  |    |   
|                                | Ammonia                                           |                                | $       | 343.2              |  |                      | $     | 325.2 |  |      |    | 6        |   |      |       | 1,263 |  |          |       | 1,308 |  |  |   | (3  | ) |   | $      | 271.65 |  |   | $      | 248.63 |  |  |    | 9  | 
|                                | Urea                                              |                                |         | 283.6              |  |                      |       | 188.0 |  |      |    | 51       |   |      |       | 1,046 |  |          |       | 887   |  |  |   | 18  |   |   | $      | 270.93 |  |   | $      | 211.87 |  |  |    | 28 | 
|                                | Nitrogen solutions/ Nitric acid/ Ammonium nitrate |                                |         | 204.0              |  |                      |       | 175.5 |  |      |    | 16       |   |      |       | 1,370 |  |          |       | 1,345 |  |  |   | 2   |   |   | $      | 148.91 |  |   | $      | 130.63 |  |  |    | 14 | 
|                                | Purchased                                         |                                |         | 86.4               |  |                      |       | 109.5 |  |      |    | (21      | ) |      |       | 314   |  |          |       | 461   |  |  |   | (32 | ) |   | $      | 275.30 |  |   | $      | 237.31 |  |  |    | 16 | 
|                               
|                                |                                                   |                                | 917.2   |                    |  |                      | 798.2 |       |  |      | 15 |          |   |      | 3,993 |       |  |          | 4,001 |       |  |  |  |     |   | $ | 229.70 |        |  | $ | 199.50 |        |  |  | 15 |   
|                                | Miscellaneous                                     |                                |         | 19.2               |  |                      |       | 16.9  |  |      |    | 14       |   |      |       |      |  |          |       |      |  |  |   |    |   |   |        |       |  |   |        |       |  |  |    |   | 
|                               
|                                |                                                   | $                              | 936.4   |                    |  | $                    | 815.1 |       |  |      | 15 |          |   |      | 3,993 |       |  |          | 4,001 |       |  |  |  |     |   | $ | 234.47 |        |  | $ | 203.75 |        |  |  | 15 |   
|                               
|                                | Fertilizer                                        |                                | $       | 378.9              |  |                      | $     | 316.1 |  |      |    | 20       |   |      |       | 1,532 |  |          |       | 1,557 |  |  |   | (2  | ) |   | $      | 247.39 |  |   | $      | 203.05 |  |  |    | 22 | 
|                                | Non-fertilizer                                    |                                |         | 557.5              |  |                      |       | 499.0 |  |      |    | 12       |   |      |       | 2,461 |  |          |       | 2,444 |  |  |   | 1   |   |   | $      | 226.44 |  |   | $      | 204.20 |  |  |    | 11 | 
|                               
|                                |                                                   |                                | 936.4   |                    |  |                      | 815.1 |       |  |      | 15 |          |   |      | 3,993 |       |  |          | 4,001 |       |  |  |  |     |   | $ | 234.47 |        |  | $ | 203.75 |        |  |  | 15 |   
|Cost of goods sold              |                                                   |                                | 692.0   |                    |  |                      | 645.3 |       |  |      | 7  |          |   |      |       |       |  |          |       |       |  |  |   |     |   | $ | 173.26 |        |  | $ | 161.31 |        |  |  | 7  |   
|                               
|Gross margin                    |                                                   | $                              | 244.4   |                    |  | $                    | 169.8 |       |  |      | 44 |          |   |      |       |       |  |          |       |       |  |  |   |     |   | $ | 61.21  |        |  | $ | 42.44  |        |  |  | 44 |   
|                               



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

29



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Highlights




| |   |                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Price increases were realized in all nitrogen products quarter
    over quarter and year over year.                                                                                                                                                                                                                                                                      
|
| |  | Hurricanes that struck the US Gulf region impacted
    PotashCorp as they drove up prices for natural gas and resulted
    in industry production curtailments. Reduced product
    availability led to higher ammonia and other nitrogen product
    prices, although these increases lagged the rise in natural gas
    costs for our US plants.                       
|
| |  | Higher ammonia and urea prices were beneficial for
    PotashCorps Trinidad facility due to our long-term
    lower-cost natural gas price contracts. Our Trinidad facility
    provided $52.3 million of third-quarter gross margin and
    contributed 66 percent of gross margin for the quarter and
    62 percent for the nine months ended September 30,
    2005.
|
| |  | The hurricanes had a minor cost impact on the company, forcing
    temporary shutdowns at our Geismar, LA facility due to loss of
    gas and power and limitations on our ammonia terminaling
    capability.                                                                                                                                                           

Sales and Cost of Goods Sold






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Higher realized nitrogen prices provided an additional
    $36.0 million to net sales. Tight market supply for urea
    led to 27 percent higher realized prices, contributing
    $20.4 million to the increase. Urea supplies remain tight
    due to strong world demand and delays in new plant start ups,
    and low US producers inventories at the end of
    third-quarter 2005 were 54 percent below the 5-year
    industry average. Higher realized prices in ammonia resulting
    from higher gas costs, supply concerns and the impact of
    hurricanes Katrina and Rita, contributed $5.7 million to
    the increase.
|
| |  | Trinidad urea sales volumes increased 21 percent as the
    facility operated at rates above the expected design. Using
    imported ammonia, the company restarted production of nitrogen
    solutions from its Geismar facility, which had been idle since
    2003, contributing to the 89 percent increase in sales
    volumes for nitrogen solutions. These volume increases were more
    than offset by declines in purchased product and US ammonia
    sales as North American supply reductions occurred due to the
    storms.                                                                                             
|
| |  | Significant increases in natural gas costs negatively impacted
    cost of goods sold. PotashCorps total average natural gas
    cost, including hedge and lower-cost Trinidad gas contracts, was
    $4.40 per MMBtu, 17 percent higher than last years third
    quarter and 9 percent higher than the second quarter of
    2005. This is a result of the substantial increase in North
    American natural gas costs. The benefit of our US natural
    gas hedging activities contributed $13.2 million to gross
    margin, $4.8 million more than in the prior year.                                                          





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Realized prices were up in all major categories, providing an
    additional $135.8 million to the companys gross
    margin. A 28 percent increase in realized price for urea,
    mostly from the companys Trinidad and Lima facilities,
    contributed $62.4 million to the increase as urea prices
    rose due to industry curtailments and a pull back in urea import
    volumes resulting from strong offshore demand. Realized prices
    for ammonia grew by 9 percent which provided
    $33.4 million as a result of permanent and temporary
    curtailments in the industry, and leveling off of ammonia import
    volumes. This tightened supply and resulted in increased
    realized prices. Higher realized prices for nitrogen solutions,
    nitric acid, and ammonium nitrate added a further
    $24.4 million also due to tighter supply/ demand
    fundamentals as a result of North American production
    curtailments.
|
| |  | Urea sales volumes grew 18 percent as the company shifted
    its product mix from ammonia to urea during the first quarter of
    2005 to take advantage of higher relative prices in that market.
    Further sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | volume increases resulted from increased agricultural product
    sales and our Trinidad facility operating at rates above the
    expected design. Although demand was strong in the second
    quarter, the impact of high natural gas prices and reduced
    supplies resulting from production curtailments caused a net
    decline in sales volumes for the year.                                                                                                                                                                                                                                                                                                                                
|
| |  | Cost of goods sold increased 7 percent per tonne. This was
    due to higher natural gas costs being partially offset by
    increased production at the companys Trinidad facility
    (which is producing at levels above the expected design) and
    fewer plant shutdowns for turnarounds in the first nine months
    of 2005. The companys US natural gas hedging
    activities contributed $36.1 million to the gross margin
    compared to $34.3 million last year. The companys
    total average natural gas cost, including the benefit of the
    companys hedge and lower-cost Trinidad gas contracts, was
    $4.04 per MMBtu, 15 percent higher than the same period
    in 2004.

Expenses and Other Income


|                                  |  |                    |      |                   |  |        |      |        |  |      |      |      |  |        |    |        |  |   |       |  |  |   |      |  |  |   |       |   |  |  |     |  
|--------------------------------- |  | ------------------ | ---- | ----------------- |  | ------ | ---- | ------ |  | ---- | ---- | ---- |  | ------ | -- | ------ |  | - | ----- |  |  | - | ---- |  |  | - | ----- | - |  |  | --- | -
|                                  |  | Three Months Ended |      | Nine Months Ended
|                                  |  | September 30       |      | September 30     
|                                 
|                                  |  | Dollar             |      | %                 |  |        |      | Dollar |  | %   
|Dollars (millions)                |  | 2005               |      | 2004              |  | Change |      | Change |  | 2005 |      | 2004 |  | Change |    | Change
|                                 
|Selling and administrative        |  | $                  | 31.8 |                   |  | $      | 32.2 |        |  | $    | (0.4 | )    |  |        | (1 | )      |  | $ | 116.0 |  |  | $ | 83.8 |  |  | $ | 32.2  |   |  |  | 38  |  
|Provincial mining and other taxes |  |                    | 28.8 |                   |  |        | 23.1 |        |  |      | 5.7  |      |  |        | 25 |        |  |   | 111.4 |  |  |   | 67.5 |  |  |   | 43.9  |   |  |  | 65  |  
|Provision for PCS Yumbes S.C.M.   |  |                    |     |                   |  |        |     |        |  |      |     |      |  |        |   |        |  |   |      |  |  |   | 5.9  |  |  |   | (5.9  | ) |  |  | n/m |  
|Foreign exchange loss             |  |                    | 24.4 |                   |  |        | 20.1 |        |  |      | 4.3  |      |  |        | 21 |        |  |   | 12.4  |  |  |   | 2.0  |  |  |   | 10.4  |   |  |  | 520 |  
|Other income                      |  |                    | 20.4 |                   |  |        | 19.1 |        |  |      | 1.3  |      |  |        | 7  |        |  |   | 54.3  |  |  |   | 35.2 |  |  |   | 19.1  |   |  |  | 54  |  
|Interest expense                  |  |                    | 20.4 |                   |  |        | 20.8 |        |  |      | (0.4 | )    |  |        | (2 | )      |  |   | 61.7  |  |  |   | 63.8 |  |  |   | (2.1  | ) |  |  | (3  | )
|Income tax expense                |  |                    | 64.2 |                   |  |        | 37.1 |        |  |      | 27.1 |      |  |        | 73 |        |  |   | 209.8 |  |  |   | 97.8 |  |  |   | 112.0 |   |  |  | 115 |  











31



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Status of Restructuring Activities




32



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LIQUIDITY AND CAPITAL RESOURCES


Cash Requirements




Contractual Obligations and Other Commitments


|                                                  |  |                        |         |               |  |              |       |              |  |              |       |  |  |   |       |  |  |   |         | 
|------------------------------------------------- |  | ---------------------- | ------- | ------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- |  |  | - | ----- |  |  | - | ------- | 
|                                                  |  | Payments Due By Period
|                                                  |  | Dollars (millions)    
|                                                 
|                                                  |  | Total                  |         | Within 1 year |  | 1 to 3 years |       | 3 to 5 years |  | Over 5 years
|                                                 
|Long-term debt                                    |  | $                      | 1,268.0 |               |  | $            | 10.2  |              |  | $            | 400.9 |  |  | $ | 0.6   |  |  | $ | 856.3   | 
|Estimated interest payments on
    long-term debt |  |                        | 415.6   |               |  |              | 87.6  |              |  |              | 132.4 |  |  |   | 118.1 |  |  |   | 77.5    | 
|Operating leases                                  |  |                        | 576.6   |               |  |              | 78.2  |              |  |              | 139.4 |  |  |   | 115.8 |  |  |   | 243.2   | 
|Purchase obligations                              |  |                        | 836.4   |               |  |              | 103.5 |              |  |              | 178.8 |  |  |   | 161.8 |  |  |   | 392.3   | 
|Other commitments                                 |  |                        | 44.8    |               |  |              | 12.1  |              |  |              | 18.0  |  |  |   | 14.7  |  |  |   |        | 
|Other long-term liabilities                       |  |                        | 326.2   |               |  |              | 27.4  |              |  |              | 61.5  |  |  |   | 31.5  |  |  |   | 205.8   | 
|                                                 
|Total                                             |  | $                      | 3,467.6 |               |  | $            | 319.0 |              |  | $            | 931.0 |  |  | $ | 442.5 |  |  | $ | 1,775.1 | 
|                                                 

Long-term Debt






Operating Leases






33



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Purchase Obligations








Other Commitments




Other Long-term Liabilities




Capital Expenditures






Share Repurchase Program






34



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Sources and Uses of Cash




|                                                |  |                    |        |                   |  |        |       |      |  |      |     |        |  |   |        |   |  |   |       |   |  |  |     | 
|----------------------------------------------- |  | ------------------ | ------ | ----------------- |  | ------ | ----- | ---- |  | ---- | --- | ------ |  | - | ------ | - |  | - | ----- | - |  |  | --- | 
|                                                |  | Three Months Ended |        | Nine Months Ended
|                                                |  | September 30       |        | September 30     
|                                               
|                                                |  | %                  |        |                   |  | %     
|Dollars (millions)                              |  | 2005               |        | 2004              |  | Change |       | 2005 |  | 2004 |     | Change
|                                               
|Cash provided by operating activities           |  | $                  | 316.1  |                   |  | $      | 168.6 |      |  |      | 87  |        |  | $ | 780.0  |   |  | $ | 485.7 |   |  |  | 61  | 
|Cash used in investing activities               |  | $                  | (212.7 | )                 |  | $      | (43.1 | )    |  |      | 394 |        |  | $ | (424.0 | ) |  | $ | (87.5 | ) |  |  | 385 | 
|Cash (used in) provided by financing activities |  | $                  | (198.7 | )                 |  | $      | 48.7  |      |  |      | n/m |        |  | $ | (486.9 | ) |  | $ | (22.2 | ) |  |  | n/m | 





|                                        |  |               |         |              |  |        |         |   |  |  |     |  
|--------------------------------------- |  | ------------- | ------- | ------------ |  | ------ | ------- | - |  |  | --- | -
|                                        |  | September 30, |         | December 31, |  | %     
|Dollars (millions) except ratio amounts |  | 2005          |         | 2004         |  | Change
|                                       
|Current assets                          |  | $             | 1,226.1 |              |  | $      | 1,243.6 |   |  |  | (1  | )
|Current liabilities                     |  | $             | (945.7  | )            |  | $      | (703.7  | ) |  |  | 34  |  
|Working capital                         |  | $             | 280.4   |              |  | $      | 539.9   |   |  |  | (48 | )
|Current ratio                           |  |               | 1.30    |              |  |        | 1.77    |   |  |  | (27 | )









| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In June 2005, the company acquired 1 million additional
    shares in APC for $18.6 million and 21 million
    additional shares in ICL for $74.9 million. As a result of
    these purchases, the companys ownership interest in APC
    increased from (approximately) 26 percent to
    28 percent and its interest in ICL increased from
    (approximately) 9 percent to 10 percent.                                                                                                                                                          
|
| |  | In July 2005, the company acquired a 9.99 percent interest
    in the ordinary shares of Sinochem Hong Kong Holdings Limited
    for cash consideration of $97.4 million. Pursuant to a
    strategic investment agreement, the company also holds an option
    to acquire an additional 10.01 percent interest within
    three years of the acquisition. The price for the shares subject
    to the option will be determined by the prevailing market price
    at the time of exercise. Sinochem Hong Kong Holdings Limited, a
    vertically-

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| |   |                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | integrated fertilizer enterprise in the Peoples Republic
    of China, is a subsidiary of Sinochem Corporation and is listed
    on The Hong Kong Stock Exchange.                                                                                 
|
| |  | The companys spending on property, plant and equipment
    increased $76.7 million and $158.6 million,
    respectively, as compared to the same three- and nine-month
    periods last year, largely due to major capital expansion
    projects.





Debt Instruments


|                           |  |                    |         |             |  |           |         |           |  |   |      |  |  |   |       | 
|-------------------------- |  | ------------------ | ------- | ----------- |  | --------- | ------- | --------- |  | - | ---- |  |  | - | ----- | 
|                           |  | September 30, 2005
|                          
|                           |  | Total              |         | Amount      |  | Amount    |         | Amount   
|Dollars (millions)         |  | Amount             |         | Outstanding |  | Committed |         | Available
|                          
|Syndicated credit facility |  | $                  | 750.0   |             |  | $         |        |           |  | $ | 94.7 |  |  | $ | 655.3 | 
|Line of credit             |  |                    | 75.0    |             |  |           |        |           |  |   | 16.5 |  |  |   | 58.5  | 
|Commercial paper           |  |                    | 500.0   |             |  |           | 94.7    |           |  |   |     |  |  |   | 405.3 | 
|US shelf registration      |  |                    | 2,000.0 |             |  |           | 1,250.0 |           |  |   |     |  |  |   | 750.0 | 





36



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Off-Balance Sheet Arrangements




Guarantee Contracts








37



---



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Derivative Instruments










Long-term Fixed Price Contracts




38



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QUARTERLY FINANCIAL HIGHLIGHTS


|                               |  |               |       |          |  |           |         |  |              |   |               |  |          |  |           |       |  |              |   |       |  |  |   |       |  |  |   |       |  |  |  |   |       | 
|------------------------------ |  | ------------- | ----- | -------- |  | --------- | ------- |  | ------------ | - | ------------- |  | -------- |  | --------- | ----- |  | ------------ | - | ----- |  |  | - | ----- |  |  | - | ----- |  |  |  | - | ----- | 
|                               |  |               |       |          |  |          
|Dollars (millions)             |  | September 30, |       | June 30, |  | March 31, |         |  | December 31, |   | September 30, |  | June 30, |  | March 31, |       |  | December 31,
|except per-share amounts       |  | 2005          |       | 2005     |  | 2005      |         |  | 2004         |   | 2004          |  | 2004     |  | 2004      |       |  | 2003        
|                               |  |               |       |          |  |           |         | 
|Sales                          |  | $             | 938.0 |          |  | $         | 1,057.3 |  |              | $ | 921.4         |  |          |  | $         | 866.6 |  |              | $ | 815.7 |  |  | $ | 833.7 |  |  | $ | 728.4 |  |  |  | $ | 717.6 | 
|                               |  |               |       |          |  |           |         | 
|Gross margin                   |  |               | 279.5 |          |  |           | 344.8   |  |              |   | 258.5         |  |          |  |           | 197.3 |  |              |   | 189.4 |  |  |   | 170.7 |  |  |   | 124.0 |  |  |  |   | 92.5  | 
|                               |  |               |       |          |  |           |         | 
|Net income                     |  |               | 130.3 |          |  |           | 164.2   |  |              |   | 131.3         |  |          |  |           | 100.1 |  |              |   | 75.2  |  |  |   | 72.6  |  |  |   | 50.7  |  |  |  |   | 26.5  | 
|                               |  |               |       |          |  |           |         | 
|Net income per share  basic   |  |               | 1.20  |          |  |           | 1.50    |  |              |   | 1.18          |  |          |  |           | 0.91  |  |              |   | 0.69  |  |  |   | 0.68  |  |  |   | 0.48  |  |  |  |   | 0.25  | 
|                               |  |               |       |          |  |           |         | 
|Net income per share  diluted |  |               | 1.17  |          |  |           | 1.46    |  |              |   | 1.15          |  |          |  |           | 0.88  |  |              |   | 0.68  |  |  |   | 0.67  |  |  |   | 0.47  |  |  |  |   | 0.25  | 
|                               |  |               |       |          |  |           |         | 





OUTSTANDING SHARE DATA






RELATED PARTY TRANSACTIONS




CRITICAL ACCOUNTING ESTIMATES






39



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##### Table of Contents







RECENT ACCOUNTING CHANGES


Change in Accounting Policy




Recent Accounting Pronouncements


Canada






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Financial assets will be classified as either held-to-maturity,
    held-for-trading or available-for-sale. Held-to-maturity
    classification will be restricted to fixed maturity instruments
    that the company intends and is able to hold to maturity and
    will be accounted for at amortized cost. Held-for-trading
    instruments will be recorded at fair value with realized and
    unrealized gains and losses reported in net income. The
    remaining financial assets will be classified as
    available-for-sale. These will be recorded at fair value with
    unrealized gains and losses reported in a new category of the
    Consolidated Statements of Financial Position under
    shareholders equity called other comprehensive income
    (OCI); and                                                                                                                                                                                                                                               
|
| |  | Derivatives will be classified as held-for-trading unless
    designated as hedging instruments. All derivatives, including
    embedded derivatives that must be separately accounted for, will
    be recorded at fair value on the Consolidated Statement of
    Financial Position. For derivatives that hedge the changes in
    fair value of an asset or liability, changes in the
    derivatives fair value will be reported in net income and
    substantially offset by changes in the fair value of the hedged
    asset or liability attributable to the risk being hedged. For
    derivatives that hedge variability in cash flows, the effective
    portion of the changes in the derivatives fair value will
    be initially recognized in OCI and the ineffectiveness will be
    recorded in net income. The amounts temporarily recorded in OCI
    will subsequently be reclassified to net income in the periods
    when net income is affected by the variability in the cash flows
    of the hedged item.



40



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United States












41



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##### Table of Contents







RISK MANAGEMENT








OUTLOOK




42



---



##### Table of Contents























43



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##### Table of Contents



FORWARD LOOKING STATEMENTS







ITEM
3.       QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK




Commodity Risk






Foreign Exchange Risk






44



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##### Table of Contents



Interest Rate Risk











ITEM 4.       CONTROLS
AND PROCEDURES








45



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##### Table of Contents






PART II.       OTHER
INFORMATION







ITEM 1.       LEGAL
PROCEEDINGS


Shaw








Planters Property




Aurora




46



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##### Table of Contents



Nebraska Property




General







ITEM 2.       ISSUER
PURCHASE OF EQUITY SECURITIES




ISSUER PURCHASES OF EQUITY SECURITIES


|                                       |  |                  |           |              |  |                     |        |                     |  |  |           |  |  |  |           | 
|-------------------------------------- |  | ---------------- | --------- | ------------ |  | ------------------- | ------ | ------------------- |  |  | --------- |  |  |  | --------- | 
|                                       |  |                  |           |              |  | (c) Total Number of |        | (d) Maximum        
|                                       |  |                  |           |              |  | Shares Purchased as |        | Number of Shares   
|                                       |  | (a) Total Number |           | (b) Average  |  | Part of Publicly    |        | that May Yet Be    
|                                       |  | of Shares        |           | Price Paid   |  | Announced           |        | Purchased Under the
|Period                                 |  | Purchased        |           | per Share(1) |  | Programs(2,3)       |        | Programs(3)        
|                                      
|July 1, 2005 - July 31, 2005           |  |                  | 0         |              |  | $                   | 0.00   |                     |  |  | 0         |  |  |  | 1,846,700 | 
|August 1, 2005 - August 31, 2005       |  |                  | 1,829,500 |              |  | $                   | 109.98 |                     |  |  | 1,829,500 |  |  |  | 17,200    | 
|September 1, 2005 - September 30, 2005 |  |                  | 446,100   |              |  | $                   | 95.72  |                     |  |  | 446,100   |  |  |  | 3,571,100 | 
|                                      
|Total                                  |  |                  | 2,275,600 |              |  | $                   | 107.19 |                     |  |  | 2,275,600 |  |  |  | 3,571,100 | 
|                                      



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Average price paid per share includes cash paid for commissions.                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(2) | On January 25, 2005, the company announced that the Board
    of Directors had approved an open market repurchase program of
    approximately 5 percent of the companys outstanding
    common shares, or approximately 5.5 million shares, through
    a normal course issuer bid. Purchasing under the program
    commenced on February 16, 2005 and may continue until
    February 14, 2006.                                                                     
|   
|(3) | On September 22, 2005, the company announced that the Board
    of Directors had approved an increase in the number of common
    shares to be repurchased under the previously announced open
    market repurchase program. The increase raises the total number
    of shares available for repurchase by an additional
    4.0 million shares, for a total of 9.5 million shares.
    Purchasing under the amended program may continue until
    February 14, 2006.

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ITEM
6.       EXHIBITS


(a)       EXHIBITS


|        |  |                                                                                                                                                                                                                                                                                                                                                                         
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                         
|Number  |  | Description of Document                                                                                                                                                                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                         
|3(a)    |  | Articles of Continuance of the registrant dated May 15,
    2002, incorporated by reference to Exhibit 3(a) to the
    registrants report on Form 10-Q for the quarterly
    period ended June 30, 2002 (the Second Quarter 2002
    Form 10-Q).                                                                                                                     
|3(b)    |  | Bylaws of the registrant effective May 15, 2002,
    incorporated by reference to Exhibit 3(a) to the Second
    Quarter 2002 Form 10-Q.                                                                                                                                                                                                                                
|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)    |  | Syndicated Term Credit Facility Amending Agreement between The
    Bank of Nova Scotia and other financial institutions and the
    registrant dated as of September 23, 2003, incorporated by
    reference to Exhibit 4(b) to the registrants report
    on Form 10-Q for the quarterly period ended
    September 30, 2003 (the Third Quarter 2003
    Form 10-Q).
|4(c)    |  | Syndicated Term Credit Facility Second Amending Agreement
    between The Bank of Nova Scotia and other financial institutions
    and the registrant dated as of September 21, 2004,
    incorporated by reference to Exhibit 4(c) to the
    registrants report on Form 8-K dated
    September 21, 2004.                                                            
|4(d)    |  | Syndicated Term Credit Facility Third Amending Agreement between
    The Bank of Nova Scotia and other financial institutions and the
    registrant dated as of September 20, 2005, incorporated by
    reference to Exhibit 4(a) to the registrants report
    on Form 8-K dated September 22, 2005.                                                                 
|4(e)    |  | 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 1997 Form 8-K).                                                                                                          
|4(f)    |  | Indenture dated as of February 27, 2003, between the
    registrant and The Bank of Nova Scotia Trust Company of
    New York, incorporated by reference to Exhibit 4(c) to
    the registrants report on Form 10-K for the year
    ended December 31, 2002 (the 2002
    Form 10-K).                                                                               
|4(g)    |  | Form of Notes relating to the registrants offering of
    $400,000,000 principal amount of 7.125% Notes due June 15,
    2007, incorporated by reference to Exhibit 4(b) to the 1997
    Form 8-K.                                                                                                                                                                     
|4(h)    |  | Form of Notes relating to the registrants offering of
    $600,000,000 principal amount of 7.75% Notes due May 31,
    2011, incorporated by reference to Exhibit 4 to the
    registrants report on Form 8-K dated May 17,
    2001.                                                                                                                                 
|4(i)    |  | Form of Note relating to the registrants offering of
    $250,000,000 principal amount of 4.875% Notes due March 1,
    2013, incorporated by reference to Exhibit 4 to the
    registrants report on Form 8-K dated
    February 28, 2003.                                                                                                                           



48



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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 registrants registration
    statement on Form F-1 (File No. 33-31303) (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 as of October 1,
    1992, incorporated by reference to Exhibit 10(f) to the
    registrants report on Form 10-K for the year ended
    December 31, 1995 (the 1995 Form 10-K).                                                                                                                                                                                                                                      
|10(e)   |  | Canpotex PCA Collateral Withdrawing/PCS Amending Agreement,
    dated as of October 7, 1993, incorporated by reference to
    Exhibit 10(g) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                             
|10(f)   |  | Canpotex Producer Agreement amending agreement dated as of
    January 1, 1999, incorporated by reference to
    Exhibit 10(f) to the registrants report on
    Form 10-K for the year ended December 31, 2000 (the
    2000 Form 10-K).                                                                                                                                                                                                                    
|10(g)   |  | Canpotex Producer Agreement amending agreement dated as of
    July 1, 2002, incorporated by reference to
    Exhibit 10(g) to the registrants report on
    Form 10-Q for the quarterly period ended June 30, 2004
    (the Second Quarter 2004 Form 10-Q).                                                                                                                                                                                                
|10(h)   |  | Form of Agreement of Limited Partnership of Arcadian Fertilizer,
    L.P. dated as of March 3, 1992, and the related Certificate
    of Limited Partnership of Arcadian Fertilizer, L.P., filed with
    the Secretary of State of the State of Delaware on March 3,
    1992, incorporated by reference to Exhibits 3.1 and 3.2 to
    Arcadian Partners L.P.s Registration Statement on
    Form S-1 (File No. 33-45828).                                   
|10(i)   |  | 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(j)   |  | Second amendment to Agreement of Limited Partnership of PCS
    Nitrogen Fertilizer, L.P. dated December 15, 2002,
    incorporated by reference to Exhibit 10(i) to the 2002
    Form 10-K.                                                                                                                                                                                                                                                                   
|10(k)   |  | Third amendment to Agreement of Limited Partnership of PCS
    Nitrogen Fertilizer, L.P. dated December 15, 2003,
    incorporated by reference to Exhibit 10(k) to the Second
    Quarter 2004 Form 10-Q.                                                                                                                                                                                                                                                     
|10(l)   |  | 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(m)   |  | 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.                                                                                                                                                                              

49



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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Number  |  | Description of Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10(n)   |  | 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(o)   |  | 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(p)   |  | 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(q)   |  | 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. (the 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(r)   |  | 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(s)   |  | 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(t)   |  | First Amendment to Manufacturing Support Agreement dated as of
    November 25, 1996, between BP Chemicals, Inc. and Arcadian
    Ohio, L.P., incorporated by reference to Exhibit 10(l) to
    the 1997 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                  
|10(u)   |  | Letter of amendment to the Manufacturing Support Agreement and
    Operating Agreement dated September 8, 2003, between BP
    Chemicals Inc. and PCS Nitrogen Ohio, L.P., incorporated by
    reference to Exhibit 10(s) to the Third Quarter 2003
    Form 10-Q.                                                                                                                                                                                                                                                                                                                                   
|10(v)   |  | Potash Corporation of Saskatchewan Inc. Stock Option
    Plan  Directors, as amended January 23, 2001,
    incorporated by reference to Exhibit 10(bb) to the Second
    Quarter 2001 Form 10-Q.                                                                                                                                                                                                                                                                                                                                                                                                    
|10(w)   |  | 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(x)   |  | Short-Term Incentive Plan of the registrant effective January
    2000, as amended March 10, 2005, incorporated by reference
    to Exhibit 10(x) to the registrants report on
    Form 10-K for the year ended December 31, 2004 (the
    2004 Form 10-K).                                                                                                                                                                                                                                                                                                                                       
|10(y)   |  | Long-Term Incentive Plan of the registrant effective January
    2000, incorporated by reference to Exhibit 10(aa) to the
    registrants report on Form 10-Q for the quarterly
    period ended June 30, 2000 (the Second Quarter 2000
    Form 10-Q).                                                                                                                                                                                                                                                                                                                                           
|10(z)   |  | Long-Term Incentive Plan of the registrant effective January
    2003, incorporated by reference to Exhibit 10(y) to the
    2002 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(aa)  |  | 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.                                                                                                                                                                                                                                                                                                                                                                                           

50



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|        |  |                                                                                                                                                                                                                                                                                                                                                  
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                  
|Number  |  | Description of Document                                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                  
|10(bb)  |  | 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(cc)  |  | 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 10(mm) to the registrants report on
    Form 10-Q for the quarterly period ended September 30,
    2000 (the Third Quarter 2000 Form 10-Q).
|10(dd)  |  | Form of Letter of amendment to existing supplemental income plan
    agreements of the registrant dated November 4, 2002,
    incorporated by reference to Exhibit 10(cc) to the 2002
    Form 10-K.                                                                                                                                             
|10(ee)  |  | Supplemental Retirement Benefits Plan for U.S. Executives
    dated effective January 1, 1999, incorporated by reference
    to Exhibit 10(aa) to the Second Quarter 2002 Form 10-Q.                                                                                                                                                             
|10(ff)  |  | 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(gg)  |  | 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(hh)  |  | 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(ii)  |  | Resolution and Form of Agreement of Indemnification 
    July 21, 2004, incorporated by reference to
    Exhibit 10(ii) to the Second Quarter 2004 Form 10-Q.                                                                                                                                                                                   
|10(jj)  |  | Chief Executive Officer Medical and Dental Benefits,
    incorporated by reference to Exhibit 10(jj) to the 2004
    Form 10-K.                                                                                                                                                                                                                  
|10(kk)  |  | 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(ll)  |  | 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(mm)  |  | 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.                                                                                                                                                             
|10(nn)  |  | Potash Corporation of Saskatchewan Inc. 2005 Performance Option
    Plan and Form of Option Agreement, incorporated by reference to
    Exhibit 10(nn) to the registrants report on
    Form 10-Q for the quarterly period ended March 31,
    2005 (the First Quarter 2005 Form 10-Q).                                                       
|11      |  | Statement re Computation of Per Share Earnings                                                                                                                                                                                                                                                                                                   
|31(a)   |  | Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.                                                                                                                                                                                                                                                                     
|31(b)   |  | Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.                                                                                                                                                                                                                                                                     
|32      |  | Certification pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002.                                                                                                                                                                                                                                                                     

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SIGNATURES






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



| |     |                   
| | --- | ------------------
| | By: | /s/ Joseph Podwika

| |                                              
| | ---------------------------------------------
| |                                              
| | Joseph Podwika                               
| | Vice President, General Counsel and Secretary



| |     |                      
| | --- | ---------------------
| | By: | /s/ Wayne R. Brownlee

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

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EXHIBIT INDEX


|        |  |                                                                                                                                                                                                                                                                                                                                                                         
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                         
|Number  |  | Description of Document                                                                                                                                                                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                         
|3(a)    |  | Articles of Continuance of the registrant dated May 15,
    2002, incorporated by reference to Exhibit 3(a) to the
    registrants report on Form 10-Q for the quarterly
    period ended June 30, 2002 (the Second Quarter 2002
    Form 10-Q).                                                                                                                     
|3(b)    |  | Bylaws of the registrant effective May 15, 2002,
    incorporated by reference to Exhibit 3(a) to the Second
    Quarter 2002 Form 10-Q.                                                                                                                                                                                                                                
|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)    |  | Syndicated Term Credit Facility Amending Agreement between The
    Bank of Nova Scotia and other financial institutions and the
    registrant dated as of September 23, 2003, incorporated by
    reference to Exhibit 4(b) to the registrants report
    on Form 10-Q for the quarterly period ended
    September 30, 2003 (the Third Quarter 2003
    Form 10-Q).
|4(c)    |  | Syndicated Term Credit Facility Second Amending Agreement
    between The Bank of Nova Scotia and other financial institutions
    and the registrant dated as of September 21, 2004,
    incorporated by reference to Exhibit 4(c) to the
    registrants report on Form 8-K dated
    September 21, 2004.                                                            
|4(d)    |  | Syndicated Term Credit Facility Third Amending Agreement between
    The Bank of Nova Scotia and other financial institutions and the
    registrant dated as of September 20, 2005, incorporated by
    reference to Exhibit 4(a) to the registrants report
    on Form 8-K dated September 22, 2005.                                                                 
|4(e)    |  | 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 1997 Form 8-K).                                                                                                          
|4(f)    |  | Indenture dated as of February 27, 2003, between the
    registrant and The Bank of Nova Scotia Trust Company of
    New York, incorporated by reference to Exhibit 4(c) to
    the registrants report on Form 10-K for the year
    ended December 31, 2002 (the 2002
    Form 10-K).                                                                               
|4(g)    |  | Form of Notes relating to the registrants offering of
    $400,000,000 principal amount of 7.125% Notes due June 15,
    2007, incorporated by reference to Exhibit 4(b) to the 1997
    Form 8-K.                                                                                                                                                                     
|4(h)    |  | Form of Notes relating to the registrants offering of
    $600,000,000 principal amount of 7.75% Notes due May 31,
    2011, incorporated by reference to Exhibit 4 to the
    registrants report on Form 8-K dated May 17,
    2001.                                                                                                                                 
|4(i)    |  | Form of Note relating to the registrants offering of
    $250,000,000 principal amount of 4.875% Notes due March 1,
    2013, incorporated by reference to Exhibit 4 to the
    registrants report on Form 8-K dated
    February 28, 2003.                                                                                                                           







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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 registrants registration
    statement on Form F-1 (File No. 33-31303) (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 as of October 1,
    1992, incorporated by reference to Exhibit 10(f) to the
    registrants report on Form 10-K for the year ended
    December 31, 1995 (the 1995 Form 10-K).                                                                                                                                                                                                                                      
|10(e)   |  | Canpotex PCA Collateral Withdrawing/PCS Amending Agreement,
    dated as of October 7, 1993, incorporated by reference to
    Exhibit 10(g) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                             
|10(f)   |  | Canpotex Producer Agreement amending agreement dated as of
    January 1, 1999, incorporated by reference to
    Exhibit 10(f) to the registrants report on
    Form 10-K for the year ended December 31, 2000 (the
    2000 Form 10-K).                                                                                                                                                                                                                    
|10(g)   |  | Canpotex Producer Agreement amending agreement dated as of
    July 1, 2002, incorporated by reference to
    Exhibit 10(g) to the registrants report on
    Form 10-Q for the quarterly period ended June 30, 2004
    (the Second Quarter 2004 Form 10-Q).                                                                                                                                                                                                
|10(h)   |  | Form of Agreement of Limited Partnership of Arcadian Fertilizer,
    L.P. dated as of March 3, 1992, and the related Certificate
    of Limited Partnership of Arcadian Fertilizer, L.P., filed with
    the Secretary of State of the State of Delaware on March 3,
    1992, incorporated by reference to Exhibits 3.1 and 3.2 to
    Arcadian Partners L.P.s Registration Statement on
    Form S-1 (File No. 33-45828).                                   
|10(i)   |  | 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(j)   |  | Second amendment to Agreement of Limited Partnership of PCS
    Nitrogen Fertilizer, L.P. dated December 15, 2002,
    incorporated by reference to Exhibit 10(i) to the 2002
    Form 10-K.                                                                                                                                                                                                                                                                   
|10(k)   |  | Third amendment to Agreement of Limited Partnership of PCS
    Nitrogen Fertilizer, L.P. dated December 15, 2003,
    incorporated by reference to Exhibit 10(k) to the Second
    Quarter 2004 Form 10-Q.                                                                                                                                                                                                                                                     
|10(l)   |  | 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(m)   |  | 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.                                                                                                                                                                              



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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Number  |  | Description of Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10(n)   |  | 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(o)   |  | 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(p)   |  | 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(q)   |  | 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. (the 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(r)   |  | 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(s)   |  | 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(t)   |  | First Amendment to Manufacturing Support Agreement dated as of
    November 25, 1996, between BP Chemicals, Inc. and Arcadian
    Ohio, L.P., incorporated by reference to Exhibit 10(l) to
    the 1997 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                  
|10(u)   |  | Letter of amendment to the Manufacturing Support Agreement and
    Operating Agreement dated September 8, 2003, between BP
    Chemicals Inc. and PCS Nitrogen Ohio, L.P., incorporated by
    reference to Exhibit 10(s) to the Third Quarter 2003
    Form 10-Q.                                                                                                                                                                                                                                                                                                                                   
|10(v)   |  | Potash Corporation of Saskatchewan Inc. Stock Option
    Plan  Directors, as amended January 23, 2001,
    incorporated by reference to Exhibit 10(bb) to the Second
    Quarter 2001 Form 10-Q.                                                                                                                                                                                                                                                                                                                                                                                                    
|10(w)   |  | 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(x)   |  | Short-Term Incentive Plan of the registrant effective January
    2000, as amended March 10, 2005, incorporated by reference
    to Exhibit 10(x) to the registrants report on
    Form 10-K for the year ended December 31, 2004 (the
    2004 Form 10-K).                                                                                                                                                                                                                                                                                                                                       
|10(y)   |  | Long-Term Incentive Plan of the registrant effective January
    2000, incorporated by reference to Exhibit 10(aa) to the
    registrants report on Form 10-Q for the quarterly
    period ended June 30, 2000 (the Second Quarter 2000
    Form 10-Q).                                                                                                                                                                                                                                                                                                                                           
|10(z)   |  | Long-Term Incentive Plan of the registrant effective January
    2003, incorporated by reference to Exhibit 10(y) to the
    2002 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(aa)  |  | 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.                                                                                                                                                                                                                                                                                                                                                                                           



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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                  
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                  
|Number  |  | Description of Document                                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                  
|10(bb)  |  | 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(cc)  |  | 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 10(mm) to the registrants report on
    Form 10-Q for the quarterly period ended September 30,
    2000 (the Third Quarter 2000 Form 10-Q).
|10(dd)  |  | Form of Letter of amendment to existing supplemental income plan
    agreements of the registrant dated November 4, 2002,
    incorporated by reference to Exhibit 10(cc) to the 2002
    Form 10-K.                                                                                                                                             
|10(ee)  |  | Supplemental Retirement Benefits Plan for U.S. Executives
    dated effective January 1, 1999, incorporated by reference
    to Exhibit 10(aa) to the Second Quarter 2002 Form 10-Q.                                                                                                                                                             
|10(ff)  |  | 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(gg)  |  | 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(hh)  |  | 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(ii)  |  | Resolution and Form of Agreement of Indemnification 
    July 21, 2004, incorporated by reference to
    Exhibit 10(ii) to the Second Quarter 2004 Form 10-Q.                                                                                                                                                                                   
|10(jj)  |  | Chief Executive Officer Medical and Dental Benefits,
    incorporated by reference to Exhibit 10(jj) to the 2004
    Form 10-K.                                                                                                                                                                                                                  
|10(kk)  |  | 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(ll)  |  | 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(mm)  |  | 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.                                                                                                                                                             
|10(nn)  |  | Potash Corporation of Saskatchewan Inc. 2005 Performance Option
    Plan and Form of Option Agreement, incorporated by reference to
    Exhibit 10(nn) to the registrants report on
    Form 10-Q for the quarterly period ended March 31,
    2005 (the First Quarter 2005 Form 10-Q).                                                       
|11      |  | Statement re Computation of Per Share Earnings                                                                                                                                                                                                                                                                                                   
|31(a)   |  | Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.                                                                                                                                                                                                                                                                     
|31(b)   |  | Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.                                                                                                                                                                                                                                                                     
|32      |  | Certification pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002.