##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




---

FORM 10-Q



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

SECURITIES EXCHANGE ACT OF 1934


For the Quarterly Period Ended March 31,
2003

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)


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

306-933-8500

(Registrants telephone number, including
area code)


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

YES x  NO o

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Exchange Act
Rule 12b-2).

YES x  NO o

APPLICABLE ONLY TO CORPORATE
ISSUERS:

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

As at
April 30, 2003, Potash Corporation of Saskatchewan Inc.
(the company) had 52,095,582 Common Shares
outstanding.



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TABLE OF CONTENTS



|               |                               |                                                                                               |  |  |  |  |  | 
|-------------- | ----------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|               | PART I. FINANCIAL INFORMATION
|               |                               | ITEM 1. FINANCIAL STATEMENTS                                                                 
|               |                               | 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 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES    
|CERTIFICATIONS
|EXHIBIT INDEX 
|Exhibit 11    
|Exhibit 99    



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##### Table of Contents






PART I.     FINANCIAL
INFORMATION






ITEM
1.     FINANCIAL
STATEMENTS


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

Potash Corporation of Saskatchewan
Inc.

Consolidated Statements of Income and Retained
Earnings

(in millions of U.S. dollars except per share
amounts)


(unaudited)


|                                           |         |                    |       |      |  |   |       |      | 
|------------------------------------------ | ------- | ------------------ | ----- | ---- |  | - | ----- | ---- | 
|                                           |         |                   
|                                           |         | Three Months Ended
|                                           |         | March 31          
|                                           |         | 2003               |       | 2002
|                                          
|                                          
|Net sales                                  |         | $                  | 574.4 |      |  | $ | 464.6 |     
|Cost of goods sold                         |         |                    | 493.3 |      |  |   | 384.9 |     
|                                          
|Gross Margin                               |         |                    | 81.1  |      |  |   | 79.7  |     
|                                          
|Selling and administrative                 |         |                    | 23.7  |      |  |   | 22.8  |     
|Provincial mining and other taxes          |         |                    | 18.1  |      |  |   | 19.7  |     
|Provision for plant closure                |         |                    | 2.2   |      |  |   |      |     
|Foreign exchange loss (gain)               |         |                    | 16.9  |      |  |   | (0.5  | )   
|Other income                               |         |                    | (4.5  | )    |  |   | (3.2  | )   
|                                          
|                                           |         |                    | 56.4  |      |  |   | 38.8  |     
|                                          
|Operating Income                           |         |                    | 24.7  |      |  |   | 40.9  |     
|Interest Expense                           |         |                    | 19.4  |      |  |   | 21.0  |     
|                                          
|Income Before Income Taxes                 |         |                    | 5.3   |      |  |   | 19.9  |     
|Income Taxes (Note 4)                      |         |                    | 2.1   |      |  |   | 7.1   |     
|                                          
|Net Income                                 |         |                    | 3.2   |      |  |   | 12.8  |     
|Retained Earnings, Beginning of
    Period |         |                    | 641.4 |      |  |   | 639.8 |     
|Dividends                                  |         |                    | (13.0 | )    |  |   | (13.0 | )   
|                                          
|Retained Earnings, End of Period           |         | $                  | 631.6 |      |  | $ | 639.6 |     
|                                          
|Net Income Per Share (Note 5)              |         |                    |       |      |  |   |       |     
|                                           | Basic   |                    | $     | 0.06 |  |   | $     | 0.25 | 
|                                           | Diluted |                    | $     | 0.06 |  |   | $     | 0.24 | 
|                                          
|Dividends Per Share                        |         | $                  | 0.25  |      |  | $ | 0.25  |     
|                                          

(See Notes to the Consolidated Financial
Statements)

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Potash Corporation of Saskatchewan
Inc.

Consolidated Statements of Financial
Position

(in millions of U.S. dollars)


|                                                                                                                                                                           |                                      |             |         |              |  |   |         |       | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | ----------- | ------- | ------------ |  | - | ------- | ----- | 
|                                                                                                                                                                           |                                      | March 31,   |         | December 31,
|                                                                                                                                                                           |                                      | 2003        |         | 2002        
|                                                                                                                                                                          
|                                                                                                                                                                          
|                                                                                                                                                                           |                                      | (unaudited) |         |             
|Assets                                                                                                                                                                     |                                      |             |         |              |  |   |         |      
|Current Assets                                                                                                                                                             |                                      |             |         |              |  |   |         |      
|                                                                                                                                                                           | Cash and cash equivalents            |             | $       | 71.7         |  |   | $       | 24.5  | 
|                                                                                                                                                                           | Accounts receivable                  |             |         | 315.7        |  |   |         | 267.8 | 
|                                                                                                                                                                           | Inventories (Note 3)                 |             |         | 516.9        |  |   |         | 499.3 | 
|                                                                                                                                                                           | Prepaid expenses                     |             |         | 46.4         |  |   |         | 40.4  | 
|                                                                                                                                                                          
|                                                                                                                                                                           |                                      |             | 950.7   |              |  |   | 832.0   |      
|Property, plant and equipment                                                                                                                                              |                                      |             | 3,237.3 |              |  |   | 3,269.9 |      
|Goodwill                                                                                                                                                                   |                                      |             | 97.0    |              |  |   | 97.0    |      
|Other assets                                                                                                                                                               |                                      |             | 500.5   |              |  |   | 486.7   |      
|                                                                                                                                                                          
|                                                                                                                                                                           |                                      | $           | 4,785.5 |              |  | $ | 4,685.6 |      
|                                                                                                                                                                          
|Liabilities                                                                                                                                                                |                                      |             |         |              |  |   |         |      
|Current Liabilities                                                                                                                                                        |                                      |             |         |              |  |   |         |      
|                                                                                                                                                                           | Short-term debt                      |             | $       | 264.3        |  |   | $       | 473.0 | 
|                                                                                                                                                                           | Accounts payable and accrued charges |             |         | 390.0        |  |   |         | 347.0 | 
|                                                                                                                                                                           | Current portion of long-term debt    |             |         | 3.4          |  |   |         | 3.4   | 
|                                                                                                                                                                          
|                                                                                                                                                                           |                                      |             | 657.7   |              |  |   | 823.4   |      
|Long-term debt                                                                                                                                                             |                                      |             | 1,269.7 |              |  |   | 1,019.9 |      
|Future income tax liability                                                                                                                                                |                                      |             | 482.9   |              |  |   | 468.9   |      
|Accrued post-retirement/post-employment benefits                                                                                                                           |                                      |             | 206.3   |              |  |   | 195.4   |      
|Accrued reclamation costs                                                                                                                                                  |                                      |             | 80.3    |              |  |   | 80.0    |      
|Other non-current liabilities and deferred credits                                                                                                                         |                                      |             | 5.4     |              |  |   | 5.5     |      
|                                                                                                                                                                          
|                                                                                                                                                                           |                                      |             | 2,702.3 |              |  |   | 2,593.1 |      
|                                                                                                                                                                          
|Shareholders Equity                                                                                                                                                       |                                      |             |         |              |  |   |         |      
|Share Capital                                                                                                                                                              |                                      |             | 1,187.4 |              |  |   | 1,186.9 |      
|Unlimited authorization of common shares without
    par value; issued and outstanding 52,094,982 and 52,077,648 at
    March 31, 2003 and December 31, 2002, respectively |                                      |             |         |              |  |   |         |      
|Contributed Surplus                                                                                                                                                        |                                      |             | 264.2   |              |  |   | 264.2   |      
|Retained Earnings                                                                                                                                                          |                                      |             | 631.6   |              |  |   | 641.4   |      
|                                                                                                                                                                          
|                                                                                                                                                                           |                                      |             | 2,083.2 |              |  |   | 2,092.5 |      
|                                                                                                                                                                          
|                                                                                                                                                                           |                                      | $           | 4,785.5 |              |  | $ | 4,685.6 |      
|                                                                                                                                                                          

(See Notes to the Consolidated Financial
Statements)

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Potash Corporation of Saskatchewan
Inc.

Consolidated Statements of Cash Flow

(in millions of U.S. dollars)


(unaudited)


|                                                   |                                                            |                    |        |       |   |   |       |       |  
|-------------------------------------------------- | ---------------------------------------------------------- | ------------------ | ------ | ----- | - | - | ----- | ----- | -
|                                                   |                                                            |                   
|                                                   |                                                            | Three Months Ended
|                                                   |                                                            | March 31          
|                                                   |                                                            | 2003               |        | 2002 
|                                                  
|                                                  
|Operating Activities                               |                                                            |                    |        |       |   |   |       |      
|Net income                                         |                                                            | $                  | 3.2    |       |   | $ | 12.8  |      
|Items not affecting cash                           |                                                            |                    |        |       |   |   |       |      
|                                                   | Depreciation and amortization                              |                    |        | 59.0  |   |   |       | 53.3  |  
|                                                   | Provision for future income tax                            |                    |        | 2.1   |   |   |       | 1.5   |  
|                                                   | Foreign exchange on future income tax                      |                    |        | 11.8  |   |   |       |      |  
|                                                   | Share of earnings of investees                             |                    |        | (2.3  | ) |   |       |      |  
|                                                   | Provision for post-retirement/post-employment
    benefits |                    |        | 11.0  |   |   |       | 5.8   |  
|                                                  
|                                                   |                                                            |                    | 84.8   |       |   |   | 73.4  |      
|Changes in non-cash operating working
    capital  |                                                            |                    |        |       |   |   |       |      
|                                                   | Accounts receivable                                        |                    |        | (50.3 | ) |   |       | (23.6 | )
|                                                   | Inventories                                                |                    |        | (27.9 | ) |   |       | 6.9   |  
|                                                   | Prepaid expenses                                           |                    |        | (5.9  | ) |   |       | (8.2  | )
|                                                   | Accounts payable and accrued charges                       |                    |        | 54.7  |   |   |       | 20.6  |  
|                                                   | Current income taxes                                       |                    |        | (11.7 | ) |   |       | 1.0   |  
|Accrued reclamation costs                          |                                                            |                    | 0.3    |       |   |   | (1.4  | )    
|Other non-current liabilities and deferred credits |                                                            |                    | 0.1    |       |   |   | (0.5  | )    
|                                                  
|Cash provided by operating
    activities          |                                                            |                    | 44.1   |       |   |   | 68.2  |      
|                                                  
|Investing Activities                               |                                                            |                    |        |       |   |   |       |      
|Additions to property, plant and equipment         |                                                            |                    | (17.0  | )     |   |   | (30.1 | )    
|Additions to other assets                          |                                                            |                    | (8.4   | )     |   |   | (9.6  | )    
|                                                  
|Cash used in investing activities                  |                                                            |                    | (25.4  | )     |   |   | (39.7 | )    
|                                                  
|Cash before financing activities                   |                                                            |                    | 18.7   |       |   |   | 28.5  |      
|                                                  
|Financing Activities                               |                                                            |                    |        |       |   |   |       |      
|Proceeds from long-term debt                       |                                                            |                    | 250.0  |       |   |   | 10.0  |      
|Repayment of long-term debt                        |                                                            |                    | (0.2   | )     |   |   |      |      
|(Repayment of) proceeds from short-term debt       |                                                            |                    | (208.8 | )     |   |   | 19.4  |      
|Dividends                                          |                                                            |                    | (13.0  | )     |   |   | (13.0 | )    
|Issuance of shares                                 |                                                            |                    | 0.5    |       |   |   | 0.6   |      
|                                                  
|Cash provided by financing
    activities          |                                                            |                    | 28.5   |       |   |   | 17.0  |      
|                                                  
|Increase in Cash and Cash
    Equivalents          |                                                            |                    | 47.2   |       |   |   | 45.5  |      
|Cash and Cash Equivalents, Beginning of
    Period |                                                            |                    | 24.5   |       |   |   | 45.3  |      
|                                                  
|Cash and Cash Equivalents, End of
    Period       |                                                            | $                  | 71.7   |       |   | $ | 90.8  |      
|                                                  
|Supplemental cash flow disclosure                  |                                                            |                    |        |       |   |   |       |      
|                                                   | Interest paid                                              |                    | $      | 1.4   |   |   | $     | 2.1   |  
|                                                   | Income taxes paid                                          |                    | $      | 15.9  |   |   | $     | 5.7   |  
|                                                  

(See Notes to the Consolidated Financial
Statements)

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Potash Corporation of Saskatchewan
Inc.



Notes to the Consolidated Financial
Statements

(in millions of U.S. dollars)


(unaudited)


1.   Significant Accounting
Policies

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

Basis of Presentation

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

 PCS
Sales (Canada) Inc.

 PCS
Joint Venture, L.P.


 PCS
Sales (USA), Inc.


 PCS
Phosphate Company, Inc.


 PCS
Purified Phosphates


 White
Springs Agricultural Chemicals, Inc.


 PCS
Nitrogen, Inc.


 PCS
Nitrogen Fertilizer, L.P.


 PCS
Nitrogen Ohio, L.P.


 PCS
Nitrogen Limited


 PCS
Nitrogen Trinidad Limited


 PCS
Cassidy Lake Company


 PCS
Yumbes S.C.M.


 PCS
Fosfatos do Brasil Ltda.


2.   Change in Accounting
Policy

Effective January 1, 2003, the company
changed the method of determining cost for substantially all
finished product inventories from the first in, first out method
to the average cost method. This change was made to more closely
align product costing with product movement. This change in
accounting policy has no significant effect on the
companys results of operations or financial position for
any of the periods presented.

3.   Inventories

|                       |  |             |       |              |  |   |       | 
|---------------------- |  | ----------- | ----- | ------------ |  | - | ----- | 
|                       |  | March 31,   |       | December 31,
|                       |  | 2003        |       | 2002        
|                      
|                      
|                       |  | (unaudited) |       |             
|Finished product       |  | $           | 159.0 |              |  | $ | 165.0 | 
|Materials and supplies |  |             | 123.8 |              |  |   | 123.5 | 
|Raw materials          |  |             | 60.3  |              |  |   | 44.6  | 
|Work in process        |  |             | 173.8 |              |  |   | 166.2 | 
|                      
|                       |  | $           | 516.9 |              |  | $ | 499.3 | 
|                      

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4.   Income Taxes

The companys effective consolidated income
tax rate for the current period approximates 40 percent. In
the first quarter of 2002, this rate was 36 percent.

5.   Net Income Per
Share

Basic net income per share for the period is
calculated on the weighted average shares issued and outstanding
for the three months ended March 31, 2003 of 52,089,000
(2002  51,960,000). Diluted net income per share is
calculated based on the weighted average shares issued and
outstanding during the period, adjusted by the total of the
additional common shares that would have been issued assuming
exercise of all share options with exercise prices at or below
the average market price for the period. Weighted average shares
outstanding for the diluted net income per share calculation
were 52,312,000 (2002  52,218,000).

6.   Segment
Information

The company has three reportable business
segments: potash, phosphate and nitrogen. These business
segments are differentiated by the chemical nutrient contained
in the product that each produces. Inter-segment net sales are
made under terms which approximate market prices.

|                              |  |                                   |       |           |  |          |       |            |  |              |       |  |  |   |     |  |  |   |       | 
|----------------------------- |  | --------------------------------- | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- |  |  | - | --- |  |  | - | ----- | 
|                              |  |                                  
|                              |  | Three Months Ended March 31, 2003
|                              |  | (unaudited)                      
|                             
|                             
|                              |  | Potash                            |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                             
|                             
|Net sales  third party       |  | $                                 | 160.5 |           |  | $        | 168.4 |            |  | $            | 245.5 |  |  | $ |    |  |  | $ | 574.4 | 
|Inter-segment net sales       |  |                                   | 2.4   |           |  |          | 2.7   |            |  |              | 11.6  |  |  |   |    |  |  |   |      | 
|Gross margin                  |  |                                   | 49.4  |           |  |          | 1.9   |            |  |              | 29.8  |  |  |   |    |  |  |   | 81.1  | 
|Depreciation and amortization |  |                                   | 15.3  |           |  |          | 18.6  |            |  |              | 23.2  |  |  |   | 1.9 |  |  |   | 59.0  | 

|                              |  |                                   |       |           |  |          |       |            |  |              |       |   |  |   |     |  |  |   |       | 
|----------------------------- |  | --------------------------------- | ----- | --------- |  | -------- | ----- | ---------- |  | ------------ | ----- | - |  | - | --- |  |  | - | ----- | 
|                              |  |                                  
|                              |  | Three Months Ended March 31, 2002
|                              |  | (unaudited)                      
|                             
|                             
|                              |  | Potash                            |       | Phosphate |  | Nitrogen |       | All Others |  | Consolidated
|                             
|                             
|Net sales  third party       |  | $                                 | 143.7 |           |  | $        | 155.7 |            |  | $            | 165.2 |   |  | $ |    |  |  | $ | 464.6 | 
|Inter-segment net sales       |  |                                   | 2.5   |           |  |          | 2.1   |            |  |              | 4.7   |   |  |   |    |  |  |   |      | 
|Gross margin                  |  |                                   | 57.9  |           |  |          | 22.3  |            |  |              | (0.5  | ) |  |   |    |  |  |   | 79.7  | 
|Depreciation and amortization |  |                                   | 11.5  |           |  |          | 18.2  |            |  |              | 21.8  |   |  |   | 1.8 |  |  |   | 53.3  | 

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7.   Pro Forma Stock
Compensation Expense

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

|                                    |             |                    |      |       |   |   |      |      | 
|----------------------------------- | ----------- | ------------------ | ---- | ----- | - | - | ---- | ---- | 
|                                    |             |                   
|                                    |             | Three Months Ended
|                                   
|                                    |             | March 31          
|                                   
|                                    |             | 2003               |      | 2002 
|                                   
|                                   
|Net income  as reported            |             | $                  | 3.2  |       |   | $ | 12.8 |     
|Stock compensation                  |             |                    | (3.7 | )     |   |   | (3.6 | )   
|                                   
|Net (loss) income  pro forma       |             | $                  | (0.5 | )     |   | $ | 9.2  |     
|                                   
|                                   
|Basic net income (loss) per share   |             |                    |      |       |   |   |      |     
|                                    | As reported |                    | $    | 0.06  |   |   | $    | 0.25 | 
|                                    | Pro forma   |                    | $    | (0.01 | ) |   | $    | 0.18 | 
|Diluted net income (loss) per share |             |                    |      |       |   |   |      |     
|                                    | As reported |                    | $    | 0.06  |   |   | $    | 0.24 | 
|                                    | Pro forma   |                    | $    | (0.01 | ) |   | $    | 0.18 | 

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

|                         |  |      |         |      |  |   |         | 
|------------------------ |  | ---- | ------- | ---- |  | - | ------- | 
|                         |  | 2002 |         | 2001
|                        
|                        
|Expected dividend        |  | $    | 1.00    |      |  | $ | 1.00    | 
|Expected volatility      |  |      | 32%     |      |  |   | 32%     | 
|Risk-free interest rate  |  |      | 4.13%   |      |  |   | 4.54%   | 
|Expected life of options |  |      | 8 years |      |  |   | 8 years | 
|Expected forfeitures     |  |      | 10%     |      |  |   | 10%     | 

8.   United States Generally
Accepted Accounting Principles (US GAAP)

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

Marketable securities:The companys investment in
Israel Chemicals Ltd. (ICL) is stated at cost. US
GAAP would require that this investment be classified as
available-for-sale and be stated at market value with the
difference between market value and cost reported as Other
Comprehensive Income (OCI).

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

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

Asset Retirement Obligations:Asset retirement obligations are not
required under Canadian GAAP. US GAAP would require that the
fair value of a liability for an asset retirement obligation be
recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The associated asset

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retirement costs are capitalized as part of the
carrying amount of the long-lived asset and then amortized over
their estimated useful lives. The asset retirement obligation
must be accreted on an annual basis.


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

Additional minimum liability:The companys accumulated benefit
obligation for its US pension plans exceeds the fair value of
plan assets. US GAAP requires that the company recognize a
liability that is at least equal to the unfunded accumulated
benefit obligation. If an additional liability required to be
recognized exceeds unrecognized prior service cost, the excess
is to be reported as OCI.

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

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

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

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

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

|                                                       |                                           |                    |            |      |   |   |            |      |  
|------------------------------------------------------ | ----------------------------------------- | ------------------ | ---------- | ---- | - | - | ---------- | ---- | -
|                                                       |                                           |                   
|                                                       |                                           | Three Months Ended
|                                                       |                                           | March 31          
|                                                       |                                           | 2003               |            | 2002
|                                                      
|                                                      
|                                                       |                                           |                   
|                                                       |                                           | (unaudited)       
|Net income as reported  Canadian GAAP                 |                                           | $                  | 3.2        |      |   | $ | 12.8       |     
|Items increasing (decreasing) reported net
    income  |                                           |                    |            |      |   |   |            |     
|                                                       | Pre-operating costs                       |                    |            | 1.3  |   |   |            |     |  
|                                                       | Depreciation and amortization             |                    |            | 2.1  |   |   |            | 2.1  |  
|                                                       | Accretion of asset retirement obligations |                    |            | (0.8 | ) |   |            |     |  
|                                                       | Future income taxes                       |                    |            | (1.0 | ) |   |            | (0.8 | )
|                                                      
|Approximate net income  US GAAP                       |                                           | $                  | 4.8        |      |   | $ | 14.1       |     
|                                                      
|Weighted average shares outstanding 
    US GAAP      |                                           |                    | 52,089,000 |      |   |   | 51,960,000 |     
|                                                      
|Approximate basic net income per
    share  US GAAP   |                                           | $                  | 0.09       |      |   | $ | 0.27       |     
|                                                      
|Approximate diluted net income per
    share  US GAAP |                                           | $                  | 0.09       |      |   | $ | 0.27       |     
|                                                      

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|                                                        |                                                             |             |         |              |   |   |         |        |  
|------------------------------------------------------- | ----------------------------------------------------------- | ----------- | ------- | ------------ | - | - | ------- | ------ | -
|                                                        |                                                             | March 31,   |         | December 31,
|                                                        |                                                             | 2003        |         | 2002        
|                                                       
|                                                       
|                                                        |                                                             | (unaudited) |         |             
|Total assets as reported  Canadian GAAP                |                                                             | $           | 4,785.5 |              |   | $ | 4,685.6 |       
|Items increasing (decreasing) reported total
    assets |                                                             |             |         |              |   |   |         |       
|                                                        | Inventory                                                   |             |         | (7.6         | ) |   |         | (4.0   | )
|                                                        | Available-for-sale securities (unrealized holding
    loss) |             |         | (6.7         | ) |   |         | (7.7   | )
|                                                        | Fair value of natural gas hedging contracts                 |             |         | 73.2         |   |   |         | 52.7   |  
|                                                        | Property, plant and equipment                               |             |         | (141.3       | ) |   |         | (143.4 | )
|                                                        | Pre-operating costs                                         |             |         | (61.7        | ) |   |         | (63.0  | )
|                                                        | Goodwill                                                    |             |         | (46.7        | ) |   |         | (46.7  | )
|                                                       
|Approximate total assets  US GAAP                      |                                                             | $           | 4,594.7 |              |   | $ | 4,473.5 |       
|                                                       

|                                                                |                                                    |             |         |              |   |   |         |        |  
|--------------------------------------------------------------- | -------------------------------------------------- | ----------- | ------- | ------------ | - | - | ------- | ------ | -
|                                                                |                                                    | March 31,   |         | December 31,
|                                                                |                                                    | 2003        |         | 2002        
|                                                               
|                                                               
|                                                                |                                                    | (unaudited) |         |             
|Total shareholders equity as
    reported  Canadian GAAP      |                                                    | $           | 2,083.2 |              |   | $ | 2,092.5 |       
|Items increasing (decreasing) reported
    shareholders equity |                                                    |             |         |              |   |   |         |       
|                                                                | Accumulated other comprehensive income, net of tax |             |         | 1.6          |   |   |         | (9.1   | )
|                                                                | Pre-operating costs                                |             |         | (61.7        | ) |   |         | (63.0  | )
|                                                                | Accretion of asset retirement obligation           |             |         | (0.8         | ) |   |         |       |  
|                                                                | Provision for asset impairment                     |             |         | (218.0       | ) |   |         | (218.0 | )
|                                                                | Depreciation and amortization                      |             |         | 30.0         |   |   |         | 27.9   |  
|                                                                | Future income taxes                                |             |         | 61.7         |   |   |         | 62.7   |  
|                                                               
|Approximate shareholders equity 
    US GAAP                  |                                                    | $           | 1,896.0 |              |   | $ | 1,893.0 |       
|                                                               

Supplemental US GAAP Disclosures

Available-for-Sale Security

The companys investment in ICL is
classified as available for sale. The fair market value of this
investment at March 31, 2003 was $111.7 and the unrealized
holding gain was $18.9.

New Accounting Pronouncements

Effective January 1, 2003 the company has
adopted SFAS 143 Accounting for Asset Retirement
Obligations. This pronouncement requires that the fair
value of a liability for an asset retirement obligation be
recognized. The fair value of this liability is added to the
carrying amount of the associated asset and then depreciated
over the life of the asset. The liability is accreted during the
period through charges to operating expenses. The adoption of
this pronouncement has had no significant effect on the
financial position of the company. On an annual basis, the
impact of accretion related to these obligations will be
approximately $1.9 after tax (approximately $0.04 per diluted
share).

Effective January 1, 2003 the company also
adopted FASB Interpretation 45 Guarantors Accounting
and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. This interpretation
requires recognition, at the inception of the guarantee, of a
liability for the fair value of the obligation undertaken in
issuing the guarantee and clarifies the disclosures that are
necessary. The adoption of this interpretation has not had any
significant effect on the results of operations or financial
position of the company.

SFAS 133 Disclosures

The companys natural gas purchase strategy
is based on diversification of price for its total gas
requirements. Its objective is to acquire a reliable supply of
natural gas feedstock and fuel on a location

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##### Table of Contents



adjusted, cost competitive basis in a manner that
minimizes volatility without undue risk. The company employs
derivative instruments including futures, swaps and option
agreements in order to establish the cost on a portion of its
natural gas requirements. These instruments are intended to
hedge the future cost of the committed and anticipated natural
gas purchases for its US nitrogen and phosphate plants. By
company policy, the maximum period for these hedges cannot
exceed five years. The company uses these instruments to reduce
price risk, not for speculative or trading purposes.


The company has designated its natural gas
derivative instruments as cash flow hedges. The gain or loss on
an effective cash flow hedge is deferred in OCI until such time
as the natural gas that it relates to is used in production, at
which time the gain or loss is then reclassified from OCI to
cost of sales. In the first quarter of 2003, $27.0 of gains were
recognized in cost of sales. Of the deferred gains at the
quarter end, approximately $55.8 will be reclassified to cost of
sales within the next twelve months.

9.   Seasonality

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

10.   Comparative
Figures

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

10



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##### Table of Contents








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

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

Earnings Guidance Review

The companys initial projection for diluted
earnings per share in the first quarter of 2003 was in the range
of $0.25 per share. The final result was $0.06 per diluted
share. During the quarter, the Canadian dollar unexpectedly
strengthened by $0.11 compared to the US dollar at
December 31, 2002 resulting in a foreign exchange loss of
$16.9 million ($0.19 per diluted share after tax),
substantially all of which is non-cash. This was the primary
cause of the variance from the companys initial projection.

Overview of Actual Results

|                                        |  |                             |       |      |  |        |       |        |  |   |       |   |  |  |     |  
|--------------------------------------- |  | --------------------------- | ----- | ---- |  | ------ | ----- | ------ |  | - | ----- | - |  |  | --- | -
|                                        |  |                            
|                                        |  | Three Months Ended March 31
|                                       
|                                       
|                                        |  | Dollar                      |       | %   
|($ millions  except per share amounts) |  | 2003                        |       | 2002 |  | Change |       | Change
|                                       
|                                       
|Net Sales                               |  | $                           | 574.4 |      |  | $      | 464.6 |        |  | $ | 109.8 |   |  |  | 24  |  
|                                       
|Gross Margin                            |  | $                           | 81.1  |      |  | $      | 79.7  |        |  | $ | 1.4   |   |  |  | 2   |  
|                                       
|Operating Income                        |  | $                           | 24.7  |      |  | $      | 40.9  |        |  | $ | (16.2 | ) |  |  | (40 | )
|                                       
|Net Income                              |  | $                           | 3.2   |      |  | $      | 12.8  |        |  | $ | (9.6  | ) |  |  | (75 | )
|                                       
|Net Income per Share  Basic            |  | $                           | 0.06  |      |  | $      | 0.25  |        |  | $ | (0.19 | ) |  |  | (75 | )
|                                       
|Net Income per Share  Diluted          |  | $                           | 0.06  |      |  | $      | 0.24  |        |  | $ | (0.18 | ) |  |  | (75 | )
|                                       

During the quarter, the Canadian dollar
strengthened significantly, negatively affecting the conversion
of the companys Canadian-dollar denominated balance sheet
monetary items and potash production costs. Since the end of
2002, the Canadian dollar has strengthened by $0.11, resulting
in a foreign exchange loss of $16.9 million compared to a
gain of $0.5 million in last years first quarter, or
a non-cash impact of $0.20 per diluted share as compared to
first quarter last year. Potash production costs (including
provincial mining and other taxes) were converted at an average
exchange rate which strengthened $0.08 over last years
same quarter. This lowered earnings by approximately $0.02 per
diluted share, primarily on a cash basis.

11



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##### Table of Contents



Potash

|              |                               |                             |       |                    |  |                      |       |      |  |      |     |        |  |      |       |       |  |        |       |     |  |  |    |    |  |   |       |       |  |   |       |       |  |  |     |    |  
|------------- | ----------------------------- | --------------------------- | ----- | ------------------ |  | -------------------- | ----- | ---- |  | ---- | --- | ------ |  | ---- | ----- | ----- |  | ------ | ----- | --- |  |  | -- | -- |  | - | ----- | ----- |  | - | ----- | ----- |  |  | --- | -- | -
|              |                               |                            
|              |                               | Three Months Ended March 31
|             
|             
|              |                               |                             |       |                    |  |                     
|              |                               | Dollars (millions)          |       | Tonnes (thousands) |  | Average Price Per MT
|             
|             
|              |                               | %                           |       |                    |  | %                    |       |      |  | %   
|              |                               | 2003                        |       | 2002               |  | Change               |       | 2003 |  | 2002 |     | Change |  | 2003 |       | 2002  |  | Change
|             
|             
|Net Sales     |                               |                             |       |                    |  |                      |       |      |  |      |     |        |  |      |       |       |  |        |       |     |  |  |    |    |  |   |       |       |  |   |       |       |  |  |     |   
|              | North American                |                             | $     | 62.4               |  |                      | $     | 56.7 |  |      |     | 10     |  |      |       | 829   |  |        |       | 731 |  |  |    | 13 |  |   | $     | 75.31 |  |   | $     | 77.47 |  |  |     | (3 | )
|              | Offshore                      |                             |       | 84.5               |  |                      |       | 79.3 |  |      |     | 7      |  |      |       | 1,039 |  |        |       | 933 |  |  |    | 11 |  |   | $     | 81.31 |  |   | $     | 84.99 |  |  |     | (4 | )
|              | Miscellaneous                 |                             |       | 13.6               |  |                      |       | 7.7  |  |      |     | 77     |  |      |       |      |  |        |       |    |  |  |    |   |  |   |       |      |  |   |       |      |  |  |     |   |  
|             
|              |                               |                             | 160.5 |                    |  |                      | 143.7 |      |  |      | 12  |        |  |      | 1,868 |       |  |        | 1,664 |     |  |  | 12 |    |  | $ | 85.92 |       |  | $ | 86.36 |       |  |  |    |   
|             
|Cost of Sales |                               |                             |       |                    |  |                      |       |      |  |      |     |        |  |      |       |       |  |        |       |     |  |  |    |    |  |   |       |       |  |   |       |       |  |  |     |   
|              | Cash costs                    |                             |       | 95.8               |  |                      |       | 74.3 |  |      |     | 29     |  |      |       |       |  |        |       |     |  |  |    |    |  |   | $     | 51.28 |  |   | $     | 44.65 |  |  |     | 15 |  
|              | Depreciation and amortization |                             |       | 15.3               |  |                      |       | 11.5 |  |      |     | 33     |  |      |       |       |  |        |       |     |  |  |    |    |  |   | $     | 8.19  |  |   | $     | 6.91  |  |  |     | 19 |  
|             
|              |                               |                             | 111.1 |                    |  |                      | 85.8  |      |  |      | 29  |        |  |      |       |       |  |        |       |     |  |  |    |    |  | $ | 59.47 |       |  | $ | 51.56 |       |  |  | 15  |   
|             
|Gross Margin  |                               | $                           | 49.4  |                    |  | $                    | 57.9  |      |  |      | (15 | )      |  |      |       |       |  |        |       |     |  |  |    |    |  | $ | 26.45 |       |  | $ | 34.80 |       |  |  | (24 | ) 
|             

Potash sales volumes were up on a year-over-year
basis in both the domestic and offshore markets. Offshore sales
volumes increased primarily due to record sales volumes to
Brazil, where farmers continue to benefit from strong soybean
prices. Domestically, year-over-year demand was up slightly
which resulted in higher domestic sales volumes. Compared to the
trailing quarter our market share increased. The February price
increase in the domestic market has been partially successful;
however, most sales in the quarter were concluded prior to the
price increase being effective and average prices realized did
not reflect the increase. Therefore, domestic prices were flat
as compared to the trailing quarter. In the offshore markets,
Canpotex has agreed to flat pricing with Chinese and Japanese
buyers for the first half of 2003 but has achieved price
increases in Brazil and other spot markets. These offshore price
increases have been more than offset by escalating freight rates
throughout the quarter.

The number of shutdown weeks in the first quarter
of 2003 was unchanged from the same period last year. Higher per
unit cost of sales for potash resulted primarily from higher
natural gas prices and a stronger Canadian dollar.

Phosphate

|              |                               |                             |       |                    |  |                      |       |       |  |      |     |        |   |      |     |      |  |        |     |     |  |  |    |    |   |   |        |        |  |   |        |        |  |  |     |    |  
|------------- | ----------------------------- | --------------------------- | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | --- | ------ | - | ---- | --- | ---- |  | ------ | --- | --- |  |  | -- | -- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | --- | -- | -
|              |                               |                            
|              |                               | Three Months Ended March 31
|             
|             
|              |                               |                             |       |                    |  |                     
|              |                               | Dollars (millions)          |       | Tonnes (thousands) |  | Average Price Per MT
|             
|             
|              |                               | %                           |       |                    |  | %                    |       |       |  | %   
|              |                               | 2003                        |       | 2002               |  | Change               |       | 2003  |  | 2002 |     | Change |   | 2003 |     | 2002 |  | Change
|             
|             
|Net Sales     |                               |                             |       |                    |  |                      |       |       |  |      |     |        |   |      |     |      |  |        |     |     |  |  |    |    |   |   |        |        |  |   |        |        |  |  |     |   
|              | Fertilizer  liquids          |                             | $     | 42.0               |  |                      | $     | 36.1  |  |      |     | 16     |   |      |     | 176  |  |        |     | 169 |  |  |    | 4  |   |   | $      | 239.39 |  |   | $      | 213.37 |  |  |     | 12 |  
|              | Fertilizer  solids           |                             |       | 38.5               |  |                      |       | 24.8  |  |      |     | 55     |   |      |     | 234  |  |        |     | 157 |  |  |    | 49 |   |   | $      | 164.54 |  |   | $      | 157.51 |  |  |     | 4  |  
|              | Feed                          |                             |       | 47.5               |  |                      |       | 54.4  |  |      |     | (13    | ) |      |     | 232  |  |        |     | 244 |  |  |    | (5 | ) |   | $      | 204.43 |  |   | $      | 222.91 |  |  |     | (8 | )
|              | Industrial                    |                             |       | 39.1               |  |                      |       | 39.3  |  |      |     |       |   |      |     | 122  |  |        |     | 120 |  |  |    | 2  |   |   | $      | 320.92 |  |   | $      | 328.06 |  |  |     | (2 | )
|              | Miscellaneous                 |                             |       | 1.3                |  |                      |       | 1.1   |  |      |     | 18     |   |      |     |     |  |        |     |    |  |  |    |   |   |   |        |       |  |   |        |       |  |  |     |   |  
|             
|              |                               |                             | 168.4 |                    |  |                      | 155.7 |       |  |      | 8   |        |   |      | 764 |      |  |        | 690 |     |  |  | 11 |    |   | $ | 220.41 |        |  | $ | 225.65 |        |  |  | (2  | ) 
|             
|Cost of Sales |                               |                             |       |                    |  |                      |       |       |  |      |     |        |   |      |     |      |  |        |     |     |  |  |    |    |   |   |        |        |  |   |        |        |  |  |     |   
|              | Cash costs                    |                             |       | 147.9              |  |                      |       | 115.2 |  |      |     | 28     |   |      |     |      |  |        |     |     |  |  |    |    |   |   | $      | 193.57 |  |   | $      | 166.95 |  |  |     | 16 |  
|              | Depreciation and amortization |                             |       | 18.6               |  |                      |       | 18.2  |  |      |     | 2      |   |      |     |      |  |        |     |     |  |  |    |    |   |   | $      | 24.35  |  |   | $      | 26.38  |  |  |     | (8 | )
|             
|              |                               |                             | 166.5 |                    |  |                      | 133.4 |       |  |      | 25  |        |   |      |     |      |  |        |     |     |  |  |    |    |   | $ | 217.92 |        |  | $ | 193.33 |        |  |  | 13  |   
|             
|Gross Margin  |                               | $                           | 1.9   |                    |  | $                    | 22.3  |       |  |      | (91 | )      |   |      |     |      |  |        |     |     |  |  |    |    |   | $ | 2.49   |        |  | $ | 32.32  |        |  |  | (92 | ) 
|             

Solid fertilizer sales volumes increased
significantly due to the restart of the companys DAP
capacity at White Springs and the ability to convert this
additional production into domestic sales. Sales volumes of
liquid fertilizers increased over the comparable quarter last
year due to good dealer fill as dealers built inventories for

12



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the spring season. Feed volumes were down
slightly in the domestic market due to additional capacity from
two competitors, reduced beef and poultry production in the US
and increased usage of meat and bone meal and phytase. Offshore
feed volumes were down due to competitive pressures caused by
new capacity in Asia and Latin America. To reduce feed
inventories, the company lowered its production rate and sold
from inventories, negatively affecting costs.


Prices for liquid and solid fertilizers in the
domestic market increased primarily due to strong demand and
tight supplies. Although demand grew in the offshore market, new
capacity from competitors more than offset this, resulting in
oversupply and competitive pressures on prices. Feed prices in
the domestic market decreased for the same reason. Industrial
prices have come under pressure due to imports from China and
Israel.

The increase in the unit cost of sales was
primarily due to the increase in sulfur and ammonia input costs
and partly due to lower feed operating rates. The average price
of sulfur increased 73 percent over the same period last
year while ammonia increased 23 percent over the same
period. The company is beginning to benefit from lower rock
costs in its costs of production with the move to a
higher-quality rock deposit situated adjacent to the plant at
Aurora.

The purified acid expansion in Aurora, NC was
completed in February and the first production of high-quality
food grade product began eight days later. Moving forward, this
plant should provide a significant competitive advantage for the
company as it is expected to be amongst the lowest-cost
producers in the world.

Nitrogen

|                    |                                  |                             |       |                    |  |                      |       |       |  |      |    |        |   |      |       |      |  |        |       |     |  |  |    |    |   |   |        |        |  |   |        |        |  |  |    |    | 
|------------------- | -------------------------------- | --------------------------- | ----- | ------------------ |  | -------------------- | ----- | ----- |  | ---- | -- | ------ | - | ---- | ----- | ---- |  | ------ | ----- | --- |  |  | -- | -- | - | - | ------ | ------ |  | - | ------ | ------ |  |  | -- | -- | 
|                    |                                  |                            
|                    |                                  | Three Months Ended March 31
|                   
|                   
|                    |                                  |                             |       |                    |  |                     
|                    |                                  | Dollars (millions)          |       | Tonnes (thousands) |  | Average Price Per MT
|                   
|                   
|                    |                                  | %                           |       |                    |  | %                    |       |       |  | %   
|                    |                                  | 2003                        |       | 2002               |  | Change               |       | 2003  |  | 2002 |    | Change |   | 2003 |       | 2002 |  | Change
|                   
|                   
|Net Sales           |                                  |                             |       |                    |  |                      |       |       |  |      |    |        |   |      |       |      |  |        |       |     |  |  |    |    |   |   |        |        |  |   |        |        |  |  |    |   
|                    | Ammonia                          |                             | $     | 79.0               |  |                      | $     | 48.6  |  |      |    | 63     |   |      |       | 433  |  |        |       | 465 |  |  |    | (7 | ) |   | $      | 182.37 |  |   | $      | 104.56 |  |  |    | 74 | 
|                    | Urea                             |                             |       | 73.0               |  |                      |       | 47.7  |  |      |    | 53     |   |      |       | 418  |  |        |       | 378 |  |  |    | 11 |   |   | $      | 174.66 |  |   | $      | 126.24 |  |  |    | 38 | 
|                    | Nitrogen Solutions               |                             |       | 20.5               |  |                      |       | 16.8  |  |      |    | 22     |   |      |       | 194  |  |        |       | 213 |  |  |    | (9 | ) |   | $      | 105.96 |  |   | $      | 78.80  |  |  |    | 34 | 
|                    | Ammonium nitrate and nitric acid |                             |       | 39.5               |  |                      |       | 32.6  |  |      |    | 21     |   |      |       | 360  |  |        |       | 322 |  |  |    | 12 |   |   | $      | 109.72 |  |   | $      | 101.24 |  |  |    | 8  | 
|                    | Miscellaneous                    |                             |       | 3.6                |  |                      |       | 4.3   |  |      |    | (16    | ) |      |       |     |  |        |       |    |  |  |    |   |   |   |        |       |  |   |        |       |  |  |    |   | 
|                   
|                    |                                  |                             | 215.6 |                    |  |                      | 150.0 |       |  |      | 44 |        |   |      | 1,405 |      |  |        | 1,378 |     |  |  | 2  |    |   | $ | 153.45 |        |  | $ | 108.85 |        |  |  | 41 |   
|Purchased           |                                  |                             | 29.9  |                    |  |                      | 15.2  |       |  |      | 97 |        |   |      | 155   |      |  |        | 147   |     |  |  | 5  |    |   | $ | 192.90 |        |  | $ | 103.40 |        |  |  | 87 |   
|                   
|                    |                                  | $                           | 245.5 |                    |  | $                    | 165.2 |       |  |      | 49 |        |   |      | 1,560 |      |  |        | 1,525 |     |  |  | 2  |    |   | $ | 157.37 |        |  | $ | 108.33 |        |  |  | 45 |   
|                   
|Fertilizer          |                                  | $                           | 101.8 |                    |  | $                    | 69.1  |       |  |      | 47 |        |   |      | 674   |      |  |        | 714   |     |  |  | (6 | )  |   | $ | 151.04 |        |  | $ | 96.78  |        |  |  | 56 |   
|Feed and Industrial |                                  |                             | 143.7 |                    |  |                      | 96.1  |       |  |      | 50 |        |   |      | 886   |      |  |        | 811   |     |  |  | 9  |    |   | $ | 162.19 |        |  | $ | 118.50 |        |  |  | 37 |   
|                   
|                    |                                  |                             | 245.5 |                    |  |                      | 165.2 |       |  |      | 49 |        |   |      | 1,560 |      |  |        | 1,525 |     |  |  | 2  |    |   | $ | 157.37 |        |  | $ | 108.33 |        |  |  | 45 |   
|                   
|Cost of Sales       |                                  |                             |       |                    |  |                      |       |       |  |      |    |        |   |      |       |      |  |        |       |     |  |  |    |    |   |   |        |        |  |   |        |        |  |  |    |   
|                    | Cash costs                       |                             |       | 192.5              |  |                      |       | 143.9 |  |      |    | 34     |   |      |       |      |  |        |       |     |  |  |    |    |   |   | $      | 123.40 |  |   | $      | 94.36  |  |  |    | 31 | 
|                    | Depreciation and amortization    |                             |       | 23.2               |  |                      |       | 21.8  |  |      |    | 6      |   |      |       |      |  |        |       |     |  |  |    |    |   |   | $      | 14.87  |  |   | $      | 14.30  |  |  |    | 4  | 
|                   
|                    |                                  |                             | 215.7 |                    |  |                      | 165.7 |       |  |      | 30 |        |   |      |       |      |  |        |       |     |  |  |    |    |   | $ | 138.27 |        |  | $ | 108.66 |        |  |  | 27 |   
|                   
|Gross Margin        |                                  | $                           | 29.8  |                    |  | $                    | (0.5  | )     |  |      |   |        |   |      |       |      |  |        |       |     |  |  |    |    |   | $ | 19.10  |        |  | $ | (0.33  | )      |  |  |   |   
|                   

The spike in natural gas prices during the
quarter once again demonstrated the value of the companys
Trinidad assets where it can produce half its total ammonia
under long-term, low-cost gas contracts. Prices for all nitrogen
products were significantly higher than in the first quarter of
2002 as high domestic gas prices

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during the quarter resulted in temporary
curtailments of US capacity and tighter supply/demand. In
addition, fewer export tonnes entered the domestic market
primarily due to the strike in Venezuela.


Sales volume for ammonia decreased primarily due
to lower operating rates at Memphis and Lima. Urea sales volumes
were up as there was more production from the companys
Trinidad plant and production from the Lima plants
granulator (which had not produced in the first quarter of last
year). Nitrogen solutions sale volumes are down as the company
stopped producing solutions at its Geismar plant for
45 days in the quarter. Good demand resulted in increased
sale tonnes of ammonium nitrate.

The average unit cost of natural gas in the first
quarter of this year ($2.92 per MMBtu) increased 38 percent
over the comparable period last year ($2.12 per MMBtu) as some
high-priced gas was consumed in March in order to fulfill
product supply commitments. The company also lowered ammonia
operating rates at Memphis and Lima and curtailed nitrogen
solutions production at Geismar. The combination of these
factors were the primary cause of the increase in the unit costs
on manufactured products.

During the quarter the company took advantage of
the spike in natural gas prices and announced on
February 25 that it had liquidated its 2003 gas futures
contracts. Any gains realized by the company will be recognized
in the months that those futures contracts would have matured
and the related inventory is sold.

Expenses and Other Income

|                                  |  |                             |      |      |  |        |      |  |  |  |     |  
|--------------------------------- |  | --------------------------- | ---- | ---- |  | ------ | ---- |  |  |  | --- | -
|                                  |  |                            
|                                  |  | Three Months Ended March 31
|                                 
|                                 
|                                  |  | %                          
|($ millions)                      |  | 2003                        |      | 2002 |  | Change
|                                 
|                                 
|Selling and Administrative        |  | $                           | 23.7 |      |  | $      | 22.8 |  |  |  | 4   |  
|Provincial Mining and Other Taxes |  |                             | 18.1 |      |  |        | 19.7 |  |  |  | (8  | )
|Provision for Plant Closure       |  |                             | 2.2  |      |  |        |     |  |  |  |    |  
|Other Income                      |  |                             | 4.5  |      |  |        | 3.2  |  |  |  | 41  |  
|Interest Expense                  |  |                             | 19.4 |      |  |        | 21.0 |  |  |  | (8  | )
|Income Taxes                      |  |                             | 2.1  |      |  |        | 7.1  |  |  |  | (70 | )

Selling and administrative expenses increased
primarily due to increases in salaries and benefits and
consulting and professional fees.

Saskatchewans Potash Production Tax is
comprised of a base tax per tonne of product sold and an
additional tax based on mine-by-mine profits. The New Brunswick
division and the Saskatchewan divisions pay a provincial Crown
royalty, which is accounted for in cost of goods sold. The
decrease in Provincial Mining and Other Taxes for the quarter
was primarily due to reduced per tonne profits due to the
increase in unit cost of sales.

During the quarter the company shut down its
Kinston, NC feed plant in an efficiency move, resulting in a
provision for plant closure.

Other income has increased primarily due to
equity earnings of SQM. The company began to account for this
investment on the equity basis in the fourth quarter of 2002.

The weighted average interest rate on short-term
debt outstanding in the first quarter of 2003 was
1.4 percent (2002  2.2 percent). Weighted
average short-term debt outstanding in the first quarter of 2003
was $416.7 million (2002  $515.2 million).
Weighted average long-term debt outstanding in the first quarter
of 2003 was $1,106.4 million (2002 
$1,017.0 million). The weighted average interest rate on
the long-term debt outstanding was 7.2 percent in the first
quarter of 2003 (2002  7.4 percent). The
increase in weighted average long-term debt outstanding and
decrease in weighted average short-term debt outstanding was
primarily due to the company issuing $250.0 million of
4.875 percent notes due 2013 during the quarter pursuant to
its shelf registration statement, the net proceeds of which were
used to pay down short-term debt.

The effective consolidated tax rate for the first
quarter of 2003 was 40 percent (2002 
36 percent) of income before income taxes. The increase in
the effective rate was primarily due to the expiration of the
last

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tax holiday in Trinidad. The tax provision for
the first quarter of 2003 was all future income taxes (in first
quarter 2002 the current/future split was 80 percent
current and 20 percent future). The decrease in the current
portion of the provision was primarily due to utilization of tax
losses in the US as well as certain reclassifications from
current to future income taxes.


ANALYSIS OF FINANCIAL CONDITION AND CASH
FLOW

|                                      |  |                             |       |      |  |        |       |   |  |  |     |  
|------------------------------------- |  | --------------------------- | ----- | ---- |  | ------ | ----- | - |  |  | --- | -
|                                      |  |                            
|                                      |  | Three Months Ended March 31
|                                     
|                                     
|                                      |  | %                          
|($ millions)                          |  | 2003                        |       | 2002 |  | Change
|                                     
|                                     
|Cash provided by operating activities |  | $                           | 44.1  |      |  | $      | 68.2  |   |  |  | (35 | )
|Cash used in investing activities     |  |                             | (25.4 | )    |  |        | (39.7 | ) |  |  | (36 | )
|Cash provided by financing activities |  |                             | 28.5  |      |  |        | 17.0  |   |  |  | 68  |  

The decrease in cash provided by operating
activities in the first three months of 2003 as compared with
2002 was primarily due to increases in accounts receivable due
to higher sales to Brazil and an increase in inventories
primarily due to the effect of the natural gas hedges and
building inventories for the spring season. This was partially
offset by the increase in accounts payable principally due to
higher natural gas prices.

The decrease in cash used in investing activities
as compared to first quarter 2002 was primarily due to the
construction of the DFP plant and purified acid plant at Aurora
and the purchase of the Joplin feed plant in 2002.

The company paid dividends of $13.0 million
in the first three months of 2003 (2002 
$13.0 million). During the period the company issued
$250.0 million of 4.875 percent notes due 2013 under
its shelf registration statement. The net proceeds from the
notes were used to repay short-term debt.

CONTRACTUAL OBLIGATIONS AND OTHER
COMMITMENTS

|                                  |  |                        |         |               |  |              |       |              |  |              |       |  |  |   |       |  |  |   |         | 
|--------------------------------- |  | ---------------------- | ------- | ------------- |  | ------------ | ----- | ------------ |  | ------------ | ----- |  |  | - | ----- |  |  | - | ------- | 
|                                  |  |                       
|                                  |  | Payments Due by Period
|                                 
|                                 
|                                  |  |                       
|                                  |  | Dollars (millions)    
|                                 
|                                 
|                                  |  | Total                  |         | Within 1 year |  | 2 to 3 years |       | 4 to 5 years |  | Over 5 years
|                                 
|                                 
|Long-term Debt                    |  | $                      | 1,273.1 |               |  | $            | 3.4   |              |  | $            | 11.8  |  |  | $ | 401.9 |  |  | $ | 856.0   | 
|Operating Leases                  |  |                        | 319.7   |               |  |              | 43.9  |              |  |              | 77.4  |  |  |   | 60.7  |  |  |   | 137.7   | 
|Raw Material Purchase Commitments |  |                        | 1,150.2 |               |  |              | 152.9 |              |  |              | 194.7 |  |  |   | 183.9 |  |  |   | 618.7   | 
|Other Commitments                 |  |                        | 36.0    |               |  |              | 11.9  |              |  |              | 22.7  |  |  |   | 1.4   |  |  |   |        | 
|Other Long-Term Liabilities       |  |                        | 308.6   |               |  |              | 21.3  |              |  |              | 76.4  |  |  |   | 84.2  |  |  |   | 126.7   | 
|                                 
|Total                             |  | $                      | 3,087.6 |               |  | $            | 233.4 |              |  | $            | 383.0 |  |  | $ | 732.1 |  |  | $ | 1,739.1 | 
|                                 

Long-term debt consists of $1,250.0 million
of notes payable that were issued under shelf registration
statements, $13.2 million Adjustable Rate Industrial
Revenue and Pollution Control Obligations, a net of
$5.9 million under a back-to-back loan arrangement and
commitments of $4.0 million payable over four years. The
notes payable are unsecured. Of the notes outstanding,
$400.0 million bear interest at 7.125 percent and
mature in 2007, $600.0 million bear interest at
7.75 percent and mature in 2011 and $250.0 million
bear interest at 4.875 percent and mature in 2013. There
are no sinking fund requirements. The notes are subject to
covenants and events of default, including an event of default
for acceleration of other debt in excess of $50.0 million. The
Adjustable Rate Industrial Revenue and Pollution Control
Obligations bear interest at varying rates, are secured by bank
letters of credit and have no sinking fund requirements.

Operating leases consist primarily of three
items. The first is railcars that are used to transport finished
goods and raw materials. These leases extend out to
approximately 2020. The second is the lease of port facilities
at the Port of Saint John for shipping New Brunswick potash
offshore. This lease runs until 2018. The third is the lease of
three vessels for transporting ammonia from Trinidad. These
leases extend to 2008. The operating lease amounts disclosed in
the above table were updated as at March 31, 2003.

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The company has long-term agreements for the
purchase of sulfur for use in the production of phosphoric acid.
These agreements provide for minimum purchase quantities and
prices based on market rates at the time of delivery. The
commitments included in the above table are based on the market
prices as at March 31, 2003. The companys Trinidad
subsidiaries have entered into long-term natural gas contracts
with the National Gas Company of Trinidad. The contracts provide
for prices that vary with ammonia market prices, escalating
floor prices and minimum purchase quantities. The commitments
included in the above table are based on floor prices and
minimum purchase quantities. The company also has a long-term
agreement for the purchase of phosphate rock used at the Geismar
facility. This agreement sets base price (less volume discounts)
through to December 2003. Prices in subsequent years are subject
to renegotiation. The commitments included in the above table
are based on the expected purchase quantity and the set base
prices (less applicable discounts).

The company has a contractual commitment for
mining of nitrates which is in effect until 2005, an acid
storage agreement that is in effect until 2004 and contracts to
purchase limestone that run through to 2007.

Other long-term liabilities include accrued
post-retirement/post-employment benefits and accrued reclamation
costs.

LIQUIDITY

|                           |  |                    |         |                       |  |                |         |  |  |   |       | 
|-------------------------- |  | ------------------ | ------- | --------------------- |  | -------------- | ------- |  |  | - | ----- | 
|                           |  |                   
|                           |  | Dollars (millions)
|                          
|                          
|                           |  | Amount            
|                           |  | Total              |         | Amount Outstanding at |  | Available at  
|                           |  | Amount             |         | March 31, 2003        |  | March 31, 2003
|                          
|                          
|Syndicated Credit Facility |  | $                  | 650.0   |                       |  | $              |        |  |  | $ | 385.7 | 
|Lines of Credit            |  |                    | 120.4   |                       |  |                |        |  |  |   | 107.5 | 
|Commercial Paper           |  |                    | 500.0   |                       |  |                | 264.3   |  |  |   | 235.7 | 
|US Shelf Registration      |  |                    | 2,000.0 |                       |  |                | 1,250.0 |  |  |   | 750.0 | 

The company has a syndicated credit facility,
renewable annually, which provides for unsecured advances. The
amount available is the total committed amount less the amount
of commercial paper outstanding. The lines of credit are also
renewable annually and the amount available is reduced by
outstanding letters of credit. Both the syndicated credit
facility and the lines of credit have financial and other
covenants which the company must comply with at each quarter
end. The principal covenants require debt to capital of less
than 0.55:1, long-term debt to EBITDA of less than 3.5:1,
tangible net worth greater than $1,250.0 million and debt
of subsidiaries less than $250.0 million. The company was
in compliance with these covenants at March 31, 2003.

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

The company has a US shelf registration statement
available under which it could, if it chose, issue up to an
additional $750.0 million in unsecured debt securities.

The company believes that internally generated
cash flow, supplemented by borrowing from existing financing
sources, will be sufficient to meet its anticipated capital
expenditures and other cash requirements, exclusive of any
possible acquisitions, in 2003.

FAIR VALUE OF GAS HEDGING CONTRACTS

In addition to physical spot and term purchases,
the company employs futures, swaps and option agreements to
establish the cost on a portion of its natural gas requirements.
These instruments are intended to hedge the future cost of the
committed and anticipated natural gas purchases for its US
nitrogen and

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phosphate plants. By company policy, the maximum
period for these hedges cannot exceed five years. The company
uses these instruments to reduce price risk, not for speculative
or trading purposes.


The fair value of the companys gas hedging
contracts at March 31, 2003 was $73.2 million
($52.7 million at December 31, 2002). The
companys futures contracts are exchange-traded and fair
value was determined based on exchange prices. Swaps and option
agreements are traded in the over-the-counter market and fair
value was calculated based on a price that was converted to an
exchange-equivalent price.

RELATED PARTY TRANSACTIONS

The company sells potash from its Saskatchewan
mines for use outside of North America exclusively to Canpotex
Limited, a potash export, sales and marketing company owned in
equal shares by the three potash producers in the Province of
Saskatchewan. Sales to Canpotex for the quarter ended
March 31, 2003 were $63.7 million (2002 
$59.2 million). Sales to Canpotex are at prevailing market
prices and are settled on normal trade terms. PCS Yumbes
purchases potash from SQM at prevailing market prices. Purchases
for the first quarter of 2003 were $0.2 million
(2002  $3.3 million). PCS Yumbes had also entered
into a contract with SQM to sell it 8,000 tonnes of potassium
nitrate per month at an arms length negotiated price
through to December 2003. Sales to SQM for the quarter ended
March 31, 2003 were $5.0 million (there were no such
sales in the first quarter of 2002). The company has no other
significant related party transactions.

CRITICAL ACCOUNTING POLICIES

The companys accounting policies are in
accordance with accounting principles generally accepted in
Canada. These differ in some respects from accounting principles
generally accepted in the United States. These differences are
explained and quantified in Note 8 of the unaudited consolidated
financial statements.

The accounting policies followed by the company
will affect the reported amount of assets, liabilities, revenues
and expenses. The company has changed its method of determining
the cost of finished product inventories from the first in,
first out method to the weighted average method. This change in
accounting policy had no significant effect on the
companys results of operations or financial position for
any of the periods presented (see Note 2 to the unaudited
consolidated financial statements). There were no other changes
to critical accounting policies.

During the quarter, the companys Board of
Directors decided to proceed with a policy of expensing all
future stock options, such policy to be effective with the
fiscal year beginning January 1, 2004.

CRITICAL ACCOUNTING ESTIMATES

In preparing the companys consolidated
financial statements in accordance with Canadian GAAP, the
company makes estimates concerning a variety of matters. Some of
these matters are highly uncertain, and the estimates involve
judgements made based on the information available. The
companys results of operations and financial condition
could be materially affected if either (a) the company used
different estimates that it could reasonably have used or (b) in
the future the company changes its estimates in response to
changes that are reasonably likely to occur. There was no
significant change in the first quarter of 2003 to the
measurement of impairment or environmental liabilities, the two
estimates that the company considers most important based on the
degree of uncertainty and the likelihood of a material impact if
we used a different estimate.

RISK MANAGEMENT

Understanding and managing risks is part of the
companys overall strategic planning process. The
companys Board of Directors has adopted a comprehensive
approach to risk identification and risk management. From a
comprehensive risk universe the risks likely to
affect the company are identified and analyzed. Those risks are
then ranked in order of importance according to severity,
duration and controllability, recognizing that there are
interconnections among them. The most effective way to manage
these risks

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were identified and are being implemented. The
identification and management of risk is an ongoing process
because circumstances change and risks change with them.


OUTLOOK

The company believes it is well placed to
generate strong cash flow and earnings over the long term due to
the high quality of its assets. Fertilizer products, which
represent the majority of its sales, are a bulk commodity, where
lowest delivered cost is the underpinning of a companys
long term competitive position. Rising world population and the
demand for more food and better diets, with meat as a protein
source, will drive fertilizer consumption growth over the long
term. The companys excess potash capacity, contrasted with
the high capital cost of developing new capacity with limited
world potash reserves, should well position the companys
potash business. Similarly, its low cost, extensive phosphate
rock reserves, particularly in North Carolina, provide a firm
foundation for its phosphate business. The companys
growing phosphate product diversification also provides some
protection against new capacity developments, the world
opportunities for which are more extensive than with potash.
Long term, the companys extensive nitrogen production base
in Trinidad, with lower priced, indexed natural gas, should
provide positive earnings support in the face of cheap offshore
gas nitrogen capacity that is displacing higher cost gas
nitrogen plants in North America. Utilizing its superior asset
base with a view to growing earnings over time, the challenge
for the company is to minimize short term earnings volatility as
a result of fluctuations in demand, particularly with potash
sales in offshore markets, and to fend off the impact of new
capacity additions around the world, particularly in phosphate
and nitrogen.

Second-quarter volumes are off to a good start in
both domestic and offshore markets. In all three nutrients,
producer inventories are below their five-year average. Pricing
is generally more buoyant but margins will likely continue to be
squeezed by increased production input costs.

After a strong first quarter in potash volumes,
the second quarter is expected to be similar to last year,
providing a healthy total at the end of the first half on a
year-over-year basis. Some of the domestic price increase should
be realized in the second quarter while offshore prices should
be similar to the first quarter due to continued high freight
rates. Higher gas costs and the strength of the Canadian dollar
in the years second quarter compared to last year are
expected to continue to negatively affect potash margins.

In phosphate, volumes are expected to be up in
all products except feed. The restart of DAP production at White
Springs should increase solid fertilizer volumes and the company
expects to begin shipping offshore through PhosChem in June.
Industrial sales volumes should be higher with the start-up of
the companys purified acid plant expansion, and should
increase the profitability of that segment of the business.
Increased input costs for sulfur and ammonia are expected to
continue to hurt phosphate margins, but should be partially
offset by lower phosphate rock costs.

The largest upside in second-quarter 2003
compared to second-quarter 2002 is anticipated to come from
nitrogen. Approximately half of the increase in gross margin is
expected to come from increased prices while the gain on the
sale of the companys natural gas futures contracts should
provide the other half. The company has begun to rebuild its gas
hedges for the latter months of 2003. Between the US and
Trinidad, it is now 59 percent hedged for its gas needs for
May through December 2003 at $2.58 per MMBtu.

In its April guidance the company forecast the
Canadian dollar exchange rate for June 30, 2003 to be
1.4724. The current exchange rate consensus estimate of the
major Canadian banks for June 30, 2003 is 1.4282.

On April 29, 2003, the company announced that
Canpotex International Pte. Limited and JSC Uralkali/Bermont, a
Russian potash producer, had mutually agreed to end their joint
marketing agreement covering certain international markets,
effective June 1, 2003.

The continued volatility in the gas markets makes
projections for 2003 extremely difficult. Higher than expected
current gas prices partially offset some of the benefit of the
previously liquidated natural gas hedges. However, the company
continues to believe that it can earn in the range of $2.00 per
diluted share in 2003 with approximately $0.90 to $1.00 in the
second quarter, roughly four times the earnings in the same
quarter

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last year. These 2003 earnings are expected to
result in cash provided by operating activities of approximately
$460.0 million for the year. Capital expenditures should
approximate $160.0 million for the year. Outstanding shares
are expected to be approximately 52.3 million.


FORWARD LOOKING STATEMENTS

Certain statements in this quarterly report on
Form 10-Q and this Managements Discussion and
Analysis of Financial Condition and Results of Operations,
including those in the Outlook section, relating to
the period after March 31, 2003, are forward-looking
statements subject to risks and uncertainties. A number of
factors could cause actual results to differ materially from
those expressed in the forward-looking statements, including,
but not limited to: fluctuation in supply and demand in
fertilizer, sulfur and petrochemical markets; changes in
competitive pressures, including pricing pressures; risks
associated with natural gas and other hedging activities;
changes in capital markets; changes in currency and exchange
rates; unexpected geological or environmental conditions;
imprecision in reserve estimates; the outcome of legal
proceedings; changes in government policy and regulation; and
acquisitions the company may undertake in the future. The
company sells to a diverse group of customers both by geography
and by end product. Market conditions will vary on a
quarter-over-quarter and year-over-year basis and sales can be
expected to shift from one period to another. The company
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise, except as otherwise
required by applicable law.




ITEM
3.     QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

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

A sensitivity analysis has been prepared to
estimate the companys market risk exposure arising from
derivative commodity instruments. The fair value of such
instruments is calculated by valuing each position using quoted
market prices. Market risk is estimated as the potential loss in
fair value resulting from a hypothetical 10 percent adverse
change in such prices. The results of this analysis indicate
that as of March 31, 2003 the companys estimated
derivative commodity instruments market risk exposure was
$33.0 million (2002  $22.6 million). Actual
results may differ from this estimate. Changes in the fair value
of such derivative instruments, with maturities in 2003 through
2008, will generally relate to changes in the spot price of
anticipated natural gas purchases.

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




ITEM
4.     CONTROLS AND
PROCEDURES

Within the 90 days prior to the date of this
report, the company carried out an evaluation under the
supervision and with the participation of the companys
management, including the companys Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design
and operation of the companys disclosure controls and
procedures. There are inherent limitations to the effectiveness
of any system of disclosure controls and procedures, including
the possibility of human error and the circumvention or
overriding of the controls and procedures. Accordingly, even
effective disclosure controls and procedures can only provide
reasonable assurance of achieving their control objectives.
Based upon and as of the date of the companys evaluation,
the Chief Executive Officer and Chief Financial Officer
concluded that the

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disclosure controls and procedures are effective
in all material respects to ensure that information required to
be disclosed in the reports the company files and submits under
the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported as and when required.


Since the date of the companys most recent
evaluation, there were no significant changes in the
companys internal controls or in other factors that could
significantly affect such internal controls, including any
corrective actions with regard to significant deficiencies and
material weaknesses.

20



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##### Table of Contents






PART II.     OTHER
INFORMATION






ITEM 1.     LEGAL
PROCEEDINGS


Geismar Facility
Investigation

On September 10, 2002, the Companys
wholly owned subsidiary, PCS Nitrogen, Inc. agreed to conclude
the federal grand jury investigation and parallel state
investigations of its Geismar, Louisiana facility by pleading
guilty to one felony violation of the Clean Air Act in the
United States District Court for the Middle District of
Louisiana and one felony violation of analogous state law in
each of the Eighteenth and Twenty-third Judicial Districts of
the State of Louisiana pursuant to plea agreements entered into
with each of the federal and state prosecutors. The plea
agreements call for the Company to pay a fine of
$1.75 million to the US government and $125,000 to each of
the two state judicial districts. The amount of the fines is
covered by a provision recorded in the second quarter of 2002.

At a sentencing hearing held on March 17,
2003 the U.S. District Court approved the federal plea agreement
and also imposed on the Company a five year probationary period.
The Company obtained judicial approval of and resolved the state
court proceedings on March 28, 2003. In addition, one
current and two former Geismar plant employees each have pleaded
guilty to one misdemeanor violation of state or federal
environmental laws.




ITEM 6.     EXHIBITS
AND REPORTS ON FORM 8-K

(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) |                         |  | 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(c) |                         |  | 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(d) |                         |  | 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(e) |                         |  | Form of Notes relating to the registrants
    offering of $600,000,000 principal amount of 7 3/4% 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(f) |                         |  | 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.                                               

The registrant hereby undertakes to file with the
Securities and Exchange Commission, upon request, copies of any
constituent instruments defining the rights of holders of
long-term debt of the registrant or its

21



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subsidiaries that have not been filed herewith
because the amounts represented thereby are less than 10% of the
total assets of the registrant and its subsidiaries on a
consolidated basis.


|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10(a) |                         |  | Sixth Voting Agreement dated April 22, 1978,
    between Central Canada Potash, Division of Noranda, Inc.,
    Cominco Ltd., International Minerals and Chemical Corporation
    (Canada) Limited, PCS Sales and Texasgulf Inc., incorporated by
    reference to Exhibit 10(f) to the 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) |                         |  | 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(h) |                         |  | Amendment to Agreement of Limited Partnership of
    Arcadian Fertilizer, L.P. and related Certificates of Limited
    Partnership of Arcadian Fertilizer, L.P. filed with the
    Secretary of State of the State of Delaware on March 6,
    1997 and November 26, 1997, incorporated by reference to
    Exhibit 10(f) to the registrants report on
    Form 10-K for the year ended December 31, 1998 (the
    1998 Form 10-K).                           
|       
|        | 10(i) |                         |  | 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(j) |                         |  | 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(k) |                         |  | Esterhazy Restated Mining and Processing
    Agreement dated January 31, 1978, between International Minerals
    & Chemical Corporation (Canada) Limited and the
    registrants predecessor, incorporated by reference to
    Exhibit 10(e) to the F-1 Registration Statement.                                                                                                                                                                                
|       
|        | 10(l) |                         |  | 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.                                                                                           

22



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|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | ----- | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|       
|        | 10(m) |                         |  | 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(n) |                         |  | 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(o) |                         |  | 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(p) |                         |  | 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(q) |                         |  | 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(r) |                         |  | 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(s) |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Trinidad Ammonia Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(x) to the registrants report
    on Form 10-Q for the quarterly period ended June 30,
    2001 (the Second Quarter 2001 Form 10-Q).                                                                                                                                                                                                                                                            
|       
|        | 10(t) |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Nitrogen Leasing Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(y) to the Second Quarter 2001
    Form 10-Q.                                                                                                                                                                                                                                                                                                                                                      
|       
|        | 10(u) |                         |  | 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(v) |                         |  | 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(w) |                         |  | Short-Term Incentive Plan of the registrant
    effective January 2000, incorporated by reference to
    Exhibit 10(z) to the registrants report on
    Form 10-Q for the quarterly period ended March 31,
    2000 (the First Quarter 2000 Form 10-Q).                                                                                                                                                                                                                                                                                                                                            
|       
|        | 10(x) |                         |  | 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).                                                                                                                                                                                                                                                                                                                                            

23



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|        |        |                         |  |                                                                                                                                                                                                                                                                                                                                                
|------- | ------ | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|       
|        | 10(y)  |                         |  | Long-Term Incentive Plan of the registrant,
    effective January 2003, incorporated by reference to
    Exhibit 10(y) to the 2002 Form 10-K.                                                                                                                                                                                                  
|       
|        | 10(z)  |                         |  | Resolution and Forms of Agreement for
    Supplemental Retirement Income Plan, for officers and key
    employees of the registrant, incorporated by reference to
    Exhibit 10(o) to the 1995 Form 10-K.                                                                                                                                     
|       
|        | 10(aa) |                         |  | 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(bb) |                         |  | Amended and restated Supplemental Retirement
    Income Plan of the registrant and text of amendment to existing
    supplemental income plan agreements, incorporated by reference
    to Exhibit (mm) to the registrants report on
    Form 10-Q for the quarterly period ended September 30,
    2000 (the Third Quarter 2000 Form 10-Q).
|       
|        | 10(cc) |                         |  | 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(dd) |                         |  | 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(ee) |                         |  | 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(ff) |                         |  | 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(gg) |                         |  | 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(hh) |                         |  | Chief Executive Officer Medical and Dental Plan,
    incorporated by reference to Exhibit 10(jj) to the 2000
    Form 10-K.                                                                                                                                                                                                                    
|       
|        | 10(ii) |                         |  | 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(jj) |                         |  | 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(kk) |                         |  | Royalty Agreement dated October 7, 1993, by
    and between the registrant and Rio Algom Limited, incorporated
    by reference to Exhibit 10(x) to the 1995 Form 10-K.                                                                                                                                                                        
|       
|        | 10(ll) |                         |  | Deferred Share Unit Plan for Non-Employee
    Directors, incorporated by reference to Exhibit 4.1 to the
    registrants Form S-8 (File No. 333-75742) filed
    December 21, 2001.                                                                                                                                                           
|       
|        | 11     |                         |  | Statement re Computation of Per Share Earnings                                                                                                                                                                                                                                                                                                 
|       
|        | 99     |                         |  | Certification pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002. The Section 906 Certification
    is furnished for the information of the Commission and is not to
    be deemed filed as part of this filing.                                                                                                                  

24



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(b) REPORTS
ON FORM 8-K

On February 6, 2003, the company filed a
current report on Form 8-K, which included as an exhibit
the companys press release concerning its financial
results for the fourth quarter of 2002 and for the full year
2002.

On February 27, 2003, the company filed a
current report on Form 8-K, which included as exhibits the
companys audited consolidated financial statements as at
December 31, 2002 and 2001 and for each of the three years
ended December 31, 2002, together with the Notes thereto,
the companys Managements Discussion and
Analysis of Financial Condition and Results of Operations
for fiscal year 2002, the computation of ratio of earnings to
fixed charges with respect to the Registrants shelf
registration statement on Form S-3 (File No. 333-89350),
and a consent of Deloitte & Touche LLP.

On February 28, 2003, the company filed a
current report on Form 8-K, which included as exhibits, in
connection with the companys issuance of $250 million
principal amount of 4.875% notes due March 1, 2013, the
form of the notes, the opinion of Davies Ward Phillips &
Vineberg LLP as to Canadian tax matters, the consent of Torys
LLP, and the consent of Davies Ward Phillips & Vineberg LLP.

25



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SIGNATURES

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



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

May 6, 2003

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

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

May 6, 2003

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

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

26



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##### Table of Contents






CERTIFICATIONS

I, William J. Doyle, certify that:



|   |                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | I have reviewed this quarterly report on
    Form 10-Q of Potash Corporation of Saskatchewan Inc.;                                                                                                                                                                                                                                                
|  
|2. | Based on my knowledge, this quarterly report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    quarterly report;
|  
|3. | Based on my knowledge, the financial statements,
    and other financial information included in this quarterly
    report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   
|  
|4. | The registrants other certifying officer
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                              



| |                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



|   |                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | The registrants other certifying officer
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent functions):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    



|   |                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | The registrants other certifying officer
    and I have indicated in this quarterly report whether or not
    there were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.



| |     |                     
| | --- | --------------------
| | By: | /s/ WILLIAM J. DOYLE

| |                                          
| | -----------------------------------------
| |                                          
| | William J. Doyle                         
| | President and Chief Executive
    Officer

Date: May 6, 2003.

C-1



---



##### Table of Contents



I, Wayne R. Brownlee, certify that:



|   |                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | I have reviewed this quarterly report on
    Form 10-Q of Potash Corporation of Saskatchewan Inc.;                                                                                                                                                                                                                                                
|  
|2. | Based on my knowledge, this quarterly report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    quarterly report;
|  
|3. | Based on my knowledge, the financial statements,
    and other financial information included in this quarterly
    report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   
|  
|4. | The registrants other certifying officer
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                              



| |                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



|   |                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | The registrants other certifying officer
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent functions):



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrants ability to record, process,
    summarize and report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    



|   |                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | The registrants other certifying officer
    and I have indicated in this quarterly report whether or not
    there were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.



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

| |                                               
| | ----------------------------------------------
| |                                               
| | Wayne R. Brownlee                             
| | Senior Vice President, Treasurer and
    Chief
| | Financial Officer                             

Date: May 6, 2003

C-2



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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) |                         |  | 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(c) |                         |  | 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(d) |                         |  | 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(e) |                         |  | Form of Notes relating to the registrants
    offering of $600,000,000 principal amount of 7 3/4% 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(f) |                         |  | 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.                                               

The registrant hereby undertakes to file with the
Securities and Exchange Commission, upon request, copies of any
constituent instruments defining the rights of holders of
long-term debt of the registrant or its





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subsidiaries that have not been filed herewith
because the amounts represented thereby are less than 10% of the
total assets of the registrant and its subsidiaries on a
consolidated basis.


|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ----- | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10(a) |                         |  | Sixth Voting Agreement dated April 22, 1978,
    between Central Canada Potash, Division of Noranda, Inc.,
    Cominco Ltd., International Minerals and Chemical Corporation
    (Canada) Limited, PCS Sales and Texasgulf Inc., incorporated by
    reference to Exhibit 10(f) to the 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) |                         |  | 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(h) |                         |  | Amendment to Agreement of Limited Partnership of
    Arcadian Fertilizer, L.P. and related Certificates of Limited
    Partnership of Arcadian Fertilizer, L.P. filed with the
    Secretary of State of the State of Delaware on March 6,
    1997 and November 26, 1997, incorporated by reference to
    Exhibit 10(f) to the registrants report on
    Form 10-K for the year ended December 31, 1998 (the
    1998 Form 10-K).                           
|       
|        | 10(i) |                         |  | 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(j) |                         |  | 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(k) |                         |  | Esterhazy Restated Mining and Processing
    Agreement dated January 31, 1978, between International Minerals
    & Chemical Corporation (Canada) Limited and the
    registrants predecessor, incorporated by reference to
    Exhibit 10(e) to the F-1 Registration Statement.                                                                                                                                                                                
|       
|        | 10(l) |                         |  | 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.                                                                                           





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|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | ----- | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|       
|        | 10(m) |                         |  | 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(n) |                         |  | 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(o) |                         |  | 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(p) |                         |  | 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(q) |                         |  | 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(r) |                         |  | 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(s) |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Trinidad Ammonia Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(x) to the registrants report
    on Form 10-Q for the quarterly period ended June 30,
    2001 (the Second Quarter 2001 Form 10-Q).                                                                                                                                                                                                                                                            
|       
|        | 10(t) |                         |  | Master Termination Agreement dated as of
    May 23, 2001, between Nitrogen Leasing Company, Limited
    Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
    reference to Exhibit 10(y) to the Second Quarter 2001
    Form 10-Q.                                                                                                                                                                                                                                                                                                                                                      
|       
|        | 10(u) |                         |  | 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(v) |                         |  | 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(w) |                         |  | Short-Term Incentive Plan of the registrant
    effective January 2000, incorporated by reference to
    Exhibit 10(z) to the registrants report on
    Form 10-Q for the quarterly period ended March 31,
    2000 (the First Quarter 2000 Form 10-Q).                                                                                                                                                                                                                                                                                                                                            
|       
|        | 10(x) |                         |  | 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).                                                                                                                                                                                                                                                                                                                                            





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|        |        |                         |  |                                                                                                                                                                                                                                                                                                                                                
|------- | ------ | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|       
|        | 10(y)  |                         |  | Long-Term Incentive Plan of the registrant,
    effective January 2003, incorporated by reference to
    Exhibit 10(y) to the 2002 Form 10-K.                                                                                                                                                                                                  
|       
|        | 10(z)  |                         |  | Resolution and Forms of Agreement for
    Supplemental Retirement Income Plan, for officers and key
    employees of the registrant, incorporated by reference to
    Exhibit 10(o) to the 1995 Form 10-K.                                                                                                                                     
|       
|        | 10(aa) |                         |  | 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(bb) |                         |  | Amended and restated Supplemental Retirement
    Income Plan of the registrant and text of amendment to existing
    supplemental income plan agreements, incorporated by reference
    to Exhibit (mm) to the registrants report on
    Form 10-Q for the quarterly period ended September 30,
    2000 (the Third Quarter 2000 Form 10-Q).
|       
|        | 10(cc) |                         |  | 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(dd) |                         |  | 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(ee) |                         |  | 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(ff) |                         |  | 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(gg) |                         |  | 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(hh) |                         |  | Chief Executive Officer Medical and Dental Plan,
    incorporated by reference to Exhibit 10(jj) to the 2000
    Form 10-K.                                                                                                                                                                                                                    
|       
|        | 10(ii) |                         |  | 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(jj) |                         |  | 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(kk) |                         |  | Royalty Agreement dated October 7, 1993, by
    and between the registrant and Rio Algom Limited, incorporated
    by reference to Exhibit 10(x) to the 1995 Form 10-K.                                                                                                                                                                        
|       
|        | 10(ll) |                         |  | Deferred Share Unit Plan for Non-Employee
    Directors, incorporated by reference to Exhibit 4.1 to the
    registrants Form S-8 (File No. 333-75742) filed
    December 21, 2001.                                                                                                                                                           
|       
|        | 11     |                         |  | Statement re Computation of Per Share Earnings                                                                                                                                                                                                                                                                                                 
|       
|        | 99     |                         |  | Certification pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002. The Section 906 Certification
    is furnished for the information of the Commission and is not to
    be deemed filed as part of this filing.