<PAGE>   1
 
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-Q
                            ------------------------
 
[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
 
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
 
                                       OR
 
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934
 
                         COMMISSION FILE NUMBER 1-10351
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                            <C>
             SASKATCHEWAN, CANADA                                   N/A
       (STATE OR OTHER JURISDICTION OF                        (I.R.S. EMPLOYER
        INCORPORATION OR ORGANIZATION)                      IDENTIFICATION NO.)
            122 - 1ST AVENUE SOUTH
           SASKATOON, SASKATCHEWAN                                S7K 7G3
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP CODE)
</TABLE>
 
                                  306-933-8500
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
 
                                Yes [X]  No [ ]
 
                     APPLICABLE ONLY TO CORPORATE ISSUERS:
 
     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
 
     As at July 31, 1998, Potash Corporation of Saskatchewan Inc. (the
"Company") had 54,232,197 Common Shares outstanding.
 
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<PAGE>   2
 
                         PART I. FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
     These interim consolidated financial statements do not include all
disclosure normally provided in annual financial statements. In management's
opinion, the unaudited financial information includes all adjustments
(consisting solely of normal recurring adjustments) necessary to present fairly
such information. Interim results are not necessarily indicative of the results
expected for the fiscal year.
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
            CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED         SIX MONTHS ENDED
                                                     JUNE 30                   JUNE 30
                                               --------------------    ------------------------
                                                 1998        1997         1998          1997
                                               --------    --------    ----------    ----------
<S>                                            <C>         <C>         <C>           <C>
Net sales..................................    $660,442    $676,648    $1,244,254    $1,141,482
Cost of goods sold.........................     473,811     492,496       906,950       842,303
                                               --------    --------    ----------    ----------
GROSS MARGIN...............................     186,631     184,152       337,304       299,179
                                               --------    --------    ----------    ----------
Selling and administrative.................      28,441      27,900        58,300        47,189
Provincial mining and other taxes..........      23,854      14,466        44,771        24,969
Other income...............................     (12,573)    (12,928)      (22,466)      (18,206)
                                               --------    --------    ----------    ----------
                                                 39,722      29,438        80,605        53,952
                                               --------    --------    ----------    ----------
OPERATING INCOME...........................     146,909     154,714       256,699       245,227
INTEREST EXPENSE...........................      17,001      23,560        37,109        37,378
                                               --------    --------    ----------    ----------
INCOME BEFORE INCOME TAXES.................     129,908     131,154       219,590       207,849
INCOME TAXES...............................      40,791      34,174        67,464        54,504
                                               --------    --------    ----------    ----------
NET INCOME.................................    $ 89,117    $ 96,980       152,126       153,345
                                               ========    ========
RETAINED EARNINGS, BEGINNING OF PERIOD.....                               680,356       438,526
DIVIDENDS..................................                               (26,761)      (27,843)
                                                                       ----------    ----------
RETAINED EARNINGS, END OF PERIOD...........                            $  805,721    $  564,028
                                               ========    ========    ==========    ==========
NET INCOME PER SHARE (NOTE 5)..............    $   1.64    $   1.81    $     2.81    $     3.02
                                               ========    ========    ==========    ==========
DIVIDENDS PER SHARE (NOTE 6)...............    $   0.25    $   0.25    $     0.50    $     0.52
                                               ========    ========    ==========    ==========
</TABLE>
 
              (See Notes to the Consolidated Financial Statements)
                                        2
<PAGE>   3
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                         (IN THOUSANDS OF U.S. DOLLARS)
 
<TABLE>
<CAPTION>
                                                               JUNE 30,      DECEMBER 31,
                                                                 1998            1997
                                                              -----------    ------------
                                                              (UNAUDITED)
<S>                                                           <C>            <C>
ASSETS
Current Assets
  Cash and cash equivalents.................................  $   22,611      $    8,756
  Accounts receivable.......................................     308,065         351,154
  Inventories (Note 4)......................................     315,959         353,425
  Prepaid expenses..........................................      37,657          21,131
                                                              ----------      ----------
                                                                 684,292         734,466
Property, plant and equipment...............................   2,976,139       2,995,625
Goodwill....................................................     566,958         574,296
Other assets................................................     119,779         123,205
                                                              ----------      ----------
                                                              $4,347,168      $4,427,592
                                                              ==========      ==========
LIABILITIES
Current Liabilities
  Short-term debt...........................................  $   79,975      $  101,928
  Accounts payable and accrued charges......................     337,715         348,103
  Current portion of long-term debt.........................         840           2,740
                                                              ----------      ----------
                                                                 418,530         452,771
Long-term debt..............................................     924,061       1,129,964
Deferred income tax liability...............................     361,483         338,431
Accrued post-retirement/post-employment benefits............     127,786         123,418
Accrued reclamation costs...................................     129,893         139,105
Other non-current liabilities and deferred credits..........      16,325          16,012
                                                              ----------      ----------
                                                               1,978,078       2,199,701
                                                              ----------      ----------
SHAREHOLDERS' EQUITY
Share Capital...............................................   1,226,883       1,211,049
Contributed Surplus.........................................     336,486         336,486
Retained Earnings...........................................     805,721         680,356
                                                              ----------      ----------
                                                               2,369,090       2,227,891
                                                              ----------      ----------
                                                              $4,347,168      $4,427,592
                                                              ==========      ==========
</TABLE>
 
              (See Notes to the Consolidated Financial Statements)
                                        3
<PAGE>   4
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                  SIX MONTHS ENDED
                                                                      JUNE 30
                                                              ------------------------
                                                                1998          1997
                                                              ---------    -----------
<S>                                                           <C>          <C>
OPERATING ACTIVITIES
Net income..................................................  $ 152,126    $   153,345
Items not affecting cash
  Depreciation and amortization.............................     97,593         77,941
  Loss (gain) on disposal of fixed assets...................        239         (1,288)
  Provision for deferred income tax.........................     52,160         37,412
  Provision for post-retirement/post-employment benefits....      3,455          3,396
                                                              ---------    -----------
                                                                305,573        270,806
CHANGES IN NON-CASH OPERATING WORKING CAPITAL
Accounts receivable.........................................     43,660         29,127
Inventories.................................................     39,250         32,125
Prepaid expenses............................................    (15,421)       (10,141)
Accounts payable and accrued charges........................    (25,868)       (75,110)
Accrued reclamation costs...................................     (4,936)       (20,399)
Other non-current liabilities and deferred credits..........     (1,598)         9,575
                                                              ---------    -----------
CASH PROVIDED BY OPERATING ACTIVITIES.......................    340,660        235,983
                                                              ---------    -----------
INVESTING ACTIVITIES
Acquisition of Arcadian Corporation.........................         --     (1,039,858)
Additions to property, plant and equipment..................    (56,570)       (56,118)
Proceeds from disposal of fixed assets......................        741          7,503
Disposal of (additions to) other assets.....................      4,012        (13,689)
                                                              ---------    -----------
CASH USED IN INVESTING ACTIVITIES...........................    (51,817)    (1,102,162)
                                                              ---------    -----------
CASH (DEFICIENCY) BEFORE FINANCING ACTIVITIES...............    288,843       (866,179)
                                                              ---------    -----------
FINANCING ACTIVITIES
(Repayment of) proceeds from long-term obligations..........   (242,108)       648,335
(Repayment of) proceeds from short-term debt................    (21,953)       149,989
Repayment of Senior Notes...................................         --       (374,526)
Dividends...................................................    (26,761)       (27,843)
Issuance of shares..........................................     15,834        575,641
                                                              ---------    -----------
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES.............   (274,988)       971,596
                                                              ---------    -----------
INCREASE IN CASH............................................     13,855        105,417
CASH AND CASH EQUIVALENTS (BANK INDEBTEDNESS), BEGINNING OF
  PERIOD....................................................      8,756         (6,330)
                                                              ---------    -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD....................  $  22,611    $    99,087
                                                              =========    ===========
Supplemental cash flow disclosure
  Interest paid.............................................  $  37,993    $    31,831
  Income taxes paid.........................................  $  12,298    $    32,896
                                                              ---------    -----------
</TABLE>
 
              (See Notes to the Consolidated Financial Statements)
                                        4
<PAGE>   5
 
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                         (IN THOUSANDS OF U.S. DOLLARS)
                                  (UNAUDITED)
 
 1. SIGNIFICANT ACCOUNTING POLICIES
 
     The Company's accounting policies are in accordance with accounting
principles generally accepted in Canada. These policies are consistent with
accounting principles generally accepted in the United States except as outlined
in Note 7.
 
  Basis of Presentation
 
     The consolidated financial statements include the accounts of Potash
Corporation of Saskatchewan Inc. (PCS) and its subsidiaries (the "Company"
except to the extent the context otherwise requires). The principal subsidiaries
are:
 
     -- PCS Sales (Canada) Inc.
        -- PCS Sales (Iowa), Inc.
        -- PCS Sales (Indiana), Inc.
        -- Potash Corporation of Saskatchewan (Florida) Inc.
     -- Potash Corporation of Saskatchewan Transport Limited
     -- PCS Sales (USA), Inc.
     -- PCS Phosphate Company, Inc.
        -- Albright & Wilson Company (proportionately consolidated)
     -- White Springs Agricultural Chemicals, Inc.
     -- PCS Nitrogen, Inc.
        -- PCS Nitrogen Fertilizer, L.P.
        -- PCS Nitrogen Ohio, L.P.
        -- PCS Nitrogen Limited
        -- PCS Nitrogen Fertilizer Limited
        -- PCS Nitrogen Trinidad Limited
     -- PCS Cassidy Lake Company (PCS Cassidy Lake)
 
 2. CHANGE IN ACCOUNTING POLICY
 
     The Company has adopted the provisions of section 3465 of the Canadian
Institute of Chartered Accountants Handbook "Income Taxes". Under this
accounting policy, deferred income taxes are determined based on the difference
between the financial reporting and tax bases of assets and liabilities using
the enacted rates expected to apply to taxable income in the years in which
those temporary differences are expected to reverse. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized. Income tax expense for the period is the tax payable for the
period and the change during the period in deferred tax assets and liabilities.
The effect of this change on prior period financial statements and current
period results is not significant.
 
 3. ACQUISITION OF POTASH COMPANY OF CANADA LIMITED
 
     On March 3, 1998, the Company acquired all the outstanding shares of Potash
Company of Canada Limited for cash of $9,363 (subject to adjustment). Concurrent
with the closing, the name Potash Company of Canada Limited was changed to PCS
Cassidy Lake Limited and this company was subsequently wound up. The acquisition
has been accounted for by the purchase method of accounting and, accordingly,
the results of operations of PCS Cassidy Lake have been included in the
consolidated financial statements from March 4, 1998.
 
                                        5
<PAGE>   6
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
     The consolidated financial statements are based on a preliminary allocation
of the purchase price (which is subject to adjustment). Changes to the
consolidated financial statements are expected as the purchase price is
adjusted, evaluations of assets and liabilities are completed, and additional
information becomes available. Accordingly, the final allocated values may
differ from the amounts set forth in the consolidated financial statements.
 
     Due to the cessation of mining activities at PCS Cassidy Lake prior to
acquisition, no pro forma information is being presented.
 
 4. INVENTORIES
 
<TABLE>
<CAPTION>
                                                       JUNE 30,      DECEMBER 31,
                                                         1998            1997
                                                      -----------    ------------
                                                      (UNAUDITED)
<S>                                                   <C>            <C>
Finished product....................................   $136,651        $162,181
Materials and supplies..............................    115,019         107,518
Raw materials.......................................     43,397          59,689
Work in process.....................................     20,892          24,037
                                                       --------        --------
                                                       $315,959        $353,425
                                                       ========        ========
</TABLE>
 
 5. NET INCOME PER SHARE (EARNINGS PER SHARE)
 
     Net income per share for the year to date is calculated on the weighted
average shares issued and outstanding during the six months ended June 30, 1998
of 54,115,000 (1997 -- 50,770,000). Second quarter net income per share is
calculated on the weighted average shares issued and outstanding during the
three months ended June 30, 1998 of 54,222,000 (1997 -- 53,685,000).
 
 6. DIVIDENDS
 
     The Company declares its dividends in Canadian dollars.
 
 7. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
 
     A description of the accounting principles which differ significantly in
certain respects from generally accepted accounting principles in the United
States (US GAAP) follows:
 
     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. The
difference in these exchange rates gives rise to the foreign currency
translation adjustment.
 
     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 included in selling and administrative expenses.
 
     Non-cash financing and investing activities: Non-cash financing and
investing activities are included in the statement of cash flow. US GAAP
requires that non-cash financing and investing activities be disclosed
supplementally rather than being included in the statement of cash flow.
 
                                        6
<PAGE>   7
                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
     In 1995, the Financial Accounting Standards Board issued Statement No. 123
"Accounting for Stock-Based Compensation". The Company has decided to continue
to apply APB Opinion 25 for measurement of compensation of employees.
 
     The application of US GAAP, as described above, would not have significant
effects on net income, net income per share, total assets or shareholders'
equity.
 
 8. COMPARATIVE FIGURES
 
     Certain of the prior period's comparative figures have been reclassified to
conform with the current period's presentation. Results for the first two months
of 1997 do not include the operations of PCS Nitrogen (formerly Arcadian
Corporation) acquired March 6, 1997.
 
                                        7
<PAGE>   8
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
 
  OVERVIEW
 
     With the exception of purchased product, nitrogen data for 1997 is only for
the period subsequent to the acquisition of PCS Nitrogen (formerly Arcadian
Corporation) on March 6, 1997. Phosphate data since March 6, 1997 includes
phosphate produced by the acquired Geismar operation.
 
  Second Quarter
 
     Net sales and net income for the three months ended June 30, 1998 declined
2 percent and 8 percent, respectively, over the same period in 1997. Net income
for the three months ended June 30, 1998 was $89.1 million (1997 -- $97.0
million) on net sales of $660.4 million (1997 -- $676.6 million), or $1.64 per
share (1997 -- $1.81 per share). Second quarter gross margin and operating
income were $186.6 million and $146.9 million, respectively, compared to a gross
margin of $184.2 million and operating income of $154.7 million for the same
period in 1997.
 
     For the three months ended June 30, 1998, North American and offshore net
sales revenue was $477.7 million (1997 -- $501.8 million) and $182.7 million
(1997 -- $174.8 million), respectively. North American net sales revenue
represented 72 percent (1997 -- 74 percent) of total net sales revenue, whereas
offshore sales represented 28 percent of net sales revenue (1997 -- 26 percent).
 
     Potash, phosphate and nitrogen net sales revenue for the second quarter of
1998 was $158.9 million (1997 -- $137.4 million), $251.2 million (1997 -- $246.9
million), and $250.3 million (1997 -- $292.3 million), respectively.
 
     Gross margin for the three months ended June 30, 1998 increased $2.5
million or 1 percent over the same period in 1997. Gross margin for potash
products was $91.9 million, an increase of $28.9 million when compared to the
second quarter of 1997. Gross margin for phosphate products was $60.8 million,
an increase of $6.3 million when compared to the same period in 1997. Gross
margin for nitrogen products was $33.9 million, a decrease of $32.7 million when
compared to 1997.
 
  Year to date
 
     Net sales for the six months ended June 30, 1998 improved 9 percent over
the same period in 1997 while net income declined marginally over the same
period. Net income for the six months ended June 30, 1998 was $152.1 million
(1997 -- $153.3 million) on net sales of $1,244.3 million (1997 -- $1,141.5
million), or $2.81 per share (1997 -- $3.02 per share). Gross margin and
operating income for the first half of 1998 were $337.3 million and $256.7
million, respectively, compared to a gross margin of $299.2 million and
operating income of $245.2 million for the same period in 1997 (increases of 13
percent and 5 percent, respectively).
 
     For the six months ended June 30, 1998, North American and offshore net
sales revenue was $903.1 million (1997 -- $829.0 million) and $341.2 million
(1997 -- $312.5 million), respectively. North American net sales revenue
represented 73 percent (1997 -- 73 percent) of total net sales revenue, whereas
offshore sales represented 27 percent of net sales revenue (1997 -- 27 percent).
 
     Potash, phosphate and nitrogen net sales revenue for the first six months
of 1998 was $304.9 million (1997 -- $244.4 million), $496.7 million
(1997 -- $470.6 million), and $442.7 million (1997 -- $426.5 million),
respectively.
 
     Gross margin for the first half of 1998 increased $38.1 million or 13
percent over the same period in 1997. Gross margin for potash products was
$176.3 million, an increase of $66.0 million when compared to the first six
months of 1997. Gross margin for phosphate products was $112.9 million, an
increase of $19.0 million when compared to the same period in 1997. Gross margin
for nitrogen products was $48.1 million, a decrease of $46.9 million when
compared to 1997.
 
                                        8
<PAGE>   9
 
     POTASH
 
  Second Quarter
 
     Potash net sales revenue for the three months ended June 30, 1998 was
$158.9 million (1997 -- $137.4 million) representing 24 percent (1997 -- 20
percent) of consolidated net sales revenue. Gross margin for potash was $91.9
million (1997 -- $63.0 million) or 49 percent of consolidated gross margin.
 
     In the second quarter of 1998, North American sales volumes decreased 25
percent (0.216 million tonnes) as compared to the record second quarter sales in
1997 (1998 -- 0.633 million tonnes; 1997 -- 0.849 million tonnes). In 1997 the
spring season fell entirely into the second quarter and there was not any
significant pre-buying in preceding quarters as there was in 1998. Potash prices
increased 29 percent in the domestic market due primarily to tighter supply as a
result of the closure of the Potacan mine and another competitor's mine in New
Mexico. Offshore sales volumes increased by 20 percent due to large volume sales
to China and Brazil. Prices realized in the offshore markets increased 7 percent
as prices in China, Japan and Brazil are higher than last year.
 
     North American net sales revenue from potash operations represented 34
percent of the potash net sales revenue of the Company during this year's second
quarter. In the three months ended June 30, 1998, the decrease in North American
potash sales volumes and an increase in North American prices resulted in a $2.0
million decrease in North American potash net sales revenue over the same period
in 1997.
 
     Second quarter offshore net sales revenue from potash operations
represented 66 percent of potash net sales revenue of the Company. The increase
in offshore sales volumes and offshore selling price resulted in a $23.5 million
increase in offshore potash net sales revenue over the same period in 1997. In
the offshore market, the Company sold 1.246 million potash tonnes during the
second quarter of 1998 (1997 -- 1.038 million tonnes). Of the 1.246 million
tonnes, 1.087 million tonnes were sold through Canpotex and the remaining 0.159
million tonnes were produced by the New Brunswick divisions and sold and
delivered to offshore markets by PCS Sales.
 
  Year to Date
 
     Potash net sales revenue for the six months ended June 30, 1998 was $304.9
million representing 25 percent (1997 -- 21 percent) of consolidated net sales
revenue. Gross margin for potash was $176.3 million (1997 -- $110.3 million) or
52 percent of consolidated gross margin.
 
     In the first six months of 1998, North American sales volumes decreased 10
percent (0.160 million tonnes) over the same period in 1997 (1998 -- 1.378
million tonnes; 1997 -- 1.538 million tonnes). Potash prices increased 28
percent in the domestic market due primarily to tighter supply as a result of
the closure of the Potacan mine and another competitor's mine in New Mexico.
Offshore sales volumes increased by 20 percent due to large volume sales to
China and Brazil. Prices realized in the offshore markets increased 10 percent
as prices in China, Japan and Brazil were higher than last year.
 
     North American net sales revenue from potash operations represented 37
percent of the Company's potash net sales revenue during this year's first six
months. In the first six months of 1998, the decrease in North American potash
sales volumes and an increase in North American prices resulted in a $14.4
million increase in North American potash net sales revenue over the same period
in 1997.
 
     In the first six months of 1998, offshore net sales revenue from potash
operations represented 63 percent of potash net sales revenue of the Company. In
the second quarter of 1998, the increase in offshore sales volumes and offshore
selling price resulted in a $46.1 million increase in offshore potash net sales
revenue over the same period in 1997. In the offshore market, the Company sold
2.265 million potash tonnes (1997 -- 1.895 million tonnes). Of the 2.265 million
tonnes, 1.950 million tonnes were sold through Canpotex and the remaining 0.315
million tonnes were produced by the New Brunswick divisions and sold and
delivered to offshore markets by PCS Sales.
 
                                        9
<PAGE>   10
 
     PHOSPHATE
 
  Second Quarter
 
     Phosphate net sales revenue for the three months ended June 30, 1998 was
$251.2 million representing 38 percent of consolidated net sales revenue. The
distribution of this revenue was as follows: liquid phosphates $91.5 million (36
percent); solid phosphates $88.7 million (35 percent); feed supplements $48.4
million (19 percent); industrial products $22.4 million (9 percent) and
phosphate rock $0.2 million. For the same three months of 1997 net sales revenue
was $246.9 million (36 percent of consolidated net sales revenue); liquid
phosphates $83.3 million (34 percent); solid phosphates $96.6 million (39
percent); feed supplements $44.0 million (18 percent); industrial products $22.8
million (9 percent) and phosphate rock $0.2 million. Gross margin for phosphate
was $60.8 million (1997 -- $54.5 million) or 33 percent of consolidated gross
margin.
 
     For the three months ended June 30, 1998 net sales revenue from liquid and
solid phosphates was $180.2 million (1997 -- $179.9 million) with sales volumes
of 0.887 million tonnes (1997 -- 0.919 million tonnes). Solid phosphates
(substantially all DAP) accounted for 35 percent (1997 -- 39 percent) of the
total phosphate net sales revenue. Liquid phosphate prices increased by 4
percent (due to a large percentage of higher priced domestic sales in the sales
mix) and sales volumes increased by 6 percent, resulting in additional net sales
revenue of $8.2 million over the second quarter of 1997. Solid phosphate prices
increased 3 percent as compared to the second quarter of 1997. However, this was
offset by a sales volume decrease of 10 percent resulting in a decrease of net
sales revenue of $7.9 million compared to the same period of 1997. The decrease
in DAP sales volumes is due to utilizing more P205 tonnes for other higher
margin products.
 
     Net sales revenue from feed supplements and industrial products during the
second quarter was $70.8 million (1997 -- $66.8 million) with sales volumes of
0.250 million tonnes (1997 -- 0.235 million tonnes). Feed supplement prices
increased 2 percent and volumes increased 8 percent as compared to the second
quarter of 1997. This resulted in additional net sales revenue of $4.4 million.
Industrial product prices declined by 5 percent while sales volumes increased by
3 percent. This resulted in a reduction of net sales revenue of $0.4 million.
Non-fertilizer products represented 31 percent of phosphate sales volumes but
accounted for 43 percent of the phosphate gross margin.
 
  Year to Date
 
     Phosphate net sales revenue for the six months ended June 30, 1998 was
$496.7 million representing 40 percent of consolidated net sales revenue. The
distribution of this revenue was as follows: liquid phosphates $176.3 million
(35 percent); solid phosphates $180.2 million (36 percent); feed supplements
$94.8 million (19 percent); industrial products $45.1 million (9 percent) and
phosphate rock $0.3 million. For the comparable six months of 1997 net sales
revenue was $470.6 million (41 percent of consolidated net sales revenue);
liquid phosphates $149.5 million (32 percent); solid phosphates $180.9 million
(38 percent); feed supplements $94.6 million (20 percent); industrial products
$44.3 million (10 percent) and phosphate rock $1.3 million. Gross margin for
phosphate was $112.9 million (1997 -- $93.9 million) or 33 percent of
consolidated gross margin.
 
     For the six months ended June 30, 1998 net sales revenue from liquid and
solid phosphates was $356.5 million (1997 -- $330.4 million) with sales volumes
of 1.752 million tonnes (1997 -- 1.677 million tonnes). Solid phosphates
(substantially all DAP) accounted for 36 percent (1997 -- 38 percent) of the
total phosphate net sales revenue. Liquid phosphate prices increased by 6
percent (due to a large percentage of higher priced domestic sales in the sales
mix) and sales volumes increased by 11 percent, resulting in additional net
sales revenue of $26.8 million compared to the first six months of 1997.
Overall, solid phosphate prices and volumes were consistent with the first six
months of 1997.
 
     Net sales revenue from feed supplements and industrial products during the
first six months was $139.9 million (1997 -- $138.9 million) with sales volumes
of 0.494 million tonnes (1997 -- 0.490 million tonnes). Feed supplement prices
and volumes were steady as compared to the first six months of 1997. Industrial
product prices declined by 3 percent while sales volumes increased by 5 percent.
Non-fertilizer
 
                                       10
<PAGE>   11
 
products represented 31 percent of phosphate sales volumes but accounted for 45
percent of the phosphate gross margin.
 
     NITROGEN
 
     With the exception of purchased product, nitrogen data for 1997 is only for
the period subsequent to the acquisition of PCS Nitrogen, Inc. (formerly
Arcadian Corporation) on March 6, 1997.
 
  Second Quarter
 
     Nitrogen net sales revenue for the three months ended June 30, 1998 was
$250.3 million (1997 -- $292.3 million) representing 38 percent (1997 -- 44
percent) of consolidated net sales revenue. Net sales revenue includes $21.1
million (1997 -- $46.1 million) of purchased nitrogen products for resale. The
overall gross margin was impacted negatively by reductions in sales prices.
Prices remained low, but increased 9 percent over prices realized in the first
quarter of 1998. These price increases were primarily due to a combination of
seasonal pressures and production problems at a competitor's plant in Trinidad
which reduced the expected supply of products. Manufactured nitrogen net sales
revenue for the three months ended June 30, 1998 was $229.2 million. The
distribution of this revenue was as follows: ammonia $56.6 million (25 percent);
urea $66.1 million (29 percent); nitrogen solutions $70.2 million (31 percent)
and other nitrogen products $36.3 million (15 percent). Second quarter 1997
manufactured nitrogen net sales revenue was $246.2 million as follows: ammonia
$73.8 million (30 percent); urea $65.9 million (27 percent); nitrogen solutions
$67.2 million (27 percent) and other nitrogen products $39.3 million (16
percent). Gross margin for nitrogen products was $33.9 million or 18 percent of
consolidated gross margin.
 
     Sales tonnes for manufactured nitrogen products in the second quarter of
1998 were as follows: ammonia 0.386 million tonnes; urea 0.442 million tonnes;
nitrogen solutions 0.889 million tonnes and other nitrogen products 0.284
million tonnes. Sales tonnes for manufactured nitrogen products for the second
quarter of 1997 were: ammonia 0.402 million tonnes; urea 0.360 million tonnes;
nitrogen solutions 0.636 million tonnes and other nitrogen products 0.294
million tonnes. Purchased nitrogen products sales tonnes for the three months
ended June 30, 1998 were 0.133 million tonnes (1997 -- 0.274 million tonnes).
 
     The nitrogen market came under pressure last year when China stopped buying
urea, depressing prices. Less ammonia was then upgraded to urea, which pulled
ammonia prices down. The market for nitrogen solutions was also affected.
However, the Company continued to sell a large portion of its North American
nitrogen production to the more stable industrial market (non-fertilizer
products represented 26 percent of nitrogen sales volumes and provided 60
percent of the nitrogen gross margin).
 
  Year to Date
 
     Nitrogen net sales revenue for the first six months was $442.7 million
(1997 -- $426.5 million) representing 35 percent (1997 -- 38 percent) of
consolidated net sales revenue. Net sales revenue includes $40.6 million
(1997 -- $97.6 million) of purchased nitrogen products for resale. The overall
gross margin was impacted negatively by reductions in sales prices. Prices
remained low. Manufactured nitrogen net sales revenue for the six months ended
June 30, 1998 was $402.1 million. The distribution of this revenue was as
follows: ammonia $100.1 million (25 percent); urea $119.5 million (30 percent);
nitrogen solutions $112.2 million (28 percent) and other nitrogen products $70.3
million (17 percent). For the four months of 1997 manufactured nitrogen net
sales revenue was $328.9 million as follows: ammonia $88.7 million (27 percent);
urea $100.1 million (30 percent); nitrogen solutions $86.6 million (27 percent)
and other nitrogen products $53.5 million (16 percent). Gross margin for
nitrogen products was $48.1 million or 15 percent of consolidated gross margin.
 
     For the first six months of 1998 sales tonnes for manufactured nitrogen
products were as follows: ammonia 0.733 million tonnes; urea 0.830 million
tonnes; nitrogen solutions 1.445 million tonnes and other nitrogen products
0.561 million tonnes. Sales tonnes for manufactured nitrogen products for the
first four months of 1997 were as follows: ammonia 0.471 million tonnes; urea
0.541 million tonnes; nitrogen solutions
 
                                       11
<PAGE>   12
 
0.813 million tonnes and other nitrogen products 0.395 million tonnes. Purchased
nitrogen products sales tonnes for the six months ended June 30, 1998 were 0.345
million tonnes (1997 -- 0.519 million tonnes).
 
     Non-fertilizer products (which are subject to contractually set prices)
represented 30 percent of nitrogen sales volumes in the first half of 1998 and
provided 86 percent of the nitrogen gross margin.
 
     COST OF GOODS SOLD
 
  Second Quarter
 
     For the three months ended June 30, 1998, the Company produced 2.046
million potassium chloride (KCl) tonnes, compared to 1.687 million tonnes in the
second quarter of 1997, an increase of 0.359 million tonnes (21 percent). For
the three months ended June 30, 1998, the Company produced 0.604 million
phosphoric acid (P(2)0(5)) tonnes from its phosphate operations, compared to
0.599 million tonnes in 1997. Nitrogen production was 0.777 million nitrogen (N)
tonnes in the second quarter of 1998 compared to 0.724 million tonnes in the
same period in 1997.
 
     Potash unit cost of sales decreased by 10 percent in the second quarter of
1998 compared to the same period in 1997 due primarily to higher production
volumes and ten fewer shutdown weeks. Reduced cost of sales combined with
domestic and offshore price increases resulted in a 46 percent increase in the
per unit gross margin realized on potash products on a year over year basis.
 
     Overall phosphate unit cost of sales in the second quarter of 1998 were
flat compared to the same period in 1997. Lower ammonia costs were offset
primarily by higher rock costs. On an overall basis the per unit gross margin on
phosphate products increased by 13 percent on a year over year basis, primarily
due to improved prices.
 
     In nitrogen, U.S. natural gas market prices have increased from the same
period in 1997. However, the Company, through its natural gas hedging program
and favorable gas contracts in Trinidad, has kept its per unit natural gas cost
relatively flat. The per unit natural gas cost included in cost of sales
decreased approximately 5 percent from the same period in 1997. This contributed
to a reduction in the overall per unit cost of sales of manufactured products of
7 percent as compared with the second quarter of 1997.
 
     Depreciation and amortization expense (including amortization of goodwill
of $3.7 million included in selling and administrative expenses) for the three
months ended June 30, 1998 was $49.4 million compared to $46.6 million in 1997.
 
  Year to Date
 
     For the six months ended June 30, 1998, the Company produced 4.042 million
KCl tonnes, compared to 3.340 million tonnes in the same period in 1997, an
increase of 0.702 million tonnes (21 percent). For the six months ended June 30,
1998, the Company produced 1.165 million P(2)0(5) tonnes from its phosphate
operations, compared to 1.121 million tonnes in 1997, an increase of 0.044
million tonnes (4 percent). Nitrogen production was 1.535 million (N) tonnes in
the first half of 1998 compared to 0.964 million tonnes in four months of 1997.
 
     Potash unit cost of sales decreased by 10 percent in the first six months
of 1998 compared to the same period in 1997 due primarily to higher production
volumes and eighteen fewer shutdown weeks. Reduced cost of sales combined with
domestic and offshore price increases resulted in a 51 percent increase in the
per unit gross margin realized on potash products on a year over year basis. The
Company's mine at Sussex, New Brunswick continues to experience saturated brine
inflow at the rate of approximately 250 gallons per minute. Mining operations
have not been affected by this inflow and efforts to locate and control it
continue. To date the costs associated with locating and managing this inflow
have not been material.
 
     Overall phosphate unit cost of sales in the first six months of 1998 were
flat compared to the first half of 1997. On an overall basis the per unit gross
margin on phosphate products increased by 17 percent on a year over year basis,
primarily due to improved prices.
 
                                       12
<PAGE>   13
 
     In nitrogen, U.S. natural gas market prices have increased from the same
period in 1997. However, the Company, through its natural gas hedging program
and favorable gas contracts in Trinidad, has kept its per unit natural gas cost
relatively flat. The per unit natural gas cost included in cost of sales
decreased approximately 5 percent from the same period in 1997. This contributed
to a reduction in the overall per unit cost of sales of manufactured products of
7 percent as compared with the first half of 1997.
 
     Depreciation and amortization expense (including amortization of goodwill
of $7.3 million included in selling and administrative expenses) for the first
six months of 1998 was $97.6 million compared to $77.9 million in 1997, an
increase of $19.7 million or 25 percent. The increase is largely attributable to
$15.8 million additional depreciation and amortization due to a full six months
of nitrogen operations.
 
     SELLING AND ADMINISTRATIVE
 
  Second Quarter
 
     Selling and administrative expenses during the second quarter of 1998 were
$28.4 million as compared to $27.9 million in 1997, an increase of $0.5 million.
 
  Year to Date
 
     Selling and administrative expenses (which includes amortization of
goodwill) during the first half of 1998 were $58.3 million as compared to $47.2
million in 1997, an increase of $11.1 million. The increase is attributable to
the inclusion of nitrogen operations for six months in 1998 versus four months
in 1997 and to general increases in supplies, compensation and benefits.
 
     PROVINCIAL MINING AND OTHER TAXES
 
     Saskatchewan's Potash Production Tax is comprised of a base tax per tonne
of product sold and an additional tax based on mine-by-mine profits. PCS New
Brunswick Division and the Saskatchewan divisions pay a provincial crown
royalty, which is accounted for under cost of goods sold.
 
  Second Quarter
 
     For the second quarter of 1998, provincial mining and other taxes were
$23.9 million as compared to $14.5 million in the first quarter of 1997, an
increase of $9.4 million. Potash Production Tax for the second quarter of 1998
was $18.4 million compared to $10.1 million in the same period in 1997, an
increase of $8.3 million. Although the Province of Saskatchewan has reduced the
top marginal rate of the profits portion of the Potash Production Tax from 50
percent to 35 percent effective January 1, 1998, the combination of higher
prices and increased volumes for potash has increased the amount of tax paid.
Corporate capital tax was $5.5 million in the three months ended June 30, 1998
compared to $4.4 million in the same period in 1997, an increase of $1.1
million.
 
  Year to Date
 
     For the first half of 1998, provincial mining and other taxes were $44.8
million as compared to $25.0 million in the first half of 1997, an increase of
$19.8 million. Potash Production Tax for the first half of 1998 was $34.3
million compared to $16.9 million in the same period in 1997, an increase of
$17.4 million. Although the Province of Saskatchewan has reduced the top
marginal rate of the profits portion of the Potash Production Tax from 50
percent to 35 percent effective January 1, 1998, the combination of higher
prices and increased volumes for potash has increased the amount of tax paid.
Corporate capital tax was $10.5 million in the six months ended June 30, 1998
compared to $8.1 million in the same period in 1997, an increase of $2.4
million.
 
                                       13
<PAGE>   14
 
     INTEREST EXPENSE
 
  Second Quarter
 
     For the second quarter of 1998, interest expense was $17.0 million as
compared to $23.6 million in the same period in 1997.
 
  Year to Date
 
     For the first half of 1998, interest expense was $37.1 million as compared
to $37.4 million in the same period in 1997. The 1998 amounts include interest
for the full half year on the debt incurred with the acquisition of PCS Nitrogen
in March 1997. This additional interest is partially offset by the reduction in
interest expense resulting from debt repayments during the first half of the
year.
 
     INCOME TAXES
 
  Second Quarter
 
     Income taxes in the second quarter of 1998 were $40.8 million, compared to
$34.2 million in the same period of 1997, an increase of $6.6 million. The
increase is attributable to the recording of a deferred income tax provision
relating to the Company's Canadian operations due to the strong results
generated by potash. The effective consolidated tax rate for the second quarter
of 1998 was 31 percent (1997 -- 26 percent), of which 7 percentage points
represented cash income taxes and 24 percentage points represented deferred
income taxes.
 
  Year to Date
 
     Income taxes in the first half of 1998 were $67.5 million, compared to
$54.5 million in the same period of 1997, an increase of $13.0 million. The
increase is attributable to the recording of a deferred income tax provision
relating to the Company's Canadian operations due to the strong results
generated by potash . The effective consolidated tax rate for the first six
months of 1998 was 31 percent (1997 -- 26 percent) of which 7 percentage points
represented cash income taxes and 24 percentage points represented deferred
income taxes.
 
ANALYSIS OF FINANCIAL CONDITION AND CASH FLOW
 
     Working capital for the first six months of 1998 decreased by $15.9
million. Cash flow from operations was $340.7 million (1997 -- $236.0 million),
a new record. Quick and current ratios were .79 and 1.63 at June 30, 1998,
respectively (.79 and 1.62 at December 31, 1997). The Company paid down its
long-term debt by $242.1 million and paid dividends of $26.8 million
(1997 -- $27.8 million). At the end of the first six months of 1998, the debt to
capital ratio was at 30 percent (36 percent at December 31, 1997) and the
interest coverage ratio was 6.9 to 1 (5.5 to 1 at December 31, 1997). The net
debt to market capitalization at June 30, 1998 was 22 percent (25 percent at
December 31, 1997).
 
YEAR 2000 UPDATE
 
     The Company has formed a Year 2000 committee composed of executive and
senior management to oversee and direct the Company's efforts to identify and
resolve Year 2000 issues. The Company anticipated Year 2000 requirements for its
corporate, potash and sales administrative systems in the early 1990s by
implementing four digit century standards. Based on investigations to date, the
Company considers those systems to be Year 2000 compliant. Testing to confirm
compliance is planned to occur in third quarter 1998. Phosphate and nitrogen
subsidiaries are conducting routine compliant upgrades of their packaged
administrative systems. The last such upgrade is expected to be completed by
mid-1999. The Company is reviewing its operational systems and expects to
complete its assessment by the end of the third quarter.
 
     The Company has initiated formal communications with critical external
parties to determine the extent to which the Company may be vulnerable to such
parties' failure to resolve their Year 2000 issues. Responses to date have not
identified any matters which are expected to materially impact the Company.
However, the
                                       14
<PAGE>   15
 
effect, if any, on the Company's results of operations from the failure of these
entities to be Year 2000 ready is uncertain.
 
     The Company is primarily utilizing internal resources to identify, upgrade
and test its systems for Year 2000 compliance and anticipates that these efforts
will be completed by mid-1999. Costs over this period are not expected to have a
material effect on the Company's financial results.
 
OUTLOOK
 
     The statements in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and in this "Outlook" section, relating to
the period after June 30, 1998, are forward-looking statements subject to
uncertainties. A number of factors could cause actual results to differ
materially from those in the forward-looking statements, including, but not
limited to, fluctuations in supply and demand in fertilizer, sulphur and
petrochemical markets, changes in capital markets, changes in currency exchange
rates, unexpected geological or environmental conditions, imprecision in reserve
estimates, and changes in government policy. The Company sells to a diverse
group of customers both by geography and by end product. Market conditions by
country will vary on a year-over-year basis and sales shift from one period to
another.
 
     The rising world population and the demand for more food and better diets,
with meat as a protein source, will continue to drive consumption for fertilizer
products over the long term. Over the short term, there should be increased
fertilizer usage as governments around the world are focusing on increasing food
production. While the consumption trend line is expected to continue to climb
over the long term, there will be, at times, fluctuations in demand.
 
     North American fertilizer demand is generally considered mature but is
expected to fluctuate from year to year, as a function of acres planted and
application rates per acre which are influenced by crop prices and weather. The
Company is expecting good fertilizer applications in the fall season.
 
     The Company sells a significant amount of potash and phosphate for
fertilizer use in the offshore markets. To date, the currency devaluation in
Asian countries has not significantly affected these sales (with the exception
of potash sales to Indonesia). These countries purchase fertilizer to grow cash
crops for export and to grow food for internal use and are making fertilizer
purchases a priority in spending plans. However, the persistence of the currency
devaluation could affect the growth trend. The United States Congress has passed
a bill which exempts fertilizers from trade sanctions against India and
Pakistan.
 
     The Company also sells products in non-fertilizer markets which are
affected by domestic economic growth. The optimistic outlook for domestic
economic growth should translate into increased demand for these upgraded
products.
 
     The effect of such an anticipated increase in demand for fertilizer and
non-fertilizer products may be offset to the degree that additional capacity,
particularly for nitrogen products, comes on stream.
 
     During the third quarter, potash prices in the domestic market are expected
to be affected by typical seasonal pressures. The Company has announced a $6 per
ton price increase effective September 15, 1998. Offshore markets are expected
to continue to be healthy. Realized export prices are expected to increase due
to increased sales in higher priced markets in the third quarter.
 
     The Company continues to operate its potash mines by matching production to
sales demand. Shutdowns at potash mines for inventory correction will influence
potash production costs on a quarter over quarter comparative basis. The Company
is currently planning thirteen shutdown weeks in the third quarter of 1998,
compared to nine in the third quarter of 1997.
 
     In the near-term phosphate prices are expected to remain firm. Worldwide
phosphoric acid capacity utilization continues to operate at historically high
levels. Liquid phosphate sales volumes in the third quarter of 1998 are expected
to be higher than the third quarter of 1997. Realized prices are expected to
decline from the second quarter of 1998 due to seasonality, however they are
expected to be higher on a year over year basis.
 
                                       15
<PAGE>   16
 
     As two-thirds of U.S. DAP is exported, a strong offshore market is required
to maintain upward pressure on prices. To date in 1998, China, the biggest
offshore buyer, has purchased above contract sales volumes from PhosChem. India
is buying DAP but is still awaiting official program announcements and final
approvals before purchasing larger volumes. In addition, Mulberry Phosphates has
joined PhosChem, further strengthening the association's offshore sales
position.
 
     In North America, projected increased acreage and low inventories are
expected to support phosphate fertilizer sales. Feed supplement sales prices are
expected to decline slightly in the third quarter due to increased North
American competition and reduced offshore meat imports.
 
     Urea prices continue to be below last year's levels. The urea market is
influenced by China where buyers remain inactive. The Company's overall urea
price realizations have been aided by higher priced industrial product. The
difficult urea market carries over into the nitrogen solutions market, where
prices continue to be disappointing. Third quarter prices are expected to be
affected by seasonal weakness and new capacity.
 
     Nitrogen gross margin for the third quarter of 1998 is expected to be
approximately one half of the comparable period in 1997, due to last year's
higher prices. However, the Company expects that its strategic plant locations
and sales to industrial customers (both of which result in higher margins) and
its favourable gas contracts in Trinidad will continue to provide positive
nitrogen margins. The Company's new ammonia plant in Trinidad began commercial
production during the second quarter and is now operating at capacity. This will
increase the amount of lower cost ammonia available for sale and is expected to
reduce the need to purchase product to fill customer orders. This is expected to
improve overall nitrogen margins.
 
     Phosphate processing costs will continue to be affected by ammonia costs,
one of the key inputs. Ammonia prices in the third quarter are expected to be
lower than in the second quarter of 1998 and the comparable period in 1997. PCS
can use one-third of the ammonia it produces and sells as ammonia at its own
phosphate plants. The Company manages its natural gas costs through a
combination of fixed price contracts, hedges and the Trinidad gas contracts. As
the most flexible producer, the Company will continue to allocate its nitrogen
and phosphate feed stock to production of the products with the best margins.
 
     Capital expenditures in 1998 are expected to approximate those in 1997.
 
     The narrative included under this Management's Discussion and Analysis of
Financial Condition and Results of Operations has been prepared with reference
to the consolidated financial statements reported under accounting principles
generally accepted in Canada.
 
                                       16
<PAGE>   17
 
                           PART II. OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
FORMER ARCADIAN EXECUTIVE PROCEEDINGS
 
     On May 7, 1997, J. Douglas Campbell, Alfred L. Williams, Peter H. Kesser,
and David Alyea, former officers of Arcadian, filed lawsuits against the Company
in the United States District Court for the Western District of Tennessee. The
complaints allege that the Company breached employment agreements between
Arcadian and the officers and breached the related assumption agreement among
the Company, PCS Nitrogen, and Arcadian. In addition, Mr. Alyea's complaint
names Charles Childers, John Gugulyn, and John Hampton as additional defendants
and alleges that the defendants interfered with and conspired to interfere with
his employment agreement, and did not accurately state their intentions in
entering into the assumption agreement. The complaints of Mr. Campbell, Mr.
Williams, Mr. Kesser, and Mr. Alyea seek damages in excess of $22.2 million,
$6.2 million, $3.7 million, and $4.2 million, respectively. In addition, on
October 14, 1997, Charles Lance, a former officer of Arcadian Corporation, filed
a lawsuit in the same court against the Company also alleging breaches of his
employment agreement and the related assumption agreement. Mr. Lance seeks
damages in an amount exceeding $3.0 million. Each complaint also seeks certain
additional unspecified damages. On July 20, 1998, the Company was granted leave
to assert the claims and defenses it asserted in the state court action
described below, including a request for a declaratory judgment regarding the
enforceability of the employment agreements. On August 11, 1998, the Court ruled
that the employment agreements were enforceable against the Company and that
equitable claims and defenses against the executives for breaches of fiduciary
duties, corporate waste, and self-dealing should be asserted by PCS Nitrogen in
the state court action. Trial with respect to the claims of Mr. Campbell, Mr.
Williams and Mr. Kesser has been set for August 17, 1998. No trial dates have
been set for the claims of Mr. Lance or Mr. Alyea. Management of the Company,
having consulted with legal counsel, believes that the lawsuits will not have a
material adverse effect on the Company.
 
     On September 15, 1997, the Company and PCS Nitrogen filed an action in the
Circuit Court of Tennessee for Thirtieth Judicial District at Memphis against J.
Douglas Campbell, Peter H. Kesser, Alfred L. Williams, Charles W. Lance, Jr.,
and David L. Alyea, for declaratory relief and damages. The Company and PCS
Nitrogen allege that the defendants, all former executives of Arcadian,
committed breaches of their fiduciary duties in the negotiation of, obtaining
approval for, and execution of the Employment Agreements each of them had with
Arcadian. In addition, the Company has sought a declaratory judgment with
respect to the unenforceability of the Employment Agreements. On October 14,
1997, the defendants removed this action from the Circuit Court of Tennessee to
the United States District Court for the Western District of Tennessee. On
October 21, 1997, the five defendants filed counterclaims: (i) under the
Employee Retirement Income Security Act of 1974, as amended (ERISA), against PCS
Nitrogen, (ii) alleging that the Company and PCS Nitrogen unlawfully interfered
with their attainment of benefits under their Employment Agreements, and (iii)
incorporating by reference all claims asserted in their individually filed
complaints. The damages sought by the defendants in these counterclaims appear
substantially equivalent to the damages sought in their individually filed suits
as plaintiffs. On July 20, 1998 the federal court dismissed all of the former
executives' claims under ERISA and granted the Company's motion to remand the
case to state court.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
     (a) On May 7, 1998, the Company held an annual and special meeting (the
"Meeting") of its shareholders.
 
                                       17
<PAGE>   18
 
     (b) At the Meeting, the Company's shareholders voted upon each of the
following proposed director nominees with the results of the voting set forth
opposite the name of each such nominee.
 
<TABLE>
<CAPTION>
                                                                 FOR        WITHHELD
                                                              ----------    --------
<S>                                                           <C>           <C>
Isabel Anderson.............................................  35,680,351     57,615
Douglas J. Bourne...........................................  35,680,108     57,858
Charles E. Childers.........................................  35,339,649    398,317
Denis J. Cote...............................................  35,680,842     57,124
William J. Doyle............................................  35,680,510     57,456
Honourable Willard Z. Estey, Q.C. ..........................  35,679,961     58,005
Dallas Howe.................................................  35,680,666     57,300
James F. Lardner............................................  35,680,139     57,827
Donald E. Phillips..........................................  35,680,842     57,124
Paul J. Schoenals...........................................  35,680,606     57,360
Daryl K. Seaman.............................................  35,679,261     58,705
E. Robert Stromberg, Q.C. ..................................  35,680,751     57,215
Jack G. Vicq................................................  35,680,661     57,305
Barrie A. Wigmore...........................................  35,680,842     57,124
Paul S. Wise................................................  35,679,560     58,406
</TABLE>
 
(c) The Company's shareholders also approved the following matters:
 
          (i) the appointment of the firm of Deloitte & Touche, the present
     auditors, as the Company's auditors, to hold office until the next annual
     meeting of the Company's shareholders; the results of the vote were:
     35,667,098 shares for, 42,843 shares against and 28,411 shares abstained;
 
          (ii) confirming the adoption of an amended and restated Shareholder
     Rights Agreement entered into by the Company; the results of the vote were:
     16,258,665 shares for, 13,033,978 shares against, 398,656 shares abstained
     (6,047,053 broker non-votes); and
 
          (iii) amending and confirming the Company's Stock Option
     Plan -- Officers and Key Employees; the results of the vote were:
     17,310,176 shares for, 11,936,933 shares against, 533,192 shares abstained
     (6,047,053 broker non-votes).
 
                                       18
<PAGE>   19
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
(a) EXHIBITS
 
<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                      DESCRIPTION OF DOCUMENT
    -------                     -----------------------
    <S>       <C>
     2        Agreement and Plan of Merger dated September 2, 1996, as
              amended, by and among the registrant, Arcadian Corporation
              and PCS Nitrogen, Inc., incorporated by reference to Exhibit
              2(a) to Amendment Number 2 to the registrant's Form S-4
              (File No. 333-17841).
     3(a)     Restated Articles of Incorporation of the registrant dated
              October 31, 1989, as amended May 11, 1995, incorporated by
              reference to Exhibit 3(i) to the registrant's report on Form
              10-K for the year ended December 31, 1995 (the "1995 Form
              10-K").
     3(b)     Bylaws of the registrant dated March 2, 1995, incorporated
              by reference to Exhibit 3(ii) to the 1995 Form 10-K.
     4(a)     Term Credit Agreement between The Bank of Nova Scotia and
              other financial institutions and the registrant dated
              October 4, 1996, incorporated by reference to Exhibit 4(b)
              to the registrant's Form S-4 (File No. 333-17841).
     4(b)     First Amending Agreement to Term Credit Agreement between
              The Bank of Nova Scotia and other financial institutions and
              the registrant dated November 6, 1997, incorporated by
              reference to Exhibit 4(b) to the registrant's report on Form
              10-K for the year ended December 31, 1997 (the "1997 Form
              10-K").
    4(c)      Second Amending Agreement to Term Credit Agreement between
              the Bank of Nova Scotia and other financial institutions and
              the registrant dated December 15, 1997, incorporated by
              reference to Exhibit 4(c) to the 1997 Form 10-K.
    4(d)      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.
    10(a)     Suspension Agreement concerning Potassium Chloride from
              Canada dated January 7, 1988, among U.S. Department of
              Commerce, the registrant, International Minerals and
              Chemical (Canada) Limited, Noranda, Inc. (Central Canada
              Potash Co.), Potash Company of America, a Division of Rio
              Algom Limited, S & P Canada, II (Kalium Chemicals), Cominco
              Ltd., Potash Company of Canada Limited, Agent for
              Denison-Potacan Potash Co. and Saskterra Fertilizers Ltd.,
              incorporated by reference to Exhibit 10(a) to the
              registrant's registration statement on Form F-1 (File No.
              33-31303) (the "F-1 Registration Statement").
    10(b)     Sixth Voting Agreement dated April 22, 1978, between Central
              Canada Potash, Division of Noranda, Inc., Cominco Ltd.,
              International Minerals and Chemical Corporation (Canada)
              Limited, PCS Sales and Texasgulf Inc., incorporated by
              reference to Exhibit 10(f) to the F-1 Registration
              Statement.
    10(c)     Canpotex Limited Shareholders Seventh Memorandum of
              Agreement effective April 21, 1978, between Central Canada
              Potash, Division of Noranda Inc., Cominco Ltd.,
              International Minerals and Chemical Corporation (Canada)
              Limited, PCS Sales, Texasgulf Inc. and Canpotex Limited as
              amended by Canpotex S & P amending agreement dated November
              4, 1987, incorporated by reference to Exhibit 10(g) to the
              F-1 Registration Statement.
    10(d)     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(e)     Agreement of Limited Partnership of Arcadian Fertilizer,
              L.P. dated as of March 3, 1992 (form), and the related
              Certificate of Limited Partnership of Arcadian Fertilizer,
              L.P., filed with the Secretary of State of the State of
              Delaware on March 3, 1992 (incorporated by reference to
              Exhibits 3.1 and 3.2 to Arcadian Partners L.P.'s
              Registration Statement on Form S-1 (File No. 33-45828)).
    10(f)     Geismar Complex Services Agreement dated June 4, 1984,
              between Allied Corporation 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(g)     Canpotex/PCS Amending Agreement, dated with effect October
              1, 1992, incorporated by reference to Exhibit 10(f) to the
              1995 Form 10-K.
    10(h)     Canpotex PCA Collateral Withdrawing/PCS Amending Agreement,
              dated with effect October 7, 1993, incorporated by reference
              to Exhibit 10(g) to the 1995 Form 10-K.
</TABLE>
 
                                       19
<PAGE>   20
 
<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                      DESCRIPTION OF DOCUMENT
    -------                     -----------------------
    <S>       <C>
    10(i)     Esterhazy Restated Mining and Processing Agreement dated
              January 31, 1978, between International Minerals and
              Chemical Corporation (Canada) Limited and the registrant's
              predecessor, incorporated by reference to Exhibit 10(e) to
              the F-1 Registration Statement.
    10(j)     Agreement dated December 21, 1990, between International
              Minerals & Chemical Corporation (Canada) Limited and the
              registrant, amending the Esterhazy Restated Mining and
              Processing Agreement dated January 31, 1978, incorporated by
              reference to Exhibit 10(p) to the registrant's report on
              Form 10-K for the year ended December 31, 1990.
    10(k)     Operating Agreement dated May 11, 1993, between BP Chemicals
              Inc. and Arcadian Ohio, L.P., as amended by the First
              Amendment to the Operating Agreement dated as of November
              20, 1995, between BP Chemicals Inc. and Arcadian Ohio, L.P.
              ("First Amendment"), incorporated by reference to Exhibit
              10.2 to Arcadian Partners L.P.'s current report on Form 8-K
              for the report event dated May 11, 1993, except for the
              First Amendment which is incorporated by reference to
              Arcadian Corporation's report on Form 10-K for the year
              ended December 31, 1995.
    10(l)     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) to the 1997 Form 10-K.
    10(m)     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(n)     First Amendment to Manufacturing Support Agreement between
              BP Chemicals and Arcadian Ohio, L.P., dated as of November
              25, 1996, incorporated by reference to Exhibit 10(l) to the
              1997 Form 10-K.
    10(o)     Amended and Restated Agreement for Lease dated as of May 16,
              1997, between Trinidad Ammonia Company, Limited Partnership,
              and PCS Nitrogen Fertilizer, L.P., incorporated by reference
              to Exhibit 10(n) to the registrant's report on Form 10-Q for
              the quarterly period ended June 30, 1997 (the "Second
              Quarter 1997 Form 10-Q").
    10(p)     Amended and Restated Lease Agreement dated as of May 16,
              1997, between Trinidad Ammonia Company, Limited Partnership,
              and PCS Nitrogen Fertilizer, L.P., incorporated by reference
              to Exhibit 10(o) to the Second Quarter 1997 Form 10-Q.
    10(q)     Amended and Restated Agreement for Lease dated as of May 16,
              1997, between Nitrogen Leasing Company, Limited Partnership,
              and PCS Nitrogen Fertilizer, L.P., incorporated by reference
              to Exhibit 10(p) to the Second Quarter 1997 Form 10-Q.
    10(r)     Amended and Restated Lease Agreement dated as of May 16,
              1997, between Nitrogen Leasing Company, Limited Partnership,
              and PCS Nitrogen Fertilizer, L.P., incorporated by reference
              to Exhibit 10(q) to the Second Quarter 1997 Form 10-Q.
    10(s)     Amended and Restated Purchase Option Agreement dated as of
              May 16, 1997, between Nitrogen Leasing Company, Limited
              Partnership, and PCS Nitrogen Fertilizer Operations, Inc.,
              incorporated by reference to Exhibit 10(r) to the Second
              Quarter 1997 Form 10-Q.
    10(t)     Amended and Restated Purchase Option Agreement dated as of
              May 16, 1997, between Trinidad Ammonia Company, Limited
              Partnership and PCS Nitrogen Fertilizer Operations, Inc.,
              incorporated by reference to Exhibit 10(s) to the Second
              Quarter 1997 Form 10-Q.
    10(u)     Agreement dated January 1, 1997 between the registrant and
              Charles E. Childers, incorporated by reference to Exhibit
              10(s) to the 1997 Form 10-K.
    10(v)     Potash Corporation of Saskatchewan Inc. Stock Option
              Plan -- Directors, incorporated by reference to Exhibit 4(b)
              to the registrant's Post-effective Amendment No. 1 to Form
              S-8 (File No. 333-19215).
    10(w)     The registrant's Stock Option Plan -- Officers and Key
              Employees, incorporated by reference to Schedule D to the
              registrant's proxy circular for the annual and special
              meeting of shareholders held on May 7, 1998.
    10(x)     Short-Term Incentive Plan of the registrant, as amended May
              7, 1997, incorporated by reference to Exhibit 10(w) to the
              Second Quarter 1997 Form 10-Q.
    10(y)     Long-Term Incentive Plan of the registrant, as amended May
              7, 1997, incorporated by reference to Exhibit 10(x) to the
              Second Quarter 1997 Form 10-Q.
</TABLE>
 
                                       20
<PAGE>   21
 
<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                      DESCRIPTION OF DOCUMENT
    -------                     -----------------------
    <S>       <C>
    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)    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(bb)    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(cc)    Employment Agreement between Arcadian Corporation and Gary
              E. Carlson, dated as of September 5, 1996, incorporated by
              reference to Exhibit 10(cc) to the registrant's report on
              Form 10-Q for the period ended March 31, 1997.
    10(dd)    Deferred Compensation Plan, for certain officers of PCS
              Phosphate Company, Inc., incorporated by reference to
              Exhibit 10(r) to the 1995 Form 10-K.
    10(ee)    Supplemental Retirement Benefits Plan, for eligible
              employees of PCS Phosphate Company, Inc., incorporated by
              reference to Exhibit 10(s) to the 1995 Form 10-K.
    10(ff)    Second Amended and Restated Membership Agreement dated
              January 1, 1995, among Phosphate Chemicals Export
              Association, Inc. and members of such association, including
              Texasgulf Inc., incorporated by reference to Exhibit 10(t)
              to the 1995 Form 10-K.
    10(gg)    International Agency Agreement dated January 1, 1995,
              between Phosphate Chemicals Export Association, Inc. and
              Texasgulf Inc. establishing Texasgulf Inc. as exclusive
              marketing agent for such association's wet phosphatic
              materials, incorporated by reference to Exhibit 10(u) to the
              1995 Form 10-K.
    10(hh)    General Partnership Agreement forming Albright & Wilson
              Company, dated July 29, 1988 and amended January 31, 1995,
              between Texasgulf Inc. and Albright & Wilson Americas, Inc.,
              incorporated by reference to Exhibit 10(v) to the 1995 Form
              10-K.
    10(ii)    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(jj)    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(kk)    Employment Agreement dated January 21, 1998, by and between
              PCS Phosphate Company, Inc. and Thomas J. Wright,
              incorporated by reference to Exhibit 10(ii) to the 1997 Form
              10-K.
    10(ll)    Shareholder Rights Agreement as amended and restated on
              March 2, 1998, incorporated by reference to Schedule B to
              the registrant's proxy circular for the annual and special
              meeting of shareholders held on May 7, 1998.
    11        Statement re Computation of Per Share Earnings.
    27        Financial Data Schedule
</TABLE>
 
(b) REPORTS ON FORM 8-K
 
     There were no reports on Form 8-K filed by the registrant during the
quarterly period covered by this Report.
 
CAUTIONARY STATEMENT
 
     This report contains forward looking statements. A number of factors could
cause actual results to differ materially from those in the forward looking
statements, including, but not limited to, fluctuation in supply and demand in
fertilizer markets, fluctuation in supply and demand in sulfur and petrochemical
markets, changes in capital markets, changes in currency exchange rates,
unexpected geological or environmental conditions, imprecision in reserve
estimates and changes in governmental policy.
 
                                       21
<PAGE>   22
 
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
 
                                    POTASH CORPORATION OF SASKATCHEWAN INC.
 
August 11, 1998                     By:        /s/ JOHN L.M. HAMPTON
 
                                       -----------------------------------------
                                                   John L.M. Hampton
                                        Senior Vice President, General Counsel
                                                     and Secretary
 
August 11, 1998                     By:        /s/ BARRY E. HUMPHREYS
 
                                       -----------------------------------------
                                                  Barry E. Humphreys
                                       Sr. Vice President, Finance and Treasurer
                                          (Principal Financial and Accounting
                                                        Officer)
 
                                       22
<PAGE>   23

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                           DESCRIPTION OF DOCUMENT
<S>            <C>
 2             Agreement and Plan of Merger dated September 2, 1996, as amended,
               by and among the registrant, Arcadian Corporation and PCS
               Nitrogen, Inc., incorporated by reference to Exhibit 2(a) to
               Amendment Number 2 to the registrant's Form S-4 (File No.
               333-17841).

 3(a)          Restated Articles of Incorporation of the registrant dated
               October 31, 1989, as amended May 11, 1995, incorporated by
               reference to Exhibit 3(i) to the registrant's report on Form 10-K
               for the year ended December 31, 1995 (the "1995 Form 10-K").

 3(b)          Bylaws of the registrant dated March 2, 1995, incorporated by
               reference to Exhibit 3(ii) to the 1995 Form 10-K.

 4(a)          Term Credit Agreement between The Bank of Nova Scotia and other
               financial institutions and the registrant dated October 4, 1996,
               incorporated by reference to Exhibit 4(b) to the registrant's
               Form S-4 (File No. 333-17841).

 4(b)          First Amending Agreement to Term Credit Agreement between The
               Bank of Nova Scotia and other financial institutions and the
               registrant dated November 6, 1997, incorporated by reference to
               Exhibit 4(b) to the registrant's report on Form 10-K for the year
               ended December 31, 1997 (the "1997 Form 10-K").

 4(c)          Second Amending Agreement to Term Credit Agreement between the
               Bank of Nova Scotia and other financial institutions and the
               registrant dated December 15, 1997, incorporated by reference to
               Exhibit 4(c) to the 1997 Form 10-K.

 4(d)          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.

 10(a)         Suspension Agreement concerning Potassium Chloride from Canada
               dated January 7, 1988, among U.S. Department of Commerce, the
               registrant, International Minerals and Chemical (Canada) Limited,
               Noranda, Inc. (Central Canada Potash Co.), Potash Company of
               America, a Division of Rio Algom Limited, S & P Canada, II
               (Kalium Chemicals), Cominco Ltd., Potash Company of Canada
               Limited, Agent for Denison-Potacan Potash Co. and Saskterra
               Fertilizers Ltd., incorporated by reference to Exhibit 10(a) to
               the registrant's registration statement on Form F-1 (File No.
               33-31303) (the "F-1 Registration Statement").

 10(b)         Sixth Voting Agreement dated April 22, 1978, between Central
               Canada Potash, Division of Noranda, Inc., Cominco Ltd.,
               International Minerals and Chemical Corporation (Canada) Limited,
               PCS Sales and Texasgulf Inc., incorporated by reference to
               Exhibit 10(f) to the F-1 Registration Statement.

</TABLE>

                                       23

<PAGE>   24

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                           DESCRIPTION OF DOCUMENT
<S>            <C>
 10(c)         Canpotex Limited Shareholders Seventh Memorandum of Agreement
               effective April 21, 1978, between Central Canada Potash, Division
               of Noranda Inc., Cominco Ltd., International Minerals and
               Chemical Corporation (Canada) Limited, PCS Sales, Texasgulf Inc.
               and Canpotex Limited as amended by Canpotex S & P amending
               agreement dated November 4, 1987, incorporated by reference to
               Exhibit 10(g) to the F-1 Registration Statement.

 10(d)         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(e)         Agreement of Limited Partnership of Arcadian Fertilizer, L.P.
               dated as of March 3, 1992 (form), and the related Certificate of
               Limited Partnership of Arcadian Fertilizer, L.P., filed with the
               Secretary of State of the State of Delaware on March 3, 1992
               (incorporated by reference to Exhibits 3.1 and 3.2 to Arcadian
               Partners L.P.'s Registration Statement on Form S-1 (File No.
               33-45828)).

 10(f)         Geismar Complex Services Agreement dated June 4, 1984, between
               Allied Corporation 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(g)         Canpotex/PCS Amending Agreement, dated with effect October 1,
               1992, incorporated by reference to Exhibit 10(f) to the 1995 Form
               10-K.

 10(h)         Canpotex PCA Collateral Withdrawing/PCS Amending Agreement, dated
               with effect October 7, 1993, incorporated by reference to Exhibit
               10(g) to the 1995 Form 10-K.

 10(i)         Esterhazy Restated Mining and Processing Agreement dated January
               31, 1978, between International Minerals and Chemical Corporation
               (Canada) Limited and the registrant's predecessor, incorporated
               by reference to Exhibit 10(e) to the F-1 Registration Statement.

 10(j)         Agreement dated December 21, 1990, between International Minerals
               & Chemical Corporation (Canada) Limited and the registrant,
               amending the Esterhazy Restated Mining and Processing Agreement
               dated January 31, 1978, incorporated by reference to Exhibit
               10(p) to the registrant's report on Form 10-K for the year ended
               December 31, 1990.

 10(k)         Operating Agreement dated May 11, 1993, between BP Chemicals Inc.
               and Arcadian Ohio, L.P., as amended by the First Amendment to the
               Operating Agreement dated as of November 20, 1995, between BP
               Chemicals Inc. and Arcadian Ohio, L.P. ("First Amendment"),
               incorporated by reference to Exhibit 10.2 to Arcadian Partners
               L.P.'s current report on Form 8-K for the report event dated May
               11, 1993, except for the First Amendment which is incorporated by
               reference to Arcadian Corporation's report on Form 10-K for the
               year ended December 31, 1995.

 10(l)         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) to the 1997 Form 10-K.

</TABLE>

                                       24

<PAGE>   25

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                           DESCRIPTION OF DOCUMENT
<S>            <C>
 10(m)         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(n)         First Amendment to Manufacturing Support Agreement between BP
               Chemicals and Arcadian Ohio, L.P., dated as of November 25, 1996,
               incorporated by reference to Exhibit 10(l) to the 1997 Form 10-K.

 10(o)         Amended and Restated Agreement for Lease dated as of May 16,1997,
               between Trinidad Ammonia Company, Limited Partnership, and PCS
               Nitrogen Fertilizer, L.P., incorporated by reference to Exhibit
               10(n) to the registrant's report on Form 10-Q for the quarterly
               period ended June 30, 1997 (the "Second Quarter 1997 Form 10-Q").

 10(p)         Amended and Restated Lease Agreement dated as of May 16, 1997,
               between Trinidad Ammonia Company, Limited Partnership, and PCS
               Nitrogen Fertilizer, L.P., incorporated by reference to Exhibit
               10(o) to the Second Quarter 1997 Form 10-Q.

 10(q)         Amended and Restated Agreement for Lease dated as of May 16,
               1997, between Nitrogen Leasing Company, Limited Partnership, and
               PCS Nitrogen Fertilizer, L.P., incorporated by reference to
               Exhibit 10(p) to the Second Quarter 1997 Form 10-Q.

 10(r)         Amended and Restated Lease Agreement dated as of May 16,1997,
               between Nitrogen Leasing Company, Limited Partnership, and PCS
               Nitrogen Fertilizer, L.P., incorporated by reference to Exhibit
               10(q) to the Second Quarter 1997 Form 10-Q.

 10(s)         Amended and Restated Purchase Option Agreement dated as of May
               16, 1997, between Nitrogen Leasing Company, Limited Partnership,
               and PCS Nitrogen Fertilizer Operations, Inc., incorporated by
               reference to Exhibit 10(r) to the Second Quarter 1997 Form 10-Q.

 10(t)         Amended and Restated Purchase Option Agreement dated as of May
               16, 1997, between Trinidad Ammonia Company, Limited Partnership
               and PCS Nitrogen Fertilizer Operations, Inc., incorporated by
               reference to Exhibit 10(s) to the Second Quarter 1997 Form 10-Q.

 10(u)         Agreement dated January 1, 1997 between the registrant and
               Charles E. Childers, incorporated by reference to Exhibit 10(s)
               to the 1997 Form 10-K.

 10(v)         Potash Corporation of Saskatchewan Inc. Stock Option Plan -- 
               Directors, incorporated by reference to Exhibit 4(b) to the 
               registrant's Post-effective Amendment No. 1 to Form S-8
               (File No. 333-19215).

 10(w)         The registrant's Stock Option Plan -- Officers and Key Employees,
               incorporated by reference to Schedule D to the registrant's proxy
               circular for the annual and special meeting of shareholders held
               on May 7, 1998.

 10(x)         Short-Term Incentive Plan of the registrant, as amended May 7,
               1997, incorporated by reference to Exhibit 10(w) to the Second
               Quarter 1997 Form 10-Q.
</TABLE>


                                       25

<PAGE>   26

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                           DESCRIPTION OF DOCUMENT
<S>            <C>
 10(y)         Long-Term Incentive Plan of the registrant, as amended May 7,
               1997, incorporated by reference to Exhibit 10(x) to the Second
               Quarter 1997 Form 10-Q.

 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)        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(bb)        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(cc)        Employment Agreement between Arcadian Corporation and Gary E.
               Carlson, dated as of September 5, 1996, incorporated by reference
               to Exhibit 10(cc) to the registrant's report on Form 10-Q for the
               period ended March 31, 1997.

 10(dd)        Deferred Compensation Plan, for certain officers of PCS Phosphate
               Company, Inc., incorporated by reference to Exhibit 10(r) to the
               1995 Form 10-K.

 10(ee)        Supplemental Retirement Benefits Plan, for eligible employees of
               PCS Phosphate Company, Inc., incorporated by reference to Exhibit
               10(s) to the 1995 Form 10-K.

 10(ff)        Second Amended and Restated Membership Agreement dated January 1,
               1995, among Phosphate Chemicals Export Association, Inc. and
               members of such association, including Texasgulf Inc.,
               incorporated by reference to Exhibit 10(t) to the 1995 Form 10-K.

 10(gg)        International Agency Agreement dated January 1, 1995, between 
               Phosphate Chemicals Export Association, Inc. and Texasgulf Inc. 
               establishing Texasgulf Inc. as exclusive marketing agent for such
               association's wet phosphatic materials, incorporated by reference to
               Exhibit 10(u) to the 1995 Form 10-K.

 10(hh)        General Partnership Agreement forming Albright & Wilson Company,
               dated July 29, 1988 and amended January 31, 1995, between
               Texasgulf Inc. and Albright & Wilson Americas, Inc., incorporated
               by reference to Exhibit 10(v) to the 1995 Form 10-K.

 10(ii)        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(jj)        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(kk)        Employment Agreement dated January 21, 1998, by and between PCS
               Phosphate Company, Inc. and Thomas J. Wright, incorporated by
               reference to Exhibit 10(ii) to the 1997 Form 10-K.
</TABLE>


                                       26

<PAGE>   27

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                           DESCRIPTION OF DOCUMENT
<S>            <C>
 10(ll)        Shareholder Rights Agreement as amended and restated on March 2,
               1998, incorporated by reference to Schedule B to the registrant's
               proxy circular for the annual and special meeting of shareholders
               held on May 7, 1998.

 11            Statement re Computation of Per Share Earnings.

 27            Financial Data Schedule

</TABLE>

                                       27