##### Table of Contents



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

QUARTERLY REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934For the Quarterly Period Ended
    June 30, 2007ORo

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   Commission File Number 1-10351
   POTASH CORPORATION OF
    SASKATCHEWAN INC.
 (Exact name of registrant as specified in its charter)
   Canada

N/A(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)122  1st Avenue
    South

S7K 7G3Saskatoon, Saskatchewan,
    Canada

(Zip Code)(Address of principal executive
    offices)    306-933-8500
 (Registrants telephone number, including area code)
     þ o
  Rule 12b-2
  þ o o
  Rule 12b-2).
  o þ




---



TABLE OF CONTENTS  PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II. OTHER INFORMATIONITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 6. EXHIBITSSIGNATURESExhibit 10(n)Exhibit 11Exhibit 31(a)Exhibit 31(b)Exhibit 32    Table of Contents  
  PART I.  FINANCIAL
    INFORMATION
 
  ITEM
    1.
    FINANCIAL
    STATEMENTS  Potash
    Corporation of Saskatchewan Inc.
    Condensed Consolidated Statements of Financial Position
    (in millions of US dollars except share amounts)
    (unaudited)
  June 30,


December 31,2007


2006AssetsCurrent assetsCash and cash equivalents

$
449.7


$
325.7Accounts receivable


481.2



442.3Inventories (Note 2)


469.0



501.3Prepaid expenses and other current
    assets


40.4



40.9Current portion of derivative
    instrument assets


44.0



-1,484.3



1,310.2Derivative instrument assets


84.0



-Property, plant and equipment


3,641.7



3,525.8Investments (Note 3)


2,589.5



1,148.9Other assets


82.0



105.8Intangible assets


27.1



29.3Goodwill


97.0



97.0$
8,005.6


$
6,217.0LiabilitiesCurrent liabilitiesShort-term debt

$
86.6


$
157.9Accounts payable and accrued
    charges


674.0



545.2Current portion of long-term debt


0.2



400.4760.8



1,103.5Long-term debt (Note 5)


1,337.4



1,357.1Future income tax liability


893.1



632.1Accrued pension and other
    post-retirement benefits


230.7



219.6Accrued environmental costs and
    asset retirement obligations


112.0



110.3Other non-current liabilities and
    deferred credits


2.6



14.13,336.6



3,436.7Contingencies and
    Guarantees(Notes 16 and 17, respectively)Shareholders
    EquityShare capital (Note 6)


1,451.9



1,431.6Unlimited authorization of common
    shares without par value; issued and outstanding 315,879,318 and
    314,403,147 at June 30, 2007 and
    December 31, 2006, respectivelyUnlimited authorization of first
    preferred shares; none outstandingContributed surplus


91.3



62.3Accumulated other comprehensive
    income (Note 7)


1,402.8



-Retained earnings


1,723.0



1,286.44,669.0



2,780.3$
8,005.6


$
6,217.0    2




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##### Table of Contents



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


Six Months EndedJune 30


June 302007


2006


2007


2006Sales(Note 10)

$
1,353.1


$
928.7


$
2,507.8


$
1,790.3Less: Freight


92.3



62.3



174.2



117.2Transportation and distribution


32.6



35.8



63.6



67.0Cost of goods sold


726.8



577.2



1,398.9



1,149.2Gross Margin


501.4



253.4



871.1



456.9Selling and administrative


73.5



47.9



114.1



78.7Provincial mining and other taxes


34.6



14.5



67.1



28.7Foreign exchange loss


39.5



16.3



41.5



13.9Other income (Note 13)


(68.5
)


(20.0
)


(82.2
)


(51.2
)79.1



58.7



140.5



70.1Operating Income


422.3



194.7



730.6



386.8Interest
    Expense(Note 14)


20.8



20.7



46.3



43.9Income Before Income
    Taxes


401.5



174.0



684.3



342.9Income
    Taxes(Note 8)


115.8



(1.1
)


200.6



42.3Net Income

$
285.7


$
175.1



483.7



300.6Retained Earnings, Beginning of
    Period










1,286.4



716.9Change in Accounting
    Policy(Note 1)










0.2



-Dividends










(47.3
)


(30.9
)Retained Earnings, End of
    Period









$
1,723.0


$
986.6Net Income Per
    Share(Note 9)Basic

$
0.91


$
0.56


$
1.53


$
0.97Diluted

$
0.88


$
0.55


$
1.50


$
0.95Dividends Per Share

$
0.10


$
0.05


$
0.15


$
0.10    3




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##### Table of Contents



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


Six Months EndedJune 30


June 302007


2006


2007


2006Operating ActivitiesNet income

$
285.7


$
175.1


$
483.7


$
300.6Adjustments to reconcile net
    income to cash provided by operating activitiesDepreciation and amortization


74.1



60.4



146.8



119.2Stock-based compensation


27.8



22.5



30.5



24.0Loss on disposal of property,
    plant and equipment


5.5



-



5.4



0.3Foreign exchange on future income
    tax


23.4



12.3



26.1



12.1Provision for (recovery of) future
    income tax


41.8



(27.8
)


67.2



(13.9
)Undistributed earnings of equity
    investees


11.1



13.9



(1.9
)


1.5Unrealized loss (gain) on
    derivative instruments


0.9



-



(5.4
)


-Other long-term liabilities


3.4



0.6



4.3



2.6Subtotal of adjustments


188.0



81.9



273.0



145.8Changes in non-cash operating
    working capitalAccounts receivable


11.1



(11.8
)


(39.7
)


51.5Inventories


26.7



(10.4
)


16.1



(1.5
)Prepaid expenses and other current
    assets


11.9



(6.7
)


0.5



(33.7
)Accounts payable and accrued
    charges


2.7



(86.9
)


112.1



(334.0
)Subtotal of changes in non-cash
    operating working capital


52.4



(115.8
)


89.0



(317.7
)Cash provided by operating
    activities


526.1



141.2



845.7



128.7Investing ActivitiesAdditions to property, plant and
    equipment


(127.5
)


(131.1
)


(236.5
)


(251.1
)Purchase of long-term investments


-



(3.7
)


(9.7
)


(130.0
)Proceeds from disposal of
    property, plant and equipment


1.0



0.2



1.3



2.2Other assets and intangible assets


12.5



7.5



10.7



3.0Cash used in investing
    activities


(114.0
)


(127.1
)


(234.2
)


(375.9
)Cash before financing
    activities


412.1



14.1



611.5



(247.2
)Financing ActivitiesRepayment and issue costs of
    long-term debt obligations


(400.2
)


(0.4
)


(403.6
)


(0.7
)(Repayment of) proceeds from
    short-term debt obligations


(9.5
)


(48.4
)


(71.3
)


304.3Dividends


(15.6
)


(15.2
)


(31.3
)


(30.5
)Issuance of common shares


8.4



6.9



18.7



9.9Cash (used in) provided by
    financing activities


(416.9
)


(57.1
)


(487.5
)


283.0(Decrease) Increase in Cash and
    Cash Equivalents


(4.8
)


(43.0
)


124.0



35.8Cash and Cash Equivalents,
    Beginning of Period


454.5



172.7



325.7



93.9Cash and Cash Equivalents, End
    of Period

$
449.7


$
129.7


$
449.7


$
129.7Cash and cash equivalents
    comprised of:Cash

$
2.6


$
17.1


$
2.6


$
17.1Short-term investments


447.1



112.6



447.1



112.6$
449.7


$
129.7


$
449.7


$
129.7Supplemental cash flow disclosureInterest paid

$
41.6


$
33.8


$
55.8


$
50.1Income taxes paid

$
37.0


$
82.5


$
69.1


$
224.5    4




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##### Table of Contents



Potash
    Corporation of Saskatchewan Inc.
    Condensed Consolidated Statements of Comprehensive Income
    (in millions of US dollars)
    (unaudited)
  Three Months EndedJune 30, 2007Before





Net ofIncome


Income


IncomeTaxes


Taxes


TaxesNet income

$
401.5


$
115.8


$
285.7Other comprehensive incomeIncrease in unrealized gains on
    available-for-sale
    securities(1)


318.2



21.3



296.9Net gains (losses) on derivatives
    designated as cash flow
    hedges(2)


(4.2
)


(1.2
)


(3.0
)Reclassification to income of
    (gains) losses on cash flow
    hedges(2)


(14.1
)


(4.3
)


(9.8
)Unrealized foreign exchange gains
    on translation of self-sustaining foreign operations


0.3



-



0.3Other comprehensive
    income


300.2



15.8



284.4Comprehensive income

$
701.7


$
131.6


$
570.1 Six Months EndedJune 30, 2007Before





Net ofIncome


Income


IncomeTaxes


Taxes


TaxesNet income

$
684.3


$
200.6


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


563.2



34.0



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


30.9



9.3



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


(31.3
)


(9.4
)


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


4.9



-



4.9Other comprehensive
    income


567.7



33.9



533.8Comprehensive income

$
1,252.0


$
234.5


$
1,017.5   (1)
    
    Available-for-sale
    securities are comprised of shares in Israel Chemicals Ltd. and
    Sinofert Holdings Limited(2)
    
    Natural gas derivative instruments   5




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##### Table of Contents



Potash
    Corporation of Saskatchewan Inc.
    Notes to the Condensed Consolidated Financial Statements
    For the Three and Six Months Ended June 30, 2007
    (in millions of US dollars except share and per-share
    amounts)
    (unaudited)
  1.
    Significant
    Accounting Policies  Basis
    of Presentation
      Changes
    in Accounting Policies
  Comprehensive
    Income, Equity, Financial Instruments and Hedges
    
    Financial assets are classified as loans and receivables,
    held-to-maturity,
    held-for-trading
    or
    available-for-sale.
    Loans and receivables include all loans and receivables except
    debt securities and are accounted for at amortized cost.
    Held-to-maturity
    classification is restricted to fixed maturity instruments that
    the company intends and is able to hold to maturity and are
    accounted for at amortized cost.
    Held-for-trading
    instruments are recorded at fair value with realized and
    unrealized gains and losses reported in net income. The
    remaining financial assets are classified as
    available-for-sale.
    These are recorded at fair value with unrealized gains and
    losses reported in a new category of the Consolidated Statements
    of Financial Position under shareholders equity called
    accumulated other comprehensive income (AOCI);
    Financial liabilities are classified as either
    held-for-trading
    or other.
    Held-for-trading
    instruments are recorded at fair value with realized and
    unrealized gains and losses reported in net income. Other
    instruments are accounted for at amortized cost with gains and
    losses reported in net income in the period that the liability
    is derecognized; and
    Derivative instruments (derivatives) are classified
    as
    held-for-trading
    unless designated as hedging instruments. All derivatives are
    recorded at fair value on the Consolidated Statements of
    Financial Position. For derivatives that hedge the changes in
    fair value of an asset or liability, changes in the
    derivatives fair value are reported in net income and are
    substantially offset by changes in the fair value of the hedged
    asset or liability attributable to the risk being hedged. For
    derivatives that hedge variability in cash flows, the effective
    portion of the changes in the derivatives fair value are
    initially recognized in other 6




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##### Table of Contents



comprehensive income (OCI) and the ineffective
    portion are recorded in net income. Amounts temporarily recorded
    in AOCI will subsequently be reclassified to net income in the
    periods when net income is affected by the variability in the
    cash flows of the hedged item.    (1)
    Available-for-sale
    securities  
    The companys investments in Israel Chemicals Ltd.
    (ICL) and Sinofert Holdings Limited
    (Sinofert) have been classified as
    available-for-sale
    and recorded at fair value in the Consolidated Statements of
    Financial Position, resulting in an increase in investments of
    $887.8, an increase to AOCI of $789.6 and an increase in future
    income tax liability of $98.2;  (2)
    Deferred debt costs  
    Bond issue costs were reclassified from other assets to
    long-term debt and deferred swap gains were reclassified from
    other non-current liabilities to long-term debt, resulting in a
    reduction in other assets of $23.9, a reduction in other
    non-current liabilities of $6.6 and a reduction in long-term
    debt of $17.3;  (3)
    Natural gas derivatives  
    The company employs futures, swaps and option agreements to
    establish the cost of a portion of its natural gas requirements.
    These derivative instruments generally qualify for hedge
    accounting. Derivative instruments were recorded on the
    Consolidated Statements of Financial Position at fair value
    resulting in an increase in current portion of derivative
    instrument assets of $50.9, an increase in derivative instrument
    assets (non-current) of $69.4, an increase in future income tax
    liability of $45.6 and an increase in AOCI of $74.7;
    Hedge ineffectiveness on these derivative instruments was
    recorded as a cumulative effect adjustment to opening retained
    earnings, net of tax, resulting in an increase in retained
    earnings of $0.2 and a decrease in AOCI of $0.2. The effect on
    basic and diluted earnings per share was not significant; and
    Deferred realized hedging gains were reclassified from inventory
    to AOCI resulting in an increase in inventory of $8.0, an
    increase in future income tax liability of $3.1 and an increase
    in AOCI of $4.9.  Accounting
    Changes
    Stripping
    Costs Incurred in the Production Phase of a Mining
    Operation
  (EIC-160). EIC-160 EIC-160, unit-of-production
 7




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##### Table of Contents



Recent
    Accounting Pronouncements
  Determining
    the Variability to be Considered in Applying the Variable
    Interest Entity Standards
  AcG-15 (EIC-163). EIC-163 by-design by-design
  Capital
    Disclosures
    Financial
    Instruments
        Inventories
   8




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##### Table of Contents



International
    Financial Reporting Standards
    2.
    Inventories  June 30,


December 31,2007


2006Finished products

$
218.8


$
237.1Intermediate products


80.8



98.5Raw materials


64.5



62.4Materials and supplies


104.9



103.3$
469.0


$
501.3   3.
    Investments      4.
    Financial
    Instruments and Risk Management  Accounting
    Policies
  Financial
    Assets and Liabilities
  held-to-maturity, held-for-trading, available-for-sale. held-for-trading Held-for-trading held-for-trading. Available-for-sale
  held-for-trading available-for-sale available-for-sale
  Derivative
    Financial Instruments and Hedging
   9




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##### Table of Contents



marked-to-market
  Fair
    Value
  point-in-time available-for-sale
 10




---



##### Table of Contents



Investments
  available-for-sale
      Supplemental
    Disclosures
            held-for-trading.
 11




---



##### Table of Contents



Fair
    Value
    5.
    Long-term
    Debt  back-to-back
    June 30


December 312007


2006Effective InterestRate(1)Notes Payable7.125% notes payable June 15,
    2007

$
-



-


$
400.07.750% notes payable May 31,
    2011


600.0



7.65
%


600.04.875% notes payable March 1,
    2013


250.0



5.08
%


250.05.875% notes payable
    December 1, 2036


500.0



6.11
%


500.0Other


7.1



7.70
%


7.51,357.1







1,757.5Less: Net unamortized debt costs


(25.9
)






-Add: Unamortized swap gains


6.0







-1,337.2







1,757.5Less: Current maturities


(0.2
)






(400.4
)Add: Current portion of
    amortization


0.4







-$
1,337.4






$
1,357.1   (1)
    
    The effective interest rate by
    instrument includes the impact of swap gains and debt costs.  6.
    Share
    Capital  three-for-one Form 10-Q,
 12




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##### Table of Contents



Quarterly Data (Post Split Basis)

First Quarter


Second Quarter


Third Quarter


Fourth Quarter


YearBasic net income per share2007

$
0.63


$
0.912006

$
0.40


$
0.56


$
0.47


$
0.59


$
2.032005

$
0.39


$
0.50


$
0.40


$
0.37


$
1.67Diluted net income per share2007

$
0.62


$
0.882006

$
0.40


$
0.55


$
0.46


$
0.58


$
1.982005

$
0.38


$
0.49


$
0.39


$
0.36


$
1.63     7.
    Accumulated
    Other Comprehensive Income    UnrealizedNet unrealized


foreignUnrealized


gains on


exchange gains


Totalholding gains


derivatives


on self-


Accumulatedon available-


designated as


sustaining


Otherfor-sale


cash flow


foreign


Comprehensivesecurities


hedges


operations


IncomeCumulative effect adjustment at
    January 1, 2007 (Note 1)

$
789.6


$
79.4


$
-


$
869.0Increase (decrease) for the six
    months ended June 30, 2007


529.2



(0.3
)


4.9



533.8Accumulated other comprehensive
    income, June 30, 2007

$
1,318.8


$
79.1


$
4.9



1,402.8Retained Earnings, June 30,
    2007














1,723.0Accumulated other comprehensive
    income and retained earnings, June 30, 2007

$
3,125.8   8.
    Income
    Taxes    
    A scheduled
    2-percentage
    point reduction in the Canadian federal income tax rate
    applicable to resource companies, effective at the beginning of
    2007, was offset by a higher percentage of consolidated income
    earned in the higher-tax jurisdictions during the three and six
    months ended June 30, 2007, compared to the same periods in
    2006.
    During the second quarter of 2007 and 2006, the Government of
    Canada enacted changes to the federal corporate income tax rate.
    The rate is being reduced from 23 percent in 2006 to
    18.5 percent by 2011. The federal corporate surtax will be
    reduced from the current 1.12 percent to nil in 2008 (a
    second-quarter 2006 enactment). These changes reduced the
    companys future income tax liability by $4.7 in the second
    quarter of 2007 and $22.9 in the second quarter of 2006. 13




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##### Table of Contents




    During the quarter ended June 30, 2006, the company reduced
    its consolidated effective income tax rate from 33 percent
    to 30 percent for the 2006 year. The $5.1 benefit of
    this change on prior periods, as applicable, was reflected
    during the quarter ended June 30, 2006. The change was
    primarily attributable to two factors. First, in addition to the
    federal changes noted above, the Province of Saskatchewan
    enacted changes to the corporate income tax, reducing the rate
    from 17 percent to 12 percent by 2009. These changes
    resulted in a $21.9 reduction in the companys future
    income tax liability. Second, the company revised its estimated
    allocation of annual earnings before income taxes by
    jurisdiction as a result of a decrease in expected potash
    operating income in Canada.
    Income tax refunds totaling $15.8 for the 2001-2004 taxation
    years were recorded during the six months ended June 30,
    2006, $3.5 of which was recognized during the second quarter of
    2006. The refunds related to a Canadian appeal court decision
    (pertaining to a uranium producer) which affirmed the
    deductibility of the Saskatchewan capital tax resource surcharge.  9.
    Net
    Income Per Share      10.
    Segment
    Information    Three Months Ended June 30, 2007Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales

$
510.2


$
481.2


$
361.7


$
-


$
1,353.1Freight


53.2



13.3



25.8



-



92.3Transportation and distribution


12.6



12.6



7.4



-



32.6Net sales  third party


444.4



455.3



328.5



-Cost of goods sold


184.0



311.1



231.7



-



726.8Gross margin


260.4



144.2



96.8



-



501.4Depreciation and amortization


21.0



21.6



29.7



1.8



74.1Inter-segment sales


-



26.1



1.0



-



-   14




---



##### Table of Contents



Three Months Ended June 30, 2006Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales

$
296.4


$
342.4


$
289.9


$
-


$
928.7Freight


32.8



9.1



20.4



-



62.3Transportation and distribution


11.0



13.6



11.2



-



35.8Net sales  third party


252.6



319.7



258.3



-Cost of goods sold


119.8



228.0



229.4



-



577.2Gross margin


132.8



91.7



28.9



-



253.4Depreciation and amortization


15.0



19.0



22.9



3.5



60.4Inter-segment sales


0.8



28.5



2.4



-



-   Six Months Ended June 30, 2007Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales

$
890.7


$
900.8


$
716.3


$
-


$
2,507.8Freight


96.7



24.6



52.9



-



174.2Transportation and distribution


22.2



26.2



15.2



-



63.6Net sales  third party


771.8



850.0



648.2



-Cost of goods sold


337.2



574.5



487.2



-



1,398.9Gross margin


434.6



275.5



161.0



-



871.1Depreciation and amortization


38.9



43.3



59.3



5.3



146.8Inter-segment sales


-



59.1



1.9



-



-   Six Months Ended June 30, 2006Potash


Nitrogen


Phosphate


All Others


ConsolidatedSales

$
522.2


$
674.3


$
593.8


$
-


$
1,790.3Freight


57.8



18.7



40.7



-



117.2Transportation and distribution


18.4



26.9



21.7



-



67.0Net sales  third party


446.0



628.7



531.4



-Cost of goods sold


222.4



457.6



469.2



-



1,149.2Gross margin


223.6



171.1



62.2



-



456.9Depreciation and amortization


26.8



38.3



47.2



6.9



119.2Inter-segment sales


4.8



60.4



4.6



-



-   11.
    Stock-Based
    Compensation    Expected dividend


$0.40Expected volatility


29%Risk-free interest rate


4.48%Expected life of options


6.4 years  15




---



##### Table of Contents



12.
    Pension
    and Other Post-Retirement Expenses  Three Months


Six MonthsEnded June 30


Ended June 30Defined Benefit Pension
    Plans

2007


2006


2007


2006Service cost

$
3.8


$
3.6


$
7.6


$
7.2Interest cost


9.1



8.4



18.2



16.8Expected return on plan assets


(10.7
)


(9.6
)


(21.4
)


(19.2
)Net amortization and change in
    valuation allowance


3.2



3.4



6.4



6.9Net expense

$
5.4


$
5.8


$
10.8


$
11.7   Three Months


Six MonthsEnded June 30


Ended June 30Other Post-Retirement
    Plans

2007


2006


2007


2006Service cost

$
1.5


$
1.2


$
2.9


$
2.4Interest cost


3.5



3.1



7.0



6.1Net amortization


0.1



(0.1
)


0.3



(0.2
)Net expense

$
5.1


$
4.2


$
10.2


$
8.3     13.
    Other
    Income  Three Months


Six MonthsEnded June 30


Ended June 302007


2006


2007


2006Share of earnings of equity
    investees

$
29.8


$
16.0


$
42.8


$
28.4Dividend income


38.7



3.0



38.7



12.1Other


-



1.0



0.7



10.7$
68.5


$
20.0


$
82.2


$
51.2   14.
    Interest
    Expense  Three Months


Six MonthsEnded June 30


Ended June 302007


2006


2007


2006Interest expense on:Short-term debt

$
3.6


$
9.5


$
5.8


$
16.6Long-term debt


30.3



23.4



61.9



47.0Interest capitalized to property,
    plant and equipment


(4.6
)


(5.9
)


(8.8
)


(9.3
)Interest income


(8.5
)


(6.3
)


(12.6
)


(10.4
)$
20.8


$
20.7


$
46.3


$
43.9   15.
    Seasonality   16




---



##### Table of Contents



16.
    Contingencies  Canpotex
    Mining
    Risk
    Investment
    in Arab Potash Company Ltd. (APC)
    Legal
    and Other Matters
       17




---



##### Table of Contents



18




---



##### Table of Contents



17.
    Guarantees    back-to-back
         19




---



##### Table of Contents



18.
    Reconciliation
    of Canadian and United States Generally Accepted Accounting
    Principles    (a) Long-term investments: available-for-sale
    (b) Property, plant and equipment and goodwill:
  (c) Depreciation and amortization:
  (d) Exploration costs:
  (e) Pre-operating costs: start-up start-up
  (f) Pension and other post-retirement benefits:
    (g) Foreign currency translation adjustment:
 20




---



##### Table of Contents



(h) Derivative instruments and hedging activities:
    (i) Comprehensive income:
  (j) Stock-based compensation:
    (k) Stripping costs
 21




---



##### Table of Contents



(l) Income taxes related to the above adjustments:
  (m) Income tax consequences of stock-based employee
    compensation:
  (n) Income taxes related to uncertain income tax
    positions:
  (o) Cash flow statements:
  The application of US GAAP, as described above, would have
    had the following effects on net income, net income per share,
    total assets, shareholders equity and comprehensive
    income.
  Three Months


Six MonthsEnded June 30


Ended June 302007


2006


2007


2006Net income as reported 
    Canadian GAAP

$
285.7


$
175.1


$
483.7


$
300.6Items increasing (decreasing)
    reported net incomeCash flow hedge ineffectiveness


-



0.2



-



0.6Depreciation and amortization


2.1



2.1



4.2



4.2Stock-based compensation


0.8



1.9



1.0



1.9Stripping costs


(1.7
)


0.7



(8.3
)


2.2Share of earnings of equity
    investees


(0.6
)


0.5



(0.6
)


0.5Pension and other post-retirement
    benefits


0.7



-



1.4



-Deferred income taxes related to
    the above adjustments


(9.5
)


9.7



0.6



8.3Income taxes related to
    US GAAP effective rate


(13.6
)


-



(13.6
)


-Income taxes related to
    stock-based compensation


(4.7
)


(3.6
)


(8.0
)


(4.4
)Income taxes related to uncertain
    income tax positions


(1.0
)


-



(2.0
)


-Net income  US GAAP

$
258.2


$
186.6


$
458.4


$
313.9Basic weighted average shares
    outstanding  US GAAP


315,458,000



311,382,000



315,180,000



311,153,000Diluted weighted average shares
    outstanding  US GAAP


323,671,000



317,760,000



323,120,000



317,637,000Basic net income per
    share  US GAAP

$
0.82


$
0.60


$
1.45


$
1.01Diluted net income per
    share  US GAAP

$
0.80


$
0.59


$
1.42


$
0.99  22




---



##### Table of Contents



June 30,


December 31,2007


2006Total assets as
    reported  Canadian GAAP

$
8,005.6


$
6,217.0Items increasing (decreasing)
    reported total assetsInventory


-



8.0Available-for-sale
    securities (unrealized holding gain)


-



889.9Fair value of derivative
    instruments


-



120.3Property, plant and equipment


(105.5
)


(109.7
)Exploration costs


(6.4
)


(6.4
)Stripping costs


(30.1
)


(21.8
)Deferred debt costs


-



(23.9
)Pension and other post-retirement
    benefits


0.1



6.7Investment in equity investees


3.6



5.5Income tax asset related to
    uncertain income tax positions


4.5



-Goodwill


(46.7
)


(46.7
)Total assets  US GAAP

$
7,825.1


$
7,038.9   June 30,


December 31,2007


2006Total shareholders equity as
    reported  Canadian GAAP

$
4,669.0


$
2,780.3Items increasing (decreasing)
    reported shareholders equityAccumulated other comprehensive
    income, net of related income taxes, consisting of:Unrealized gains and losses on
    available-for-sale
    securities


-



792.0Gains and losses on derivatives
    designated as cash flow hedges


-



79.4Cumulative-effect adjustment in
    respect of uncertain tax positions


(1.2
)


-Pension and other post-retirement
    benefits


(113.8
)


(117.9
)Share of accumulated other
    comprehensive income of equity investees


-



0.9Foreign currency translation
    adjustment


(20.9
)


(20.9
)Foreign currency translation
    adjustment


20.9



20.9Provision for asset impairment


(218.0
)


(218.0
)Depreciation and amortization


65.8



61.6Exploration costs


(6.4
)


(6.4
)Stripping costs


(30.1
)


2.6Cash flow hedge ineffectiveness


-



0.4Pension and other post-retirement
    benefits


17.5



16.1Share of earnings of equity
    investees


3.6



4.2Deferred income taxes relating to
    the above adjustments


32.9



24.0Income taxes related to
    US GAAP effective rate


(13.6
)


-Income taxes related to uncertain
    tax positions


(2.0
)


-Cumulative-effect adjustment to
    retained earnings in respect of stripping costs


-



(16.3
)Cumulative-effect adjustment to
    retained earnings in respect of uncertain tax positions


57.5



-Shareholders
    equity  US GAAP

$
4,461.2


$
3,402.9   23




---



##### Table of Contents



Six MonthsEnded June 302007


2006Net income  US GAAP

$
458.4


$
313.9Other comprehensive incomeIncrease in unrealized gains on
    available-for-sale
    securities


561.1



220.5Net gains (losses) on derivatives
    designated as cash flow hedges


30.9



(42.7
)Reclassification to income of
    (gains) losses on cash flow hedges


(31.3
)


(40.7
)Unrealized foreign exchange gains
    on translation of self-sustaining foreign operations


4.9



-Pension and other post-retirement
    benefits


5.8



-Share of OCI of equity investees


(1.3
)


0.2Deferred income taxes related to
    other comprehensive income


(35.5
)


38.8Other comprehensive income, net of
    related income taxes


534.6



176.1Comprehensive income 
    US GAAP

$
993.0


$
490.0   Supplemental
    US GAAP Disclosures
  Recent
    Accounting Pronouncements
  Uncertainty
    in Income Taxes
        YearsCanada


1997-presentUS


2001-presentTrinidad


1999-presentBarbados


1999-present  24




---



##### Table of Contents



Definition
    of Settlement Under FIN No. 48
    Planned
    Major Maintenance Activities
  AIR-1, accrue-in-advance
  Framework
    for Fair Value Measurement
    Fair
    Value Option for Financial Assets and Financial Liabilities
    19.  Comparative
    Figures
   25




---



##### Table of Contents



ITEM
    2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K,
  POTASHCORP
    AND OUR BUSINESS ENVIRONMENT
        POTASHCORP
    VISION
      POTASHCORP
    STRATEGY
     26




---



##### Table of Contents



KEY
    PERFORMANCE DRIVERS  PERFORMANCE COMPARED TO
    GOALS
    
    management will focus on the most important things, which will
    be reinforced by having the measurable, relevant results readily
    accessible;
    employees will understand and be able to effectively monitor
    their contribution to the achievement of corporate goals; and
    we will be even more effective in meeting our targets. 27




---



##### Table of Contents



Representative


PerformanceGoal


2007 Annual Target


to June 30, 2007To continue to outperform our
    sector and other basic materials companies in total shareholder
    return.


Exceed total shareholder return
    performance for our sector and companies on the DJUSBM for 2007.


PotashCorps total
    shareholder return was 63 percent in the first six months
    of 2007, exceeding the DJUSBM return of 19 percent and our
    sector average return of 44 percent.To be the low-cost supplier on a
    delivered basis in our industry through ongoing cost reduction
    management.


Achieve 3-percent reduction in
    per-tonne potash conversion costs on a Canadian dollar basis.


Potash conversion costs were
    reduced 5 percent per tonne on a Canadian dollar basis
    during the first six months of 2007 when compared to the 2006
    annual average. Compared to the six months ended June 30,
    2006, per-tonne potash conversion costs were reduced
    10 percent.Improve energy efficiency in
    Trinidad by 3 percent from 2006.


Trinidad energy efficiency rate
    improved over 2 percent during the first six months of 2007
    compared to the 2006 annual average.Achieve rock costs at Aurora and
    White Springs 1 percent below 2006.


Rock costs at Aurora increased
    3 percent while White Springs declined 2 percent
    during the first six months of 2007 compared to the 2006 annual
    average. Compared to the first six months of 2006, per-tonne
    rock costs increased 4 percent at Aurora and were flat at
    White Springs.To remain the leader and preferred
    supplier of potash, nitrogen and phosphate products worldwide.


Potash gross margin to exceed
    $800 million, more than 40 percent above 2006.


Potash gross margin was
    $434.6 million for the first six months of 2007,
    representing 54 percent of the 2007 annual target and an
    increase of 94 percent compared to the first six months of
    2006.Phosphate gross margin to be up by
    50 percent from 2006.


Phosphate gross margin was
    $161.0 million, up 159 percent for the first six
    months of 2007 compared to the corresponding period in 2006.
    This first-half gross margin represents 86 percent of the 2007
    annual target.Nitrogen gross margin to exceed
    $325 million.


Nitrogen gross margin was
    $275.5 million for the first six months of 2007,
    representing 85 percent of the 2007 annual target and an
    increase of 61 percent compared to the first six months of
    2006.To move closer to our goal of no
    harm to people, no accidents, no damage to the environment.


Reduce recordable injury rate by
    15 percent from 2006.


Recordable injury rate increased
    13 percent for the first six months of 2007 compared to the
    2006 annual level. As compared to the six months ended
    June 30, 2006, recordable injury rate increased
    32 percent.Reduce lost-time injury rate by
    40 percent from 2006.


Lost-time injury rate was reduced
    63 percent for the first six months of 2007 as compared to
    the 2006 annual level. As compared to the six months ended
    June 30, 2006, lost-time injury rate was reduced
    50 percent.Reduce reportable releases and
    permit excursions by 10 percent from 2006.


Reportable release rate on an
    annualized basis declined 33 percent while annualized
    permit excursions were down 50 percent during the first six
    months of 2007 compared to 2006 annual levels. Compared to the
    first half of 2006, reportable releases dropped 50 percent
    while permit excursions were reduced 33 percent.  28




---



##### Table of Contents



FINANCIAL
    OVERVIEW
  Form 10-Q. Three-for-One three-for-one
    Three-for-One
    Stock Split
  three-for-one Form 10-Q,
  First


Second


Third


FourthQuarterly Data (Post Split Basis)

Quarter


Quarter


Quarter


Quarter


YearBasic net income per share2007

$
0.63


$
0.912006

$
0.40


$
0.56


$
0.47


$
0.59


$
2.032005

$
0.39


$
0.50


$
0.40


$
0.37


$
1.67Diluted net income per share2007

$
0.62


$
0.882006

$
0.40


$
0.55


$
0.46


$
0.58


$
1.982005

$
0.38


$
0.49


$
0.39


$
0.36


$
1.63     Earnings
    Guidance
   29




---



##### Table of Contents



Overview
    of Actual Results
  Operations
  Three Months Ended June 30


Six Months Ended June 30Dollar


%








Dollar


%(Dollars millions  except per-share amounts)

2007


2006


Change


Change


2007


2006


Change


ChangeSales

$
1,353.1


$
928.7


$
424.4



46


$
2,507.8


$
1,790.3


$
717.5



40Freight


92.3



62.3



30.0



48



174.2



117.2



57.0



49Transportation and distribution


32.6



35.8



(3.2
)


(9
)


63.6



67.0



(3.4
)


(5
)Cost of goods sold


726.8



577.2



149.6



26



1,398.9



1,149.2



249.7



22Gross margin

$
501.4


$
253.4


$
248.0



98


$
871.1


$
456.9


$
414.2



91Operating income

$
422.3


$
194.7


$
227.6



117


$
730.6


$
386.8


$
343.8



89Net income

$
285.7


$
175.1


$
110.6



63


$
483.7


$
300.6


$
183.1



61Net income per share 
    basic

$
0.91


$
0.56


$
0.35



63


$
1.53


$
0.97


$
0.56



58Net income per share 
    diluted

$
0.88


$
0.55


$
0.33



60


$
1.50


$
0.95


$
0.55



58            30




---



##### Table of Contents



Balance
    Sheet
    
    The fair value of
    available-for-sale
    investments are recorded as assets on the Consolidated
    Statements of Financial Position. The company has classified its
    investments in ICL and Sinofert as
    available-for-sale
    and therefore has recorded these investments at their fair
    value, resulting in a balance of unrealized holding gains in
    investments of $1,451.0 million, accumulated other
    comprehensive income of $1,318.8 million and future income
    tax liability of $132.2 million as of June 30, 2007.
    The total balance recorded in investments related to ICL and
    Sinofert as of June 30, 2007 was $1,842.4 million. In
    previous periods these investments had been recorded at cost
    which, as of December 31, 2006 and June 30, 2007, was
    $167.7 million for ICL and $223.7 million for Sinofert.
    Derivative instruments are generally recorded on the
    Consolidated Statements of Financial Position at fair value. At
    June 30, 2007, the fair value of the companys
    derivative instrument assets represented a current asset of
    $44.0 million and a long-term asset of $84.0 million,
    of which $127.2 million related to natural gas swap
    contracts designated as accounting hedges and physical gas
    purchase contracts and $0.8 million related to foreign
    currency forward contracts. As of December 31, 2006, no
    such derivative instrument assets were recorded on the balance
    sheet. As of June 30, 2007, derivative instrument
    liabilities of $2.0 million related to natural gas futures
    contracts were included in accounts payable and accrued charges.
    Gains of $79.1 million on the contracts designated as
    accounting hedges have been recognized in accumulated other
    comprehensive income, net of income taxes, as of June 30,
    2007, to the extent those hedges are effective; ineffectiveness
    of $1.2 million arising from January 1 to June 30,
    2007 has been recognized through net income, including a net
    reduction to the total of $1.0 million recognized during
    the 31




---



##### Table of Contents



second quarter. The future income tax liability associated with
    these instruments was $50.1 million. Unrealized losses
    recognized in net income on physical gas purchase contracts
    arising from January 1 to June 30, 2007 were
    insignificant; no amounts were recorded in net income during the
    first six months of 2006. Hedge ineffectiveness existing on
    derivative instruments as of January 1, 2007 was recorded
    as a cumulative effect adjustment to opening retained earnings,
    net of tax, resulting in an increase in retained earnings of
    $0.2 million and a decrease in accumulated other
    comprehensive income of $0.2 million.  
    Bond issue costs were reclassified from other assets to
    long-term debt and deferred swap gains were reclassified from
    other non-current liabilities to long-term debt, resulting in a
    reduction in other assets of $23.9 million, a reduction in
    other non-current liabilities of $6.6 million and a
    reduction in long-term debt of $17.3 million at
    January 1, 2007. These costs are amortized using the
    effective interest rate method, and will continue to be
    amortized over the term of the related liability. As of
    June 30, 2007, unamortized bond issue costs decreased
    long-term debt by $25.9 million while unamortized deferred
    swap gains increased long-term debt by $6.0 million.    available-for-sale
  10-year
  available-for-sale
 32




---



##### Table of Contents



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


Tonnes (thousands)


Average Price per
    Tonne(1)2007


2006


% Change


2007


2006


% Change


2007


2006


% ChangeSales

$
510.2


$
296.4



72Freight


53.2



32.8



62Transportation and distribution


12.6



11.0



15$
444.4


$
252.6



76Net SalesNorth American

$
190.9


$
129.2



48



1,051



739



42


$
181.62


$
174.65



4Offshore


251.1



122.0



106



1,762



951



85


$
142.56


$
128.24



11442.0



251.2



76



2,813



1,690



66


$
157.16


$
148.54



6Miscellaneous products


2.4



1.4



71



-



-



-



-



-



-444.4



252.6



76



2,813



1,690



66


$
157.98


$
149.47



6Cost of goods sold


184.0



119.8



54














$
65.41


$
70.89



(8
)Gross margin

$
260.4


$
132.8



96














$
92.57


$
78.58



18   Six Months Ended June 30Dollars (millions)


Tonnes (thousands)


Average Price per
    Tonne(1)2007


2006


% Change


2007


2006


% Change


2007


2006


% ChangeSales

$
890.7


$
522.2



71Freight


96.7



57.8



67Transportation and distribution


22.2



18.4



21$
771.8


$
446.0



73Net SalesNorth American

$
343.6


$
221.1



55



1,943



1,266



53


$
176.81


$
174.51



1Offshore


422.1



219.2



93



3,035



1,683



80


$
139.08


$
130.27



7765.7



440.3



74



4,978



2,949



69


$
153.81


$
149.27



3Miscellaneous products


6.1



5.7



7



-



-



-



-



-



-771.8



446.0



73



4,978



2,949



69


$
155.04


$
151.24



3Cost of goods sold


337.2



222.4



52














$
67.74


$
75.42



(10
)Gross margin

$
434.6


$
223.6



94














$
87.30


$
75.82



15   (1)
    
    Rounding differences may occur due
    to the use of whole dollars in per-tonne calculations. 33




---



##### Table of Contents



Highlights
  
    Potash gross margins of $260.4 million for the second
    quarter and $434.6 million for the first half of 2007 were
    96 percent and 94 percent higher than the same periods
    in 2006, respectively. Compared to 2005, prior to the extended
    price negotiations with China and India that negatively impacted
    last years second quarter and first half, second-quarter
    gross margin was 17 percent higher while first-half 2007
    exceeded first-half 2005 by 9 percent.
    Potash sales volumes were significantly higher in second-quarter
    and first-half 2007 compared to the same periods in 2006 in both
    the North American and offshore markets, reflecting strong
    volumes and prices. In North America, improved agricultural
    conditions and related crop prices (especially for crops
    relevant to North American farmers such as corn, wheat and
    soybeans), led to strong demand for fertilizer, including
    potash. In the offshore markets, demand was strong compared to
    the first half of 2006 when China and India were engaged in
    price negotiations (that ultimately extended through the end of
    July 2006) and also led to many offshore customers delaying
    purchasing.
    To meet increasing global demand, we raised our production to
    2.5 million tonnes for the second quarter and
    4.8 million tonnes for the first half of 2007; this
    compares to 1.9 million tonnes in the second quarter and
    3.2 million tonnes in the first half of 2006. We took 7.4
    shutdown weeks in second-quarter 2007 and 9.4 weeks during
    the first six months of the year, significantly less than the
    18.7 weeks taken in the second quarter of 2006 and
    50.4 weeks in the first half. As a result of higher
    production levels, cost of goods sold dropped by over $5 per
    tonne in the second quarter and almost $8 per tonne in the first
    half despite additional costs for our share of brine inflow
    management at Esterhazy, higher brine inflow management costs at
    New Brunswick, and general price escalations of production
    inputs.
    North American potash producer inventories at the end of June
    were 44 percent below the same time in 2006, while high demand
    drew down customer inventories and made supply very tight by the
    end of the quarter. Our potash inventories at the end of June
    were 0.74 million tonnes, down from 1.06 million
    tonnes at the end of March and 1.35 million tonnes at
    June 30, 2006.  Potash
    gross margin variance attributable to:
  Three Months Ended June 30



Six Months Ended June 30Dollars (millions)

2007 vs. 2006



2007 vs. 2006Change in











Change inPrices/Costs











Prices/CostsChange in







Total Gross



Change in







Total GrossSales






Cost of



Margin



Sales






Cost of



MarginVolumes



Net Sales


Goods Sold



Variance



Volumes



Net Sales


Goods Sold



VarianceNorth American

$
40.9



$
7.3


$
(4.1
)


$
44.1



$
85.8



$
4.4


$
(6.6
)


$
83.6Offshore


64.0




24.9



(5.6
)



83.3




106.2




26.7



(5.5
)



127.4Other(1)


8.1




(7.9
)


-




0.2




12.1




(12.1
)


-




-Total

$
113.0



$
24.3


$
(9.7
)


$
127.6



$
204.1



$
19.0


$
(12.1
)


$
211.0  (1)
    
    Includes change in product mix.  Sales and
    Cost of Goods Sold
    
    Offshore sales volumes were up 85 percent. Canpotex Limited
    (Canpotex), the offshore marketing company for
    Saskatchewan potash producers, shipped 2.65 million tonnes,
    more than double the 1.25 million tonnes shipped in the
    same quarter last year as sales in the most significant markets
    of China, India and Brazil increased from 0.24 million to
    1.53 million tonnes. China took 0.80 million tonnes
    during the quarter as compared to being virtually absent from
    the market during the second quarter of 2006 as the country
    waited to conclude new pricing contracts with suppliers,
    including Canpotex, before coming back into the market for new
    tonnage. In addition, India took 0.25 million tonnes versus
    none in the second 34




---



##### Table of Contents



quarter of 2006, while Brazil purchased approximately
    0.49 million tonnes in the second quarter of 2007 versus
    0.21 million tonnes in the same period last year. Higher
    soybean prices in Brazil have led to an increase in acres
    planted and a corresponding increase in potash imports. Last
    year, Brazil continued to be affected by the strengthening of
    the Brazilian real relative to the US dollar. This was
    accompanied by lower soybean prices, which pressured margins for
    Brazilian farmers and limited their credit availability and led
    to fewer acres being planted.  
    According to the US Department of Agricultures
    June 29 Acreage report, this spring saw the
    US planting the highest number of corn acres since 1944.
    High commodity prices resulted in strong dealer fill and field
    application, leading to higher demand for potash in the North
    American market. Purchasing ahead of potash price increase
    announcements in anticipation of tight supply further
    contributed to higher sales volumes. In 2006, low crop commodity
    prices led to fewer corn acres planted and lower potash demand.
    Compounding this were the efforts of fertilizer dealers to
    finish the season without inventories, which further reduced
    potash shipments.
    Offshore realized prices were up 11 percent compared to
    last years second quarter and six percent compared to the
    trailing quarter. They were negatively impacted in
    second-quarter 2006 by higher per-unit throughput distribution
    costs resulting from the reduced sales volumes. Higher prices
    realized during the latter part of 2006 were maintained through
    first-half 2007 and when coupled with increased volumes that
    reduced throughput distribution costs per tonne, per-tonne
    realized prices were slightly higher than the first half of
    2006. These factors were enhanced in the second quarter of 2007
    by tight supply/demand fundamentals as high crop commodity
    prices led to higher acreages planted. Tight market fundamentals
    also contributed to the 4-percent increase in our North American
    realized prices. Our North American realized prices dropped off
    during mid-2006 due to higher producer inventories and
    heightened competitive pressures. Our price increases in late
    2006 and early 2007 have restored average realized prices that
    now surpass 2006 levels. Prices in the North American market
    were $39 per tonne, or 27 percent, higher than offshore
    prices. The gap between the two markets is due in part to
    offshore contracts lagging the North American spot market. It
    also reflects product mix, as North American customers prefer
    granular product that commands a premium over standard product
    more typically consumed offshore.
    Higher production levels and fewer shutdown weeks significantly
    lowered cost of goods sold per tonne compared to the second
    quarter of 2006 when production shutdowns occurred as the
    company remained true to its strategy of matching production to
    market demand. The effect of increased production and lower
    natural gas costs was partially offset by escalating prices for
    supplies and services, higher incremental brine inflow
    management costs and the impact of foreign exchange on potash
    operating costs. Higher brine inflow costs at Esterhazy and New
    Brunswick negatively impacted cost of goods sold by
    approximately $3 per tonne and a stronger Canadian dollar
    relative to the US dollar negatively impacted cost of goods sold
    by almost $1 per tonne.    
    Sales by Canpotex increased from 2.31 million to
    4.68 million tonnes as shipments rebounded following
    adverse weather earlier in the year, contributing to the
    80-percent increase in offshore sales volumes. In its most
    significant markets (China, India and Brazil), Canpotex sales
    increased from 0.37 million to 2.60 million tonnes.
    Our North American sales volumes increased as stronger dealer
    fill and field application of potash, due to high commodity
    prices and more acreage planted, led to high demand.
    Offshore prices were up 7 percent as price increases in
    major markets were announced through the first half of 2007. In
    early February, Canpotex reached an agreement with Sinofert in
    China on a $5-per-tonne increase for shipments in 2007. Canpotex
    has announced and implemented price increases in Brazil that
    total $100 per tonne so far in 2007, with a further
    $25-per-tonne increase scheduled to take effect on
    October 1. In India, a $50-per-tonne price increase will
    take effect on second-half imports. Southeast Asian customers
    have seen a total of $55 per tonne in price increases so far in
    2007, with an additional $40 per tonne announced for the second
    half of the year. Higher ocean freight rates had a negative
    impact of about $12 per tonne on all delivered-basis
    (CFR) sales, as Canpotex sells approximately
    60 percent of its volumes on a CFR basis. However, Canpotex
    has locked in about 40 percent of its CFR shipments under 35




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##### Table of Contents



long-term freight agreements which, compared to shipping
    entirely at spot rates, are expected to save it over
    $50 million in ocean freight costs in 2007. Prices in the
    North American market, which were flat compared to the first
    half of 2006, were $38 per tonne, or 27 percent, higher
    than offshore prices. An $11-per-tonne North American increase
    announced in the first quarter was fully realized in the second
    quarter and we began to capture a further $15-per-tonne increase
    that took effect June 1.  
    Cost of goods sold declined significantly on a per-tonne basis
    due to higher production levels and fewer shutdown weeks. The
    price variance in cost of goods sold negatively impacted gross
    margin as brine inflow management costs at New Brunswick and
    Esterhazy incrementally increased almost $4 per tonne while
    escalating prices for supplies and services throughout the year
    further increased cost of goods sold. A stronger Canadian dollar
    relative to the US dollar negatively impacted cost of goods sold
    by almost $1 per tonne.  Nitrogen
  Three Months Ended June 30Dollars (millions)


Tonnes (thousands)


Average Price per
    Tonne(1)2007


2006


% Change


2007


2006


% Change


2007


2006


% ChangeSales

$
481.2


$
342.4



41Freight


13.3



9.1



46Transportation and distribution


12.6



13.6



(7
)$
455.3


$
319.7



42Net SalesAmmonia

$
186.7


$
135.7



38



576



442



30


$
323.86


$
307.27



5Urea


111.9



87.4



28



312



328



(5
)

$
357.73


$
266.34



34Nitrogen solutions/Nitric
    acid/Ammonium nitrate


132.4



83.9



58



647



468



38


$
204.79


$
178.98



14Purchased


15.7



4.6



241



45



15



200


$
352.21


$
312.29



13446.7



311.6



43



1,580



1,253



26


$
282.72


$
248.68



14Miscellaneous


8.6



8.1



6



-



-



-



-



-



-455.3



319.7



42



1,580



1,253



26


$
288.09


$
255.10



13Cost of goods sold


311.1



228.0



36














$
196.82


$
181.92



8Gross margin

$
144.2


$
91.7



57














$
91.27


$
73.18



25   36




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##### Table of Contents



Six Months Ended June 30Dollars (millions)


Tonnes (thousands)


Average Price per
    Tonne(1)2007


2006


% Change


2007


2006


% Change


2007


2006


% ChangeSales

$
900.8


$
674.3



34Freight


24.6



18.7



32Transportation and distribution


26.2



26.9



(3
)$
850.0


$
628.7



35Net SalesAmmonia

$
356.1


$
258.7



38



1,096



806



36


$
324.78


$
321.02



1Urea


225.8



168.8



34



651



609



7


$
346.71


$
277.16



25Nitrogen solutions/Nitric
    acid/Ammonium nitrate


218.8



164.9



33



1,125



850



32


$
194.56


$
193.80



-Purchased


33.4



21.6



55



94



69



36


$
355.98


$
315.86



13834.1



614.0



36



2,966



2,334



27


$
281.22


$
263.07



7Miscellaneous


15.9



14.7



8



-



-



-



-



-



-850.0



628.7



35



2,966



2,334



27


$
286.56


$
269.32



6Cost of goods sold


574.5



457.6



26














$
193.67


$
196.01



(1
)Gross margin

$
275.5


$
171.1



61














$
92.89


$
73.31



27   (1)
    
    Rounding differences may occur due
    to the use of whole dollars in per-tonne calculations.  Highlights
  
    Quarterly nitrogen gross margin of $144.2 million, driven
    by higher prices and increased sales volumes, was a record high
    for the company. When coupled with the previous record gross
    margin realized in first-quarter 2007, gross margin for the
    first six months of 2007 was $275.5 million. This is
    61 percent higher than the $171.1 million generated in
    the first six months of last year.
    Our Trinidad facility, which benefits from long-term lower-cost
    natural gas price contracts, delivered $77.2 million (or
    54 percent) of nitrogen gross margin for the quarter and
    $157.3 million (or 57 percent) for the first half. Our
    US operations contributed $52.9 million in gross margin for
    the quarter and $86.9 million for the first six months, and
    we gained $14.1 million and $31.3 million from our
    natural gas hedges during these periods, respectively. The major
    improvement in the US was in nitrogen solutions, which generated
    $17.6 million in second-quarter gross margin versus a loss
    of $3.7 million last year.
    Strong fundamentals in the fertilizer market led to realized
    price increases in all major nitrogen products quarter over
    quarter and year over year, with the exception of ammonium
    nitrate. Sales volumes increased with higher fertilizer demand,
    due to the fact that we had more product to sell than in the
    second quarter and first half of 2006. Fertilizer products made
    up 39 percent of our total nitrogen sales in the quarter,
    compared to 33 percent in the same quarter last year. For
    the first six months of 2007, total fertilizer sales tonnes (due
    to strong US demand) are up 46 percent versus same period
    last year, while industrial tonnes are up 18 percent.
    Transportation and distribution costs declined despite the
    increase in sales and sales volumes for the three and six months
    ended June 30, 2007 compared to the same periods in 2006. A
    change in sales volumes with certain customers occurred whereby
    fewer transportation and storage requirements existed. Freight
    increases were consistent with higher sales.
    Cost of goods sold was negatively impacted by natural gas costs
    that, including our hedge, were 14 percent higher than the
    second quarter of last year and up 8 percent compared to
    the first half. Our hedge gains were $5.1 million and
    $8.8 million lower than the second quarter and first half
    of 2006, respectively. These reductions were partially offset by
    savings resulting from higher production volumes. 37




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##### Table of Contents



Nitrogen
    gross margin variance attributable to:
  Three Months Ended June 30



Six Months Ended June 30Dollars (millions)

2007 vs. 2006



2007 vs. 2006Change in











Change inPrices/Costs











Prices/CostsChange in







Total Gross



Change in







Total GrossSales






Cost of



Margin



Sales






Cost of



MarginVolumes



Net Sales


Goods Sold



Variance



Volumes



Net Sales


Goods Sold



VarianceAmmonia

$
18.2



$
10.3


$
(4.8
)


$
23.7



$
44.4



$
4.4


$
3.9



$
52.7Urea


(3.0
)



29.5



(3.6
)



22.9




(0.5
)



45.3



5.5




50.3Solutions, NA, AN


4.9




15.8



(8.7
)



12.0




7.6




0.9



(0.1
)



8.4Purchased


(4.6
)



1.6



3.5




0.5




(1.3
)



3.7



(0.1
)



2.3Hedge gains


-




-



(5.1
)



(5.1
)



-




-



(8.8
)



(8.8
)Other(1)


4.7




(4.7
)


(1.5
)



(1.5
)



2.3




(2.9
)


0.1




(0.5
)Total

$
20.2



$
52.5


$
(20.2
)


$
52.5



$
52.5



$
51.4


$
0.5



$
104.4  (1)
    
    Includes change in product mix.  Sales and
    Cost of Goods Sold
    
    Tight supply/demand fundamentals pushed urea prices
    34 percent higher than last years second quarter and
    another 6 percent over the robust first quarter. US
    producer inventories are very low (30 percent below the
    five-year average at quarter-end) due to strong agricultural
    demand (led by the highest corn acreage planted in the US since
    1944). Prices for nitrogen solutions were up 42 percent
    quarter over quarter and 19 percent over the trailing
    quarter, contributing $21.8 million to the increase in
    gross margin. Increased corn acreage and product characteristics
    make solutions an increasingly preferred nitrogen source led to
    the heightened prices. Realized ammonia prices improved
    5 percent from last years second quarter, though were
    flat compared to the trailing quarter. The companys
    natural gas cost, exclusive of the hedge, increased
    10 percent quarter over quarter and was flat compared to
    the trailing quarter. Tight fundamentals that pushed ammonia
    prices up and led to a decoupling of ammonia from natural gas
    cost early in 2007 continued, driven by strong North American
    agricultural demand and low product inventories. Prices were
    sustained through the second quarter, though the gap between
    natural gas and ammonia was reduced slightly. These price
    increases were partially offset by a 17-percent decline in
    per-tonne realized price for ammonium nitrate prills because our
    primary customer contracts are impacted by the natural gas
    prices on a time-lag basis, negatively impacting gross margin by
    $7.2 million.
    Ammonia sales volumes were up 30 percent due in part to us
    having significantly more product to sell than in second-quarter
    2006, for two primary reasons. First, the completion of our
    Trinidad 01 and 02 ammonia plant debottlenecks reduced
    production for over a month during the second quarter of 2006,
    while they operated at full rates in 2007. Secondly, mechanical
    difficulties at our Lima, Ohio plant caused it to shut down for
    25 days in the second quarter of 2006, while it ran well in
    the second quarter of this year. As well, higher demand in the
    agricultural market further improved ammonia sales volumes. Urea
    sales volumes were down 5 percent due primarily to timing,
    as some sales were shifted into the strong first quarter of
    2007. Nitrogen solution sales volumes were up 174 percent
    as we utilized our production flexibility
    opportunistically  primarily using purchased ammonia
    and carbon dioxide to feed capability at our Geismar facility,
    which we restarted during the first quarter of 2007 
    to meet the strong US demand under favorable pricing conditions.
    Cost of goods sold increased 8 percent per tonne, primarily
    as a result of higher natural gas cost during the quarter.
    Natural gas costs continue to be the single most important
    contributor to cost of goods sold, typically representing
    between 75 percent and 90 percent of the cash cost of
    producing one tonne of ammonia. The companys average
    natural gas cost was $4.41 per MMBtu, 14 percent higher
    than the second quarter of 2006. This was partially offset by
    the impact of higher production as compared to the 38




---



##### Table of Contents



second quarter of 2006 when production was constrained at
    Trinidad and Lima. Our US natural gas hedging activities
    contributed $14.1 million to gross margin, compared to
    $19.2 million last year.    
    Realized prices for urea were up 25 percent on strong
    agricultural demand, supplemented by production disruptions in
    the Middle East and new capacity delays early in 2007. Realized
    prices for ammonia were flat despite the increase in second
    quarter as realized prices declined 4 percent in the first
    quarter compared to last years first quarter, when high
    natural gas costs from the aftermath of Hurricane Katrina drove
    prices. Our natural gas cost increased 1 percent compared
    to the first half of 2006, exclusive of the hedge. The
    significant price increase seen in nitrogen solutions during the
    second quarter positively impacted gross margin for the first
    six months of 2007, contributing $23.4 million to the
    increase.
    Ammonia sales volumes were up 36 percent as we benefited
    from the strong overall demand for nitrogen and the additional
    tonnes available from the final stage of our Trinidad
    debottlenecking projects and from having 81 fewer shutdown days
    at our Lima plant. This compared to the first half of 2006 when
    a scheduled turnaround reduced production at Trinidad, higher
    natural gas costs curtailed production at Lima for much of the
    first quarter, and mechanical problems limited production at
    Lima in the second quarter. Urea sales volumes also increased,
    due in large part to significant demand for field application.
    Fertilizer sales tonnes were up 46 percent from first-half
    2006 on strong demand, as compared to last year when US farmers
    were purchasing less as we believe they were hoping for lower
    prices. Total industrial demand remained strong, rising
    18 percent from the same period last year and representing
    63 percent of nitrogen sales volumes.
    The decline in cost of goods sold per tonne positively impacted
    gross margin. Our average natural gas cost was $4.41 per MMBtu,
    8 percent higher than the first half of 2006. Our US
    natural gas hedging activities contributed $31.3 million to
    gross margin, compared to $40.1 million last year. The
    negative impacts of slightly higher natural gas costs and lower
    gain from our natural gas hedges were more than offset by the
    efficiencies arising from higher production rates as compared to
    the first half of 2006.  Phosphate
  Three Months Ended June 30Dollars (millions)


Tonnes (thousands)


Average Price per
    Tonne(1)2007


2006


% Change


2007


2006


% Change


2007


2006


% ChangeSales

$
361.7


$
289.9



25Freight


25.8



20.4



26Transportation and distribution


7.4



11.2



(34
)$
328.5


$
258.3



27Net SalesFertilizer  liquids

$
55.7


$
42.6



31



207



185



12


$
269.53


$
230.34



17Fertilizer  solids


137.1



93.8



46



350



385



(9
)

$
392.41


$
244.11



61Feed


63.5



60.0



6



204



197



4


$
310.48


$
305.46



2Industrial


68.7



58.7



17



185



156



19


$
369.89


$
376.46



(2
)325.0



255.1



27



946



923



2


$
343.45


$
276.80



24Miscellaneous


3.5



3.2



9



-



-



-



-



-



-328.5



258.3



27



946



923



2


$
347.10


$
280.25



24Cost of goods sold


231.7



229.4



1














$
244.77


$
248.94



(2
)Gross margin

$
96.8


$
28.9



235














$
102.33


$
31.31



227   39




---



##### Table of Contents



Six Months Ended June 30Dollars (millions)


Tonnes (thousands)


Average Price per
    Tonne(1)2007


2006


% Change


2007


2006


% Change


2007


2006


% ChangeSales

$
716.3


$
593.8



21Freight


52.9



40.7



30Transportation and distribution


15.2



21.7



(30
)$
648.2


$
531.4



22Net SalesFertilizer  liquids

$
124.4


$
104.5



19



476



445



7


$
261.42


$
234.89



11Fertilizer  solids


257.5



186.9



38



777



762



2


$
331.67


$
245.47



35Feed


126.4



112.3



13



412



362



14


$
306.65


$
310.82



(1
)Industrial


131.9



121.9



8



358



329



9


$
367.94


$
369.92



(1
)640.2



525.6



22



2,023



1,898



7


$
316.47


$
277.04



14Miscellaneous


8.0



5.8



38



-



-



-



-



-



-648.2



531.4



22



2,023



1,898



7


$
320.41


$
280.09



14Cost of goods sold


487.2



469.2



4














$
240.83


$
247.32



(3
)Gross margin

$
161.0


$
62.2



159














$
79.58


$
32.77



143   (1)
    
    Rounding differences may occur due
    to the use of whole dollars in per-tonne calculations.  Highlights
  
    While strategic focus on our unique ability to produce and
    market specialty phosphate products has brought both stability
    and increased profitability to the phosphate segment over recent
    years, strengthening global agricultural fundamentals has
    started to demonstrate the value of our leverage in liquid and
    solid phosphate fertilizers.
    Phosphate gross margin of $96.8 million for the second
    quarter was our highest quarterly phosphate gross margin ever,
    and over three times the $28.9 million generated in the
    same quarter last year and 51 percent higher than last
    quarter. This record quarterly phosphate gross margin, coupled
    with a strong first quarter gross margin, led gross margin for
    the first half of $161.0 million to exceed full-year
    phosphate gross margin for every year since 1998.
    Solid and liquid fertilizers contributed $51.4 million and
    $13.0 million of gross margin for the second quarter,
    respectively, while our stable base of higher-margin industrial
    and feed products combined to deliver $30.6 million. For
    the first six months of the year, solid and liquid fertilizers
    contributed $69.8 million and $28.3 million of gross
    margin, respectively, while industrial and feed products
    delivered a combined $58.6 million.
    Freight increases in the second quarter and first half of 2007
    were consistent with higher sales, while higher costs for
    transportation and distribution in 2006 as a result of
    miscellaneous write-downs and a reduced reliance on warehousing
    of solid fertilizers, resulting from more direct customer sales,
    caused the costs to be lower in 2007 compared to the same
    periods in 2006.
    Our phosphate portfolio now includes silicon tetrafluoride
    (STF), a product used in manufacturing silicon
    wafers for the growing solar energy market. This stable,
    high-return industrial product is made from hydrofluorosilicic
    acid (HFSA) recovered from the evaporators when
    phosphoric acid is produced. We completed construction and
    commissioned a 7,500-short-ton-per-year plant at Aurora during
    the first half of 2007 and signed a contract in the second
    quarter for construction of three additional STF plants of that
    size. 40




---



##### Table of Contents



Phosphate
    gross margin variance attributable to:
  Three Months Ended June 30



Six Months Ended June 30Dollars (millions)

2007 vs. 2006



2007 vs. 2006Change in











Change inPrices/Costs











Prices/CostsChange in







Total Gross



Change in







Total GrossSales






Cost of



Margin



Sales






Cost of



MarginVolumes



Net Sales


Goods Sold



Variance



Volumes



Net Sales


Goods Sold



VarianceFertilizer  liquids

$
2.4



$
7.1


$
(0.6
)


$
8.9



$
8.1



$
11.3


$
(2.2
)


$
17.2Fertilizer  solids


(3.2
)



53.2



6.9




56.9




2.1




68.2



10.3




80.6Feed


0.5




1.3



(3.2
)



(1.4
)



10.0




(1.7
)


(10.5
)



(2.2
)Industrial


7.2




(1.0
)


(3.3
)



2.9




7.5




(0.7
)


(6.2
)



0.6Other(1)


(2.3
)



3.0



(0.1
)



0.6




(1.7
)



4.4



(0.1
)



2.6Total

$
4.6



$
63.6


$
(0.3
)


$
67.9



$
26.0



$
81.5


$
(8.7
)


$
98.8  (1)
    
    Includes change in product mix.  Sales and
    Cost of Goods Sold
  Quarter-over-quarter
  
    High commodity prices have led to increased demand for
    fertilizer products. Extremely tight fundamentals for fertilizer
    products in North America extended pricing momentum during the
    quarter. After lagging feed and industrial product pricing for
    several years, solid and liquid fertilizer prices rose
    39 percent and 6 percent, respectively, over the
    trailing quarter and 61 percent and 17 percent,
    respectively, over the second quarter of last year.
    Solid fertilizer sales volumes were down 9 percent,
    including an 11-percent decrease in North America. Field
    application and off-take into North American dealer storage
    ahead of anticipated price increases was strong in the first
    quarter of 2007, and product supply was very tight due to
    industry curtailments in late 2006. As well, the application
    season got off to an early start in the first quarter in the
    South and Southeast. These factors caused very strong pull for
    solid fertilizer in the first quarter and as a result, led to
    lower sales volumes in the second quarter. Further, we sold
    fewer tonnes of solid fertilizers in order to deliver on liquid
    phosphate demand. Our liquid phosphate fertilizer capability
    allowed us to capitalize on significantly higher US demand,
    selling 23 percent more there than in the same quarter last
    year, but this was partially offset by lower offshore sales.
    Total liquid fertilizer sales volumes increased 12 percent.
    Industrial sales volumes were 19 percent higher due to
    increased production at our newest Aurora purified acid plant.
    Cost of goods sold declined 2 percent per tonne though the
    price variance in cost of goods sold negatively impacted the
    change in gross margin by $0.3 million. Sulfur prices were
    20 percent lower, increasing gross margin by
    $7.7 million while production efficiencies associated with
    a higher operating rate further benefited the change in gross
    margin. These were more than offset by 3-percent higher rock
    costs. Despite a decline in rock costs at White Springs, average
    rock costs increased due to higher costs for purchased rock at
    Geismar and higher water treatment and chemical processing costs
    at Aurora. Further, though
    7-percent
    higher ammonia prices negatively impacted gross margin for solid
    fertilizer products by $2.2 million, the price variance in
    cost of solid fertilizers was positive while other products were
    negative because in the second quarter of 2006 the company had
    production inefficiencies at one of its plants after the
    conversion of the plant to a different phosphoric acid
    production technology, while the plant ran efficiently in 2007.  year-over-year
  
    Strong agricultural demand for fertilizer products pushed up
    realized prices for solid and liquid fertilizers by 35 and
    11 percent, respectively and increased sales volumes. Feed
    volumes rose 14 percent with a
    35-percent
    increase in offshore sales, primarily due to new business in
    Latin America in the first quarter of 2007, and on stronger
    North American demand in the second quarter. 41




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##### Table of Contents




    The price variance in cost of goods sold had an
    $8.7 million unfavorable impact on the change in gross
    margin. The $15.9-million positive impact of 20-percent lower
    sulfur prices was more than offset by higher costs. Ammonia
    costs 3-percent higher decreased gross margin by
    $2.0 million while 4-percent higher rock costs resulting
    from higher costs for purchased rock at Geismar, higher
    electrical and chemical processing costs at Aurora and White
    Springs and two planned dragline turnarounds at Aurora increased
    costs further. The price variance in cost of goods sold for
    solid fertilizer products was positive due to the elimination of
    production inefficiencies resulting from the conversion referred
    to above.  Expenses
    and Other Income
  Three Months Ended


Six Months EndedJune 30


June 30Dollar


%








Dollar


%Dollars (millions)

2007


2006


Change


Change


2007


2006


Change


ChangeSelling and administrative

$
73.5


$
47.9


$
25.6



53


$
114.1


$
78.7


$
35.4



45Provincial mining and other taxes


34.6



14.5



20.1



139



67.1



28.7



38.4



134Foreign exchange loss


39.5



16.3



23.2



142



41.5



13.9



27.6



199Other income


68.5



20.0



48.5



243



82.2



51.2



31.0



61Interest expense


20.8



20.7



0.1



-



46.3



43.9



2.4



5Income taxes


115.8



(1.1
)


116.9



n/m



200.6



42.3



158.3



374   n/m = not meaningful
    71-percent
   42




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##### Table of Contents




    A scheduled 2-percentage point reduction in the Canadian federal
    income tax rate applicable to resource companies, effective at
    the beginning of 2007, was offset by a higher percentage of
    consolidated income earned in the higher-tax jurisdictions
    during the three and six months ended June 30, 2007,
    compared to the same periods in 2006.
    During the quarter ended June 30, 2006, the company reduced
    its consolidated effective income tax rate from 33 percent
    to 30 percent for the 2006 year. The $5.1 million
    benefit of this change on prior periods, as applicable, was
    reflected during the quarter ended June 30, 2006. The
    change was primarily attributable to two factors that occurred
    during the quarter ended June 30, 2006. First, in addition
    to the federal changes noted above, the Province of Saskatchewan
    enacted changes to the corporate income tax, reducing the rate
    from 17 percent to 12 percent by 2009. These changes
    resulted in a $21.9-million reduction in the companys
    future income tax liability. Second, we revised our estimated
    allocation of annual earnings before income taxes by
    jurisdiction as a result of a decrease in expected potash
    operating income in Canada.
    During the second quarter of 2007 and 2006, the Government of
    Canada enacted changes to the federal corporate income tax rate.
    The rate is being reduced from 23 percent in 2006 to
    18.5 percent by 2011. The federal corporate surtax will be
    reduced from the current 1.12 percent to nil in 2008 (a
    second-quarter 2006 enactment). These changes reduced the
    companys future income tax liability by $4.7 million
    in the second quarter of 2007 and $22.9 million in the
    second quarter of 2006.
    Income tax refunds totaling $15.8 million for the 2001-2004
    taxation years were recorded during the six months ended
    June 30, 2006, $3.5 million of which was recognized
    during second-quarter 2006. The refunds related to a Canadian
    appeal court decision (pertaining to a uranium producer) which
    affirmed the deductibility of the Saskatchewan capital tax
    resource surcharge.   43




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##### Table of Contents



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


Within 1 year


1 to 3 years


3 to 5 years


Over 5 yearsLong-term debt

$
1,357.1


$
0.2


$
0.6


$
605.4


$
750.9Estimated interest payments on
    long-term debt


1,182.7



96.8



193.5



146.9



745.5Operating leases


631.4



88.0



158.6



126.6



258.2Purchase obligations


760.5



133.9



183.7



137.1



305.8Other commitments


73.9



23.4



24.5



6.8



19.2Other long-term liabilities


1,288.5



38.0



73.6



58.2



1,118.7Total

$
5,294.1


$
380.3


$
634.5


$
1,081.0


$
3,198.3   Long-term
    Debt
  back-to-back
      Operating
    Leases
   44




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##### Table of Contents



Purchase
    Obligations
        Other
    Commitments
    Other
    Long-term Liabilities
      Capital
    Expenditures
         45




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##### Table of Contents



Sources
    and Uses of Cash
    Three Months Ended


Six Months EndedJune 30


June 30$


%








$


%Dollars (millions)

2007


2006


Change


Change


2007


2006


Change


ChangeCash provided by operating
    activities

$
526.1


$
141.2


$
384.9



273


$
845.7


$
128.7


$
717.0



557Cash used in investing activities


(114.0
)


(127.1
)


13.1



(10
)


(234.2
)


(375.9
)


141.7



(38
)Cash (used in) provided by
    financing activities


(416.9
)


(57.1
)


(359.8
)


630



(487.5
)


283.0



(770.5
)


n/m   n/m = not meaningful
    June 30,


December 31,


$


%Dollars (millions) except ratio amounts

2007


2006


Change


ChangeCurrent assets

$
1,484.3


$
1,310.2


$
174.1



13Current liabilities

$
(760.8
)

$
(1,103.5
)

$
342.7



(31
)Working capital

$
723.5


$
206.7


$
516.8



250Current ratio


1.95



1.19



0.76



64      46




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##### Table of Contents




    During the first quarter of 2007, $9.7 million was paid to
    settle outstanding amounts related to the December 2006 purchase
    of additional shares in SQM. During the first quarter of 2006,
    the company acquired an additional 10-percent interest in the
    ordinary shares of Sinofert for cash consideration of
    $126.3 million, which was financed by short-term debt.
    Our spending on property, plant and equipment was
    $127.5 million in the second quarter of 2007 and
    $236.5 million in the first six months, a decrease of
    $3.6 million and $14.6 million compared to the same
    periods in 2006, respectively. Approximately 52 percent
    (2006  55 percent) of our consolidated capital
    expenditures for the second quarter related to the potash
    segment and 55 percent (2006  52 percent)
    related to the potash segment in the first six months of 2007.  10-year
    Principal
    Debt Instruments
  June 30, 2007Total


Amount


Amount


AmountDollars (millions)

Amount


Outstanding


Committed


AvailableSyndicated credit facility

$
750.0


$
-


$
86.6


$
663.4Line of credit


75.0



-



18.8



56.2Commercial paper


750.0



86.6



-



663.4US shelf registrations


2,000.0



1,350.0



-



250.0
(1)   (1)
    
    $400.0 million of bonds issued
    under one of the companys US shelf registration statements
    have matured; no additional amount is available in respect of
    the principal of these bonds.  debt-to-capital debt-to-EBITDA
 47




---



##### Table of Contents



Outstanding
    Share Data
    Off-Balance
    Sheet Arrangements
    Guarantee
    Contracts
    back-to-back
 48




---



##### Table of Contents



Derivative
    Instruments
  marked-to-market marked-to-market
  Long-term
    Fixed Price Contracts
    QUARTERLY
    FINANCIAL HIGHLIGHTS
  Dollars (millions)

June 30,


March 31,



December 31,


September 30,


June 30,


March 31,



December 31,


September 30,except per-share amounts

2007


2007



2006


2006


2006


2006



2005


2005Sales

$
1,353.1


$
1,154.7



$
1,022.9


$
953.5


$
928.7


$
861.6



$
930.5


$
938.0Gross margin


501.4



369.7




299.3



245.8



253.4



203.5




242.2



279.5Net income


285.7



198.0




186.0



145.2



175.1



125.5




117.1



130.3Net income per share 
    basic


0.91



0.63




0.59



0.47



0.56



0.40




0.37



0.40Net income per share 
    diluted


0.88



0.62




0.58



0.46



0.55



0.40




0.36



0.39      49




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##### Table of Contents



RELATED
    PARTY TRANSACTIONS
    CRITICAL
    ACCOUNTING ESTIMATES
  Form 10-Q.
      RECENT
    ACCOUNTING CHANGES
  Changes
    in Accounting Policies
  Canada
  Comprehensive
    Income, Equity, Financial Instruments and Hedges
  Form 10-Q.
  Accounting
    Changes
   50




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##### Table of Contents



Stripping
    Costs Incurred in the Production Phase of a Mining Operation
    United
    States
  Uncertainty
    in Income Taxes
  Form 10-Q.
  Recent
    Accounting Pronouncements
  Canada
  Variable
    Interest Entities  Clarification
    Capital
    Disclosures
    Financial
    Instruments
  Form 10-Q.
   51




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##### Table of Contents



Inventories
    International
    Financial Reporting Standards
    United
    States
  Variable
    Interest Entities  Clarification
    Planned
    Major Maintenance Activities
  accrue-in-advance
  Fair
    Value Measurement
    Fair
    Value Option for Financial Assets and Financial Liabilities
    RISK
    MANAGEMENT
   52




---



##### Table of Contents



2.0-milliontonne-per-year
  OUTLOOK
   53




---



##### Table of Contents



year-over-year
         54




---



##### Table of Contents



FORWARD
    LOOKING STATEMENTS
  Form 10-Q, 10-Q
 
  ITEM
    3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    Commodity
    Risk
       55




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##### Table of Contents



Interest
    Rate Risk
        Foreign
    Exchange Risk
     
  ITEM
    4.
    CONTROLS
    AND PROCEDURES     56




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##### Table of Contents



PART II.  OTHER
    INFORMATION
 
  ITEM
    4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS      FOR


AGAINST


WITHHELD*Frederick J. Blesi


90,091,705



0



40,193William J. Doyle


90,009,038



0



122,860John W. Estey


90,092,541



0



39,357Wade Fetzer III


90,089,199



0



42,699Dallas J. Howe


90,083,469



0



48,429Alice D. Laberge


90,086,793



0



45,105Keith G. Martell


89,986,508



0



145,390Jeffrey J. McCaig


90,090,231



0



41,667Mary Mogford


90,091,116



0



40,782Paul J. Schoenhals


89,868,215



0



263,683E. Robert Stromberg, Q.C.


88,977,204



0



1,154,694Elena Viyella de Paliza


90,001,617



0



130,281        (*)
    Number of withheld votes is based
    upon proxies received prior to the Meeting. 
  ITEM
    6.  EXHIBITS
  (a)
    EXHIBITS  ExhibitNumber

Description of
    Document3
(a)

Articles of Continuance of the
    registrant dated May 15, 2002, incorporated by reference to
    Exhibit 3(a) to the registrants report on
    Form 10-Q
    for the quarterly period ended June 30, 2002 (the
    Second Quarter 2002
    Form 10-Q).3
(b)

Bylaws of the registrant effective
    May 15, 2002, incorporated by reference to
    Exhibit 3(b) to the Second Quarter 2002
    Form 10-Q.4
(a)

Term Credit Agreement between The
    Bank of Nova Scotia and other financial institutions and the
    registrant dated September 25, 2001, incorporated by
    reference to Exhibit 4(a) to the registrants report
    on
    Form 10-Q
    for the quarterly period ended September 30, 2001.4
(b)

Syndicated Term Credit Facility
    Amending Agreement between The Bank of Nova Scotia and other
    financial institutions and the registrant dated as of
    September 23, 2003, incorporated by reference to
    Exhibit 4(b) to the registrants report on
    Form 10-Q
    for the quarterly period ended September 30, 2003 (the
    Third Quarter 2003
    Form 10-Q).4
(c)

Syndicated Term Credit Facility
    Second Amending Agreement between The Bank of Nova Scotia and
    other financial institutions and the registrant dated as of
    September 21, 2004, incorporated by reference to
    Exhibit 4(c) to the registrants report on
    Form 8-K
    dated September 21, 2004. 57




---



##### Table of Contents



ExhibitNumber

Description of
    Document4
(d)

Syndicated Term Credit Facility
    Third Amending Agreement between The Bank of Nova Scotia and
    other financial institutions and the registrant dated as of
    September 20, 2005, incorporated by reference to
    Exhibit 4(a) to the registrants report on
    Form 8-K
    dated September 22, 2005.4
(e)

Syndicated Term Credit Facility
    Fourth Amending Agreement between The Bank of Nova Scotia and
    other financial institutions and the registrant dated as of
    September 27, 2006, incorporated by reference to
    Exhibit 4(e) to the registrants report on
    Form 10-Q
    for the quarterly period ended September 30, 2006.4
(f)

Indenture dated as of
    June 16, 1997, between the registrant and The Bank of Nova
    Scotia Trust Company of New York, incorporated by reference
    to Exhibit 4(a) to the registrants report on
    Form 8-K
    dated June 18, 1997 (the 1997
    Form 8-K).4
(g)

Indenture dated as of
    February 27, 2003, between the registrant and The Bank of
    Nova Scotia Trust Company of New York, incorporated by
    reference to Exhibit 4(c) to the registrants report
    on
    Form 10-K
    for the year ended December 31, 2002 (the 2002
    Form 10-K).4
(h)

Form of Note relating to the
    registrants offering of $600,000,000 principal amount of
    7.75% Notes due May 31, 2011, incorporated by reference to
    Exhibit 4 to the registrants report on
    Form 8-K
    dated May 17, 2001.4
(i)

Form of Note relating to the
    registrants offering of $250,000,000 principal amount of
    4.875% Notes due March 1, 2013, incorporated by reference
    to Exhibit 4 to the registrants report on
    Form 8-K
    dated February 28, 2003.4
(j)

Form of Note relating to the
    registrants offering of $500,000,000 principal amount of
    5.875% Notes due December 1, 2036, incorporated by
    reference to Exhibit 4(a) to the registrants report
    on
    Form 8-K
    dated November 29, 2006.     ExhibitNumber

Description of
    Document10
(a)

Sixth Voting Agreement dated
    April 22, 1978, between Central Canada Potash, Division of
    Noranda, Inc., Cominco Ltd., International Minerals and Chemical
    Corporation (Canada) Limited, PCS Sales and Texasgulf Inc.,
    incorporated by reference to Exhibit 10(f) to the
    registrants registration statement on
    Form F-1
    (File
    No. 33-31303)
    (the F-1 Registration Statement).10
(b)

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

Producer Agreement dated
    April 21, 1978, between Canpotex Limited and PCS Sales,
    incorporated by reference to Exhibit 10(h) to the
    F-1
    Registration Statement.10
(d)

Canpotex/PCS Amending Agreement,
    dated as of October 1, 1992, incorporated by reference to
    Exhibit 10(f) to the registrants report on
    Form 10-K
    for the year ended December 31, 1995 (the 1995
    Form 10-K).10
(e)

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

Canpotex Producer Agreement
    amending agreement dated as of January 1, 1999,
    incorporated by reference to Exhibit 10(f) to the
    registrants report on
    Form 10-K
    for the year ended December 31, 2000 (the 2000
    Form 10-K). 58




---



##### Table of Contents



ExhibitNumber

Description of
    Document10
(g)

Canpotex Producer Agreement
    amending agreement dated as of July 1, 2002, incorporated
    by reference to Exhibit 10(g) to the registrants
    report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 (the
    Second Quarter 2004
    Form 10-Q).10
(h)

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

Agreement dated December 21,
    1990, between International Minerals & Chemical
    Corporation (Canada) Limited and the registrant, amending the
    Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978, incorporated by reference to
    Exhibit 10(p) to the registrants report on
    Form 10-K
    for the year ended December 31, 1990.10
(j)

Agreement effective
    August 27, 1998, between International Minerals &
    Chemical (Canada) Global Limited and the registrant, amending
    the Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978 (as amended), incorporated by reference to
    Exhibit 10(l) to the 1998
    Form 10-K.10
(k)

Agreement effective
    August 31, 1998, among International Minerals &
    Chemical (Canada) Global Limited, International
    Minerals & Chemical (Canada) Limited Partnership and
    the registrant assigning the interest in the Esterhazy Restated
    Mining and Processing Agreement dated January 31, 1978 (as
    amended) held by International Minerals & Chemical
    (Canada) Global Limited to International Minerals &
    Chemical (Canada) Limited Partnership, incorporated by reference
    to Exhibit 10(m) to the 1998
    Form 10-K.10
(l)

Potash Corporation of Saskatchewan
    Inc. Stock Option Plan  Directors, as amended,
    incorporated by reference to Exhibit 10(l) to the
    registrants report on
    Form 10-K
    for the year ended December 31, 2006 (the 2006
    Form 10-K).10
(m)

Potash Corporation of Saskatchewan
    Inc. Stock Option Plan  Officers and Employees, as
    amended, incorporated by reference to Exhibit 10(m) to the
    2006
    Form 10-K.10
(n)

Short-Term Incentive Plan of the
    registrant effective January 2000, as amended.10
(o)

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
(p)

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
(q)

Amended and restated Supplemental
    Retirement Income Plan of the registrant and text of amendment
    to existing supplemental income plan agreements, incorporated by
    reference to Exhibit 10(mm) to the registrants report
    on
    Form 10-Q
    for the quarterly period ended September 30, 2000 (the
    Third Quarter 2000
    Form 10-Q).10
(r)

Form of Letter of amendment to
    existing supplemental income plan agreements of the registrant
    dated November 4, 2002, incorporated by reference to
    Exhibit 10(cc) to the 2002
    Form 10-K.10
(s)

Amended and restated agreement
    dated February 20, 2007, between the registrant and William
    J. Doyle concerning the Supplemental Retirement Income Plan,
    incorporated by reference to Exhibit 10(s) to the 2006
    Form 10-K.10
(t)

Supplemental Retirement Benefits
    Plan for U.S. Executives dated effective January 1, 1999,
    incorporated by reference to Exhibit 10(aa) to the Second
    Quarter 2002
    Form 10-Q.10
(u)

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
(v)

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. 59




---



##### Table of Contents



ExhibitNumber

Description of
    Document10
(w)

Resolution and Form of Agreement
    of Indemnification dated January 24, 2001, incorporated by
    reference to Exhibit 10(ii) to the 2000
    Form 10-K.10
(x)

Resolution and Form of Agreement
    of Indemnification  July 21, 2004, incorporated
    by reference to Exhibit 10(ii) to the Second Quarter 2004
    Form 10-Q.10
(y)

Chief Executive Officer Medical
    and Dental Benefits, incorporated by reference to
    Exhibit 10(jj) to the
    Form 10-K
    for the year ended December 31, 2004.10
(z)

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

International Agency Agreement
    dated effective December 15, 2006, between Phosphate
    Chemicals Export Association, Inc. and PCS Sales (USA), Inc.,
    incorporated by reference to Exhibit 10(aa) to the 2006
    Form 10-K.10
(bb)

Deferred Share Unit Plan for
    Non-Employee Directors, incorporated by reference to
    Exhibit 4.1 to the registrants
    Form S-8
    (File
    No. 333-75742)
    filed December 21, 2001.10
(cc)

Potash Corporation of Saskatchewan
    Inc. 2005 Performance Option Plan and Form of Option Agreement,
    as amended, incorporated by reference to Exhibit 10(cc) to
    the 2006
    Form 10-K.10
(dd)

Potash Corporation of Saskatchewan
    Inc. 2006 Performance Option Plan and Form of Option Agreement,
    as amended, incorporated by reference to Exhibit 10(dd) to
    the 2006
    Form 10-K.10
(ee)

Potash Corporation of Saskatchewan
    Inc. 2007 Performance Option Plan and Form of Option Agreement,
    incorporated by reference to Exhibit 10(ee) to the
    registrants report on
    Form 10-Q
    for the quarterly period ended March 31, 2007.10
(ff)

Medium Term Incentive Plan of the
    registrant effective January 2006, incorporated by reference to
    Exhibit 10(dd) to the registrants report on
    Form 10-K
    for the year ended December 31, 2005.11


Statement re Computation of Per
    Share Earnings.31
(a)

Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
(b)

Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32


Certification pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.  60




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##### Table of Contents



SIGNATURES
         By:
    /s/  Joseph
    Podwika   Senior Vice President, General Counsel and Secretary
    By:
    /s/  Wayne
    R. Brownlee   Executive Vice President, Treasurer and
 Chief Financial Officer
 (Principal Financial and Accounting Officer)
 61




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##### Table of Contents



EXHIBIT
    INDEX
  ExhibitNumber

Description of
    Document3
(a)

Articles of Continuance of the
    registrant dated May 15, 2002, incorporated by reference to
    Exhibit 3(a) to the registrants report on
    Form 10-Q
    for the quarterly period ended June 30, 2002 (the
    Second Quarter 2002
    Form 10-Q).3
(b)

Bylaws of the registrant effective
    May 15, 2002, incorporated by reference to
    Exhibit 3(b) to the Second Quarter 2002
    Form 10-Q.4
(a)

Term Credit Agreement between The
    Bank of Nova Scotia and other financial institutions and the
    registrant dated September 25, 2001, incorporated by
    reference to Exhibit 4(a) to the registrants report
    on
    Form 10-Q
    for the quarterly period ended September 30, 2001.4
(b)

Syndicated Term Credit Facility
    Amending Agreement between The Bank of Nova Scotia and other
    financial institutions and the registrant dated as of
    September 23, 2003, incorporated by reference to
    Exhibit 4(b) to the registrants report on
    Form 10-Q
    for the quarterly period ended September 30, 2003 (the
    Third Quarter 2003
    Form 10-Q).4
(c)

Syndicated Term Credit Facility
    Second Amending Agreement between The Bank of Nova Scotia and
    other financial institutions and the registrant dated as of
    September 21, 2004, incorporated by reference to
    Exhibit 4(c) to the registrants report on
    Form 8-K
    dated September 21, 2004.4
(d)

Syndicated Term Credit Facility
    Third Amending Agreement between The Bank of Nova Scotia and
    other financial institutions and the registrant dated as of
    September 20, 2005, incorporated by reference to
    Exhibit 4(a) to the registrants report on
    Form 8-K
    dated September 22, 2005.4
(e)

Syndicated Term Credit Facility
    Fourth Amending Agreement between The Bank of Nova Scotia and
    other financial institutions and the registrant dated as of
    September 27, 2006, incorporated by reference to
    Exhibit 4(e) to the registrants report on
    Form 10-Q
    for the quarterly period ended September 30, 2006.4
(f)

Indenture dated as of
    June 16, 1997, between the registrant and The Bank of Nova
    Scotia Trust Company of New York, incorporated by reference
    to Exhibit 4(a) to the registrants report on
    Form 8-K
    dated June 18, 1997 (the 1997
    Form 8-K).4
(g)

Indenture dated as of
    February 27, 2003, between the registrant and The Bank of
    Nova Scotia Trust Company of New York, incorporated by
    reference to Exhibit 4(c) to the registrants report
    on
    Form 10-K
    for the year ended December 31, 2002 (the 2002
    Form 10-K).4
(h)

Form of Note relating to the
    registrants offering of $600,000,000 principal amount of
    7.75% Notes due May 31, 2011, incorporated by reference to
    Exhibit 4 to the registrants report on
    Form 8-K
    dated May 17, 2001.4
(i)

Form of Note relating to the
    registrants offering of $250,000,000 principal amount of
    4.875% Notes due March 1, 2013, incorporated by reference
    to Exhibit 4 to the registrants report on
    Form 8-K
    dated February 28, 2003.4
(j)

Form of Note relating to the
    registrants offering of $500,000,000 principal amount of
    5.875% Notes due December 1, 2036, incorporated by
    reference to Exhibit 4(a) to the registrants report
    on
    Form 8-K
    dated November 29, 2006.     62




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##### Table of Contents



ExhibitNumber

Description of
    Document10
(a)

Sixth Voting Agreement dated
    April 22, 1978, between Central Canada Potash, Division of
    Noranda, Inc., Cominco Ltd., International Minerals and Chemical
    Corporation (Canada) Limited, PCS Sales and Texasgulf Inc.,
    incorporated by reference to Exhibit 10(f) to the
    registrants registration statement on
    Form F-1
    (File
    No. 33-31303)
    (the F-1 Registration Statement).10
(b)

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

Producer Agreement dated
    April 21, 1978, between Canpotex Limited and PCS Sales,
    incorporated by reference to Exhibit 10(h) to the
    F-1
    Registration Statement.10
(d)

Canpotex/PCS Amending Agreement,
    dated as of October 1, 1992, incorporated by reference to
    Exhibit 10(f) to the registrants report on
    Form 10-K
    for the year ended December 31, 1995 (the 1995
    Form 10-K).10
(e)

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

Canpotex Producer Agreement
    amending agreement dated as of January 1, 1999,
    incorporated by reference to Exhibit 10(f) to the
    registrants report on
    Form 10-K
    for the year ended December 31, 2000 (the 2000
    Form 10-K).10
(g)

Canpotex Producer Agreement
    amending agreement dated as of July 1, 2002, incorporated
    by reference to Exhibit 10(g) to the registrants
    report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 (the
    Second Quarter 2004
    Form 10-Q).10
(h)

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

Agreement dated December 21,
    1990, between International Minerals & Chemical
    Corporation (Canada) Limited and the registrant, amending the
    Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978, incorporated by reference to
    Exhibit 10(p) to the registrants report on
    Form 10-K
    for the year ended December 31, 1990.10
(j)

Agreement effective
    August 27, 1998, between International Minerals &
    Chemical (Canada) Global Limited and the registrant, amending
    the Esterhazy Restated Mining and Processing Agreement dated
    January 31, 1978 (as amended), incorporated by reference to
    Exhibit 10(l) to the 1998
    Form 10-K.10
(k)

Agreement effective
    August 31, 1998, among International Minerals &
    Chemical (Canada) Global Limited, International
    Minerals & Chemical (Canada) Limited Partnership and
    the registrant assigning the interest in the Esterhazy Restated
    Mining and Processing Agreement dated January 31, 1978 (as
    amended) held by International Minerals & Chemical
    (Canada) Global Limited to International Minerals &
    Chemical (Canada) Limited Partnership, incorporated by reference
    to Exhibit 10(m) to the 1998
    Form 10-K.10
(l)

Potash Corporation of Saskatchewan
    Inc. Stock Option Plan  Directors, as amended,
    incorporated by reference to Exhibit 10(l) to the
    registrants report on
    Form 10-K
    for the year ended December 31, 2006 (the 2006
    Form 10-K).10
(m)

Potash Corporation of Saskatchewan
    Inc. Stock Option Plan  Officers and Employees, as
    amended, incorporated by reference to Exhibit 10(m) to the
    2006
    Form 10-K.10
(n)

Short-Term Incentive Plan of the
    registrant effective January 2000, as amended.10
(o)

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. 63




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##### Table of Contents



ExhibitNumber

Description of
    Document10
(p)

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
(q)

Amended and restated Supplemental
    Retirement Income Plan of the registrant and text of amendment
    to existing supplemental income plan agreements, incorporated by
    reference to Exhibit 10(mm) to the registrants report
    on
    Form 10-Q
    for the quarterly period ended September 30, 2000 (the
    Third Quarter 2000
    Form 10-Q).10
(r)

Form of Letter of amendment to
    existing supplemental income plan agreements of the registrant
    dated November 4, 2002, incorporated by reference to
    Exhibit 10(cc) to the 2002
    Form 10-K.10
(s)

Amended and restated agreement
    dated February 20, 2007, between the registrant and William
    J. Doyle concerning the Supplemental Retirement Income Plan,
    incorporated by reference to Exhibit 10(s) to the 2006
    Form 10-K.10
(t)

Supplemental Retirement Benefits
    Plan for U.S. Executives dated effective January 1, 1999,
    incorporated by reference to Exhibit 10(aa) to the Second
    Quarter 2002
    Form 10-Q.10
(u)

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
(v)

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
(w)

Resolution and Form of Agreement
    of Indemnification dated January 24, 2001, incorporated by
    reference to Exhibit 10(ii) to the 2000
    Form 10-K.10
(x)

Resolution and Form of Agreement
    of Indemnification  July 21, 2004, incorporated
    by reference to Exhibit 10(ii) to the Second Quarter 2004
    Form 10-Q.10
(y)

Chief Executive Officer Medical
    and Dental Benefits, incorporated by reference to
    Exhibit 10(jj) to the
    Form 10-K
    for the year ended December 31, 2004.10
(z)

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

International Agency Agreement
    dated effective December 15, 2006, between Phosphate
    Chemicals Export Association, Inc. and PCS Sales (USA), Inc.,
    incorporated by reference to Exhibit 10(aa) to the 2006
    Form 10-K.10
(bb)

Deferred Share Unit Plan for
    Non-Employee Directors, incorporated by reference to
    Exhibit 4.1 to the registrants
    Form S-8
    (File
    No. 333-75742)
    filed December 21, 2001.10
(cc)

Potash Corporation of Saskatchewan
    Inc. 2005 Performance Option Plan and Form of Option Agreement,
    as amended, incorporated by reference to Exhibit 10(cc) to
    the 2006
    Form 10-K.10
(dd)

Potash Corporation of Saskatchewan
    Inc. 2006 Performance Option Plan and Form of Option Agreement,
    as amended, incorporated by reference to Exhibit 10(dd) to
    the 2006
    Form 10-K.10
(ee)

Potash Corporation of Saskatchewan
    Inc. 2007 Performance Option Plan and Form of Option Agreement,
    incorporated by reference to Exhibit 10(ee) to the
    registrants report on
    Form 10-Q
    for the quarterly period ended March 31, 2007.10
(ff)

Medium Term Incentive Plan of the
    registrant effective January 2006, incorporated by reference to
    Exhibit 10(dd) to the registrants report on
    Form 10-K
    for the year ended December 31, 2005.11


Statement re Computation of Per
    Share Earnings.31
(a)

Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
(b)

Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32


Certification pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.  64