Form 8-K POTASH CORP OF SASKATCHE For: Jan 29

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

CURRENT REPORT

Pursuant to Section�13 or 15(d)

of the Securities Exchange Act of 1934

January�29, 2015

(Date of earliest event reported)

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Potash Corporation of Saskatchewan Inc.

(Exact name of registrant as specified in its charter)

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Canada	�	1-10351	�	Not Applicable
(State or other jurisdiction of incorporation)	�	(Commission File Number)	�	(IRS Employer Identification No.)

Suite 500, 122 - 1^st Avenue South

Saskatoon, Saskatchewan, Canada S7K 7G3

(Address of principal executive offices, including zip code)

306 / 933-8500

(Registrant�s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

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�	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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�	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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�	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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�	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item�2.02

Results of Operations and Financial Condition.

On January�29, 2015, Potash Corporation of Saskatchewan Inc. issued a news release announcing its financial results for the fourth quarter and full year ended December�31, 2014. A copy of the news release is attached hereto as Exhibit 99.1.

The information contained in this current report shall not be deemed �filed� for purposes of Section�18 of the Securities Exchange Act of 1934, or incorporated by reference in any filing under the Securities Act of 1933, or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in any such filing.

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Item�9.01

Financial Statements and Exhibits.

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Exhibit Number	��	Exhibit Description
99.1	��	News release, dated January 29, 2015, issued by Potash Corporation of Saskatchewan Inc.

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SIGNATURE

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

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Dated: January�29, 2015

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Index to Exhibits

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Exhibit Number	��	Exhibit Description
99.1	��	News release, dated January 29, 2015, issued by Potash Corporation of Saskatchewan Inc.

Exhibit 99.1

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For Immediate Release	�	Symbol: POT
January�29, 2015	�
Listed: TSX, NYSE	�

PotashCorp Reports Full-Year 2014 Earnings of $1.82 per Share

Key Highlights

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Fourth-quarter earnings of $0.49 per share1; full-year total of $1.82 per share

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Annual cash flow prior to working capital changes2 of $2.7 billion

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Record fourth-quarter potash sales volumes of 2.5�million tonnes

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Full-year 2015 guidance of $1.90-$2.20 per share; $0.45-$0.55 for the first quarter

CEO Commentary

�Record potash sales volumes, combined with higher realizations across all three nutrients, raised our quarterly earnings near the upper end of our guidance range,� said PotashCorp President and Chief Executive Officer Jochen Tilk. �As we look ahead, we see a supportive market environment � most notably in potash. We are ready to respond should demand for this nutrient prove stronger than expected and, as we balance operational flexibility with efficiencies, we believe PotashCorp is well positioned should conditions be more challenging.�

Saskatoon, Saskatchewan ��Potash Corporation of Saskatchewan Inc. (PotashCorp) reported fourth-quarter earnings of $0.49 per share ($407 million), well ahead of the $0.26 per share ($230 million) generated in 2013�s fourth quarter, a total that included $60 million in severance-related charges. Although the most recent quarter marked the continuation of a robust potash environment following a sharp reset of prices in late 2013, the $1.82 per share ($1.5 billion) earned during 2014 trailed the $2.04 per share ($1.8 billion) earned in the previous full year.

With improved contributions from all three nutrient segments, fourth-quarter gross margin of $746 million surpassed the $460 million generated during the same period in 2013. For the full year, totals reached $2.6 billion, slightly below the $2.8 billion earned in 2013.

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Cash flow prior to working capital changes of $754 million during the quarter exceeded the prior year result (up 33 percent), but lower earnings through the first nine months caused our annual total of $2.7 billion to trail 2013�s comparative period (down 8 percent). Free cash flow² for both the fourth quarter and full year surpassed the respective totals in 2013.

Our investments in Arab Potash Company (APC) in Jordan, Israel Chemicals Ltd. (ICL) in Israel and Sociedad Quimica y Minera de Chile S.A. (SQM) in Chile contributed $31 million to our quarterly earnings, exceeding the $25 million in fourth-quarter 2013. A weaker earnings environment caused annual contributions of $210 million from these investments to trail the $276 million earned in 2013, which included a dividend from Sinofert Holdings Limited in China (Sinofert). The market value of our holdings in these publicly traded companies equated to approximately $4 billion, or $5 per PotashCorp share, at market close on January�28, 2015.

Market Conditions

In contrast to an especially weak demand environment during the second half of 2013, the record pace of global potash shipments evident through the first nine months of 2014 continued in the fourth quarter. Demand was strong in all key markets, especially offshore, where exports from North American producers increased significantly. In North America, domestic shipments remained high as dealers worked to position product to meet fall fertilizer demand and prepare for the spring season. After increasing through most of the year, spot prices in many markets moderated slightly during the quarter, although remaining above those in the same period of 2013.

In nitrogen, supply challenges in key exporting countries supported favorable market fundamentals. These conditions helped sustain ammonia benchmark prices at higher levels than in 2013�s similar period, although seasonal demand weakness and improving supply availability caused them to trend lower late in the quarter. Markets for urea and other nitrogen products were relatively flat with fourth-quarter 2013, but increased on improved demand as the year came to a close.

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In phosphate, improved market fundamentals � buoyed by record annual shipments to Latin America and periodic supply outages � caused prices in the fourth quarter to surpass those of the same period in 2013. Despite subdued Indian demand for most phosphate products in 2014, imports and prices for phosphoric acid remained relatively strong given rising consumption of NPK fertilizers.

Potash

The combination of increased sales volumes, lower costs and slightly higher realized prices raised our fourth-quarter potash gross margin to $445 million, surpassing the $228 million generated during the same period in 2013. This strength raised full-year gross margin to $1.4 billion, although moderated pricing levels as the year began caused it to trail the $1.6 billion earned in 2013.

Sales volumes reached a fourth-quarter record of 2.5�million tonnes, raising our 2014 total to 9.3�million tonnes � the second highest in PotashCorp�s history. For the quarter, offshore sales volumes represented the largest increase, up 80 percent relative to the same period in 2013 on improved demand across all key markets. The majority of Canpotex³ shipments during the quarter were to Other Asian countries (38 percent) and China (24 percent), while Latin America and India accounted for 19 percent and 12 percent, respectively. In North America, the need to secure product to meet healthy fall demand resulted in historically strong fourth-quarter sales volumes, consistent with levels in 2013 when a similar dynamic took hold.

North American and offshore price improvements realized during the quarter were largely offset by a greater proportion of sales to lower-priced markets resulting in our fourth-quarter average realized price of $284 per tonne staying relatively flat with 2013�s comparative period.

Efficiencies from our operational and workforce realignment and increased production contributed to significantly lower cost of goods sold in 2014 � allowing us to achieve our cost reduction target. Compared to 2013, these factors, along with a weaker Canadian dollar, translated into improvements for both the quarter (down $45 per tonne) and full year (down $23 per tonne). Totals for 2013 included approximately $32 million in charges for severance-related costs.

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Nitrogen

In nitrogen, higher prices helped raise gross margin for the quarter to $234 million, well above the $188 million earned during the same period in 2013. Our US operations generated $118 million of our quarterly result, and Trinidad accounted for the remainder. For the full year, a robust pricing environment and higher sales volumes brought our gross margin in this nutrient to a record $1.0 billion.

Sales volumes for the quarter of 1.5�million tonnes were relatively flat with 2013�s comparative period as an extended maintenance turnaround at our Lima facility and greater natural gas-related curtailments in Trinidad limited our ability to sell more tonnes. For full-year 2014, improved production across most of our operations helped raise annual sales volumes to 6.4�million tonnes � the highest in our history.

With strong market fundamentals supporting key benchmark prices at higher levels, our average realized price for the fourth quarter of $405 per tonne was up 24 percent relative to the same period in 2013. The most significant contributor was the price of ammonia, which rose by 31 percent.

Downtime at Lima and higher natural gas costs were the main drivers of higher per-tonne cost of goods sold for the fourth quarter, up 24 percent from 2013�s comparable period.

Phosphate

In phosphate, fourth-quarter gross margin totaled $67 million, surpassing the $44 million earned during the same period in 2013. Despite an improving gross margin trend throughout 2014, the closure of our Suwannee River chemical plant in July and production challenges at our operations negatively impacted our results. For the full-year, gross margin of $202 million � which includes approximately $48 million in accelerated depreciation charges and $34 million related to adjustments to asset retirement obligations and water treatment costs � fell well short of the $304 million earned in 2013.

With fewer tonnes of production available, our sales volumes for both the fourth quarter (0.8 million tonnes) and full year (3.1 million tonnes) trailed the respective periods of 2013.

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Our fourth-quarter average realized phosphate price was $528 per tonne, well above the $455 per tonne in the same period of 2013. The primary drivers were improved pricing for liquid fertilizers and the allocation of a greater proportion of our production to higher-netback products.

Cost of goods sold of $446 per tonne for the quarter exceeded the $401 per tonne in 2013�s similar period, largely due to reduced production and increased input costs for ammonia and sulfur. Totals in 2013 included approximately $17 million in severance-related costs.

Financial

The timing of annual potash production tax accruals combined with reduced capital spending in Saskatchewan and stronger potash earnings raised provincial mining and other taxes for the fourth quarter to $82 million, compared to the $40 million recorded in 2013�s comparative period.

Income tax expense of $162 million for the quarter exceeded the $100 million recognized in fourth-quarter 2013 due to improved earnings.

Capital-related cash expenditures totaled $412 million during the quarter, relatively flat compared to the same period in 2013. Capital expenditures in 2014 of $1.1 billion declined significantly from the $1.6 billion spent in 2013 as our multi-year potash expansion program nears completion.

Market Outlook

Despite a strong US recovery, weakening economic growth in other regions of the world continues to temper the global outlook. In this environment, currencies have generally weakened relative to the US dollar and commodity prices remain subdued. While we closely monitor these factors, we enter 2015 with a positive � albeit moderated � view for our business.

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The agricultural outlook remains supportive. Even as prices for many crops settled at lower levels in 2014, we believe they continue to provide economic incentives for farmers to improve yields, encouraging growth in demand for our products.

In potash, global shipments are expected to slow from 2014�s record level of more than 61�million tonnes. We believe the conditions that emerged in 2014, including encouraging consumption trends, a drawdown of producer inventories and potential production constraints among certain competitors, will help offset the expected reduction in shipments. In this environment, we see opportunity for suppliers with the ability to quickly respond to customers� needs. For 2015, we estimate global shipments will range between 58�million and 60�million tonnes with strong consumption underpinning demand.

In North America, we expect the necessity of replenishing nutrients at the farm level after a record crop in 2014 will support healthy demand as we approach the spring season. Customers are now working to position product and PotashCorp is shipping tonnage against significant winter-fill commitments. The anticipated reduction in planted acres and improved distributor inventories are likely to result in a modest decline in annual shipments compared to 2014, with 2015 totals anticipated at 9.5-10�million tonnes.

Potash shipments to Latin America are expected to remain strong. After a subdued start to the year, customers in this region are now engaging and procuring new tonnage. We anticipate that weaker crop economics will result in some moderation of growth in this market and forecast total shipments of 10.8-11.3�million tonnes in 2015.

In China, with the completion of potash deliveries against previous contracts, negotiations continue on new first-half supply agreements. We see the encouraging Chinese consumption trends that emerged in 2014 continuing, especially for compound fertilizers with higher potassium content. We forecast Chinese demand at 12.5-13.0�million tonnes in 2015, including import expectations of 6.5-7�million tonnes.

In India, we also saw positive consumption trends for both direct application and compound fertilizers, and these will help drive continuing demand growth. Canpotex has completed shipments against previous

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contracts and is beginning to negotiate new supply agreements to meet Indian customers� needs. For 2015, we forecast potash shipments of 4.5-4.8�million tonnes.

Potash demand in Other Asian countries (outside of China and India) has been slow to gain momentum this year due to higher distributor inventories. We see this situation improving as agronomic need and supportive crop economics � especially for oil palm � are expected to foster greater import needs as the year progresses. We forecast shipments to these countries for 2015 to be in the range of 8.3-8.7�million tonnes.

Financial Outlook

Based on our capability and outlook for 2015, we estimate annual potash sales volumes of 9.2-9.7�million tonnes. We believe increased operational capability at New Brunswick and our Saskatchewan facilities � estimated at 10.9�million tonnes � will provide us with the flexibility to respond as market opportunities emerge. Given higher prices in most potash markets at the beginning of 2015, and our expectation of slightly lower per-tonne costs, we forecast full-year potash gross margin will reach $1.5-$1.8 billion.

In nitrogen, the potential for fewer supply-related disruptions, lower global energy prices and slightly weaker agricultural fundamentals could result in a more tempered pricing environment in 2015. With gas supply restrictions at our Trinidad facility predicted to continue, our annual sales volumes are estimated to be relatively consistent with 2014. We believe lower natural gas costs will contribute to improved per-tonne operating costs, but given our expectation of a slightly weaker pricing environment, we anticipate that gross margin in nitrogen will trail the record level achieved in 2014.

Improving phosphate market conditions are expected to support better results in 2015. Although we will be affected by lower production capability (due to the closure of Suwannee River), the absence of closure-related costs, a relative shift to higher-margin products and the anticipation of better pricing are expected to enhance gross margin.

Given these considerations, we forecast our combined nitrogen and phosphate gross margin will be in the range of $1.1-$1.3 billion in 2015, relatively flat with 2014.

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Capital expenditures are anticipated to be approximately $1.2 billion in 2015. This amount is expected to be slightly above the previous year given higher sustaining spending for our phosphate division to adhere to a recent EPA ruling along with a carryover of certain amounts of capital from 2014.

Based on these factors, we forecast full-year 2015 earnings of $1.90-$2.20 per share, including first-quarter earnings of $0.45-$0.55 per share. Along with those noted above, other annual guidance numbers are outlined in the table below.

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2015 Guidance
Earnings per share		Annual: $1.90-$2.20 Q1: $0.45-$0.55
Potash sales volumes		9.2-9.7 million tonnes
Potash gross margin		$1.5-$1.8 billion
Nitrogen and phosphate gross margin		$1.1-$1.3 billion
Capital expenditures		~$1.2 billion
Effective tax rate		26-28 percent
Provincial mining and other taxes*		15-17 percent
Selling and administrative expenses		$235-$245 million
Finance costs		$200-$210 million
Income from offshore investments**		$195-$205 million
Foreign Exchange Rate		CDN$1.24 per US$
EPS sensitivity to Foreign Exchange		US$�strengthens�vs.�CDN$�by�$0.02�=�+$0.01�EPS

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*	As a percentage of potash gross margin

**	Includes income from dividends and share of equity earnings

Notes

1. All references to per-share amounts pertain to diluted net income per share.

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2. See reconciliation and description of non-IFRS measures in the attached section titled �Selected Non-IFRS Financial Measures and Reconciliations.�

3. Canpotex Limited (Canpotex), the offshore marketing company for Saskatchewan potash producers.

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PotashCorp is the world�s largest integrated fertilizer and related industrial and feed products company by capacity and plays an integral role in global food production. PotashCorp is the world�s largest producer, by capacity, of potash and one of the largest producers of nitrogen and phosphate. These three essential nutrients are required to help farmers grow healthier, more abundant crops. With the global population rising and diets improving in developing countries, these nutrients offer a responsible and practical solution to meeting the long-term demand for food. While agriculture is its primary market, the company also produces products for animal feed and industrial uses. Common shares of Potash Corporation of Saskatchewan Inc. are listed on the Toronto Stock Exchange and the New York Stock Exchange.

For further information please contact:

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Investors Denita Stann Vice President, Investor and Public Relations Phone: (306) 933-8521 Fax: (306) 933-8844 Email: [email protected]		Media Randy Burton Director, Public Relations and Communications Phone: (306) 933-8849 Fax: (306) 933-8844 Email: [email protected]

Website:����www.potashcorp.com

This release contains forward-looking statements or forward-looking information (forward-looking statements). These statements can be identified by expressions of belief, expectation or intention, as well as those statements that are not historical fact. These statements often contain words such as �should,� �could,� �expect,� �may,� �anticipate,� �believe,� �intend,� �estimates,� �plans� and similar expressions. These statements are based on certain factors and assumptions, including with respect to: foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities and effective tax rates. While the company considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are subject to risks and uncertainties that are difficult to predict. The results or events set forth in forward-looking statements may differ materially from actual results or events. Several factors could cause actual results or events to differ materially from those expressed in forward-

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looking statements including, but not limited to, the following: variations from our assumptions with respect to foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities, and effective tax rates; fluctuations in supply and demand in the fertilizer, sulfur, transportation and petrochemical markets; changes in competitive pressures, including pricing pressures; costs and availability of transportation and distribution of our raw materials and products, including railcars and ocean freight; risks and uncertainties related to operating and workforce changes made in response to our industry and the markets we serve; risks and uncertainties related to our international operations and assets; failure to prevent or respond to a major safety incident; adverse or uncertain economic conditions and changes in credit and financial markets; the results of sales contract negotiations within major markets; economic and political uncertainty around the world; risks associated with natural gas and other hedging activities; changes in capital markets; unexpected or adverse weather conditions; catastrophic events or malicious acts, including terrorism; changes in currency and exchange rates; imprecision in reserve estimates; adverse developments in new and pending legal proceedings or government investigations; our prospects to reinvest capital in strategic opportunities and acquisitions; our ownership of non-controlling equity investments in other companies; the impact of further technological innovation; increases in the price or reduced availability of the raw materials that we use; security risks related to our information technology systems; certain complications that may arise in our mining process, including water inflows; our ability to attract, retain, develop and engage skilled employees; strikes or other forms of work stoppage or slowdowns; timing and impact of capital expenditures; rates of return on, and the risks associated with, our investments and capital expenditures; changes in, and the effects of, government policies and regulations; risks related to reputational loss; and earnings; and the decisions of taxing authorities, which could affect our effective tax rates. Additional risks and uncertainties can be found in our Form 10-K for the fiscal year ended December�31, 2013 under the captions �Forward-Looking Statements� and �Item 1A � Risk Factors� and in our other filings with the US Securities and Exchange Commission and the Canadian provincial securities commissions. Forward-looking statements are given only as at the date of this release and the company disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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PotashCorp will host a Conference Call on Thursday January�29, 2015 at 1:00 pm Eastern Time.

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Telephone�Conference:	�		��	����������������������������Dial-in numbers:
	�	-	��	From�Canada�and�the�US	��	1-877-881-1303
	�	-	��	From Elsewhere	��	1-412-902-6719
Live Webcast:	�		��	Visit�www.potashcorp.com	��
	�		��	Webcast participants can submit questions to management online from their audio player pop-up window.

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Potash Corporation of Saskatchewan Inc.

Condensed Consolidated Statements of Income

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

(unaudited)

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�����������Three Months Ended

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�����������Twelve Months Ended

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�����������December�31

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�����������2013

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Sales (Note 2)

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$���1,902

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$���1,541

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$���7,115

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$���7,305

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Freight, transportation and distribution

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(144

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(137

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(609

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(572

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Cost of goods sold

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(1,012

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(944

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(3,859

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(3,943

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Gross Margin

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746

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460

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2,647

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2,790

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Selling and administrative expenses

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(73

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(66

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(245

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(231

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Provincial mining and other taxes

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(82

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(40

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(257

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(194

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Share of earnings of equity-accounted investees

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17

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21

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102

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195

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Dividend income

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17

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7

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117

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92

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Impairment of available-for-sale investment (Note 3)

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(38

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Other (expenses) income

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(14

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(15

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22

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(36

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Operating Income

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�

611

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367

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�

2,348

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2,616

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Finance costs

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(42

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(37

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(184

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(144

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Income Before Income Taxes

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�

569

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�

330

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2,164

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2,472

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Income taxes (Note 4)

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(162

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(100

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(628

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(687

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Net Income

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$�����407

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$�����230

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$���1,536

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$���1,785

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Net Income per Share

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Basic

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$�����0.49

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$�����0.27

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$�����1.83

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$�����2.06

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$�����0.49

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$�����0.26

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$�����1.82

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$�����2.04

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Dividends Declared per Share

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$�����0.35

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$�����0.35

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$�����1.40

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$�����1.33

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Weighted Average Shares Outstanding

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Basic

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829,983,000

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861,331,000

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838,101,000

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864,596,000

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Diluted

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835,984,000

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868,015,000

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844,544,000

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873,982,000

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(See Notes to the Condensed Consolidated Financial Statements)

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Potash Corporation of Saskatchewan Inc.

Condensed Consolidated Statements of Comprehensive Income

(in millions of US dollars)

(unaudited)

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��Three�Months�Ended ��December�31

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��Twelve�Months�Ended ��December�31

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(Net of related income taxes)

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����2014��

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����2013��

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����2014��

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����2013��

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Net Income

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$

407

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$

230

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$

1,536

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$

1,785

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Other comprehensive loss

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Items that will not be reclassified to net income:

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Net actuarial (loss) gain on defined benefit plans (1)

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(109

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14

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(109

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164

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Items that have been or may be subsequently reclassified to net income:

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Available-for-sale investments (2)

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Net fair value gain (loss) during the period

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37

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(22

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(157

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(759

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Cash flow hedges

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Net fair value loss during the period (3)

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(33

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(40

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Reclassification to income of net loss (4)

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6

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8

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26

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33

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Other

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(2

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(1

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1

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Other Comprehensive Loss

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(101

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(1

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(279

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(562

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Comprehensive Income

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$

306

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$

229

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$

1,257

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$

1,223

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�

(1)�	Net of income taxes of $60 (2013 - $(5)) for the three months ended December�31, 2014 and $60 (2013 - $(92)) for the twelve months ended December�31, 2014.

(2)�	Available-for-sale investments are comprised of shares in Israel Chemicals Ltd. and Sinofert Holdings Limited.

(3)�	Cash flow hedges are comprised of natural gas derivative instruments and were net of income taxes of $18 (2013 - $NIL) for the three months ended December�31, 2014 and $22 (2013 - $NIL) for the twelve months ended December�31, 2014.

(4)�	Net of income taxes of $(3) (2013 - $(4)) for the three months ended December�31, 2014 and $(14) (2013 - $(18)) for the twelve months ended December�31, 2014.

(See Notes to the Condensed Consolidated Financial Statements)

---

Potash Corporation of Saskatchewan Inc.

Condensed Consolidated Statements of Cash Flow

(in millions of US dollars)

(unaudited)

�

�

��

��Three�Months�Ended

�

�

��Twelve�Months�Ended

�

�

��

��December�31

�

�

��December�31

�

��

��

��2014

�

�

��2013

�

�

��2014

�

�

��2013

�

Operating Activities

��

�

�

�

Net income

��

$

407

��

�

$

230

��

�

$

1,536

��

�

$

1,785

��

Adjustments to reconcile net income to cash provided by operating activities (Note 5)

��

�

347

��

�

�

336

��

�

�

1,168

��

�

�

1,142

��

Changes in non-cash operating working capital (Note 5)

��

�

(41

)�

�

�

90

��

�

�

(90

)�

�

�

285

��

Cash provided by operating activities

��

�

713

��

�

�

656

��

�

�

2,614

��

�

�

3,212

��

Investing Activities

��

�

�

�

Additions to property, plant and equipment

��

�

(412

)�

�

�

(414

)�

�

�

(1,138

)�

�

�

(1,624

)�

Other assets and intangible assets

��

�

(10

)�

�

�

8

��

�

�

(22

)�

�

�

�

��

Cash used in investing activities

��

�

(422

)�

�

�

(406

)�

�

�

(1,160

)�

�

�

(1,624

)�

Financing Activities

��

�

�

�

Proceeds from long-term debt obligations

��

�

�

��

�

�

�

��

�

�

737

��

�

�

�

��

Repayment of, and finance costs on, long-term debt obligations

��

�

�

��

�

�

�

��

�

�

(500

)�

�

�

(254

)�

Proceeds from short-term debt obligations

��

�

52

��

�

�

357

��

�

�

66

��

�

�

101

��

Dividends

��

�

(284

)�

�

�

(297

)�

�

�

(1,141

)�

�

�

(997

)�

Repurchase of common shares

��

�

�

��

�

�

(245

)�

�

�

(1,065

)�

�

�

(411

)�

Issuance of common shares

��

�

4

��

�

�

8

��

�

�

36

��

�

�

39

��

Cash used in financing activities

��

�

(228

)�

�

�

(177

)�

�

�

(1,867

)�

�

�

(1,522

)�

Increase (Decrease) in Cash and Cash Equivalents

��

�

63

��

�

�

73

��

�

�

(413

)�

�

�

66

��

Cash and Cash Equivalents, Beginning of Period

��

�

152

��

�

�

555

��

�

�

628

��

�

�

562

��

Cash and Cash Equivalents, End of Period

��

$

215

��

�

$

628

��

�

$

215

��

�

$

628

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Cash and cash equivalents comprised of:

��

�

�

�

Cash

��

$

89

��

�

$

129

��

�

$

89

��

�

$

129

��

Short-term investments

��

�

126

��

�

�

499

��

�

�

126

��

�

�

499

��

�

��

$

215

��

�

$

628

��

�

$

215

��

�

$

628

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

(See Notes to the Condensed Consolidated Financial Statements)

---

Potash Corporation of Saskatchewan Inc.

Condensed Consolidated Statement of Changes in Equity

(in millions of US dollars)

(unaudited)

�

�

�

�

�

�

�

�

�

Accumulated Other Comprehensive Income

�

�

�

�

�

�

�

��

�

Share Capital

�

�

Contributed Surplus

�

�

Net unrealized gain on available- for-sale investments

�

�

Net loss�on derivatives designated�as cash�flow�hedges

�

�

Net actuarial loss on defined benefit�plans�(1)

�

�

Other

�

�

Total Accumulated Other Comprehensive Income

�

�

Retained Earnings

�

�

Total Equity

�

Balance�-�December�31, 2013

�

$

1,600

��

�

$

219

��

�

$

780

��

�

$

(105

)�

�

$

�

��

�

$

(2

)�

�

$

673

��

�

$

7,136

��

�

$

9,628

��

Net income

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

1,536

��

�

�

1,536

��

Other comprehensive (loss) income

�

�

�

��

�

�

�

��

�

�

(157

)�

�

�

(14

)�

�

�

(109

)�

�

�

1

��

�

�

(279

)�

�

�

�

��

�

�

(279

)�

Share repurchase

�

�

(53

)�

�

�

(2

)�

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

(976

)�

�

�

(1,031

)�

Dividends declared

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

(1,164

)�

�

�

(1,164

)�

Effect of share-based compensation including issuance of common shares

�

�

49

��

�

�

17

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

66

��

Shares issued for dividend reinvestment plan

�

�

36

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

36

��

Transfer of net actuarial loss on defined benefit plans

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

109

��

�

�

�

��

�

�

109

��

�

�

(109

)�

�

�

�

��

Balance - December�31, 2014

�

$

1,632

��

�

$

234

��

�

$

623

��

�

$

(119

)�

�

$

�

��

�

$

(1

)�

�

$

503

��

�

$

6,423

��

�

$

8,792

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

(1)�	Any amounts incurred during a period were closed out to retained earnings at each period-end. Therefore, no balance exists at the beginning or end of period.

(See Notes to the Condensed Consolidated Financial Statements)

---

Potash Corporation of Saskatchewan Inc.

Condensed Consolidated Statements of Financial Position

(in millions of US dollars except share amounts)

(unaudited)

�

�	��	�����December�31,�����		�	��	�����December�31,�����		�
As at	��	2014		�	��	2013		�
Assets	��				��
Current assets	��				��
Cash and cash equivalents	��	$	215	��	��	$	628	��
Receivables	��	�	1,029	��	��	�	752	��
Inventories	��	�	646	��	��	�	728	��
Prepaid expenses and other current assets	��	�	48	��	��	�	81	��
	��	�	1,938	��	��	�	2,189	��
Non-current assets	��				��
Property, plant and equipment	��	�	12,674	��	��	�	12,233	��
Investments in equity-accounted investees	��	�	1,211	��	��	�	1,276	��
Available-for-sale investments (Note 3)	��	�	1,527	��	��	�	1,722	��
Other assets	��	�	232	��	��	�	401	��
Intangible assets	��	�	142	��	��	�	137	��
Total Assets	��	$	17,724	��	��	$	17,958	��
�	��	�	�	�	��	�	�	�
Liabilities
Current liabilities
Short-term debt and current portion of long-term debt (Note 6)		$	1,032	��		$	967	��
Payables and accrued charges		�	1,086	��		�	1,104	��
Current portion of derivative instrument liabilities		�	80	��		�	42	��
		�	2,198	��		�	2,113	��
Non-current liabilities
Long-term debt (Note 6)		�	3,213	��		�	2,970	��
Derivative instrument liabilities		�	115	��		�	129	��
Deferred income tax liabilities		�	2,201	��		�	2,013	��
Pension and other post-retirement benefit liabilities		�	503	��		�	410	��
Asset retirement obligations and accrued environmental costs		�	589	��		�	557	��
Other non-current liabilities and deferred credits		�	113	��		�	138	��
Total Liabilities		�	8,932	��		�	8,330	��
Shareholders� Equity
Share capital		�	1,632	��		�	1,600	��
Unlimited authorization of common shares without par value; issued and outstanding 830,242,574 and 856,116,325 at December�31, 2014 and 2013, respectively
Contributed surplus		�	234	��		�	219	��
Accumulated other comprehensive income		�	503	��		�	673	��
Retained earnings		�	6,423	��		�	7,136	��
Total Shareholders� Equity		�	8,792	��		�	9,628	��
Total Liabilities and Shareholders� Equity		$	17,724	��		$	17,958	��
�	��	�	�	�	��	�	�	�

(See Notes to the Condensed Consolidated Financial Statements)

---

Potash Corporation of Saskatchewan Inc.

Notes to the Condensed Consolidated Financial Statements

For the Three and Twelve Months Ended December�31, 2014

(in millions of US dollars except as otherwise noted)

(unaudited)

1. Significant Accounting Policies

With its subsidiaries, Potash Corporation of Saskatchewan Inc. (�PCS�) � together known as �PotashCorp� or �the company� except to the extent the context otherwise requires � forms an integrated fertilizer and related industrial and feed products company. The company�s accounting policies are in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (�IFRS�). The accounting policies and methods of computation used in preparing these unaudited condensed consolidated financial statements are consistent with those used in the preparation of the company�s 2013 annual consolidated financial statements.

These unaudited condensed consolidated financial statements include the accounts of PCS and its subsidiaries; however, they do not include all disclosures normally provided in annual consolidated financial statements and should be read in conjunction with the company�s 2013 annual consolidated financial statements. The company�s 2014 annual consolidated financial statements will include additional information under IFRS in its Annual Integrated Report in February 2015.

In management�s opinion, the unaudited condensed consolidated financial statements include all adjustments necessary to present fairly such information.

2. Segment Information

The company has three reportable operating segments: potash, nitrogen and phosphate. Inter-segment sales are made under terms that approximate market value. The accounting policies of the segments are the same as those described in Note 1.

�

��

�

Three Months Ended December�31, 2014

�

��

�

������Potash������

�

�

����Nitrogen����

�

�

��Phosphate��

�

�

��All�Others��

�

�

Consolidated

�

Sales - third party

�

$

������777

��

�

$

������626

��

�

$

������499

��

�

$

��������

��

�

$

���1,902

��

Freight, transportation and distribution - third party

�

�

(62

)�

�

�

(28

)�

�

�

(54

)�

�

�

�

��

�

�

(144

)�

Net sales - third party

�

�

715

��

�

�

598

��

�

�

445

��

�

�

�

��

�

Cost of goods sold - third party

�

�

(270

)�

�

�

(378

)�

�

�

(364

)�

�

�

�

��

�

�

(1,012

)�

Margin (cost) on inter-segment sales (1)

�

�

�

��

�

�

14

��

�

�

(14

)�

�

�

�

��

�

�

�

��

Gross margin

�

�

445

��

�

�

234

��

�

�

67

��

�

�

�

��

�

�

746

��

Depreciation and amortization

�

�

(59

)�

�

�

(45

)�

�

�

(63

)�

�

�

(15

)�

�

�

(182

)�

Cash outflows for additions to property, plant and equipment

�

�

156

��

�

�

179

��

�

�

62

��

�

�

15

��

�

�

412

��

� (1)������Inter-segment net sales were $24. �

�

�

�

�

�

��

�

Three Months Ended December�31, 2013

�

��

�

Potash

�

�

Nitrogen

�

�

Phosphate

�

�

All Others

�

�

Consolidated

�

Sales - third party

�

$

���564

��

�

$

���494

��

�

$

���483

��

�

$

���������

��

�

$

���1,541

��

Freight, transportation and distribution - third party

�

�

(60

)�

�

�

(23

)�

�

�

(54

)�

�

�

�

��

�

�

(137

)�

Net sales - third party

�

�

504

��

�

�

471

��

�

�

429

��

�

�

�

��

�

Cost of goods sold - third party

�

�

(276

)�

�

�

(298

)�

�

�

(370

)�

�

�

�

��

�

�

(944

)�

Margin (cost) on inter-segment sales (1)

�

�

�

��

�

�

15

��

�

�

(15

)�

�

�

�

��

�

�

�

��

Gross margin

�

�

228

��

�

�

188

��

�

�

44

��

�

�

�

��

�

�

460

��

Depreciation and amortization

�

�

(39

)�

�

�

(40

)�

�

�

(80

)�

�

�

(18

)�

�

�

(177

)�

Cash outflows for additions to property, plant and equipment

�

�

279

��

�

�

72

��

�

�

60

��

�

�

3

��

�

�

414

��

�

(1)�	Inter-segment net sales were $28.

---

Potash Corporation of Saskatchewan Inc.

Notes to the Condensed Consolidated Financial Statements

For the Three and Twelve Months Ended December�31, 2014

(in millions of US dollars except as otherwise noted)

(unaudited)

�

2. Segment Information (continued)

�

��

�

Twelve Months Ended December�31, 2014

�

��

�

������Potash������

�

�

����Nitrogen����

�

�

��Phosphate��

�

�

��All�Others��

�

�

Consolidated

�

Sales - third party

�

$

���2,828

��

�

$

���2,425

��

�

$

���1,862

��

�

$

���������

��

�

$

���7,115

��

Freight, transportation and distribution - third party

�

�

(291

)�

�

�

(117

)�

�

�

(201

)�

�

�

�

��

�

�

(609

)�

Net sales - third party

�

�

2,537

��

�

�

2,308

��

�

�

1,661

��

�

�

�

��

�

Cost of goods sold - third party

�

�

(1,102

)�

�

�

(1,357

)�

�

�

(1,400

)�

�

�

�

��

�

�

(3,859

)�

Margin (cost) on inter-segment sales (1)

�

�

�

��

�

�

59

��

�

�

(59

)�

�

�

�

��

�

�

�

��

Gross margin

�

�

1,435

��

�

�

1,010

��

�

�

202

��

�

�

�

��

�

�

2,647

��

Depreciation and amortization

�

�

(224

)�

�

�

(173

)�

�

�

(297

)�

�

�

(7

)�

�

�

(701

)�

Cash outflows for additions to property, plant and equipment

�

�

521

��

�

�

388

��

�

�

203

��

�

�

26

��

�

�

1,138

��

� (1)������Inter-segment net sales were $107. �

�

�

�

�

�

��

�

Twelve Months Ended December�31, 2013

�

��

�

������Potash������

�

�

����Nitrogen����

�

�

��Phosphate��

�

�

��All�Others��

�

�

Consolidated

�

Sales - third party

�

$

���2,963

��

�

$

���2,275

��

�

$

���2,067

��

�

$

���������

��

�

$

���7,305

��

Freight, transportation and distribution - third party

�

�

(256

)�

�

�

(101

)�

�

�

(215

)�

�

�

�

��

�

�

(572

)�

Net sales - third party

�

�

2,707

��

�

�

2,174

��

�

�

1,852

��

�

�

�

��

�

Cost of goods sold - third party

�

�

(1,134

)�

�

�

(1,316

)�

�

�

(1,493

)�

�

�

�

��

�

�

(3,943

)�

Margin (cost) on inter-segment sales (1)

�

�

�

��

�

�

55

��

�

�

(55

)�

�

�

�

��

�

�

�

��

Gross margin

�

�

1,573

��

�

�

913

��

�

�

304

��

�

�

�

��

�

�

2,790

��

Depreciation and amortization

�

�

(176

)�

�

�

(161

)�

�

�

(294

)�

�

�

(35

)�

�

�

(666

)�

Cash outflows for additions to property, plant and equipment

�

�

1,151

��

�

�

184

��

�

�

238

��

�

�

51

��

�

�

1,624

��

�

(1)�	Inter-segment net sales were $139.

3. Available-for-Sale Investments

The company assesses at the end of each reporting period whether there is objective evidence of impairment. A significant or prolonged decline in the fair value of the investment below its cost would be evidence that the asset is impaired. If objective evidence of impairment exists, the impaired amount (i.e., the unrealized loss) is recognized in net income; any subsequent reversals would be recognized in other comprehensive income (�OCI�) and would not flow back into net income. Any subsequent decline in fair value below the carrying amount at the impairment date would represent a further impairment to be recognized in net income.

During 2012, the company concluded its investment in Sinofert Holdings Limited (�Sinofert�) was impaired due to the significance by which fair value was below cost. As a result, an impairment loss of $341 was recognized in net income during 2012. At March�31, 2014, the company concluded its investment in Sinofert was further impaired due to the fair value declining below the carrying amount of $238 at the previous impairment date. As a result, an impairment loss of $38 was recognized in net income during the three months ended March�31, 2014. The fair value was determined through the market value of Sinofert shares on the Hong Kong Stock Exchange.

---

Potash Corporation of Saskatchewan Inc.

Notes to the Condensed Consolidated Financial Statements

For the Three and Twelve Months Ended December�31, 2014

(in millions of US dollars except as otherwise noted)

(unaudited)

�

3. Available-for-Sale Investments (continued)

�

Changes in fair value, and related accounting, for the company�s investment in Sinofert since December�31, 2013 were as follows:

�

�����������������������

�����������������������

�����������������������

�����������������������

�

��

�

�

�

�

�

�

Impact�of�Unrealized�Loss�on:

�

��

��

Fair Value

�

�

Unrealized Loss

�

�

OCI and AOCI

�

�

Net Income and Retained Earnings

�

Balance � December�31, 2013

��

$

254

��

�

$

(325

)�

�

$

16

��

�

$

(341

)�

Decrease in fair value and recognition of impairment

��

�

(54

)�

�

�

(54

)�

�

�

(16

)�

�

�

(38

)�

Balance � March�31, 2014

��

$

200

��

�

$

(379

)�

�

$

�

��

�

$

(379

)�

Increase in fair value

��

�

10

��

�

�

10

��

�

�

10

��

�

�

�

��

Balance � June�30, 2014

��

$

210

��

�

$

(369

)�

�

$

10

��

�

$

(379

)�

Increase in fair value

��

�

11

��

�

�

11

��

�

�

11

��

�

�

�

��

Balance � September�30, 2014

��

$

221

��

�

$

(358

)�

�

$

21

��

�

$

(379

)�

Increase in fair value

��

�

31

��

�

�

31

��

�

�

31

��

�

�

�

��

Balance � December�31, 2014

��

$

252

��

�

$

(327

)�

�

$

52

��

�

$

(379

)�

�

�

4. Income Taxes

A separate estimated average annual effective tax rate was determined for each taxing jurisdiction and applied individually to the pre-tax income of each jurisdiction.

�

�

��

Three�Months�Ended

�

��

Twelve�Months�Ended

�

�

��

December�31

�

��

December�31

�

��

��

2014

�

�

2013

�

��

2014

�

��

2013

�

Income tax expense

��

$

�������������162

��

�

$

��������������100

��

��

$

��������������628

��

��

$

��������������687

��

Actual effective tax rate on ordinary earnings

��

�

29%

��

�

�

25%

��

��

�

28%

��

��

�

26%

��

Actual effective tax rate including discrete items

��

�

29%

��

�

�

30%

��

��

�

29%

��

��

�

28%

��

Discrete tax adjustments that impacted the tax rate

��

$

(1

)�

�

$

18

��

��

$

20

��

��

$

55

��

Significant items to note include the following:

�

�

�

�

The actual effective tax rate on ordinary earnings for the three and twelve months ended December�31, 2014 increased compared to the same periods last year due to different income weightings between jurisdictions.

�

�

�

�

In third-quarter 2014, a deferred tax expense of $11 was recorded as a result of a Chilean income tax rate increase.

�

�

�

�

In 2013, a tax expense of $8 (recovery of $1 in the fourth quarter) was recorded to adjust the 2012 income tax provision.

�

�

�

�

In fourth-quarter 2013, a net tax expense of $13 was recorded to adjust the deferred tax asset related to foreign tax loss carryforwards to the amount expected to be realized upon utilization.

�

�

�

�

In fourth-quarter 2013, a deferred tax expense of $10 was recorded as a result of a planned distribution of earnings from a foreign jurisdiction.

�

�

�

�

In second-quarter 2013, a deferred tax expense of $11 was recorded as a result of a Canadian income tax rate increase.

---

Potash Corporation of Saskatchewan Inc.

Notes to the Condensed Consolidated Financial Statements

For the Three and Twelve Months Ended December�31, 2014

(in millions of US dollars except as otherwise noted)

(unaudited)

�

5. Consolidated Statements of Cash Flow

�

�

�

Three�Months�Ended

�

�

Twelve�Months�Ended

�

�

�

December�31

�

�

December�31

�

��

�

2014

�

�

2013

�

�

2014

�

�

2013

�

Reconciliation of cash provided by operating activities

�

�

�

�

Net income

�

$

������407

��

�

$

������230

��

�

$

����1,536

��

�

$

����1,785

��

Adjustments to reconcile net income to cash provided by operating activities

�

�

�

�

Depreciation and amortization

�

�

182

��

�

�

177

��

�

�

701

��

�

�

666

��

Share-based compensation

�

�

6

��

�

�

2

��

�

�

28

��

�

�

27

��

Net distributed (undistributed) earnings of equity-accounted investees

�

�

17

��

�

�

47

��

�

�

68

��

�

�

(15

)�

Impairment of available-for-sale investment (Note 3)

�

�

�

��

�

�

�

��

�

�

38

��

�

�

�

��

Provision for deferred income tax

�

�

126

��

�

�

86

��

�

�

268

��

�

�

397

��

Pension and other post-retirement benefits

�

�

5

��

�

�

(6

)�

�

�

28

��

�

�

(16

)�

Asset retirement obligations and accrued environmental costs

�

�

2

��

�

�

14

��

�

�

18

��

�

�

(2

)�

Other long-term liabilities and miscellaneous

�

�

9

��

�

�

16

��

�

�

19

��

�

�

85

��

Subtotal of adjustments

�

�

347

��

�

�

336

��

�

�

1,168

��

�

�

1,142

��

Changes in non-cash operating working capital

�

�

�

�

Receivables

�

�

(140

)�

�

�

114

��

�

�

(220

)�

�

�

276

��

Inventories

�

�

46

��

�

�

(1

)�

�

�

70

��

�

�

28

��

Prepaid expenses and other current assets

�

�

8

��

�

�

3

��

�

�

29

��

�

�

(1

)�

Payables and accrued charges

�

�

45

��

�

�

(26

)�

�

�

31

��

�

�

(18

)�

Subtotal of changes in non-cash operating working capital

�

�

(41

)�

�

�

90

��

�

�

(90

)�

�

�

285

��

Cash provided by operating activities

�

$

713

��

�

$

656

��

�

$

2,614

��

�

$

3,212

��

Supplemental cash flow disclosure

�

�

�

�

Interest paid

�

$

55

��

�

$

68

��

�

$

187

��

�

$

191

��

Income taxes paid

�

$

113

��

�

$

76

��

�

$

405

��

�

$

189

��

6. Long-Term Debt

On March�7, 2014, the company closed the issuance of $750 of 3.625 percent senior notes due March�15, 2024. The senior notes were issued under a US shelf registration statement.

On March�7, 2014, the company issued a notice of redemption for all of its outstanding $500 of 5.250 percent senior notes due May�15, 2014. On April�7, 2014, the company completed the redemption of all $500 of the senior notes at a redemption price of 100.497 percent of the principal amount of the notes redeemed plus accrued interest.

During the third quarter of 2014, the company classified as current the $500 aggregate principal amount of 3.750 percent senior notes due September�30, 2015.

---

Potash Corporation of Saskatchewan Inc.

Selected Financial Data

(unaudited)

�

�

��

Three�Months�Ended

�

�

Twelve�Months�Ended

�

�

��

December�31

�

�

December�31

�

��

��

2014

�

�

2013

�

�

2014

�

�

2013

�

Potash Sales (tonnes - thousands)

��

�

�

�

Manufactured Product

��

�

�

�

North America

��

�

829

��

�

�

836

��

�

�

3,549

��

�

�

3,185

��

Offshore

��

�

1,671

��

�

�

929

��

�

�

5,797

��

�

�

4,915

��

Manufactured Product

��

�

2,500

��

�

�

1,765

��

�

�

9,346

��

�

�

8,100

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Potash Net Sales

(US $ millions)

Sales

$

777

��

$

564

��

$

2,828

��

$

2,963

��

Freight, transportation and distribution

�

(62

)�

�

(60

)�

�

(291

)�

�

(256

)�

Net Sales

$

715

��

$

504

��

$

2,537

��

$

2,707

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Manufactured Product

North America

$

296

��

$

287

��

$

1,162

��

$

1,210

��

Offshore

�

412

��

�

211

��

�

1,354

��

�

1,482

��

Other miscellaneous and purchased product

�

7

��

�

6

��

�

21

��

�

15

��

Net Sales

$

715

��

$

504

��

$

2,537

��

$

2,707

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Manufactured Product

Average Realized Sales Price per MT

North America

$

358

��

$

343

��

$

328

��

$

380

��

Offshore

$

246

��

$

227

��

$

234

��

$

302

��

Average

$

284

��

$

282

��

$

269

��

$

332

��

Cost of Goods Sold per MT

$

��(105

)�

$

��(150

)�

$

(113

)�

$

(136

)�

Gross Margin per MT

$

�����179

��

$

�����132

��

$

�����156

��

$

�����196

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

---

Potash Corporation of Saskatchewan Inc.

Selected Financial Data

(unaudited)

�

�

��

Three�Months�Ended

�

�

��Twelve�Months�Ended��

�

�

��

December�31

�

�

December�31

�

��

��

2014

�

�

2013

�

�

2014

�

�

2013

�

Average Natural Gas Cost in Production per MMBtu

��

$

6.34

��

�

$

4.83

��

�

$

5.77

��

�

$

5.38

��

Nitrogen Sales (tonnes - thousands)

��

�

�

�

Manufactured Product

��

�

�

�

Ammonia (1)

��

�

652

��

�

�

543

��

�

�

2,428

��

�

�

2,163

��

Urea

��

�

195

��

�

�

270

��

�

�

1,049

��

�

�

1,070

��

Solutions/Nitric acid/Ammonium nitrate

��

�

664

��

�

�

685

��

�

�

2,875

��

�

�

2,663

��

Manufactured Product

��

�

1,511

��

�

�

1,498

��

�

�

6,352

��

�

�

5,896

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Fertilizer sales tonnes (1)

�

380

��

�

472

��

�

2,079

��

�

1,833

��

Industrial/Feed sales tonnes

�

1,131

��

�

1,026

��

�

4,273

��

�

4,063

��

Manufactured Product

�

1,511

��

�

1,498

��

�

6,352

��

�

5,896

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Nitrogen Net Sales

(US $ millions)

Sales - third party

$

626

��

$

494

��

$

2,425

��

$

2,275

��

Freight, transportation and distribution - third party

�

(28

)�

�

(23

)�

�

(117

)�

�

(101

)�

Net sales - third party

�

598

��

�

471

��

�

2,308

��

�

2,174

��

Inter-segment net sales

�

24

��

�

28

��

�

107

��

�

139

��

Net Sales

$

622

��

$

499

��

$

2,415

��

$

2,313

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Manufactured Product

Ammonia (2)

$

385

��

$

244

��

$

1,260

��

$

1,143

��

Urea

�

75

��

�

96

��

�

439

��

�

443

��

Solutions/Nitric acid/Ammonium nitrate

�

153

��

�

149

��

�

679

��

�

638

��

Other miscellaneous and purchased product (3)

�

9

��

�

10

��

�

37

��

�

89

��

Net Sales

$

622

��

$

499

��

$

2,415

��

$

2,313

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Fertilizer net sales (2)

$

138

��

$

156

��

$

778

��

$

722

��

Industrial/Feed net sales

�

475

��

�

333

��

�

1,600

��

�

1,502

��

Other miscellaneous and purchased product (3)

�

9

��

�

10

��

�

37

��

�

89

��

Net Sales

$

622

��

$

499

��

$

2,415

��

$

2,313

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Manufactured Product

Average Realized Sales Price per MT

Ammonia

$

590

��

$

449

��

$

519

��

$

529

��

Urea

$

384

��

$

356

��

$

418

��

$

414

��

Solutions/Nitric acid/Ammonium nitrate

$

231

��

$

218

��

$

236

��

$

240

��

Average

$

405

��

$

326

��

$

374

��

$

377

��

Fertilizer average price per MT

$

362

��

$

331

��

$

374

��

$

396

��

Industrial/Feed average price per MT

$

420

��

$

325

��

$

374

��

$

370

��

Average

$

405

��

$

326

��

$

374

��

$

377

��

Cost of Goods Sold per MT

$

(253

)�

$

(204

)�

$

(218

)�

$

(225

)�

Gross Margin per MT

$

152

��

$

122

��

$

156

��

$

152

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

(1)����Includes inter-segment ammonia sales (tonnes - thousands)

�

29

��

�

48

��

�

170

��

�

184

��

(2)����Includes inter-segment ammonia net sales

$

20

��

$

27

��

$

101

��

$

106

��

(3)����Includes inter-segment other miscellaneous and purchased product net sales

$

4

��

$

1

��

$

6

��

$

33

��

---

Potash Corporation of Saskatchewan Inc.

Selected Financial Data

(unaudited)

�

�

��

Three�Months�Ended

�

�

Twelve�Months�Ended

�

�

��

December�31

�

�

December�31

�

��

��

2014

�

�

2013

�

�

2014

�

�

2013

�

Phosphate Sales (tonnes - thousands)

��

�

�

�

Manufactured Product

��

�

�

�

Fertilizer

��

�

501

��

�

�

637

��

�

�

1,987

��

�

�

2,496

��

Feed and Industrial

��

�

293

��

�

�

297

��

�

�

1,155

��

�

�

1,184

��

Manufactured Product

��

�

794

��

�

�

934

��

�

�

3,142

��

�

�

3,680

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Phosphate Net Sales

(US $ millions)

Sales

$

499

��

$

483

��

$

1,862

��

$

2,067

��

Freight, transportation and distribution

�

(54

)�

�

(54

)�

�

(201

)�

�

(215

)�

Net Sales

$

445

��

$

429

��

$

1,661

��

$

1,852

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Manufactured Product

Fertilizer

$

233

��

$

244

��

$

889

��

$

1,079

��

Feed and Industrial

�

187

��

�

181

��

�

713

��

�

749

��

Other miscellaneous and purchased product

�

25

��

�

4

��

�

59

��

�

24

��

Net Sales

$

445

��

$

429

��

$

1,661

��

$

1,852

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Manufactured Product

Average Realized Sales Price per MT

Fertilizer

$

465

��

$

383

��

$

447

��

$

433

��

Feed and Industrial

$

636

��

$

608

��

$

617

��

$

632

��

Average

$

528

��

$

455

��

$

510

��

$

497

��

Cost of Goods Sold per MT

$

��(446

)�

$

��(401

)�

$

��(448

)�

$

��(415

)�

Gross Margin per MT

$

�����82

��

$

�����54

��

$

�����62

��

$

�����82

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

---

Potash Corporation of Saskatchewan Inc.

Selected Additional Data

(unaudited)

Exchange Rate (Cdn$/US$)

�

��	��	����2014����		�	��	��	��	������2013����		�
December�31	��	�	1.1601	��	��		��	�	1.0636	��
Fourth-quarter average conversion rate	��	�	1.1184	��	��		��	�	1.0399	��

�

�

����

������������������Three�Months�Ended

�

����

������������������Twelve�Months�Ended

�

�

����

������������������December�31

�

����

������������������December�31

�

��

����

2014��

�

����

2013��

�

����

2014��

�

����

2013��

�

Production

����

����

����

����

Potash production (KCl Tonnes - thousands)

����

�

������������2,557

��

����

�

������������1,940

��

����

�

������������8,726

��

����

�

������������7,792

��

Potash shutdown weeks (1)

����

�

4

��

����

�

10

��

����

�

18

��

����

�

42

��

Nitrogen production (N Tonnes - thousands)

����

�

720

��

����

�

798

��

����

�

3,170

��

����

�

2,952

��

Phosphate production (P2O5 Tonnes - thousands)

����

�

412

��

����

�

505

��

����

�

1,671

��

����

�

2,058

��

Phosphate P2O5 operating rate

����

�

87%

��

����

�

85%

��

����

�

76%

��

����

�

87%

��

Shareholders

����

����

����

����

PotashCorp�s total shareholder return

����

�

3%

��

����

�

6%

��

����

�

12%

��

����

�

-16%

��

Customers

����

����

����

����

Product tonnes involved in customer complaints (thousands)

����

�

39

��

����

�

27

��

����

�

63

��

����

�

43

��

Community

����

����

����

����

Taxes and royalties ($ millions) (2)

����

�

156

��

����

�

84

��

����

�

715

��

����

�

568

��

Employees

����

����

����

����

Annualized turnover rate (excluding retirements) (3)

����

�

3%

��

����

�

7%

��

����

�

12%

��

����

�

5%

��

Safety

����

����

����

����

Total site recordable injury rate (per 200,000 work hours) (4)

����

�

0.66

��

����

�

0.86

��

����

�

1.01

��

����

�

1.06

��

Environment

����

����

����

����

Environmental incidents (5)

����

�

5

��

����

�

4

��

����

�

24

��

����

�

17

��

�

�	��	December�31,		�	��	December�31,		�
As at	��	2014		�	��	2013		�
Number of employees (6)	��				��
Potash	��	�	2,534	��	��	�	2,912	��
Nitrogen	��	�	802	��	��	�	789	��
Phosphate	��	�	1,385	��	��	�	1,637	��
Other	��	�	415	��	��	�	449	��
Total	��	�	5,136	��	��	�	5,787	��
�	��	�	�	�	��	�	�	�

�

(1)	Represents weeks of full production shutdown; excludes the impact of any periods of reduced operating rates and planned routine annual maintenance shutdowns.

(2)�	Taxes and royalties = current income tax expense - investment tax credits - realized excess tax benefit related to share-based compensation + potash production tax + resource surcharge + royalties + municipal taxes + other miscellaneous taxes (calculated on an accrual basis).

(3)	Results in 2014 include a portion of the impact of our workforce reduction announced in 2013.

(4)	Total site includes PotashCorp employees, contractors and others on site (as defined in our 2013 Annual Integrated Report).

(5)	Total of reportable quantity releases, permit excursions and provincial reportable spills (as defined in our 2013 Annual Integrated Report).

(6)�	Totals as at December�31, 2013 did not fully reflect workforce changes announced in December 2013.

---

Potash Corporation of Saskatchewan Inc.

Selected Non-IFRS Financial Measures and Reconciliations

(in millions of US dollars except percentage amounts)

(unaudited)

The following information is included for convenience only. Generally, a non-IFRS financial measure is a numerical measure of a company�s performance, cash flows or financial position that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS. EBITDA, adjusted EBITDA, adjusted EBITDA margin, cash flow prior to working capital changes and free cash flow are not measures of financial performance (nor do they have standardized meanings) under IFRS. In evaluating these measures, investors should consider that the methodology applied in calculating such measures may differ among companies and analysts.

The company uses both IFRS and certain non-IFRS measures to assess performance. Management believes these non-IFRS measures provide useful supplemental information to investors in order that they may evaluate PotashCorp�s financial performance using the same measures as management. Management believes that, as a result, the investor is afforded greater transparency in assessing the financial performance of the company. These non-IFRS financial measures should not be considered as a substitute for, nor superior to, measures of financial performance prepared in accordance with IFRS.

�

A.	EBITDA, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN

Set forth below is a reconciliation of �EBITDA� and �adjusted EBITDA� to net income and �adjusted EBITDA margin� to net income as a percentage of sales, the most directly comparable financial measures calculated and presented in accordance with IFRS.

�

�

��

Three�Months�Ended

�

��

Twelve�Months�Ended

�

�

��

December�31

�

��

December�31

�

��

��

����2014����

�

��

����2013����

�

��

����2014����

�

��

����2013����

�

Net income

��

$

���407

��

��

$

���230

��

��

$

1,536

��

��

$

1,785

��

Finance costs

��

�

42

��

��

�

37

��

��

�

184

��

��

�

144

��

Income taxes

��

�

162

��

��

�

100

��

��

�

628

��

��

�

687

��

Depreciation and amortization

��

�

182

��

��

�

177

��

��

�

701

��

��

�

666

��

EBITDA

��

$

793

��

��

$

544

��

��

$

3,049

��

��

$

3,282

��

Termination benefit costs

��

�

�

��

��

�

60

��

��

�

�

��

��

�

60

��

Impairment of available-for-sale investment

��

�

�

��

��

�

�

��

��

�

38

��

��

�

�

��

Adjusted EBITDA

��

$

793

��

��

$

604

��

��

$

3,087

��

��

$

3,342

��

�

��

�

�

�

��

�

�

�

��

�

�

�

��

�

�

�

EBITDA is calculated as net income before finance costs, income taxes and depreciation and amortization. Adjusted EBITDA is calculated as net income before finance costs, income taxes, depreciation and amortization, termination benefit costs and certain impairment charges. PotashCorp uses EBITDA and adjusted EBITDA as supplemental financial measures of its operational performance. Management believes EBITDA and adjusted EBITDA to be important measures as they exclude the effects of items which primarily reflect the impact of long-term investment and financing decisions, rather than the performance of the company�s day-to-day operations. As compared to net income according to IFRS, these measures are limited in that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the company�s business, termination benefit costs, or the charges associated with impairments. Management evaluates such items through other financial measures such as capital expenditures and cash flow provided by operating activities. The company believes that these measurements are useful to measure a company�s ability to service debt and to meet other payment obligations or as a valuation measurement.

�

�

��

Three�Months�Ended

�

�

Twelve�Months�Ended

�

�

��

December�31

�

�

December�31

�

��

��

����2014����

�

�

����2013����

�

�

����2014����

�

�

����2013����

�

Sales

��

$

1,902

��

�

$

1,541

��

�

$

7,115

��

�

$

7,305

��

Freight, transportation and distribution

��

�

(144

)�

�

�

(137

)�

�

�

(609

)�

�

�

(572

)�

Net sales

��

$

1,758

��

�

$

1,404

��

�

$

6,506

��

�

$

6,733

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Net income as a percentage of sales

�

21%

��

�

15%

��

�

22%

��

�

24%

��

Adjusted EBITDA margin

�

45%

��

�

43%

��

�

47%

��

�

50%

��

Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net sales (sales less freight, transportation and distribution). Management believes comparing EBITDA to net sales earned (net of costs to deliver product) is an important indicator of efficiency. In addition to the limitations given above in using adjusted EBITDA as compared to net income, adjusted EBITDA margin as compared to net income as a percentage of sales is also limited in that freight, transportation and distribution costs are incurred and valued independently of sales; adjusted EBITDA also includes share of earnings of equity-accounted investees whose sales are not included in consolidated sales. Management evaluates these items individually on the consolidated statements of income.

---

Potash Corporation of Saskatchewan Inc.

Selected Non-IFRS Financial Measures and Reconciliations

(in millions of US dollars)

(unaudited)

�

B.

CASH FLOW

Set forth below is a reconciliation of �cash flow prior to working capital changes� and �free cash flow� to cash provided by operating activities, the most directly comparable financial measure calculated and presented in accordance with IFRS.

�

�

��

Three�Months�Ended

�

�

Twelve�Months�Ended

�

�

��

December�31

�

�

December�31

�

��

��

����2014����

�

�

����2013����

�

�

����2014����

�

�

����2013����

�

Cash flow prior to working capital changes

��

$

754

��

�

$

566

��

�

$

2,704

��

�

$

2,927

��

Changes in non-cash operating working capital

��

�

�

�

Receivables

��

�

(140

)�

�

�

114

��

�

�

(220

)�

�

�

276

��

Inventories

��

�

46

��

�

�

(1

)�

�

�

70

��

�

�

28

��

Prepaid expenses and other current assets

��

�

8

��

�

�

3

��

�

�

29

��

�

�

(1

)�

Payables and accrued charges

��

�

45

��

�

�

(26

)�

�

�

31

��

�

�

(18

)�

Changes in non-cash operating working capital

��

�

(41

)�

�

�

90

��

�

�

(90

)�

�

�

285

��

Cash provided by operating activities

��

$

713

��

�

$

656

��

�

$

2,614

��

�

$

3,212

��

Additions to property, plant and equipment

��

�

(412

)�

�

�

(414

)�

�

�

(1,138

)�

�

�

(1,624

)�

Other assets and intangible assets

��

�

(10

)�

�

�

8

��

�

�

(22

)�

�

�

�

��

Changes in non-cash operating working capital

��

�

41

��

�

�

(90

)�

�

�

90

��

�

�

(285

)�

Free cash flow

��

$

332

��

�

$

160

��

�

$

1,544

��

�

$

1,303

��

�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Management uses cash flow prior to working capital changes as a supplemental financial measure in its evaluation of liquidity. Management believes that adjusting principally for the swings in non-cash working capital items due to seasonality or other timing issues assists management in making long-term liquidity assessments. The company also believes that this measurement is useful as a measure of liquidity or as a valuation measurement.

The company uses free cash flow as a supplemental financial measure in its evaluation of liquidity and financial strength. Management believes that adjusting principally for the swings in non-cash operating working capital items due to seasonality or other timing issues, additions to property, plant and equipment, and changes to other assets assists management in the long-term assessment of liquidity and financial strength. Management also believes that this measurement is useful as an indicator of its ability to service its debt, meet other payment obligations and make strategic investments. Readers should be aware that free cash flow does not represent residual cash flow available for discretionary expenditures.