PotashCorp Reports Fourth-Quarter Earnings of $0.48 per Share

        PotashCorp Reports Fourth-Quarter Earnings of $0.48 per Share

PR Newswire

SASKATOON, Jan. 31, 2013

Listed: TSX, NYSE
Symbol: POT

Key Performance and Outlook Highlights

  *Fourth-quarter earnings of $0.48 per share^1
  *Full-year 2012 earnings of $2.37 per share
  *Record full-year nitrogen gross margin of $978 million
  *Earnings guidance of $0.50-$0.65 per share for first-quarter 2013;
    $2.75-$3.25 per share for full year

SASKATOON, Jan. 31,  2013 /PRNewswire/  - Potash  Corporation of  Saskatchewan 
Inc. (PotashCorp) today  reported fourth-quarter earnings  of $0.48 per  share 
($421 million), which compared to $0.78  per share ($683 million) in the  same 
period last  year.  Full-year earnings  for  2012  of $2.37  per  share  ($2.1 
billion) trailed  the $3.51  per  share ($3.1  billion)  earned in  2011.  Our 
results included a $41 million ($0.04 per share) provision for the  settlement 
of antitrust claims  in the  US recorded  in the  fourth quarter,  and a  $341 
million ($0.39 per share) non-cash impairment charge related to our investment
in Sinofert  Holdings  Limited (Sinofert)  in  China recorded  in  the  second 
quarter.

With lower contributions from  all three nutrients,  gross margin declined  to 
$0.6 billion from the  $0.9 billion generated in  the fourth quarter of  2011. 
This result brought our full-year gross margin to $3.4 billion, which compared
to $4.3 billion earned in the previous year. Adjusted earnings before  finance 
costs, income  taxes and  depreciation  and amortization^2  (adjusted  EBITDA) 
totaled $0.7 billion for the quarter and $3.9 billion for the year, with  both 
amounts trailing those of the comparative periods. Cash provided by  operating 
activities of $0.9 billion  was flat with the  previous year's fourth  quarter 
and raised our 2012 total to $3.2 billion, the second-highest annual result in
our history.

Our offshore  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 $94 million to earnings in the fourth quarter.  For 
the full year,  contributions from  these investments  - and  a dividend  from 
Sinofert - reached a record $412 million. The market value of our  investments 
in these publicly traded companies was approximately $9.1 billion, or $10  per 
PotashCorp share at market close on January 30, 2013.

"Our fourth-quarter results were adversely  affected by weaker performance  in 
all three nutrients  as global  fertilizer markets  paused in  the absence  of 
significant immediate  needs  and  amid lack  of  direction,  particularly  in 
phosphate and potash," said PotashCorp  President and Chief Executive  Officer 
Bill Doyle. "Despite these temporary challenges, we operated with a consistent
approach  -  temporarily   slowing  potash  production   and  leveraging   our 
diversified product mix in our other nutrients - to best position our  company 
for the expected rebound in fertilizer demand in 2013."

Market Conditions
The typical late-season slowdown in  global potash demand was more  pronounced 
in the  quarter  as buyers  awaited  clarity on  contract  settlements  before 
committing to  fully engage  in  procuring new  supply.  The impact  on  North 
American potash producers was most  evident in shipments to offshore  markets, 
which declined by  43 percent  in the  fourth quarter  of 2012  from the  same 
period last  year.  In  contrast to  this  weakness,  fourth-quarter  domestic 
shipments from North American producers outpaced those of the previous year by
38 percent as dealers continued to  respond to the immediate needs of  farmers 
capitalizing on  favorable  crop economics  and  an extended  fall  fertilizer 
application season.  Despite the  relative strength  of this  market,  limited 
global purchasing caused prices to move lower through the quarter.

Phosphate demand  was affected  by similar  global trends.  Fourth-quarter  US 
producer sales of  solid phosphate to  the North American  market reached  the 
highest level of any quarter in 2012  - 33 percent above the same period  last 
year. However, this strength  was offset by weak  demand in offshore  markets, 
primarily India,  which led  to  lower prices  for most  phosphate  fertilizer 
products.

In nitrogen, strong industrial and  agricultural demand for ammonia,  combined 
with global supply challenges that limited the amount of product available for
trade, supported prices  through much of  the quarter. While  prices for  urea 
remained above 2011 levels for most of the year, a significant rise in imports
into the US market and  a surge in Chinese  exports during the fourth  quarter 
resulted in a  weakening of  prices relative  to the  comparative period  last 
year.

Potash
With reduced  shipments  to  offshore customers  and  lower  realized  prices, 
fourth-quarter potash gross margin  of $281 million  trailed the $486  million 
earned in the  same period of  2011. Although full-year  gross margin of  $2.0 
billion represented  the  third-highest total  in  our history,  weaker  sales 
volumes were  primarily responsible  for  it falling  below the  $2.7  billion 
generated in the previous year.

Total fourth-quarter potash sales volumes declined to 1.3 million tonnes, down
17 percent  from  the  same  period  the  previous  year.  In  North  America, 
distributors purchased to  meet immediate  farmer demand,  which pushed  North 
American sales volumes  to 0.6 million  tonnes -39 percent  above the  fourth 
quarter of 2011. This strength was more  than offset by a decline in  offshore 
sales volumes.  The absence  of  Canpotex^3 contract  shipments to  China  and 
India, along  with  the  deferral  of demand  in  other  markets,  pushed  our 
fourth-quarter offshore sales volumes down  to 0.7 million tonnes (37  percent 
below fourth-quarter 2011). Latin  American (32 percent)  and other Asian  (58 
percent) markets represented the majority of shipments from Canpotex.

Our fourth-quarter average  realized potash  price was $387  per tonne,  which 
compared to $431 per tonne in the same period of 2011. This decline  reflected 
heightened competitive pressure  in most major  spot markets, as  well as  the 
impact of  higher  per-tonne costs  for  Canpotex's fixed  transportation  and 
distribution expenses that were allocated over fewer tonnes.

In response to market conditions, we reduced fourth-quarter production to  1.8 
million tonnes from  2.2 million tonnes  in the closing  quarter of 2011.  The 
combination of fewer tonnes produced, a rise in costs associated with  product 
from Esterhazy and a greater percentage of production coming from  higher-cost 
facilities negatively impacted potash cost of goods sold on a per-tonne basis.

Phosphate
Fourth-quarter phosphate  gross  margin of  $99  million was  below  the  $163 
million in the comparative period of 2011. This was largely attributable to  a 
decline  in  contributions  from  fertilizer  products,  which  generated  $54 
million, while feed  and industrial product  lines remained relatively  strong 
and added $41  million in the  quarter. For  the year, gross  margin was  $469 
million, which  trailed the  $648 million  generated in  2011, mainly  due  to 
reduced volumes and lower realized fertilizer prices.

Fourth-quarter sales  volumes  fell to  0.8  million tonnes  compared  to  0.9 
million  tonnes  in  the  same  period  last  year,  as  temporary  production 
constraints at  Aurora  caused  by  challenging  mining  conditions  primarily 
impacted saleable tonnage of fertilizer products.

Average realized phosphate prices  for the quarter were  $577 per tonne,  down 
from $631 per tonne  in the fourth  quarter of 2011, as  prices for solid  and 
liquid fertilizers  declined as  a  result of  weaker  demand. This  drop  was 
tempered by comparatively stable feed and industrial realizations.

Per-tonne cost of goods sold for the quarter remained relatively flat compared
to the same period  last year as  higher ammonia and  rock costs were  largely 
offset by lower sulfur costs.

Nitrogen
Although fourth-quarter nitrogen gross  margin of $206  million was below  the 
$241 million generated  in the same  period the previous  year, it raised  our 
2012 total to a record $978 million. For the quarter, our Trinidad  operations 
contributed $127  million in  gross margin  and our  US operations  added  $79 
million.

Fourth-quarter nitrogen sales volumes of 1.1 million tonnes were flat compared
to the same period in  2011. The loss of  production at our Trinidad  facility 
due to interruptions in natural gas supply limited product available for  sale 
and resulted in full-year sales volumes of 4.8 million tonnes trailing the 5.0
million tonnes sold last year.

A combination of strong demand and supply challenges in key producing  regions 
resulted in higher  realized ammonia prices  for the quarter  compared to  the 
same period  of  2011. While  this  environment supported  higher  prices  for 
nitrogen products through  most of  2012, fourth-quarter  prices softened  for 
downstream products. As a result, our average realized price of $453 per tonne
in the fourth quarter declined slightly from the closing quarter of 2011.

The total average cost  of natural gas included  in production for the  fourth 
quarter of  2012,  including our  hedge  position,  was $7.01  per  MMBtu,  an 
increase from $6.35 in the same period the previous year. This was  primarily 
the result of higher  Trinidad gas costs related  to increasing Tampa  ammonia 
prices - the primary benchmark to which those gas costs are indexed.

Financial
We recognized a  $41 million  charge during the  quarter -  included in  other 
expenses - for a provision related  to a settlement of antitrust claims  filed 
in the US. These claims - which  were completely without merit but would  have 
resulted in a multi-year effort in time and significant cost to defend -  were 
settled on  January 30,  2013  for $43.75  million,  to avoid  an  unnecessary 
distraction from  the  production of  potash  and  serving the  needs  of  our 
customers.

Provincial mining and other taxes were $18 million for the fourth quarter,  up 
from the same  period in 2011  when our  tax expense was  minimized by  higher 
accruals recognized earlier in  the year relative to  our expected expense  by 
year-end. Income taxes in the fourth quarter were down $134 million from  2011 
due to lower earnings, particularly in potash.

Capital-related  cash  expenditures,  primarily  associated  with  our  potash 
expansion projects, totaled $628 million  in the fourth quarter, bringing  our 
2012 total to $2.1  billion. Total anticipated spending  on these projects  is 
now more than 80 percent complete.

General Outlook
Agriculture is  inherently an  unpredictable  business -from  variability  in 
weather and growing conditions  to government policy  changes that can  affect 
the decisions of farmers. This reality  returned to the forefront in 2012,  as 
crop production  challenges pushed  prices  for corn  and soybeans  to  record 
highs. These rising prices created an  expectation that a surge in  fertilizer 
demand - especially for phosphate and  potash - was imminent, but this  failed 
to consider  that  our  business is  tied  to  growing seasons  and  does  not 
necessarily move in lockstep with the rise and fall of commodity prices. As we
enter 2013, farmers  in many parts  of the  world are only  now preparing  for 
their opportunity to help  meet the global need  for grains and capitalize  on 
higher crop prices. Given the importance  of crop nutrients to yields and  the 
affordability of fertilizer as a percentage of crop revenue, we believe demand
is poised for a rebound.

Potash Market Outlook
Increased demand is beginning  to take hold in  most major potash markets.  We 
believe buyer confidence has  been bolstered by the  recent settlement of  new 
contracts with China,  leading many  that had temporarily  delayed or  stopped 
purchasing to re-engage. We expect demand to accelerate in 2013 and anticipate
global potash shipments for the year to  be between 55 million and 57  million 
tonnes, well above the approximately 51 million tonnes shipped in 2012.

In North America, demand is expected to be strong entering the spring planting
season. Supportive economics and the expectation of large planted acreage  are 
anticipated to  result in  significant demand  at the  farm level.  While  dry 
conditions in certain  regions could  potentially weaken  demand, we  forecast 
2013 shipments  to  this market  at  approximately 9.5  million  tonnes.  With 
limited inventory positioned in advance of the season, we anticipate that  our 
ability to keep pace with just-in-time orders will be a competitive  advantage 
in this market.

Latin America is  expected to remain  a region of  strength, with 2013  demand 
poised to surpass last year's robust levels. In contrast to its slow start  in 
2012, Brazil is buying early in the  year -in part to reduce the pressure  of 
expected record volumes on  its limited port  capabilities during peak  import 
periods. For  the year,  we  anticipate demand  in  Latin America  will  reach 
approximately 10 million  tonnes, and expect  to be well  positioned to  serve 
this market through Canpotex and our New Brunswick facility.

After delaying new contracts for seaborne deliveries during the second half of
2012, China began  to secure them  late in  the year. By  mid-January, it  had 
settled with all major potash suppliers for delivery during the first half  of 
2013 - including  record volumes  committed with Canpotex.  While these  large 
commitments  will  help  meet  China's  significant  potash  requirements,  we 
anticipate its internal needs will grow in 2013 as it works to improve lagging
crop yields. We  expect its demand  will be  in the range  of 11-11.5  million 
tonnes for 2013, with between 6.5  million and 7.0 million tonnes coming  from 
imports.

We believe the  challenges that affected  Indian potash demand  during 2012  - 
including high retail  prices due to  fertilizer subsidy reductions,  weakened 
currency and  fiscal uncertainty  - are  unlikely to  improve meaningfully  in 
2013, but  anticipate shipments  to  this market  will surpass  the  depressed 
levels of last year. With limited inventory to draw from and the potential for
improved affordability at the farm level  acting as a catalyst, we  anticipate 
India will need to begin securing new supply during the first quarter of  2013 
and forecast full-year demand will be in the range of 3.5-4.5 million  tonnes. 
While this would  reflect an  increase in potassium  applications from  recent 
levels, the agronomic risk of  under-application continues to present a  major 
barrier to improving yields in the long term.

In other Asian countries  -those outside of China  and India - we  anticipate 
the consumption strength that  was masked by destocking  efforts in 2012  will 
support demand growth. Fueled by  a need to meet  the demands of the  region's 
potassium-intensive crops, activity in this market has begun to accelerate. We
forecast shipments for the year to approximate 8.5 million tonnes.

Financial Outlook
In this environment, we estimate our 2013 potash segment gross margin will  be 
in the range of $1.9-$2.4 billion, with shipments forecast between 8.5 million
and 9.2  million  tonnes. While  strengthened  global demand  is  expected  to 
translate into  improved sales  volumes, our  gross margin  guidance  reflects 
lower prices in spot and contract markets compared to 2012 levels.

We forecast  2013 operational  capability of  12.4 million  tonnes before  the 
impact of market-related downtime. This total reflects available new  capacity 
from our  expansion program  as well  as the  loss of  tonnage from  Esterhazy 
following the  completion of  our tolling  agreement with  The Mosaic  Company 
(Mosaic). The reversion of this tonnage to Mosaic will temporarily reduce  our 
share of 2013 Canpotex shipments, but we are positioned to complete a Canpotex
allocation run for our Cory expansion during  the first half of the year  that 
is expected to partially offset this loss. Our guidance includes a  successful 
completion  of  this  run  during  the   first  half,  and  it  accounts   for 
approximately 0.2 million tonnes of our second-half sales volumes assumptions.

Given our  expected  operational capability  for  2013 and  our  stated  sales 
volumes guidance, we see  the need for  additional market-related downtime  at 
our facilities  during the  year. Based  on union  notifications to  date,  we 
anticipate 17 shutdown weeks in the  first quarter. Despite this downtime,  we 
expect our full-year cost of goods sold to benefit from higher operating rates
as well as the absence of higher-cost tonnes from Esterhazy.

In phosphate, the expectation of strong demand for fertilizer products in  the 
North American market is  likely to be offset  by the continued depression  in 
Indian requirements and result in  weaker fertilizer margins than we  captured 
in 2012. Feed and  industrial demand is forecast  to remain relatively  strong 
and margins are anticipated to be near those generated last year.

Although the historically high nitrogen prices experienced in 2012 are  likely 
to ease, we  anticipate that  strong agricultural and  industrial demand  will 
keep margins  at supportive  levels.  Our ammonia  plant restart  at  Geismar, 
expected to add approximately 0.5 million  tonnes of ammonia capacity, is  now 
anticipated to have  significant production  available for  sale beginning  in 
March of this  year. We  believe these tonnes  could help  us achieve  another 
record gross margin year in this nutrient.

In this environment,  we forecast  our combined phosphate  and nitrogen  gross 
margin for 2013 to be in the range of $1.5 billion to $1.7 billion.

Income from  offshore investments  by way  of dividends  and share  of  equity 
earnings is expected to approximate  $320-$380 million in 2013, while  selling 
and administrative expenses are forecast to  be between $240 million and  $260 
million. We anticipate finance costs of $100-$130 million.

Capital expenditures for the year  - excluding capitalized interest and  major 
maintenance and repair - are expected to be approximately $1.5 billion, with a
significant portion of this  total related to  our remaining potash  expansion 
projects at  New  Brunswick  and  Rocanville. Included  in  this  estimate  is 
approximately $500 million of sustaining capital.

With reduced  capital  spending  anticipated  in  potash,  which  impacts  the 
calculation of the  Saskatchewan potash production  tax, we expect  provincial 
mining and other  taxes to be  higher than 2012  levels and approximate  11-13 
percent of total potash  gross margin. Our 2013  annual effective tax rate  is 
forecast to be 25-27 percent.

Based on  these factors,  PotashCorp forecasts  first-quarter net  income  per 
share in the range of  $0.50-$0.65 and between $2.75  and $3.25 per share  for 
the full year.

Conclusion
"The only certainties in agriculture are that the world depends on farmers for
food and  that increased  production is  required  to meet  the demands  of  a 
growing population,"  said  Doyle.  "We  recognize  that  ebbs  and  flows  in 
fertilizer demand will  always be  part of our  business, but  we believe  the 
factors that limited demand this past year - destocking and deferred purchases
- will  begin to  drive an  even greater  need for  our products  in 2013  and 
beyond. We believe  our approach  to managing  and developing  our assets  has 
PotashCorp well positioned for improved performance as we move forward."

Notes

1.All references to per-share amounts pertain to diluted net income per
    share.
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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Potash Corporation of Saskatchewan Inc. is the world's largest fertilizer
enterprise by capacity producing the three primary plant nutrients and a
leading supplier to three distinct market categories: agriculture, with the
largest capacity in the world in potash, third largest in each of nitrogen and
phosphate; animal nutrition, with the world's largest capacity in phosphate
feed ingredients; and industrial chemicals, as the largest global producer of
industrial nitrogen products and the world's largest capacity for production
of purified industrial phosphoric acid. PotashCorp's common shares are listed
on the Toronto Stock Exchange and the New York Stock Exchange.

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 are based on certain
factors and  assumptions including  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. Several factors could cause actual results to differ  materially 
from those expressed  in the  forward-looking statements,  including, but  not 
limited to: 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; costs and
availability of  transportation and  distribution for  our raw  materials  and 
products,  including  railcars  and  ocean  freight;  changes  in  competitive 
pressures,  including  pricing  pressures;   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, timing and impact of capital expenditures; risks  associated 
with natural gas and other hedging activities; changes in capital markets  and 
corresponding effects  on the  company's  investments; unexpected  or  adverse 
weather  conditions;  changes  in  currency  and  exchange  rates;  unexpected 
geological or environmental conditions,  including water inflows;  imprecision 
in  reserve  estimates;  adverse  developments   in  new  and  pending   legal 
proceedings or  government  investigations;  acquisitions  we  may  undertake; 
strikes or  other forms  of work  stoppage or  slowdowns; changes  in and  the 
effects of, government policies and regulations; security risks related to our
information technology systems; and earnings, exchange rates and the decisions
of taxing authorities,  all of  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, 2011  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  any 
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 31, 2013 at  1:00 
pm Eastern Time.

Telephone Conference: Dial-in numbers:
                      From Canada and the US:         1-877-881-1303
                      From Elsewhere:                 1-412-902-6510
Live Webcast:        Visit www.potashcorp.com
                      Webcast participants can submit questions to management
                       online from their audio player pop-up window.

              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                                               2012          2011     
                                                                        
    Assets                                                            
    Current assets                                                  
      Cash and cash equivalents        $          562 $          430 
      Receivables                              1,089         1,195 
      Inventories                                762           731 
              Prepaid expenses and other
      current assets                              83            52 
                                                     2,496         2,408 
    Non-current assets                                              
      Property, plant and equipment           11,505         9,922 
              Investments in equity-accounted
      investees                                1,254         1,187 
              Available-for-sale investments
      (Note 2)                                 2,481         2,265 
      Other assets                               344           360 
      Intangible assets                          126           115 
    Total Assets                            $       18,206 $       16,257 
                                                                       
                                                                       
    Liabilities                                                       
    Current liabilities                                             
              Short-term debt and current
      portion of long-term debt        $          615 $          832 
      Payables and accrued charges             1,188         1,295 
              Current portion of derivative
      instrument liabilities                      51            67 
                                                     1,854         2,194 
    Non-current liabilities                                         
      Long-term debt                           3,466         3,705 
              Derivative instrument
      liabilities                                167           204 
      Deferred income tax liabilities          1,482         1,052 
              Pension and other
              post-retirement benefit
      liabilities                                569           552 
              Asset retirement obligations and
      accrued environmental costs                645           615 
              Other non-current liabilities
      and deferred credits                       111            88 
    Total Liabilities                               8,294         8,410 
                                                                       
    Shareholders' Equity                                              
    Share capital                                 1,543         1,483 
         Unlimited authorization of common
         shares without par value; issued and
         outstanding 864,900,513 and
         858,702,991 at December 31, 2012 and
       2011, respectively                                              
        Contributed surplus                             299           291 
         Accumulated other comprehensive
    income                                        1,399           816 
    Retained earnings                             6,671         5,257 
    Total Shareholders' Equity                      9,912         7,847 
       Total Liabilities and Shareholders'
    Equity                                  $       18,206 $       16,257 
(See Notes to the Condensed Consolidated
Financial Statements)                                                    

                   Potash Corporation of Saskatchewan Inc.
                 Condensed Consolidated Statements of Income
             (in millions of US dollars except per-share amounts)
                                 (unaudited)
                                                                    
                                 Three Months Ended Twelve Months Ended   
                                    December 31         December 31   
                                  2012     2011      2012        2011 
                                                                    
Sales (Note 3)                     $  1,642  $ 1,865   $     7,927  $    8,715
Freight, transportation and
distribution                         (113)    (86)        (494)      (496)
Cost of goods sold                   (943)   (889)      (4,023)    (3,933)
Gross Margin                           586     890        3,410      4,286
Selling and administrative
expenses                              (53)    (41)        (219)      (217)
Provincial mining and other taxes     (18)       -        (180)      (147)
Share of earnings of
equity-accounted investees              58      76          278        261
Dividend income                         38      42          144        136
Impairment of available-for-sale
investment (Note 2)                      -       -        (341)          -
Other expenses (Note 4)               (52)     (3)         (73)       (13)
Operating Income                       559     964        3,019      4,306
Finance costs                         (25)    (34)        (114)      (159)
Income Before Income Taxes             534     930        2,905      4,147
Income taxes (Note 5)                (113)   (247)        (826)    (1,066)
Net Income                         $    421  $   683   $     2,079  $    3,081
                                                                    
Net Income per Share (Note 6)                                        
  Basic                          $   0.49  $  0.80   $      2.42  $     3.60
  Diluted                        $   0.48  $  0.78   $      2.37  $     3.51
                                                                     
Dividends Declared per Share       $   0.21  $  0.07   $      0.70  $     0.28
(See Notes to the Condensed Consolidated Financial Statements)        


                   Potash Corporation of Saskatchewan Inc.
          Condensed Consolidated Statements of Comprehensive Income
                         (in millions of US dollars)
                                 (unaudited)
                                                                     
                                 Three Months Ended    Twelve Months Ended
                                     December 31           December 31
(Net of related income taxes)      2012       2011      2012        2011
                                                                     
Net Income                       $     421   $     683  $   2,079   $    3,081
Other comprehensive income
(loss)                                                               
      Net increase (decrease)
      in net unrealized gain on
      available-for-sale
     investments ^(1)                 47      (230)       216     (1,581)
      Reclassification to
      income of unrealized loss
      on impaired
      available-for-sale
     investment (Note 2)               -          -       341           -
      Net actuarial gain (loss)
      on defined benefit plans
     ^(2)                             22       (11)      (62)       (136)
      Net loss on derivatives
      designated as cash flow
     hedges ^(3)                     (4)       (20)      (20)        (38)
      Reclassification to
      income of net loss on
     cash flow hedges ^(4)            14          9        50          47
     Other                           (2)        (1)       (4)         (6)
Other Comprehensive Income
(Loss)                                 77      (253)       521     (1,714)
Comprehensive Income             $     498   $     430  $   2,600   $    1,367
                                                                     
^(1) Available-for-sale investments are comprised of shares in Israel
Chemicals Ltd. and Sinofert Holdings Limited.
^(2) Net of income taxes of $(17) (2011 - $4) for the three months ended
December 31, 2012 and $31 (2011 - $75) for the twelve months ended December
31, 2012.
^(3) Cash flow hedges are comprised of natural gas derivative instruments and
are net of income taxes of $(4) (2011 - $13) for the three months ended
December 31, 2012 and $7 (2011 - $24) for the twelve months ended December 31,
2012.
^(4) Net of income taxes of $(8) (2011 - $(6)) for the three months ended
December 31, 2012 and $(32) (2011 - $(29)) for the twelve months ended
December 31, 2012.
(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                            
                                             Net
                                   unrealized       Net         Net               Total                    
                                     gain on      loss on    actuarial         Accumulated                 
                                   available-   derivatives    loss               Other                    
                                                       designated       on
                Share   Contributed   for-sale        as        defined         Comprehensive  Retained  Total
                                                        cash flow     benefit
               Capital    Surplus    investments    hedges     plans^(1)  Other     Income      Earnings  Equity
                                                                                                       
Balance -
December 31,
2011           $   1,483 $         291 $         982 $       (168) $         - $     2 $           816 $    5,257 $  7,847
Net income            -            -            -            -          -      -              -     2,079   2,079
Other
comprehensive
income (loss)         -            -          557           30       (62)    (4)            521         -     521
Dividends             -            -            -            -          -      -              -     (603)   (603)
declared
Effect of
share-based
compensation
including
issuance of
common shares        47            8            -            -          -      -              -         -      55
Shares issued
for dividend
reinvestment
plan                 13            -            -            -          -      -              -         -      13
Transfer of
net actuarial
loss on
 defined
benefit plans         -            -            -            -         62      -             62      (62)       -
Balance -
December 31,
2012           $   1,543 $         299 $       1,539 $       (138) $         - $   (2) $         1,399 $    6,671 $  9,912
                                                                                                       
^(1) Any amounts incurred during a period are closed out to retained earnings at each period-end. Therefore, no balance
exists in the reserve at the beginning or end of period.
(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  
                                  2012       2011      2012        2011
                                                                     
Operating Activities                                                  
Net income                      $      421   $     683 $     2,079  $    3,081
                                                                     
Adjustments to reconcile net
income to cash provided by
operating activities                                                  
    Depreciation and
   amortization                      144        115        578        489
   Share-based compensation            3          2         24         24
    Impairment of
    available-for-sale
   investment (Note 2)                 -          -        341          -
    Realized excess tax benefit
    related to share-based
   compensation                       23          -         30         29
    Provision for (recovery of)
   deferred income tax                26        (5)        392        337
    Net distributed
    (undistributed) earnings of
   equity-accounted investees         23       (15)       (67)      (133)
    Pension and other
   post-retirement benefits            3          9       (68)      (122)
    Asset retirement
    obligations and accrued
   environmental costs               (6)        (1)        (2)         39
    Other long-term liabilities
   and miscellaneous                  18       (17)         51       (40)
   Subtotal of adjustments           234         88      1,279        623
                                                                    
    Changes in non-cash
   operating working capital                                         
   Receivables                       272        122        188      (155)
   Inventories                      (70)      (132)        (7)      (146)
    Prepaid expenses and other
   current assets                   (11)       (13)       (32)        (1)
    Payables and accrued
   charges                            26        118      (282)         83
    Subtotal of changes in
    non-cash operating working
   capital                           217         95      (133)      (219)
Cash provided by operating
activities                            872        866      3,225      3,485
                                                                     
Investing Activities                                                  
Additions to property, plant
and equipment                       (628)      (653)    (2,133)    (2,176)
Other assets and intangible
assets                               (34)       (64)       (71)       (75)
Cash used in investing
activities                          (662)      (717)    (2,204)    (2,251)
                                                                     
Financing Activities                                                  
Repayment of long-term debt
obligations                             -        (7)        (2)      (607)
Proceeds from (repayment of)
short-term debt obligations            41       (50)      (460)      (445)
Dividends                           (174)       (60)      (467)      (208)
Issuance of common shares              24          4         40         44
Cash used in financing
activities                          (109)      (113)      (889)    (1,216)
Increase in Cash and Cash
Equivalents                           101         36        132         18
Cash and Cash Equivalents,
Beginning of Period                   461        394        430        412
Cash and Cash Equivalents, End
of Period                       $      562   $     430 $       562  $      430
                                                                     
Cash and cash equivalents
comprised of:                                                         
  Cash                        $       64   $      46 $        64  $       46
  Short-term investments            498        384        498        384
                               $      562   $     430 $       562  $      430
                                                                     
Supplemental cash flow
disclosure                                                            
  Interest paid               $       95   $      65 $       209  $      233
  Income taxes paid           $       93   $     208 $       676  $      623
(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, 2012
       (in millions of US dollars except share and percentage amounts)
                                 (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
used in preparing these unaudited condensed consolidated financial statements
are consistent with those used in the preparation of the 2011 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 2011 annual consolidated financial
statements. The company's 2012 annual consolidated financial statements will
include additional information under IFRS in its Annual Integrated Report in
February 2013. 
        
In management's opinion, the unaudited condensed consolidated financial
statements include all adjustments necessary to present fairly such
information. 
        
2. Available-for-Sale Investments       
        
The company assesses at the end of each reporting period whether there is
objective evidence that a financial asset or group of financial assets is
impaired. In the case of equity instruments classified as available-for-sale,
for which unrealized gains and losses are generally recognized in other
comprehensive income ("OCI"), a significant or prolonged decline in the fair
value of the investment below its cost may be evidence that the asset is
impaired. When 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 OCI and would not flow back into net income.

        
Changes in fair value, and related accounting, for the company's investment in
Sinofert Holdings Limited ("Sinofert") since December 31, 2011 were as
follows: 
        
                                                               Impact of
                                                           Unrealized Loss on:
                                                            
                                                                        Net
                                                                       Income
                                                                        and
                                                                      Retained
                                 Fair       Unrealized     OCI and    Earnings
                            Value        Loss        AOCI        
Balance —                     $     439   $       (140)  $   (140)  $     - 
December 31,
2011                    
Decrease in                       (61)           (61)      (61)       - 
fair value              
Balance — March               $     378   $       (201)  $   (201)  $     - 
31, 2012                
Decrease in                      (140)          (140)     (140)       - 
fair value
prior to
recognition of
impairment              
Recognition of                                                341    (341) 
impairment                        -              -
Balance — June                $     238   $       (341)  $      -  $  (341) 
30, 2012                
Increase in                         66             66        66       - 
fair value              
Balance —                     $     304   $       (275)  $      66  $  (341) 
September 30,
2012                    
Increase in                         73             73        73       - 
fair value              
Balance —                     $     377   $       (202)  $     139  $  (341) 
December 31,
2012                    
                                                                  


        
3. Segment Information        
        
The company has three reportable operating segments: potash, phosphate and
nitrogen. 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, 2012
                                                          All
                     Potash   Phosphate  Nitrogen  Others  Consolidated
                                                                 
                      
Sales                $     554 $       542 $      546 $      - $        1,642
Freight,
transportation
and distribution         (41)       (51)      (21)       -         (113)
Net sales - third
party                     513        491       525       -             
Cost of goods
sold                    (232)      (392)     (319)       -         (943)
Gross margin              281         99       206       -           586
Depreciation and
amortization          (34)       (73)      (35)     (2)         (144)
Inter-segment
sales                       -          -        83       -             -
Cash flows for
additions to
property,                                                         
      plant and
    equipment           395         73       118      42           628
                                                                 
                   
                             Three Months Ended December 31, 2011
                                                          All
                      Potash  Phosphate  Nitrogen  Others  Consolidated
                                                                
                      
Sales                $     718 $       606 $      541 $      - $        1,865
Freight,
transportation
and distribution         (32)       (37)      (17)       -          (86)
Net sales - third
party                     686        569       524       -             
Cost of goods
sold                    (200)      (406)     (283)       -         (889)
Gross margin              486        163       241       -           890
Depreciation and
amortization          (30)       (48)      (35)     (2)         (115)
Inter-segment
sales                       -          -        54       -             -
Cash flows for
additions to
property,                                                         
      plant and
    equipment           479         26       143       5           653
                                                                
                             Twelve Months Ended December 31, 2012
                                                          All
                     Potash   Phosphate  Nitrogen  Others  Consolidated
                                                                 
                      
Sales                $   3,285 $     2,292 $    2,350 $      - $        7,927
Freight,
transportation
and distribution        (206)      (191)      (97)       -         (494)
Net sales - third
party                   3,079      2,101     2,253       -             
Cost of goods
sold                  (1,116)    (1,632)   (1,275)       -       (4,023)
Gross margin            1,963        469       978       -         3,410
Depreciation and
amortization         (169)      (261)     (138)    (10)         (578)
Inter-segment
sales                       -          -       247       -             -
Cash flows for
additions to
property,                                                         
      plant and
    equipment         1,424        245       379      85         2,133
                                                                 
                   
                             Twelve Months Ended December 31, 2011
                                                         All
                     Potash   Phosphate  Nitrogen  Others  Consolidated
                   
                                                                  
                   
Sales                $   3,983 $     2,478 $    2,254 $      - $        8,715
Freight,
transportation     
and distribution        (244)      (166)      (86)       -         (496)
Net sales - third  
party                   3,739      2,312     2,168       -            
Cost of goods      
sold                  (1,017)    (1,664)   (1,252)       -       (3,933)
                   
Gross margin            2,722        648       916       -         4,286
Depreciation and   
amortization         (142)      (207)     (132)     (8)         (489)
Inter-segment      
sales                       -          -       187       -             -
Cash flows for
additions to       
property,                                                          
      plant and    
    equipment         1,717        159       260      40         2,176
                      
                                                                   



        
4. Other Expenses        
        
                          Three Months Ended         Twelve Months Ended
                            December 31                 December 31
                       2012           2011        2012          2011
                                                                  
Foreign exchange
gain                 $      (10)      $     (9)   $      (7)     $      (7)
Legal matters  
                               42             -          43             -
Other                        20            12          37            20
                    $        52      $       3   $       73     $       13
                                                                  
In January 2013, the company settled its eight antitrust lawsuits for a total
of $44. A $41 provision was recorded at December 31, 2012 associated with this
matter.



5. Income Taxes        
        
A separate estimated average annual effective tax rate is 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 
                              2012         2011      2012      2011 
Income tax expense          $      113     $     247  $    826   $  1,066 
Actual effective tax                 19%          23%      25%       26% 
rate on ordinary
earnings                 
Actual effective tax                 21%          27%      28%       26% 
rate including
discrete items           
Discrete tax                   $       10     $      29  $     27   $      1 
adjustments that
impacted the rate        
        
Significant items to note include the following:          

  *The actual effective tax rate on ordinary earnings for the fourth quarter
    of 2012 decreased compared to the same period last year due to a lower
    proportion of earnings in Canada and the US.
  *The impairment of the company's available-for-sale investment in Sinofert
    is not deductible for tax purposes; this increased the 2012 actual
    effective tax rate including discrete items by 3 percent.
  *In 2012, a tax expense of $17 ($NIL in the fourth quarter) was recorded to
    adjust the 2011 tax provision to the income tax returns filed for that
    year.
  *In first-quarter 2011, a current tax recovery of $21 was recorded for
    previously paid withholding taxes.
  *In fourth-quarter 2011, a deferred tax expense of $26 was recorded to
    adjust amounts related to partnerships.
  *In 2011, a current tax recovery of $14 ($2 in the fourth quarter) was
    recorded due to income tax losses in a foreign jurisdiction. 

6. Net Income Per Share                                        
                                                              
Net income per share was calculated on the following weighted
average number of shares:                                              
              Three Months Ended         Twelve Months Ended        
                 December 31               December 31            
              2012          2011          2012          2011       
Basic     862,757,000   857,615,000   860,033,000   855,677,000   
Diluted     875,959,000   875,706,000   875,907,000   876,637,000   
                                                               
Diluted net income per share was calculated based on the weighted
average number of shares issued and outstanding during the period,
incorporating the following adjustments. The denominator was: (1)
increased by the total of the additional common shares that would
have been issued assuming the exercise of all stock options with
exercise prices at or below the average market price for the
period; and (2) decreased by the number of shares that the company     
could have repurchased if it had used the assumed proceeds from the
exercise of stock options to repurchase them on the open market at
the average share price for the period. For performance-based stock
option plans, the number of contingently issuable common shares
included in the calculation was based on the number of shares, if
any, that would be issuable if the end of the reporting period were
the end of the performance period and the effect were dilutive.



                   Potash Corporation of Saskatchewan Inc.
                           Selected Financial Data
                                 (unaudited)
 
                                Three Months Ended   Twelve Months Ended 
                                   December 31            December 31
                                 2012       2011     2012         2011
                                                                     
Potash Sales (tonnes -
thousands)                                                            
    Manufactured Product                                             
   North America                588       422     2,590         3,114
   Offshore                     729     1,159     4,640         5,932
    Manufactured Product          1,317     1,581     7,230         9,046
                                                                     
Potash Net Sales                                                      
    (US $ millions)                                                  
   Sales                   $     554   $    718 $    3,285       $ 3,983
        Freight, transportation
   and distribution            (41)      (32)     (206)         (244)
   Net Sales               $     513   $    686 $    3,079    $     3,739
                                                                    
    Manufactured Product                                             
   North America           $     263   $    217 $    1,231    $     1,502
   Offshore                     247       465     1,835         2,223
     Other miscellaneous and
    purchased product                 3         4        13            14
    Net Sales                  $     513   $    686 $    3,079    $     3,739
                                                                     
Manufactured Product                                                  
     Average Realized Sales
    Price per MT                                                     
   North America           $     447   $    514 $      475    $       482
   Offshore                $     339   $    401 $      396    $       375
   Average                 $     387   $    431 $      424    $       412
    Cost of Goods Sold per MT  $   (172)   $  (125) $    (152)    $     (112)
    Gross Margin per MT        $     215   $    306 $      272    $       300

                   Potash Corporation of Saskatchewan Inc.
                           Selected Financial Data
                                 (unaudited)
 
                                   Three Months Ended  Twelve Months Ended
                                     December 31         December 31 
                                    2012       2011    2012       2011
                                                                    
Phosphate Sales (tonnes -
thousands)                                                           
    Manufactured Product                                            
  Fertilizer                       541       586    2,473      2,666
  Feed and Industrial              297       304    1,170      1,188
    Manufactured Product               838       890    3,643      3,854
                                                                    
Phosphate Net Sales                                                  
    (US $ millions)                                                 
  Sales                       $     542   $    606 $   2,292   $   2,478
       Freight, transportation and
  distribution                    (51)      (37)    (191)      (166)
  Net Sales                   $     491   $    569 $   2,101   $   2,312
                                                                    
    Manufactured Product                                            
  Fertilizer                  $     287   $    360 $   1,291   $   1,533
  Feed and Industrial              197       202      778        750
     Other miscellaneous and
    purchased product                    7         7       32         29
    Net Sales                     $     491   $    569 $   2,101   $   2,312
                                                                    
Manufactured Product                                                 
     Average Realized Sales Price
    per MT                                                          
  Fertilizer                  $     529   $    614 $     522   $     575
  Feed and Industrial         $     663   $    663 $     665   $     631
  Average                     $     577   $    631 $     568   $     592
    Cost of Goods Sold per MT     $   (463)   $  (453) $   (444)   $   (428)
    Gross Margin per MT           $     114   $    178 $     124   $     164



                  Potash Corporation of Saskatchewan Inc.
                          Selected Financial Data
                                 (unaudited)
     
  
                                 Three Months Ended  Twelve Months Ended
                                    December 31          December 31 
                                  2012       2011     2012       2011
                                                                   
Average Natural Gas Cost in
Production per MMBtu            $     7.01   $    6.35 $    5.91   $    6.13
Nitrogen Sales (tonnes -
thousands)                                                          
    Manufactured Product                                           
  Ammonia                        395        458    1,894      1,961
  Urea                           235        242    1,105      1,214
       Nitrogen
       solutions/Nitric
  acid/Ammonium nitrate          437        381    1,808      1,837
    Manufactured Product           1,067      1,081    4,807      5,012
                                                                   
    Fertilizer sales tonnes          274        272    1,382      1,553
     Industrial/Feed sales
    tonnes                           793        809    3,425      3,459
    Manufactured Product           1,067      1,081    4,807      5,012
                                                                   
Nitrogen Net Sales                                                  
    (US $ millions)                                                
  Sales                    $      546   $     541 $   2,350   $   2,254
       Freight, transportation
  and distribution              (21)       (17)     (97)       (86)
  Net Sales                $      525   $     524 $   2,253   $   2,168
                                                                   
    Manufactured Product                                           
  Ammonia                  $      264   $     278 $   1,058   $   1,052
  Urea                           112        122      568        564
       Nitrogen
       solutions/Nitric
  acid/Ammonium nitrate          107         99      445        445
     Other miscellaneous and
    purchased product                 42         25      182        107
    Net Sales                  $      525   $     524 $   2,253   $   2,168
                                                                   
    Fertilizer net sales       $      119   $     123 $     644   $     667
    Industrial/Feed net sales        364        376    1,427      1,394
     Other miscellaneous and
    purchased product                 42         25      182        107
    Net Sales                  $      525   $     524 $   2,253   $   2,168
                                                                   
Manufactured Product                                                
     Average Realized Sales
    Price per MT                                                   
  Ammonia                  $      667   $     607 $     558   $     536
  Urea                     $      475   $     502 $     514   $     464
       Nitrogen
       solutions/Nitric
  acid/Ammonium nitrate    $      247   $     259 $     247   $     242
  Average                  $      453   $     461 $     431   $     411
       Fertilizer average price
  per MT                   $      436   $     451 $     467   $     430
       Industrial/Feed average
  price per MT             $      458   $     464 $     417   $     403
  Average                  $      453   $     461 $     431   $     411
    Cost of Goods Sold per MT  $    (276)   $   (252) $   (242)   $   (238)
    Gross Margin per MT        $      177   $     209 $     189   $     173

                   Potash Corporation of Saskatchewan Inc.
                           Selected Additional Data
                                 (unaudited)
        
Exchange Rate (Cdn$/US$)                                                  
                                                          2012         2011
                                                                         
December 31                                              0.9949       1.0170
Fourth-quarter average conversion
rate                                                     0.9875       1.0161
                                                                         
                                 Three Months Ended   Twelve Months Ended
                                   December 31            December 31
                                   2012      2011       2012         2011
                                                                         
Production                                                                
Potash production (KCl Tonnes -
thousands)                            1,763    2,244        7,724        9,343
Potash shutdown weeks ^(1)               22       15           77           24
Phosphate production (P[2]O[5
]Tonnes - thousands)                    504      555        1,983        2,204
Phosphate P[2]O[5] operating rate
[ ]                                     85%      94%          84%          93%
Nitrogen production (N Tonnes -
thousands)                              573      698        2,602        2,813
                                                                         
Shareholders                                                              
PotashCorp's shareholder return         -6%      -4%           0%         -20%
                                                                         
Customers                                                                 
Product tonnes involved in
customer complaints as a
percentage of the prior
three-year average                      50%      N/A          56%          N/A
                                                                         
Community                                                                 
Taxes and royalties ($ millions)
^ (2)                                   133      291          654          997
                                                                         
Employees                                                                 
Annualized turnover rate
(excluding retirements)                  3%       4%           5%           4%
                                                                         
Safety                                                                    
Total site severity injury rate
(per 200,000 work hours) ^ (3)         0.53     0.52         0.55         0.54
                                                                         
Environment                                                             
Environmental incidents ^ (4)             1        3           19           14
                                                                        
                                                                         
                                                  December 31, December 31,
As at                                                  2012         2011
                                                                         
Number of employees                                                       
  Potash                                                2,759        2,520
  Phosphate                                             1,792        1,975
  Nitrogen                                                788          775
  Other                                                   440          433
  Total                                                 5,779        5,703
                                                                         
(1) Excludes 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) Total of lost-time injuries and modified work injuries (as defined in our
2011 Annual Report). Total site includes PotashCorp
employees, contractors and others on site.    
(4) Total of reportable quantity releases, permit excursions and provincial
reportable spills (as defined in our 2011 Annual Report).    
N/A = Not applicable        





                 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,
financial position or cash flows 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  
                                                                     2011 
                                   2012       2011      2012         
Net income                                                            3,081 
                                 $     421   $    683   $   2,079   $       
Finance costs                          25        34        114    159  
Income taxes                                                          1,066 
                                      113       247        826          
Depreciation and amortization         144       115        578    489  
EBITDA                                                                4,795 
                                 $     703   $  1,079   $   3,597   $       
Impairment of
available-for-sale investment           -         -        341      -  
Adjusted EBITDA                                                       4,795 
                                 $     703   $  1,079   $   3,938   $       
                                                                  
                                                                  
EBITDA is calculated as earnings before finance costs, income taxes and
depreciation and amortization. Adjusted EBITDA is calculated as earnings
before finance costs, income taxes, depreciation and amortization, certain
gains and losses on disposal of assets 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. 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.  
                                                                  
                                                         Twelve Months Ended
                                   Three Months Ended              
                                     December 31           December 31  
                                                                     2011 
                                   2012       2011      2012         
Sales                                                                 8,715 
                                 $   1,642   $  1,865   $   7,927   $       
Freight, transportation and                                           (496) 
distribution                        (113)      (86)      (494)          
Net sales                                                             8,219 
                                 $   1,529   $  1,779   $   7,433   $       
                                                                  
Net income as a percentage of          26%        37%         26%     35%  
sales                                                            
Adjusted EBITDA margin                46%       61%        53%    58%  
                                                                  
Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net sales
(sales less freight, transportation and distribution). Management believes
comparing the company's operations (excluding the impact of long-term
investment decisions) 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 earnings from equity
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
                             2012        2011         2012          2011
Cash flow prior to working
capital changes ^            $     655   $     771   $     3,358   $     3,704
Changes in non-cash
operating working capital                                             
      Receivables               272        122          188        (155)
      Inventories              (70)      (132)          (7)        (146)
      Prepaid expenses
        and other current
        assets                   (11)       (13)         (32)          (1)
      Payables and
        accrued charges            26        118        (282)           83
Changes in non-cash
operating working capital         217         95        (133)        (219)
Cash provided by operating
activities                   $     872   $     866   $     3,225   $     3,485
Additions to property,
plant and equipment             (628)      (653)      (2,133)      (2,176)
Other assets and
intangible assets                (34)       (64)         (71)         (75)
Changes in non-cash
operating working capital       (217)       (95)          133          219
Free cash flow               $     (7)   $      54   $     1,154   $     1,453
                                                                     
The company 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. The company 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.
                                             

SOURCE Potash Corporation of Saskatchewan Inc.

Contact:

Investors
Denita Stann
Vice President, Investor and Public Relations
Phone: (306) 933-8521
Fax: (306) 933-8844
Email:ir@potashcorp.com

Media
Bill Johnson
Senior Director, Public Affairs
Phone: (306) 933-8849
Fax: (306) 933-8844
Email:pr@potashcorp.com

Web Site:www.potashcorp.com
 
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