For Immediate Release		Symbol: POT
April 28, 2011
Listed: TSX, NYSE

PotashCorp Reports Record First-Quarter Earnings on Stronger Prices and Volumes

Saskatoon, Saskatchewan — Potash Corporation of Saskatchewan Inc. (PotashCorp) today reported record first-quarter earnings of $0.84 per share¹ ($732 million), 71 percent above the $0.49 per share ($444 million) earned in the same period last year. Strong demand and improved prices for all three nutrients resulted in record first-quarter gross margin of $1.1 billion, significantly above the $729 million earned in last year’s first quarter. Earnings before finance costs, income taxes and depreciation and amortization (EBITDA)² of $1.1 billion and cash flow prior to working capital changes² of $899 million substantially exceeded the first-quarter 2010 totals of $776 million and $633 million, respectively.

Fueled by strong fertilizer market conditions, our strategic offshore investments in Arab Potash Company Ltd. (APC) in Jordan and Sociedad Química y Minera de Chile S.A. (SQM) in Chile added $51 million to operating income in the quarter, nearly double the $26 million contribution for the same period last year. The market value of our investments in these publicly traded companies, together with our positions in Israel Chemicals Ltd. (ICL) in Israel and Sinofert Holdings Limited (Sinofert) in China, was $10.3 billion as of market close on April 27, 2011, equating to approximately $12 per PotashCorp share.

“Tight global grain inventories, strong crop returns and the need to address nutrient deficiencies are powerful motivators for the world’s farmers, and the impact was evident in our record first-quarter results,” said PotashCorp President and Chief Executive Officer Bill Doyle. “Robust demand for all three nutrients demonstrated a global push to improve crop yields and reflected the importance of fertilizer to food production. This is especially true of potash and, as higher prices for our core nutrient continued to take hold, we began to demonstrate the earnings potential of our company.”

Market Conditions

Prices for many key crop commodities increased during the quarter, fueled by declining inventories and growing concern that farmers will be challenged to keep pace with rising demand. However, higher prices did little to temper demand for crops used for food, fiber, fuel and animal feed which kept global grain inventories at extremely low levels.

Global potash demand approached record territory during the quarter as all major potash-consuming markets actively moved to fill immediate needs. Strong demand — particularly from Latin America and Asian countries outside of China and India — helped raise offshore shipments from North American producers to a record 3.0 million tonnes, surpassing the previous mark achieved in the second quarter of 2007 and 28 percent above the first quarter of 2010. Domestic shipments from North American producers remained robust at 2.4 million tonnes in the first quarter, even on the heels of strong demand in fourth-quarter 2010. Although the first-quarter total was below the 3.0 million tonnes shipped in the same period last year — when dealers first began to address the limited movement of 2009 — it reflected continued demand strength in North America. Rising global demand reportedly left many potash producers sold out for the second quarter, even with India’s contracted shipments completed at the end of March. With global supply capabilities being tested and North American producer inventory levels falling well below the previous five-year average, realized and announced prices moved higher in nearly all markets.

POTASH CORPORATION OF SASKATCHEWAN INC.
SUITE 500, 122 — 1ST AVENUE SOUTH, SASKATOON, SK CANADA S7K 7G3 PHONE (306) 933-8520 FAX (306) 933-8844

Solid phosphate fertilizer markets were supported by strong domestic demand ahead of the key planting season, with first-quarter shipments from US producers to North American customers increasing 13 percent from the same period last year. Offshore shipments declined 17 percent as customers slowed their purchasing ahead of the settlement of new supply contracts with India, the world’s largest phosphate importer. The continuation of strong demand — along with rising costs for key inputs (including phosphate rock, sulfur and ammonia) and production curtailments in North Africa due to political unrest — pushed prices significantly higher compared to first-quarter 2010.

In nitrogen, healthy demand for ammonia continued, with US domestic shipments at similar levels to the first quarter of 2010. With strong global agricultural demand, improved industrial demand and higher natural gas prices in key European producing regions, including the Ukraine, prices for all nitrogen products rose significantly. Urea experienced some softness on rising supply availability, but demand and pricing began to firm by the end of the quarter. Competitive US gas prices continue to support healthy margins for domestic producers.

Potash

Higher prices and sales volumes elevated potash gross margin to a first-quarter record of $743 million, 40 percent above the previous quarterly record of $530 million generated in the same period last year.

Strong demand resulted in record first-quarter sales volumes of 2.8 million tonnes — the second-highest quarterly total in our history and 13 percent above the 2.5 million tonnes sold in the same period last year. Offshore volumes rose 42 percent to 1.7 million tonnes on the strength of record sales by Canpotex Limited (Canpotex), the offshore marketing company for Saskatchewan potash producers. Key spot markets purchased aggressively, with the majority of Canpotex shipments sent to Latin America (27 percent) and Asian countries other than China and India (45 percent), while China (16 percent) began purchasing on a six-month pricing agreement and India (7 percent) completed shipments under its previous annual contract. North American sales volumes of 1.1 million tonnes represented our third-highest quarterly total, trailing the record first quarter of 2010 when the depleted supply chain absorbed 1.3 million tonnes.

Our first-quarter average realized price of $366 per tonne was $45 per tonne higher than in the same period last year, as realizations began to reflect the shipment of tonnage booked at higher prices. By the end of the quarter, North American realized prices included both the September and October 2010 price increases, while offshore spot-market realizations reflected previously announced increases.

Strong sales pulled inventories down significantly despite near-record quarterly production, as our potash facilities operated near their full capabilities during the quarter with no shutdown weeks, compared to the 13 weeks taken in the first quarter of 2010. Higher operating rates had a favorable impact on our per-tonne cost of goods sold, but the benefits were partially offset by the translation of Canadian-dollar production costs to a weaker US dollar and higher depreciation expense.

Phosphate

Robust agricultural fundamentals helped push up prices for all phosphate products and raised gross margin for the first quarter of 2011 to $150 million, more than double the $64 million earned in the same period last year. Liquid and solid fertilizers generated $50 million and $48 million in gross margin, respectively, while industrial ($26 million) and feed phosphate ($22 million) products also made significant contributions.

Total phosphate sales volumes of 0.9 million tonnes were relatively flat on a quarter-over-quarter basis. Sales of liquid fertilizer products increased 41 percent over the same period last year as we allocated more

production to capitalize on the higher-margin opportunity in this product line. This limited sales of solid, feed and industrial products for the quarter.

Our average realized phosphate price climbed to $559 per tonne, up 33 percent over the first quarter of 2010. The largest price increases were evident in liquid and solid fertilizers, which rose 49 percent and 44 percent, respectively, from last year’s first quarter on strong agricultural fundamentals and higher production costs. Prices for feed products — up 23 percent from first-quarter 2010 — increased less rapidly than fertilizer prices as a result of challenging livestock feed economics, while industrial prices rose 21 percent, as these products include certain longer-term contracts that lag current market conditions.

Although higher operating levels had a favorable impact on our per-tonne fixed costs for phosphate products compared to the same period last year, this was more than offset by significantly higher sulfur and ammonia input costs.

Nitrogen

Supported by a strong pricing environment, our nitrogen gross margin climbed to a first-quarter record of $203 million. This was 50 percent higher than the $135 million generated in the same quarter of 2010 and represented the third-highest quarterly total in company history. Our Trinidad operation contributed $118 million in gross margin, while our US operations delivered $85 million.

First-quarter nitrogen sales volumes totaled 1.3 million tonnes, relatively flat compared to the same quarter last year. Ammonia sales rose 20 percent as a greater percentage of our production was allocated to this higher-margin product to meet strong industrial and agricultural demand, limiting production of downstream products.

Our first-quarter average realized nitrogen price was $368 per tonne, 32 percent higher than in the same period of 2010. Ammonia prices rose 38 percent, while urea was up 19 percent and other nitrogen products 26 percent.

The total average natural gas cost for first-quarter 2011, including our hedge position, was $5.84 per MMBtu, an increase of 19 percent over the same period last year. The majority of the increase was the result of higher Trinidad gas costs, which are primarily indexed to the Tampa ammonia price and reflected the sharp rise in this benchmark.

Financial

Our quarterly results are now being prepared based on International Financial Reporting Standards (IFRS). The new policies have been consistently applied to all of the periods presented in this news release and all prior period information has been restated or reclassified for comparative purposes unless otherwise noted. Further details on the transition to IFRS are provided in the notes to our unaudited interim condensed consolidated financial statements as well as in our Annual Report on Form 10-K for the year ended December 31, 2010.

Following the three-for-one stock split announcement in January 2011, our common shares began trading on a post-split basis on the Toronto and New York stock exchanges in February.

Higher earnings raised first-quarter income tax expense to $243 million, up from $191 million in the same quarter of 2010. Selling and administrative expenses for the quarter increased year-over-year, from $60 million to $75 million, primarily due to higher compensation expense accruals driven by a higher common share price.

Potash expansion projects at our Allan, Cory, Rocanville and New Brunswick facilities continued throughout the first quarter, and accounted for the majority of our $441 million in capital expenditures on property, plant and equipment.

Outlook

With rising demand putting pressure on global supplies of a wide range of crop commodities, we believe the need for high-yield agriculture around the world has never been greater. Higher crop prices reflect tight supply/demand fundamentals, providing farmers with significant economic opportunities and motivating them to improve soil fertility to maximize production. We believe this is a global opportunity that holds true for corn farmers in the US, produce growers in China, soybean producers in Brazil, and others.

While record or near-record prices for many crops — including $7-per-bushel corn and $14-per-bushel soybeans — are creating headlines, farmers are recognizing a business opportunity that extends beyond short-term price movements. Even at crop prices well below current levels, farmers see the opportunity to generate a significant return on their investment. This is shifting their emphasis towards maximizing yields to capitalize on the economic opportunity — and that is best achieved by improving fertilization application practices to replenish nutrients in the soil and protect its fertility for future crops. We believe that the growth in demand for food and fertilizers is supportive for our business in the current environment, and are confident that these powerful trends will lead to even greater opportunities in the years ahead, especially in potash.

Rising demand from fertilizer buyers around the world is putting pressure on the global potash industry’s supply capabilities and creating an environment of rising prices. These conditions continue to provide a powerful earnings opportunity for PotashCorp because of our unmatched ability to expand our operational capability and increase production over the next five years to meet this growing demand. Since 2003 and continuing through the darkest days of the global recession, we have been investing in new operational capability to prepare for the situation that we believe is unfolding.

We recently completed construction of the first portion of a two-phase expansion at our Cory facility and are ramping up its new production. We expect to complete major projects at New Brunswick and Allan in 2012 and at Rocanville, our largest project, by 2014, with new production from all our expansion projects ramped up by 2015. Cumulatively, these projects are expected to raise our operational capability to an estimated 17.1 million tonnes annually, an increase of more than 50 percent from 2011 levels. Our additional tonnes represent the largest percentage of new potash capacity expected to become available worldwide over the next several years, and, we believe, will be well timed to meet the rise in global demand.

The fundamental demand drivers that supported our decision to invest in our potash expansion program continue today. We believe the rising need for potash is not a product of short-term surges or inventory restocking following the deferrals of 2009, but a response to the increasing crop nutrient requirements necessary to feed a growing world. Based on current conditions, we continue to anticipate 2011 global potash demand of 55-60 million tonnes.

In North America, strong spring demand has PotashCorp fully committed through the end of May, with sales at $515 per short ton (FOB) to Midwest warehouses — a price that has yet to reflect the $45 per short ton increase announced in February. Despite adverse weather impacting the early progress of spring plantings and large volumes shipped during the past two quarters, we anticipate that high application rates will support robust second-quarter demand. We expect supportive crop economics will also lead to strong second-half demand.

Potash demand in Latin America is projected to reach a record of approximately 10 million tonnes due to strong crop economics and limited distributor inventory entering the year. Second-quarter shipments are likely to be at more seasonal levels as distributors work to move record first-quarter shipments to customers, and are expected to reflect a recently realized increase in the Canpotex delivered price to Brazil to $520 per tonne.

Rising demand from growers in Asian countries outside of China and India — many striving to address the significant potash requirements of crops such as oil palm and sugarcane to capitalize on attractive economics — is expected to account for the largest share of Canpotex sales in the second quarter. Demand in this region is now forecast to reach 7.3 million tonnes in 2011, supporting higher prices — including a $50 per tonne increase on new business announced by Canpotex in April.

China, which now purchases through six-month contracts, is expected to receive shipments under first-half agreements, although continued pressure on its domestic food supply and reduced potash inventories are expected to support higher second-half volume commitments. We anticipate 2011 potash (KCl) consumption could approach 11 million tonnes, including imports of approximately 7 million tonnes.

With strong demand in all other markets, Canpotex is expected to have limited product available to ship to India in the second quarter, even if new supply contracts are settled. With low inventory levels and significant agronomic need, we believe India’s requirements remain high. We anticipate strong pressure from fertilizer distributors and farmers to ensure potash is available for their coming planting season.

Given global conditions, we now estimate our 2011 potash segment gross margin will be between $2.7 billion and $2.9 billion and total shipments within the range of 9.6-10.0 million tonnes.

In phosphate, the recent settlement of key supply contracts with India is expected to support healthy export demand through 2011. With strong agricultural demand and higher phosphate rock and phosphoric acid prices, markets for processed phosphate products are likely to remain strong throughout 2011, although rising ammonia and sulfur prices may limit upside margin potential. Sales volumes and prices for nitrogen products should also remain relatively strong, based on continuing agricultural strength and improved industrial demand. We forecast combined 2011 gross margin for our phosphate and nitrogen segments to be in the range of $1.1 billion to $1.3 billion.

We now estimate selling and administration expenses will be slightly higher than 2010 levels and finance costs for 2011 to approximate $150-$160 million.

PotashCorp expects second-quarter net income to be in the range of $0.70 to $0.90 per share, with full-year earnings in the range of $3.00 to $3.40 per share.

Conclusion

“By operating with a long-term view, we have positioned our company to capitalize on the opportunities that are unfolding today,” said Doyle. “As global food producers tackle the challenge of feeding a growing population, PotashCorp is prepared to play an important role in meeting the rising demand for fertilizer, especially potash. We look forward to meeting the increasing needs of our customers and creating new opportunities to deliver long-term growth for our investors.”

Notes

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

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

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.

For further information please contact:

Investors		Media
Denita Stann		Bill Johnson
Vice President, Investor and Public Relations		Senior Director, Public Affairs
Phone: (306) 933-8521		Phone: (306) 933-8849
Fax: (306) 933-8844		Fax: (306) 933-8844
Email: ir@potashcorp.com		Email: pr@potashcorp.com

Web Site: www.potashcorp.com

This release contains forward-looking statements or forward-looking information (forward-looking statements). 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. Several factors could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to: fluctuations in supply and demand in fertilizer, sulfur, transportation and petrochemical markets; changes in competitive pressures, including pricing pressures; the recent global financial crisis and conditions and changes in credit markets; the results of sales contract negotiations with major markets; timing and amount of capital expenditures; risks associated with natural gas and other hedging activities; changes in capital markets and corresponding effects on the company’s investments; changes in currency and exchange rates; unexpected geological or environmental conditions, including water inflow; strikes and other forms of work stoppage or slowdowns; changes in, and the effects of, government policies and regulations; 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, 2010 under the captions “Forward-Looking Statements” and “Item 1A — Risk Factors” and in our other filings with the US Securities and Exchange Commission and 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.

PotashCorp will host a Conference Call on Thursday, April 28, 2011 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)

		March 31,				December 31,
		2011				2010
Assets
Current assets
Cash and cash equivalents		$	473			$	412
Receivables			1,256				1,059
Inventories			597				570
Prepaid expenses and other current assets			55				54
			2,381				2,095
Non-current assets
Property, plant and equipment			8,494				8,141
Investments in equity-accounted investees			1,100				1,051
Available-for-sale investments			3,571				3,842
Other assets			305				303
Intangible assets			114				115
Total Assets		$	15,965			$	15,547
Liabilities
Current liabilities
Short-term debt and current portion of long-term debt		$	1,694			$	1,871
Payables and accrued charges			1,261				1,198
Current portion of derivative instrument liabilities			61				75
			3,016				3,144
Non-current liabilities
Long-term debt			3,707				3,707
Derivative instrument liabilities			175				204
Deferred income tax liabilities			799				737
Accrued pension and other post-retirement benefits			474				468
Asset retirement obligations and accrued environmental costs			488				455
Other non-current liabilities and deferred credits			126				147
Total Liabilities			8,785				8,862
Shareholders’ Equity
Share capital			1,449				1,431
Unlimited authorization of common shares without par value; issued and outstanding 854,762,383 and 853,122,693 at March 31, 2011 and December 31, 2010, respectively
Contributed surplus			359				308
Accumulated other comprehensive income			2,148				2,394
Retained earnings			3,224				2,552
Total Shareholders’ Equity			7,180				6,685
Total Liabilities and Shareholders’ Equity		$	15,965			$	15,547

(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
		March 31
		2011				2010
Sales (Note 2)		$	2,204			$	1,714
Freight, transportation and distribution			(149	)			(155	)
Cost of goods sold			(959	)			(830	)
Gross Margin			1,096				729
Selling and administrative			(75	)			(60	)
Provincial mining and other taxes			(34	)			(23	)
Foreign exchange loss			(8	)			(8	)
Share of earnings of equity-accounted investees			51				26
Other (expenses) income			(5	)			2
Operating Income			1,025				666
Finance Costs (Note 3)			(50	)			(31	)
Income Before Income Taxes			975				635
Income Taxes (Note 4)			(243	)			(191	)
Net Income		$	732			$	444
Net Income per Share (Note 5)
Basic		$	0.86			$	0.50
Diluted		$	0.84			$	0.49
Dividends per Share		$	0.07			$	0.03

(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
		March 31
(Net of related income taxes)		2011				2010
Net Income		$	732			$	444
Other comprehensive (loss) income
Net (decrease) increase in unrealized gains on available-for-sale investments (1)			(271	)			126
Net gains (losses) on derivatives designated as cash flow hedges (2)			13				(53	)
Reclassification to income of net losses on cash flow hedges (3)			14				9
Other			(2	)			(1	)
Other Comprehensive (Loss) Income			(246	)			81
Comprehensive Income		$	486			$	525

(1)		Available-for-sale investments are comprised of shares in Israel Chemicals Ltd. and Sinofert Holdings Limited.
(2)		Cash flow hedges are comprised of natural gas derivative instruments, and are net of income taxes of $8 (2010 — $(32)).
(3)		Net of income taxes of $8 (2010 — $6).

(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
										Unrealized				Net unrealized								Total
										gains on				losses on								Accumulated
										available-				derivatives								Other
		Share				Contributed				for-sale				designated as								Comprehensive				Retained				Total
		Capital				Surplus				investments				cash flow hedges				Other				Income				Earnings				Equity
Balance — January 1, 2011		$	1,431			$	308			$	2,563			$	(177	)		$	8			$	2,394			$	2,552			$	6,685
Net income			—				—				—				—				—				—				732				732
Other comprehensive (loss) income			—				—				(271	)			27				(2	)			(246	)			—				(246	)
Effect of share-based compensation			—				51				—				—				—				—				—				51
Dividends declared			—				—				—				—				—				—				(60	)			(60	)
Issuance of common shares			18				—				—				—				—				—				—				18
Balance — March 31, 2011		$	1,449			$	359			$	2,292			$	(150	)		$	6			$	2,148			$	3,224			$	7,180

(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
		March 31
		2011				2010
Operating Activities
Net income		$	732			$	444
Adjustments to reconcile net income to cash provided by operating activities
Depreciation and amortization			124				110
Share-based compensation			14				15
Excess tax benefit related to share-based compensation			12				7
Provision for deferred income tax			75				58
Undistributed earnings of equity-accounted investees			(51	)			(26	)
Other			(7	)			25
Subtotal of adjustments			167				189
Changes in non-cash operating working capital
Receivables			(213	)			94
Inventories			(27	)			42
Prepaid expenses and other current assets			—				6
Payables and accrued charges			31				36
Subtotal of changes in non-cash operating working capital			(209	)			178
Cash provided by operating activities			690				811
Investing Activities
Additions to property, plant and equipment			(441	)			(457	)
Purchase of long-term investments			—				(422	)
Other assets and intangible assets			—				(34	)
Cash used in investing activities			(441	)			(913	)
Cash before financing activities			249				(102	)
Financing Activities
Proceeds from long-term debt obligations			—				400
Repayment of long-term debt obligations			—				(150	)
Repayments of short-term debt obligations			(253	)			(215	)
Dividends			(28	)			(29	)
Issuance of common shares			18				10
Cash (used in) provided by financing activities			(263	)			16
Decrease in Cash Position			(14	)			(86	)
Cash Position, Beginning of Period			412				385
Cash Position, End of Period		$	398			$	299
Cash position comprised of:
Cash		$	82			$	51
Short-term investments			391				248
Cash and cash equivalents			473				299
Bank overdraft (included in short-term debt)			(75	)			—
		$	398			$	299
Supplemental cash flow disclosure
Interest paid		$	41			$	42
Income taxes paid		$	175			$	22

(See Notes to the Condensed Consolidated Financial Statements)

Potash Corporation of Saskatchewan Inc.
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2011
(in millions of US dollars except share and per-share 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 previously prepared its financial statements in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) as set out in the Handbook of the Canadian Institute of Chartered Accountants (“CICA Handbook”). The company adopted International Financial Reporting Standards (“IFRS”), which were incorporated into the CICA Handbook, on January 1, 2011 with effect from January 1, 2010. Accordingly, these unaudited interim condensed consolidated financial statements are based on IFRS, as issued by the International Accounting Standards Board (“IASB”). In these unaudited interim condensed consolidated financial statements, the term “Canadian GAAP” refers to Canadian GAAP before the company’s adoption of IFRS.

These unaudited interim condensed consolidated financial statements include the accounts of PCS and its wholly owned subsidiaries; however, they do not include all disclosures normally provided in annual consolidated financial statements. Further, while the financial figures included in this preliminary interim results announcement have been computed in accordance with IFRS applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as that term is defined in International Accounting Standard (“IAS”) 34, “Interim Financial Reporting”. The company expects to publish an interim financial report that complies with IAS 34, “Interim Financial Reporting”, and will include additional information under IFRS 1, “First-time Adoption of International Financial Reporting Standards”, in its Quarterly Report on Form 10-Q in May 2011.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the following sources:

	•		2010 annual consolidated financial statements, for additional annual disclosures presented under Canadian GAAP;
	•		2010 annual Management’s Discussion and Analysis, for a more detailed description of significant differences in the company’s IFRS and Canadian GAAP policies; and
	•		Note 6 to these unaudited interim condensed consolidated financial statements, for the transition impact between IFRS and Canadian GAAP.

In management’s opinion, the unaudited interim condensed consolidated financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary to fairly present such information. Interim results are not necessarily indicative of the results expected for the fiscal year.

2.  Segment Information

The company has three reportable operating segments: potash, phosphate and nitrogen. These operating segments are differentiated by the chemical nutrient contained in the product that each produces. 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 March 31, 2011
		Potash				Phosphate				Nitrogen				All Others				Consolidated
Sales		$	1,109			$	549			$	546			$	—			$	2,204
Freight, transportation and distribution			(83	)			(43	)			(23	)			—				(149	)
Net sales — third party			1,026				506				523				—
Cost of goods sold			(283	)			(356	)			(320	)			—				(959	)
Gross margin			743				150				203				—				1,096
Depreciation and amortization			(42	)			(47	)			(33	)			(2	)			(124	)
Inter-segment sales			—				—				38				—				—

		Three Months Ended March 31, 2010
		Potash				Phosphate				Nitrogen				All Others				Consolidated
Sales		$	892			$	401			$	421			$	—			$	1,714
Freight, transportation and distribution			(96	)			(35	)			(24	)			—				(155	)
Net sales — third party			796				366				397				—
Cost of goods sold			(266	)			(302	)			(262	)			—				(830	)
Gross margin			530				64				135				—				729
Depreciation and amortization			(30	)			(48	)			(30	)			(2	)			(110	)
Inter-segment sales			—				—				26				—				—

		Three Months Ended June 30, 2010
		Potash				Phosphate				Nitrogen				All Others				Consolidated
Sales		$	641			$	364			$	432			$	—			$	1,437
Freight, transportation and distribution			(51	)			(28	)			(20	)			—				(99	)
Net sales — third party			590				336				412				—
Cost of goods sold			(179	)			(287	)			(287	)			—				(753	)
Gross margin			411				49				125				—				585
Depreciation and amortization			(29	)			(48	)			(30	)			(2	)			(109	)
Inter-segment sales			—				—				28				—				—

Potash Corporation of Saskatchewan Inc.
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2011
(in millions of US dollars except share and per-share amounts)
(unaudited)

		Three Months Ended September 30, 2010
		Potash				Phosphate				Nitrogen				All Others				Consolidated
Sales		$	637			$	536			$	402			$	—			$	1,575
Freight, transportation and distribution			(55	)			(44	)			(20	)			—				(119	)
Net sales — third party			582				492				382				—
Cost of goods sold			(243	)			(396	)			(267	)			—				(906	)
Gross margin			339				96				115				—				550
Depreciation and amortization			(28	)			(49	)			(27	)			(2	)			(106	)
Inter-segment sales			—				—				28				—				—

		Three Months Ended December 31, 2010
		Potash				Phosphate				Nitrogen				All Others				Consolidated
Sales		$	830			$	521			$	462			$	—			$	1,813
Freight, transportation and distribution			(56	)			(37	)			(22	)			—				(115	)
Net sales — third party			774				484				440				—
Cost of goods sold			(238	)			(347	)			(287	)			—				(872	)
Gross margin			536				137				153				—				826
Depreciation and amortization			(38	)			(52	)			(32	)			(2	)			(124	)
Inter-segment sales			—				—				38				—				—

3.  Finance Costs

		Three Months Ended
		March 31
		2011				2010
Interest expense on debt
Short-term		$	(5	)		$	(1	)
Long-term			(64	)			(54	)
Unwinding of discount on asset retirement obligations			(4	)			(3	)
Borrowing costs capitalized to property, plant and equipment			19				18
Interest income			4				9
		$	(50	)		$	(31	)

4.  Income Taxes

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

For the three months ended March 31, 2011, the company’s income tax expense was $243. This compared to an expense of $191 for the same period last year. The actual effective tax rate including discrete items for the three months ended March 31, 2011 was 25 percent compared to 30 percent for the first three months of 2010. Total discrete tax adjustments that impacted the rate in the first quarter resulted in an income tax recovery of $23 compared to an income tax expense of $11 in the same period last year.

Significant items recorded included the following:

	•		In first-quarter 2011, a current tax recovery of $21 for previously paid withholding taxes.
	•		In first-quarter 2010, a current tax expense of $18 to adjust the 2009 income tax provision to the income tax return filed that quarter.
	•		In first-quarter 2010, a current tax recovery of $10 for an anticipated refund of taxes paid related to forward exchange contracts.

5.  Net Income Per Share

Basic net income per share for the quarter is calculated on the weighted average shares issued and outstanding for the three months ended March 31, 2011 of 854,033,000 (2010 — 888,357,000).

Diluted net income per share is calculated based on the weighted average number of shares issued and outstanding during the period. The denominator is: (1) increased by the total of the additional common shares that would have been issued assuming 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 is 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 is dilutive. The weighted average number of shares outstanding for the diluted net income per share calculation for the three months ended March 31, 2011 was 876,467,000 (2010 — 914,112,000).

Potash Corporation of Saskatchewan Inc.
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2011
(in millions of US dollars except share and per-share amounts)
(unaudited)

6.  Transition to IFRS

The company adopted IFRS on January 1, 2011 with effect from January 1, 2010. The company’s financial statements for the year ending December 31, 2011 will be the first annual consolidated financial statements that comply with IFRS and these unaudited interim condensed consolidated financial statements were prepared as described in Note 1.

Reconciliations from Canadian GAAP to IFRS

Reconciliation of Net Income

		Year to Date Period Ended
		December 31,				March 31,
		2010				2010
Net Income — Canadian GAAP		$	1,806			$	449
IFRS adjustments to net income:
Policy choices
Employee benefits — Actuarial gains and losses			26				6
Other
Provisions — Changes in asset retirement obligations			(13	)			(1	)
Property, plant and equipment			34				—
Borrowing costs			(11	)			(2	)
Employee benefits — Past service costs			(2	)			—
Impairment of assets			(3	)			1
Constructive obligations			(3	)			—
Share-based payments			(2	)			(15	)
Manufacturing cost variance at interim periods			—				9
Income taxes — Tax effect of above differences			(10	)			—
Income tax-related differences			(47	)			(3	)
Net Income — IFRS		$	1,775			$	444

Reconciliation of Shareholders’ Equity

		December 31,				March 31,
		2010				2010
Shareholders’ Equity — Canadian GAAP		$	6,804			$	6,952
IFRS adjustments to shareholders’ equity:
Policy choices
Employee benefits — Actuarial gains and losses			(375	)			(358	)
Other
Provisions — Changes in asset retirement obligations			(79	)			(67	)
Property, plant and equipment			52				18
Investments (Equity investee adoption of IFRS earlier than PotashCorp)			(45	)			(45	)
Borrowing costs			(25	)			(16	)
Employee benefits — Past service costs and Canadian GAAP transition amounts			10				12
Impairment of assets			5				9
Constructive obligations			(5	)			(2	)
Share-based payments			1				1
Manufacturing cost variance at interim periods			—				9
Income taxes — Tax effect of above differences			154				152
Income tax-related differences			188				178
Shareholders’ Equity — IFRS		$	6,685			$	6,843

Potash Corporation of Saskatchewan Inc.
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2011
(in millions of US dollars except share and per-share amounts)
(unaudited)

Adjusted Financial Statements

The following tables show the unaudited adjustments to the company’s consolidated statements of financial position and consolidated statements of income.

Adjustments to Consolidated Statement of Financial Position — as at December 31, 2010

						IFRS				IFRS
		Canadian				Adjust-				Reclass-
Canadian GAAP Accounts		GAAP				ments				ifications				IFRS				IFRS Accounts
Assets																		Assets
Current assets																		Current assets
Cash and cash equivalents		$	412			$	—			$	—			$	412			Cash and cash equivalents
Receivables			1,044				15				—				1,059			Receivables
Inventories			570				—				—				570			Inventories
Prepaid expenses and other current assets			114				(60	)			—				54			Prepaid expenses and other current assets
			2,140				(45	)			—				2,095
																		Non-current assets
Property, plant and equipment			8,063				78				—				8,141			Property, plant and equipment
Investments			4,938				(45	)			(4,893	)			—
			—				—				1,051				1,051			Investments in equity-accounted investees
			—				—				3,842				3,842			Available-for-sale investments
Other assets			363				(60	)			—				303			Other assets
Intangible assets			18				—				97				115			Intangible assets
Goodwill			97				—				(97	)			—
		$	15,619			$	(72	)		$	—			$	15,547			Total Assets
Liabilities																		Liabilities
Current liabilities																		Current liabilities
Short-term debt and current portion of long-term debt		$	1,871			$	—			$	—			$	1,871			Short-term debt and current portion of long-term debt
Payables and accrued charges			1,246				(48	)			—				1,198			Payables and accrued charges
Current portion of derivative instrument liabilities			75				—				—				75			Current portion of derivative instrument liabilities
			3,192				(48	)			—				3,144
																		Non-current liabilities
Long-term debt			3,707				—				—				3,707			Long-term debt
Derivative instrument liabilities			204				—				—				204			Derivative instrument liabilities
Future income tax liabilities			1,078				(341	)			—				737			Deferred income tax liabilities
Accrued pension and other post-retirement benefits			299				169				—				468			Accrued pension and other post-retirement benefits
Accrued environmental costs and asset retirement obligations			330				125				—				455			Asset retirement obligations and accrued    environmental costs
Other non-current liabilities and deferred credits			5				142				—				147			Other non-current liabilities and deferred credits
			8,815				47				—				8,862			Total Liabilities
Shareholders’ Equity																		Shareholders' Equity
Share capital			1,431				—				—				1,431			Share capital
Contributed surplus			160				148				—				308			Contributed surplus
Accumulated other comprehensive income			2,244				150				—				2,394			Accumulated other comprehensive income
Retained earnings			2,969				(417	)			—				2,552			Retained earnings
			6,804				(119	)			—				6,685			Total Shareholders' Equity
		$	15,619			$	(72	)		$	—			$	15,547			Total Liabilities and Shareholders' Equity

Potash Corporation of Saskatchewan Inc.
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2011
(in millions of US dollars except share and per-share amounts)
(unaudited)

Adjustments to Consolidated Statement of Income — Year Ended December 31, 2010

						IFRS				IFRS
		Canadian				Adjust-				Reclass-
Canadian GAAP Accounts		GAAP				ments				ifications				IFRS				IFRS Accounts
Sales		$	6,539			$	—			$	—			$	6,539			Sales
Freight			(336	)			—				(152	)			(488	)		Freight, transportation and distribution
Transportation and distribution			(152	)			—				152				—
Cost of goods sold			(3,426	)			65				—				(3,361	)		Cost of goods sold
Gross Margin			2,625				65				—				2,690			Gross Margin
Selling and administrative			(228	)			—				—				(228	)		Selling and administrative
Provincial mining and other taxes			(77	)			—				—				(77	)		Provincial mining and other taxes
Foreign exchange loss			(17	)			—				—				(17	)		Foreign exchange loss
			—				—				174				174			Share of earnings of equity-accounted investees
			—				—				163				163			Dividend income
Other income			245				(16	)			(211	)			18			Other income
			—				—				(126	)			(126	)		Other expenses
Operating Income			2,548				49				—				2,597			Operating Income
Interest Expense			(99	)			(42	)			—				(141	)		Finance Costs
Income Before Income Taxes			2,449				7				—				2,456			Income Before Income Taxes
Income Taxes			(643	)			(38	)			—				(681	)		Income Taxes
Net Income		$	1,806			$	(31	)		$	—			$	1,775			Net Income
Net Income per Share																		Net Income per Share
Basic		$	2.04			$	(0.04	)		$	—			$	2.00			Basic
Diluted		$	1.98			$	(0.03	)		$	—			$	1.95			Diluted
Dividends per Share		$	0.13			$	—			$	—			$	0.13			Dividends per Share

Adjusted Quarterly Statements of Income

The following table shows the company’s unaudited consolidated statements of income on a quarterly basis:

																		Twelve
		Three Months Ended																Months Ended
		March 31,				June 30,				September 30,				December 31,				December 31,
		2010				2010				2010				2010				2010
Sales		$	1,714			$	1,437			$	1,575			$	1,813			$	6,539
Freight, transportation and distribution			(155	)			(99	)			(119	)			(115	)			(488	)
Cost of goods sold			(830	)			(753	)			(906	)			(872	)			(3,361	)
Gross Margin			729				585				550				826				2,690
Selling and administrative			(60	)			(33	)			(71	)			(64	)			(228	)
Provincial mining and other taxes			(23	)			(17	)			(16	)			(21	)			(77	)
Foreign exchange (loss) gain			(8	)			(1	)			2				(10	)			(17	)
Share of earnings of equity-accounted investees			26				45				51				52				174
Dividend income			—				114				25				24				163
Other income			7				5				1				5				18
Other expenses			(5	)			(19	)			(25	)			(77	)			(126	)
Operating Income			666				679				517				735				2,597
Finance Costs			(31	)			(40	)			(28	)			(42	)			(141	)
Income Before Income Taxes			635				639				489				693				2,456
Income Taxes			(191	)			(159	)			(146	)			(185	)			(681	)
Net Income		$	444			$	480			$	343			$	508			$	1,775
Net Income per Share
Basic		$	0.50			$	0.54			$	0.39			$	0.58			$	2.00
Diluted		$	0.49			$	0.53			$	0.38			$	0.56			$	1.95
Dividends per Share		$	0.03			$	0.03			$	0.03			$	0.03			$	0.13

Potash Corporation of Saskatchewan Inc.
Selected Operating and Revenue Data
(unaudited)

		Three Months Ended
		March 31
		2011				2010
Potash Operating Data
Production (KCl Tonnes — thousands)			2,592				1,955
Shutdown weeks (1)			—				13.4
Sales (tonnes — thousands)
Manufactured Product
North America			1,092				1,266
Offshore			1,696				1,198
Manufactured Product			2,788				2,464
Potash Net Sales
(US $ millions)
Sales		$	1,109			$	892
Freight, transportation and distribution			(83	)			(96	)
Net Sales		$	1,026			$	796
Manufactured Product
North America		$	466			$	450
Offshore			555				342
Other miscellaneous and purchased product			5				4
Net Sales		$	1,026			$	796
Potash Average Price per MT
North America		$	427			$	355
Offshore		$	327			$	285
Manufactured Product		$	366			$	321

(1)

Excludes planned routine annual maintenance shutdowns.

Potash Corporation of Saskatchewan Inc.
Selected Operating and Revenue Data
(unaudited)

		Three Months Ended
		March 31
		2011				2010
Phosphate Operating Data
Production (P2O5 Tonnes — thousands)			532				448
P2O5 Operating Rate			90%				76%
Sales (tonnes — thousands)
Manufactured Product
Fertilizer — Liquid phosphates			349				248
Fertilizer — Solid phosphates			255				293
Feed			135				167
Industrial			154				152
Manufactured Product			893				860
Phosphate Net Sales
(US $millions)
Sales		$	549			$	401
Freight, transportation and distribution			(43	)			(35	)
Net Sales		$	506			$	366
Manufactured Product
Fertilizer — Liquid phosphates		$	170			$	81
Fertilizer — Solid phosphates			157				126
Feed			71				71
Industrial			101				82
Other miscellaneous and purchased product			7				6
Net Sales		$	506			$	366
Phosphate Average Price per MT
Fertilizer — Liquid phosphates		$	488			$	328
Fertilizer — Solid phosphates		$	616			$	428
Feed		$	525			$	426
Industrial		$	654			$	540
Manufactured Product		$	559			$	419

Potash Corporation of Saskatchewan Inc.
Selected Operating and Revenue Data
(unaudited)

		Three Months Ended
		March 31
		2011				2010
Nitrogen Operating Data
Production (N Tonnes — thousands)			686				738
Average Natural Gas Production Cost per MMBtu		$	5.84			$	4.92
Sales (tonnes — thousands)
Manufactured Product
Ammonia			514				430
Urea			331				344
Nitrogen solutions/Nitric acid/Ammonium nitrate			495				548
Manufactured Product			1,340				1,322
Fertilizer sales tonnes			388				498
Industrial/Feed sales tonnes			952				824
Manufactured Product			1,340				1,322
Nitrogen Net Sales
(US $ millions)
Sales		$	546			$	421
Freight, transportation and distribution			(23	)			(24	)
Net Sales		$	523			$	397
Manufactured Product
Ammonia		$	244			$	147
Urea			138				121
Nitrogen solutions/Nitric acid/Ammonium nitrate			112				99
Other miscellaneous and purchased product			29				30
Net Sales		$	523			$	397
Fertilizer net sales		$	144			$	129
Industrial/Feed net sales			350				238
Other miscellaneous and purchased product			29				30
Net Sales		$	523			$	397
Nitrogen Average Price per MT
Ammonia		$	474			$	343
Urea		$	416			$	351
Nitrogen solutions/Nitric acid/Ammonium nitrate		$	226			$	180
Manufactured Product		$	368			$	278
Fertilizer average price per MT		$	371			$	259
Industrial/Feed average price per MT		$	367			$	289
Manufactured Product		$	368			$	278