q4 investor presenation

PotashCorp.com

Q4 2016 Investor Presentation

Forward-looking Statements

Slide #2

This presentation contains “forward-looking statements" (within the meaning of the US Private Securities Litigation Reform Act of 1995) or “forward-looking information”(within the meaning of applicable Canadian securities legislation) that relate to future events or our future performance. These statements can be identified by expressions of belief, expectation or intention, as well as those statements that are not historical fact. These statements often contain words such as “should,” “could,” “expect,” “forecast,” “may,”“anticipate,” “believe,” “intend,” “estimates,” “plans” and similar expressions. These statements are based on certain factors and assumptions as set forth in this document, including with respect to: foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities, including the proposed merger of equals with Agrium, and effective tax rates. While we consider these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are subject to risks and uncertainties that are difficult to predict. The results or events set forth in forward-looking statements may differ materially from actual results or events. Several factors could cause actual results or events to differ materially from those expressed in forward-looking statements including, but not limited to, the following: our proposed merger of equals transaction with Agrium, including the failure to satisfy all required conditions, including required regulatory, Canadian court and securityholder approvals, or to satisfy or obtain waivers with respect to all other closing conditions in a timely manner and on favorable terms or at all; the occurrence of any event, change or other circumstances that could give rise to the termination of the arrangement agreement; certain costs that we may incur in connection with the proposed merger of equals; certain restrictions in the arrangement agreement on our ability to take action outside the ordinary course of business without the consent of Agrium; the effect of the announcement of the proposed merger of equals on our ability to retain customers, suppliers and personnel and on our operating future business and operations generally; risks related to diversion of management time from ongoing business operations due to the proposed merger of equals; failure to realize the anticipated benefits of the proposed merger of equals and to successfully integrate Agrium and PotashCorp; the risk that our credit ratings may be downgraded or there may be adverse conditions in the credit markets; 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 and petrochemical markets; changes in competitive pressures, including pricing pressures; risks and uncertainties related to any operating and workforce changes made in response to our industry and the markets we serve, including mine and inventory shutdowns; adverse or uncertain economic conditions and changes in credit and financial markets; economic and political uncertainty around the world; changes in capital markets; the results of sales contract negotiations; unexpected or adverse weather conditions; changes in currency and exchange rates; risks related to reputational loss; the occurrence of a major safety incident; inadequate insurance coverage for a significant liability; inability to obtain relevant permits for our operations; catastrophic events or malicious acts, including terrorism; certain complications that may arise in our mining process, including water inflows; risks and uncertainties related to our international operations and assets; our ownership of non-controlling equity interests in other companies; our prospects to reinvest capital in strategic opportunities and acquisitions; risks associated with natural gas and other hedging activities; security risks related to our information technology systems; imprecision in reserve estimates; costs and availability of transportation and distribution for our raw materials and products, including railcars and ocean freight; changes in, and the effects of, government policies and regulations; earnings and the decisions of taxing authorities which could affect our effective tax rates; increases in the price or reduced availability of the raw materials that we use; our ability to attract, develop, engage and retain skilled employees; strikes or other forms of work stoppage or slowdowns; rates of return on, and the risks associated with, our investments and capital expenditures; timing and impact of capital expenditures; the impact of further innovation; adverse developments in new and pending legal proceedings or government investigations; and violations of our governance and compliance policies. These risks and uncertainties are discussed in more detail under the headings “Risk Factors” and “Management’s Discussion and Analysis of Results and Operations and Financial Condition” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, the joint information circular of the company and Agrium, filed as Exhibit 99.1 to the company’s Current Report on Form 8-K dated October 6, 2016 and with Canadian provincial securities commissions, in connection with the proposed merger of equals with Agrium and in other documents and reports subsequently filed by us with the US Securities and Exchange Commission and the Canadian provincial securities commissions. Forward-looking statements are given only as of the date hereof and we disclaim any obligation to update or revise any forward-looking statements in this release, whether as a result of new information, future events or otherwise, except as required by law.

Company Overview

Source: PotashCorp

Slide#4

• Six mines in Canada with over 16 MMT of nameplate capacity• Highest-quality, lowest-cost North American potash producer

with significant platform for growth

• Three facilities in the US and a large-scale facility in Trinidad• Lower-cost natural gas, proximity to key markets and more

stable industrial customer base

• Two mining/processing plants and five upgrading facilities in the US

• Most diversified product offering in the industry; historically higher margins and more stable returns

• Four strategic investments: APC (Jordan) 28%, ICL (Israel) 14%, Sinofert (China) 22% and SQM (Chile) 32%

• Market value of $4.0 billion*, or $5 per PotashCorp share

World Class Potash Assets and Advantaged Positions in Nitrogen and Phosphate

Company Overview

* At market close on October 26, 2016

Company Overview

Slide#5

Potash Has Generated Superior Margins Even in Weak Market Conditions

Source: PotashCorp

-20

0

20

40

60

80

100

50%

41%

60%53%

79%

66%73%

64%58% 57% 57%

31%

201020052000 20032001 2002

38%

60%58%

47%

33%

2004 2006 2007 2008 2009 2011 2012 2013 2014 2015

Potash

Phosphate

Nitrogen

PotashCorp Gross Margin (as a % of Net Sales)Percentage

* 2016 based on Q3 YTD gross margin percentage

2016*

90%

10%

Fertilizer Feed & Industrial

30%

70%

North America Offshore

Source: PotashCorp

Slide#6

Product Sales Volumes (2015)

Geographic Sales Volumes (2015)

Priorities

Potash

Company Overview

• Long-term strategy of matching supply to demand

• Strike the right balance between:• Maximizing flexibility (operational capability

to respond to demand growth) • Minimizing costs (optimization of production

to lowest cost mines)

• Enhance market opportunities and distribution capabilities

• Explore additional opportunities to enhance our potash enterprise

60%

40%

FertilizerFeed & Industrial

34%

66%

Fertilizer Feed & Industrial

74%

26%

North AmericaOffshore

Source: PotashCorp

Slide#7

Product Sales Volumes (2015)Priorities

Geographic Sales Volumes (2015)

84%

16%

North America Offshore

Nitrogen Phosphate

Company Overview

• Enhance our cost position by achieving energy and labor efficiencies

• Reduce the impacts from natural gas related production curtailments in Trinidad

• Maintain/enhance product and market flexibility

• Improve the cost position of our assets by refining mining techniques and procurement initiatives

• Maximize sales of less cyclical, higher-return products

• Evaluate new market viability and product differentiation opportunities

Nitrogen

Phosphate

Strategy and Focus Areas

Market Responsive Potash Approach

• Aligning operating capability to current and expected market demand• Responding, as appropriate, with additional operational capability to meet future demand growth

Positioned to Succeed by Focusing on Three Key Areas

Strategy and Key Focus Areas

Slide#9

Financial Flexibility

Portfolio Optimization

• Focusing on protecting the balance sheet and our investment grade credit rating• Evaluating value creation opportunities

• Focusing on continued operational excellence across all three nutrients• Shifting potash production toward lowest-cost operations• Ramping up Rocanville in 2017 to further reduce per-tonne costs

Source: PotashCorp

Rocanville Allan Lanigan Cory New Brunswick Patience Lake0

1

2

3

4

5

6

7

Operational Capability*

Nameplate Capacity**

Aligning Capability to Market Demand; Paid-for Capacity a Platform for Growth

Source: PotashCorp

Million Tonnes KCl

* Estimated annual achievable production level at current staffing and operational readiness (estimated at beginning of 2016). Estimate does not include inventory-related shutdowns and unplanned downtime

** Estimates based on 2017 capacity as per design specifications or Canpotex entitlements once determined. In the case of New Brunswick, nameplate capacity represents design specifications for the Picadilly mine, which is currently in care-and-maintenance mode. In the case of Patience Lake, estimate reflects current operational capability.

Slide#10

Market Responsive Potash Approach

2013 2014 2015 2016F** 2017F***0

25

50

75

100

125

150Cash-related Cost of Goods Sold*Depreciation and Amortization

Optimizing Potash Production Toward Lowest-Cost Operations

Source: PotashCorp

* Refers to total cost of goods sold less depreciation and amortization** Excluding severance and transition charges in 2016*** Assumes Rocanville production of approximately 3mmt in 2016 and 5mmt in 2017; FX rate of CDN 1.34 per 1 USD; 2016 sales volumes consistent with guidance and sales volumes of 9.5mmt in 2017 (for illustrative purposes only; actual 2017 sales expectations may differ)

Slide#11

Portfolio Optimization

US$ - Per Tonne (Potash)

Rocanville cash costs anticipated

to be ~$45-$50 per tonne when ramped up

Focusing on Financial Flexibility and Investment-Grade Credit Rating

Financial Discipline and Flexibility

Slide#12

2006200720082009201020112012201320142015 LTM0

1

2

3

Long-term Short-term

Moody’s Baa1 P-2

S&P BBB+ A-2

Source: PotashCorp, S&P, Moody’s

2015 2016F* 2017F**0

600

1,200

1,800

2,400

3,000DividendCAPEX - SustainingCAPEX - Opportunity

US$ Millions:

* Combined sustaining and opportunity CAPEX represents guidance ~$800 million; annual dividend expenditures based on current payout level** Represents midpoint of sustaining capital expenditures range of $600-$800 million; annual dividend expenditures based on current payout level

Investment Grade Credit Rating

Net Debt to EBITDA Ratio

Reduced Capex/Dividend Requirements

Source: PotashCorp

2017Q1 Q2

2016

Picadilly Mine in Care & Maintenance

2.0 mmt of nameplate capacity

Announced Inventory Shutdowns

at Allan & Lanigan

Q3

Reduced quarterly dividend

to $0.10/share

Reduced quarterly dividendto $0.25/share

Q4 Q1

2017

Rocanville Ramp-upExpect Canpotex allocation

increase for 2H 2017

Hammond Warehouse/ Distribution Centre Complete

enhancing US distribution

Commitment to a Proactive Approach; Merger Expected to Close Mid-2017

Recent and Upcoming Event Timeline

Announced Merger of Equals with Agrium

Expect up to $500M in annual synergies

Shareholders Approve Merger

with Agrium

Q2 Q3

Merger Regulatory Review Process

Expect to be complete in mid-2017

Slide #13

Integration Planning Process

Market Update

Highlights• Record global grain/oilseed consumption

provides incentive to increase crop production

• US exports for major crops are at all-time highs in 2016, partially offseting record production

• South American planting progressing well; anticipate growth in corn and soybean acres

• US corn acreage projected at ~90 million acres in 2017; expect minimal impact on nutrient demand

• Palm oil and sugar markets supported by strong demand and tight supply

Prices Remain at Supportive Levels Due to Strong Demand

Crop Market Update

Source: CapIQ

Selected Crop Prices*

$3.91$3.48

$3.87

Corn (US$/bu)

2017 ForecastCurrent3-Year Average

$10.63$9.90 $9.82

Soybean (US$/bu)

$0.16

$0.22$0.20

Sugar (US$/lbs)

$2,398$2,736 $2,699

Palm Oil (MYR/mt)

Nov ’17Dec ’17

Oct ’17 Nov ’17

* As at November 6, 2016. 2017 based on consensus forecast as reported by CapIQ

Slide #15

Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-1680%

100%

120%

140%

160%

180%

* Based on corn, soybean and wheat prices (weighted by global consumption).

** Based on urea, DAP and KCl prices (weighted by global consumption).

Fertilizer Affordability IndexFertilizer Represents Good Value for Farmers

Source: Bloomberg, Fertilizer Week

Fertilizer Represents Good Value for Farmers

Crop Price Index* as a % of Fertilizer Price Index**

110% 142%Average Ratio (Crop Index as % of Fertilizer

Index)

Slide #16

65 71 77 83 89 95 01 07 130.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

5

10

15

20

25

30

35PotashCrop Production

65 71 77 83 89 95 01 07 130.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

10

20

30

40

50PhosphateCrop Production

Nitrogen Potash

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

20

40

60

80

100

120 NitrogenCrop Production

Phosphate

Source: Fertecon, CRU, USDA, PotashCorp

Strong Correlation Between Growth in Crop Production and Fertilizer Use

World Fertilizer Consumption and Crop Production

Crop ProductionBillion Tonnes



ConsumptionMillion Tonnes K20

ConsumptionMillion Tonnes P205

ConsumptionMillion Tonnes N

50-year Correlation – 0.9720-year Correlation – 0.98



Slide #17

Potash Shipments by Region

Source: Fertecon, CRU, Industry Publications, PotashCorp

Expect Demand of 61-64 Million Tonnes in 2017

14 15 16F 17F 14 15 16F 17F 14 15 16F 17F 14 15 16F 17F 14 15 16F 17F0

5

10

15

20

India

Note: Shaded bars represent shipment forecast range as of October 27, 2016.

4.2 – 4.7mmt• Lower farm retail prices and agronomic need expected to support consumption growth

Other Asia

8.8 – 9.3mmt• Demand supported by good crop economics, lower inventories and improved moisture conditions

North America

9.3 – 9.8mmt• Supportive nutrient prices and significant removal of nutrients following record crop expected to support demand

Latin America

11.5 – 12.0mmt• Agronomic need and favorable crop economics expected to support demand growth

China

14.5 – 15.5mmt• Lower inventories and strong consumption expected to support more timely contract settlements

2017

H

ighl

ight

s

Million Tonnes KCl

Previous Record:6.3mmt (2010)





Slide #18

World Potash Inventory ChangesInventory Has Been Drawn Down at Both Producer and Distribution Level

Source: CRU, TFI, Company Reports, PotashCorp

Estimated Inventory Change*Million Tonnes (KCl)

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

2012 2013 2014 2015 2016F20112010

Estimated Producer Inventory Change (Production less Sales)Estimated Distributor Inventory Change (Shipments less Consumption)

Slide #19

Source: Fertecon, CRU

Lower Operating Rates and Slowdown in Capacity Expansion

China’s Nutrient Profile

2010

2011

2012

2013

2014

2015

2016F

0

10

20

30

40

50

60

70

80 Exports Domestic Sales

~52%

2010

2011

2012

2013

2014

2015

2016F

0

5

10

15

20

25

30

35 Exports Domestic Sales

Nitrogen (Urea)Million Tonnes

Phosphate (DAP/MAP)Million Tonnes

Potash (KCl)Million Tonnes

Current Operati

ng Rate*:

~60% ~89%

2010

2011

2012

2013

2014

2015

2016F

0

1

2

3

4

5

6

7

8 Domestic Production

* Based on industry consultants’ estimates.

Slide #20

PotashCorp.com

Contact Us

[email protected](306) 933-8500

Denita StannSenior VP, Investor & Public Relations

Jeff HolzmanSenior Director, Investor Relations & Sustainability

Ryan Shacklock Director, Investor Relations

Tim McMillanManager, Investor Relations

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