West CoastInvestorMeetingsAugust 2012Bill DoylePresident and CEO   PotashCorp.com
Forward-looking StatementsThis presentation contains forward-looking statements or forward-looking information (forward-lo...
Potash       Phosphate   Nitrogen                                                 % of Global Capacity        20%         ...
PotashCorp Profile    Unique Potash Position Drives Earnings Growth and Strong Cash Flow Returns    Gross Margin - US$ Bil...
Agriculture Market Overview
Global Crop ConditionLess Than Ideal Conditions Have Impacted 2012 Crop Production Potential   High rainfall and recent he...
World Corn Stocks-to-UseTightest Stocks Level Since 1973                 Percent            50            45            40...
Fertilizer Cost Percentage of US Corn RevenuePotash and Phosphate Costs Account for Small Percentage of Projected Corn Rev...
Fertilizer Market UpdateFertilizer Market Update
World Potash Fertilizer Consumption Growth    Significant Consumption Growth in Large Developing Markets    Percent Annual...
2012 US Corn/Soybean Potash Application and RemovalEstimated Removal Exceeds Application Even in Low Yield Scenarios      ...
US Corn/Soybean Potash Application and RemovalApplication Rates Have Not Kept Pace With Nutrient Removal                  ...
US Fertilizer Use Following Major Yield DeclinesFertilizer Use Increased in Majority of Fertilizer Years Following a Major...
North American Potash Shipments vs ConsumptionAnticipate Strong Demand Given Low Dealer Inventories Entering 2012/13 Ferti...
South America Soybean and Corn Production      Expect a Large Production Response from South America in 2012/13      Soybe...
Brazil Fertilizer Deliveries to Final ConsumerExpect Record Fertilizer Use in 2012                  Million Product Tonnes...
China Grain and Oilseed Profile      Despite Increased Acreage, Production Has Not Kept Pace With Demand      Harvest Area...
China Soybean and KCl Import CostHigher Prices and Demand Driving Up Food Import Costs; KCl Cost Fraction ofSoybeans      ...
China Fertilizer ConsumptionConsumption Rising But Nutrient Application Balance is an Issue                  Million Tonne...
India Market Situation    Unbalanced Fertilizer Application and Weak Monsoon Increases Crop Production Risk    N:K Applica...
India Potash Situation         Changes to India’s Subsidy System Have Impacted Potash Demand         Rs/tonne of MOP      ...
Indian Fertilizer Subsidies       Government Actions Counter to Agronomic Needs                                           ...
Potash Market Overview
World Potash Producer ProfilePotashCorp Has Greatest Capability and Significant Offshore Equity Investments               ...
Saskatchewan Brownfield & Greenfield Potash CostsNew Projects Are Increasingly Expensive and Complex to Complete          ...
World Potash Supply/DemandBalanced to Tight Market Expected in the Coming Years                   Million Tonnes KCl      ...
Phosphate and Nitrogen OverviewPhosphate and Nitrogen Overview
DAP Production Costs       Significant Advantage for Integrated Producers       Integrated Producer                       ...
PotashCorp Phosphate ProfileLong-lived, High-quality Phosphate Rock Supports Diverse Product Mix                          ...
US Midwest Delivered Ammonia CostInterior Plants Have Significant Delivered Cost Advantage                        US$/Tonn...
PotashCorp Ammonia CapacityIncreasing US Ammonia Production Capability Through Quick Payback Projects                  Mil...
Deploying Cash: Historical Perspective and Future Priorities
PotashCorp Capital Spending and Cash FlowCash Flow Expected to Remain Strong                  US$ Millions                ...
Historical Cash Flow DeploymentFocused on Using Free Cash Flow to Drive Long-Term Shareholder Value            Opportunity...
Future Cash Flow PrioritiesFocused on Using Free Cash Flow to Drive Long-Term Shareholder Value2012                   2013...
Thank youThere’s more online:    PotashCorp.com    Visit us online    Facebook.com/PotashCorp    Find us on Facebook    Tw...
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PotashCorp - West Coast Tour - August 2012

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PotashCorp - West Coast Tour - August 2012

  1. 1. West CoastInvestorMeetingsAugust 2012Bill DoylePresident and CEO PotashCorp.com
  2. 2. Forward-looking StatementsThis presentation contains forward-looking statements or forward-looking information (forward-looking statements). Thesestatements can be identified by expressions of belief, expectation or intention, as well as those statements that are nothistorical fact. These statements are based on certain factors and assumptions including with respect to foreign exchangerates, 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 theforward-looking statements, including, but not limited to: variations from our assumptions with respect to foreign exchangerates, 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 oftransportation and distribution for our raw materials and products, including railcars and ocean freight; changes incompetitive pressures, including pricing pressures; adverse or uncertain economic conditions and changes in credit andfinancial markets; the results of sales contract negotiations with major markets; the European sovereign debt crisis and therecent downgrade of US sovereign debt and political concerns over budgetary matters; timing and impact of capitalexpenditures; risks associated with natural gas and other hedging activities; changes in capital markets and correspondingeffects on the company’s investments; unexpected or adverse weather conditions; changes in currency and exchangerates; 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 mayundertake; strikes or other forms of work stoppage or slowdowns; changes in and the effects of, government policies andregulations; security risks related to our information technology systems; and earnings, exchange rates and the decisionsof taxing authorities, all of which could affect our effective tax rates. Additional risks and uncertainties can be found in ourForm 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 provincialsecurities commissions. Forward-looking statements are given only as at the date of this presentation and the companydisclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, futureevents or otherwise, except as required by law. Slide#1
  3. 3. Potash Phosphate Nitrogen % of Global Capacity 20% 5% 2%PotashCorp Profile Global Position % of Gross Margin (2011) #1 64% #3 15% #3 21%A Global Crop Nutrient Company Sinofert APC ICL Potash Phosphate (Mining/Processing) Nitrogen Investments SQM Source: Fertecon; CRU; Blue, Johnson & Associates; PotashCorp Slide#2
  4. 4. PotashCorp Profile Unique Potash Position Drives Earnings Growth and Strong Cash Flow Returns Gross Margin - US$ Billions Percentage Potash GM Phosphate GM Nitrogen GM PotashCorp CFR WACC6 50%5 40%4 30%3 20%2 10%10 0% 2004 2006 2008 2010 2012F* 2003 2004 2005 2006 2007 2008 2009 2010 2011 * 2012F as at July 26, 2012 Source: PotashCorp Slide#3
  5. 5. Agriculture Market Overview
  6. 6. Global Crop ConditionLess Than Ideal Conditions Have Impacted 2012 Crop Production Potential High rainfall and recent heat providing good crop potential in Western Canada Adverse conditions have reduced FSU crop expectations Rapid deterioration of US corn and soybean conditions. Projected corn yield is the lowest since 1995. Imbalance in fertility is expected to impact crop yields; current monsoon rains are about 14% below Brazil is gearing up for normal levels increased corn/soybean planting for 2012/13 Key Factors to Watch in 2012: How will corn and soybean demand be rationed Uncertainty of FSU grain export supply Crop production response in South America China corn and soybean import demand Source: USDA, World Commodity Analysis Corporation, Doane, Government of India, PotashCorp Slide#5
  7. 7. World Corn Stocks-to-UseTightest Stocks Level Since 1973 Percent 50 45 40 35 30 25 20 15 10 5 0 2012F refers to the 2012/13 crop year. Source: USDA Source: USDA Slide#6
  8. 8. Fertilizer Cost Percentage of US Corn RevenuePotash and Phosphate Costs Account for Small Percentage of Projected Corn Revenue Nitrogen Phosphate Potash Percent Percent Percent 18 18 18 10- year high 16 16 16 14 14 14 12 12 12 10 10 10 8 8 8 10- year low 10- year high 6 6 10- year high 6 4 4 4 2 2 2 10- year low 10- year low 0 0 0 $4.00 $5.00 $6.00 $7.00 $8.00 $4.00 $5.00 $6.00 $7.00 $8.00 $4.00 $5.00 $6.00 $7.00 $8.00 US$/bushel US$/bushel US$/bushel Based on DTN reported retail fertilizer prices as of August 10, 2012. Source: USDA, DTN, PotashCorp Slide#7
  9. 9. Fertilizer Market UpdateFertilizer Market Update
  10. 10. World Potash Fertilizer Consumption Growth Significant Consumption Growth in Large Developing Markets Percent Annualized Growth (2001-2011) Million Tonnes K2O Latin America Other Asia China7 35 India North America Other6 305 254 203 152 101 50 0 India China Latin Other North World America Asia America Source: Fertecon, PotashCorp Slide#9
  11. 11. 2012 US Corn/Soybean Potash Application and RemovalEstimated Removal Exceeds Application Even in Low Yield Scenarios Million Tonnes KCl Equivalent Column4 2012 Estimated Potash Application 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 Corn 110 & Soybean 34 Corn 120 & Soybean 36 Corn 130 & Soybean 38 Yield Scenarios – bushels per acre Application estimate does not include nutrients received from manure which can reduce the deficit on a regional basis. Source: USDA, IPNI, PotashCorp Slide#10
  12. 12. US Corn/Soybean Potash Application and RemovalApplication Rates Have Not Kept Pace With Nutrient Removal Million Tonnes KCl Equivalent* Column4 Crop Removal 8 7 6 5 4 3 2 1 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010E 2012F 2012F assumes 135 bu/acre corn & 38 bu/acre soybean yields. Application estimate does not include nutrients received from manure which can reduce the deficit on a regional basis. Source: IPNI, USDA, PotashCorp Slide#11
  13. 13. US Fertilizer Use Following Major Yield DeclinesFertilizer Use Increased in Majority of Fertilizer Years Following a Major Yield Decline Percentage Change Change in US Fertilizer use (in following fertilizer year) 30% Year-over-Year Corn Yield Decline 20% 10% 20% 7% 7% 4% 0% 3% 0% -9% -10% -20% -30% -40% 1970 1974 1980 1983 1988 1993 1995 Source: USDA, AAPFCO Slide#12
  14. 14. North American Potash Shipments vs ConsumptionAnticipate Strong Demand Given Low Dealer Inventories Entering 2012/13 FertilizerYear Million Tonnes KCl Domestic Shipments Offshore Imports Total Potash Consumption 12 10 Destocking of 8 inventories built in 2010/11 6 4 2 0 2001/02 2003/04 2005/06 2007/08 2009/10 2011/12E Source: Fertecon, AAPFCO, TFI, PotashCorp Slide#13
  15. 15. South America Soybean and Corn Production Expect a Large Production Response from South America in 2012/13 Soybeans Corn Million Tonnes Million Tonnes 120160 100140120 80100 608060 4040 2020 0 0 2002 2004 2006 2008 2010 2012F 2002 2004 2006 2008 2010 2012F 2012F refers to the 2012/13 crop year. Source: USDA Source: USDA Slide#14
  16. 16. Brazil Fertilizer Deliveries to Final ConsumerExpect Record Fertilizer Use in 2012 Million Product Tonnes 35 30 25 20 15 10 5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F 2012 YTD fertilizer deliveries are up 4 percent yr/yr as of July Source: Potafertz, ANDA, PotashCorp Slide#15
  17. 17. China Grain and Oilseed Profile Despite Increased Acreage, Production Has Not Kept Pace With Demand Harvest Area – Million Hectares Million Tonnes Production Consumption120 600 500116 400112 300108 200104 100100 0 1992 1997 2002 2007 2012F 1992 1997 2002 2007 2012F Source: USDA Source: USDA Slide#16
  18. 18. China Soybean and KCl Import CostHigher Prices and Demand Driving Up Food Import Costs; KCl Cost Fraction ofSoybeans US$ Billions Soybeans KCl 40 35 30 25 20 15 10 5 0 2004 2005 2006 2007 2008 2009 2010 2011 2012F Source: Bloomberg, Industry Publications, PotashCorp Slide#17
  19. 19. China Fertilizer ConsumptionConsumption Rising But Nutrient Application Balance is an Issue Million Tonnes Nutrient Million tonnes N Million tonnes P2O5 P2O5 K2O Million tonnes K2O 60 50 40 30 20 10 0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12F Source: Fertecon Source: Fertecon Slide#18
  20. 20. India Market Situation Unbalanced Fertilizer Application and Weak Monsoon Increases Crop Production Risk N:K Application Ratio Percentage of Normal Monsoon Rain (as of mid-August)7 1206 1005 804 603 402 2010 0 2010 2011 2012F 00 01 02 03 04 05 06 07 08 09 10 11 12 Rains less than 90 percent considered to be a drought. Source: Fertecon, India Meteorological Department Slide#19
  21. 21. India Potash Situation Changes to India’s Subsidy System Have Impacted Potash Demand Rs/tonne of MOP Thousand Tonnes of MOP Return on Potash Fertilizer MOP Imports MOP Retail Prices 2010 Potash Prices 2012 Potash Prices16,000 7,000 14 6,000 1212,000 5,000 10 4,000 8 8,000 3,000 6 2,000 4 4,000 1,000 2 0 0 0 Rice Wheat Source: Fertecon, CRU, FAI, PotashCorp Slide#20
  22. 22. Indian Fertilizer Subsidies Government Actions Counter to Agronomic Needs Percentage of Indian Fertilizer Subsidy US$ Subsidy per product tonne500 Potash450 DAP 11%400 Potash350300 Phosphate 20%250 Urea200150100 69% 50 Nitrogen 0Nov 19, 2010 Mar 9, 2011 May 5, 2011 April 1, 2012 Note: Rupee to US$ conversion is at the rate of 46 Rupees per US$ for 2010-11 and 50 for 2012 Source: Fertecon, India Department of Fertilizers Slide#21
  23. 23. Potash Market Overview
  24. 24. World Potash Producer ProfilePotashCorp Has Greatest Capability and Significant Offshore Equity Investments Million Tonnes KCl PotashCorp Uralkali (Russia)Mosaic (Canada,US)Belaruskali (Belarus) ICL… K+S (Germany) China* PotashCorp (Operational Capability) Agrium (Canada) PotashCorp Investments (Capacity) APC (Jordan)* Other Producers (Capacity) SQM (Chile)* Intrepid (US) Announced Expansions Through 2016 Vale (Brazil) 0 2 4 6 8 10 12 14 16 18 20 * PotashCorp investments: ICL (14%), APC (28%), SQM (32%) and Sinofert (22%) Note: PotashCorp based on operational capability (estimated annual achievable production) while competitor capacity is stated nameplate, which may exceed operational capability. Source: Fertecon, CRU, IFA, PotashCorp Slide#23
  25. 25. Saskatchewan Brownfield & Greenfield Potash CostsNew Projects Are Increasingly Expensive and Complex to Complete Capital Cost per Tonne 3,500 Greenfield (Excluding infrastructure and reserve costs) 3,000 Greenfield (Including infrastructure and reserve costs) 2,500 2,000 1,500 1,000 500 0 POT Projects POT Projects in MOS Projects in AGU Project SK Greenfield** Completed Progress* Progress * New Brunswick cost per tonne based on new 2MMT mine (net addition totals 1.2MMT). ** Based on 2MMT conventional greenfield mine constructed in Saskatchewan. PotashCorp project costs exclude infrastructure outside the plant gate. Assuming US$/CDN$ at par Source: AMEC, Company Reports, PotashCorp Slide#24
  26. 26. World Potash Supply/DemandBalanced to Tight Market Expected in the Coming Years Million Tonnes KCl Operating Rate* - Percent Shipments 80 Shipment Range 100 Operational Capability 70 Operating Rate 90 60 80 50 40 70 30 60 20 50 10 0 40 2002 2004 2006 2008 2010 2012F 2014F 2016F * Based on percentage of operational capability (estimated annual achievable production level). Shipment range based on 3-3.5% annualized demand growth rate (2002-2016). Operating rate forecast based on mid-point of shipment range divided by operational capability (including announced projects; assuming typical ramp-up period for new capacity). Source: Fertecon, CRU, IFA, PotashCorp Slide#25
  27. 27. Phosphate and Nitrogen OverviewPhosphate and Nitrogen Overview
  28. 28. DAP Production Costs Significant Advantage for Integrated Producers Integrated Producer Non-Integrated Producer US$/Tonne US$/Tonne Rock Sulfur Ammonia Rock Sulfur Ammonia1200 1200 Other Tampa DAP Other Tampa DAP1000 1000800 800600 600400 400200 200 0 0 05 06 07 08 09 10 11F 05 06 07 08 09 10 11F Source: Fertecon, PotashCorp Slide#27
  29. 29. PotashCorp Phosphate ProfileLong-lived, High-quality Phosphate Rock Supports Diverse Product Mix Percentage of Sales by Product CategoryRock Reserve Years* 35 Industrial 17% 30 30 Solid Fertilizer 25 34% 20 Feed 14% 15 17 10 5 35% 0 Aurora NC White Springs FL Liquid Fertilizer * Proven and probable reserves permitted and to be permitted as of December 31, 2011. Including deposits classified as resources, the mine life at Aurora would be about 49 years. Mine life is based on average annual production rate for the past three years. Source: PotashCorp Slide#28
  30. 30. US Midwest Delivered Ammonia CostInterior Plants Have Significant Delivered Cost Advantage US$/Tonne – 2012F Cash CostsUS Midwest Producer Freight to US Gulf US Gulf Producer Freight and Handling to US Midwest Middle East Trinidad Russia - Yuzhnyy Ukraine Port Plant 0 100 200 300 400 500 600 700 Source: Fertecon; Blue, Johnson & Associates; PotashCorp Slide#29
  31. 31. PotashCorp Ammonia CapacityIncreasing US Ammonia Production Capability Through Quick Payback Projects Million Tonnes Trinidad Augusta, GA Lima, OH Geismar, LA* 4.5 4.0 16% Capacity Increase 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2011 2013F * Expect to resume ammonia production at Geismar in January 2013 Source: PotashCorp Slide#30
  32. 32. Deploying Cash: Historical Perspective and Future Priorities
  33. 33. PotashCorp Capital Spending and Cash FlowCash Flow Expected to Remain Strong US$ Millions Capital Expenditures Estimates* Cash Provided by Operating Activities 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2006 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F * Excluding capitalized interest and major repairs and maintenance Source: PotashCorp Slide#32
  34. 34. Historical Cash Flow DeploymentFocused on Using Free Cash Flow to Drive Long-Term Shareholder Value Opportunity Capital Equity Investments $6.6 Billion since 2003 $2.0 Billion since 1998 5-Year Average CFR = 24.3% Current Market Value = $8.2 billion Share Repurchases Dividend Payments $6.3 Billion since 1999 $0.9 Billion since 2002 Average purchase price = $26/share Doubled dividend twice since January 2011 Source: PotashCorp Slide#33
  35. 35. Future Cash Flow PrioritiesFocused on Using Free Cash Flow to Drive Long-Term Shareholder Value2012 2013 2014 2015 2016 Potential: Dividend Increases / Share Buybacks / M&A Potash Brownfield Projects (Existing) Phosphate & Nitrogen Brownfield Projects Source: PotashCorp Slide#34
  36. 36. Thank youThere’s more online: PotashCorp.com Visit us online Facebook.com/PotashCorp Find us on Facebook Twitter.com/PotashCorp Follow us on Twitter

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