PotashCorp.com
CitiBasic Materials
Conference
December 2014
Jochen Tilk
President and CEO
This presentation contains forward-looking statements or forward-looking information (forward-looking statements). These statements can be
identified by expressions of belief, expectation or intention, as well as those statements that are not historical fact. These statements often
contain words such as “should,” “could,” “expect,” “may,” “anticipate,” “believe,” “intend,” “estimates,” “plans” and similar expressions. These
statements are based on certain factors and assumptions including with respect to: foreign exchange rates, expected growth, results of
operations, performance, business prospects and opportunities and effective tax rates. While the company considers these factors and
assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are subject
to risks and uncertainties that are difficult to predict. The results or events set forth in forward-looking statements may differ materially from
actual results or events. Several factors could cause actual results or events to differ materially from those expressed in the forward-looking
statements, including, but not limited to the following: variations from our assumptions with respect to foreign exchange rates, expected growth,
results of operations, performance, business prospects and opportunities, and effective tax rates; risks and uncertainties related to operating and
workforce changes made in response to our industry and the markets we serve; changes in competitive pressures, including pricing pressures;
risks and uncertainties related to our international operations and assets; 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; adverse or uncertain economic conditions and changes in credit and financial markets; the results of sales contract negotiations
within major markets; unexpected geological or environmental conditions, including water inflows; economic and political uncertainty around the
world; risks associated with natural gas and other hedging activities; changes in capital markets; unexpected or adverse weather conditions;
changes in currency and exchange rates; imprecision in reserve estimates; adverse developments in new and pending legal proceedings or
government investigations; acquisitions we may undertake; increases in the price or reduced availability of the raw materials that we use; strikes
or other forms of work stoppage or slowdowns; timing and impact of capital expenditures; rates of return on, and the risks associated with, our
investments and capital expenditures; changes in, and the effects of, government policies and regulations; security risks related to our
information technology systems; risks related to reputational loss; and earnings, and the decisions of taxing authorities, which could affect our
effective tax rates. Additional risks and uncertainties can be found in our Form 10-K for the fiscal year ended December 31, 2013 under the
captions “Forward-Looking Statements” and “Item 1A – Risk Factors” and in our other filings with the US Securities and Exchange Commission
and the Canadian provincial securities commissions. Forward-looking statements are given only as at the date hereof 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 may be required by law.
Forward-looking Statements
Slide#2
PotashCorp Overview
World’s largest fertilizer producer by capacity;
#1 in potash and among the largest in nitrogen
and phosphate.
Potash advantages include highest margins and
significant barriers to entry.
Canadian potash operations and strategic offshore
investments position us to benefit from growth
markets.
World-class nitrogen and phosphate businesses
focused on historically more stable feed and
industrial markets.
Slide#3
• Strong cash flow
• Cash flow from operating activities of $3.2B in 2013
• 95% complete decade-long CDN $8.3B potash expansion program
• Well positioned potash business
• Low-cost supplier to key consuming regions
• Operational capability aligned with anticipated near-term demand
• Flexibility to significantly grow future sales volume
• Proven track record of returning capital to shareholders
• Dividend yield ~4%
• Completed 5% repurchase authorization in 2014
• Since 1999: $7.8B at average purchase price of ~$27 per share
PotashCorp Highlights
Slide#4
Building Blocks
Creating Long-term Value by Capitalizing on Our Unique Potential
Strategic Overview
Pursue disciplined growth initiatives
Create advantaged competitive
position
Enhance operational flexibility
Minimize earnings volatility
Return capital to shareholders
Maximize long-term shareholder value
Goal:
Corporate Priorities:
Operational Priorities:
Near-Term Initiatives:
1. Review assets
• Review alternatives and identify
opportunities in each of our three
nutrients
2. Review investments
• Evaluate alternatives for each equity
investment
3. Review capital allocation strategy
• Review and prioritize opportunities for use
and return of cash
Deliver earnings growth
Slide#5
0
10
20
30
40
50
60
70
80
05 07 09 11 13 15F 17F 19F
Demand
Operational Capability*
Anticipate Supportive Supply/Demand Environment
Potash Environment
Source: Fertecon, CRU, IFA, PotashCorp
1. Demand growth expected to keep market
relatively balanced
• Anticipate demand growth of 2.5-3.0 percent
from 2014 levels
• Operating rates anticipated in the 85-90
percent range
2. Majority of new capability from PotashCorp
and other Canpotex members
• Approximately 40% of new capability from
POT by 2019; Canpotex members represent
approximately 60%
3. Anticipate reduced volatility
• Supply/demand environment expected to be
more balanced
World Potash Supply and Demand Highlights
Slide#6
Million Tonnes KCl
* Estimated annual achievable production level
1. Operational capability limited in 2014
• Capability, not demand, appeared to be the
constraining factor in 2014, suggesting
operating challenges for a number of producers
• Achieving expected levels assumes no major
disruptions (e.g. major equipment failures,
weather issues, strikes or other unplanned
outages)
2. Planned future capacity additions include risks
• A number of global projects taking substantially
longer – and costing considerably more – to
complete and ramp up than initial estimates
• Total capital required to reach forecasted global
operational capability level is substantial
Operational Capability Not Always Achievable
Potash Environment
Source: Company Reports, Fertecon, CRU, IFA, PotashCorp
World Potash Supply and Demand Key Considerations
0
10
20
30
40
50
60
70
80
OperationalCapability*
(2014E)
Production(2014E)
OperationalCapability*
(2019F)
Million tonnes KCl
1
2
1
2
Slide#7
* Estimated annual achievable production level
Focused on Achieving 2016 Cost Savings of $20-$30 per Tonne (from 2013 Levels)
Potash Priorities
Source: PotashCorp
1. Complete remaining lower-cost expansions
• Rocanville expansion on time and budget
• Accelerating Picadilly mine development and
operating Penobsquis through ramp-up period
2. Optimize production costs and product mix
• Produce at lowest cost facilities in Saskatchewan,
while ensuring optimal product mix
• Shifting production to Picadilly in New Brunswick
3. Align staffing levels with anticipated demand
• Ensure staffing levels are managed according to
anticipated supply requirements
Potash Cost of Goods Sold Plans to Achieve Savings
40
60
80
100
120
140
160
2013Cash Cost*
2014ECash Cost*
2015ECash Cost*
2016Cash Cost*
Target
Cash-related Cost of Goods Sold
Depreciation and Amortization
US$ - Per Tonne
* Cash costs refers to total cost of goods sold less depreciation and amortization.
As compared to 2013 levels (not adjusted for inflation, changes to depreciation and
amortization or potash royalties); target assumes successful ramp up of
expansions at lower-cost facilities
Slide#8
Focused on Aligning Operational Capability with Future Demand Growth
Potash Priorities
Source: PotashCorp
1. Rocanville• Tonnes:+3.0mmt
• Timeframe: Planned ramp-up by 2016
• Capital Costs: Within project estimates
2. Other SK Mines• Tonnes: +3.0mmt
• Timeframe: 3-12 months (from decision point)
• Capital: Minimal (<$60M)
3. New Brunswick*• Tonnes: +0.7mmt
• Timeframe: ~36 months (from decision point)
• Capital: Minimal (<$75M)
Operational Capability Opportunity* Incremental Capability
0
4
8
12
16
20
2015F Rocanville Other SKMines
NewBrunswick
Potential
Million tonnes KCl
* Operational capability will be staffed and ramped up according to anticipated
market demand and PotashCorp’s supply requirements
1
23
1
2
3
10.9
mmt
Slide#9
17.6
mmt
* Estimates assume continued operation of Penobsquis in tandem with Picadilly
ramp up. Closure of Penobsquis and full ramp up of Picadilly would require up to an
additional 24 months and $75M capital outlay to achieve 1.8mmt
Focused on Opportunities to Grow Potash Gross Margin
Potash Priorities
Source: PotashCorp
1. Operating cost savings
• On target to achieve $20-$30 per tonne
savings by 2016
2. Logistical and distribution
• Distribution investments and east and west-
coast export capability expected to improve
ability to serve customers in certain markets
3. Improved prices
• Anticipate higher 2015 netbacks given
improved pricing in most markets through 2014
4. Volume growth opportunity
• Unmatched ability to meet market demand as
opportunities develop; granular capability
expected to rise
• Evaluating additional market development
opportunities
Potash Gross Margin Sensitivities Margin Opportunities
Gross Margin per tonne (US$)
$100 $150 $200 $250
8.0 $0.8B $1.2B $1.6B $2.0B
10.0 $1.0B $1.5B $2.0B $2.5B
12.0 $1.2B $1.8B $2.4B $3.0B
14.0 $1.4B $2.1B $2.8B $3.5B
16.0 $1.6B $2.4B $3.2B $4.0B
Sale
s V
olu
me (
mm
t)
2014E: $1.3-$1.4B
Slide#10
Considerations:
• Strategic value; ability to influence
• Likelihood of favorable and successful future control transaction in reasonable time period
• Risk profile of assets
• Valuation and alternative uses of cash
Plan to Evaluate Investment Portfolio
Potash Priorities
Ownership Percentage: 14%
Current Value*: $1.2B
Board Representation: none
ICL
Ownership Percentage: 32%
Current Value*: $2.3B
Board Representation: 3 of 8
SQM
Ownership Percentage: 28%
Current Value*: $0.7B
Representation: 3 of 13 Board; top 4 Management
APC
Ownership Percentage: 22%
Current Value*: $0.3B
Board Representation: 2 of 7
Sinofert
* As at November 27, 2014
Slide#11
Source: Bloomberg
0
5
10
15
20
25
05 07 09 11 13 15F 17F 19F
Demand
Operational Capability*
Anticipate Supportive Supply/Demand Environment
Nitrogen Environment
Source: Fertecon, CRU, PotashCorp
1. US to remain net importer
• Anticipate new capacity to come online
although expect US to remain a net importer
2. US to maintain advantaged cost position
• Lower-cost gas environment expected to
persist for the medium term
• US producers expected to maintain healthy
margins and competitive gas position
• Challenges and costs of exporting ammonia
expected to help insulate US market
US Ammonia Supply and Demand Highlights
Slide#12
Million Tonnes – NH3
* Estimated annual achievable production level from existing operations and
projected new capacity.
0 100 200 300 400 500 600 700
Ukraine Port Plant
Russia - Yuzhnyy
Trinidad
Middle East
US Gulf Producer
US Midwest Producer
Cash Costs
Freight to US Gulf
Freight and Handling to USMidwest
Significant Contributor to PotashCorp’s Value Equation
Nitrogen Environment
Source: Fertecon, PotashCorp
1. Strong gross margin contributor
• Anticipate gross margin contributions to
remain at historically strong levels
2. Reduces earnings volatility
• Diversified nitrogen portfolio enhances
quality of PotashCorp earnings
3. PotashCorp’s assets well positioned
• US assets largely isolated from key import
and new capacity regions
• Trinidad expected to remain key exporter to
US market
4. Synergies within PotashCorp’s portfolio
• Sales and distribution synergies realized
through three-product offering
US Midwest Delivered Ammonia Cost Highlights
Slide#13
US$/Tonne – 2014F
Focused on Reliability, Trinidad Gas Position and Disciplined Growth Opportunities
Nitrogen Priorities
Source: PotashCorp
1. Focus on operational reliability
• High operating rates across all our facilities;
work to further enhance reliability
2. Successful execution of Lima expansion
• On time and budget; expect incremental
100Kmt of ammonia capacity
3. Improve Trinidad gas situation
• Gas availability has limited ammonia
production in recent years; working to
minimize future impacts
4. Assess other US opportunities
• Review other high-IRR brownfield projects;
exploring other low-cost opportunities
PotashCorp’s Ammonia Production Plans
0.0
1.0
2.0
3.0
4.0
5.0
2013 2014F LimaExpansion
(2016F)
TrinidadGas
(Longer-term)
Potential
1 23
1
2
3
Potential: ~500Kmt
Million Tonnes
4
Slide#14
Focus Remains on Cost Improvement and Higher-margin Products
Phosphate Priorities
Source: Company report, CRU, PotashCorp
Phosphate Production Profile Highlights
Slide#15
0%
20%
40%
60%
80%
100%
PotashCorp OCP** Mosaic* Agrium*
Feed & Industrial Fertilizer
Percentage
* Based on most recently reported 12-month sales volume totals as per publicly
available data
** Estimate per CRU. Excludes phosphate rock sales
1. Well-positioned, world-class assets
• Leverage our integrated rock supply to produce
a diversified, higher-margin product mix
2. Challenging margin environment
• Operational challenges due to mining conditions
and lower return for fertilizer products has
impacted profitability
3. Opportunities to improve earnings
• Working on initiatives to improve margins as well
as assess additional opportunities to enhance
shareholder value
0.0
0.5
1.0
1.5
2.0
2.5
2008 2010 2012 2014F 2016E 2018E
Source: PotashCorp
PotashCorp Capital Spending*
Capital Spending Winding Down
PotashCorp’s Opportunity
Sustaining Opportunity
US$ Billions
* Cash additions to property, plant and equipment per cash flow statement (2008-2013); 2014F-2018E includes Major Repairs and Maintenance expenditures. As we
adopted International Financial Reporting Standards (IFRS) with effect from January 1, 2010, information from 2008-2009 is presented on a previous Canadian generally
accepted accounting principals (GAAP) basis. Accordingly, previous results may not be comparable to 2010 forward.
Current Estimate
2015F Spending Composition
Slide#16
Review Underway to Better Define Future Priorities
Capital Allocation Strategy
Source: PotashCorp
1. Dividends
• Will continue as core element of future
capital deployment strategy
2. Share Repurchases
• Better define parameters around buybacks,
including approach to balance sheet
management and targeted debt levels
3. Organic Growth
• No additional potash projects planned;
prioritize high-return nitrogen brownfield
projects (>15% IRR)
4. M&A / Joint Ventures
• Prioritize strategic, high return projects
Considerations
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
OpportunityProjects
ShareRepurchases
Dividends Acquisition &Investments
US$ Billions
Capital Allocation History (2009-2014 YTD)
Slide#17
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Thank you
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