2016 Annual Integrated Report GRAPHS

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Ethan Wilcox
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1 Annual Integrated Report GRAPHS

2 PotashCorp AIR Graphs Page WHY POTASHCORP? GLOBAL POPULATION (billions) FERTILIZER CONSUMPTION GROWTH RATE FORECAST (percentage annual long-term global growth rate) GLOBAL POTASH CAPACITY (percent KCl capacity*) POTASHCORP S COMBINED NITROGEN/PHOSPHATE GROSS MARGIN PROFILE* (percentage of net sales) %.5-.%.5-.% % PotashCorp Mosaic Uralkali Belaruskali F Potash Nitrogen Phosphate Fertilizer Feed/Industrial Source: United Nations Dept. of Economic and Social Affairs Source: CRU, Fertecon, IFA, PotashCorp * Refers to nameplate capacity, which may exceed operational capability (estimated annual achievable production) Source: IFA, CRU, company reports, PotashCorp * Excludes the impact of natural gas hedges WHO WE ARE AND WHAT WE DO Volumes by Product Category Volumes by Region Volumes by Product Category Volumes by Region Volumes by Product Category Volumes by Region % 9% 9% % 7% % 9% 6% 6% % 6% 7% Fertilizer Feed & Industrial North America Offshore Fertilizer Feed & Industrial North America Offshore Fertilizer Feed & Industrial North America Offshore

3 PotashCorp AIR Graphs Page OPERATING ENVIRONMENT POPULATION INCREASE BY 5* (billions) FOOD CONSUMPTION INCREASE* (kcal/person/day) CROP PRODUCTION GROWTH FACTORS* (percent change) FERTILIZER IMPACT ON CROP YIELDS GLOBAL FERTILIZER CONSUMPTION (million tonnes) Nitrogen (N) Phosphate (P O 5 ) Potash (K O) 5 5% 5 % 5 Developed Countries Developing Countries * 5/7 to 5F Source: United Nations, FAO Developed Countries Developing Countries Yield increase Land expansion Cropping intensity * 5/7 to 5F Source: FAO, IPNI Fertilizer impact All other factors 5 Source: Fertecon, CRU, PotashCorp 5 F 5F NEAR-TERM FACTORS FERTILIZER AFFORDABILITY INDEX (January 5 = ) GLOBAL OPERATING RATES (production as a percentage of global operational capability) POTASHCORP GROSS MARGIN (percentage of net sales) Crop Price Index* Fertilizer Price Index** Jan 5 May 5 Sep 5 Jan May Sep Jan 7 * Based on corn, soybean and wheat prices (weighted by global consumption) ** Based on urea, DAP and KCl prices (weighted by global consumption) Source: Bloomberg, Fertilizer Week 75 Potash Source: CRU, Fertecon, PotashCorp Nitrogen Phosphate Potash Nitrogen Phosphate

4 PotashCorp AIR Graphs Page POTASH OPERATING ENVIRONMENT GLOBAL POTASH SHIPMENTS (million tonnes KCl) 6 Shipments CAGR.5% to.% Forecast Shipment Range WORLD POTASH CAPACITY BY REGION* % % 6% 5% % % % 5% % 9% %.5% 6 Source: Fertecon, CRU, IFA, PotashCorp E F F * Capacity totals based on year-end ; other countries total.5 percent Source: CRU, IFA, company reports, PotashCorp NITROGEN OPERATING ENVIRONMENT US MIDWEST DELIVERED AMMONIA COST ($ per tonne ) Cash costs Freight to US Gulf Freight* to US Midwest GLOBAL NITROGEN TRADE Percent traded 5 % % Ammonia Urea US Midwest Producer US Gulf Producer Trinidad Middle East Russia Yuzhnyy Ukraine Port Plant Source: Fertecon, PotashCorp * Includes related handling costs Source: Fertecon, PotashCorp

5 PotashCorp AIR Graphs Page 5 PHOSPHATE OPERATING ENVIRONMENT CASH COST OF PHOSPHORIC ACID PRODUCTION ($ per tonne P O 5 ) Integrated Non-integrated GLOBAL PHOSPHATE TRADE Percent traded, % 6 Phosphoric Acid DAP/MAP % 5 E Source: CRU, PotashCorp Source: CRU, Fertilizer Week, PotashCorp GOVERNANCE WOMEN IN MANAGEMENT POSITIONS* 5 5 CORPORATE GOVERNANCE PRACTICE SCORE (out of ) Target 5 * Company-wide representation of women in management Source: The Globe and Mail

6 PotashCorp AIR Graphs Page 6 Portfolio and Return Optimization Operational Excellence Source: Bloomberg, PotashCorp TOTAL SHAREHOLDER RETURN (percentage ) 5 CASH FLOW RETURN POTASH COST OF GOODS SOLD ($ per tonne) Depreciation and amortization 5 Cash-related cost of goods sold* AMMONIA RELIABILITY RATES (percentage ) Target PotashCorp Sector Average* DXAG 5 5 US Trinidad * Sector: weighted average (based on market capitalization) for Agrium, APC, CF Industries, ICL, Intrepid, K+S, Mosaic, SQM and Yara for most recent four fiscal quarters available Source: Bloomberg, PotashCorp See reconciliation and description of this non-ifrs measure on Page 9 * Cash-related cost refers to total cost of goods sold less depreciation and amortization. Customer & Market Development Stakeholder Communications & Engagement People Development Good Governance AVERAGE CUSTOMER SURVEY SCORE VS PEERS (percentage ) AVERAGE COMMUNITY SURVEY SCORE (out of 5) EMPLOYEE TURNOVER RATE CORPORATE GOVERNANCE RATING (out of ) PotashCorp Source: Third-party survey Peer Average Source: Third-party survey 5 5 PotashCorp Industry Average DJSI NA RobecoSAM CHM Chemicals industry average DJSI World Source: RobecoSAM Corporate Sustainability Assessment in collaboration with DJSI

7 PotashCorp AIR Graphs Page 7 Safety, Health & Environmental Excellence SAFETY PERFORMANCE VS PEERS PotashCorp Peer group average* Peer group lowest quartile*. SAFETY PERFORMANCE.5 Total recordable injury rate Total lost-time injury rate GREENHOUSE GAS EMISSIONS (CO equivalent tonnes per nitrogen product tonne).5 ENVIRONMENTAL INCIDENTS (number of incidents) Total recordable injury rate Total lost-time injury rate * Simple average based on most recent publicly available data from a sample of leading global resource companies ENVIRONMENTAL INCIDENTS 5

8 PotashCorp AIR Graphs Page POTASH POTASH SHIPMENTS BY REGION (million tonnes KCl) Shipments PotashCorp forecasted shipment range GLOBAL POTASH INVENTORY CHANGES (million tonnes KCl) 5. Estimated producer inventory change (production less sales) Estimated distributor inventory change (shipments less consumption) E 7F 5 E 7F 5 E 7F 5 E 7F 5 E 7F India Asia North America Latin America China Source: Fertecon, CRU, industry publications, PotashCorp -5. Source: CRU, TFI, company reports, PotashCorp 5 E POTASH GROSS MARGIN CHANGES BY MARKET POTASH GROSS MARGIN CHANGES BY VOLUMES, PRICES AND COSTS,5,,5 (5) 9, (),5,,5 () (5), (7) (97) 9 (55) 9 6 (7) (7) 7 North America Offshore 5 North America Offshore Volumes Net Prices Cost of Goods Sold 5 Volumes Net Prices Cost of Goods Sold

9 PotashCorp AIR Graphs Page 9 POTASH GROSS MARGIN AND NET SALES PRICES ($ per tonne) POTASH SALES VOLUMES, PRODUCTION AND INVENTORY (million tonnes) Gross margin Net sales prices Offshore sales North America sales Production Inventory 6 5 Annual 5 5 Annual 5 POTASH PRODUCTION HIGHLIGHTS (KCl tonnes produced thousands), POTASH SAFETY HIGHLIGHTS (rate). Total recordable injury rate Total lost-time injury rate (number) Life-altering injuries POTASH EMPLOYEE HIGHLIGHTS (Employee turnover rate) POTASH ENVIRONMENTAL HIGHLIGHTS (incidents) (million tonnes) Environmental incidents Waste,.5 9 6,,.,

10 PotashCorp AIR Graphs Page NITROGEN NITROGEN PRICES () Ammonia CFR Tampa ($/mt) Urea FOB New Orleans ($/st) UAN FOB New Orleans ($/st) NITROGEN CAPACITY ADDITIONS (7)* (million tonnes NH ) Net additions = +6. MMT (~%) US Middle East Asia Russia Africa Latin America China** Jan Feb Mar Source: Fertilizer Week Apr May Jun Jul Aug Sep Oct Nov Dec - - * Based on industry consultant estimates; capacity is prorated for start-up timing in 7 ** Net of additions and permanent closures Source: CRU, Fertecon, company reports, PotashCorp NITROGEN CAPACITY ADDITIONS (7)* NITROGEN GROSS MARGIN CHANGES BY PRODUCT MIX NITROGEN GROSS MARGIN CHANGES BY VOLUMES, PRICES AND COSTS,, 9 6, (5) (9) (6) () 76 () (5) () , (66) () 7 76 (665) () 6 Ammonia Urea Solutions/ NA/AN Hedge, 5 Ammonia Urea Solutions/ NA/AN Hedge, Volumes Net Prices Cost of Goods Sold 5 Volumes Net Prices Cost of Goods Sold

11 PotashCorp AIR Graphs Page NITROGEN GROSS MARGIN, NET SALES PRICES AND NATURAL GAS COSTS ($ per tonne) ($ per MMBtu) 5 NITROGEN SALES VOLUMES (million tonnes) Gross margin Net sales prices Average natural gas costs* Ammonia Urea Solutions, nitric acid, ammonium nitrate Annual 5 5 Annual 5 * In production, including hedge NITROGEN PRODUCTION HIGHLIGHTS (thousands), N tonnes produced Ammonia operating rate NITROGEN SAFETY HIGHLIGHTS (rate). Total recordable injury rate Total lost-time injury rate (number) Life-altering injuries NITROGEN EMPLOYEE HIGHLIGHTS (Employee turnover rate) NITROGEN ENVIRONMENTAL HIGHLIGHTS (incidents) (million tonnes) Environmental incidents Greenhouse gas emissions., , , CO equivalent tonnes/tonne of product

12 PotashCorp AIR Graphs Page PHOSPHATE PHOSPHATE PRICES () ($/mt) 6 CFR Tampa DAP CFR India Phos Acid* GLOBAL PHOSPHATE CAPACITY ADDITIONS (7)* (million tonnes P O 5 ) 5% % Net additions = +.5 MMT (~%) Morocco Saudi Arabia % Jan Feb Mar * % P O 5 basis Apr May Jun Jul Aug Sep Oct Nov Dec * Based on industry consultant estimates; capacity is prorated for start-up timing in 7 Source: CRU, Katana, Profercy, PotashCorp PHOSPHATE GROSS MARGIN CHANGES BY PRODUCT MIX PHOSPHATE GROSS MARGIN CHANGES BY VOLUMES, PRICES AND COSTS 59 () () (9) () () (7) () (5) () (5) 99 (5) - Fertilizer Feed & Industrial 5 Fertilizer Feed & Industrial - Volumes Net Prices Cost of Goods Sold 5 Volumes Net Prices Cost of Goods Sold

13 PotashCorp AIR Graphs Page PHOSPHATE GROSS MARGIN AND NET SALES PRICES ($ per tonne) Annual 5 PHOSPHATE SALES VOLUMES (million tonnes) Gross margin Net sales prices Fertilizer Feed & Industrial 5 Annual 5 PHOSPHATE PRODUCTION HIGHLIGHTS (thousands), P O 5 tonnes produced P O 5 operating rate PHOSPHATE SAFETY HIGHLIGHTS (rate) (number). Total recordable injury rate Total lost-time injury rate Life-altering injuries PHOSPHATE EMPLOYEE HIGHLIGHTS (Employee turnover rate) PHOSPHATE ENVIRONMENTAL HIGHLIGHTS (incidents) (cubic meters per tonne) Environmental incidents Water consumption 6, , m per tonne of product

14 PotashCorp AIR Graphs Page 7 GUIDANCE POTASHCORP S GUIDANCE 7 Guidance vs Actual Results 7 Guidance Potash sales volumes (included in potash gross margin below) Potash gross margin Nitrogen and phosphate gross margin Share of earnings of equity-accounted investees and dividend income Selling and administrative expenses Finance costs Annual effective tax rate Provincial mining and other taxes as a percentage of total potash gross margin Earnings per share Actual Results.6 MMT.7 MMT to 9. MMT $.B $.55B to $.B $.9B $.5B to $.B $M $5M to $5M $()M $(5)M to $(5)M $()M $()M to $()M % 7% to % % 7% to % $. $.5 to $.55 EARNINGS PER SHARE ($) Annual actual, 7 guidance Annual upper guidance Actual: GROSS MARGIN BY NUTRIENTS ($ billions) Annual actual, 7 guidance Annual upper guidance Actual:. Potash Nitrogen & Phosphate E. 7E.5 7E GROSS MARGIN BY NUTRIENTS

15 PotashCorp AIR Graphs Page 5 OTHER EXPENSES AND INCOME WEIGHTED AVERAGE DEBT OBLIGATIONS OUTSTANDING AND EFFECTIVE INTEREST RATES ($ billions) QUARTERLY RESULTS SEGMENT GROSS MARGIN 5 Short-term debt Long-term debt* Short-term rate Long-term rate Potash Nitrogen Phosphate 6 6.9%.7%.% * Includes current portion.%.% 5.% - 5 FINANCIAL CONDITION REVIEW CHANGES IN BALANCES December, 5 to December, ($ billions) Assets, December, 5 Receivables Property, plant and equipment Investments All other assets Assets, December, Liabilities and Equity, December, 5 Short-term debt and current portion of long-term debt Payables and accrued charges Derivative instrument liabilities Retained earnings All other liabilities and equity Liabilities and Equity, December, 6 9 5

16 PotashCorp AIR Graphs Page LIQUIDITY AND CAPITAL RESOURCES CHANGES IN CASH FLOWS vs 5 vs ($ billions) Cash provided by operating activities Cash used in investing activities Cash used in financing activities.6 (.6). (.7) (.). (.95) (.). (.5)..6 (.) (.) (.9) (.7) (.). (.) (.) - (.)..6 (.).5 (.) - (.) - Net income Receivables Inventories 5 Net income Deferred income tax Equity-accounted investees Receivables Additions to PP&E and other 5 Additions to PP&E and other Long-term debt obligations Repurchase of common shares 5 Long-term debt obligations Short-term debt obligations Dividends 7 FORECAST CAPITAL EXPENDITURES CASH ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT WORKING CAPITAL As at December ($ billions) (ratio) Opportunity capital $69 Sustaining capital $5 Routine Environment Plant turnaround Health & Safety Mine development 6 Potash Nitrogen Phosphate $.B $.B $.9B Current assets Current liabilities Working capital Working capital ratio Includes capitalized interest and is based on a forecast exchange rate of. Canadian dollars per US dollar. To sustain operations at existing levels and for major repairs and maintenance, including plant turnarounds

17 PotashCorp AIR Graphs Page 7 CAPITAL STRUCTURE AND MANAGEMENT As at December, (units) Credit Facility Line of Credit $, $75 $9 $ $ $,5 $ $75 Amount outstanding and committed Amount available The authorized aggregate amount under the company s commercial paper programs in Canada and the US is $,5 million. The amounts available under the commercial paper programs are limited to the availability of backup funds under the credit facility. Included in the amount outstanding and committed is $9 million of commercial paper. Letters of credit committed. We also have an uncommitted $ million letter of credit facility against which $ million was issued at December,. YEAR DATA ($ billions) ($ billions) Net income EBITDA Net income as a percentage of sales Adjusted EBITDA margin Cash provided by operating activities Free cash flow 6 6 6* 7* * 9* 5-6* 7* * 9* 5 See Page 9 for non-ifrs reconciliation. * Figures were prepared in accordance with previous Canadian GAAP. See Page 9 for non-ifrs reconciliation. * Figures were prepared in accordance with previous Canadian GAAP.

18 PotashCorp AIR Graphs Page Consolidated Statements of Income NET INCOME PER SHARE Unaudited ($ per share). Net income per share basic Net income per share diluted Dividends declared per share Consolidated Statements of Cash Flow CASH FLOW Unaudited ($ billions) Year ended December Cash provided by operating activities Cash used in investing activities Cash used in financing activities As at December Cash and cash equivalents - - 5

19 PotashCorp AIR Graphs Page 9 HIGHLIGHTS UNAUDITED TOTAL ASSETS As at December Unaudited Property, plant and equipment Investments Current assets All other non-current assets TOTAL LIABILITIES AND SHAREHOLDERS EQUITY As at December Unaudited Retained earnings Share capital All other shareholders equity Long-term debt Deferred income tax liabilities Current liabilities All other non-current liabilities TOTAL DEBT AND TOTAL DEBT TO CAPITAL As at December Unaudited ($ billions) 5 Total debt Total debt to capital 5 5 Note Note SALES AND GROSS MARGIN BY SEGMENT Unaudited ($ billions).5... K N P K N P Gross Margin SALES TO CUSTOMERS Unaudited United States Canpotex Latin America Canada India All others INCOME TAX EXPENSE Unaudited Current income tax Deferred income tax 6 Actual effective tax rate including discrete items.7. Year - 5

20 PotashCorp AIR Graphs Page Note 9 Note NET INCOME PER SHARE Unaudited ($ per share).5 Basic Diluted FINISHED PRODUCT INVENTORIES BY SEGMENT As at December Unaudited $69 $.5. 5 Potash Nitrogen Phosphate Note CARRYING AMOUNTS OF PROPERTY, PLANT AND EQUIPMENT As at December Unaudited Machinery and equipment Buildings and improvements Assets under construction Mine development costs Land and improvements RECONCILIATION OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT CARRYING AMOUNT As at December Unaudited ($ billions) 5.7 Additions. (.7). (.7).. Depreciation 5 Additions Depreciation Note 9 SIGNIFICANT INVESTMENTS MARKET VALUE AND PURCHASE COST As at December Unaudited ($ billions) Market value 5 Equity-accounted investments SQM APC Available-for-sale investments ICL Sinofert Purchase cost

21 PotashCorp AIR Graphs Page Note SENIOR NOTES OUTSTANDING AT DECEMBER, Unaudited Amount Interest rate Note SHARE CAPITAL CONSIDERATION Unaudited As at December Year ended December, Total share capital DIVIDENDS AND EARNINGS PER SHARE Unaudited ($) Issued under option plans Issued for dividend reinvestment plan Repurchased Dividends declared per share Earnings per share.6 6 6,6, Maturity Year Note Note 5 NET DEBT AND NET DEBT TO ADJUSTED CAPITAL As at December Unaudited ($ billions) 5 Net debt Net debt to adjusted capital 5 GUARANTEES As at December Unaudited Future (undiscounted) payments under significant guarantees provided to third parties Trust fund (CDN$) Letters of credit

22 PotashCorp AIR Graphs Page Note 6 FAIR VALUE OF PLAN ASSETS BY CATEGORY As at December Unaudited Equity securities Debt securities International balanced fund Cash, cash equivalents and other ANNUAL PENSION AND OTHER POST-RETIREMENT BENEFIT PLAN CONTRIBUTIONS Unaudited 6 Defined benefit pension plans Defined contribution plans Defined benefit other post-retirement plans DEFINED BENEFIT PENSION PLANS FUNDED STATUS AND CONTRIBUTION LEVELS Unaudited Year ended December At at December 6 Contributions Funded status Note 7 Note 9 STOCK OPTIONS GRANTED Unaudited ($ per share) 5 5 TOTAL SHARES AND STOCK OPTIONS OUTSTANDING As at December Unaudited (millions) Aggregate grant-date fair value Weighted average exercise price Number of common shares Stock options, 6 AGING OF TRADE RECEIVABLES As at December Unaudited Current Past due 5 5

23 PotashCorp AIR Graphs Page SHAREHOLDER INFORMATION INSTITUTIONAL INVESTOR BASE BY COUNTRY As at December ANALYST RECOMMENDATION As at December 9% 5% % United States Canada United Kingdom Rest of World Buy % Hold 9% Sell % 57% Source: Ipreo Source: Ipreo YEARLY POT STOCK PRICE SINCE INCEPTION* NYSE COMPOSITE (dollars) High Close Low * Data are adjusted for two-for-one stock split in August, a three-for-one stock split in May 7 and a three-for-one stock split in February. Source: FactSet

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