Portfolio & Return Optimization

Maximize returns for our assets and explore other value creation opportunities

  • Achieved
  • Not achieved
  • On track
  Result * 2015 2014 2013 2012 2011
  • *Relative to 2015 stated target
  • 1See reconciliation and description of this non-IFRS measure
Total shareholder return (TSR) (49.0)% 11.6% (16.4)% (0.2)% (19.7)%
Cash flow return (CFR) 1 10.7% 13.0% 15.0% 19.2% 25.7%

PotashCorp’s Cash Flow Return 1

(percentage)

Graph of PotashCorp’s Cash Flow Return <sup>1</sup>

PotashCorp’s Cash Flow Return 1

(percentage)

Graph of PotashCorp’s Cash Flow Return <sup>1</sup>
  • Achieved
  • Not achieved
  • On track
Target Progress Discussion
Exceed total shareholder return (TSR) performance for our sector * and the DAXglobal Agribusiness Index (DXAG)
  • PotashCorp’s TSR of -49.0 percent was below the sector’s return of -15.8 percent and the DXAG return of -12.7 percent.
  • Weaker potash fundamentals negatively impacted our share price in 2015. As a result, our significant exposure to potash was the primary factor that kept our TSR below that of our peers.
Exceed cash flow return (CFR) on investment for our sector
  • Driven primarily by weaker cash flow generation, our 2015 CFR 1 of 10.7 percent was below the CFR for the sector, but exceeded our weighted average cost of capital of 7.3 percent.
  • *Sector: weighted average (based on market capitalization) for Agrium, CF Industries, ICL, Intrepid, K+S, Mosaic, SQM, Uralkali and Yara for most recent four fiscal quarters available
  • 1See reconciliation and description of this non-IFRS measure

Total Shareholder Return

2015 (percentage)

Graph of Total Shareholder Return

Total Shareholder Return

2015 (percentage)

Graph of Total Shareholder Return
  • Exceed TSR performance for our sector and the DXAG
  • Exceed CFR for our sector
  • Expand and further develop innovation teams for each nutrient

Operational Excellence

Improve our competitive position through reliability, productivity and flexibility

  • Achieved
  • Not achieved
  • In progress
  Result * 2015 2014 2013 2012 2011
  • *Relative to 2015 stated target
  • n/a = not a stated target in noted year
Potash per-tonne cash cost savings n/a n/a n/a

PotashCorp's Potash Cost of Goods Sold

($ per tonne)

Graph of PotashCorp's Potash Cost of Goods Sold

PotashCorp's Potash Cost of Goods Sold

($ per tonne)

Graph of PotashCorp's Potash Cost of Goods Sold
  • Achieved
  • Not achieved
  • On track
Target Progress Discussion
Achieve potash cost savings of $20-$30 per tonne by 2016 from 2013 levels (excluding the impacts of foreign exchange and royalties)
  • While our cash cost of goods sold was $27 per tonne lower in 2015 compared to 2013 levels, it was only $6 per tonne lower when excluding the impacts of foreign exchange and royalties.
  • We now expect to achieve our target in 2017 when our Rocanville expansion is complete and ramped up.
  • Achieve potash cash cost savings of $20-$30 per tonne from 2013 levels by 2017 (excluding the impacts of foreign exchange and royalties)
  • Track procurement effectiveness and capture cumulative savings of $125 million from 2014 levels by end of 2016
  • Achieve 96 percent operating rate for all US nitrogen plants and 88 percent in Trinidad

PotashCorp's Ammonia Operating Rates

2015 (percentage)

Graph of PotashCorp's Ammonia Operating Rates

PotashCorp's Ammonia Operating Rates

2015 (percentage)

Graph of PotashCorp's Ammonia Operating Rates

Customer & Market Development

Encourage product demand and support customer growth

  • Achieved
  • Not achieved
  • In progress
  Result * 2015 2014 2013 2012 2011
  • *Relative to 2015 stated target
  • n/a = not a stated target in noted year
Customer survey score 92% 89% 90% 92% 90%
Enhance market development initiatives n/a n/a n/a n/a
  • Achieved
  • Not achieved
  • On track
Target Progress Discussion
Outperform competitor groups on quality, reliability and service as measured by customer surveys
  • Outperformed our competitors in all quality, reliability and service categories in 2015. Our average customer survey score was 92 percent compared to our peer average of 80 percent.
  • Our sales team continued to rank higher than competitors based on knowledge of products, customers and the industry.
Support development of existing and new markets with initiatives in education, sales, and supply chain enhancements
  • Our sales and agronomy teams held a total of 52 seminars in 2015 focused on communicating the benefits of our products and proper soil fertility.
  • In 2015, we entered into a long-term supply agreement with Heringer, enhancing access to the Brazilian potash market.

Average Customer Survey Score vs Peers

2015 (percentage)

Graph of Average Customer Survey Score vs Peers

Average Customer Survey Score vs Peers

2015 (percentage)

Graph of Average Customer Survey Score vs Peers
52
Educational seminars delivered in 2015
to support market development initiatives
  • Outperform competitor groups on quality, reliability and service as measured by customer surveys
  • Support development of existing and new markets with initiatives in education, sales, and supply chain enhancements
  • Successfully integrate Hammond, Indiana distribution facility into our North American marketing strategy

Stakeholder Communications & Engagement

Earn stakeholder trust through strong communications and engagement

  • Achieved
  • Not achieved
  • In progress
  Result * 2015 2014 2013 2012 2011
  • *Relative to 2014 stated target
Community investment $28M $26M $31M $28M $21M
Average community survey score (out of 5) 4.5 4.4 4.2 4.5 4.4
Employee matching gift participation change (41)% (7)% (1)% 11% 12%

Community Investment

($ millions)

Graph of Community Investment

Community Investment

($ millions)

Graph of Community Investment

Average Community Survey Score

(score out of 5)

Graph of Average Community Survey Score

Average Community Survey Score

(score out of 5)

Graph of Average Community Survey Score
  • Achieved
  • Not achieved
  • On track
Target Progress Discussion
Invest 1 percent of consolidated income before income taxes (on a five-year rolling average) in community initiatives
  • We invested $28 million in community initiatives, representing 1 percent of consolidated income before income taxes.
  • In 2015, we refined our community investment priorities and guidelines and will communicate our funding priorities in 2016.
Achieve 4 (performing well) out of 5 on surveys of community leaders
  • We achieved an average score of 4.5 out of 5 among surveyed communities.
  • The communities where we operate continue to positively acknowledge our safety performance and significant local investment. In 2015, we continued our efforts to improve communication with our communities through engagement activities, newsletters and community reports.
Achieve an increase in employee participation in our matching gift program from 2014 levels
  • Participation decreased 41 percent, with approximately 7 percent of employees participating in the program (down from 48 percent in 2014). Total dollars matched decreased by 39 percent.
  • Invest 1 percent of consolidated income before income taxes (on a five-year rolling average) in community initiatives
  • Achieve 4 (performing well) out of 5 on surveys of community leaders
  • Achieve rating on third-party annual investor survey that exceeds 2015 results for quality of communications

People Development

Attract, develop and retain engaged employees

  • Achieved
  • Not achieved
  • In progress
  Result * 2015 2014 2013 2012 2011
  • *Relative to 2015 stated target
  • n/a = not a stated target in noted year
Employee engagement score n/a n/a 67% n/a 79% 73%
Percentage of senior staff positions filled internally 77% 78% 79% 80% 92%
Develop diversity and inclusion policy n/a n/a n/a n/a

Senior Staff Positions Filled Internally

(percentage)

Graph of Senior Staff Positions Filled Internally

Senior Staff Positions Filled Internally

(percentage)

Graph of Senior Staff Positions Filled Internally
  • Achieved
  • Not achieved
  • On track
Target Progress Discussion
Achieve an average employee engagement score of 75 percent on the company-wide biennial survey n/a
  • Our biennial employee engagement survey was completed in 2014 and will be completed again in 2016.
  • We continue to develop action plans with all sites and corporate offices to improve in this area.
Fill 75 percent of senior staff openings with qualified internal candidates
  • We filled 77 percent of senior-level positions with qualified internal candidates, demonstrating that our development planning provides our employees with the skills, abilities and desire to move into leadership roles within PotashCorp.
  • We also recognize the value of bringing in candidates with new skills and experiences. As we assess our needs as a company, we have looked outside PotashCorp to fill certain vacancies.
Develop a diversity and inclusion policy that is appropriate for our business and the communities where we operate
  • A comprehensive diversity and inclusion policy was developed in 2015 and distributed to PotashCorp’s executive management for review and approval.
  • Aboriginal people represented approximately 8% of new hires at our Canadian potash operations (5-year average).
~8%
Of new hires are of Aboriginal descent
at our Canadian potash operations
(5-year average)
  • Achieve an average employee engagement score of 75 percent on the company-wide biennial survey
  • Maintain an annual employee turnover rate of 5 percent or less*
  • Implement diversity and inclusion policy through training and communication initiatives

* Excluding retirements and workforce changes related to suspension of Picadilly potash operations


Good Governance

Foster a culture of accountability, fairness and transparency

  • Achieved
  • Not achieved
  • In progress
  Result * 2015 2014 2013 2012 2011
  • *Relative to 2015 stated target
Top quartile of governance practices

PotashCorp’s Corporate Governance Practice Score

Score (out of 100)

Graph of PotashCorp’s Corporate Governance Practice Score

PotashCorp’s Corporate Governance Practice Score

Score (out of 100)

Graph of PotashCorp’s Corporate Governance Practice Score
  • Achieved
  • Not achieved
  • On track
Target Progress Discussion
Remain in the top quartile of governance practices as measured by external reviews
  • We ranked in the top quartile of governance practices in The Globe and Mail’s annual Board Games.
  • Our governance practices were highly ranked by the Dow Jones Sustainability Index and FTSE4Good Index.
  • 2014 Annual Integrated Report ranked first overall globally by Report Watch.
94th
Percentile governance ranking
on the Dow Jones Sustainability Index, North America
  • Remain in the top quartile of governance practices as measured by external reviews

Safety, Health & Environmental Excellence

Be relentless in pursuit of the safety of our people and the environment

  • Achieved
  • Not achieved
  • In progress
  Result * 2015 2014 2013 2012 2011
  • *Relative to 2015 stated target
  • n/a = not a stated target in noted year
  • 2Includes one incident at a legacy site
Life-altering injuries at our sites 1 1 0 1 1
Total site recordable injury rate 1.01 1.01 1.06 1.29 1.42
Become one of the safest resource companies n/a n/a n/a
Greenhouse gas emissions (CO2 equivalent per tonne of nitrogen product) 2.1MT 2.3MT 2.4MT 2.3MT 2.6MT
Environmental incidents 24 2 24 17 19 14
Water consumption per tonne of phosphate product 26m3 26m3 26m3 33m3 33m3

PotashCorp's Safety Performance

(total site recordable injury rate)

Graph of PotashCorp's Safety Performance

PotashCorp's Safety Performance

(total site recordable injury rate)

Graph of PotashCorp's Safety Performance

Greenhouse Gas (GMG) Emissions

(CO2 equivalent tonnes per nitrogen product tonne)

Graph of Greenhouse Gas (GMG) Emissions

Greenhouse Gas (GMG) Emissions

(CO2 equivalent tonnes per nitrogen product tonne)

Graph of Greenhouse Gas (GMG) Emissions

Reportable Environmental Incidents

(number of incidents)

Graph of Reportable Environmental Incidents

Reportable Environmental Incidents

(number of incidents)

Graph of Reportable Environmental Incidents
 

Safety Performance

  • Achieved
  • Not achieved
  • On track
Target Progress Discussion
  • *Simple average based on the most recent publicly available data from a sample of 18 leading global resource companies
Achieve zero life-altering injuries at our sites
  • Early in 2015, we experienced a fatality at our White Springs phosphate operation. In addition to our own thorough assessment of this accident, we participated fully in all safety investigations and implemented all recommendations as quickly and efficiently as possible.
Reduce total site recordable injury rate to 0.95 (or lower) and lost-time injury rate to 0.10 (or lower)
  • Our total site recordable injury rate and our lost-time injury rate were 1.01 and 0.10, respectively, in 2015. While our total site recordable injury rate did not meet our target, it matched our lowest recordable injury rate on record.
  • We are focused on improving leadership and engagement practices – including better use of leading safety indicators – to make the workplace safer for our employees and contractors.
By 2018, become one of the safest resource companies in the world by achieving recordable injury and lost-time injury rates in the lowest quartile of a best-in-class peer group *
  • Specific targets and initiatives are in place and all sites are taking action in identified areas of opportunity.
  • In 2015, we continued to improve our safety systems and focused on leadership development activities to enhance in-field safety engagement.

Safety Performance vs Peers

(total site recordable injury rate)

Graph of Safety Performance vs Peers

Safety Performance vs Peers

(total site recordable injury rate)

Graph of Safety Performance vs Peers

Environmental Performance

  • Achieved
  • Not achieved
  • On track
Target Progress Discussion
By 2018, reduce GHG emissions per tonne of nitrogen product by 5 percent from 2014 levels
  • We lowered GHG emissions by 9 percent in 2015. The main causes for the decrease are more CO2 product sales and a lower emission factor for our nitric acid plants as determined by annual stack tests.
By 2018, reduce total reportable incidents (releases, permit excursions and spills) by 40 percent from 2014 levels
  • In 2015, we had 24 reportable incidents, the same as 2014.
  • Though results were unchanged in 2015, we believe we are on track to achieve our 2018 target given the implementation of a new environmental strategy and newly formed teams focused on taking action to reduce our environmental impact.
By 2018, reduce water consumption per tonne of phosphate product by 10 percent from 2014 levels
  • While our water usage per tonne was unchanged in 2015, we believe we are on track to achieve this target by implementing the Eagle Creek water recycling project at our White Springs facility.

Safety

  • Achieve zero life-altering injuries at our sites
  • Reduce total site recordable injury rate to 0.85 (or lower) and lost-time injury rate to 0.09 (or lower)
  • By 2018, become one of the safest resource companies in the world by achieving recordable injury and lost-time injury rates in the lowest quartile* of a best-in-class peer group

* Current estimate of rates is 0.55 and 0.06, respectively

Environmental

  • By 2018, reduce GHG emissions per tonne of nitrogen product by 5 percent from 2014 levels
  • By 2018, reduce total reportable incidents (releases, permit excursions and spills) by 40 percent from 2014 levels
  • By 2018, reduce water consumption per tonne of phosphate product by 10 percent from 2014 levels