Report of the Audit Committee

A. Laberge, Chair

S. Hoffman

K. Martell

J. McCaig

M. Mogford

The Corporation has a standing Audit Committee. The Board has determined that each of the following directors, who served as members of the Audit Committee during the year ended December 31, 2008, is independent according to the Board's independence standards as set out in the "PotashCorp Governance Principles" (which is available on the Corporation's website, www.potashcorp.com), National Instrument 52-110 "Audit Committees" ("NI 52-110"), applicable rules of the SEC and the corporate governance rules of the NYSE. See also "Nominees for Election to the Board of Directors — Director Independence and Other Relationships".

The Board has determined that Ms. Laberge and Mr. Martell each qualify as an "audit committee financial expert" under the rules of the SEC and thereby have the requisite accounting and/or related financial management expertise required under the rules of the NYSE. In addition, the Board has determined that each member of the Audit Committee is "financially literate" within the meaning of and required by NI 52-110.

The following is a brief description of the education and experience for each current member of the Audit Committee that is relevant to the performance of his or her responsibilities as a member of the Audit Committee.

Ms. Laberge acquired significant financial experience and exposure to accounting and financial issues as Chief Executive Officer and Chief Financial Officer of Fincentric Corporation, Chief Financial Officer with MacMillan Bloedel Limited and a director of various public companies. In her positions with previous companies she was actively involved in assessing the performance of the companies' auditors. Ms. Laberge completed her Masters of Business Administration at the University of British Columbia.

As a senior executive and officer of IMC Global Inc. for 10 years, Mr. Hoffman acquired financial experience through supervision of the principal accounting officers of the Sales and Marketing departments and evaluation of the financial statements of IMC Global. He also served on the Audit Committee of Canpotex Limited, the international marketing company for Saskatchewan potash producers. Mr. Hoffman received his Bachelor of Business Administration Degree at Stephen F. Austin State University and completed the Financial Literacy Program at the University of Toronto in 2008.

Mr. Martell has acquired significant financial experience as Executive Chairman of First Nations Bank of Canada, as a director of the Public Sector Pension Investment Board of Canada (where he is the Chair of the Audit Committee), as a director of The North West Company Inc. and as a trustee of The North West Company Fund. Mr. Martell is a Chartered Accountant and has ten years of public practice with KPMG. He received his Bachelor of Commerce degree from the University of Saskatchewan.

Mr. McCaig has gained experience relevant to the performance of his responsibilities as an Audit Committee member as Chairman and Chief Executive Officer of Trimac Holdings. Mr. McCaig also has a Masters of Science in Management from the Sloan Program, Stanford University and a Bachelor of Economics degree from Harvard College in Cambridge, Massachusetts.

Ms. Mogford is a former Ontario Deputy Minister of Finance and Deputy Minister of Natural Resources. She currently acts or has acted as a member of the audit committee for several publicly traded companies. Ms. Mogford has eighteen years of experience acting as a member of an audit committee.

The role of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities for (i) the integrity of the Corporation's financial statements, (ii) the Corporation's compliance with legal and regulatory requirements, (iii) the qualification and independence of the Corporation's independent auditors, and (iv) the performance of the Corporation's independent auditors. In accordance with the Audit Committee Charter adopted by the Board, the Audit Committee has responsibility for the oversight of the Corporation's financial reporting and audit processes and related internal controls on behalf of the Board. During the fiscal year ended December 31, 2008, the Audit Committee met 9 times.

In overseeing the audit process, the Audit Committee obtained from the independent auditors their letter dated February 20, 2009, as required by the Independent Standards Board Standard No. 1, describing all relationships between the auditors and the Corporation that might bear on the auditors' independence and the auditors' judgment that they are, in fact, independent and discussed with the auditors the disclosures therein. The Audit Committee also reviewed the organizational structure, procedure and practices that support the objectivity of the internal audit department and reviewed the Internal Audit Department Charter. The Audit Committee reviewed with both the independent and the internal auditors their audit plans, audit scope and identification of audit risks.

The Audit Committee discussed, with and without management present, the results of the independent auditors' communications required by generally accepted auditing standards. The Committee also discussed the results of the internal audit examinations.

In meetings with financial management, internal audit and the independent auditors, the Audit Committee reviewed the interim financial statements and interim earnings releases and approved the interim financial statements for the applicable quarter. The Audit Committee also reviewed and approved the quarterly "Management's Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A").

The Audit Committee reviewed and discussed the MD&A and the audited financial statements of the Corporation as of and for the fiscal year ended December 31, 2008, with management and the independent auditors, including the quality and acceptability of the Corporation's financial reporting practices and the completeness and clarity of the related financial disclosures. Management is responsible for the preparation of the Corporation's financial statements and the independent auditors are responsible for auditing those financial statements.

The Audit Committee reviewed the processes involved in evaluating the Corporation's internal control environment and the Audit Committee also oversaw and monitored the 2008 compliance process related to the certification and attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002.

Based on the above-mentioned review and discussions with management and the independent auditors, the Audit Committee recommended to the Board that the audited consolidated financial statements and MD&A be included in the Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, for filing with the SEC and Canadian securities regulatory authorities. The Audit Committee also recommended the reappointment, subject to shareholder approval, of the independent auditors.

The Audit Committee reviews the Corporation's Disclosure Controls and Procedures on an annual basis. It also reviewed its committee charter and the PotashCorp Core Values and Code of Conduct. Both the Audit Committee Charter and the PotashCorp Core Values and Code of Conduct are available to shareholders and others on the Corporation's website, www.potashcorp.com. The Audit Committee Charter is also in Appendix F. The Audit Committee has oversight responsibility for the Corporation's compliance with legal and regulatory requirements. The Audit Committee receives regular periodic reports of the Corporation's ethics and compliance activities, including a review of management's compliance risk assessment and the efforts undertaken to mitigate ethics and compliance risks during the year, including an overview of the corporate ethics and compliance training program and quantitative and qualitative accounts of compliance matters which have been reported to the Corporation. In addition to ensuring that there are mechanisms for the anonymous submission of ethics and compliance reports generally, the Audit Committee has established specific procedures for:

• the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and
• the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.

In 2008, the Audit Committee was active in the revisions to the Corporation's Risk Management Policy, which changes were made by the Board at its September meeting. The new policy provides clear delineation of accountability and responsibilities as well as a more complete outline of the components of the corporate level risk management program. The Audit Committee also oversaw revisions to the Corporation's treasury policies, which revisions included expanded accountability and reports to the Audit Committee.

Submitted on behalf of the Audit Committee: Alice D. Laberge, C. Steven Hoffman, Keith G. Martell, Jeffrey J. McCaig and Mary Mogford.