Good afternoon ladies and gentlemen. Thank you for standing by. Welcome to the PotashCorp. Second Quarter Earnings Conference Call. At this time all call-in participants are in a listen-only-mode. Following the presentation, we will conduct a question-and-answer session. (Operator Instructions). I would like to remind everyone that this conference is been recorded on Thursday, July 23, at 1 PM Eastern Daylight time. At this time, I would like to turn the conference to Denita Stann Senior Director, Investor Relations.

Thanks Jack, good afternoon. Thank you for joining us today and welcome to our second quarter earnings call. In the room with us we have Bill Doyle, our President and Chief Executive Officer; Wayne Brownlee, our Executive Vice President and Chief Financial Officer; Jim Dietz, Executive Vice President and Chief Operating Officer, Joe Podwicka, Senior Vice President and General Counsel, Garth Moore, President of PCS Potash; Tom Regan, President of PCS Nitrogen and Phosphate and David Delaney, President of PCS Sales. I'd like to welcome the media who are listening in and remind people that we are live on our website. I would also like to remind everyone that today's call may include forward-looking statements. Such forward-looking statements are given as of the date of this call and involve risks and uncertainties. A number of factors and assumptions were applied in the formulation of such statements and actual results could differ materially. For additional information with respect to forward-looking statements, factors and assumptions we direct you to our news release and our most recent Form-10-K. Also today's news release which is posted on our website includes a reconciliation of certain non-GAAP financial measures to the most directly comparable GAAP measures. I'll now turn the call over to Bill Doyle for some comments and then we'll go to questions.

Thank you, Denita and good afternoon everyone. And thank you for joining us for PotashCorp's second quarter conference call. We appreciate the opportunity to discuss our performance and to return the focus to the opportunity that lies ahead for our company. The challenges in the past year which carried into the second quarter have been well documented. With the onset of a global economic recession last fall, our industry entered the longest period of demand deferral on record. As we stated in the past, a severe economic downturn carried the risk of temporarily slowing our growth. With fertilizer buyers and farmers protecting their cash, working down inventories and reducing applications, we felt the impact and took the hit. Second quarter sales volumes for potash and phosphate were well below the levels of one year ago. And prices for phosphate and nitrogen products nearly collapsed. As a result, we earned $0.62 per diluted share in the quarter, and generated $170.6 million in gross margin. We reported EBITDA of 355.9 million and cash flow prior to working capital changes of $304.7 million. While these totals are much lower than our record levels of last year they demonstrated our ability to remain profitable, even in the worst economic conditions seen in our lifetime. What has been commonly overlooked in recent discussions of our business is that the long term drivers of our success remain intact and unchanged. In fact the short term pain we've experienced is expected to clear the path for increased and longer lasting success for our company. Global population is still growing, especially in developing nations like China and India. But those countries have not escaped the recession, their economies are still outpacing the growth in most other parts of the world. With higher incomes their people are continuing to…

Thank you. Ladies and gentlemen, we will now conduct the question and answer session. (Operator Instructions) The first question today comes from Jacob Bout of CIBC World Markets.

Good afternoon. Just a question on your guidance here of 55 to 60 million tonnes for 2010 potash consumption. What are your thoughts there on China in 2010, and then maybe you can give us a bit of an update on where you think Chinese potash inventories are at? When they're going to settle and thoughts on pricing. And then if I can do kind of a Part B on this; for the contracts that you've signed for 2009, is any of this pricing provisional on where China settles?

The answer to the second question Jacob is no. The answer to the first question, China in 2010 we think is going to have a very big year. China has mined the soil bank in 2008 and again here in 2009. They have been very fortunate in China with extremely good weather, even the drought over the winter and the winter weed area has been resuscitated with timely rain, so they're going to pull off a good wheat crop of course that has lot of nutrient removal attached to it. But China according to all the sources that we have is going to have a big rebound year in potash in 2010. Now you're second part of that -- first part question, inventories and when they settle. The best information that we have on when they settle will be, the end of the third quarter of this year. And the reason for that is that the inventory levels have not come down significantly. Our best guess for potash inventories at the moment is 3.5 to 3.7 million. The problem has been that consumption in China has been virtually non-existent, suffering from the same problems that we've seen here in North America. Chinese farmers are just like any other consumer also worried about this global crisis. That's affecting all forms of business and agriculture specifically over the last year. Whats going on during that period time is domestic production has continued. Sales have been very low. So there's really hasn't been any substantial working down of the inventories and the best information we have -- we talked to our partner in Sanford earlier this week and they believe it will be end of the third quarter. Which means it's going to be a skinny year in China for 2009, that's another reason why we think there's a relatively slow development of the potash rebound here at the end of 2009. We also think with the late crop in the US coming off, provided we don't have an early frost, that if is a narrow window for false fall season in the domestic market. But nevertheless, we do clearly see that the fertilizer depression is over. The Indian contract marks the end of that. The Brazilians are getting very active in moving and we're are seeing markets around the world besides China picking up at this moment. I will say that once the Indian contract was concluded two weeks ago, I guess it is just about now that Chinese consumption did start to pick up. And also Russian rail, low priced Russian rail into China stopped at that point because again they were going to be focused on supplying India. So, we are seeing right now a pick up in domestic consumption in China. But, our best guess is third quarter settlement -- end of third quarter settlement in China.

Your next question comes from Vincent Andrews of Morgan Stanley.

Bill I'm wondering if you can give us a sense of where Brazilian prices are going? Another fertilizer company today that's in Brazil suggested that prices there were very similar to where they are in India. Can you just help us clarify what's happening in the Brazilian market?

Well, Brazil is a granular market and of course India is a standard market. So you've got that differential. Brazil is currently getting price definition. This is all in the works as we speak. So to say specifically what that price range is would be I think premature. We have an idea but I think we'll let Campatex team settle that out. But as we said during -- in our remarks the Indians will recalibrate really almost every market around the world. We do think Brazil is going to have a very healthy second half. Our forecast for Brazil -- the range for 2009 is five to 5.5 million. If they reach 23 million tonnes of NPK, you'll see that higher end of the range of the 5.5. So you're going to see a very active shipment period, August through at least November. And you'll see that Brazil supply chain start to be refilled. Again 2010, I think you are going to see a very active year in Brazil. All these things, this delay and the slowdown that we've been through we're now starting to refill this supply chain is going to take a while. And when you turn the switch on just to arrange ships and get everything moving it just takes a period of time, that's why we see the big push and really even here in North America being 2010. This is going to be a big year 2010 and you're going to see that the inventory levels at the producer -- in the producers hands you're going to see that empty out, fairly quickly here. And as I said in better balance with demand. So that, that inventory level in the supply chain we said in the last chance we had a meeting with the Analyst Community at our Chicago Meeting we said it was 95% empty at the end of June, well that turned out to be the case. And we always like to say that the good news is you can't empty it out twice. So we're going to have to fill it up and you're going to see that pressure really show in 2010 around the world.

Your next question comes from Steve Byrne of Merrill Lynch.

Hi, as PotashCorp accounts for the majority of the shipments out of Campatex, do I assume that you also have to cover the majority of the fixed costs?

You are correct. It's all on the basis of your capacity and your percentage of all the bills we pay according to our percentage of Campatex and the shipments, all that pricing everything works just that way you stated, so you got it right.

Your next question comes from Fai Lee of RBC Capital Markets.

Thank you. Bill the Indian contract price summit obviously came as a surprise to the industry in light of what the global producers and -- industry did to the Indian potash offer. But regardless given 460 per tonne as a new benchmark contract price for 2009, how should we be thinking about pricing -- potash pricing in 2010 with respect to the premium of spot over contract. And the upside for pricing, given your global demand forecast and the lower than expected contract price settlements in '09?

Okay Fai -- the Indian business did come to us as a surprise. When you have a tender -- eleventh hour tender if you remember they negotiated with BPC for months and months and months and then they called a tender at the eleventh hour and all the bids, except one come in at 6:25. And the one they decided to negotiate with, and you end up with a magic price of 460. If you know anything about the history of the business, how it works in tenders; to have that big a drop on the tender is really quite remarkable. And I don't know if you think about it logically, you would think well if it were $25 or $30 or even $50 below -- normally we used to say if you were looking back in history, if you are more than a couple of bucks below the lowest on a tender, you didn't do too well. You're being in touch with the market was a little out of touch. So to see that happen, we first didn't believe it and it took a little while -- out of India you got a lot of misinformation and they're going to need to correct that because credibility is important. But it took a little while to verify it and then the dominos did start to fall, into place. And so whether you believe that it was rouse, the original business or not was a rouse which some people think it was. The fact is that it was established when other people jumped in line and Campatex this morning with the announcement but we're not at the end of the line we're closed to it. So that 460 price then becomes reality, and as I said in our remarks we deal…

Next question comes from Pj Juvekar of Citi.

Yes, hi. Bill, you gave us good data on supply demand on potash and we appreciate that. But, if you look at from the farmer point of view, what are your agronomy saying about soil samples around North America and Brazil? When do they take these samples and how do you monitor that mining of soil?

Pj, I'm going to ask David Delaney to comment on that one.

Pj, the IPNI did a survey back in '05 for North America and they indicated 40% of the soils were below the critical levels of both P&K. That was done in '05 and since '05, we've had four, five record crops. So, we'll wait and see how this yield turns out. The IPNI will be doing further surveys here yet this year, and that data should come out here, I would say late in the fourth quarter -- early first quarter. So, we'll see how much more critical that's gotten. Brazilian soils are poor soils. They cannot afford to go without potash on an annual basis. We've seen yields both in Brazil and in Argentina below -- well below expectations this past year. The world will be watching very closely. Their spring year starts in September-October. How well there's soy bean and corn crop yield is here in the next six to eight months. We don't see a lot of growth in Brazilian NPK consumption here this crop year, probably around 22 million tonnes. And I guess, one further thing to add is the Indian soils are very poor. Their yields have been stagnant. Right now, they've got a short monsoon. They've indicated that their rice acreage could be down as much as 25%. And they are the number two rice producer in the world. So, with this reduction in demand around the world we're also seeing reduction in yields. And that has long-term impacts on grain supply and prices going forward.

Next question comes from Jeff Zekauskas of JP Morgan.

Hi, good afternoon. Recently Korea, Taiwan and Japan brought from Campotex a little bit more than $700 a tonne delivered. And in the light of the India contract that 460 -- do those purchasers get some sort of discount or you're going or does Campotex ship on that, a little bit more than 700?

Jeff, the answer to that question is, we adjust. And we will we always treat our long term loyal customers like Taiwan, Korea, Japan very fairly. And as I said in my remarks, the Indian contract recaliberates prices around the world. We just always make sure that we treat them fair and square. That's part of the reason for the difference between our former guidance of $0.70 and $0.62. We had to adjust some of those Campotex tonnes. And so that's the majority of the reason for that little change. So we always treat our long term customers fair and square.

Your next question comes from Don Carson of UBS.

Yes I had a question, just wanted to follow up on Dave Delaney's comments on yields. Assuming the US market we've got a significant reduction in consumption, and we may end up with trend yields. Do you think that you've got much better seed now, with a little better restructured, do you think that that's reducing the need for potash or at least the plant is better able to utilize available potash just doesn't seem to correlate between these still pretty good yields and dramatically lower potash consumption?

Well as I said Don the crop's not in the bin yet. So don't go spending that money if you are a farmer. They don't. Last year we didn't ever freeze to the middle of November, which was unbelievable. This year also late crop especially in the eastern corn belt. So, do we have a frost free fall again, or do you have a September frost; which would dramatically change the situation. We've had cold months, every month this year. The July, is the second coldest July in 50 years, here so, this global warming thing is really catching on. I'd also say that 60% of the fields in the United States were well supplied with P&K, and keep in mind that P&K are immobile in this soil. So, they are used only when a crop is consumed, or is consuming the nutrients. So, we've ideal weather up to this point, and 60% of those soils having incredibly good fertility. The key is what happens when you harvest this crop, and what happens to those the 60% of those soils that don't have the same fertility going in as they had, and the other 40% of soils we know are low on P&K. So you're going to have a huge vacuum again, in the supply chain. You know Don you've been covering this business for a long time. And you know this is -- agriculture is a scientific undertaking. And farmers know so well the science behind it and there's a lot of them do their test in this fall, and those both tissue analysis and soil testing. And I guarantee you they will not miss a beat. They won't apply more pound more, but they won't apply one pound less especially coming off a year in which they dramatically lower consumption.

Your, next question comes from Michael Piken of Cleveland Research.

Good afternoon. Just looking here for a second looking at a couple of your other businesses, could you just give us a sense for kind of where you guys are in terms of phosphate utilization rates, and your expectations for kind of how quickly demand might come back in the phosphate and to some extent also, the nitrogen markets noticed that we had a higher than expected number corn acreage number this spring, relative to what a lot of people are thinking the nitrogen prices never really picked up here in the US that much, this spring so, any discussion on those two businesses.

Michael I'm going to ask David Delaney to comment on phosphate demands.

In terms of the phosphate demand, demand has been very similar to the other nutrients that was down to the fertilizer year-ending June. We are seeing the international phosphate market pick up in the last 30 days. Brazil and Argentina couldn't go any longer, they were out of inventories. So they've been active buyers of MAP/DAP. India just increased their contract with PhosChem by another 450,000 tonnes. Pakistan has been back in the market. So we're seeing the international market come back. Domestically, I think we'll have a decent fall. Inventories were quite low at the end of the year. The Tampa benchmark price for DAP is moved from 270 to $300, and will likely continue to move up with higher ammonia input cost. Ammonia prices just moved up for August from 180 to 260. And that's due to some supply outages here in the US as well as a couple of plants in Europe. Ukrainian production is still very high cost at $7 gas; we think they're breakeven cost that will be used in close to 270 to 280. So those plants are still down. And we've seen limited production out of Russia. I think they've become better supply managers. And I think 260 was done yesterday out of using these Russian products. We've seen Urea prices move up in the last few months. There are some South American plants that have had issues. But we do see basically the world is de-stocked and they've got to get back in both markets. And with a few supply disruptions, we've seen markets react favorably and move up. And so we'll see where that goes.

Michael to answer your question on the capacity utilization for P205 phosphate, we were 52% for the first six months of the year and for Potash, we were 27% capacity utilization. So, pretty slim pick-ins for the first half of the year.

Your next question....

Sorry about 90%, for nitrogen. Sorry about dropping that one.

Your next question comes from Mark Connelly of Sterne Agee. Mark Connelly - Sterne, Agee & Leach: Thank you. Bill I wonder if you could help us think through the impact of farmers balance sheets on recovery. We've got balance sheet in the US at the farm level in good shape. But in the most emerging market they're not that good, and I'm wondering if you could give us your perspective on how emerging market governments are going to keep the investment rolling. Are we going to see just massive increases in subsidies, are we going to see grain price supports?

Mark I'm going to ask David to comment on that first.

Okay. You just start with the US. We've seen record net farm income for four, five straight years. The debt-to-equity ratio for US farmers is around 10 to 15%. So the health of the US farmers are in great shape. India, the farmers subsidize, the government picks up the addition increased cost to fertilizers. So with low grain stocks and low yields and feeding1.2 billion people they're not going to drop the ball and they'll continue to support the Indian farmer. China in the last three or four years have started to subsidize the Chinese farmer from seed and fertilizer, machinery, and again it's a state -- from a state standpoint they need to produce 500 million tonnes of grain every year. So the government will make sure that happens. As you look at Southeast Asia, Indonesia, Malaysia; you've got very good palm oil economics right now. Palm oil prices are very profitable. Running down to South America $9 beams, they make money for the Brazilian farmer. Argentina looks to be in decent shape. So there are may be a few other countries that aren't as favorable, but if you look at the major food producing countries of the world they cannot afford to let up one bit.

You know Mark I think what people also have lost track up here a little bit over the last 9 -- 12 months is, a year ago at this time we were in headlines of global food prices. And what I would tell you is that, that really hasn't gone away. It's been overshadowed by the economic crisis. And as you know I have said you before we can't seem to focus in on more than one thing at a time, but the food prices hasn't gone away. And so what you have is you come out of this global recession, and you have return of growth around the world and you have the impact of all this people who still by the way have the same aspirations for a better life that they had before the economic crisis. And so, you are going to see more pressure there. You've got limited land and limited water on a per capita basis around the world, less than ever before. The pressure on the food supply is just enormous. And its -- you are going to see these same headlines on food crisis appear once again. My guess is a year from now we'll be back in the food crisis, where people are saying jeez, what happened this thing came back at us again. We thought it was over, well isn't over with it is never been over with. And you are just going to have a lot of pressure on food supply, which means you're going to have higher prices. You are going to have higher prices across the Ag commodity spectrum and that is going to put incentive wherever that farmer is to grow more food. And in that process, he's going to use more fertilizer. So, this is a long term story. And a lot of analysis that you see is very short term and is concerned about like this afternoon or tomorrow morning, next week would be a stretch for some people. But you really got to look at this thing on a multi-year basis and then you think about the response that you have on producing the nutrients required to fill that long term need of food demand around the world. We can do it quicker and faster than anybody else and potash as you know -- but by far it even takes us a little off. These are major capital projects that require a hell of lot of effort, ingenuity, money, time and the asset to be able to do that in the first place. So it really is a long term business and if you don't focus on anything other than the long term you'll never be successful. And so we only look at our success, over long term period of time. So, everything else that we get people that are analysts, are focused on in a quarter and that's just all like noise, it doesn't distract us one eye from where we're going.

Your next question comes from Bob Koort of Goldman Sachs.

Hi, this is David Howard at Goldman Sachs in for Bob Koort. I was just wondering if you give us an update on what's going on with China, particularly on the inventory side and, I was also wondering how your counter the assertion that China may just hold out for a lower pricing and may be even just negotiate a 2010, contract directly? Thanks.

David I answered that question once but I'm going to help and do it again. The inventory level for China's best guess at the moment is 3.5 to 3.7 million tonnes on Urea. In terms of their holding out for lower price, I think the Chinese clearly recognize that 460 is it. That's the bottom of the barrel and the world's moving on here without China and again these markets are not as big. Once you get movement, these markets are not as big as some in the analyst community would think of. As they say China is about 12% of our total market in a normal year. It's 70 to 88% somewhere else. And maybe a little smaller this year, but by god they're going to have come back after mining the soil bank for two years, 2008 and 2009 with a big year in 2010. Our partner there has already told us -- just expect a really big year for potash in 2010. So what they do for 2009, again that's another short term thing, we don't worry too much about it.

Your next question comes from Paul D'Amico of TD Newcrest

Thanks I'll be quick. Bill, just again -- not to belabor it, but on China, in terms of the process there. Is it possible that we're probably going to see a tender like what India did? Just want to understand how the negotiation is going to happen you're talking at the end to Q3? And secondly on the Greenfield, given your comments on it, is it fair to assume then that the greenfield is no longer being considered by PotashCorp, along the same lines with the costing that you've got. What -- for the record, what is the US dollar metric FOB mine price you think is necessary for the greenfield, thanks?

No, I don't see a tender coming out of China, the bank consortium will meet again in earnest and the inventory levels get down low enough which as I said we think will be by the end of that this will be done by the end of the third quarter of this year. And again that number -- that timeframe has changed during the year -- but the information is changed and the consumption absolute as parlays in China, which some of our -- did not expect and so it's taken a lot longer, they originally told us they thought its going to be at EFA, which would been the end of May. So you can see how long even the biggest fertilizer company in China can be about consumption. But again over the long term they're going to be right. So no, I don't see a tender in China. In terms of Greenfield if you look at plans that has infrastructure requirements, with it -- that number is 4.5 to 5 billion Canadian. So if you run the numbers on that the price FOB mine is got to be up in the 900 and 950 range to make it work. And you can just see what happened with India. You take off the -- transportation to India and get the terminal and the rail back to the mine site, you are a long-long way from that. So all these junior companies, while they sell and are trying to sell right now I guess, from what I hear, so they might have been a little late with that decision. But I'd really think there in for a tough go. I don't know how you would make that work. So the promotion there is disappearing and even for some of the big boys, some of the international miners who have eyes on it, I think its going to make them think twice about greenfield because, if you are not in this business you're not an existing producer everyday, you're going to make a bet on what the price of products is going to be in 10 years. That comes right onstream when India the contract is concluded; you might have to say whoops, what happened. So that's a risk and I think that's a risk and I think it just points to the problem with greenfield. I've said that we have read in there as far as long as any property that will be our greenfield site when the time is right; certainly not now. But we'll keep tabs on it. And again that's a decision that once you make it, you're looking 10 years out before you got any products, so it's not in the immediate horizon.

And Jack we have time for just one more call.

Thank you. The last question comes from Mark Gulley of Soleil Securities.

Bill, you talked about pricing in your earlier prepared comments, where you thought that the ASP for potash for '09 would be similar to '08. Could you share with us your view for what that might look like for 2010?

Yeah, Mark, I think it will be up, over 2009 and 2008; the average price for the year.

Great. Thank you everybody. If you have any further questions, please don't hesitate to give us a shout at the office and have a great day.

Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. Please disconnect your lines.