Media Centre
2003/02/21

Maple Leaf Reports Financial Results For Fiscal 2002

TORONTO, ONTARIO--Maple Leaf Foods Inc. (TSX:MFI) today reported 
its financial results for the fourth quarter and year ended
December 31, 2002.

"Maple Leaf Foods achieved solid performance in 2002, with a 16%
improvement in operating earnings for the year," said Michael H.
McCain, President and Chief Executive Officer. "These results
were achieved despite very challenging market conditions,
including a North American over-supply of animal proteins, low
hog prices, high grain and feed costs and rising wheat prices.
The impact of difficult markets on our results was reduced by our
business portfolio and Vertical Coordination strategies,
continued differentiation of our products through value-added
processing, and by improved underlying operating performance in
key areas."

"The Maple Leaf brand has built a leading reputation for quality
and food safety assurance", continued Mr. McCain, "with our focus
on Leadership and Six Sigma, we have developed a highly
disciplined, competitive and forward thinking organization that
gets things done. We are well satisfied with our performance
relative to North American industry peers, driven by these
fundamentals", said Mr. McCain.

In accordance with changes in generally accepted accounting
principles, effective January 1, 2002 the Company no longer
amortizes goodwill, resulting in a positive impact on 2002
reported earnings. The effect of this is explained more fully in
note 1 to the Company's financial statements. All comparative
percentage increases noted herein are after taking account of
this change.

Sales for the year 2002 increased to $5.1 billion from $4.8
billion for 2001. Earnings from operations were $203.6 million
compared to $157.5 million for the prior year ($167.9 million
before goodwill amortization). Net earnings for the year were
$84.7 million ($0. 71 per share) compared to $57.4 million ($0.55
per share) for the prior year ($66.8 million or $0.65 per share
before goodwill amortization).

Sales for the fourth quarter of 2002 were $1.3 billion, in line
with the prior year. Earnings from operations of $60.7 million
compared to $57.6 million last year ($60.4 million before
goodwill amortization).

Included in operating earnings in the fourth quarter is an $8.6
million pre-tax gain ($5.5 million after tax) related to the
wind-up of a defined benefit pension plan for hourly employees
pursuant to a surplus sharing agreement with the plan's
beneficiaries. All of the gain is included in the results for the
Meat Products Group. The Company anticipates that additional
accounting gains of about $6.5 million before tax will be
realized in 2003 and also anticipates receiving about $25 million
in cash in 2003 as its portion of the plan surplus distribution.


Adjusting for goodwill amortization in 2001 and for the pension
plan wind-up gain in 2002, following is an analysis and
comparison of operating earnings:


/T/
($ millions) Fourth Quarter Full Year
-------------------------------------------
2002 2001 Change 2002 2001 Change
---- ---- ------ ---- ---- ------
Meat Products Group $19.2 $24.0 $58.2 $42.3
Agribusiness Group 15.1 20.8 66.8 82.8
------------ -------------
Meat & Agribusiness
Groups 34.3 44.8 (23)% 125.1 125.1 0%
Bakery Products Group 17.8 15.7 13% 69.9 42.7 64%
------------ -------------
52.1 60.4 (14)% 195.0 167.8 16%
Less goodwill
amortization (2.8) (10.3)
Add pension wind-up gain 8.6 8.6
------------ -------------
Reported Operating
Earnings $60.7 $57.6 $203.6 $157.5
----- ----- ----- ------
----- ----- ----- ------
/T/

Therefore, on a comparable basis, the Company's overall results
were down 14% quarter-over-quarter and up 16% for the year.
Aggregate results for the Meat Products Group and Agribusiness
Group (which comprise the Company's protein value chain
operations, which are linked through the Company's Vertical
Coordination strategy) were down 23 % quarter-over-quarter and
flat for the year. Bakery Products Group results were up 13%
quarter-over-quarter and 64% for the year.

Net earnings for the fourth quarter were $25.9 million ($0.22 per
share) compared to $24.7 million ($0.24 per share) in 2001 ($27.3
million or $0.27 per share before goodwill amortization).

Other income was $5.4 million in 2002 compared to $10.6 million
last year. In the fourth quarter. Other income from investments
and real estate operations of $3.0 million was more than offset
by $3.4 million in transaction expenses related to the sale of
Maple Leaf Foods' Bakery assets to Canada Bread, resulting in a
$0.4 million loss in Other Income, compared to a gain of $2.1
million in the fourth quarter last year.

Interest expense for the year was $56.3 million compared to $64.4
million in 2001, as lower average debt levels and interest rates
reduced interest expense. Interest expense for the quarter of
$14.0 million decreased from $15.0 million in the prior year
period.

On December 17, 2002 the Company issued US$200 million of
long-term debt with Prudential Capital Group of Newark, New
Jersey. Of the US$200 million placement, US$60 million is
repayable in 2007, and the remaining US$140 million in 2009. The
two notes have interest rate coupons of 5.64% and 6.26%
respectively.

Proceeds were used to reduce drawings under the Company's
revolving lines of credit, and for general corporate purposes.

The Company's cash flow from operating activities for the year
was $195.8 million compared to $226.2 million in 2001. Cash flow
from operating activities in the fourth quarter decreased to
$86.5 million compared to $163.3 million in the fourth quarter
last year, primarily reflecting a smaller contribution from a
reduction in working capital than in 2001.

Meat Products Group (branded value-added prepared meat products;
fresh, frozen and branded value-added pork products; fresh,
frozen and branded value-added chicken and turkey products; and
global food marketing, distribution and trading)

Meat Products Group sales for year ended December 31, 2002 were
$3.0 billion compared to $3.1 billion for the prior year period,
while operating earnings increased to $66.8 million compared to
$38.1 million for 2001 ($42.3 million before goodwill
amortization). After adjusting for the pension gain of $8.6
million referred to above, operating earnings increased by 38%
from last year. Sales for the fourth quarter were $746.8 million
compared to $804.3 million last year, as the price for meat
products declined across the industry due to lower raw material
input prices, reducing dollar value per unit sales, although
actual tonnage increased. Earnings from operations for the fourth
quarter were $27.8 million ($19.2 million before the pension
wind-up gain) compared to $23.1 million for the prior year period
($24.0 million before goodwill amortization).

Maple Leaf Pork significantly improved operations and
profitability in 2002, with both the Brandon and Burlington
plants operating at full single shift capacity, increased
processing efficiencies and an improved sales mix built on
consistent quality, value-added processing and strengthened
customer relationships. Maple Leaf Consumer Foods profitability
increased year-over-year, based on strong brand identity,
superior customer service and strong sales of Maple Leaf Top
Dogs, Canada's fastest growing brand of hot dogs. Maple Leaf
Poultry, while adversely impacted in 2002 by a North American
oversupply of poultry, reported improved results in the fourth
quarter as fresh poultry prices and markets began to strengthen.
Maple Leaf Foods International continued to achieve strong profit
growth throughout 2002, largely through record sales of
value-added pork products to Japan.

Agribusiness Group: (research, development and supply of quality
livestock nutrition products and services; pet food; swine
production; and animal by-products recycling)

Agribusiness Group sales for the year ended December 31, 2002
were $943.9 million compared to $878.7 million last year, while
operating earnings decreased by 19% to $66.8 million from $81.5
million in 2001 ($82.8 million before goodwill amortization).
Sales for the fourth quarter of 2002 were $242.4 million compared
to $226.0 million last year, while operating earnings were $15.1
million compared to $20.7 million for the same period last year
($20.8 million before goodwill amortization). Low industry
pricing for hogs and rising grain prices affecting the Company's
interests in hog production operations were the principal reasons
for the lower earnings. While rising grain prices adversely
impacted the profitability of the Company's hog production
operations, increased grain costs had no material impact on the
profitability of the Company's feed operations.

Bakery Products Group (fresh, frozen and branded value-added
bakery products, including frozen par-baked bakery products; and
specialty pasta and sauces)

Bakery Products Group sales for the year ended December 31, 2002
increased 50% to $1.2 billion from $784 million last year, while
operating earnings increased 64% to $69.9 million compared to
$37.9 million for 2001 ($42.7 million before goodwill
amortization). Excluding the effect of acquisitions, sales for
the year increased by 13% compared to 2001. Sales for the fourth
quarter of 2002 increased 18% to $315.2 from $267.7 million for
the prior year period, while earnings from operation were $17.8
million compared to $13.8 million for the same period last year
($15.7 million before goodwill amortization). Sales and earnings
were strong for both Fresh and Frozen Products, driven by the
strength of the branded fresh bread sales and par-baked sales in
the food service and retail channels.

On December 27, 2002, Canada Bread completed the purchase of all
of Maple Leaf Foods' other bakery operations, Maple Leaf Bakery
U.S. and Maple Leaf Bakery U.K. In late January 2003, Maple Leaf
Foods completed the purchase of four million Canada Bread
treasury shares in a private placement bringing the Company's
ownership of Canada Bread to 73%.

Other Matters

Maple Leaf Foods declared a dividend of $0.04 per share payable
on March 31, 2003 to shareholders of record on March 14, 2003.

Maple Leaf Foods Inc. is a leading Canadian food processing
company committed to delivering quality food products to
consumers around the world. Headquartered in Toronto, Canada, the
Company employs more than 18,000 people at its operations across
Canada and in the United States, Europe and Asia.

A conference call will be held at 10:00 a.m. (EST) on February
21, 2003 to review Maple Leaf Foods' financial results for the
fourth quarter and year ended December 31, 2002. The call will be
hosted by Michael H. McCain, President & Chief Executive Officer;
Tom P. Muir, Chief Financial Officer, Michael H. Vels, Executive
Vice-President, Finance and Lynda Kuhn, Vice President Public and
Investor Relations.

To participate in the call, please dial in to 1-888-673-1254. For
those unable to participate playback will be made available an
hour after the event at 1-800-558-5253 passcode #21108576.


/T/
Maple Leaf Foods Inc.
Consolidated Statements of Earnings
--------------------------------------------------------------------
In thousands of Canadian
dollars, except per Quarter ended Year ended
share amounts December 31, December 31,
(Unaudited) 2002 2001 2002 2001
--------------------------------------------- ---------------------

Sales $1,304,396 $1,298,019 $5,075,879 $4,775,358

Earnings from operations 60,733 57,571 203,550 157,503
Other income (loss)
(note 4) (373) 2,102 5,355 10,638
--------------------- ---------------------
Earnings before interest
and income taxes 60,360 59,673 208,905 168,141
Interest expense 13,982 14,983 56,289 64,437
--------------------- ---------------------
Earnings before
income taxes 46,378 44,690 152,616 103,704
Income taxes 16,789 16,933 54,947 39,116
--------------------- ---------------------
Earnings before
minority interest 29,589 27,757 97,669 64,588
Minority interest 3,679 3,022 12,983 7,149
--------------------- ---------------------
Net earnings for
the period $25,910 $24,735 $84,686 $57,439
--------------------- ---------------------
--------------------- ---------------------

Earnings per share
(basic and fully diluted) $0.22 $0.24 $0.71 $0.55
Dividends per share
declared 0.04 0.04 0.16 0.16
Weighted average number
of shares (millions) 112.9 98.2 112.5 95.9

The accompanying notes to the consolidated financial statements
are an integral part of this statement.

Maple Leaf Foods Inc.
Consolidated Balance Sheets
----------------------------------------------------------------
In thousands of Canadian dollars As at December 31,
2002 2001
----------------------------------------------------------------
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash $156,866 $52,611
Accounts receivable (note 3) 243,121 248,064
Inventories 266,889 231,918
Prepaid expenses and other assets 14,806 14,725
---------- ----------
681,682 547,318
Investments in associated companies 59,497 58,303
Property and equipment 785,425 795,932
Other long-term assets 159,910 161,961
Future tax asset 21,733 14,602
Goodwill and other intangibles 481,000 402,636
---------- ----------
$2,189,247 $1,980,752
---------- ----------
---------- ----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank indebtedness $ - $ -
Accounts payable and accrued charges 532,132 488,226
Income and other taxes payable 42,283 34,573
Current portion of long-term debt 22,588 23,556
---------- ----------
597,003 546,355
Long-term debt 713,689 627,890
Future tax liability 46,453 51,417
Other long-term liabilities 6,981 7,315
Minority interest 93,220 88,059
Shareholders' equity 731,901 659,716
---------- ----------
$2,189,247 $1,980,752
---------- ----------
---------- ----------

The accompanying notes to the consolidated financial statements are
an integral part of this statement.

Maple Leaf Foods Inc.
Consolidated Statements of Cash Flows

--------------------------------------------------------------------
In thousands of Canadian dollars Quarter ended Year ended
December 30, December 31,
(Unaudited) 2002 2001 2002 2001
--------------------------------------------------------------------

CASH PROVIDED BY (USED IN):

Operating activities
Net earnings for
the period $25,910 $24,735 $84,686 $57,439
Add (deduct) items not
affecting cash:
Depreciation 23,926 24,287 96,212 88,369
Amortization - 2,930 - 10,895
Minority interest 3,679 3,022 12,983 7,149
Future income taxes (11,767) 5,599 (8,215) 6,876
Increase in pension asset (10,751) (6,592) (18,910) (11,572)
Undistributed earnings
of associated companies 1,772 (1,120) 1,453 2,311
Loss (gain) on sale
of property and equipment 83 55 (14) (154)
Other 4,356 (2,133) 9,050 8,096
Change in other
long-term receivables 4,046 6,503 17,560 19,021
Change in non-cash
operating working capital 45,202 106,029 1,014 37,807
-------------------------------------
86,456 163,315 195,819 226,237
-------------------------------------

Financing activities
Dividends paid (4,518) (4,478) (18,035) (15,889)
Dividends paid
to minority interest (411) (411) (2,770) (1,777)
Increase (decrease)
in long-term debt 76,621 (206,929) 82,991 (85,440)
Convertible debenture
interest paid (1,369) (1,369) (5,478) (5,478)
Increase in share capital 197 169,931 8,079 172,524
Shares repurchased
for cancellation - - - (1,511)
Other 1,124 391 819 1,807
-------------------------------------
71,644 (42,865) 65,606 64,236
-------------------------------------

Investing activities
Additions to property and
equipment (23,743) (34,521) (92,160) (86,763)
Proceeds from sale
of property and equipment 2,441 599 5,306 8,515
Purchase of net assets
of businesses,
net of cash aquired (note 2) (26,081) (104,378) (66,967) (158,228)
Change in other
investments, net (6,390) 3,728 (1,307) (1,587)
Other (2,042) - (2,042) -
-------------------------------------
(55,815) (134,572) (157,170) (238,063)
-------------------------------------

Increase (decrease)
in cash
and cash equivalents 102,285 (14,122) 104,255 52,410
Cash and cash equivalents,
beginning of period 54,581 66,733 52,611 201
-------------------------------------
Cash and cash equivalents,
end of period 156,866 52,611 156,866 52,611
-------------------------------------

The accompanying notes to the consolidated financial statements are
an integral part of this statement.

Maple Leaf Foods Inc.
Consolidated Statements of Retained Earnings / Deficit
--------------------------------------------------------------------
In thousands of Canadian dollars,
except per share amounts. Year Ended December 31,
(Unaudited) 2002 2001
--------------------------------------------------------------------
Retained earnings (deficit), beginning
of period as previously reported $3,310 $(32,889)
Adjustment to reflect change in accounting
for foreign currency translation (note 2 (b))$(1,493)
--------------------------------------------------------------------
As restated $1,817 $(32,889)
Net earnings for the period 84,686 57,439
Dividends declared
($0.16 per share; 2001 - $0.16 per share) (18,035) (15,889)
Premium on repurchase of share capital - (811)
Convertible debenture charge (4,710) (4,540)
--------------------------------------------------------------------
Retained earnings, end of period $63,758 $3,310
--------------------------------------------------------------------
--------------------------------------------------------------------
The accompanying notes to the consolidated financial statements are
an integral part of this statement.

Maple Leaf Foods Inc.
Segmented Financial Information
-----------------------------------------------------------------
Pro-forma
for the
Quarter ended quarter ended
In thousands of Canadian dollars. December 31, December 31,
(Unaudited) 2002 2001 2001 (i)
-----------------------------------------------------------------

Sales
Meat Products Group $746,791 $804,318 $804,318
Agribusiness Group 242,432 225,963 225,963
Bakery Products Group 315,173 267,738 267,738
----------------------------------------------------------------
$1,304,396 $1,298,019 $1,298,019
----------------------------------------------------------------
----------------------------------------------------------------

Earnings from operations
Meat Products Group $27,787 $23,070 $23,958
Agribusiness Group 15,135 20,658 20,759
Bakery Products Group 17,811 13,843 15,716
----------------------------------------------------------------
$60,733 $57,571 $60,433
----------------------------------------------------------------
----------------------------------------------------------------

Capital expenditures
Meat Products Group $10,361 $7,173 $7,173
Agribusiness Group 9,844 11,744 11,744
Bakery Products Group 3,538 15,604 15,604
----------------------------------------------------------------
$23,743 $34,521 $34,521
----------------------------------------------------------------
----------------------------------------------------------------

Depreciation and amortization
Meat Products Group $10,890 $12,247 $11,359
Agribusiness Group 4,278 4,441 4,340
Bakery Products Group 8,758 10,529 8,656
----------------------------------------------------------------
$23,926 $27,217 $24,355
----------------------------------------------------------------
----------------------------------------------------------------

Pro-forma
for the
Year ended year ended
In thousands of Canadian dollars. December 31, December 31,
(Unaudited) 2002 2001 2001 (i)
-----------------------------------------------------------------
Sales
Meat Products Group $2,952,869 $3,113,025 $3,113,025
Agribusiness Group 943,930 878,746 878,746
Bakery Products Group 1,179,080 783,587 783,587
----------------------------------------------------------------
$5,075,879 $4,775,358 $4,775,358
----------------------------------------------------------------
----------------------------------------------------------------

Earnings from operations
Meat Products Group $66,778 $38,082 $42,349
Agribusiness Group 66,845 81,520 82,829
Bakery Products Group 69,927 37,901 42,737
----------------------------------------------------------------
$203,550 $157,503 $167,915
----------------------------------------------------------------
----------------------------------------------------------------

Capital expenditures
Meat Products Group $32,243 $28,885 $28,885
Agribusiness Group 35,035 22,238 22,238
Bakery Products Group 24,882 35,640 35,640
----------------------------------------------------------------
$92,160 $86,763 $86,763
----------------------------------------------------------------
----------------------------------------------------------------

Depreciation and amortization
Meat Products Group $41,218 $46,790 $42,522
Agribusiness Group 16,526 17,966 16,658
Bakery Products Group 38,468 34,508 29,672
----------------------------------------------------------------
$96,212 $99,264 $88,852
----------------------------------------------------------------
----------------------------------------------------------------

As at
In thousands of Canadian dollars, December 30,
2002 2001
----------------------------------------------------------------
(Unaudited) (Unaudited)

Total assets
Meat Products Group $694,042 $724,137
Agribusiness Group 500,039 457,862
Bakery Products Group 742,759 627,017
Non-allocated assets 252,407 171,736
----------------------
$2,189,247 $1,980,752
----------------------
----------------------

(i) Effective January 1, 2002, in accordance with changes in
generally accepted accounting principles, the Company no longer
amortizes goodwill. The pro-forma effect of this change, as if
goodwill had not been amortized in 2001, is presented above.

The accompanying notes to the consolidated financial statements are
an integral part of this statement.

Maple Leaf Foods Inc.
Notes to Consolidated Financial Statements
(For the quarters ended December 31, 2002 and December 31, 2001)
(Tabular amounts in thousands of Canadian dollars except for per
share amounts)
/T/

1. Significant Accounting Policies

The unaudited interim consolidated financial statements should be
read in conjunction with the annual consolidated financial
statements for the year ended December 31, 2001. These unaudited
interim consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles
using the same accounting policies as were applied in the
consolidated financial statements for the year ended December 31,
2001 except for the following:

(a) Business Combinations, Goodwill and Other Intangible Assets

In September 2001, the Canadian Institute of Chartered
Accountants ("CICA") issued Handbook Sections 1581 "Business
Combinations" and 3062 "Goodwill and Other Intangible Assets".
The new standards required the purchase method of accounting for
business combinations and required that goodwill no longer be
amortized but instead be tested for impairment at least annually.
The Company has adopted these new standards as of January 1, 2002
and has discontinued amortization of all existing goodwill.
Goodwill arising on business combinations completed after June
30, 2001 was not amortized.

Effective January 1, 2002, the Company had unamortized goodwill
of $402.6 million which is no longer being amortized. This change
in accounting policy has not been applied retroactively and the
amounts presented for prior periods have not been restated for
this change. To enable consistent comparison to prior periods,
the following selected pro-forma financial information is
provided for 2001, assuming no goodwill amortization for 2001:


/T/
Quarter ended December 31, Year ended December 31,
-------------------------------------------------------------------
2002 2001 2002 2001
-------------------------------------------------------------------
Earnings from operations
as reported $60,733 $57,571 $203,550 $157,503
-------------------------------------------------------------------
Add back goodwill
amortization 2,862 10,412
-------------------------------------------------------------------
Pro-forma earnings
from operations $60,733 $60,433 $203,550 $167,915
-------------------------------------------------------------------
Pro-forma net earnings
for the period $25,910 $27,300 $84,686 $66,846
-------------------------------------------------------------------
Earnings per share
as reported
(basic and diluted) $0.22 $0.24 $0.71 $0.55
-------------------------------------------------------------------
Pro-forma earnings
per share
(basic and diluted) $0.22 $0.27 $0.71 $0.65
-------------------------------------------------------------------

Maple Leaf Foods Inc.
Notes to Consolidated Financial Statements
(For the quarters ended December 31, 2002 and December 31, 2001)
(Tabular amounts in thousands of Canadian dollars except for per
share amounts)
/T/

(b) Stock-based compensation and other stock-based payments

Effective January 1, 2002, the Company adopted the new CICA
Handbook Section 3870, which requires that a fair value based
method of accounting be applied to certain types of stock
options. The new standard requires that for stock option awards
such as those awarded by the Company, the effect on reported net
earnings be disclosed on a pro-forma basis in the notes to the
financial statements as if the Company had accounted for these
stock option awards under the fair value method.

During the fourth quarter of 2002, the Company granted 175,000
stock options (2,503,500 year to date) that call for settlement
by the issuance of common shares at a weighted average exercise
price per share of $10.76. The fair value of the options issued
in the quarter was determined using the Black-Scholes option
pricing model with the following assumptions: a weighted-average
risk free interest rate of 4.9%, a weighted-average expected
dividend yield of 1.5%, a weighted-average volatility factor of
the market price of the Company's shares of 38.0%, and a
weighted-average expected option life of 4.2 years. The estimated
fair value of the options issued during the quarter was $0.4
million ($8.8 million year to date). For the purpose of the
pro-forma disclosure, the estimated fair value of the options
issued is amortized to income over the vesting period of the
related options. For the three months ended December 31, 2002,
the effect of these stock option awards, had they been charged to
earnings during the fourth quarter of 2002, would have been an
expense of $0.9 million ($1.8 million year to date) with a
related $0.01 reduction to diluted earnings per common share.

On a comparative basis, during the fourth quarter of 2001, the
Company granted 110,000 stock options (2,916,400 year to date
2001) that call for settlement by the issuance of common shares
at a weighted average exercise price per share of $11.19. The
estimated fair value of the options issued during the fourth
quarter of 2001 was $0.3 million ($8.6 million year to date
2001). For the three months ended December 31, 2001, the effect
of these stock option awards, had they been charged to earnings
during the fourth quarter of 2001, would have had minimal impact
on diluted earnings per common share.

(c) Foreign Currency Translation

A revision to section 1650 of the CICA Handbook eliminated
deferral and amortization of foreign currency translation
differences resulting from the translation of long-term monetary
assets and liabilities denominated in foreign currencies. All
such translation differences are now charged directly to income.
The Company adopted the revision retroactively, effective January
1, 2002, without restating the financial statements of any prior
period. Application of the recommendation would not have
materially affected net earnings reported in 2001. In total, the
adoption of the standard results in a cumulative reduction to
retained earnings at January 1, 2002 of $1.5 million.

(d) Comparative figures

Certain comparative figures have been reclassified to conform
with the financial statement presentation adopted in the current
year.

2. Acquisitions

In 2001, Canada Bread Company Limited, ("Canada Bread"), a 68%
owned subsidiary of the Company, acquired the remaining 75%
interest in Multi-Marques Inc., to hold 100% and on April 11,
2002, Canada Bread acquired the remaining 40% of the shares of
Ben's Bakery limited in Atlantic Canada, to hold 100%.

In July 2002, Canada Bread acquired all the outstanding shares of
Olafson's Baking Company Inc. of Delta, British Columbia. The
initial purchase price was $11 million. Additional consideration,
up to a maximum of $11 million, may be payable depending on the
attainment of certain financial targets, up until February 28,
2004.

In October, 2002, the Company acquired Grace Baking Company of
San Francisco, California. The Company has not yet completed the
determination of fair values of the individual assets and
liabilities acquired, or its restructuring and integration plans
for the operations acquired in 2002. Accordingly, the allocation
of the purchase costs to the assets and liabilities acquired is
preliminary and will change as restructuring plans are finalized.
No restructuring costs have been accrued in the preliminary
purchase accounting included in these financial statements or
accrued with respect to any restructuring of existing Canada
Bread operations that may result from the integration plans, when
finalized.

In December 2002, Canada Bread purchased all of Maple Leaf Foods'
U.S. and U.K. bakery operations, including Grace Baking Company,
for $262 million, inclusive of debt assumption. In these
consolidated financial statements, this transaction has been
accounted for at book value, however, transaction costs in the
amount of $3.4 million have been expensed and included in other
income.

3. Accounts Receivable

Under revolving securitization programs, the Company has sold,
with limited recourse, certain of its trade accounts receivable
to financial institutions. The Company retains servicing
responsibilities and assumes limited recourse obligations for
delinquent receivables. At December 31, 2002, trade accounts
receivable amounting to $195.0 million (December 31, 2001 -
$163.0 million) had been sold under these programs.


/T/
4. Other Income
-----------------------------------------------------------------
Quarter Ended December 31, Year Ended December 31,
-----------------------------------------------------------------
2002 2001 2002 2001
Earnings from
associated companies $472 $94 $715 $1,958
Dividends received 1,598 289 1,629 3,789
Gain on sale
of investments, net 361 2,502 1,340 2,502
Gain (loss) on real
estate operations 794 187 4,796 1,926
Gain (loss) on sale
of property & equipment (83) (55) 14 154
Advisor, legal and
accounting costs
for bakery
reorganization (3,400) - (3,400) -
Other (115) (915) 261 309
------ ------ ------ -------
$(373) $2,102 $5,355 $10,638
------ ------ ------ -------
------ ------ ------ -------

-----------------------------------------------------------------
/T/

5. Subsequent Events



On January 28, 2003, Maple Leaf Foods purchased 4 million shares
from the Canada Bread treasury at $26.50 per share in a private
placement transaction. The $26.50 per share price represents a
24% premium to the average closing price for Canada Bread common
shares the 10 days preceding the announcement. Proceeds from the
financing of $106 million have been used to pay down debt under
Canada Bread's existing credit facility with Maple Leaf Foods.
Prior to this transaction, Maple Leaf Foods owned 68.3% of the
outstanding common shares. After the issuance of the shares,
Maple Leaf Foods owns approximately 73.3% of the outstanding
common shares of Canada Bread.

-30-

FOR FURTHER INFORMATION PLEASE CONTACT:
MAPLE LEAF FOODS INC.
Lynda Kuhn
Vice-President, Public & Investor Relations
(416) 926-2026
www.mapleleaf.com

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