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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 acquired (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