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Maple Leaf Reports Strong 2004 Third Quarter Financial Results

TORONTO, Oct 27, 2004 (BUSINESS WIRE) — Maple Leaf Foods Inc.
(TSX:MFI) today reported its financial results for the third quarter
ended September 30, 2004.

“Our third quarter results demonstrate continued strong momentum
in our earnings performance,” said Michael McCain, President and Chief
Executive Officer. “Our operating income more than doubled in the
third quarter, and our net income increased over three fold. We are
pleased with the progress in every aspect of our operations, including
the contribution of Schneider Foods. We are maintaining a disciplined
focus on earnings growth and successfully integrating the Schneider
Foods organization into Maple Leaf.”

Sales for the third quarter increased to $1.7 billion from $1.3
billion last year, while year-to-date sales increased to $4.6 billion
from $3.8 billion last year, due primarily to the inclusion of results
from Schneider Foods, which was acquired on April 5, 2004, and high
protein demand and prices. Excluding Schneider Foods, sales increased
8% in the third quarter and 3% in the first nine months of 2004.

Net earnings for the third quarter were $27.9 million ($0.24 per
share) compared to $7.2 million ($0.05 per share) before $6.9 million
($10.3 million pre-tax) of restructuring costs in the third quarter
last year. Year-to-date net earnings were $73.5 million ($0.62 per
share) compared to $18.5 million ($0.13 per share) before $11.7
million ($17.7 million pre-tax) of restructuring costs last year.

Operating Review

Comparisons of earnings from operations for the quarter exclude
$10.3 million of restructuring costs in the third quarter of 2003
($17.7 million for the first nine months of 2003). Management believes
that this is the most appropriate basis on which to evaluate operating
results, as restructuring costs are not representative of ongoing
operating earnings. Earnings comparisons are also affected by income
related to sale of poultry production quota in the third quarter last
year and a gain related to the wind up of a pension plan last year,
all of which are more fully explained in previous quarterly reports
and the 2003 Annual Financial Statements. The following table reflects
earnings from operations by business group before these items, and
forms the basis for discussion in this news release.

Earnings from operations before restructuring costs

($ millions)                              Third Quarter  Year-to-Date
---------------------------------------------------------------------
Protein Value Chain                        2004    2003   2004   2003
---------------------------------------------------------------------
Meat Products Group                        15.3   (9.3)   37.8 (15.6)
Agribusiness Group                         25.3    19.1   72.6   45.0
---------------------------------------------------------------------
Total Protein Value Chain                  40.6     9.8  110.4   29.4
Bakery Products Group                      27.8    16.5   66.1   43.6
---------------------------------------------------------------------
                                           68.4    26.3  176.5   73.0
Sale of production quota                      -     5.2    4.6    6.3
Pension wind-up gain                          -     1.3      -    9.5
---------------------------------------------------------------------
                                          $68.4   $32.8 $181.1  $88.8
---------------------------------------------------------------------
---------------------------------------------------------------------

Earnings from operations for the third quarter increased to $68.4
million from $26.3 million last year, driven by strong operating
performance in both the protein and bakery groups, and the inclusion
of Schneider Foods results. Protein Value Chain operating earnings
(including Meat and Agribusiness operations) increased substantially
to $40.6 million from $9.8 million last year, while Bakery Group
earnings increased 68% to $27.8 million from $16.5 million last year.
Year-to-date, earnings from operations have more than doubled to
$176.5 million.

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 Product Group sales for the third quarter increased to $1.1
billion from $701.6 million last year, while year-to-date sales
increased to $2.9 billion from $2.1 billion last year. The increase
reflects the contribution of Schneider Foods and increased volumes and
sales across other businesses, driven by higher commodity values.

Earnings from operations increased to $15.3 million from an
operating loss of $9.3 million last year. Operating earnings for the
first nine months were $37.8 million compared to an operating loss of
$15.6 million last year. Although processed meats earnings were
negatively impacted by higher raw material prices that began to abate
towards the end of the quarter, strong results in primary poultry
processing, improved operating performance in fresh pork operations,
the inclusion of Schneider Foods, and increased earnings from
international operations contributed to a very strong quarter.
Following the acquisition of the Schneider Foods business, the Meat
Products Group is now well balanced between fresh and further
processed products, with a good mix of commodity influenced and more
stable margin businesses. Over time, the relative contribution from
these operations will change, but the overall benefit for the Meat
Products Group should be increased margins and earnings stability.

Primary poultry processing continued to be very strong in the
third quarter, benefiting from continued higher demand and prices and
increased sales of branded fresh chicken. Poultry meat prices began to
decline at the end of the quarter, a trend that is expected to
continue into the fourth quarter. Improvements in fresh pork operating
performance and sales mix contributed to increased margins despite a
large decline in the USDA pork processor spread compared to last year.
In the processed meats operations, higher input costs for poultry,
pork and beef negatively impacted earnings compared to last year,
although strong sales of higher value products such as branded sliced
meats, bacon and new products such as Maple Leaf Fully Cooked Roasts
helped to offset this impact. Four new lines of Ready Cooked Roasts
were launched in the third quarter, with eleven varieties of premium
pre-cooked meat entrees now in stores. The Company has increased
prices to return these businesses to normal margins, although there is
often a short-term lag effect as price increases are rolled out.

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 of $230.6 million for the quarter and
$686.0 million year-to-date were consistent with last year. Operating
earnings increased 32% to $25.3 million from $19.1 million last year,
and $72.6 million year-to-date compared to $45.0 million last year.
This improvement was driven primarily by a 33% increase in hog prices
compared to last year, and strong performance in the rendering
business. The Company had effective ownership of approximately 19% of
the hogs that it processed at the end of the third quarter. Hog prices
have remained unusually strong, although they are now beginning to
show signs of the usual seasonal decline. The rising Canadian dollar
presents ongoing challenges to all Canadian hog producers to remain
competitive with the U.S. industry, and Maple Leaf has, as previously
reported, restructured its hog contracts and continues to focus on
improving its cost base through production efficiencies. The feed
businesses also posted solid results in the third quarter, although
marginally lower than last year.

Bakery Products Group (comprised of Maple Leaf’s 84.7% ownership
in Canada Bread Company, Limited, a leading producer of fresh and
frozen par-baked bakery products, and fresh pasta and sauces)

Bakery Products Group sales for the third quarter rose to $332.4
million compared to $321.5 million last year, primarily due to
increased sales of fresh bakery products. Year-to-date, sales
increased to $966.9 million compared to $943.1 million last year.
Earnings from operations for the third quarter increased to $27.8
million from $16.5 million last year, and 52% year-to-date to $66.1
million compared to $43.6 million last year. Last year’s results were
impacted by a strike at one of the Company’s distribution centres,
which cost $4.8 million in the third quarter and $7.4 million in the
first nine months of 2003. Excluding this impact, operating earnings
for both the third quarter and year-to-date increased approximately
30% compared to last year.

The Bakery Group continued to perform extremely well in spite of
reduced carbohydrate diets. The Company benefited from a sales mix
that favours higher value and nutritious product lines, as consumers
shift their buying patterns from white bread products to higher health
products such as whole grains. Sales volumes in the third quarter,
both in the Bakery Group and the industry, indicate that the negative
impact on white bread of low carbohydrate diets may be softening.
Against this backdrop, the fresh bakery operations increased earnings,
largely through improved sales mix and price increases which offset
significant rising input costs. Strong sales of value added products
including whole grain, organic and specialty breads, and Dempster’s
Stays Fresh bread contributed to increased margins for the quarter. A
national rollout of Dempster’s Healthy Way Organics, including 100%
Stone Ground Whole Wheat and 14 Grain breads, was completed in the
third quarter, reflecting the Company’s continuing investment in whole
grain premium bakery products.

The U.K. bakery operations produced strong results in the quarter,
from increased volumes in the U.K. and initial sales into Europe. An
expansion at the bagel plant in Rotherham, Yorkshire will be
commissioned in early 2005 to increase production capacity. The North
American frozen par-baked business benefited from increased food
service sales in the third quarter, although overall sales and volumes
were largely consistent with last year due to a weaker retail market.

In both the fresh and frozen bakery businesses, cost reduction
continues to be a significant focus and contributed to results,
particularly in Eastern Canada where synergies from recent
acquisitions and factory consolidations are being realized. Rising
flour, packaging and energy costs continue to place cost pressure on
the bakery operations, however both the fresh and frozen businesses
continue to manage rising input costs through price increases.

Cash Flow and Financing

Interest expense for the quarter of $22.0 million increased from
$17.4 million last year primarily due to increased debt arising from
the Schneider Foods acquisition. During the fourth quarter, management
anticipates that short-term debt incurred to fund the Schneider Foods
acquisition will be refinanced by the issuance of new long-term
investment grade debt. Given the Company’s strong operating results
for the year, no decision has been made to date whether to pursue an
equity issue.

Increased earnings and reduced investment in working capital
resulted in a significant increase in cash flow from operating
activities to $45.5 million from $30.5 million last year. Year to
date, cash flow from operating activities improved significantly to
$94.9 million. This represented a $130 million improvement over the
prior year, resulting from the substantial improvement in operating
earnings, a $39 million improvement in working capital, and an
increase in future taxes. Capital expenditures for the quarter
increased to $45.6 million, reflecting the Company’s investment in
major capital projects such as the expanded bagel plant in the U.K.
and a new world class feed mill in Moncton, New Brunswick.

Other Matters

The Company declared a dividend of $0.04 per share payable
December 31, 2004 to shareholders of record December 10, 2004.

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 approximately 23,000 people at its operations across Canada
and in the United States, Europe and Asia.

An investor presentation related to the Company’s third quarter
financial results is available at www.mapleleaf.com and can be found
under Investor Relations on the Quarterly Results page. A conference
call will be held at 2:30 p.m. (EST) on October 27, 2004 to review
Maple Leaf Foods’ financial results for the third quarter ended
September 30, 2004. To participate in the call, please dial in to
1-416-405-9328 or 800-387-6216. For those unable to participate,
playback will be made available an hour after the event at
1-416-695-5800 / 800- 408-3053 (Pass code 3104258#).

A webcast presentation of the third quarter financial results will
be available at
http://firstcallevents.com/service/aiwz4O4882369qfl2.html at 2:30 p.m.
EST and via a link on the Company’s website at www.mapleleaf.com
http://www.mapleleaf.com. An archived replay of the webcast will be
available following the call at each of the above links.

This release contains forward-looking statements and information,
which may include statements concerning the company’s outlook for the
future, as well as other statements of beliefs, future plans and
strategies or anticipated events, and similar expressions concerning
matters that are not historical facts. The forward-looking information
and statements are subject to risks and uncertainties that could cause
actual results to differ materially from those expressed in, or
implied by, the statements. These risks and uncertainties include
availability and prices of livestock, raw materials and supplies,
livestock costs, product pricing, the competitive environment and
related market conditions, operating efficiencies, access to capital,
the cost of compliance with environmental and health standards,
adverse results from ongoing litigation and actions of domestic and
foreign governments. Maple Leaf assumes no obligation to publicly
update or revise these forward-looking statements even if experience
or future changes make it clear that any projected results expressed
or implied therein do not materialize. Refer to the Company’s annual
report, management information circular, annual information form and
other filings with the Ontario Securities Commission and Toronto Stock
Exchange for further information on risks and uncertainties that could
cause actual results to differ materially from forward-looking
statements.

Maple Leaf Foods Inc.
Notes to Consolidated Financial Statements
(For the quarters ended September 30, 2004 and September 30, 2003)
(Tabular amounts in thousands of Canadian dollars except share
amounts)

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, 2003. 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, 2003.

a) Hedging Relationships

As discussed in note 2(m)(i) of the annual consolidated financial
statements for the year ended December 31, 2003, the Company is in
compliance with CICA Accounting Guideline 13 relating to hedging.

b) Accounting for Asset Retirement Obligations

The application of new accounting standard, Section 3110,
“Accounting for Asset Retirement Obligations” as disclosed in note
2(m)(ii) of the annual consolidated financial statements for the year
ended December 31, 2003, did not have a material impact on the
financial statements of the Company.

c) Customer Rebates and Promotional Allowances

A new accounting standard, EIC-144,became applicable in the third
quarter of 2004. This new standard which generally requires that
rebates and other promotional allowances received from a vendor be
accounted for as a reduction of the cost of product acquired, has no
material impact on the Company’s financial statements. The Company is
reviewing its income statement classification of certain sales
incentives which it pays to its customers, including rebates and
promotional programs, certain of which are classified as cost of
sales.

d) Comparative Figures

Certain 2003 comparative figures have been reclassified to conform
with the financial statement presentation adopted in 2004.

2. 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 September 30, 2004, trade accounts receivable amounting to $194.3
million (September 30, 2003: $179.2 million; December 31, 2003: $186.8
million) had been sold under these programs.

3. Restructuring Costs

During the first quarter of 2003, the Company recorded $7.4
million in restructuring costs ($4.8 million, net of tax), relating to
plant closures and operational restructuring in the Bakery Products
Group.

During the third quarter of 2003, the Company recorded $10.3
million in restructuring costs ($6.9 million, net of tax), relating to
plant closures and operational restructuring of several businesses,
primarily consolidation of feed mill operations in the Maritimes and
reorganization of Atlantic Canada meat processing operations.

4. Other Income (Expense)

---------------------------------------------------------------------
---------------------------------------------------------------------
                                     Quarter Ended  Nine months Ended
                                     September 30,      September 30,
---------------------------------------------------------------------
                                     2004     2003      2004     2003
Income from associated companies    $ 211     $ 68     $ 699    $ 108
Gain (loss) on sale of property and
 equipment                          (128)      236     1,112       87
Rental income                          84       79       280      235
Gain on disposal of investments       492        -       512        -
Gain (loss) on real estate
 Operations                          (49)       26     (196)      542
Advisor, legal and accounting costs     -  (1,549)         -  (1,549)
 of bakery re-organization
Other                                 112       48       112       87
---------------------------------------------------------------------
                                    $ 722 $(1,092)   $ 2,519  $ (490)
---------------------------------------------------------------------
---------------------------------------------------------------------


5. Earnings Per Share

The following table sets forth the calculation of basic and diluted
earnings per share.

---------------------------------------------------------------------
---------------------------------------------------------------------
                                     Quarter Ended  Nine months Ended
                                     September 30,      September 30,
---------------------------------------------------------------------
                                     2004     2003      2004     2003
Numerator:
 Net earnings                      27,934      299    73,519    8,080
 Convertible debenture charge     (1,223)  (1,215)   (3,659)  (3,637)
---------------------------------------------------------------------
Earnings available to common
 shareholders                    $ 26,711  $ (916)  $ 69,860  $ 4,443
---------------------------------------------------------------------
---------------------------------------------------------------------

Weighted average number of shares
 (millions)                         113.3    113.1     113.2    113.1
Earnings per share (basic)          $0.24  ($0.01)     $0.62    $0.04
Earnings per share (diluted)        $0.23  ($0.01)     $0.61    $0.04
---------------------------------------------------------------------
---------------------------------------------------------------------

6. Stock-based Compensation

As disclosed in note 12 of the annual consolidated financial
statements for the year ended December 31, 2003, the Company elected
to early-adopt the new “Stock-based Compensation and Other Stock-based
Payments” accounting rules on a prospective basis. The stock-based
compensation charge to earnings was $1.0 million during the quarter
ended September 30, 2004 and $2.5 million for the year to date. For
the first 9 months of 2003, the impact of stock compensation charges
to earnings was not significant.

However, the effect of stock option awards granted in 2002
(2,503,500 at a weighted average price per share of $14.36), had they
been charged to earnings on a fair value basis, would have been an
additional expense in the current quarter of $0.9 million (2003: $0.9
million) and year to date of $2.6 million (2003: $2.6 million year to
date) with a related reduction to basic earnings per common share in
the current quarter of $0.01 (2003: $0.01) and 2004 year to date of
$0.03 (2003: $0.02 year-to-date).

During the third quarter of 2004, the Company granted 1,265,250
stock options at a weighted average price per share of $13.21 (2003:
2,438,000 stock options granted at a weighted average price per share
of $10.30). The fair value of the total options issued in a quarter is
determined using the Black-Scholes option pricing model with the
following weighted average assumptions:

---------------------------------------------------------------------
---------------------------------------------------------------------
                                     Quarter Ended September 30, 2004
---------------------------------------------------------------------

Expected option life                                        4.2 years
Risk-free interest rate                                          3.9%
Expected annual volatility                                      33.5%
Dividend yield                                                   1.2%
---------------------------------------------------------------------
---------------------------------------------------------------------

The estimated fair value of the options issued during the third
quarter of 2004 was $4.1 million (2003: $6.2 million). This value is
amortized to income over the vesting period of the related options.

In September 2004, the Company granted 776,375 restricted stock
units (“RSUs”) to its employees under the Company’s Share Incentive
Plan. Each RSU entitles the holder to receive one common share in the
capital of the Company at specified future dates. The issuance of
these shares is dependent upon the achievement of specified
performance targets relative to an index and continued employment with
the Company at the end of the third and fifth years.

The fair value of the total RSUs granted in a quarter is
determined using a present value calculation with an assumed
forfeiture rate. The fair value of the RSUs on the date of grant is
$7.6 million which is amortized to income on a pro-rata basis over the
vesting periods of the related RSUs. The amortization of the fair
value of the RSUs had no material impact on earnings in the quarter.

7. Pensions

During the quarter, the Company recorded income of $5.8 million
related to net benefit plan income including post-retirement benefit
costs (2003: $0.5 million). For the first nine months of 2004, the
Company recorded $6.8 million in net benefit plan income (2003: $6.7
million).

8. Acquisitions

On April 5, 2004 the Company completed the acquisition of
Schneider Corporation (“Schneider Foods”) for $499 million.

The company has not yet completed the determination of the fair
values of the individual assets and liabilities acquired, or its
restructuring and integration plans for the operations acquired. As at
September 30, 2004, the only significant items that have been assigned
preliminary fair values are accrued pension benefit liabilities and
accrued post-retirement benefit liabilities. Accordingly, the
allocation of the purchase costs to the assets and liabilities
acquired is preliminary and will change. Goodwill resulting from the
above transaction is included in the total assets of the Meat Products
Group.

Details of net assets acquired and other purchase adjustments made in
2004 are as follows:

---------------------------------------------------------------------
---------------------------------------------------------------------

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                                                                 2004
Net working capital                                          $ 75,880
Investments                                                    18,789
Property and equipment                                        182,339
Goodwill                                                      288,164
Other intangibles                                              36,712
Indebtedness - short term                                    (32,063)
Long-term debt                                              (101,067)
Future income taxes                                            23,235
Accrued pension benefit liabilities                          (78,200)
Accrued post-retirement benefit liabilities                  (35,484)
Minority interest                                             (1,737)
---------------------------------------------------------------------
Purchase Cost                                               $ 376,568
---------------------------------------------------------------------
---------------------------------------------------------------------

Consideration
Cash                                                        $ 380,899
Less: Previously accrued charges                              (4,331)
---------------------------------------------------------------------
                                                            $ 376,568
---------------------------------------------------------------------
---------------------------------------------------------------------

In addition to the assets and liabilities acquired, the Company
has also assumed operating lease, rent and other commitments that
require minimum aggregate payments of approximately $23 million in the
next four fiscal years and approximately $31 million thereafter.

The acquisition was funded by a combination of existing unused
credit facilities, a new short-term bank facility and the assumption
of existing debt of Schneider Foods.

The Company entered into a Credit Agreement with a syndicate of
banks on March 1, 2004. The amount of the syndicated facility provides
for an amount up to $205 million for the purpose of financing part of
the purchase price and any required repayments of existing Schneider
indebtedness. The facility has a maturity date of April 5, 2005 and
bears interest based on bankers’ acceptance rates for Canadian dollar
loans and LIBOR for U.S. dollar loans.

In addition to the bank financing, the Company has entered into a
Financing Agreement with The Ontario Teachers’ Pension Plan Board
(OTPPB). This agreement provides the Company with a standby commitment
from OTPPB to purchase, at the Company’s option, up to $150 million of
treasury shares at any time until its expiry on April 15, 2005.
Pricing of the shares under this arrangement would be at a 6% discount
to the market-trading price of the Company’s common shares prior to an
issue.

9. Derivatives

In the ordinary course of business, the Company enters into
derivative financial instruments to reduce underlying fair value and
cash flow risks associated with foreign currency, interest rates and
commodity prices. If the Company had not entered into these contracts,
operating earnings for the third quarter 2004 would have been higher
by $7.7 million (year-to-date $10.8 million) and interest expense for
the third quarter 2004 would have been lower by $4.6 million
(year-to-date $12.6 million).

The new short-term bank facilities used to finance the Schneider
Foods acquisition (see Note 8) bear interest at floating market rates.
The Company plans to re-finance these bank facilities with new long
term debt and possibly equity financing. In the second quarter the
Company entered into a series of interest rate and cross currency
swaps to hedge the interest rate on the anticipated new debt issue.
The swaps were issued for notional amounts of $50.0 million and
US$185.0 million, have terms of seven and ten years and fixed interest
rates that range between 6.08% and 6.75%. As at September 30, 2004
these swaps had a market value loss of $13.4 million.

10. Supplemental Information

---------------------------------------------------------------------
---------------------------------------------------------------------
                                     Quarter Ended  Nine months Ended
                                     September 30,      September 30,
---------------------------------------------------------------------
                                              2004               2004
Cash taxes paid                            $ 9,028           $ 30,446
Cash interest paid                          16,203             56,614
---------------------------------------------------------------------


Maple Leaf Foods Inc.
Consolidated Balance Sheets

---------------------------------------------------------------------
---------------------------------------------------------------------
In thousands of Canadian dollars                As at        As at
                                            September 30, December 31
                                         2004        2003        2003
---------------------------------------------------------------------
                                  (Unaudited) (Unaudited)
ASSETS
Current assets:
 Cash and cash equivalents           $ 46,726    $ 99,903    $ 38,908
 Accounts receivable (Note 2)         337,784     273,161     242,306
 Inventories                          390,181     265,228     259,758
 Future tax asset-current               5,292      12,666       4,854
 Prepaid expenses and other assets     17,179      18,363       9,355
---------------------------------------------------------------------
                                      797,162     669,321     555,181
Investments in associated companies    78,671      67,474      58,189
Property and equipment                992,936     781,342     802,332
Other long-term assets                212,485     180,261     171,262
Future tax asset non-current           28,965      29,677      29,906
Goodwill and other intangible assets  855,020     522,113     531,851
---------------------------------------------------------------------
                                  $ 2,965,239 $ 2,250,188 $ 2,148,721
---------------------------------------------------------------------
---------------------------------------------------------------------


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Accounts payable and accrued
  charges                           $ 606,296   $ 514,970   $ 501,997
 Income and other taxes payable        12,244      13,732      12,212
 Current portion of long-term debt    116,110      35,925       4,959
---------------------------------------------------------------------
                                      734,650     564,627     519,168
Long-term debt                      1,144,311     822,226     730,627
Future tax liability                   42,813      43,787      50,397
Other long-term liabilities           162,587      37,414      35,274
Minority interest                      79,995      66,269      70,068
Shareholders' equity:                 800,883     715,865     743,187
---------------------------------------------------------------------
                                  $ 2,965,239 $ 2,250,188 $ 2,148,721
---------------------------------------------------------------------
---------------------------------------------------------------------

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


Maple Leaf Foods Inc.
Consolidated Statements of Earnings

---------------------------------------------------------------------
---------------------------------------------------------------------
In thousands of Canadian dollars, Quarter ended     Nine months ended
except per share amounts          September 30,         September 30,
                                2004       2003       2004       2003
---------------------------------------------------------------------
                         (Unaudited)(Unaudited)(Unaudited)(Unaudited)

Sales                     $1,698,508 $1,252,982 $4,582,729 $3,768,446

Earnings from operations
 before restructuring costs   68,405     32,815    181,093     88,842
Restructuring costs (Note 3)       -   (10,310)          -   (17,732)
---------------------------------------------------------------------
Earnings from operations      68,405     22,505    181,093     71,110
Other income (expense) (Note 4)  722    (1,092)      2,519      (490)
---------------------------------------------------------------------
Earnings before interest and
 income taxes                 69,127     21,413    183,612     70,620
Interest expense              22,046     17,412     60,059     50,303
---------------------------------------------------------------------
Earnings before income taxes  47,081      4,001    123,553     20,317
Income taxes                  16,131      1,594     42,820      7,288
---------------------------------------------------------------------
Earnings before minority
 interest                     30,950      2,407     80,733     13,029
Minority interest              3,016      2,108      7,214      4,949
---------------------------------------------------------------------
Net earnings for the period $ 27,934      $ 299   $ 73,519    $ 8,080
---------------------------------------------------------------------
---------------------------------------------------------------------


Earnings per share (basic)
 (Note 5)                     $ 0.24   $ (0.01)     $ 0.62     $ 0.04
Earnings per share (diluted)
 (Note 5)                     $ 0.23   $ (0.01)     $ 0.61     $ 0.04
Dividends per share declared    0.04       0.04       0.12       0.12
Weighted average number of
 shares (millions)             113.3      113.1      113.2      113.1

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


Maple Leaf Foods Inc.
Consolidated Statements of Retained Earnings

---------------------------------------------------------------------
---------------------------------------------------------------------
In thousands of Canadian dollars,
except per share amounts.            Nine Months Ending September 30,
                                                2004             2003
---------------------------------------------------------------------
                                         (Unaudited)      (Unaudited)
Retained earnings, beginning of period      $ 74,982         $ 63,758
Net earnings for the period                   73,519            8,080
Dividends declared ($0.12 per share;
 2003: $0.12 per share)                     (13,589)         (13,567)
Convertible debenture charge                 (3,659)          (3,637)
Premium on repurchase of share capital             -            (899)
---------------------------------------------------------------------
Retained earnings, end of period           $ 131,253         $ 53,735
---------------------------------------------------------------------
---------------------------------------------------------------------

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     Nine months ended
                                  September 30,         September 30,
                                2004       2003       2004       2003
---------------------------------------------------------------------
CASH PROVIDED BY
 (USED IN):              (Unaudited)(Unaudited)(Unaudited)(Unaudited)

Operating activities
 Net earnings for the
  period                    $ 27,934      $ 299   $ 73,519    $ 8,080
 Add (deduct) items not
  affecting cash:
  Depreciation and
   amortization               30,177     25,426     91,264     74,768
  Stock based compensation
   (Note 6)                    1,040        289      2,505        350
  Minority interest            3,016      2,108      7,214      4,949
  Future income taxes          5,199   (12,974)     17,036   (11,600)
  Increase in pension asset
   (Note 7)                 (13,935)    (3,001)   (25,493)   (17,234)
  Undistributed earnings of
   associated companies      (1,799)      (260)    (3,304)      (293)
  (Gain) loss on sale of
   property and equipment        128      (236)    (1,112)       (87)
  Gain on sale of investments  (492)          -      (512)          -
  Other                      (8,892)      2,061   (10,642)    (4,962)
Change in other long-term
 receivables                     274       (38)    (5,525)         58
Change in non-cash operating
 working capital               2,818     16,819   (50,064)   (88,669)
---------------------------------------------------------------------
                              45,468     30,493     94,886   (34,640)
---------------------------------------------------------------------
Financing activities
 Dividends paid              (4,532)    (4,526)   (13,589)   (13,567)
 Dividends paid to minority
  interest                     (255)      (358)      (722)    (1,429)
 Increase in long-term debt   24,589     61,112    447,484    186,635
 Decrease in long-term debt (38,967)    (2,033)   (42,524)   (12,822)
 Convertible debenture
  interest paid              (1,370)    (1,370)    (4,109)    (4,109)
 Increase in share capital       542        626      1,213      2,772
 Shares repurchased for
  cancellation                     -          -          -    (1,829)
 Other                           460        465      1,384      1,393
---------------------------------------------------------------------
                            (19,533)     53,916    389,137    157,044
---------------------------------------------------------------------
Investing activities
 Additions to property
  and equipment             (45,615)   (35,374)  (108,108)   (92,899)
 Proceeds from sale of
  property and equipment         210        704      9,066      1,216
 Purchase of net assets of
  businesses (Note 8)       (10,338)   (29,417)  (380,899)   (80,417)
 Change in other investments,
  net                          2,270      1,209      2,554    (7,684)
 Other                         (334)        435      1,182        417
---------------------------------------------------------------------
                            (53,807)   (62,443)  (476,205)  (179,367)
---------------------------------------------------------------------

Increase (decrease) in cash
 and cash equivalents       (27,872)     21,966      7,818   (56,963)
Cash and cash equivalents,
 beginning of period          74,598     77,937     38,908    156,866
---------------------------------------------------------------------
Cash and cash equivalents,
 end of period                46,726     99,903     46,726     99,903
---------------------------------------------------------------------

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


Maple Leaf Foods Inc.
Segmented Financial Information

---------------------------------------------------------------------
---------------------------------------------------------------------
In thousands of Canadian dollars  Quarter ended     Nine Months Ended
                                  September 30,         September 30,
                                2004       2003       2004       2003
---------------------------------------------------------------------
                         (Unaudited)(Unaudited)(Unaudited)(Unaudited)
Sales
 Meat Products Group      $1,135,501 $  701,631 $2,929,806 $2,141,288
 Agribusiness Group          230,559    229,873    686,001    684,058
 Bakery Products Group       332,448    321,478    966,922    943,100
---------------------------------------------------------------------
                          $1,698,508 $1,252,982 $4,582,729 $3,768,446
---------------------------------------------------------------------
---------------------------------------------------------------------
Earnings from operations,
 before restructuring
 costs (1)
 Meat Products Group        $ 15,246  $ (8,003)  $  37,833  $ (6,061)
 Agribusiness Group           25,331     24,269     77,151     51,303
 Bakery Products Group        27,828     16,549     66,109     43,600
---------------------------------------------------------------------
                            $ 68,405  $  32,815  $ 181,093  $  88,842
---------------------------------------------------------------------
Capital expenditures
 Meat Products Group        $ 10,445  $   8,664   $ 36,361  $  29,182
 Agribusiness Group           15,043      6,549     25,611     22,966
 Bakery Products Group        20,127     20,161     46,136     40,751
---------------------------------------------------------------------
                            $ 45,615    $35,374   $108,108  $  92,899
---------------------------------------------------------------------
---------------------------------------------------------------------
Depreciation and amortization
 Meat Products Group        $ 13,957  $  10,438   $ 43,396  $  30,781
 Agribusiness Group            5,585      4,764     15,839     13,891
 Bakery Products Group        10,635     10,224     32,029     30,096
---------------------------------------------------------------------
                            $ 30,177  $  25,426   $ 91,264  $  74,768
---------------------------------------------------------------------
---------------------------------------------------------------------


---------------------------------------------------------------------
---------------------------------------------------------------------
In thousands of Canadian dollars,               As at        As at
                                            September 30, December 31
                                         2004        2003        2003
---------------------------------------------------------------------
                                  (Unaudited) (Unaudited)
Total assets
 Meat Products Group              $ 1,435,818   $ 707,145   $ 666,489
 Agribusiness Group                   606,824     564,090     555,693
 Bakery Products Group                708,472     718,812     716,463
 Non-allocated assets                 214,125     260,141     210,076
---------------------------------------------------------------------
                                  $ 2,965,239 $ 2,250,188 $ 2,148,721
---------------------------------------------------------------------
---------------------------------------------------------------------

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

(1) Prior to 2004, the Company included the cost of production
contracts with hog producers in the Meat Products Group. Management
considers it more appropriate to include these impacts in the
Agribusiness Group operating results. Therefore, 2003 segmented
operating earnings before restructuring costs have been restated to
reflect this change in presentation and make them comparable with
2004.

SOURCE: Maple Leaf Foods Inc.

Maple Leaf Foods Inc.
Lynda Kuhn
Vice-President, Public & Investor Relations
(416) 926-2026
www.mapleleaf.com