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Maple Leaf Reports Strong 2004 Year-End And Fourth Quarter Financial Results

TORONTO–(BUSINESS WIRE)–Feb. 23, 2005–Maple Leaf Foods Inc.
(TSX:MFI) today reported its financial results for the fourth quarter
and year ended December 31, 2004.

“Our performance in 2004 reflects the underlying strength of our
balanced portfolio of bakery and protein value chain operations,”
said Michael McCain, President and Chief Executive Officer. “Our
earnings from operations for the year increased 68% and earnings per
share increased from $0.36 to $0.90 on a comparable basis. We
significantly strengthened our balance sheet through debt and equity
refinancing. We are maintaining our disciplined focus on earnings
growth, increasing our value-added product mix and successfully
integrating the Schneider Foods organization into Maple Leaf.”

Sales for the fourth quarter increased 40% to $1.8 billion
compared to $1.3 billion last year. Sales for the year were $6.4
billion compared to $5.0 billion for 2003. The increase in 2004 sales
was primarily due to the acquisition of Schneider Foods on April 5,
2004. Excluding Schneider Foods, sales increased 11% in the fourth
quarter and 5% in 2004.

Net earnings for the fourth quarter were $33.2 million ($0.28 per
share) compared to $27.0 million ($0.23 per share) for 2003, an
increase of 23%. Net earnings for 2004 were $106.8 million ($0.90 per
share) compared to $45.5 million ($0.36 per share) last year, before
$11.7 million ($17.7 million pre-tax) of restructuring costs in 2003.

Operating Review

Comparisons of earnings from operations exclude $17.7 million
($11.7 million after tax) of restructuring costs in 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 for the fourth
quarter and year were also effected by income in 2003 related to
sales of poultry production quota and a gain related to the wind up
of a pension plan, 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)                   Fourth Quarter              Full Year
                         --------------------------------------------
                         2004   2003   Change   2004   2003   Change
                         ----   ----   ------   ----   ----   ------
Meat Products Group      30.6   30.4       1%   68.5   14.8     363%
Agribusiness Group       21.0   13.1      59%   93.5   58.2      61%
                         -----------            -----------
Total Protein Value
 Chain                   51.6   43.5      18%  162.0   73.0     122%
Bakery Products Group    23.1   14.6      59%   89.2   58.1      53%
                         -----------            -----------
                         74.7   58.1      28%  251.2  131.1      92%
Sale of poultry
 production quota         0.6    5.5             5.2   11.8
Pension wind-up gain        -      -               -    9.5
                          ----------             ----------
Earnings from operations
 before restructuring
 costs                   75.3   63.6      18%  256.4  152.4      68%
                         ----   ----      ---  -----  -----
                         ----   ----           -----  -----

Earnings from operations for the fourth quarter increased by 28%,
driven by strong improvements in both the Protein Value Chain and
Bakery operations. This improvement was achieved despite the negative
affect of a significant decline in pork processor and commodity
poultry margins and a 4.7% increase in the value of the Canadian
dollar in the fourth quarter, and reflects the benefit of a well
balanced portfolio of protein and bakery operations, and the
Company’s improved value added sales mix.

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 the fourth quarter of 2004 were
$1.2 billion compared to $728.6 million in 2003, while sales for the
year were $4.1 billion compared to $2.9 billion last year. The
increase in sales was largely due to the contribution of Schneider
Foods and increased sales from fresh pork and poultry operations.
Excluding Schneider Foods sales increased 13.0% in the fourth quarter
and 6.4% in 2004.

Earnings from operations for the fourth quarter were $30.6
million compared to $30.4 million last year, with the increased
contribution from the Schneider Foods and the Consumer Foods
processed meats operations, offset by a significant decline in
industry pork and poultry processor margins. The Company’s fresh pork
and poultry operations performed well against these industry
conditions due to improved manufacturing efficiencies and an
increased valued added sales mix. Operating earnings for the year
more than quadrupled to $68.5 million from $14.8 million in 2003. The
processed meats operations benefited from a significant increase in
sales and earnings in the fourth quarter driven by strong ham and
bacon sales, and continued market growth through new product
innovation. In the fourth quarter the Company launched four new
varieties of Maple Leaf Fully Cooked Roasts, further solidifying its
leadership in this premium convenience market. Schneider Foods
benefited from continued strong growth of its recently launched
Schneiders Hot n’Hearty sandwich makers and very strong Schneiders
Lunchmate sales. Schneider Foods was accretive to earnings per share
for the fourth quarter and the year.

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 fourth quarter of 2004 were
$238.9 million compared to $234.8 million last year, while sales for
the year increased to $924.9 million compared to $918.8 million in
2003. Operating earnings for the fourth quarter of 2004 increased to
$21.0 million from $13.1 million last year, while operating earnings
for the year increased 61% to $93.5 million from $58.2 million last
year.

The improvement in profitability in the fourth quarter and for
the year was primarily due to continued strong hog prices and cost
reductions in the Company’s hog production operations. In December
2004, the Company had an effective hog ownership interest of
approximately 21%. Earnings from feed operations were largely
consistent with last year, while profits from rendering operations
declined from the fourth quarter last year due to reductions in the
price of competing feed ingredients.

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 fourth quarter of 2004 were
$345.9 million compared to $310.1 million last year, while sales for
the year of $1.31 billion compared to $1.25 billion in 2003. Earnings
from operations for the fourth quarter were $23.1 million compared to
$14.6 million last year, while operating earnings for the year
increased to $89.2 million from $58.1 million in 2003.

The Bakery Group benefited significantly from a sales mix that is
weighted towards health and well-being categories. Strong sales of
branded whole grain, whole wheat and specialty breads, and price
increases implemented to offset rising input costs contributed to
increased earnings for the quarter. Product line extensions for the
quarter supporting this focus included national expansion of
Dempsters Whole Grains bagels. Fresh Bakery operations realized
improved operating performance and efficiencies quarter-over quarter,
benefiting from the application of Six Sigma to reduce manufacturing
and distribution costs. The Bakery Group also benefited from
increased demand for bread products, as the low carbohydrate trend
continued to abate. Frozen Bakery sales and earnings increased for
the year, due to ongoing growth in the U.K. bakery operations.
Earnings from North American Frozen Bakery operations declined for
the fourth quarter and year due to increased distribution costs and a
stronger Canadian dollar, although volumes increased for the year.
The Company is launching a revolutionary new line of FroBake(R)
products that complement its par-baked product line and provide a
superior alternative to frozen dough by offering a product that is
more moist and crusty while eliminating the need to proof the bread.
FroBake(R) products will be produced on a commercial basis at the
Company’s bakery in Roanoke, Virginia commencing in the second
quarter of 2005.

Cash Flow and Financing: Total debt, net of cash balances, of
$1,046.3 million at the end of the year increased from $696.7 million
last year. The primary drivers of the increase was debt incurred to
purchase Schneider Foods, offset partly by the proceeds of an equity
issue in the fourth quarter. Cash flow from operating activities for
the fourth quarter increased to $144.2 million from $111.2 million
last year. Cash flow from operating activities for the year was
$239.1 million compared to $76.6 million in 2003. The increase for
the year was primarily the result of higher earnings and a
significant improvement in working capital performance.

Interest expense for the fourth quarter increased to $23.4
million from $18.1 million last year, while interest expense for 2004
was $83.5 million compared to $68.4 million last year. The increase
for the quarter and year was primarily due to higher average debt
incurred to finance the acquisition of Schneider Foods.

During the fourth quarter the Company completed three separate
financing transactions that enabled the Company to refinance
short-term debt incurred to acquire Schneider Foods and redeem a
significant portion of its convertible debenture for cash. These
transactions have provided the Company with long-term liquidity at
investment grade financing rates. As a result of these transactions,
the Company had invested cash balances in excess of $100 million as
at December 31, 2004, of which $79.8 million was employed on January
7, 2005 to redeem convertible debentures.

As noted above, on December 9th, the Company completed $500
million in long-term debenture financings for terms of seven, ten and
twelve years. The notes were issued to institutional investors in
Canada and the United States at fixed interest rates between 5.21%
and 6.22%.

Also on December 9th, Maple Leaf Foods completed an agreement
with its principal bank syndicate to renew the Company’s primary
revolving credit facility. This renewal increased the maximum
available amount from $635 million to $700 million, and extended the
maturity from October 3, 2005 to December 6, 2007. The new bank
facility is an unsecured revolving credit arrangement and bears
interest based on short term interest rates.

Finally, on December 20th, the Company completed a common share
offering of 11,340,000 shares at a price of $14.55 for net proceeds
of approximately $160 million after costs of $5 million.

Other Matters

The Company declared a dividend of $0.04 per share payable on
March 31, 2005 to shareholders of record on March 11, 2005.

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.

A web cast and conference call will be held at 2:30 p.m. (EST) on
February 23, 2005. To view the webcast, please log on to
http://www.mapleleaf.com/investor/default.aspx

A replay of the webcast will be available through the same
webcast site later in the day, or at www.mapleleaf.com under the
Investor Relations section.

To participate in the conference call, please dial in to
1-416-470-1140 or 877-793-3791.

Maple Leaf Foods Inc.
Notes to Consolidated Financial Statements
(For the quarters ended December 31, 2004 and December 31, 2003)
(Tabular amounts in thousands of Canadian dollars except
 per 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 Canadian Accounting Guideline 13 relating to hedging
and the implementation of Accounting Guideline 13, effective January
1, 2004, had no impact on the Company.

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) Revenue recognition

The Company recognizes revenues from product sales upon transfer
of title to customers. Revenue is recorded at the invoice price for
each product net of estimated returns. An estimate of sales
incentives provided to customers is also recognized at the time of
sale and is classified as cost of sales. Sales incentives include
various rebate and promotional programs with the Company’s customers,
primarily rebates based on achievement of specified volume levels.

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 December 31, 2004, trade accounts
receivable amounting to $209.7 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    Twelve months ended
                                  December 31,        December 31,
                               --------------------------------------
                                2004        2003      2004      2003

Earnings (losses) from
 associated companies          $ 286       $ (57)    $ 985      $ 51
Rental income                    178          54       458       337
Dividends received                32           -       144        39
Fees related to bakery
 reorganization                    -        (283)        -    (1,832)
Loss from real estate
 operations                      (50)       (734)     (246)     (192)
Gain (loss) on sale of
 investments, net                (95)        362       417       362
Gain (loss) on sale of
 property and equipment         (220)       (229)      892      (142)

                               --------------------------------------
                               $ 131      $ (887)  $ 2,650  $ (1,377)
                               --------------------------------------
                               --------------------------------------

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

    5. Stock-based compensation

    Stock options

The fair value of the total stock options issued in a quarter is
determined using the Black-Scholes option pricing model with the
following weighted average assumptions:

---------------------------------------------------------------------
---------------------------------------------------------------------
                                          Quarters ended December 31,
                                           2004                  2003
---------------------------------------------------------------------

Expected option life (years)                4.2                  4.2
Risk-free interest rate                     4.2%                 4.2%
Expected annual volatility                 32.8%                35.1%
Dividend yield                              1.1%                 1.5%
---------------------------------------------------------------------
---------------------------------------------------------------------

During the quarter, the Company granted 23,750 stock options
(2003: 85,000) at a weighted average price per share of $14.56 (2003:
$10.85). Year-to-date, the Company granted 1,416,600 stock options
(2003: 2,742,000) at a weighted average price per share of $13.09
(2003: $10.34).

The estimated fair value of the options issued during the fourth
quarter of 2004 and the prior year comparable quarter was minimal and
$4.5 million year-to-date (2003: $5.8 million year-to-date). The
value is amortized to income over the vesting period of the related
options. The charge to earnings in the quarter was $1.0 million
(2003: $0.5 million) and for the year was $3.4 million (2003: $0.8
million).

Restricted stock units (“RSUs”)

In the fourth quarter of 2004, the Company granted 12,625 RSUs
(789,000 year-to-date) 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 granted in the quarter
was $0.1 million ($7.7 million year-to-date). This amount 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
an earnings impact in the quarter of $0.6 million ($0.7 million
year-to-date).

Pro forma impact on earnings

In 2003, the Company elected to early adopt the new “Stock-based
Compensation and Other Stock-based Payments” accounting rules on a
prospective basis for awards granted or modified after January 1,
2003. During 2002, the Company granted 2,503,500 stock options at a
weighted average price per share of $14.36. The effect of these stock
option awards, had they been charged to earnings during the year on a
fair value basis, would have been an expense of $3.4 million (2003:
$3.5 million) with a related reduction to basic and diluted earnings
per common share of $0.03 (2003: $0.03).

6. Pensions

During the quarter, the Company recorded income of $4.3 million
related to net benefit plan income including post-retirement benefit
costs (2003: $9.5 million). For the full year, the Company recorded
$11.1 million in net benefit plan income (2003: $16.2 million). These
amounts exclude gains from plan wind-up.

7. Investment in Canada Bread Company Limited (“Canada Bread”)

During 2004, the Company acquired 490,400 shares (2003:
6,887,800) in Canada Bread for $18.9 million (2003: $180.8 million).
This increased Maple Leaf’s ownership to 86.6%. Subsequently, in
January 2005, the Company purchased an additional 66,900 shares for
$2.7 million, increasing its ownership to 86.9%.

8. Acquisitions

On April 5, 2004, the Company acquired Schneider Corporation
(“Schneider Foods”) for cash consideration of $376.7 million
including transaction costs of $8.1 million and the assumption of
Schneider Foods’ debt.

As at December 31, 2004, a preliminary purchase price allocation
(including fair value assigned to intangible assets, certain fixed
assets, legal claims, investments, long-term debt, pensions,
post-retirement benefits and taxes) has been completed, but the
Company has not yet finalized all of its restructuring and
integration plans for the operations acquired. Accordingly, the
allocation of the purchase cost to the assets and liabilities
acquired is still subject to change. Goodwill resulting from the
above transaction is included in the total assets of the Meat
Products Group.

Details of net assets acquired and purchase adjustments made in
2004 and 2003 are as follows:

---------------------------------------------------------------------
---------------------------------------------------------------------
                             Schneider                 2004     2003
                                 Foods     Other      Total    Total
---------------------------------------------------------------------
Net working capital (deficit) $ 79,590    $ (304)  $ 79,286 $ (9,915)
Investments                     21,191         -     21,191       56
Property and equipment         152,604         -    152,604   (2,524)
Other assets                     7,689         -      7,689        -
Goodwill                       291,402     1,976    293,378   17,162
Other intangibles               72,480         -     72,480        -
Long-term debt                (146,691)        -   (146,691)       -
Future income taxes             27,014         -     27,014    2,985
Pension benefit liability      (75,993)        -    (75,993)       -
Post employment benefit
 liability                     (49,631)        -    (49,631)       -
Other long-term liabilities     (1,255)        -     (1,255)       -
Minority interest               (1,737)        -     (1,737)    (762)
---------------------------------------------------------------------
Total purchase cost            376,663     1,672    378,335    7,002

Consideration:
  Cash                         376,663     6,003    382,666    7,002
  Accounts payable, accrued
   charges, and long-term debt       -     4,331      4,331        -
---------------------------------------------------------------------
                             $ 376,663  $  1,672  $ 378,335  $ 7,002
---------------------------------------------------------------------
---------------------------------------------------------------------

9. Long-term debt

In December 2004, the Company completed the following
re-financing transactions:

(a) In December 2004, the Company renegotiated its primary bank
debt facility. The principal changes were an increase in the size of
the facility from $635.0 million to $700.0 million and the maturity
date was extended from October 3, 2005 to December 6, 2007.

This facility can be drawn in either Canadian or U.S. dollars and
bears interest based on bankers’ acceptance rates for Canadian dollar
loans and LIBOR for U.S. dollar loans.

As at December 31, 2004, $66.0 million (2003: $207.8 million) of
the revolving facility was utilized, of which the full amount was in
respect of letters of credit and trade finance (2003: $55.8 million).

(b) In December 2004, the Company issued $500.0 million of notes
payable. The notes were issued in tranches of U.S. and Canadian
dollar denominations, with maturity dates from seven to twelve years
and bearing interest at fixed annual coupon rates. Details of the
five tranches are:

---------------------------------------------------------------------
---------------------------------------------------------------------
Principal                        Maturity Date          Annual Coupon
---------------------------------------------------------------------

US $207 million                           2011                   5.2%
US $98 million                            2014                   5.6%
US $7 million                             2016                   5.8%
CAD $105 million                          2014                   6.1%
CAD $20 million                           2016                   6.2%
---------------------------------------------------------------------
---------------------------------------------------------------------

Interest is payable semi-annually. Through the use of
cross-currency swaps and forwards (note 10), the Company effectively
converted: U.S. $177.0 million of debt maturing in 2011 into Canadian
dollar-denominated debt of $227.4 million bearing interest at an
annual fixed rate of 5.6%, U.S. $98 million of debt maturing in 2014
into Canadian dollar-denominated debt of $135.3 million bearing
interest at an annual fixed rate of 6.0%, and U.S. $2 million of debt
maturing in 2016 into Canadian dollar-denominated debt of $2.7
million bearing interest at an annual fixed rate of 6.1%. The
financial impact of currency rate changes on the swaps are reported
as other liabilities. At December 31, 2004, the swap liabilities were
$31.9 million based on year-end exchange rates.

(c) At December 31, 2004, the Company had convertible debentures
with a principal amount of $91.3 million outstanding. These
convertible debentures previously had a maturity date of December
2005 and were recorded as equity. On December 8, 2004, the Company
issued a cash redemption notice with payment due on January 7, 2005.
Accordingly, as of that date, the Company reclassified $90.0 million
of the convertible debentures to current debt. On January 7, 2005,
certain of the debenture holders tendered $79.8 million for cash
redemption and the remaining debenture holders tendered $11.5 million
of the debentures for conversion to common equity (see notes 11 and
12).

The required repayments of long-term debt are as follows:

---------------------------------------------------------------------
---------------------------------------------------------------------
2005                                                     $    105,910
2006                                                           11,977
2007                                                           84,110
2008                                                           10,957
2009                                                          178,415
Thereafter                                                    766,736
---------------------------------------------------------------------
Total long-term debt                                     $  1,158,105
---------------------------------------------------------------------
---------------------------------------------------------------------

10. 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 fourth quarter 2004 would have
been higher by $5.5 million ($16.3 million year-to-date) and interest
expense for the fourth quarter of 2004 would have been lower by $5.1
million ($17.7 million lower year-to-date).

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 debt issue (see note 9). The swaps that were
originally 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 6.0% and 6.7%. Concurrent with the debt issue in
December 2004, the Company terminated a portion of the swaps relating
to the debt issue for $16.1 million. This amount will be deferred and
amortized as interest expense over the life of the hedged debt (7 to
12 years). In addition, the Company modified the remaining swaps to
match the coupon payments on the hedged debt. These remaining swaps
have notional amounts of US$185.0 million and have terms of seven to
ten years and fixed interest rates that range between 5.6% and 6.1%.
As at December 31, 2004, these swaps had a market value loss of $37.5
million (2003: nil).

11. Shareholders’ equity

On December 20, 2004, the Company issued 11.3 million common
shares pursuant to a public offering at $14.55 per share for net
proceeds to the Company of $160.0 million (after costs of $5.0
million). McCain Capital Corporation (“MCC”) acquired 5,154,639
shares pursuant to this equity offering, increasing MCC share
ownership as at December 31, 2004 to 33.2%.

On January 7, 2005, certain convertible debenture holders
exercised their conversion right and the Company issued 763,933
common shares from Treasury at a price of $15 per share (see note 12).

12. Convertible debentures

On December 8, 2004, the Company issued a redemption notice for
the aggregate principal amount on the debentures of $91.3 million for
cash at par plus accrued interest with a date fixed for redemption of
January 7, 2005. As a result, the Company no longer had the option to
satisfy repayment on redemption with common shares. Accordingly, as
of that date the Company reclassified $90.0 million of the
convertible debentures to current debt, leaving $7.3 million related
to the debenture holders’ conversion option within shareholders’
equity. For the period from the date of the reclassification to
December 31, 2004, the carrying charges, including coupon interest,
were classified as interest expense.

On January 7, 2005, certain of the debenture holders exercised
their conversion rights and the Company issued 763,933 common shares
from Treasury for a reduction in the total cash to be paid by the
Company upon redemption of approximately $11.5 million. Accordingly,
the Company paid $79.8 million to redeem the remaining debentures
outstanding resulting in a net loss on redemption of $1.1 million in
2005.

13. Earnings Per Share

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

---------------------------------------------------------------------
---------------------------------------------------------------------
                                 Quarter ended   Twelve months ended
                                  December 31,          December 31,
                                 2004      2003       2004      2003
                             ------------------- --------------------
Numerator:
 Net earnings                $ 33,240  $ 26,988  $ 106,759  $ 35,068
 Convertible debenture charge    (817)   (1,214)    (4,476)  ( 4,851)
                             ------------------- --------------------
 Earnings available to
  common shareholders
  -  basic                     32,423    25,774    102,283    30,217

 Effect on earnings of
  dilutive securities:
  Convertible debt (ii)         1,222         -      4,882         -
                             ------------------- --------------------
 Earnings available to
  common shareholders -
  fully diluted              $ 33,645  $ 25,774  $ 107,165  $ 30,217
                             ------------------- --------------------
                             ------------------- --------------------

Denominator:
 Weighted average common
  shares outstanding (in
  millions)                   114.435   113.100    113.623   113.064
 Effect of dilutive
  securities (in millions):
  Employee stock options(i)     1.775     0.000      1.095     0.226
  Convertible debt(ii)
                                6.087     0.000      6.087     0.000
                             ------------------- --------------------
Weighted average shares -
 diluted (in millions)        122.297   113.100    120.805   113.290
                             ------------------- --------------------
                             ------------------- --------------------

(i) Excludes the effect of 11.4 million options and restricted stock
 units (2003: 5.4 million) to purchase common shares that are
 anti-dilutive.

(ii) For 2003, the convertible debt is anti-dilutive.

Earnings per share (basic)       0.28      0.23       0.90      0.27
Earnings per share (diluted)     0.28      0.23       0.89      0.27

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14. Supplemental information

---------------------------------------------------------------------
---------------------------------------------------------------------
                                 Quarter ended   Twelve months ended
                                  December 31,          December 31,
                                ---------------  --------------------
                                         2004                   2004

Cash interest paid                     20,971                 77,585
Cash taxes paid                        14,464                 44,910

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Maple Leaf Foods Inc.
Consolidated Balance Sheets

---------------------------------------------------------------------
---------------------------------------------------------------------
In thousands of Canadian dollars                  As at December 31,
                                                 2004           2003
---------------------------------------------------------------------

ASSETS
Current assets:
 Cash and cash equivalents                 $  111,770      $  38,908
 Accounts receivable (Note 2)                 292,462        242,306
 Inventories                                  385,128        259,758
 Future tax asset - current                     6,708          4,854
 Prepaid expenses and other assets             13,218          9,355
                                         ----------------------------
                                              809,286        555,181
Investments in associated companies            82,302         58,189
Property and equipment                        973,718        802,332
Other long-term assets                        230,201        171,262
Future tax asset - non-current                 26,976         29,906
Goodwill                                      816,408        523,561
Other intangible assets                        82,840          8,290
                                         ----------------------------
                                          $ 3,021,731    $ 2,148,721
                                         ----------------------------
                                         ----------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
 Accounts payable and accrued charges      $  621,564      $ 501,997
 Income and other taxes payable                27,651         12,212
 Current portion of long-term debt
  (Note 9)                                    105,910          4,959
                                         ----------------------------
                                              755,125        519,168
Long-term debt (Note 9)                     1,052,195        730,627
Future tax liability                           29,207         50,397
Other long-term liabilities                   205,542         35,274
Minority interest                              74,109         70,068

Shareholders' equity (Note 11):               905,553        743,187
                                         ----------------------------
                                          $ 3,021,731    $ 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     Twelve months ended
 except per share               December 31,            December 31,
 amounts                    2004        2003        2004        2003
--------------------------------------------------------------------
                      (Unaudited) (Unaudited)

Sales                $ 1,782,254 $ 1,273,450 $ 6,364,983 $ 5,041,896

Earnings from
 operations before
 restructuring costs      75,271      63,586     256,364     152,428
Restructuring costs
 (Note 3)                      -           -           -     (17,732)
                     ------------------------------------------------
Earnings from
 operations               75,271      63,586     256,364     134,696
Other income
 (expense) (Note 4)          131        (887)      2,650      (1,377)
                     ------------------------------------------------
Earnings before interest
 and income taxes         75,402      62,699     259,014     133,319
Interest expense          23,419      18,066      83,478      68,369
                     ------------------------------------------------
Earnings before income
 taxes                    51,983      44,633     175,536      64,950
Income taxes              16,042      15,591      58,862      22,879
                     ------------------------------------------------
Earnings before
 minority interest        35,941      29,042     116,674      42,071
Minority interest          2,701       2,054       9,915       7,003
                     ------------------------------------------------
Net earnings for the
 period                $  33,240   $  26,988  $  106,759   $  35,068
                     ------------------------------------------------
                     ------------------------------------------------

Earnings per share
 (basic) (Note 13)      $   0.28     $  0.23   $    0.90     $  0.27
Earnings per share
 (diluted) (Note 13)    $   0.28     $  0.23   $    0.89     $  0.27
Dividends per share
 declared                   0.04        0.04        0.16        0.16
Weighted average number
 of shares (millions)      114.4       113.1       113.6       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           Twelve Months
 share amounts.                                   ended December 31,
                                                      2004      2003
--------------------------------------------------------------------

Retained earnings, beginning of period            $ 74,982  $ 63,758
Net earnings for the period                        106,759    35,068
Dividends declared ($0.16 per share; 2003:
 $0.16 per share)                                  (18,136)  (18,094)
Convertible debenture charge (Note 12)              (4,476)   (4,851)
Premium on repurchase of share capital                   -      (899)
--------------------------------------------------------------------
Retained earnings, end of period                 $ 159,129  $ 74,982
--------------------------------------------------------------------
--------------------------------------------------------------------

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                   Quarter ended  Twelve months ended
 Canadian dollars                  December 31,         December 31,
                               2004        2003      2004       2003
---------------------------------------------------------------------
CASH PROVIDED BY
 (USED IN):              (Unaudited) (Unaudited)

Operating activities
 Net earnings for the
  period                   $ 33,240    $ 26,988 $ 106,759   $ 35,068
 Add (deduct) items not
  affecting cash:
  Depreciation and
   amortization              34,230      26,462   125,494    101,230
  Stock based compensation
   (Note 5)                   1,590         499     4,095        849
  Minority interest           2,701       2,054     9,915      7,003
  Future income taxes        (9,051)     12,180     7,985        580
  Increase in pension asset
   (Note 6)                     516     (12,267)  (24,977)   (29,501)
  Undistributed (earnings)
   losses of associated
   companies                 (2,985)      1,776    (6,289)     1,483
  (Gain) loss on sale of
   property and equipment       220         229      (892)       142
  (Gain) loss on sale of
   investments                   95        (362)     (417)      (362)
  Other                      (6,873)     (2,686)  (17,515)    (7,648)
 Change in other long-term
  receivables                  (493)     (3,914)   (6,018)    (3,856)
 Proceeds from pension
  plan wind-up                    -      27,251         -     27,251
 Change in non-cash
  operating working capital  91,027      33,032    40,963    (55,637)
                            -----------------------------------------
                            144,217     111,242    239,103    76,602
                            -----------------------------------------

Financing activities
 Dividends paid              (4,547)     (4,527)   (18,136)  (18,094)
 Dividends paid to
  minority interest            (234)       (234)      (956)   (1,663)
 Increase in long-term debt 575,523    (117,297) 1,023,007    69,338
 Decrease in long-term
  debt                     (729,577)     (7,510)  (772,101)  (20,332)
 Convertible debenture
  interest paid              (1,369)     (1,369)    (5,478)   (5,478)
 Increase in share
  capital                   165,030         346    166,243     3,118
 Changes in deferred
  financing costs
  (Note 10)                 (17,934)     (1,657)   (17,934)   (1,657)
 Shares repurchased for
  cancellation                    -           -          -    (1,829)
 Other                          866         465      2,250     1,858
                            -----------------------------------------
                            (12,242)   (131,783)   376,895    25,261
                            -----------------------------------------

Investing activities
 Additions to property
  and equipment             (48,669)    (39,708)  (156,777) (132,607)
 Proceeds from sale of
  property and equipment      3,583         717     12,649     1,933
 Investment in Canada Bread
  (Note 7)                  (18,909)          -    (18,909)  (74,831)
 Purchase of net assets of
  businesses (Note 8)        (1,767)     (1,416)  (382,666)   (7,002)
 Change in other
  investments, net           (1,443)      1,488      1,111    (6,196)
 Other                          274      (1,535)     1,456    (1,118)
                            -----------------------------------------
                            (66,931)    (40,454)  (543,136) (219,821)
                            -----------------------------------------

Increase (decrease) in cash
 and cash equivalents        65,044     (60,995)    72,862  (117,958)
Cash and cash equivalents,
 beginning of period         46,726      99,903     38,908   156,866
                            -----------------------------------------
Cash and cash equivalents,
 end of period              111,770      38,908    111,770    38,908
                            -----------------------------------------

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                 Quarter ended    Twelve months ended
 Canadian dollars                December 31,           December 31,
                              2004       2003       2004        2003
---------------------------------------------------------------------
Sales
 Meat Products Group   $ 1,197,449  $ 728,578 $4,127,255 $ 2,869,866
 Agribusiness Group        238,911    234,762    924,912     918,820
 Bakery Products Group     345,894    310,110  1,312,816   1,253,210
                       ---------------------- -----------------------
                       $ 1,782,254 $1,273,450 $6,364,983 $ 5,041,896
                       ---------------------- -----------------------
                       ---------------------- -----------------------

Earnings from
 operations, before
 restructuring costs(1)

 Meat Products Group    $   30,607     30,402 $   68,440   $  24,341
 Agribusiness Group         21,585     18,624     98,736      69,927
 Bakery Products Group      23,079     14,560     89,188      58,160
                       ---------------------- -----------------------
                        $   75,271  $  63,586 $  256,364   $ 152,428
                       ---------------------- -----------------------
                       ---------------------- -----------------------

Capital expenditures
 Meat Products Group    $   15,471   $  7,600 $   51,832   $  36,782
 Agribusiness Group          9,268      8,067     34,879      31,033
 Bakery Products Group      23,930     24,041     70,066      64,792
                       ---------------------- -----------------------
                        $   48,669  $  39,708 $  156,777   $ 132,607
                       ---------------------- -----------------------
                       ---------------------- -----------------------

Depreciation and
 amortization
 Meat Products Group    $   17,420  $  10,922  $  60,816   $  41,703
 Agribusiness Group          5,484      4,944     21,323      18,835
 Bakery Products Group      11,326     10,596     43,355      40,692
                       ---------------------- -----------------------
                        $   34,230  $  26,462 $  125,494   $ 101,230
                       ---------------------- -----------------------
                       ---------------------- -----------------------



---------------------------------------------------------------------
---------------------------------------------------------------------
                                                              As at
In thousands of Canadian dollars,                       December 31,
                                                 2004           2003
---------------------------------------------------------------------
Total assets
 Meat Products Group                      $ 1,452,100      $ 666,489
 Agribusiness Group                           597,806        555,693
 Bakery Products Group                        702,137        716,463
 Non-allocated assets                         269,688        210,076
                                        -----------------------------
                                          $ 3,021,731    $ 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.

Maple Leaf Foods Inc. (TSX:MFI)

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

    SOURCE: Maple Leaf Foods Inc.