Maple Leaf Foods Reports Results for Fourth Quarter and Fiscal 2008



    RECOVERY PROGRESSING WELL

    TORONTO, Feb. 24 /CNW/ - Maple Leaf Foods Inc. (TSX: MFI) today reported
its financial results for the fourth quarter and year ended December 31, 2008.
Fourth quarter highlights follow:

    
    -   Adjusted Earnings per Share of $0.12 compared to $0.20 last year
    -   The packaged meats recall significantly affected the business by an
        estimated $59 million to $69 million before taxes, of which $19
        million in one-time direct costs has been excluded in calculating
        Adjusted Earnings per Share
    -   Consumer confidence strengthening and volumes recovering in Meat
        Products Group
    -   Bakery margins improved as input costs declined
    -   Cost savings from protein restructuring contributed to earnings
    -   Net Loss per Share of ($0.12) compared to ($0.19) last year including
        on-going effects and direct costs of the packaged meats recall

    Note: Adjusted Earnings per Share measures are defined as earnings per
          share from continuing operations before one-time direct product
          recall, restructuring and other related costs and certain non-
          recurring tax adjustments.  Adjusted Earnings per Share and
          Operating Earnings measures include on-going effects of the product
          recall, such as lower sales and higher supply chain costs.
    

    "Last year was a historically challenging year on many fronts as we
managed through unprecedented spikes in global commodity prices, financial
market meltdowns, and the largest product recall in Canadian history," said
Michael H. McCain, President and CEO. "Within this context, we are satisfied
with the results we were able to deliver. They are a reflection of the
diversity of our business, the capability of our people to manage through
extreme adversity and the strength of our entire brand portfolio."
    "While our profits were down 40% in the quarter, overshadowed by the
product recall which, excluding one-time amounts, is estimated to have cost
the Company $40 million to $50 million before taxes, there were many areas
where we showed substantial improvement. These included normalizing our bakery
margins after absorbing the impact of commodity markets earlier in the year,
increasing benefits from our protein business restructuring, and steadily
regaining consumer confidence in the Maple Leaf brand. Our packaged meats
volumes have almost fully recovered, although we must demonstrate that
consistently and we continue to experience significant margin compression.
Overall we are pleased with the early progress made in recovering our packaged
meats business, and are even more confident in the direction of our
transformational efforts. We look forward to improving trends in 2009."

    
    Financial Overview
    ------------------
    
    Sales for the fourth quarter increased by 5.2% to $1.3 billion compared
to the same period last year, and sales for the year were consistent at $5.2
billion. While sales were impacted by the divestiture or exit of non-core
businesses and a decline in meat volumes in the second half of 2008 due to the
recall, price increases, fluctuations in the Canadian dollar and contributions
from acquisitions contributed to sales for the fourth quarter and year to
date.
    Fourth quarter earnings from continuing operations before one-time direct
product recall, restructuring and other related costs ("Adjusted Operating
Earnings") decreased 38.9% to $35.4 million and by 35.5% to $128.4 million for
the year. Adjusted Earnings per Share was $0.12 compared to $0.20 last year
and for the year was $0.29 compared to $0.51 last year.
    Following is a summary of Adjusted Earnings per Share, defined as
Earnings per Share ("EPS") from continuing operations before one-time direct
product recall, restructuring and other related costs. On-going operational
effects of the product recall, such as lower sales and higher supply chain
costs are estimated to be $40 million to $50 million (before taxes) and have
reduced Adjusted Operating Earnings and Adjusted Earnings per Share.

    
                                                           ------------------
                                           Fourth Quarter        Full Year
    Per share                             2008      2007      2008      2007
    -------------------------------------------------------------------------
    EPS from continuing operations     $ (0.12)  $ (0.19)  $ (0.29)  $ (0.18)
    Restructuring and other related
     costs                             $  0.13   $  0.47   $  0.36   $  0.81
    One-time product recall costs      $  0.11   $     -   $  0.22   $     -
    Tax benefit from lower future tax
     rates (i)                               -     (0.08)        -     (0.08)
    Tax benefit related to animal
     nutrition business                      -         -         -     (0.04)
    -------------------------------------------------------------------------
    Adjusted EPS                          0.12      0.20      0.29      0.51
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (i) During the fourth quarter of 2007, the company recorded a significant
        net tax benefit related to the enactment of lower future tax rates

    Business Segment Review
    -----------------------
    Following is a summary of operating earnings from continuing operations
before one-time direct product recall, restructuring and other related costs
("Adjusted Operating Earnings") by business segment:


                           Fourth Quarter                    Full Year
    ($ millions)       2008      2007   Change      2008      2007    Change
    -------------------------------------------------------------------------
    Meat Products
     Group          $ (2.1)   $ 44.0   (104.7%)   $ 29.5    $ 94.1    (68.7%)
    Agribusiness
     Group(i)         13.0      (8.6)   250.4%      30.1      (6.6)   555.2%
    -------------------------------------------------------------------------
    Protein Group     10.9      35.4    (69.2%)     59.6      87.5    (31.9%)
    Bakery Products
     Group            26.6      25.7      3.7%      83.0     119.3    (30.4%)
    Non-allocated
     costs(ii)        (2.1)     (3.1)    31.0%     (14.2)     (7.7)   (83.6%)
    -------------------------------------------------------------------------
                    $ 35.4    $ 57.9    (38.9%)   $128.4    $199.1    (35.5%)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (i)    Agribusiness Group earnings for 2007 exclude the results of the
           animal nutrition business that are reported as discontinued
           operations.
    (ii)   Non-allocated costs include costs related to the Company's IT
           system conversion, certain shared services and consulting expenses
           related to restructuring initiatives. Management believes that not
           allocating these costs provides a more comparable assessment of
           segment operating results.

    Meat Products Group (value-added processed packaged meats; chilled meal
    entrees and lunch kits; value-added fresh pork, poultry and turkey
    products)
    

    Adjusted Operating Earnings for the fourth quarter were a loss of $2.1
million compared to earnings of $44.0 million last year. For the year,
adjusted operating earnings were $29.5 million compared to $94.1 million last
year. Adjusted Operating Earnings for the fourth quarter were impacted by an
estimated $40 million to $50 million before taxes as a result of the packaged
meats product recall that occurred in August, 2008. This reflected lower sales
and higher supply chain costs, the suspension of price increases to offset
rising meat costs, and delays in planned promotional activities. In addition,
one-time recall costs were $18.5 million in the quarter and $37.5 million for
the total year. These costs, primarily product destruction and facility
sanitation, have been separately identified in the income statement. No
further one-time costs are anticipated as the recall has been completed and
all recalled product has been destroyed.
    The Company has been making steady progress in stabilizing its
manufacturing supply chain and rebuilding its packaged meat volumes and brand
equity, reflecting a return in consumer confidence. However margins in this
business will take some time to fully restore. The Company is pursuing an
aggressive promotion and product innovation program to drive sales and
profitability. The Company is also implementing enhanced food safety protocols
across its packaged meat operations, including extensive testing, sanitization
and workplace training that are based on global best practices and exceed
regulatory requirements.
    Earnings from poultry operations declined due to lower industry processor
margins and the cost of a six week strike at the Company's Edmonton plant,
while the fresh pork processing operations had a strong quarter, benefiting
from efficiencies gained through the closure of three plants and the
consolidation of production into scale plants in Brandon and Winnipeg. The
ongoing restructuring of the protein business contributed materially to
earnings in the quarter and year, and these initiatives will continue through
2009.

    Agribusiness Group (swine production and animal by-products recycling)

    Adjusted Operating Earnings for the fourth quarter rose to $13.0 million
compared to a loss of $8.6 million in the prior year. Adjusted Operating
Earnings for the year increased to $30.1 million from a loss of $6.6 million
in 2007. Earnings in the quarter reflect the benefits from the restructuring
of hog production operations. The Company has completed the sale of its
Alberta and Ontario businesses and a small genetics business, and consolidated
its remaining wholly owned operations in Manitoba. This resulted in a
reduction in hogs under management to approximately 220,000 in the quarter
approximately 20% of the supply into the Brandon processing plant.
Agribusiness earnings also include a $3 million government stability grant
received in the quarter related to previously owned hog production operations
in Ontario. Earnings from the rendering operations increased in the fourth
quarter, although pricing of rendered products continued to decline through
the quarter and into 2009 as commodity markets normalized from the
unprecedented high prices in the first half of 2008.

    
    Bakery Products Group (fresh and frozen bakery products, including
    breads, artisan, specialty and sweet goods, sandwiches and fresh pasta
    and sauces)
    

    Adjusted Operating Earnings for the fourth quarter increased to $26.6
million compared to $25.7 million last year. Adjusted operating earnings for
the year declined significantly to $83.0 million compared to $119.3 million
for 2007, reflecting the impact of high commodity prices earlier in 2008.
During the quarter margins increased closer to long term historic levels as a
result of lower wheat costs and price increases implemented in December 2007
and March 2008. Margins were not fully restored as the benefit from decreasing
input costs was partially offset by the weakening Canadian dollar that affects
the Canadian price for flour. North American bakery volumes remained
consistent in the fourth quarter, supported by innovation and mix
improvements.
    The North American frozen bakery operations have made progress in
implementing cost reduction and sales strategies to improve earnings. In the
UK Bakery operations, commissioning of a new oven at the Rotherham bagel plant
to replace an oven destroyed by a fire earlier in the year resulted in higher
production costs and reduced earnings. These costs were offset by an $8.3
million insurance payment in the fourth quarter that is recorded in other
income. Commissioning of the oven and a weak UK economy resulted in
significantly lower sales of specialty bakery products. The business has
increased promotional activity to restore growth in the bagel market. To
increase operating efficiencies, two sub-scale plants were closed in the third
quarter, with production shifted to other facilities to increase capacity
utilization.

    Liquidity and capital Resources: On December 16 2008, the company issued
$70 million (before issuance costs) in equity units comprising subscription
receipts and equity warrants. This transaction was structured to provide the
Company with flexibility in managing its capital base and resources and to
strengthen the balance sheet. This combined with a reduction in capital
spending and improved working capital management resulted in a significant
improvement in the Company's financial position compared to the last quarter.

    Other Income: The Company recorded other income for the fourth quarter of
$13.8 million, compared to $2.2 million last year. Other income included
insurance proceeds of $8.3 million to cover costs related to an oven fire that
occurred at the Company's UK bagel plant earlier in the year. For the
year-to-date, $14.7 million in insurance payments related to this fire have
been received. The Agribusiness operations also received net insurance
proceeds of $4.7 million in the fourth quarter to compensate for losses
resulting from a fire in a sow barn.

    
    Other Matters
    -------------
    
    On February 24, 2009, Maple Leaf Foods Inc. declared a dividend of $0.04
per share payable on March 31, 2009 to shareholders of record on March 10,
2009. Unless indicated otherwise, by the Company, in writing at or before the
time the dividend is paid, each dividend paid by the corporation in 2009 or a
subsequent year is an eligible dividend for the purposes of the "Enhanced
Dividend Tax Credit System."
    An investor presentation related to the Company's fourth quarter and full
year 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. EDT on February 24, 2009 to review Maple Leaf Foods'
fourth quarter and full year financial results. To participate in the call,
please dial 416-641-6111 or 866-696-5911. For those unable to participate,
playback will be made available an hour after the event at 416-695-5800 /
800-408-3053 (Passcode 3282092 followed by the number sign.) A webcast
presentation of the fourth quarter and full year financial results will also
be available at http://investor.mapleleaf.ca via a link
http://events.startcast.com/events6/91/C0006/Default.aspx.
    The Company's full financial statements and related Management's
Discussion and Analysis are available for download on the Company's website
and will be available on SEDAR at sedar.com as of March 2, 2009.
    
    Forward-Looking Statements
    --------------------------
    
    This document contains, and the Company's oral and written public
communications often contain, forward-looking statements that are based on
current expectations, estimates, forecasts and projections about the
industries in which the Company operates and beliefs and assumptions made by
the Management of the Company. Such statements include, but are not limited
to, statements with respect to our objectives and goals, as well as statements
with respect to our beliefs, plans, objectives, expectations, anticipations,
estimates and intentions. Specific statements include, but are not limited to,
statements with respect to our expectations concerning improving business
trends in 2009, our expectation that there will be no additional one time
product recall costs in 2009, our expectations concerning the timing of margin
recovery in our packaged meats business and our expectations concerning
continuing restructuring initiatives in 2009. Words such as "expect,"
"anticipate," "intend," "attempt," "may," "will," "plan," "believe," "seek,"
"estimate," and variations of such words and similar expressions are intended
to identify such forward-looking statements. These statements are not
guarantees of future performance and involve assumptions and risks and
uncertainties that are difficult to predict.
    In particular, the specific forward-looking statements contained in this
document are based on a variety of factors and assumptions including, but not
limited to: with respect to the forward looking statement concerning
continuing restructuring initiatives, the assumption that the Company will be
able to execute these initiatives in 2009. In addition, expectations
concerning performance of the Company's business in general are based on a
number of factors and assumptions including, but not limited to: the condition
of the Canadian and United States economies; the rate of exchange of the
Canadian dollar to the U.S. dollar and Japanese yen; expected recovery of
sales following the product recall; the availability and prices of raw
materials, energy and supplies; product pricing; the availability of
insurance; the competitive environment and related market conditions;
improvement of operating efficiencies whether as a result of the protein
business transformation or otherwise; continued access to capital; the cost of
compliance with environmental and health standards; no adverse results from
ongoing litigation that would not be covered by insurance; no unexpected
actions of domestic and foreign governments; and the general assumption that
none of the risks identified under "Risk Factors" in the Company's Management
Discussion and Analysis will materialize. All of these assumptions have been
derived from information currently available to the Company including
information obtained by the Company from third-party industry sources. These
assumptions may prove to be incorrect in whole or in part. In addition, actual
results may differ materially from those expressed, implied or forecasted in
such forward looking statements, which reflect the Company's expectations only
as of the date hereof.
    Factors that could cause actual results or outcomes to differ materially
from the results expressed, implied or forecasted by forward-looking
statements are discussed more fully in the Company's Management Discussion and
Analysis including in the section entitled "Risk Factors" that will be
available on SEDAR at www.sedar.com. The Company does not intend, and the
Company disclaims any obligation to update any forward-looking statements,
whether written or oral, or whether as a result of new information, future
events or otherwise except as required by law.

    Maple Leaf Foods Inc. is a leading food processing company, headquartered
in Toronto, Canada. The Company employs approximately 24,000 people at its
operations across Canada and in the United States, the United Kingdom and
Asia. The Company had sales of $5.2 billion in 2008.


    
                  Consolidated Interim Financial Statements
                       (Expressed in Canadian dollars)

                            MAPLE LEAF FOODS INC.
           Three and twelve months ended December 31, 2008 and 2007



    MAPLE LEAF FOODS INC.
    Consolidated Balance Sheets
    (In thousands of Canadian dollars)

    -------------------------------------------------------------------------
                                                           As at December 31,
                                                          2008          2007
    -------------------------------------------------------------------------

    ASSETS

    Current assets
      Cash and cash equivalents                    $   365,518   $    28,222
      Accounts receivable                              139,144       202,285
      Inventories                                      377,414       351,064
      Income and other taxes recoverable                20,971             -
      Future tax asset - current                        19,787        25,409
      Prepaid expenses and other assets                 32,289        16,529
      Assets held for sale                                   -        10,092
      -----------------------------------------------------------------------
                                                   $   955,123   $   633,601

    Property and equipment                           1,169,435     1,126,727
    Other long-term assets                             329,070       304,567
    Future tax asset - non-current                      24,854        22,837
    Goodwill                                           876,261       817,477
    Other intangible assets                             97,358        92,635

    -------------------------------------------------------------------------
                                                   $ 3,452,101   $ 2,997,844
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities
      Bank indebtedness                            $     8,894   $     9,845
      Accounts payable and accrued charges             600,924       550,528
      Income and other taxes payable                         -        12,881
      Current portion of long-term debt                179,244        17,945
      Other current liabilities                         28,456             -
      -----------------------------------------------------------------------
                                                   $   817,518   $   591,199

    Long-term debt                                   1,200,224       855,281
    Future tax liability - non-current                  37,903        74,115
    Other long-term liabilities                        179,039       248,448
    Non-controlling interest                            74,447        79,554
    Shareholders' equity                             1,142,970     1,149,247

    -------------------------------------------------------------------------
                                                   $ 3,452,101   $ 2,997,844
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    MAPLE LEAF FOODS INC.
    Consolidated Statements of Earnings
    (In thousands of Canadian dollars, except share amounts)

    -------------------------------------------------------------------------
                              Three months ended         Twelve months ended
                                     December 31,                December 31,
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
                        (Unaudited)   (Unaudited)

    Sales              $ 1,339,704   $ 1,273,633   $ 5,242,602   $ 5,209,640
    Cost of goods
     sold                1,184,003     1,075,111     4,622,409     4,523,448
    -------------------------------------------------------------------------
    Gross margin       $   155,701   $   198,522   $   620,193   $   686,192
    Selling, general
     and administrative
     expenses              120,351       140,581       491,778       487,136
    -------------------------------------------------------------------------

    Earnings from
     continuing
     operations
     before the
     following         $    35,350   $    57,941   $   128,415   $   199,056
    Product recall,
     restructuring
     and other
     related costs         (40,570)      (71,907)     (102,812)     (122,304)
    Other income            13,789         2,244        24,864         4,578
    -------------------------------------------------------------------------

    Earnings (loss)
     from continuing
     operations
     before interest
     and income taxes  $     8,569   $   (11,722)  $    50,467   $    81,330
    Interest expense        22,795        21,093        88,651        94,122
    -------------------------------------------------------------------------

    Loss
     from continuing
     operations
     before income
     taxes             $   (14,226)  $   (32,815)  $   (38,184)  $   (12,792)
    Income taxes            (2,336)      (11,772)       (8,538)          801
    -------------------------------------------------------------------------
    Loss
     from continuing
     operations before
     minority interest $   (11,890)  $   (21,043)  $   (29,646)  $   (13,593)
    Non-controlling
     interest                2,685         2,695         7,211         9,639
    -------------------------------------------------------------------------

    Net loss
     from
     continuing
     operations        $   (14,575)  $   (23,738)  $   (36,857)  $   (23,232)
    Net earnings (loss)
     from discontinued
     operations - net
     of income tax               -        (1,666)            -       218,196

    -------------------------------------------------------------------------
    Net earnings (loss)
     for the period    $   (14,575)  $   (22,072)  $   (36,857)  $   194,964
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic earnings
     (loss) per share
      From continuing
       operations     $      (0.12)  $     (0.19)  $     (0.29)  $     (0.18)
      From discontinued
       operations                -          0.01             -          1.71
    -------------------------------------------------------------------------
                      $      (0.12)  $     (0.17)  $     (0.29)  $      1.53
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Diluted earnings
     (loss) per share
      From continuing
       operations     $      (0.12)  $     (0.19)  $     (0.29)  $     (0.18)
      From discontinued
       operations                -          0.01             -          1.68
    -------------------------------------------------------------------------
                      $      (0.12)  $     (0.17)  $     (0.29)  $      1.50
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average
     number of shares
     (millions)              126.4         127.0         126.7         127.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    MAPLE LEAF FOODS INC.
    Consolidated Statements of Retained Earnings
    (In thousands of Canadian dollars)
    -------------------------------------------------------------------------

                                             Twelve months ended December 31,
                                                          2008          2007
    -------------------------------------------------------------------------

    Retained earnings, beginning of year           $   378,604   $   204,415
    Net earnings (loss) for the year                   (36,857)      194,964
    Dividends declared ($0.16 per share;
     2007: $0.16 per share)                            (20,769)      (20,775)
    Premium on shares repurchased for cancellation      (5,515)            -
    Premium on shares issued from Restricted Share
     Unit Trust                                           (814)            -

    -------------------------------------------------------------------------
    Retained earnings, end of year                 $   314,649   $   378,604
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated Statements of Comprehensive Income (Loss)
    (In thousands of Canadian dollars)
    -------------------------------------------------------------------------
                              Three months ended         Twelve months ended
                                     December 31,                December 31,
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
                        (Unaudited)   (Unaudited)

    Net earnings (loss)
     for the period    $   (14,575)  $   (22,072)  $   (36,857)  $   194,964

    Other comprehensive
     income (loss)

      Change in
       accumulated
       foreign
       currency
       translation
       adjustment           (5,626)       (2,314)       (6,579)      (16,036)
      Change in net
       unrealized
       derivative
       loss on cash
       flow hedges          (8,016)        4,347       (10,329)       22,620
    -------------------------------------------------------------------------
                       $   (13,642)  $     2,033   $   (16,908)  $     6,584
    -------------------------------------------------------------------------
    Comprehensive
     income (loss)     $   (28,217)  $   (20,039)  $   (53,765)  $   201,548
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    MAPLE LEAF FOODS INC.
    Consolidated Statements of Cash Flows
    (In thousands of Canadian dollars)
    -------------------------------------------------------------------------
                              Three months ended         Twelve months ended
                                     December 31,                December 31,
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
    CASH PROVIDED BY
     (USED) IN          (Unaudited)   (Unaudited)

    Operating activities
      Net loss from continuing
       operations      $   (14,575)  $   (23,738)  $   (36,857)  $   (23,232)
      Add (deduct)
       items not
       affecting cash:
        Depreciation
         and amortization   38,157        35,477       149,219       141,181
        Stock-based
         compensation        5,134         4,866        17,160        15,340
        Non-controlling
         interest            2,686         2,695         7,212         9,639
        Future income
         taxes              (1,489)      (35,274)      (23,254)      (46,290)
        Gain on sale
         of property
         and equipment        (651)       (2,086)       (4,724)       (2,341)
        Gain on sale
         of investments          -           (14)            -          (176)
        Amortization of
         terminated
         interest rate swaps   732         1,723         4,391         3,721
        Change in fair value
         of derivative
         financial
         instruments        14,600         3,818        12,851        (1,085)
      Change in other
       long-term
       receivables             334        (2,071)          893        (1,957)
      Increase in net
       pension asset       (11,290)      (11,308)      (27,489)      (48,034)
      Asset impairments
       and change in
        provision for
        restructuring
        and other related
        costs                9,067        69,917        37,859       101,348
      Other                  2,174        10,962         6,066         5,363
      Change in non-cash
       operating working
       capital             141,991        44,176        52,156       (30,643)
    -------------------------------------------------------------------------
    Cash provided by
     operating activities
     of continuing
     operations        $   186,870   $    99,143   $   195,483   $   122,834
    Cash used in
     operating activities
     of discontinued
     operations                  -             -             -       (17,086)
    -------------------------------------------------------------------------
                       $   186,870   $    99,143   $   195,483   $   105,748
    Financing
     activities
      Dividends paid        (5,069)       (5,384)      (20,769)      (20,775)
      Dividends paid
       to non-controlling
       interest               (156)         (183)         (755)         (801)
      Net increase
       (decrease) in
       long-term debt       32,914       (74,908)      392,285      (335,474)
      Proceeds on
       issuance of
       share capital         1,133           600         5,143        20,944
      Shares repurchased
       for cancellation          -             -       (11,814)            -
      Issuance of
       equity units         69,106             -        69,106             -
      Purchase of
       treasury stock            -       (25,362)      (11,341)      (30,054)
      Other                  1,210           909         1,994         8,200
    -------------------------------------------------------------------------
    Cash provided by
     (used in)
     financing
     activities of
     continuing
     operations        $    99,138   $  (104,328)  $   423,849   $  (357,960)
    Cash used in
     financing activities
     of discontinued
     operations                  -             -             -          (389)
    -------------------------------------------------------------------------
                       $    99,138   $  (104,328)  $   423,849   $  (358,349)
    Investing
     activities
      Additions to
       property and
       equipment           (48,512)      (66,424)     (206,220)     (236,660)
      Proceeds from
       disposal of
       property and
       equipment             2,500         6,668        19,727         9,788
      Acquisition of
       business -
       net of cash
       acquired                 (8)         (390)      (62,962)      (65,013)
      Proceeds on sale
       of investments        1,053             -         1,053         3,713
      Proceeds on
       disposal of
       business                  -             -             -         5,470
      Purchase of
       Canada Bread shares       -             -       (32,643)       (6,521)
      Other                   (405)          138           (40)        1,521
    -------------------------------------------------------------------------
    Cash used in
     investing activities
     of continuing
     operations        $   (45,372)  $   (60,008)  $  (281,085)  $  (287,702)
    Cash provided
     by investing
     activities of
     discontinued
     operations                  -             -             -       503,316

    -------------------------------------------------------------------------
                       $   (45,372)  $   (60,008)  $  (281,085)  $   215,614
    Increase
     (decrease) in
     cash and cash
     equivalents           240,636       (65,193)      338,247       (36,987)
    Cash and cash
     equivalents,
     beginning of
     period                115,988        83,570        18,377        55,364
    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     end of period     $   356,624   $    18,377   $   356,624   $    18,377
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    MAPLE LEAF FOODS INC.
    Segmented Financial Information
    (In thousands of Canadian dollars)
    -------------------------------------------------------------------------
                              Three months ended         Twelve months ended
                                     December 31,                December 31,
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
                        (Unaudited)   (Unaudited)
    Sales
      Meat Products
       Group           $   846,316   $   820,402   $ 3,303,694   $ 3,458,055
      Agribusiness
       Group                49,180        60,449       232,999       240,956
      Bakery Products
       Group               444,208       392,782     1,705,909     1,510,629
    -------------------------------------------------------------------------
                       $ 1,339,704   $ 1,273,633   $ 5,242,602   $ 5,209,640
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings from
     operations,
     before
     restructuring
     and other
     related costs and
     other income
      Meat Products
       Group           $    (2,087)  $    43,983   $    29,455   $    94,087
      Agribusiness
       Group                12,980        (8,632)       30,132        (6,620)
      Bakery Products
       Group                26,601        25,653        82,979       119,297
      Non-allocated
       costs                (2,144)       (3,063)      (14,151)       (7,708)
    -------------------------------------------------------------------------
                       $    35,350   $    57,941   $   128,415   $   199,056
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Capital Expenditures
      Meat Products
       Group           $    31,645   $    39,074   $   133,238   $   132,220
      Agribusiness
       Group                 1,963         4,652        11,577        15,068
      Bakery Products
       Group                14,904        22,698        61,405        89,372
    -------------------------------------------------------------------------
                       $    48,512   $    66,424   $   206,220   $   236,660
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Depreciation and
     amortization
      Meat Products
       Group           $   19,164    $    16,595   $    75,712   $    68,806
      Agribusiness
       Group                3,969          5,552        16,221        20,536
      Bakery Products
       Group               15,024         13,330        57,286        51,839
    -------------------------------------------------------------------------
                       $   38,157    $    35,477   $   149,219   $   141,181
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                           As at December 31,
                                                          2008          2007
    -------------------------------------------------------------------------

    Total assets
      Meat Products Group                          $ 1,677,671   $ 1,560,244
      Agribusiness Group                               318,387       302,999
      Bakery Products Group                            922,158       823,137
      Non-allocated assets                             533,885       311,464
    -------------------------------------------------------------------------
                                                   $ 3,452,101   $ 2,997,844
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Goodwill
      Meat Products Group                          $   450,431   $   450,929
      Agribusiness Group                                14,445         2,058
      Bakery Products Group                            411,385       364,490
    -------------------------------------------------------------------------
                                                   $   876,261   $   817,477
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





For further information:

For further information: Lynda Kuhn, Senior Vice-President,
Communications & Consumer Relations, (416) 926-2026, www.mapleleaf.com


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