Maple Leaf Foods Reports Results for Fourth Quarter and Year-End 2012

    Maple Leaf Foods Reports Results for Fourth Quarter and Year-End 2012

PR Newswire

TORONTO, Feb. 26, 2013

TSX: MFI
www.mapleleaffoods.com

TORONTO, Feb. 26, 2013 /PRNewswire/ - Maple Leaf Foods Inc. (TSX: MFI) today
reported its financial results for the fourth quarter and fiscal year ended
December 31, 2012.

Highlights for the fourth quarter of 2012 include:

  *Adjusted Operating Earnings^(1) increased 58.9% to $91.3 million
  *Net earnings increased to $56.8 million from $9.2 million last year
  *Adjusted Earnings per Share^(2) increased to $0.38 from $0.21 last year
  *EBITDA^(3) margins were 10.6% for the company

Highlights for the full year 2012 include:

  *Adjusted Operating Earnings increased 8.1% to $280.0 million following
    strong second half results
  *Net earnings increased 40.5% to $122.7 million
  *Full year Adjusted Earnings per Share was $1.06, compared to $1.01 last
    year (2011 includes $0.09 per share tax adjustments related to a prior
    acquisition)

"We are very  pleased with  our results  for the  fourth quarter  and 2012  in 
total. They  reflect steady,  ongoing progress  in realizing  earnings  growth 
towards our financial  targets," said  Michael H. McCain,  President and  CEO. 
"The challenging  market conditions  in primary  pork processing  margins  and 
consumer bread demand  were significant  headwinds for the  year; however,  we 
achieved an 8%  increase in  operating profits  for the  year and  59% in  the 
fourth quarter despite  these challenges. This  is a strong  testament to  the 
strength of our business and our strategic initiatives, and the  extraordinary 
contribution of our people. The effects of food inflation driven by the  North 
American droughts of 2012 will be felt mostly in the first half of 2013. As a
result, we expect some short-term volatility in our earnings as we pass  those 
cost increases on in the  marketplace. Beyond this, our strategic  initiatives 
will accelerate in 2013 and contribute to continued margin growth."

(1): Adjusted Operating Earnings, a non-IFRS measure, is used by Management to
evaluate financial operating results. It is defined as earnings before income
taxes adjusted for items that are not considered representative of on-going
operational activities of the business, and items where the economic impact of
the transactions will be reflected in earnings in future periods when the
underlying asset is sold or transferred.

(2): Adjusted Earnings per Share, a non-IFRS measure, is used by Management to
evaluate on-going  financial  operating  results.  It  is  defined  as  basic 
earnings per share attributable  to common shareholders,  and is adjusted  for 
all items  that  are not  considered  representative of  on-going  operational 
activities of  the  business, and  items  where  the economic  impact  of  the 
transactions will  be  reflected  in  earnings  in  future  periods  when  the 
underlying asset is sold or transferred.

(3): EBITDA is calculated as earnings from operations and before interest  and 
income taxes plus depreciation and intangible asset amortization, adjusted for
items  that  are  not   considered  representative  of  on-going   operational 
activities of  the  business, and  items  where  the economic  impact  of  the 
transactions will  be  reflected  in  earnings  in  future  periods  when  the 
underlying asset is sold or transferred.

Please refer to the section entitled Reconciliation of Non-IFRS Financial
Measures at the end of this news release.

Financial Overview

Sales for the  fourth quarter declined  3.3% to $1,204.8  million compared  to 
$1,245.3 million  last  year, or  2.2%  after  adjusting for  the  impacts  of 
divestitures and  foreign exchange,  primarily  as a  result of  lower  sales 
volumes. For  the full  year,  sales were  $4,864.8  million, down  0.6%  from 
$4,893.6 million in 2011, or 0.3% after adjusting for divestitures and foreign
exchange.

Adjusted Operating Earnings for the fourth quarter were $91.3 million compared
to $57.4 million last year, due to strong improvements in the Meat and  Bakery 
Products Groups. For  the full  year, Adjusted  Operating Earnings  increased 
8.1%, to $280.0 million compared to $259.0 million last year due to  increased 
earnings in the Meat and Bakery businesses.

Adjusted Earnings per Share were $0.38 in the quarter, compared to $0.21  last 
year. For the year, Adjusted Earnings per Share were $1.06, compared to  $1.01 
last year. Adjusted Earnings per Share in 2011 included $12.2 million  ($0.09 
per share) of tax adjustments related to a prior acquisition.

For the fourth quarter, net earnings were $56.8 million ($0.39 basic  earnings 
per share) compared  to $9.2  million ($0.06  basic earnings  per share)  last 
year. Net earnings included $12.8 million ($0.07 per share) of pre-tax  costs 
related to restructuring activities (2011: $32.2 million, or $0.17 per share).
For the full year, net earnings were $122.7 million ($0.83 basic earnings  per 
share) compared to $87.3 million ($0.59 basic earnings per share) last  year. 
Net earnings for the year included $47.5 million ($0.25 per share) of  pre-tax 
costs related to restructuring activities  (2011: $79.8 million, or $0.41  per 
share).

Several items  are  excluded  from  the  discussions  of  underlying  earnings 
performance  as   they  are   not  representative   of  on-going   operational 
activities.  Refer  to  the  section  entitled  Reconciliation  of   Non-IFRS 
Financial Measures in this news release.

Business Segment Review

Following is a summary of sales by business segment:

                                
                         Fourth Quarter           Year-to-Date
                            (Unaudited)              (Audited)
($ thousands)                2012        2011        2012        2011
Meat Products Group   $   740,764 $   781,813 $ 3,003,444 $ 3,039,460
Agribusiness Group        73,410     63,499    294,713    259,644
Protein Group         $   814,174 $   845,312 $ 3,298,157 $ 3,299,104
Bakery Products Group    390,603    400,016  1,566,622  1,594,520
Sales                 $ 1,204,777 $ 1,245,328 $ 4,864,779 $ 4,893,624

Following is a summary of Adjusted Operating Earnings by business segment:

                                                               
                                         Fourth Quarter      Year-to-Date
                                            (Unaudited)         (Audited)
($ thousands)                                2012     2011      2012      2011
Meat Products Group                      $ 48,133 $ 27,472 $ 121,272 $  95,987
Agribusiness Group                        12,660  14,744   68,436   81,895
Protein Group                            $ 60,793 $ 42,216 $ 189,708 $ 177,882
Bakery Products Group                     31,410  16,129   97,634   86,294
Non-allocated Costs in Adjusted            (901)   (898)  (7,305)  (5,160)
Operating Earnings^(i)
Adjusted Operating Earnings              $ 91,302 $ 57,447 $ 280,037 $ 259,016

(i) Non-allocated costs comprise expenses not separately identifiable to
         business segment groups,
         and do not form part of the measures used by the Company when
         assessing the segments'
         operating results.

Protein Group

Sales for the Protein Group, which includes the Company's Meat Products  Group 
and Agribusiness Group, declined 3.7% to $814.2 million in the fourth  quarter 
of 2012  from $845.3  million last  year. For  the full  year, sales  for  the 
Protein Group of $3,298.2 million  were consistent with $3,299.1 million  last 
year. Adjusted  Operating Earnings  increased 44.0%  to $60.8  million in  the 
fourth quarter,  compared to  $42.2  million last  year.  For the  full  year, 
Adjusted Operating  Earnings increased  6.6% to  $189.7 million,  compared  to 
$177.9 million last year.  Results for the Company's  Meat Products Group  and 
Agribusiness Group  should  be  viewed  in  combination  due  to  intercompany 
transactions and correlated factors within these operations.

Meat Products Group
Includes value-added prepared meats, lunch  kits; and fresh pork, poultry  and 
turkey products  sold  to  retail,  foodservice,  industrial  and  convenience 
channels. Includes leading Canadian brands such as Maple Leaf ®, Schneiders  ® 
and many leading sub-brands.

Meat Products  Group sales  for the  fourth quarter  declined 5.3%  to  $740.8 
million from $781.8 million in the  fourth quarter last year. After  adjusting 
for the impact of a stronger Canadian dollar, which decreased the sales  value 
of pork  exports, sales  declined  4.6%, primarily  due to  discontinuance  of 
lower-margin accounts in the prepared meats business.

Adjusted Operating Earnings for  the fourth quarter  increased 75.2% to  $48.1 
million, compared  to $27.5  million last  year, driven  by stronger  earnings 
growth in the prepared  meats and fresh poultry  businesses, which was  partly 
offset by  lower  earnings in  the  primary pork  processing  operations.  The 
prepared meats business benefited from price increases to manage higher  input 
costs, an improved sales  mix driven by higher  margin product innovation  and 
the  discontinuance  of  lower-margin  foodservice  business.  Other  positive 
effects impacting  earnings  for the  quarter  included cost  reductions  from 
simplification  of  the  Company's  product  portfolio  and  $5.9  million  in 
provisions related  to re-assessments  of environmental  remediation costs  on 
facilities planned for closure.  These benefits were  partly offset by  lower 
volumes.

Sales of higher value  products, such as the  Maple Leaf Prime chicken  brand, 
combined with  improved sales  mix  in higher  value channels  contributed  to 
higher earnings  in the  fresh poultry  operations. Earnings  in primary  pork 
processing declined from last year  due to continued weaker industry  margins, 
although improved from earlier in the year.

For the full  year, Adjusted  Operating Earnings  in the  Meat Products  Group 
increased 26.3% to $121.3 million compared to $96.0 million last year, largely
driven by the same factors noted in the quarter.

Agribusiness Group
Consists  of  Canadian   hog  production  and   animal  by-product   recycling 
operations, including biodiesel manufacturing and distribution.

Sales in  the Agribusiness  Group increased  15.6% to  $73.4 million  for  the 
fourth quarter  compared to  $63.5 million  last year,  as higher  volumes  in 
biodiesel and  rendering  operations were  partly  offset by  lower  biodiesel 
selling prices.

Adjusted Operating  Earnings in  the fourth  quarter declined  14.1% to  $12.7 
million compared to  $14.7 million  last year. Hog  production earnings  were 
impacted by a  combination of higher  feed costs and  lower market prices  for 
hogs. Earnings  in  the by-products  recycling  operations were  impacted  by 
higher payments for raw materials  and lower biodiesel selling prices,  partly 
offset by stronger export volumes.

Adjusted Operating  Earnings for  the  year declined  16.4% to  $68.4  million 
compared to $81.9 million last year, as a result of lower results in both  hog 
production and by-product recycling operations.

Bakery Products Group 
Includes fresh and frozen bakery products, including breads, rolls, bagels,
specialty and artisan breads, sweet goods, and fresh pasta and sauces sold to
retail, foodservice and convenience channels. It includes national brands such
as Dempster's®, Tenderflake®, Olivieri® and New York Bakery Co^TM, and many
leading regional brands.

Bakery Products Group  sales for the  fourth quarter declined  2.4% to  $390.6 
million compared to $400.0 million last year. After adjusting for the  closure 
of a bakery  in the U.K.  and currency translation  on sales in  the U.S.  and 
U.K., sales were consistent with the prior year. Higher volumes in the  North 
American and U.K. frozen  bakery businesses were offset  by lower volumes  and 
unfavourable sales mix  in the  fresh pasta operations.  Fresh bakery  volumes 
were consistent with the last year.

Adjusted Operating Earnings for the fourth quarter increased to $31.4  million 
from $16.1 million last year. Earnings  growth in the fresh bakery and  North 
American frozen bakery businesses was partly  offset by lower earnings in  the 
fresh pasta  business,  while earnings  in  the U.K.  bakery  operations  were 
consistent with prior year.

The Company benefited from efficiency gains resulting from the closure of  its 
bakery in Delta, British Columbia, in late 2011 and the transfer of production
to more  efficient bakeries,  and from  reduced  input costs  as a  result  of 
positive hedging activities. In  the fourth quarter of  2011, the Company  was 
impacted by higher costs resulting from its SAP installation in Western Canada
that were  not  repeated  in  2012. Higher  duplicative  overhead  costs  were 
incurred last year as  the Company continued to  operate three bakeries  while 
transferring production to a new, more efficient bakery in Hamilton, Ontario.
During 2012, two of these facilities were closed, with associated reduction in
costs. The closure  of the  third Ontario bakery  is planned  for the  second 
quarter of 2013.

Adjusted Operating Earnings for the full year increased 13.1% to $97.6 million
compared to $86.3 million last year, as the earnings improvements in the fresh
bakery, North American frozen  bakery and U.K.  bakery businesses were  partly 
offset by lower earnings in the fresh pasta business.

Subsequent Events

On January 4, 2013,  the Company sold its  potato processing product  facility 
and related assets in Lethbridge,  Alberta to Cavendish Farms Corporation  for 
proceeds of $57.8 million, resulting in a pre-tax gain of approximately  $44.5 
million.

On January 30, 2013, the  Company announced plans to  close a bakery in  Grand 
Falls, New Brunswick and a  bakery in Edmonton, Alberta  in the first half  of 
2013. The Company expects to incur  approximately $6.3 million before tax  in 
restructuring costs, of which approximately $4.2 million are cash costs.

Other Matters

On February 25, 2013, Maple Leaf Foods declared a dividend of $0.04 per  share 
payable March 28,  2013 to  shareholders of record  at the  close of  business 
March 8, 2013.  Unless indicated  otherwise by the  Company in  writing on  or 
before the  time the  dividend is  paid, the  dividend will  be considered  an 
Eligible Dividend  for  the purposes  of  the "Enhanced  Dividend  Tax  Credit 
System".

An investor presentation  related to  the Company's  fourth quarter  financial 
results is available at www.mapleleaffoods.com and can be found under Investor
Relations on  the Quarterly  Results  page. A  conference  call will  be  held 
at2:30p.m. EDT  on February  26, 2013  to review  Maple Leaf  Foods'  fourth 
quarter  financial  results.   To  participate  in   the  call,  please   dial 
416-340-8018 or 866-223-7781. For those  unable to participate, playback  will 
be made  available an  hour after  the event  at 905-694-9451  /  800-408-3053 
(Passcode9670637).

A webcast presentation of  the fourth quarter financial  results will also  be 
available      at      http://investor.mapleleaf.ca      via      a      link: 
http://www.media-server.com/m/p/hub8k8pe.

The Company's full  financial statements and  related Management's  Discussion 
and Analysis are available for download on the Company's website.

Reconciliation of Non-IFRS Financial Measures

The Company uses the following non-IFRS measures: Adjusted Operating  Earnings 
and Adjusted  Earnings per  Share. Management  believes that  these  non-IFRS 
measures provide  useful  information  to both  Management  and  investors  in 
measuring the financial performance  of the Company  for the reasons  outlined 
below. These measures do not have a standardized meaning prescribed by  IFRS, 
and therefore  they  may  not  be  comparable  to  similarly  titled  measures 
presented by other publicly traded companies and should not be construed as an
alternative to other financial measures determined in accordance with IFRS.

Adjusted Operating Earnings

Adjusted Operating  Earnings, a  non-IFRS measure,  is used  by Management  to 
evaluate financial operating results. It is defined as earnings before income
taxes adjusted for items  that are not  considered representative of  on-going 
operational activities of the business, and items where the economic impact of
the transactions  will be  reflected  in earnings  infuture periods  when  the 
underlying  asset  is  sold  or  transferred.  The  table  below  provides  a 
reconciliation  of  net  earnings  as  reported  under  IFRS  in  the  audited 
consolidated statements of  earnings for  the three months  and twelve  months 
then ended  to Adjusted  Operating Earnings.  Management believes  that  this 
basis is the most appropriate on which to evaluate operating results, as  they 
are representative of the on-going operations of the Company.

                                                                          
                               Three months ended December 31, 2012
                    Meat                   Bakery                           
(Unaudited)      Products   Agribusiness   Products   Unallocated              
($ thousands)       Group          Group      Group         costs   Consolidated
Net earnings                                                  $       56,844
Income taxes                                                          20,080
Earnings from
operations                                                    $       76,924
before income
taxes
Interest                                                              17,187
expense
Change in the
fair value of
non-designated                                                 
interest
rate swaps                                                                      (117)
Other (income)        673        (4,296)      (277)         (481)        (4,381)
expense
Restructuring
and other           8,982              -      3,814             -         12,796
related costs
Earnings from  $   48,133 $       12,660 $  31,410 $      10,206 $      102,409
Operations
Increase in
fair value of           -              -          -      (10,703)       (10,703)
biological
assets
Unrealized
gains on
commodity               -              -          -         (404)          (404)
futures
contracts
Adjusted
Operating      $   48,133 $       12,660 $  31,410 $       (901) $       91,302
Earnings
                                                            
                                                                    
                              Three months ended December 31, 2011
                     Meat                     Bakery                             
(Unaudited)       Products    Agribusiness    Products    Unallocated               
($ thousands)        Group           Group       Group          costs    Consolidated
Net earnings                                                  $        9,195
Income taxes                                                           7,410
Earnings from
operations                                                    $       16,605
before income
taxes
Interest                                                              17,795
expense
Change in the
fair value of
non-designated                                                 
interest
rate swaps                                                                      (422)
Other (income)    (4,459)          (215)       (50)         (381)        (5,105)
expense
Restructuring
and other          18,835              -     12,161         1,197         32,193
related costs
Earnings from  $   27,472 $       14,744 $   16,129 $       2,721 $       61,066
Operations
Increase in
fair value of           -              -          -          (67)           (67)
biological
assets
Unrealized
gains on
commodity        -                     -          -       (3,552)        (3,552)
futures
contracts
Adjusted
Operating      $   27,472 $       14,744 $   16,129 $       (898) $       57,447
Earnings

                
                            Twelve months ended December 31, 2012
                      Meat                     Bakery
(Audited)         Products      Agribusiness Products Unallocated
($ thousands)        Group             Group    Group       costs Consolidated
Net earnings                                                     $ 122,714
Income taxes                                                        47,889
                                                                        
Earnings from
operations
before income
taxes                                                            $ 170,603
Interest expense                                                    71,685
Change in the
fair value of
non-designated
interest rate
swaps                                                              (7,297)
Other (income)
expense            (2,323)           (4,885)  (1,635)       (388)      (9,231)
Restructuring
and other
related costs       36,438                -   11,073          -       47,511
Earnings from
Operations       $ 121,272          $ 68,436 $ 97,634  $ (14,071)    $ 273,271
Decrease in fair
value of
biological
assets                  -                -       -       3,436        3,436
Unrealized
losses on
commodity
futures
contracts               -                -       -       3,330        3,330
Adjusted
Operating
Earnings         $ 121,272          $ 68,436 $ 97,634   $ (7,305)    $ 280,037
                                                                        
                                                                        
                            Twelve months ended December 31, 2011
                      Meat                     Bakery
(Audited)         Products      Agribusiness Products Unallocated
($ thousands)        Group             Group    Group       costs Consolidated
                                                                        
Net earnings                                                      $ 87,331
Income taxes                                                        24,469
                                                                        
Earnings from
operations
before income
taxes                                                            $ 111,800
Interest expense                                                    70,747
Change in the
fair value of
non-designated
interest rate
swaps                                                               10,960
Other (income)
expense            (8,547)             (958)    (414)       (413)     (10,332)
Restructuring
and other                  
related costs       31,130                 -   46,356       2,309       79,795
Earnings from
Operations        $ 95,987          $ 81,895 $ 86,294   $ (1,206)    $ 262,970
Decrease in fair
value of
biological
assets                  -                -       -       1,027        1,027
Unrealized gains
on commodity
futures
contracts               -                -       -     (4,981)      (4,981)
Adjusted
Operating
Earnings          $ 95,987          $ 81,895 $ 86,294   $ (5,160)    $ 259,016



Adjusted Earnings per Share

Adjusted Earnings per  Share, a  non-IFRS measure,  is used  by Management  to 
evaluate on-going  financial  operating  results.  It  is  defined  as  basic 
earnings per share attributable  to common shareholders,  and is adjusted  for 
items  that  are  not   considered  representative  of  on-going   operational 
activities of  the  business, and  items  where  the economic  impact  of  the 
transactions will  be  reflected  in  earnings  in  future  periods  when  the 
underlying  asset  is  sold  or  transferred.  The  table  below  provides  a 
reconciliation of  basic earnings  per share  as reported  under IFRS  in  the 
audited consolidated statements of  earnings for the  three months and  twelve 
months then ended  to Adjusted  Earnings per Share.  Management believes  this 
basis is the most appropriate on  which to evaluate financial results as  they 
are representative of the on-going operations of the Company.

                                                                    
                                      Three months ended Twelve months ended
                                            December 31,        December 31,
                                            (Unaudited)          (Audited)
($ per share)                             2012     2011     2012     2011
Basic earnings per share              $   0.39 $   0.06 $   0.83 $   0.59
Restructuring and other related           0.07     0.17     0.25     0.41
costs^(i)
Non-operational gains, net of legal     (0.02)        -   (0.02)   (0.02)
fees^(ii)
Change in the fair value of
non-designated interest rate                 -        -   (0.04)     0.06
swaps^(iii)
Change in the fair value of
unrealized (gains) losses on                                         
commodity
futures contracts^(iii)                      -   (0.02)     0.02   (0.03)
Change in the fair value of             (0.06)        -     0.02     0.01
biological assets^(iii)
Adjusted Earnings per Share^(iv)      $   0.38 $   0.21 $   1.06 $   1.01
                                                              

(i)   Includes per share impact of restructuring and other related costs,
          net of tax and non-controlling interest.
(ii) Gains associated with non-operational activities, including gains
          related to restructuring activities and on
          business combinations, and associated legal fees are net of tax.
(iii) Includes per share impact of the change in fair value of
          non-designated interest rate swaps, hedge
          ineffectiveness recognized in earnings, unrealized (gains) losses on
          commodity futures contracts and the
          change in fair value of biological assets, net of tax.
(iv) May not add due to rounding.

Forward-Looking Statements

This  document  contains,   and  the   Company's  oral   and  written   public 
communications often contain, "forward-looking information" within the meaning
of  applicable  securities  law.  These  statements  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 objectives  and goals, as well  as statements with respect  to 
beliefs,  plans,  objectives,   expectations,  anticipations,  estimates   and 
intentions. Specific forward-looking  information in  this document  includes, 
but is not limited  to, statements with respect  to the anticipated  benefits, 
timing, actions, costs  and investments  associated with  the Company's  Value 
Creation Plan, expectations  regarding Net  Debt to EBITDA  ratios during  the 
implementation of the  Plan, expectations  regarding the  use of  derivatives, 
futures and  options,  expectations regarding  improving  efficiencies,  the 
expected  use  of  cash  balances,  source  of  funds  for  ongoing   business 
requirements including renewal of existing securitization facilities,  capital 
investments  and  debt  repayment,  expectations  regarding  acquisitions  and 
divestitures, the timing  of new plant  openings and old  plant closures,  job 
losses and  LEED®  certification, expectations  regarding  the impact  of  new 
accounting standards, expectations regarding sufficiency of the allowance  for 
uncollectible accounts and expectations regarding pension plan performance and
future pension plan  liabilities and  contributions. 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  information.  These  statements  are  not 
guarantees of  future  performance  and  involve  assumptions  and  risks  and 
uncertainties that are difficult to predict.

In addition, these statements and  expectations concerning the 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, 
U.S., U.K. and Japanese economies; the rate of exchange of the Canadian dollar
to the U.S. dollar, U.K. British pound and the Japanese yen; 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 
Value Creation Plan  or otherwise; continued  access to capital;  the cost  of 
compliance with environmental  and health standards;  no adverse results  from 
ongoing litigation; no unexpected actions of domestic and foreign governments;
and the  general  assumption  that  none of  the  risks  identified  below  or 
elsewhere in this document  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  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 information, 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 information is
discussed more  fully  in the  Company's  Annual Management's  Discussion  and 
Analysis for the period ended December 31, 2012 including the section entitled
"Risk Factors", that are updated  each quarter in the Management's  Discussion 
and Analysis, and are  available on SEDAR at  www.sedar.com. The Company  does 
not intend  to,  and the  Company  disclaims  any obligation  to,  update  any 
forward-looking information, 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.  ("Maple Leaf" or the  "Company") is a leading  Canadian 
value-added meat, meals  and bakery  company committed  to delivering  quality 
food products to consumers around the world. Headquartered in Toronto, Canada,
the Company  employs  approximately 20,000  people  at its  operations  across 
Canada and in the United States, Europe and Asia.

Consolidated Financial Statements
(Expressed in Canadian dollars)

MAPLE LEAF FOODS INC.

Three and twelve months ended December 31, 2012 and 2011

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

                                                                
                                            As at            As at
                                     December 31,     December 31,
                                             2012             2011
                                                                
ASSETS                                                           
                                                                
Current assets                                                   
  Cash and cash equivalents         $       90,414    $            -
  Accounts receivable                     116,503          133,504
  Notes receivable                        125,487           98,545
  Inventories                             301,804          293,231
  Biological assets                        78,127           49,265
  Income taxes recoverable                 41,527           43,789
  Prepaid expenses and other assets        12,590           24,688
  Assets held for sale                     37,087                -
                                    $      803,539   $      643,022
                                                                
  Property and equipment                1,212,177        1,067,246
  Investment property                      11,979           11,232
  Employee benefits                       107,831          133,942
  Other long-term assets                  13,663           11,926
  Deferred tax asset                      132,558          127,456
  Goodwill                                753,156          753,739
  Intangible assets                       208,793          191,896
  Total assets                      $    3,243,696    $    2,940,459
                                                                
LIABILITIES AND EQUITY                                           
                                                                
Current liabilities                                              
  Bank indebtedness                 $       48,243   $       36,404
  Accounts payable and accruals           446,911          482,059
  Provisions                               26,335           44,255
  Current portion of long-term debt         6,573            5,618
  Other current liabilities                14,961           20,409
                                    $      543,023        $ 588,745
                                                                
  Long-term debt                        1,206,945          941,956
  Employee benefits                       420,933          350,853
  Provisions                               25,800           28,936
  Other long-term liabilities              80,084           88,153
  Deferred tax liability                   8,912           11,703
  Total liabilities                $    2,285,697    $    2,010,346
                                                               
Shareholders' equity                                            
Share capital                        $      902,810   $      902,810
Deficit                                   (72,701)         (78,674)
Contributed surplus                         75,913           64,327
Accumulated other comprehensive loss      (13,263)         (17,042)
Treasury stock                             (1,845)          (6,347)
Total shareholders' equity          $      890,914   $      865,074
Non-controlling interest                    67,085           65,039
Total equity                         $      957,999   $      930,113
Total liabilities and equity         $    3,243,696   $    2,940,459



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,
                            2012          2011        2012        2011
                     (Unaudited)   (Unaudited)                      
                                                                  
Sales                $   1,204,777  $   1,245,328  $ 4,864,779  $ 4,893,624
                                                                  
Cost of goods sold        994,074     1,058,687   4,096,794   4,126,460
                                                                  
Gross margin         $     210,703  $     186,641  $   767,985  $   767,164
                                                                  
Selling, general and
administrative                                               
expenses                   108,294         125,575       494,714       504,194
                                                                  
                                                                  
Earnings before the  $              $              $            $
following:                 102,409          61,066       273,271       262,970
                                                                  
Restructuring and                                            
other related costs       (12,796)        (32,193)      (47,511)      (79,795)
Change in fair value
of non-designated                                            
interest rate
swaps                          117             422         7,297      (10,960)
Other income                                                 
(expense)                    4,381           5,105         9,231        10,332
                                                                  
Earnings before
interest and income  $              $              $            $
taxes                       94,111          34,400       242,288       182,547
Interest expense           17,187        17,795      71,685      70,747
                                                                  
Earnings before      $              $              $            $
income taxes                76,924          16,605       170,603       111,800
Income taxes               20,080         7,410      47,889      24,469
                                                                  
Net earnings         $      56,844  $       9,195  $   122,714  $    87,331
                                                                  
Attributed to:                                                     
                                                                  
Common shareholders  $      54,609  $       8,426  $   115,296  $    82,134
Non-controlling                                              
interest                     2,235             769         7,418         5,197
                                                                  
                    $      56,844  $       9,195  $   122,714  $    87,331
                                                                  
Earnings per share
attributable to                                              
common
shareholders                                                              
Basic earnings per   $              $              $            $
share                         0.39            0.06          0.83          0.59
Diluted earnings per $              $              $            $
share                         0.38            0.06          0.81          0.58
                                                                  
                                                                  
Weighted average
number of shares                                             
(millions)                   139.3           138.1         139.4         138.7
                                                                  



MAPLE LEAF FOODS INC.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands of Canadian dollars)

                                                                 
                                Three months ended     Twelve months ended
                                      December 31,            December 31,
                             2012          2011      2012        2011
                      (Unaudited)   (Unaudited)                    
Net earnings          $      56,844  $       9,195 $  122,714  $    87,331
                                                                 
                                                       
Other comprehensive                                                   
income (loss)                                                   
          Change in
        accumulated
  foreign currency    $       1,972   $             $  (1,730)   $     5,651
        translation
         adjustment                         (4,434)            
   Change in
  unrealized gains         (1,061)                    5,251          282
   and losseson
   cash flow hedges                           5,154            
   Change in asset
  ceiling and                    -                        -       12,680
   minimum funding
   requirements                              12,680            
   Change in
  actuarial gains              723                 (87,743)    (128,832)
   and losses                                 6,127            
                     $       1,634  $      19,527 $ (84,222)  $ (110,219)
                                                                 
Comprehensive                58,478         28,722     38,492     (22,888)
income (loss)          $               $             $            $
                                                                 
Attributed to:                                                    
                                                                 
Common shareholders   $      55,773  $      28,619 $   31,981  $  (26,979)
Non-controlling               2,705            103      6,511        4,091
interest                                                        
                                                       



MAPLE LEAF FOODS INC.
Consolidated Statements of Changes in Total Equity
(In thousands of Canadian dollars)

                                                                                                            
                                         Attributable to Common Shareholders                                              
                                                                   Total                                     
                                                             accumulated                                     
                                                                   other                      Non-            
                          Share               Contributed    comprehensive    Treasury    controlling        Total
                        capital     Deficit        surplus             loss       stock       interest       equity
                                                                                                            
Balance at December                 $                                                 $           $               $
31, 2011               $  902,810     (78,674)   $      64,327  $      (17,042)      (6,347)           65,039       930,113
                                                                                                            
 Net earnings                -     115,296              -                -           -          7,418      122,714
 Other comprehensive                                                                         -                   
  income (loss)                -     (87,094)              -            3,779                        (907)       (84,222)
 Dividends declared                                                                          -                   
  ($0.16 per share)         -     (22,229)              -                -                      (4,473)       (26,702)
 Stock-based                                                                                 -                   
  compensation expense         -            -         24,711                -                            -        24,711
 Issue of stock from                                                                                             
  treasury                     -            -       (13,525)                -       13,525               -              -
 Repurchase of                                                                         (9,023)                   
  treasury stock               -            -              -                -                            -        (9,023)
 Acquisition of                                                                              -                   
  business                     -            -              -                -                         (82)           (82)
 Other                        -           -            400                -           -             90          490
Balance at December                 $                                                 $           $               $
31, 2012               $ 902,810     (72,701)  $      75,913  $      (13,263)      (1,845)           67,085       957,999
                                                                                                            
                                                                                                            
                                                                                                            
                                         Attributable to Common Shareholders                                     
                                                                   Total                                     
                                                             accumulated                                     
                                                                   other                      Non-            
                          Share               Contributed    comprehensive    Treasury    controlling        Total
                        capital     Deficit        surplus             loss       stock       interest       equity
                                                                                                            
                                                                                                            
Balance at December                 $                                                  $            $                $
31, 2010               $  902,810      (5,267)   $      59,002   $      (22,585)     (10,078)           62,890       986,772
                                                                                                            
 Net earnings                 -      82,134              -                -           -          5,197       87,331
  Other                                                                                         -
 comprehensiveincome                                                                                            
  (loss)                       -    (114,656)              -            5,543                      (1,106)      (110,219)
 Dividends declared                                                                                              
  ($0.16 per share)         -     (22,386)              -                -            -         (1,830)       (24,216)
 Stock-based                                                                                 -                   
  compensation expense         -            -         19,393                -                            -         19,393
 Issue of stock from                                                                    32,567                   
  treasury                     -     (18,499)       (14,068)                -                            -              -
 Repurchase of                                                                        (28,836)                   
  treasury stock               -            -              -                -                            -       (28,836)
 Decrease in minority                                                                        -                   
  interest                     -            -              -                -                        (112)          (112)
Balance at December                 $                                                  $            $                $
31, 2011               $  902,810     (78,674)   $      64,327   $      (17,042)      (6,347)           65,039       930,113
                                                                                                 



MAPLE LEAF FOODS INC.
Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)

                                                                     
                                Three months ended          Twelve months ended
                                      December 31,                 December 31,
                            2012           2011         2012         2011
                                                                     
CASH PROVIDED BY   
(USED IN):             (Unaudited)    (Unaudited)                        
                                                                     
Operating          
activities                                                             
 Net earnings      $      56,844  $       9,195   $  122,714  $    87,331
  Add (deduct)
 items not
  affecting cash:                                                     
    Change in fair
  value of                                                                 1,027
    biological
    assets               (10,703)           (67)        3,436   
    Depreciation
  and                                                                    125,990
    amortization           35,093         28,368      132,739   
  Stock-based                                                             19,393
    compensation            8,482          6,575       24,711   
  Deferred                                                                 5,896
    income taxes           12,945        (6,050)       18,967   
  Income tax                                                              18,573
    current                 7,135         13,460       28,922   
  Interest                                                                70,747
    expense                17,187         17,795       71,685   
    Gain on sale
  of long-term                                                           (6,987)
    assets                  (203)        (3,221)        (624)   
    Gain on
  disposal of                                                              (571)
    assets held
    for sale                    -          (571)        (459)   
    Gain on
  business                                                                     -
    combination           (5,330)              -      (5,330)   
    Change in fair
  value of                                                                     
    non-designated                                           
  interest                                                             10,959
    rate swaps              (117)          (423)      (7,297)   
    Change in fair
    value of
  derivative
    financial
    instruments          (196)        (6,756)        3,107      (3,924)
  Increase
 (decrease) in
  net pension
  liability              (13,589)          6,545     (21,870)       10,364
 Net income taxes
  paid                    (5,349)          1,096     (21,861)     (17,703)
 Interest paid          (16,473)       (21,381)     (69,896)     (57,969)
  Change in
  provision for
 restructuring
  and
  other
  relatedcosts             7,120         22,925       13,179       43,563
 Other                   (2,038)        (2,255)      (9,427)      (5,969)
  Change in
 non-cash
  operating
  working capital        (24,383)         13,644     (64,616)     (55,886)
Cash provided by
operating          
activities           $      66,425   $      78,879   $  218,080   $  244,834
                                                                     
Financing          
activities                                                             
 Dividends paid    $     (5,639)   $     (5,470)   $  (22,229)   $  (22,386)
  Dividends paid
 to
  non-controlling
  interest                (1,270)          (508)      (3,710)      (1,830)
  Net increase
 (decrease) in
  long-term debt           83,410       (26,846)      272,546        5,195
 Increase in
  financing costs               -          (214)            -      (6,610)
 Purchase of
  treasury stock                -              -      (9,023)     (28,836)
 Other                    (352)          (366)      (1,619)      (1,512)
Cash provided by
(used in)          
financing
activities            $      76,149   $    (33,404)   $  235,965  $  (55,979)
                                                                     
Investing          
activities                                                             
  Additions to
 long-lived
  assets             $   (108,723)   $    (68,588)   $ (306,334)  $ (229,171)
 Acquisition of
  business               (46,560)              -     (77,690)            -
  Capitalization
 of interest
  expense                 (2,771)        (1,109)      (6,901)      (5,600)
  Proceeds from
 sale of
  long-term assets          1,630          5,524        7,481       24,267
  Proceeds from
 sale of assets
  held for sale                 -              -        7,974            -
 Other                         -             23            -        1,103
Cash used in
investing          
activities            $   (156,424)  $    (64,150)   $ (375,470)   $ (209,401)
                                                                     
Increase
(decrease) in cash 
and cash
equivalents           $    (13,850)   $    (18,675)   $    78,575  $  (20,546)
Net cash and cash
equivalents,       
beginning of
period                      56,021       (17,729)     (36,404)     (15,858)
Net cash and cash
equivalents, end   
of period             $      42,171  $    (36,404)  $    42,171  $  (36,404)
                                                                     
Net cash and cash
equivalents is     
comprised of:                                                          
                                                                     
Cash and cash      
equivalents          $      90,414   $           -   $    90,414   $         -
Bank indebtedness        (48,243)       (36,404)     (48,243)     (36,404)
                                                                     
Net cash and cash
equivalents, end   
of period            $      42,171  $    (36,404)   $    42,171  $ (36,404)
                                                        



MAPLE LEAF FOODS INC.
Segmented Financial Information
(In thousands of Canadian dollars)

                                                                         
                            Three months ended           Twelve months ended
                                   December 31,                  December 31,
                         2012           2011         2012          2011
                  (Unaudited)    (Unaudited)                         
Sales                                                               
  Meat Products  $     740,764    $                                        
   Group                                781,813  $  3,003,444   $  3,039,460
  Agribusiness         73,410                       294,713         259,644
   Group                                 63,499                
  Bakery              390,603                     1,566,622       1,594,520
   Products Group                       400,016                
                 $   1,204,777   $   1,245,328  $  4,864,779   $  4,893,624
                                                                   
Earnings before   
restructuring
andother related                                            
costs and other
income                                                                   
  Meat Products  $      48,133    $                   121,272          95,987
   Group                                 27,472  $              $
  Agribusiness         12,660                        68,436          81,895
   Group                                 14,744                
  Bakery               31,410                        97,634          86,294
   Products Group                        16,129                
  Non-allocated        10,206                      (14,071)         (1,206)
   costs                                  2,721                
                $     102,409  $      61,066 $    273,271  $    262,970
                                                                  
Capital                                                    
expenditures                                                             
  Meat Products  $      85,951    $                   234,663          84,437
   Group                                 32,491 $              $
  Agribusiness          7,424                        16,361          17,108
   Group                                  8,400                
  Bakery               15,348                        55,310         127,626
   Products Group                        27,697                
                 $     108,723   $      68,588  $    306,334   $    229,171
                                                                   
Depreciation and                                           
amortization                                                             
  Meat Products  $      16,431    $                    61,260          57,702
   Group                                 10,286  $              $
  Agribusiness          4,031                        15,980          16,126
   Group                                  4,473                
  Bakery               14,631                        55,499          52,162
   Products Group                        13,609                
                 $      35,093   $      28,368  $    132,739   $    125,990
                                                                   
                                                                   
                                                                   
                                                  As at         As at
                                                December       December
                                                         31,            31,
                                                  2012          2011
                                                                  
Total assets                                                        
  Meat Products                                  1,617,413       1,465,576
   Group                                       $              $
  Agribusiness                                     275,167         223,013
   Group                                                      
  Bakery                                         1,005,432         937,292
   Products Group                                             
  Non-allocated                                    345,684         314,578
   assets                                                     
                                            $  3,243,696   $  2,940,459
                                                                   
Goodwill                                                            
  Meat Products                                    442,925         442,336
   Group                                        $              $
  Agribusiness                                      13,845          13,845
   Group                                                      
  Bakery                                           296,386         297,558
   Products Group                                             
                                            $    753,156   $    753,739
                                                      





SOURCE Maple Leaf Foods Inc.

Contact:

Investor Contact: Nick Boland,
VP Investor Relations: 416-926-2005
Media Contact: 416-926-2020