EX-99.1 2 tm2019263d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

CONSOLIDATED BALANCE SHEET

ASSET	Note		March 31, 2020		December 31, 2019
CURRENT
Cash and cash equivalents		5		4,548,329		3,249,127
Marketable securities		6		5,009,160		6,150,631
Trade accounts receivable		7		4,447,957		3,035,817
Inventories		8		4,262,511		4,685,595
Recoverable taxes		9		836,043		997,201
Derivative financial instruments		4		128,845		260,273
Advances to suppliers		10		158,740		170,481
Other assets				266,231		335,112
Total current assets				19,657,816		18,884,237

NON CURRENT
Marketable securities		6		181,564		179,703
Recoverable taxes		9		679,779		708,914
Deferred taxes		12		9,363,252		2,134,040
Derivative financial instruments		4		959,549		838,699
Advances to suppliers		10		1,212,713		1,087,149
Judicial deposits				267,338		268,672
Other assets				235,810		228,881

Biological assets		13		10,431,416		10,571,499
Investments		14		326,879		322,446
Property, plant and equipment		15		40,701,410		41,120,945
Right of use		19.1		3,956,304		3,850,237
Intangible		16		17,468,599		17,712,803
Total non-current				85,784,613		79,023,988
TOTAL ASSET				105,442,429		97,908,225

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

CONSOLIDATED BALANCE SHEET

LIABILITIES	Note		March 31, 2020			December 31, 2019
CURRENT
Trade accounts payable		17		2,408,286			2,376,459
Loans, financing and debentures		18.1		6,523,908			6,227,951
Lease liabilities		19.2		664,651			656,844
Derivative financial instruments		4.5		4,642,367			893,413
Taxes payable				226,565			307,639
Payroll and charges				308,756			400,435
Liabilities for assets acquisitions and subsidiaries		23		116,792			94,414
Dividends payable				5,714			5,720
Advance from customers				67,897			59,982
Other liabilities				302,903			456,338
Total current liabilities				15,267,839			11,479,195

NON CURRENT
Loans, financing and debentures		18.1		69,257,752			57,456,375
Lease liabilities		19.2		4,062,710			3,327,226
Derivative financial instruments		4.5		7,150,959			2,024,500
Liabilities for assets acquisitions and subsidiaries		23		516,979			447,201
Provision for judicial liabilities		20.1		3,460,373			3,512,477
Employee benefit plans		21.2		739,595			736,179
Deferred taxes		12		76,073			578,875
Share-based compensation plans		22.3		160,949			136,505
Other liabilities				84,323			121,723
Total non-current liabilities				85,509,713			68,341,061
TOTAL LIABILITIES				100,777,552			79,820,256

EQUITY		24
Share capital				9,235,546			9,235,546
Capital reserves				6,198,899			6,198,599
Retained earnings reserves				317,144			317,144
Other reserves				2,205,836			2,221,341
Retained loss				(13,409,659	)
Controlling shareholder´s				4,547,766			17,972,630
Non-controlling interest				117,111			115,339
Total equity				4,664,877			18,087,969
TOTAL LIABILITIES AND EQUITY				105,442,429			97,908,225

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

CONSOLIDATED INTERIM STATEMENT OF INCOME (LOSS)

	Note		March 31, 2020			March 31, 2019
NET SALES		27		6,980,793			5,698,999
Cost of sales		29		(4,819,999	)		(4,724,893	)
GROSS PROFIT				2,160,794			974,106

OPERATING INCOME (EXPENSES)
Selling		29		(514,936	)		(441,303	)
General and administrative		29		(314,836	)		(330,765	)
Income from associates and joint ventures		14		711			1,658
Other, net		29		16,731			(18,884	)
OPERATING PROFIT BEFORE NET FINANCIAL INCOME (EXPENSES)				1,348,464			184,812

NET FINANCIAL INCOME (EXPENSES)		26
Financial expenses				(1,086,424	)		(992,804	)
Financial income				120,754			149,322
Derivative financial instruments				(9,058,792	)		(636,934	)
Monetary and exchange variations, net				(12,419,586	)		(455,727	)
NET LOSS BEFORE TAXES				(21,095,584	)		(1,751,331	)

Current income taxes		12		(54,360	)		(129,249	)
Deferred income taxes		12		7,730,883			651,448
NET LOSS FOR THE PERIOD				(13,419,061	)		(1,229,132	)

Attributable to
Controlling shareholders’				(13,422,530	)		(1,226,803	)
Non-controlling interest				3,469			(2,329	)

Loss per share
Basic		25.1		(9.94835	)		(0.93686	)

Diluted		25.1		(9.94835	)		(0.93686	)

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

CONSOLIDATE INTERIM STATEMENT OF COMPREHENSIVE INCOME (LOSS)

	March 31, 2020			March 31, 2019
Net loss for the period		(13,419,061	)		(1,229,132	)

Items that will not be reclassified to profit or loss
Exchange rate variation and fair value on financial assets measured at fair value through of comprehensive income
Ensyn Corporation					1,323
CelluForce Inc.		1,100			462
Spinnova Oy					(315	)
Tax effect of the above items		(374	)		(500	)
		(13,418,335	)		(1,228,162	)

Item that may be subsequently reclassified to profit or loss
Exchange variation on conversion of financial statements and on foreign investments		(3,360	)		11,745

Total comprehensive loss		(13,421,695	)		(1,216,417	)

Attributable to
Controlling shareholders’		(13,425,164	)		(1,214,088	)
Non-controlling interest		3,469			(2,329	)

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

	Share Capital					Capital reserves													Retained earnings reserves
	Share Capital		Share issuance costs			Tax incentives			Stock options granted		Share issuance costs			Other		Treasury shares			Tax incentives		Legal Reserve		Reserve for capital increase		Special statutory reserve		Dividends proposed		Other reserves			Retained earnings (losses)			Total			Non-controlling interest			Total equity
Balances at December 31, 2018		6,241,753					684,563			5,100		(15,442	)				(218,265	)				422,815		1,730,629		242,612		596,534		2,321,708						12,012,007			13,928		12,025,935
Total comprehensive income (loss)
Net (loss) for the period																																	(1,226,803	)		(1,226,803	)		(2,329	)	(1,229,132)
Other comprehensive income for the period																														12,715						12,715					12,715
Transactions with shareholders
Share capital increase (note 1.3.1.1)		3,027,528																																		3,027,528					3,027,528
Share issuance costs				(33,735	)							15,442																								(18,293	)				(18,293)
Stock options granted										1,421																										1,421					1,421
Non-controlling interest arising from business combination																																							110,616		110,616
Internal changes in equity
Transfer of tax incentives							(684,563	)												684,563
Partial realization of deemed cost, net of taxes																														(13,137	)		13,137
Realization of asset revaluation reserve																														6,290						6,290					6,290
Foreign exchange variation of hyperinflation of foreign subsidiary																														5,387						5,387					5,387
Issue of common shares related to business combination (note 1.3.1.1)															6,410,885																					6,410,885					6,410,885
Balances at March 31, 2019		9,269,281		(33,735	)					6,521					6,410,885		(218,265	)		684,563		422,815		1,730,629		242,612		596,534		2,332,963			(1,213,666	)		20,231,137			122,215		20,353,352

Balances at December 31, 2019		9,269,281		(33,735	)					5,979					6,410,885		(218,265	)				317,144								2,221,341						17,972,630			115,339		18,087,969
Total comprehensive income (loss)
Net (loss) for the period																																	(13,422,530	)		(13,422,530	)		3,469		(13,419,061)
Other comprehensive income for the period																														(2,634	)					(2,634	)				(2,634)
Transactions with shareholders
Stock options granted										300																										300					300
Non-controlling interest arising from business combination																																							(1,697	)	(1,697)
Internal changes in equity
Partial realization of deemed cost, net of taxes																														(12,871	)		12,871
Balances at March 31, 2020		9,269,281		(33,735	)					6,279					6,410,885		(218,265	)				317,144								2,205,836			(13,409,659	)		4,547,766			117,111		4,664,877

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

	March 31, 2020			March 31, 2019
OPERATING ACTIVITIES
Net income (loss) for the period		(13,419,061	)		(1,229,132	)
Adjustment to
Depreciation, depletion and amortization (Notes 26 and 29)		1,590,393			2,443,326
Amortization of right of use (Note 29)		39,330			27,959
Interest expense on lease liabilities		95,350			38,715
Results from sale, disposals and provision for losses (impairment) of property, plant and equipment and biological assets, net (Note 29)		4,488			(11,288	)
Income from associates and joint ventures (Note 14.2)		(711	)		(1,658	)
Exchange rate and monetary variations, net (Note 26)		12,419,586			455,727
Interest expenses with financing, loans and debentures, net (Note 18.2)		886,270			823,958
Accrual of interest on marketable securities		(58,870	)		(228,047	)
Amortization of fundraising costs (Note 18.2)		25,250			31,574
Derivative (gains) losses, net (Note 26)		9,058,792			636,934
Deferred income tax and social contribution expenses (Note 12.1)		(7,730,883	)		(651,448	)
Interest on employee benefits (Note 21.2)		13,195			13,421
Reversal for judicial liabilities, net		(8,772	)		(10,296	)
Allowance for doubtful accounts, net (Note 7.3)		5,522			7,724
Provision for (reversal of) inventory losses, net (Note 8.1)		16,168			(1,739	)
Provision for loss of ICMS credits, net (Note 9.1)		19,571			37,063
Other		5,439			65,227
Decrease (increase) in assets
Trade accounts receivables		(608,145	)		331,901
Inventories		424,128			(942,669	)
Recoverable taxes		200,988			58,745
Other assets		101,406			84,564
Increase (decrease) in liabilities
Trade accounts payables		(94,248	)		75,087
Taxes payable		(59,487	)		245,692
Payroll and charges		(92,262	)		(332,520	)
Other liabilities		(208,734	)		(304,819	)
Cash provided by operations, net		2,624,703			1,664,001
Payment of interest with financing, loans and debentures		(1,167,141	)		(783,745	)
Interest received from marketable securities		52,486			175,057
Payment of income taxes		(28,931	)		(310,977	)
Cash provided by operating activities		1,481,117			744,336

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

INVESTING ACTIVITIES
Additions to property, plant and equipment (Note 15)	(299,426	)	(705,246	)
Additions to intangible assets (Note 16)	(469	)	(636	)
Additions to biological assets (Note 13)	(578,224	)	(791,684	)
Proceeds from sale of property, plant and equipment	27,905		33,933
Increase of capital in subsidiaries and associates (Note 14.3)			(11,216	)
Marketable securities, net	1,145,994		21,756,512
Advance for acquisition of wood from operations with development	(68,957	)	(126,866	)
Acquisition of subsidiaries, net cash (Note 1.2.2.2)			(26,002,541	)
Cash provided (used) in investing activities, net	226,823		(5,847,744	)
FINANCING ACTIVITIES
Proceeds from loans, financing and debentures (note 18.2)	3,663,623		7,671,829
Payment of derivative transactions (note 4.5.4)	(172,797	)	24,765
Payment of loans, financing and debentures (note 18.2)	(4,503,548	)	(3,735,541	)
Payment of leases (note 19.2)	(157,209	)	(118,237	)
Payment of dividends			(68	)
Liabilities for assets acquisitions and subsidiaries	(2,838	)	(1,701	)
Other financing			(377	)
Cash provided (used) by financing activities	(1,172,769	)	3,840,670
Exchange variation on cash and cash equivalents	764,031		(28,830	)
Increase (reduction) in cash and cash equivalents, net	1,299,202		(1,291,568	)
Cash and cash equivalents at the beginning for the period	3,249,127		4,387,453
Cash and cash equivalents at the end for the period	4,548,329		3,095,885
Increase (reduction) in cash and cash equivalents, net	1,299,202		(1,291,568	)

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

COMPANY´S OPERATIONS

Suzano S.A., together with its subsidiaries (“Suzano” or collectively “Company”), is a public company with its headquarters office in the city of Salvador, State of Bahia, Brazil.

Suzano owns shares traded in B3 S.A. (“Brasil, Bolsa, Balcão - “B3”), listed on the New Market under the ticker SUZB3. On December 10, 2018, Suzano began trading its American Depositary Receipts ("ADRs") in a ratio of 1 (one) common share, Level II, traded in the New York Stock Exchange under the ticker SUZ, pursuant to a program approved by the Brazilian Securities and Exchange Commission (“CVM”).

The Company holds 11 industrial units, located in Aracruz (Espírito Santo, State), Belém (Pará, State), Eunápolis (Bahia, State) and Mucuri (Bahia, State), Fortaleza (Ceará, State), Imperatriz (Maranhão, State), Jacareí, Limeira, Rio Verde and Suzano (São Paulo, State) and Três Lagoas (Mato Grosso do Sul, State).

These units produce hardwood pulp from eucalyptus, paper (coated paper, paperboard, uncoated paper and cut size paper) and packages of sanitary paper (consumer goods - tissue) to serve the domestic and foreign markets.

Pulp and paper are sold in the foreign market directly by Suzano, as well as through its wholly-owned subsidiaries in Argentina, the United States of America, Switzerland, Austria and sales offices in China.

The Company's corporate purpose also includes the commercial operation of eucalyptus forest for its own use, the operation of port terminals, and the holding of interest, as partner or shareholder, in any other company or project, and the generation and sale of electricity.

The Company is controlled by Suzano Holding S.A., through a Voting Agreement whereby it holds 45.85% of the common shares of its share capital.

These unaudited condensed consolidated interim financial information was approved by Company’s Management on May 11, 2020.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

1.1.

Equity interest

The Company holds equity interest in the following entities:

					% equity interest
Entity	Main activity	Country	Type of investment	Accounting method	March 31, 2020			December 31, 2020
AGFA – Com. Adm. e Participações Ltda.	Holding	Brazil	Direct	Consolidated		100	%		100	%
Asapir Produção Florestal e Comércio Ltda.	Eucalyptus cultivation	Brazil	Direct	Consolidated		100	%		100	%
CelluForce Inc.	Nanocrystalline pulp research and development	Canada	Direct	Fair value through other comprehensive income		8,3	%		8,3	%
Comercial e Agrícola Paineiras Ltda.	Lease of reforestation land	Brazil	Direct	Consolidated		100	%		100	%
Ensyn Corporation	Bio fuel research and development	United States of America	Direct	Equity		25.3	%		25.3	%
Facepa - Fábrica de Papel da Amazônia S.A.	Industrialization and commercialization of tissue paper	Brazil	Direct/Indirect	Consolidated		92.8	%		92.8	%
Fibria Celulose (USA) Inc.	Business office	United States of America	Direct	Consolidated		100	%		100	%
Fibria Terminal de Celulose de Santos SPE S.A.	Port operation	Brazil	Direct	Consolidated		100	%		100	%
Fibria Overseas Finance Ltd.	Financial fundraising	Cayman Island	Direct	Consolidated		100	%		100	%
Fibria Terminais Portuários S.A.	Port operation	Brazil	Direct	Consolidated		100	%		100	%
FuturaGene AgriDev Xinjiang Company Ltd.	Biotechnology research and development	China	Indirect	Consolidated		100	%		100	%
FuturaGene Biotechnology Shangai Company Ltd.	Biotechnology research and development	China	Indirect	Consolidated		100	%		100	%
FuturaGene Brasil Tecnologia Ltda.	Biotechnology research and development	Brazil	Direct/Indirect	Consolidated		100	%		100	%
FuturaGene Delaware Inc.	Biotechnology research and development	United States of America	Indirect	Consolidated		100	%		100	%
FuturaGene Hong Kong Ltd.	Biotechnology research and development	Hong Kong	Indirect	Consolidated		100	%		100	%
FuturaGene Inc.	Biotechnology research and development	United States of America	Indirect	Consolidated		100	%		100	%
FuturaGene Israel Ltd.	Biotechnology research and development	Israel	Indirect	Consolidated		100	%		100	%
FuturaGene Ltd.	Biotechnology research and development	England	Indirect	Consolidated		100	%		100	%
F&E Tecnologia do Brasil S.A.	Biofuel production, except alcohol	Brazil	Indirect	Consolidated		100	%		100	%
F&E Technologies LLC	Biofuel production, except alcohol	United States of America	Direct	Equity		50	%		50	%
Gansu FuturaGene Biotech Co. Ltd. ⁽¹⁾	Biotechnology research and development	China	Indirect	Consolidated		100	%		100	%
Ibema Companhia Brasileira de Papel	Industrialization and commercialization of paperboard	Brazil	Direct	Equity		49.9	%		49.9	%
Itacel - Terminal de Celulose de Itaqui S.A.	Port operation	Brazil	Indirect	Consolidated		100	%		100	%
Maxcel Empreendimentos e Participações S.A.	Holding	Brazil	Direct	Consolidated		100	%		100	%
Mucuri Energética S.A.	Power generation and distribution	Brazil	Direct	Consolidated		100	%		100	%
Ondurman Empreendimentos Imobiliários Ltda.	Lease of reforestation land	Brazil	Direct/Indirect	Consolidated		100	%		100	%
Paineiras Logística e Transporte Ltda.	Road freight transport	Brazil	Direct /Indirect	Consolidated		100	%		100	%
Portocel - Terminal Espec. Barra do Riacho S.A.	Port operation	Brazil	Direct	Consolidated		51	%		51	%
Projetos Especiais e Investimentos Ltda.	Commercialization of equipment and parts	Brazil	Direct	Consolidated		100	%		100	%
Rio Verde Participações e Propriedades Rurais S.A.	Forest assets	Brazil	Indirect	Consolidated		100	%		100	%
Spinnova OY	Research and development of sustainable raw materials (wood) for the textile industry	Finland	Direct	Equity		24,06	%		24,06	%
Stenfar S.A. Indl. Coml. Imp. Y. Exp.	Commercialization of computer paper and materials	Argentine	Direct /Indirect	Consolidated		100	%		100	%
Suzano Áustria GmbH.	Business office	Austria	Direct	Consolidated		100	%		100	%
Suzano Canada Inc.	Lignin research and development	Canada	Direct	Consolidated		100	%		100	%
Suzano International Trade GmbH.	Business office	Austria	Direct	Consolidated		100	%		100	%
Suzano Participações do Brasil Ltda.	Holding	Brazil	Direct	Consolidated		100	%		100	%
Suzano Pulp and Paper America Inc.	Business office	United States of America	Direct	Consolidated		100	%		100	%
Suzano Pulp and Paper Europe S.A.	Business office	Switzerland	Direct	Consolidated		100	%		100	%
Suzano Shanghai Ltd. ⁽²⁾	Customer relationship services	China	Direct	Consolidated		100	%
Suzano Trading Ltd.	Business office	Cayman Island	Direct	Consolidated		100	%		100	%
Suzano Trading International KFT	Business office	Hungary	Direct	Consolidated		100	%		100	%
Veracel Celulose S.A. ⁽³⁾	Industrialization, commercialization and exportation of pulp	Brazil	Direct	Consolidated		50	%		50	%

On April 8, 2020, disposal of equity interest.

On February 26, 2020, establishment of legal entity arising from corporate reorganization.

Joint operation with Stora Enso, a company located in Finland.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

1.2.

Major events in the three-month period ended March 31, 2020

1.2.1.

Effects arising from COVID 19

Suzano has been adopting preventive and mitigating measures in line with guidelines issued by the national and international health authorities, in order to minimize as far as possible, the harmful effects of the pandemic of COVID-19, popularly known as the new coronavirus, referring to the safety of people and the inheritance of their businesses.

The Company's initiatives are based on three pillars: (i) people (ii) society and (iii) business continuity.

(i)

people: in order to provide security to its employees and third parties, Suzano adopted a series of rules and procedures to minimize the exposure of its team.

(ii)

society: Suzano now understands its responsibility to the communities in which it operates and based on its guideline “It is only good for us, if it is good for the world”, made the donation of toilet paper and diapers produced by the Company for needy regions. With regard to support to its business partners, the Company decided to maintain payment of 100% of the cost of the payroll of service providers' workers who will have their activities suspended for 60 days (until the end of May) in order to consequent job preservation.

(iii)

business continuity: so far, the Company continues with its normal operations and a crisis management committee has been implemented.

The paper and pulp sector were recognized by the World Health Organization (“WHO”), as well as by several countries, as a producer of goods essential to society. Therefore, in order to fulfill the responsibility arising from the essentiality of the business, Suzano has taken measures to ensure operational normality and full service to its customers, increasing the level of wood and raw material inventories in the factories and has been working to advance its inventories of finished goods product bringing them closer to their customers to mitigate possible risks of disruption in the factories' supply chain and the sale of their products.

The current situation resulting from the coronavirus also implies a higher credit risk, especially for its customers in the paper business. Thus, the Company has also been monitoring the evolution of this risk and implementing measures to mitigate it, and so far, there has been no significant financial impact.

Due to the social isolation measures adopted in Brazil and in several countries around the world, causing schools and offices to close, for example, the demand for printing and writing papers was reduced and due to uncertainty about their recovery, Suzano decided to stop temporary production with a forecast of 30 days from April 27, 2020 and May 1, 2020 on the paper production lines of the Rio Verde and Mucuri industrial units, respectively. However, the reduction in production volumes resulting from this decision is not material to the business and to the Company's economic and financial performance. We note that in several countries around the world similar measures have already been announced to temporarily reduce the production of printing and writing papers.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

An effect also resulting from the coronavirus concerns the decision to postpone Suzano's Ordinary and Extraordinary General Meetings (“AGOE”), initially called for April 24, 2020 and changed to May 22, 2020, in order to allow the digital modality, with content kept for deliberation by the shareholders.

Finally, it is also opportune to inform that, as a result of the current scenario, the Company has made a vast communication effort to further increase the interaction with its main stakeholders, with the objective of guaranteeing the adequate transparency and flow of information with the them in a timely manner to the dynamics of the social and economic conjuncture. For example, Suzano held a conference call on March 19, 2020 with its investors to update them about the Company in the context of COVID-19. The presentation used in the conference call, as well as the audio of the event, are available on the Company's Investor Relations website. There you will also find the Market Announcements published on the subject on March 17 and 30, 2020.

1.2.2.

Business combination with Fibria

Due to the relevance of the information, the Company considered it necessary to maintain the disclosure of information related to the business combination with Fibria performed during 2019.

On January 3, 2019, acquisition date of control by Suzano, after all fulfilled conditions for the conclusion of business combination and shareholding base, Fibria’s shares were exchanged for Suzano’s shares and on January 14, 2019, Suzano concluded the corporate reorganization process, following the terms of the

Agreement signed by both entities on March 15, 2018.

The transferred consideration by Suzano for acquisition of control of Fibria, defined in terms of the Agreement, was as follows:

1.2.2.1.

Share exchange ratio

On January 2, 2019, according to Notice to Shareholders, the exchange ratio of the common shares issued by Eucalipto Holding S.A. (“Holding”) held by Fibria’s shareholders for shares issued by Suzano was adjusted from 0.4611 to 0.4613, being the exchange ratio of 0.4613 considered as final. The adjustment in the exchange ratio, compared to the originally announced, was due to (i) a change in the total number of shares issued by Fibria ex-treasury and disregarding the shares resulting from the vesting of option plans between those in the Protocol and Justification and that date of 553,080,611 shares for 553,733,881 shares and (ii) alteration of the number of shares issued by Suzano ex-treasury and disregarding the shares resulting from the vesting of option plans between that contained in the Protocol and Justification and that present date of 1,091,984,141 shares to 1,093,784,141 shares.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

As consequence of this adjustment, (i) Suzano issued, as a result of the merger of the Holding, 255,437,439 new common shares in the market value of R$36.95, totaling amount of R$9,438,413, of which R$3,027,528 was recognized as capital increase and R$6,410,885, as capital reserve and (ii) the amount attributed to Suzano's common share to calculate the capital gain, as disclosed in the Notice of Shareholders on November 29, 2018, increased from R$15.38 attributed to 0.4611 common share for R$15.39 attributed to 0.4613 common share of Suzano.

1.2.2.2.

Cash installment

On January 10, 2019, by means of the Notice to Shareholders, the Company communicated the final value of the Adjusted Cash Installment, corresponding to the redemption value of each Holding's redeemable preferred share, originally equivalent to R$52.50, (i) reduced by the amount of dividends declared by Fibria on December 3, 2018 and paid in Brazil on December 12, 2018 in the amount of R$5.03 per share issued by Fibria (ii) plus R$2.73, corresponding to the variation of the average daily rate of Brazilian interbank deposits expressed as an annual percentage, based on 252 business days, measured and disclosed daily by B3 ("DI Rate"), between March 15, 2018 and the Expiration Date of the Transaction including January 10, 2019 (including) and January 14, 2019 (including), the DI Rate was estimated at 6.40% per annual, with a total and final amount of R$50.20 per share, making up the final amount of the Adjusted Cash Amount of R$27,797,441.

The amounts mentioned above are gross, not considering any tax impacts on the payment to Fibria Resident or Non-Resident Shareholders, which are detailed in the Notice to Shareholders disclosed on November 29, 2018.

Suzano performed a valuation analysis of the fair value of the assets acquired and liabilities assumed of Fibria and, using the total transferred consideration for the Merger, and allocated for such assets and liabilities.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

The following table summarizes the final purchase price allocation based on the appraisal report prepared by an independent and specialized entity:

Cash consideration	27,797,441
Issuance of shares by Suzano	9,438,413
Total consideration	37,235,854

Book value of Fibria's shareholders' equity	14,149,004
Write-off of the book value of existing goodwill, net of the deferred income taxes	(3,495,077	)
Mandatory minimum dividends (eliminated from the balance sheet at the date of acquisition)	724,829
Book value of Fibria's shareholders' equity, net of goodwill	11,378,756

Fair value adjustment on business combination with Fibria (assets and liabilities):
Inventories	2,178,903	⁽¹⁾
Property, plant and equipment	9,362,315	⁽²⁾
Customer relationship	9,030,779	⁽³⁾
Port assets	749,060	⁽⁴⁾
Contingent liabilities	(2,970,546	)⁽⁵⁾
Loans and financing	(59,921	)⁽⁶⁾
Taxes recoverable	(235,843	)⁽⁷⁾
Other assets and liabilities, net	451,624	⁽⁸⁾
Deferred taxes, net	(546,324	)⁽⁹⁾
Total impact of fair value	17,960,047
Goodwill on the expectation of future profitability	7,897,051	⁽¹⁰⁾

Measured considering the balance of finished products based on selling price, net of selling expenses and an accepted margin based on the results achieved in 2018.

Determined based on the analysis of market data on comparable transactions and cost quantification, based on the estimate of replacement or replacement value of the assets.

In order to determine the fair value adjustment in the customer portfolio, the income approach and the method were used to measure the present value of the income that will be generated during the remaining useful life of the asset. Considering the 5-year history of Fibria's sales data and the customer churn rate that measures customer satisfaction and customer permanence in the portfolio, the adjustment was measured using estimated discounted cash flows. The customer churn rate and the discounted cash flows were considered as significant assumptions to determine the fair value of the customer portfolio.

Fibria has concession contracts and port assets to assist in port operations in Brazil. For fair value measurement of these assets was considered the income approach, the Multi Period Excess Earnings Method (“MPEEM”) that measures the present value of the income that will be generated during the remaining useful life of the asset and method of direct cost differential.

In the business combination, for the contingencies fair value measurement, whose chances of loss were classified as possible and remote, Fibria's Management and its external and independent advisors were considered for their fair values, whose amounts were measured based on the analyzes of Company’s external lawyers. Thus, the estimate and assumptions with respect to the probability of loss of the possible and remote lawsuits for the fair value calculation of contingent liabilities assumed were considered as significant assumptions to determine the fair value of the contingent liabilities.

The adjustment to fair value of loans and financing was measured based on the fair value of the Bonds, based on the quotation of the security in the secondary market, and the adjustment to present value considering the market rate at the base date on December 31, 2018.

For the measurement of the fair value of the taxes to be recovered, the amount to be recovered, discounted to the present value considering the expected Selic rate for the tax period, was considered.

In other net assets and liabilities, including supply contracts, accounts receivable and advances to suppliers, the income evaluation methodology, the present value and the direct cost differential were used.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

Deferred asset on income tax on fair value adjustments of assets of Veracel and Portocel. For the remaining fair value, we did not recognize deferred liability on income taxes liabilities due to Fibria’s Legal Merger in April 2019.

10)

Goodwill is attributable to the strong market position and expected future profitability of Fibria in negotiations in the eucalyptus pulp market.

2.	BASIS OF PREPARATION AND PRESENTATION OF UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

The Company’s unaudited condensed consolidated interim financial information are prepared in accordance with and in compliance with the international standard IAS 34 Interim Financial Reporting issued by the International Accounting Standards Board (“IASB”) and disclose all the applicable significant information related to the financial information, which is consistent with the information utilized by Management in the performance of its duties.

The Company’s unaudited condensed consolidated interim financial information are expressed in thousands of Brazilian Reais (“R$”), as well as the amounts of other currencies disclosed in the unaudited condensed consolidated interim financial information, when applicable, were also expressed in thousands, unless otherwise stated.

The preparation of unaudited condensed consolidated interim financial information requires Management to make judgments, use estimates and adopt assumptions in the process of applying accounting practices, that affect the disclosed amounts of revenues, expenses, assets and liabilities, including contingent liabilities. However, the uncertainty inherent to these judgements, assumptions and estimates could result in material adjustments to the carrying amount of certain assets and liabilities in future periods.

The Company reviews its judgments, estimates and assumptions continually as disclosed in the annual financial statements for the year ended December 31, 2019 (Note 3.2.32). In the three-month period ended March 31, 2020, the Company reviewed the judgments, estimates and assumptions related to the measurement of the fair value of biological assets and the impairment test of the intangible asset, which are disclosed in the respective notes 13 and 16 of this interim financial statement.

The unaudited condensed consolidated interim financial information were prepared on the historical cost basis, except for the following material items recognized:

(i)

derivative and non-derivative financial instruments measured at fair value;

(ii)

share-based payments and employee benefits measured at fair value;

(iii)

biological assets measured at fair value; and

(iv)

deemed cost of property, plant and equipment.

The main accounting polices applied in the preparation of these unaudited condensed consolidated interim financial information are presented in note 3.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

The unaudited condensed consolidated interim financial information were prepared under the going concern assumption.

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited condensed consolidated interim financial information was prepared based on the information of Suzano and its wholly-owned subsidiaries on the three-month period ended March 31, 2020, as well as in accordance with consistent accounting practices and policies.

The unaudited condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended December 31, 2019, considering that its purpose is to provide an update on the activities, events and significant circumstances in relation to those disclosed in the consolidated financial statements. Therefore, unaudited condensed consolidated interim financial information focus on new activities, events and circumstances and do not duplicate the information previously disclosed, except when Management judges that the maintenance of the information is relevant.

The accounting policies have been consistently applied to all consolidated companies.

There were no changes on such policies and estimates calculation methodologies, except for the application of the new accounting policies as of January 1, 2020 and whose estimated impact was disclosed in the annual financial statements of December 31, 2019, as described in the Note 3.1.

3.1.

New accounting policies and changes in the accounting policies adopted

3.1.1.

Translation into currency presentation

Due to the merger with Fibria, the Company had several changes in the structure, activities and operations during 2019 that led management to conclude that they needed to reassess the functional currency of its subsidiaries whose functional currency was different from Brazilian Reais.

Those facts resulted in the corporate reorganization, as well as, it has impacted how management conducted the Company's business in order to achieve the alignment between the cultures of the two Companies, the unification of processes, operating, tax systems and strategies, through synergy gains arising from the business combination. In this process some of Company’s wholly-owned subsidiaries were considered an extension of the activities of the parent company.

These circumstances collectively justify the change in the functional currency to Brazilian Real and they have occurred gradually during 2019, therefore it was not practicable to determine the date of the change at a precise point during the reporting period. Thus, the Company changed the functional currency of those wholly-owned subsidiaries as of January 1, 2020.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

The cumulative translation adjustment (“CTA”) arising from the translation of a foreign operation previously recognized in other comprehensive income will not be reclassified from equity to profit or loss until the disposal of the operations. The total or partial disposal of interest in wholly-owned subsidiaries occurs through sale or dissolution, of all or part of operation.

Therefore, the financial statements of foreign subsidiaries, whose functional currency was different from Brazilian Reais in 2019, were translated using the criteria established below:

(i)

assets and liabilities are translated at the exchange rate in effect at period-end;

(ii)

revenues and expenses are translated based on the monthly average rate;

(iii)

the cumulative effects of gains or losses upon translation are recognized as accumulated foreign currency translation adjustments component of other comprehensive income.

And as from January 1, 2020, the financial statements of foreign subsidiaries are translated using the following criteria:

(i)

monetary assets and liabilities are translated at the exchange rate in effect at period-end;

(ii)

non-monetary assets and liabilities are translated at the historical rate of the transaction;

(iii)

revenues and expenses are translated based on monthly average rate;

(iv)

the cumulative effects of gains or losses upon translation are recognized in the other comprehensive income period-end.

3.1.2.

Business combination – IFRS 3

This pronouncement was amended and clarifies definition of a “business”. It’s also permitted a simplified assessment of whether an acquired set of activities and assets is a group of assets rather than a business. The Company assessed the content of this pronouncement and did not identify any material impacts.

3.1.3.

Presentation of financial statements – IAS 1 and Accounting policies, changes in accounting estimates and errors – IAS 8

This pronouncement was amended and clarifies definition of a “material” and how it should be applied by (i) including in the definition guidance that until now has featured elsewhere in IFRS Standards; (ii) improving the explanations accompanying the definition; and (iii) ensuring that the definition of material is consistent across all IFRS Standards. The Company assessed the content of this pronouncement and did not identify any material impacts.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

3.1.4.

Conceptual framework for financial reporting

This pronouncement was amended and includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts, the main changes are set forth below:

(i)

the objective of financial reporting describes the objective of general purpose financial reporting, the information needed to achieve that objective and who uses the financial reports. The term “stewardship” was reintroduced, in order to clarify its meaning and defining the information needed to assess management’s stewardship and separates this from the information that users need to assess the prospects of the entity’s future net cash flows. Both types of information are required to provide information that is useful for making decisions about providing resources to the entity, and therefore achieves the objective of financial reporting.

(ii)

qualitative characteristics of useful financial information: the concepts of prudence and substance over form were reintroduced. It was also defined the concept of measurement uncertainty in assessing the usefulness of financial information, since in some cases, relevant information may have a high level of measurement uncertainty, which may reduce its usefulness. Slightly less relevant information with a lower measurement uncertainty may be preferable in such case.

(iii)

financial statements and the reporting entity: describes about new concepts, in which it is clarified the scope and objective of financial statements and also provides a description of the reporting entity.

(iv)

the elements of financial statements: the definitions of assets and liabilities were revised and the definitions of income and expenses were updated accordingly, as set forth below:

Previous definition		New definition
Asset: A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.		Asset: A present economic resource controlled by the entity as a result of past events. An economic resource is a right that has the potential to produce economic benefits.

The new definition clarifies that an asset is an economic resource, and that the potential economic benefits no longer need to be ‘expected’ to flow to the entity. Thus, they do not need to be certain or even likely, but if this is the case, the recognition and measurement of the asset may be affected.

Liability: A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.		Liability: A present obligation of the entity to transfer an economic resource as a result of past events.

The main difference is that the new definition clarifies that a liability is the obligation to transfer an economic resource, and not the ultimate outflow of economic benefits. The outflow also no longer needs to be ‘expected’, similar to the change in the definition of an asset, above. It was also introduced the concept of ‘no practical ability to avoid’ to the definition of an obligation, and factors used to assess this will depend on the nature of an entity’s duty or responsibility, which requires the use of judgement.

Income: increases in economic benefits during the accounting period in the form of inflows or enhancements of assets, or decreases of liabilities, that result in increases in equity, other than those relating to contributions from equity participants.		Income: Increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims.

Expense: Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets, or incurrences of liabilities, that result in decreases in equity, other than those relating to distributions to equity participants.		Expense: Decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to distributions to holders of equity claims.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

(v)

recognition and derecognition: the criteria for recognizing assets and liabilities in the financial statements were reviewed. The pronouncement states that recognition is only appropriate if it results in both relevant information about the element being recognized, and faithful representation of that element. On the other hand, derecognition should aim to faithfully represent those assets and liabilities retained after the transaction, if any, and any change in assets and liabilities as a result of the transaction that led to the derecognition.

(vi)

measurement: new guidance was introduced about measurement bases and provide factors to consider when selecting a measurement basis. Therefore, two categories of measurement basis were identified:

historical cost:

current value: which comprises fair value, value in use of assets and fulfilment value for liabilities and current cost.

(vii)

Presentation and disclosure: the concepts were reviewed (i) how information should be presented and disclosed in financial statements (ii) classifying income and expenses in the statement of income and (iii) whether and when income and expenses included in other comprehensive income (“OCI”) should subsequently be recycled to statement of income. Additionally, reinforces that statement of income is the primary source of information about the entity’s financial performance.

(viii)

concepts of capital and capital maintenance: describes the concepts of capital and capital maintenance and profit determination and adjustments for capital maintenance, the content of this item has not changed.

The Company assessed the content of this pronouncement and did not identify any material impacts.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

3.2.

New standards, revisions and interpretations not yet in force

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company’s unaudited consolidated condensed interim financial information.

4.	Financial Instruments and Risks Management

4.1.

Financial risks management

4.1.1.

Overview

In the three-month period ended March 31, 2020, there were no significant changes in the financial risk management policies and procedures compared to those reported in note 4 to the financial statements of December 31, 2019.

The Company maintained its conservative approach and strong cash and marketable securities position, as well as its hedge policy, during the crisis caused by the pandemic of COVID-19 and even though there were impacts on the fair value of its financial instruments due to the effects on all global economies, the impacts were as expected, according to sensitivity analyses disclosed in previous reports, and measures were taken in relation to the risks associated to the financial instruments, in particular to the risks of liquidity, credit and exchange rate variation, as described following items set forth.

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

4.1.2.

Rating

All transactions with financial instruments are recognized for accounting purposes and classified in the following categories:

	March 31, 2020		December 31, 2019
Assets
Amortized cost
Cash and cash equivalents (Note 5)		4,548,329		3,249,127
Trade accounts receivable (Note 7)		4,447,957		3,035,817
Other assets		502,041		563,993
		9,498,327		6,848,937
Fair value through other comprehensive income
Other investments (Note 14)		23,770		20,048
		23,770		20,048

Fair value through profit or loss
Derivative financial instruments (Note 4.6)		1,088,394		1,098,972
Marketable securities (Note 6)		5,190,724		6,330,334
		6,279,118		7,429,306
		15,801,215		14,298,291
Liabilities
Amortized cost
Loans, financing and debentures (Note 18.1)		75,781,660		63,684,326
Lease liabilities (Note 19.2)		4,727,361		3,984,070
Liabilities for assets acquisitions and subsidiaries (Note 23)		633,771		541,615
Trade accounts payable (Note 17)		2,408,286		2,376,459
Other liabilities		387,226		578,061
		83,938,304		71,164,531
Fair value through profit or loss
Derivative financial instruments (Note 4.5)		11,793,326		2,917,913
		11,793,326		2,917,913
		95,731,630		74,082,444

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

4.1.3.

Fair value of loans and financing

The estimated fair values of loans and financing are set forth below:

	Yield used to discount	March 31, 2020		December 31, 2019
Quoted in the secondary market
In foreign currency
Bonds	U.S.$		32,356,046		30,066,087
Estimated to present value
In foreign currency
Export credits (“Pre-payment”)	LIBOR U.S.$		22,556,880		17,213,963
Export credits (“ACC/ACE”)	DI 1		756,150		575,521
In local currency
BNP – Forest Financing	DI 1		182,872		193,646
BNDES – TJLP	DI 1		1,806,819		1,895,959
BNDES - TLP	DI 1		510,941		535,812
BNDES – Fixed	DI 1		104,127		113,979
BNDES – Selic (“Special Settlement and Custody System”)	DI 1		678,599		693,969
BNDES - Currency basket	DI 1		61,232		54,420
CRA (“Agribusiness Receivables Certificate”)	DI 1		6,047,925		6,039,983
Debentures	DI 1		5,537,898		5,534,691
FINAME (“Special Agency of Industrial Financing”)	DI 1		12,881		14,168
FINEP (“Financier of Studies and Projects”)	DI 1		3,218		5,138
NCE (“Export Credit Notes”)	DI 1		1,353,644		1,445,383
NCR (“Rural Credit Notes”)	DI 1		280,716		288,122
Export credits (“Pre-payment”)	DI 1		1,417,420		1,464,798
FDCO (“West Center Development Fund”)	DI 1		575,670		571,904
			74,243,038		66,707,543

The Management considers that for its other financial liabilities measured at amortized cost, its book values approximate to their fair values and therefore the information on their fair values is not being presented.

4.2.

Liquidity risk

As disclosed in note 4 to the financial statements as of December 31, 2019, the Company’s purpose is maintaining a strong cash and marketable securities position to meet its financial and operating obligations. The amount held as cash is used for payments expected in the normal course of its operations, while the cash surplus amount is invested in highly liquid financial investments according Cash Management Policy. The cash position is monitored by the Company’s senior management, by means of management reports and participation in performance meetings with determined frequency. In the three-month period ended March 31, 2020, there was no relevant impact in cash and marketable securities, and the Company believes that, eventually, the crisis scenario caused by the COVID-19 pandemic would be extend and the Brazilian Reais keep devalued against the U.S.Dollar, adjustments of derivative instruments that will mature in the coming months would be negatively impacted, however those would, be offset by higher cash generation, which will benefit from this devaluation and exceeds the cost of any adjustments to derivatives.

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

As material fact disclosed to the market on February 14, 2020, the Company, voluntarily prepaid the principal amount of U.S.$750,000 (equivalent to R$3,237,225), related to an export prepayment, with quarterly interest payments of 1.15% p.a. plus quarterly LIBOR, which was scheduled to mature in February 14, 2023. At the same time, the Company entered into a new transaction related to an export prepayment in the amount of U.S.$850.000 (equivalent to R$3,668,855), of 1.15% p.a. plus quarterly LIBOR, which was scheduled to mature in February 13, 2026. Furthermore, as material fact disclosed to the market on February 28, 2020, the Company through its wholly-owned subsidiary Suzano Trading Ltd. (“Suzano Trading”) exercised its right to redeem all of the outstanding aggregate principal amount of the 5.875% senior notes issued by it and guaranteed by Suzano due 2021 (“2021 Notes”) currently outstanding, in the total aggregate principal amount of U.S.$189.630.

Such transactions were performed under market conditions, considered attractive by the Company, and even though they were carried out before the crisis caused by the COVID-19 pandemic, they were in line with the debt management strategy based on cost reduction and extension of the term portfolio, thus reinforcing our liquidity position.

In line with the material fact disclosed to the market on March 30, 2020, there was a disbursement of U.S.$500,000 (equivalent to R$2,632,550) of its revolving credit facility maintained with certain financial institutions, of 1.30% plus quarterly LIBOR and maturity in February 2024. The disbursement is in line with the preventive measures that the Company has been taking to mitigate eventual impacts resulting from the COVID-19 pandemic and aims to bring even more strength to the liquidity position of the Company. The funds were credited on April 1, 2020.

The remaining contractual maturities of financial liabilities are disclosed at the date of this financial information reporting date. The amounts as set forth below, consist in the undiscounted cash flows and include interest payments and exchange rate variation, and therefore may not be reconciled with the amounts disclosed in the balance sheet.

	March 31, 2020
	Total book value		Total future value		Up to 1 year		1 - 2 years		2 - 5 years		More than 5 years
Liabilities
Trade accounts payables		2,408,286		2,408,286		2,408,286
Loans, financing and debentures ⁽¹⁾		75,781,660		106,324,064		9,184,688		4,519,542		38,260,341		54,359,493
Lease liabilities		4,727,361		8,305,229		669,471		1,309,502		1,724,706		4,601,550
Liabilities for asset acquisitions and subsidiaries		633,771		728,961		130,790		126,604		360,237		111,330
Derivative financial instruments ⁽¹⁾		11,793,326		16,588,383		4,717,622		1,806,315		2,721,021		7,343,425
Other liabilities		387,226		387,226		302,903		84,323
		95,731,630		134,742,149		17,413,760		7,846,286		43,066,305		66,415,798

The variation is due to the increase in the exchange rate variation in the three-month period ended March 31, 2020.

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

	December 31, 2019
	Total book value		Total future value		Up to 1 year		1 - 2 years		2 - 5 years		More than 5 years
Liabilities
Trade accounts payables		2,376,459		2,376,459		2,376,459
Loans, financing and debentures		63,684,326		89,708,210		8,501,278		5,692,149		29,088,292		46,426,491
Lease liabilities		3,984,070		7,109,966		559,525		1,426,011		1,186,386		3,938,044
Liabilities for asset acquisitions and subsidiaries		541,615		618,910		103,132		101,149		315,989		98,640
Derivative financial instruments		2,917,913		8,299,319		1,488,906		415,791		1,258,200		5,136,422
Other liabilities		578,061		578,061		456,338		121,723
		74,082,444		108,690,925		13,485,638		7,756,823		31,848,867		55,599,597

4.3.

Credit risk management

In the three-month period ended March 31, 2020, there were no significant changes in the credit risk management policies and procedures compared to those reported in note 4 to the financial statements of December 31, 2019, except for described set forth below.

4.3.1.

Trade accounts receivable and advances to supplier

As a result of the crisis caused by COVID-19, the Company started to accept requests for the extension of customer invoices, limiting these postponements to those invoices close to maturity, with due interest charges.

Most of the customers who requested extension are related to the domestic market in the paper segment and do not represent a significant amount compared to the Company's total accounts receivable.

In the three-month period ended March 31, 2019, the Company did not observe an increase in customer default due to the COVID-19 crisis. The Company believes that delays in receipts may behave more accentuated than the historic over the next few months, however, internal analyzes and credit metrics do not demonstrate that these delays may have a significant impact on the Company's liquidity position.

All policies aimed at mitigating the possible risks arising from the default of its customers were maintained, as well as the collection policies and procedures. Moreover, the policy of expected credit losses normally follows, without any changes.

4.3.2.

Banks and financial institutions

In the three-month period ended March 31, 2020, there were no significant changes in the credit risk management policies and procedures related to bank and financial institutions compared to those reported in note 4 to the financial statements of December 31, 2019.

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

4.3.3.

Market risk management

In the three-month period ended March 31, 2020, there were no significant changes in the market risk management policies and procedures compared to those reported in note 4 to the financial statements of December 31, 2019.

4.4.

Exchange rate risk management

As disclosed in note 4 of the financial statements for the year ended December 31, 2019, the Company contracts sales operations of U.S.Dollar in the futures markets, including strategies with options, in order to ensure attractive levels of operating margins for a portion of revenue. These operations are limited to a percentage of the net foreign exchange surplus over the 18-month horizon and, therefore, are attached to the availability of ready-to-sell foreign exchange in the short term.

Due to pandemic COVID-19 and the effects on all global economies during the first quarter, financial markets have experienced volatility throughout the period with a strong sense of aversion to risk, with a consequent substantial devaluation of the Real against the U.S.Dollars. For the calculation of mark-to-market (“MtM”) the PTAX of the penultimate business day of the quarter was used, in December 2019 it was R$4.0307 and in March 2020 it was R$5.1594, with an increase of 28%. These market movements caused a negative impact on the mark-to-market hired hedge position.

It is important to mention that even if there is negative impact on the fair value of derivative operations, whereas hedging contracts are limited by policy in a maximum of 75% of the exposure in US Dollars, the exchange devaluation benefits, in a net way, the Company's cash generation.

The net exposure of assets and liabilities in foreign currency which is substantially in U.S. dollars, is set forth below:

	March 31, 2020			December 31, 2019
Assets
Cash and cash equivalents		4,082,697			2,527,834
Trade accounts receivables		3,495,423			2,027,018
Derivative financial instruments		221,081			9,440,141
		7,799,201			13,994,993
Liabilities
Trade accounts payables		(961,279	)		(1,085,207	)
Loans and financing		(57,627,985	)		(45,460,138	)
Liabilities for asset acquisitions and subsidiaries		(376,376	)		(288,172	)
Derivative financial instruments		(10,445,752	)		(11,315,879	)
		(69,411,392	)		(58,149,396	)
Net liability exposure		(61,612,191	)		(44,154,403	)

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

4.4.1.1.

Sensitivity analysis – foreign exchange rate exposure – except financial instruments derivatives

For market risk analysis, the Company uses scenarios to jointly evaluate assets and liabilities positions in foreign currency, and the possible effects on its results. The probable scenario represents the amounts recognized, as they reflect the translation into Brazilian Reais on the base date of the balance sheet (R$ to U.S.$ = R$5.1987).

This analysis assumes that all other variables, particularly, the interest rates, remains constant. The other scenarios considered the appreciation/depreciation of the Brazilian real against the U.S.$. at the rates of 25% and 50%, before taxes.

The following table set forth the potential impacts in absolute amounts:

	March 31, 2020
	Effect on profit or loss and equity
	Probable			Possible (25%)			Remote (50%)
Cash and cash equivalents		4,082,697			1,020,674			2,041,349
Trade accounts receivable		3,495,423			873,856			1,747,712
Trade accounts payable		(961,279	)		(240,320	)		(480,640	)
Loans and financing		(57,627,985	)		(14,406,996	)		(28,813,993	)
Liabilities for asset acquisitions and subsidiaries		(376,376	)		(94,094	)		(188,188	)

4.4.1.2.

Sensitivity analysis – foreign exchange rate exposure – financial instruments derivatives

The following table set forth the potential impacts assuming these scenarios:

	March 31, 2020
	Effect on profit or loss and equity
	Probable			Possible (+25%)			Remote (+50%)			Possible (-25%)		Remote (-50%)
	5.1594			6.4493			7.7391			3.8696		2.5797
Financial instruments derivatives
Derivative options		(3,096,523	)		(4,526,159	)		(9,220,221	)		3,820,861		8,317,034
Derivative NDF ⁽¹⁾		(42,522	)		(58,194	)		(116,388	)		58,194		116,388
Derivative swaps		(8,198,092	)		(5,573,098	)		(11,146,189	)		5,573,083		11,146,174

NDF: Non-Deliverable Forward

4.4.2.

Interest rate risk management

4.4.2.1.

Sensitivity analysis – exposure to interest rates – except financial instruments derivatives

For market risk analysis, the Company uses scenarios to evaluate the sensitivity that variations in operations impacted by the rates: Interbank Deposit Rate (“CDI”), Long Term Interest Rate (“TJLP”), Special System for Settlement and Custody ("SELIC") and the London Interbank Offered Rate (“LIBOR”) may have on its results. The probable scenario represents the amounts already booked, as they reflect the best estimate of the Management.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

This analysis assumes that all other variables, particularly exchange rates, remain constant. The other scenarios considered appreciation/depreciation of 25% and 50% in the market interest rates.

The following table set forth the potential impacts in absolute amounts:

	March 31, 2020
	Effect on profit or loss and equity
	Probable		Possible (25%)		Remote (50%)
CDI
Cash and cash equivalents		337,309		3,078		6,156
Marketable securities		5,190,724		47,365		94,731
Loans and financing		11,463,323		104,603		209,206

TJLP
Loans and financing		1,772,356		22,553		45,106

LIBOR
Loans and financing		21,268,682		77,126		154,251

4.4.2.2.

Sensitivity analysis – exposure to interest rates – financial instruments derivatives

This analysis assumes that all other variables, particularly exchange rates, remain constant. The other scenarios considered appreciation/depreciation of 25% and 50% in the market interest rates.

The following table set forth the potential impacts assuming these scenarios:

	March 31, 2020
	Effect on profit or loss and equity
	Probable			Probable (+25%)			Remote (+50%)			Probable (-25%)			Remote (-50%)
CDI
Financial instruments derivatives
Liabilities
Derivative options		(3,096,523	)		(76,517	)		(152,503	)		77,090			154,697
Derivative swaps		(8,198,092	)		(37,176	)		(72,822	)		38,689			78,906
LIBOR
Financial instruments derivatives
Liabilities
Derivative swaps		(8,198,092	)		84,881			169,738			(84,929	)		(169,884	)

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

4.4.2.3.

Sensitivity analysis for changes in the consumer price index of the US economy

For the measurement of the probable scenario, the United States Consumer Price Index (US-CPI) was considered on December 31, 2019. The probable scenario was extrapolated considering an appreciation/depreciation of 25 % and 50% in the US-CPI to define the possible and remote scenarios, respectively, in absolute amounts.

	March 31, 2020
	Impact of an increase/decrease of US-CPI on the fair value
	Probable		Possible (25%)			Remote (50%)
Embedded derivative in forestry partnership and standing wood supply agreements		589,197		(62,007	)		(125,396	)

4.4.3.

Commodity price risk management

The Company is exposed to commodity prices that reflect mainly on the pulp sale price in the foreign market. The dynamics of opening and closing production capacities in the global market and the macroeconomic conditions may have an impact on the Company´s operating results.

Through a specialized team, the Company monitors the pulp price and analyses future trends, adjusting the forecast which that aims to assisting preventive measures to properly conduct the different scenarios. There is no liquid financial market to sufficiently mitigate the risk of a material portion of the Company's operations. Price protection operations cellulose available on the market have low liquidity and volume and large distortion in price formation. No relevant changes were observed in relation to pulp prices and future markets related to this index due to the crisis caused by the pandemic of COVID-19.

The Company is also exposed to international oil prices, which is reflected on logistical costs for selling to the export market. In this case, the Company assess, when comprehend necessary, hiring derivative financial instruments to set oil price. The crisis caused by the COVID-19 pandemic significantly impacted the global demand for oil and its derivatives, which caused a substantial devaluation of the prices of these assets in the spot and future markets. In this context, and considering attractive market conditions, the Company increased its oil hedge position in line with its hedge strategy and policies and set a good part of its exposure at levels below the estimated price levels for the 2020 budget.

In the three-month period ended March 31, 2020, a contracted position to hedge its logistics costs was purchased in the amount of U.S.$95,117 (U.S.$ 0.364 as of December 31, 2019).

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

4.4.3.1.

Commodity price risk management

This analysis assumes that all other variables, except price risk, remain constant. The other scenarios considered appreciation/depreciation of 25% and 50% of oil price in the market.

The following table set forth the potential impacts assuming these scenarios:

	March 31, 2020
	Impact of an increase/decrease of price risk
	Probable			Possible (25%)		Remote (50%)
Oil derivative		(147,240	)		234,052		320,863

4.5.

Derivative financial instruments

The Company determines the fair value of derivative contracts, which differ from the amounts realized in the event of early settlement due to bank spreads and market factors at the time of quotation. The amounts presented by the Company are based on an estimate using market factors and use data provided by third parties, measured internally and compared to calculations performed by external consultants.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

4.5.1.

Outstanding derivatives by type of contract, including embedded derivatives

The positions of outstanding derivatives are set forth below:

	Notional value in U.S.$				Fair value
	March 31, 2020		December 31, 2019		March 31, 2020			December 31, 2019
Instruments contracted with protection strategy
Operational Hedge
NDF (R$ x U.S.$)		45,000				(42,500	)
Zero Cost Collar (R$ x U.S.$) ⁽¹⁾		3,667,000		3,425,000		(3,090,095	)		67,078

Debt hedge
Interest rate hedge
Swap LIBOR to Fixed (U.S.$) ⁽¹⁾		3,683,333		2,750,000		(1,139,261	)		(444,910	)
Swap IPCA to CDI (notional in Reais)		843,845		843,845		216,854			233,255
Swap IPCA to Fixed (U.S.$)		121,003		121,003		(160,910	)		30,544
Swap CDI x Fixed (U.S.$) ⁽¹⁾		3,099,156		3,115,614		(6,366,297	)		(1,940,352	)
Pre-fixed Swap to U.S.$ (U.S.$)		350,000		350,000		(564,868	)		(33,011	)

Hedge de Commodity
Swap US-CPI standing wood (U.S.$) ⁽²⁾		668,346		679,485		589,197			268,547
Swap Bunker (oil)		95,117		365		(147,052	)		(92	)
						(10,704,932	)		(1,818,941	)

Current assets						128,845			260,273
Non-current assets						959,549			838,699
Current liabilities						(4,642,367	)		(893,413	)
Non-current liabilities						(7,150,959	)		(2,024,500	)
						(10,704,932	)		(1,818,941	)

The variation is due to the increase in the exchange rate in the three-month period ended March 31, 2020.

The embedded derivative refers to swap contracts for the sale of US-CPI variations within the term of the forest partnership and standing wood supply contracts.

The COVID-19 pandemic negatively impacted the financial markets and, consequently, caused increased volatility throughout the first quarter, devaluing the Real against the US Dollar by 28%, as previously mentioned. The variation in the fair value of derivatives for the three-month period ended March 31, 2020 compared to the fair value measured on December 31, 2019 is explained substantially by this significant devaluation of the local currency. There were also less significant impacts caused by the variation in the Pre, Foreign Exchange Coupon and LIBOR curves in transactions.

It is important to highlight that, the outstanding agreements in the three-month period ended March 31, 2020, are over-the-counter market, without any kind of guarantee margin or early settlement clause forced by changes from mark to market, including possible variations caused by the COVID-19 pandemic.

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

4.5.2.

Fair value by maturity schedule

	March 31, 2020			December 31, 2019
2020		(3,880,979	)		(633,644	)
2021		(1,729,476	)		98,850
2022		(916,271	)		(154,734	)
2023		(447,481	)		185,209
2024		(693,886	)		(197,718	)
2025		(1,677,310	)		(606,827	)
2026 onwards		(1,359,529	)		(510,077	)
		(10,704,932	)		(1,818,941	)

4.5.3.

Outstanding of assets and liabilities derivatives positions

The outstanding derivatives positions are set forth below:

			Notional value				Fair value
	Currency		March 31, 2020		December 31, 2019		March 31, 2020			December 31, 2019
Debt hedge
Assets
Swap CDI x Fixed (U.S.$)		R$		11,443,605		11,498,565		11,847,439			11,673,117
Swap Pre-Fixed to U.S.$ (U.S.$)		R$		1,317,226		1,317,226		1,452,533			1,478,336
Swap LIBOR x Fixed (U.S.$)		US$		3,683,333		2,750,000		19,322,891			11,063,970
Swap IPCA x CDI		IPCA		948,932		933,842		1,087,479			1,093,067
Swap IPCA x U.S.$		IPCA		507,511		499,441		574,523			579,307
								34,284,865			25,887,797
Liabilities
Swap CDI x Fixed (U.S.$)		US$		3,099,156		3,115,614		(18,213,736	)		(13,613,469	)
Swap LIBOR x Fixed (U.S.$)		US$		350,000		350,000		(2,017,401	)		(1,511,347	)
Swap LIBOR x Fixed (U.S.$)		US$		3,683,333		2,750,000		(20,462,152	)		(11,508,880	)
Swap IPCA x CDI		R$		843,845		843,845		(870,625	)		(859,812	)
Swap IPCA x U.S.$		US$		121,003		121,003		(735,433	)		(548,763	)
								(42,299,347	)		(28,042,271	)
								(8,014,482	)		(2,154,474	)
Operational hedge
Zero cost collar (U.S.$ x R$)		US$		3,667,000		3,425,000		(3,090,095	)		67,078
NDF (R$ x U.S.$)		US$		45,000				(42,500	)
								(3,132,595	)		67,078
Commodity hedge
Swap US-CPI (standing wood)		US$		668,346		679,485		589,197			268,547
Swap Bunker (oil)		US$		95,117		365		(147,052	)		(92	)
								442,145			268,455
								(10,704,932	)		(1,818,941	)

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

4.5.4.

Fair value settled amounts

The settled derivatives positions are set forth below:

	March 31, 2020			December 31, 2019
Operational hedge
Zero cost collar (R$ x U.S.$)		(161,713	)		(104,040	)
NDF (R$ x U.S.$)					63,571
		(161,713	)		(40,469	)
Commodity hedge
Swap Bunker (oil)		(92	)		3,804
		(92	)		3,804
Debt hedge
Swap CDI x Fixed (U.S.$)		(19,783	)		(68,362	)
Swap IPCA x CDI					23,024
Swap Pre-Fixed to U.S.$ (U.S.$)		34,099			(26,358	)
Swap LIBOR x Fixed (U.S.$)		(25,308	)		(27,088	)
		(10,992	)		(98,784	)
		(172,797	)		(135,449	)

4.6.

Fair value hierarchy

For the three-month period ended March 31, 2020, there were no changes between the 3 (three) levels of hierarchy and no transfers between levels 1, 2 and 3 during the periods disclosed.

	March 31, 2020
	Level 1		Level 2		Level 3		Total
Assets
Fair value through profit or loss
Derivative financial instruments				1,088,394				1,088,394
Marketable securities		503,321		4,687,403				5,190,724
		503,321		5,775,797				6,279,118

Fair value through other comprehensive income
Other investments - CelluForce						23,770		23,770
						23,770		23,770

Biological assets						10,431,416		10,431,416
						10,431,416		10,431,416
Total assets		503,321		5,775,797		10,455,186		16,734,304

Liabilities
Fair value through profit or loss
Derivative financial instruments				11,793,326				11,793,326
Total liabilities				11,793,326				11,793,326

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

	December 31, 2019
	Level 1		Level 2		Level 3		Total
Assets
Fair value through profit or loss
Derivative financial instruments				1,098,972				1,098,972
Marketable securities		1,631,319		4,699,015				6,330,334
		1,631,319		5,797,987				7,429,306

Fair value through other comprehensive income
Other investments - CelluForce						20,048		20,048
						20,048		20,048

Biological assets						10,571,499		10,571,499
						10,571,499		10,571,499
Total assets		1,631,319		5,797,987		10,591,547		18,020,853

Liabilities
Fair value through profit or loss
Derivative financial instruments				2,917,913				2,917,913
				2,917,913				2,917,913
Total liabilities				2,917,913				2,917,913

4.7.

Capital management

The main objective is to strengthen its capital structure, aiming to maintain an adequate financial leverage, and to mitigate risks that may affect the availability of capital in business development.

The Company monitors constantly significant indicator, such as, consolidated financial leverage, which is the ratio of total net debt to its adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”).

CASH AND CASH EQUIVALENTS

	Average yield p.a. %		March 31, 2020		December 31, 2019
Cash and banks		0.49		3,454,839		2,464,097

Cash equivalents
Local currency
Fixed-term deposits ⁽¹⁾		102.90 of CDI		337,309		630,075

Foreign currency
Fixed-term deposits ⁽¹⁾		1.53		756,181		154,955
				4,548,329		3,249,127

Refers to Time Deposit and Sweep Account applications, maturing up to 90 days.

Time Deposit is a remunerated bank deposit with a specific maturity period.

Sweep Account: is a paid sweep account. At the end of the day, the balance remaining in the account is automatically applied and automatically made available the next business day in the morning.

Suzano S.A.

Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

MARKETABLE SECURITIES

	Average yield p.a. %		March 31, 2020		December 31, 2019
In local currency
Investment funds		54.00 of CDI		6,625		6,683
Private funds		29.85 of CDI		947,857		1,431,303
Public titles measured at fair value through profit or loss		29.85 of CDI		503,321		1,631,319
Private Securities (Compromised)		101.12 of CDI		3,551,357		3,081,326
Private Securities (Compromised) - Escrow Account ⁽¹⁾		102.00 of CDI		181,564		179,703
				5,190,724		6,330,334

Current				5,009,160		6,150,631
Non-Current				181,564		179,703

Refers to the guarantee account, which will be released only after obtaining the applicable governmental approvals and compliance by the Company with the precedent conditions to the conclusion of the Losango Project provided for in the agreement entered with CMPC Celulose Riograndense SA ("CMPC"). The Losango Project was a transaction to buy and sell lands and forests involving Fibria and CMPC, entered into in December 2012.

TRADE ACCOUNTS RECEIVABLE

7.1

Breakdown of balances

	March 31, 2020			December 31, 2019
Domestic customers
Third parties		967,206			1,027,034
Receivables Investment Fund ("FIDC")
Related parties (Note 11)		34,192			23,761

Foreign customers
Third parties		3,495,423			2,027,018

(-) Expected credit losses		(48,864	)		(41,996	)
		4,447,957			3,035,817

The Company performs factoring transactions for certain customers’ receivables where, substantially all risks and rewards related to these receivables are transferred to the counterpart, so that these receivables are derecognized from accounts receivable in the balance sheet. This transaction refers to an additional cash generation opportunity and may be discontinued at any time without significant impact on the Company's operation and is therefore classified as a financial asset measured at amortized cost. The impact of these factoring transactions on the accounts receivable in the balance sheet for the three-month period ended March 31, 2020, is R$3,671,869 (R$3,544,625 as of December 31, 2019).

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

7.2

Breakdown of trade accounts receivable by maturity

	March 31, 2020		December 31, 2019
Current		3,951,612		2,552,459
Overdue
Up to 30 days		347,720		180,909
From 31 to 60 days		20,355		148,388
From 61 to 90 days		27,815		20,448
From 91 to 120 days		9,147		20,680
From 121 to 180 days		20,319		17,899
More than 180 days		70,989		95,034
		4,447,957		3,035,817

7.3

Rollforward of the expected credit losses

	March 31, 2020			December 31, 2019
Beginning balance		(41,996	)		(37,179	)
Business combination with Fibria ⁽¹⁾					(5,947	)
Addition		(5,522	)		(18,650	)
Reversal					6,364
Write-off		872			13,383
Exchange rate variation		(2,218	)		33
Ending balance		(48,864	)		(41,996	)

Business combination with Fibria and its subsidiaries held on January 3, 2019, Note 1.2.2.

The Company maintains guarantees for overdue securities in its commercial operations, through credit insurance policies, letters of credit and other guarantees. These guarantees avoid the need to recognize expected credit losses, in accordance with the Company's credit policy.

7.4

Main customers

The Company has 1 (one) customer for 8.92% of net sales of pulp segment for the three-month period ended March 31, 2020 (1 (one) customer for 10% of net sales of pulp segment as of December 31, 2019).

INVENTORIES

	March 31, 2020		December 31, 2019
Finished goods
Pulp
Domestic (Brazil)		578,102		575,335
Foreign		1,538,644		2,229,206
Paper
Domestic (Brazil)		281,213		199,635
Foreign		114,186		70,199
Work in process		112,512		75,377
Raw material		1,259,298		1,047,433
Spare parts and other		378,556		488,410
		4,262,511		4,685,595

For the three-month period ended March 31, 2020, inventories are net of estimated losses in the amounts of R$62,725 (R$106,713 as of December 31, 2019).

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

8.1

Rollforward of estimated losses

	March 31, 2020			December 31, 2019
Beginning balance		(106,713	)		(33,195	)
Business combination with Fibria ⁽¹⁾					(11,117	)
Addition ⁽²⁾		(15,104	)		(111,077	)
Reversal		44			9,734
Write-off ⁽³⁾		59,048			38,942
Ending balance		(62,725	)		(106,713	)

Business combination with Fibria and its subsidiaries held on January 3, 2019, Note 1.2.2.

For the three-month period ended March 31, 2020, refers, substantially, to estimated losses of inventories of finished goods and raw material, in the amounts of R$1,025 and R$13,504, respectively (R$42,470 and R$39,382 as of December 31, 2019).

For the three-month period ended March 31, 2020, refers, substantially, to write-off of finished pulp product, raw material, work in process (tissue) and spare parts in the amounts of R$30,539, R$24,831, R$2,463 and R$1,146 respectively (R$5,786 and R$26,093 spare parts and raw material, respectively as of December 31, 2019).

For the three-month period ended March 31, 2020, additional write-offs were booked in the income statement in the amount of R$1,108 (R$5,190 as of December 31, 2019).

For the three-month period ended March 31, 2020, there were no inventory items pledged as collateral (there were no inventory items pledged as collateral as of December 31, 2019).

RECOVERABLE TAXES

	March 31, 2020			December 31, 2019
IRPJ/CSLL – prepayments and withheld taxes		502,498			575,351
PIS/COFINS – on acquisition of property, plant and equipment ⁽¹⁾		118,542			61,376
PIS/COFINS – operations		332,518			507,919
PIS/COFINS – exclusion ICMS ⁽²⁾		128,115			128,115
ICMS – on acquisition of property, plant and equipment ⁽³⁾		112,197			115,560
ICMS – operations ⁽⁴⁾		1,513,742			1,515,840
Reintegra program ⁽⁵⁾		112,254			108,657
Other taxes and contributions		19,856			18,758
Provision for loss of ICMS credits ⁽⁶⁾		(1,323,900	)		(1,304,329	)
Provision for loss of PIS/COFINS credits					(21,132	)
		1,515,822			1,706,115

Current		836,043			997,201
Non-current		679,779			708,914

Social Integration Program (“PIS”) and Social Security Funding Contribution (“COFINS”): Credits whose realization is in connection with depreciation year of the corresponding asset.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

The Company filed legal actions claiming the exclusion of ICMS from the PIS and COFINS contribution tax basis, in relation to certain operations for certain periods starting from March 1992.

Regarding this subject, the Federal Supreme Court (“STF”) initially decided on March 15th, 2017, that ICMS is not included in the tax basis of the aforementioned contributions. The Federal Government made an appeal (“Embargos de Declaração”) in October 2017, requesting the reversal of the Supreme Court’s initial decision among other items. The appeal has yet to be judged.

Based on the Supreme Court’s initial decision and the legal opinion provided by external legal consultants, the Company believes that the probability of the Supreme Court altering its decision is remote. The Company thus started to exclude the ICMS from the tax basis of the referred contributions since August 2018, a practice also supported by court decisions.

For certain PIS and COFINS credits to be recovered, the Company has received final favorable court decisions. The balance of R$128,115 recognized in the statement of income (loss) in 2019 within other operational results, regarding certain claims for the calculation period from 2006 to July 2018. The Company has estimated the amount attributable to these claims based on the available relevant fiscal documents, and this amount is subject to adjustments to be recorded by management in the future periods.

The Company has additional claims for which a final decision has not been received and for which no asset or gain have been recorded.

Tax on Sales and Services (“ICMS”): Credits from the acquisition of property, plant and equipment are recovered on a linear basis over a four period, from the acquisition date, in accordance with the relevant regulation, ICMS Control on Property, Plant and Equipment (“CIAP”).

ICMS credits accrued due to the volume of exports and credit generated in operations of entry of products: Credits are concentrated in the state of Maranhão, Espírito Santo, Bahia and Mato Grosso do Sul, where the Company realizes the credits through sale of credits to third parties, after approval from the State Ministry of Finance. Credits are also being realized through consumption in its consumer goods (tissue) operations in the domestic market that are already operational in Maranhão.

Special Regime of Tax Refunds for Export Companies ("Reintegra"): Reintegra is a program that aims to refund the residual costs of taxes paid throughout the exportation chain to taxpayers, to make them more competitive in foreign markets.

Includes the provision for discount on sale to third parties of the accumulated ICMS credit in Maranhão and the provision for full loss of the low probability of realization of the units of Espírito Santo, Bahia and Mato Grosso do Sul due to the difficulty of its realization.

9.1.

Rollforward of provision for loss

	ICMS			PIS/COFINS			Total
Balance as of December 31, 2018		(10,792	)					(10,792	)
Business combination with Fibria ⁽¹⁾		(1,211,109	)					(1,211,109	)
Addition		(82,428	)		(21,132	)		(103,560	)
Balance as of December 31, 2019		(1,304,329	)		(21,132	)		(1,325,461	)
Write-off					21,132			21,132
Addition		(19,571	)					(19,571	)
Balance as of March 31, 2020		(1,323,900	)					(1,323,900	)

Business combination with Fibria and its subsidiaries held on January 3, 2019, Note 1.2.2.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

10.

ADVANCE TO SUPPLIERS

	March 31, 2020		December 31, 2019
Forestry development program		1,212,714		1,087,149
Advance to suppliers		158,739		170,481
		1,371,453		1,257,630

Current		158,740		170,481
Non-current		1,212,713		1,087,149

In the financial statements for the year ended December 31, 2019, additional information on advances was disclosed, which did not change during the period.

11.

RELATED PARTIES

The Company's commercial and financial operations with controlling shareholder and Companies owned by controlling shareholder Suzano Holding S.A. ("Suzano Group"). For transactions with related parties, it is determined that the usual market prices and conditions for these transactions are observed, as well as the corporate governance practices adopted by the Company and those recommended and/or required by the legislation.

For the three-month period ended March 31, 2020, there were no material changes in the terms of the agreements, deal and transactions entered into, nor were there any new contracts, agreements or transactions of different natures entered into between the Company and its related parties in relation to those disclosed in the annual financial statements for the year ended December 31, 2019.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

11.1

Balances recognized in assets and liabilities

		Balances receivable (payable)
	Nature	March 31, 2020			December 31, 2019
Transactions with controlling shareholders
Suzano Holding	Granting of guarantees and administrative expenses		5			3
			5			3
Transactions with companies of the Suzano Group and other related parties
Bexma	Reimbursement for expenses		2			1
Bizma	Reimbursement for expenses		1			1
Ecofuturo	Social services		(1,730	)		(9	)
Ensyn Technologies	Reimbursement for expenses		2,004
Ibema	Sale of pulp		32,180			23,755
Ibema	Purchase of products		(1,364	)		(2,467	)
Management	Reimbursement for expenses		(72	)		(1	)
			31,021			21,280
			31,026			21,283
Assets
Trade accounts receivable			34,192			23,761
Liabilities
Trade accounts payable			(3,166	)		(2,478	)
			31,026			21,283

11.2

Amounts transacted in the period

		Expenses (income)
	Nature	March 31, 2020			March 31, 2019
Transactions with controlling shareholders
Suzano Holding	Granting of guarantees and administrative expenses		(1,072	)		(1,647	)
			(1,072	)		(1,647	)
Transactions with companies of the Suzano Group and other related parties:
Bexma	Reimbursement for expenses		3			1
Bizma	Reimbursement for expenses		2			5
Ecofuturo	Social services		(2,016	)		(1,557	)
Ibema	Sale of pulp		24,419			36,881
Ibema	Purchase of products		(1,007	)		(933	)
IPFL	Reimbursement for expenses		1
Mabex	Aircraft services		50			(35	)
Management	Reimbursement for expenses		(3,494	)		(115	)
Nemonorte	Real estate advisory		(50	)		(45	)
			17,908			34,202
			16,836			32,555

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

11.3

Management compensation

Expenses related to the compensation of key management personnel, which include the Board of Directors, Fiscal Council and Board of Statutory Executive Officers, recognized in the statement of income for the period, are set for the below:

	March 31, 2020		March 31, 2020
Short-term benefits
Salary or compensation		10,204		8,955
Direct and indirect benefits		230		467
Bonus		3,437		2,897
		13,871		12,319
Long-term benefits
Share-based compensation plan		50,669		38,238
		50,669		38,238
		64,540		50,557

Short-term benefits include fixed compensation (salaries and fees, vacation, mandatory bonus and “13^th salary” bonus), payroll charges (Company share of contributions to social security – INSS) and variable compensation such as profit sharing, bonus and benefits (company car, health plan, meal voucher, market voucher, life insurance and private pension plan).

Long-term benefits include the stock option plan and phantom shares for executives and key members of the Management, in accordance with the specific regulations as disclosed in Note 22.

12.

INCOME AND SOCIAL CONTRIBUTION TAXES

The Company and its wholly-owned subsidiaries located in Brazil are subject to the tax regime based on taxable income. The wholly-owned subsidiaries located abroad are taxed in their respective jurisdictions, according to local regulations.

In Brazil, the Law nº. 12,973/14 revoked article 74 of Provisional Measure nº.2,158/01 and determines that the parcel of the adjustment of the value of the investment in wholly-owned subsidiary, direct and indirect, located abroad, equivalent to the profit earned by it before income tax, except for exchange rate variation, must be added in the determination of taxable income and the social contribution calculation basis of the controlling entity located in Brazil, at the each period ended.

Management’s Company believes on the validity of the provisions of international treaties entered into Brazil to avoid double taxation. In order to guarantee its right to non-double taxation, the Company filed a lawsuit in April 2019, which aims at a non-double taxation, in Brazil, of profit earned by its wholly-owned subsidiary located in Austria, according to Law n°. 12,973/14. Due to the preliminary injunction granted in favor of the Company in the records of the aforementioned lawsuit, the Company decided to not to add the profit from Suzano International Trading GmbH, located in Austria, in determining of taxable income and social contribution basis of the net profit of the Company for the three-month period ended March 31, 2020. There is no provision for tax related to the profit of such wholly-owned subsidiary in 2020.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

12.1.

Deferred income and social contribution taxes

	March 31, 2020		December 31, 2019
Tax loss carryforwards		740,344		600,249
Negative tax base		205,619		146,346
Provision for judicial liabilities		260,132		265,571
Operating provisions and other losses		915,293		933,818
Exchange rate variation - Taxation on a cash basis ⁽¹⁾		6,320,713		2,001,942
Losses on derivatives ⁽¹⁾		3,639,677		618,427
Fair value adjustment on business combination – Amortization		713,429		713,656
Unrealized profit on inventories		381,321		293,322
Lease		262,096		2,922
Assets temporary differences		13,438,624		5,576,253

Goodwill - Tax benefit on unamortized goodwill		283,982		216,857
Property, plant and equipment - deemed cost adjustment		1,498,177		1,506,220
Accelerated tax depreciation		1,090,709		1,113,200
Borrowing cost		117,035		104,549
Fair value of biological assets		73,104		53,502
Tax provision on results of subsidiaries abroad		533,821		463,850
Fair value adjustment on business combination – Deferred taxes, net		494,393		502,347
Tax credits - gains in tax lawsuit (ICMS from the PIS/COFINS calculation basis)		43,559		43,559
Other temporary differences		16,665		17,004
Liabilities temporary differences		4,151,445		4,021,088

Non-current assets		9,363,252		2,134,040
Non-current liabilities		76,073		578,875

The variation is due to the increase in the exchange rate in the three-month period ended March 31, 2020.

Except for tax loss carryforwards, the negative basis of social contribution and accelerated depreciation are only achieved by the Income Tax (“IRPJ”), other tax bases were subject to both taxes.

The breakdown of accumulated tax losses and social contribution tax loss carryforwards is set forth below:

	March 31, 2020		December 31, 2019
Tax loss carry forward		2,961,376		2,400,998
Social contribution tax loss carryforward		2,284,660		1,626,064

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

The rollforward of net balance of deferred income tax is set for the below:

	March 31, 2020			December 31, 2019
Beginning balance		1,555,165			(1,029,135	)
Business combination with Fibria ⁽¹⁾					1,034,842
Tax loss		140,094			270,559
Tax loss carryforwards		59,273			139,719
(Reversal)/provision for judicial liabilities		(5,439	)		31,262
Operating provisions and other losses		(18,525	)		(21,757	)
Exchange rate variation - Taxation on a cash basis ⁽²⁾		4,318,771			552,421
Derivative losses ⁽²⁾		3,021,250			319,860
Fair value adjustment on business combination – Amortization		7,730			699,527
Unrealized profit on inventories		87,998			65,492
Lease		259,173			(3,274	)
Tax benefit on unamortized goodwill		(67,125	)		(203,696	)
Property, plant and equipment - Deemed cost		8,043			46,359
Accelerated depreciation		22,491			82,982
Borrowing cost		(12,486	)		44,727
Fair value of biological assets		(19,602	)		(60,778	)
Tax provision on results of subsidiaries abroad		(69,971	)		(351,485	)
Tax credits - gains in tax lawsuit (ICMS from the PIS/COFINS calculation basis)					(43,559	)
Other temporary differences		339			(18,901	)
Ending balance		9,287,179			1,555,165

Business combination with Fibria and its subsidiaries held on January 3, 2019, Note 1.2.2.

The variation is due to the increase in the exchange rate in the three-month period ended March 31, 2020.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

12.2.

Reconciliation of the effects of income tax and social contribution on profit or loss

	March 31, 2020			March 31, 2019
Net income (loss) before taxes		(21,095,584	)		(1,751,331	)
Income tax and social contribution benefit (expense) at statutory nominal rate of 34%		7,172,499			595,453

Tax effect on permanent differences
Taxation (difference) on profit of wholly-owned subsidiaries abroad ⁽¹⁾		573,858			(70,924	)
Tax incentive – Reduction SUDENE ⁽²⁾					6,534
Equity method		242			82
Thin capitalization ⁽³⁾		(45,213	)
Credit related to Reintegra Program		1,404			1,097
Tax incentives applicable to income tax ⁽⁴⁾		3,557			1,767
Director bonus		(2,345	)		(42,682	)
Other		(27,479	)		30,872
		7,676,523			522,199
Income tax
Current		(50,399	)		(98,379	)
Deferred		5,683,928			475,511
		5,633,529			377,132
Social Contribution
Current		(3,961	)		(30,870	)
Deferred		2,046,955			175,937
		2,042,994			145,067
Income and social contribution benefits (expenses) on the period		7,676,523			522,199

Effective rate of income and social contribution tax expenses		36.40	%		29.80	%

The effect of the difference in taxation of subsidiaries is substantially due to the difference between the nominal rates of Brazil and subsidiaries abroad.

Benefit used to reduce 75% of the tax calculated based on the operating profit of the Mucuri / BA and Imperatriz / MA facilities.

The Brazilian thin capitalization rules establish that interest paid or credited by a Brazilian entity to a related party may only be deducted for income tax purposes if the interest expense is viewed as necessary for the activities of the local entity and when determined limits and requirements are met. On March 31, 2020 the Company did not meet all limits and requirements, therefore a provision for tax payment was recorded.

Income tax deduction amount referring to the use of the PAT (“Worker Feeding Program”) benefit and donations made in cultural and sports projects.

12.3.

Tax incentives

Company has a tax incentive for the partial reduction of the income tax obtained by the operations carried out in areas of the Northeast Development Superintendency (“SUDENE”) in the Mucuri (BA) and Imperatriz (MA) regions. The IRPJ reduction incentive is calculated based on the activity profit (exploitation profit) and considers the allocation of the operating profit by the incentive production levels for each product. The incentive of lines 1 and 2 of Mucuri (BA) facility expire, respectively, in 2024 and 2027 and Imperatriz facility expire in 2024.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

13.

BIOLOGICAL ASSETS

The rollforward of biological assets is set forth below:

Balances on December 31, 2018	4,935,905
Business combination with Fibria ⁽¹⁾	4,579,526
Addition	2,849,039
Depletion	(1,905,118	)
Gain on fair value adjustment	185,399
Disposal	(23,764	)
Other write-offs	(49,488	)
Balances on December 31, 2019	10,571,499
Addition	578,224
Depletion	(697,675	)
Transfers	678
Disposal	(15,203	)
Other write-offs	(6,107	)
Balances on March 31, 2020	10,431,416

Business combination with Fibria and its subsidiaries held on January 3, 2019, Note 1.2.2.

As a result of disclosed in note 1.2.1., which deals with the effects arising from COVID19, the Company reassessed the main assumptions used in measuring the fair value of biological assets disclosed in the financial statements of December 31, 2019 and concluded that there were no significant changes in the assumptions relatively with the three-month period ended March 31, 2020. Therefore, Management believes that the revaluation of biological assets in this period will not be necessary, which will be revalued in the next period, in line with the Company's internal policy.

The Company has no biological assets pledged for the three-month period ended March 31, 2020 (has no biological assets pledged as of December 31, 2019).

14.

INVESTMENTS

14.1.

Investments breakdown

	March 31, 2020		December 31, 2019
Investments in associates and joint ventures		136,290		140,934
Goodwill		166,819		161,464
Other investments evaluated at fair value through other comprehensive income		23,770		20,048
		326,879		322,446

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

14.2.

Investments in associates and joint ventures

Information of joint ventures as of			Company Participation
March 31, 2020			In equity				In the income of the period
	Participation equity (%)		March 31, 2020		December 31, 2019		March 31, 2020	March 31,2019
Associate
Ensyn Corporation		25.30		12,730		21,437	(3,351)
Spinnova		24.06		85,529		86,969	(1,439)
				98,259		108,406	(4,790)
Joint ventures
Ibema				35,161		28,487	6,672	1,635
F&E Technologies LLC				2,870		4,041	(1,171)	23
				38,031		32,528	5,501	1,658
				136,290		140,934	711	1,658

15.

PROPERTY, PLANT AND EQUIPMENT

	Lands			Buildings			Machinery, equipment and facilities			Work in progress			Other ⁽¹⁾			Total
Average rate %					3			5						10 to 20

Cost
Balance as of December 31, 2018		5,104,717			3,058,520			16,441,031			466,156			332,089			25,402,513
Additions		337,932			1,943			136,855			1,477,420			47,524			2,001,674
Write-offs		(92,705	)		(36,276	)		(172,458	)		(1,462	)		(34,858	)		(337,759	)
Business combination with Fibria		2,151,338			3,918,552			20,255,811			425,868			454,759			27,206,328
Fair value adjustment - Fibria		2,637,671			1,502,021			5,109,939						195,684			9,445,315
Fair value adjustment – Facepa								3,072			(883	)		(111	)		2,078
Fair value adjustment – Ibema								5,448									5,448
Transfer and other ⁽³⁾		182,621			323,029			740,879			(1,397,398	)		(61,761	)		(212,630	)
Balance as of December 31, 2019		10,321,574			8,767,789			42,520,577			969,701			933,326			63,512,967
Additions					1,470			46,068			249,713			2,175			299,426
Write-offs		(15,656	)					(4,338	)		(5	)		(397	)		(20,396	)
Transfer and other ⁽³⁾		9,692			11,955			20,089			(44,982	)		(10,639	)		(13,885	)
Balance as of March 31, 2020		10,315,610			8,781,214			42,582,396			1,174,427			924,465			63,778,112

Depreciation
Balance as of December 31, 2018					(906,616	)		(7,248,143	)					(227,495	)		(8,382,254	)
Additions					(255,888	)		(2,123,193	)					(91,170	)		(2,470,251	)
Write-offs					26,886			115,732						13,944			156,562
Business combination with Fibria ⁽²⁾					(1,804,967	)		(9,552,825	)					(249,087	)		(11,606,879	)
Additions - Fair value adjustment from business combination – Fibria					(63,495	)		(543,468	)					(17,364	)		(624,327	)
Fair value adjustment from business combination – Facepa					(5,742	)		(6,481	)					(95	)		(12,318	)
Fair value adjustment from business combination - Ibema								(593	)								(593	)
Transfer and other ⁽³⁾					29,906			508,585						9,547			548,038
Balance as of December 31, 2019					(2,979,916	)		(18,850,386	)					(561,720	)		(22,392,022	)
Additions					(69,211	)		(594,445	)					(24,773	)		(688,429	)
Write-offs								3,395						354			3,749
Balance as of March 31, 2020					(3,049,127	)		(19,441,436	)					(586,139	)		(23,076,702	)

Residual amount
Balance as of December 31, 2019		10,321,574			5,787,873			23,670,191			969,701			371,606			41,120,945
Balance as of March 31, 2020		10,315,610			5,732,087			23,140,960			1,174,427			338,326			40,701,410

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

Includes vehicles, furniture and utensils and computer equipment.

Business combination with Fibria and its subsidiaries held on January 3, 2019.

Includes transfers carried out between the items of property, plant and equipment, intangible assets and inventories (On December 31, 2019 includes right of use).

For the three-month period ended March 31, 2020, the Company did not identify any impairment of property, plant and equipment.

15.1.

Items pledged as collateral

For the three-month period ended March 31, 2020, property, plant and equipment items that are pledge as collateral for loans transactions and lawsuits, consisting substantially of the units of, Imperatriz, Limeira, Mucuri, Suzano and Três Lagoas] totaled R$21,613,361 (R$24,985,741 consisting substantially of the units of Imperatriz, Limeira, Mucuri and Suzano as of December 31, 2019).

15.2.

Capitalized expenses

For the three-month period ended March 31, 2020, the Company capitalized interest in the amount of R$3,803 (R$606 as of March 31, 2019). The weighted average interest rate utilized to determine the capitalized amount was 9.21% p.a. (9.08% p.a. as of March 31, 2019).

16.

INTANGIBLE

16.1.

Goodwill and intangible assets with indefinite useful life

	March 31, 2020		December 31, 2019
Vale Florestar		45,435		45,435
FACEPA		119,332		119,332
Fibria		7,897,051		7,897,051
Other ⁽¹⁾		1,196		1,196
		8,063,014		8,063,014

Refer to other intangible assets with indefinite useful life such as servitude and electricity.

The goodwill is based on expected future profitability supported by valuation reports, after purchase price allocation.

Goodwill are allocated to cash-generating units as presented in Note 28.4.

As a result of disclosed in note 1.2.1., which deals with the effects arising from COVID19, the Company reassessed the main assumptions used in the impairment test of the intangible disclosed in the financial statements of December 31, 2019 and concluded that there were no significant changes in the assumptions compared to the three-month period ended March 31, 2020. Therefore, Management understands that it is not necessary to carry out the impairment test of the intangible in this period.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

For the three-month period ended March 31, 2020, the Company did not identify any impairment of intangible.

16.2.

Intangible assets with determined useful life

		March 31, 2020			December 31, 2019
Beginning balance			9,649,789			180,311
Business combination with Fibria ⁽¹⁾						308,681
Additions			469			17,715
Fair value adjustment on business combination with Ibema						702
Write-offs			(17	)
Amortization			(244,842	)		(74,332	)
Fair value adjustment on business combination with Fibria						10,159,550
Customer portfolio						9,030,779
Supplier agreements						172,094
Port services agreements						694,590
Port concession						54,470
Lease agreements						44,371
Cultivars						142,744
Software						20,502
Fair value adjustment on business combination with Fibria - Amortization						(956,577	)
Customer portfolio						(820,980	)
Supplier agreements						(72,097	)
Port services agreements						(29,362	)
Port concession						(2,147	)
Lease agreements						(7,499	)
Cultivars						(20,392	)
Software						(4,100	)
Fair value adjustment on business combination with Facepa - Amortization						(15,430	)
Fair value adjustment on business combination with Ibema - Amortization						(24	)
Exchange rate variation						2,930
Transfers and others			186			26,263
Ending balance			9,405,585			9,649,789
Represented by	Average rate %
Non-compete agreement	5		1,980			2,150
Research and development agreement	19		73,696			74,643
Ports concession	4		216,893			219,256
Lease agreements	17		34,996			36,871
Supplier agreements	13 to 100		96,293			99,997
Port service contracts	4		657,887			665,228
Cultivars	14		117,257			122,352
Development and implementation of systems	20		1,610			1,687
Trademarks and patents	5 to 10		18,095			20,649
Customer portfolio	9		8,015,803			8,217,192
Supplier agreements	5		48,984			51,562
Software	20		116,400			135,668
Others			5,691			2,534
			9,405,585			9,649,789

Business combination with Fibria and its subsidiaries held on January 3, 2019, Note 1.2.2.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

17.

TRADE ACCOUNTS PAYABLE

	March 31, 2020		December 31, 2019
In local currency
Related party (note 11.1)		3,166		2,478
Third party		1,443,841		1,288,774
In foreign currency
Third party ⁽¹⁾		961,279		1,085,207
		2,408,286		2,376,459

The Company had a take or pay agreement with Klabin S.A., under conditions differentiated in terms of volume, exclusivity, guarantees and payment terms in up to 360 days, and prices were practiced under conditions of contractually established. Following the requirements imposed by the European Union's competition authority, the contract with Klabin expired in July 2019. For the three-month period ended March 31, 2020, the amount of R$360,290 in the consolidated refers to purchases of Klabin's pulp.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

18.

LOANS, FINANCING AND DEBENTURES

18.1.

Breakdown by type

				Current						Non-current				Total
Type	Interest rate	Average annual interest rate - %		March 31, 2020			December 31, 2019			March 31, 2020		December 31, 2019		March 31, 2020			December 31, 2019
In foreign currency
BNDES	UMBNDES		6.0		32,292			26,307			28,156		27,620		60,448			53,927
Bonds ⁽¹⁾	Fixed		5.7		359,440			640,177			34,332,730		27,375,673		34,692,170			28,015,850
Export credits (ACC - pre-payment) ⁽¹⁾	LIBOR/Fixed		1.8		2,577,025			1,994,868			20,341,103		15,431,478		22,918,128			17,426,346
Others					3,383			3,481							3,383			3,481
					2,972,140			2,664,833			54,701,989		42,834,771		57,674,129			45,499,604
In local currency
BNDES	TJLP		7.3		288,744			283,658			1,457,035		1,517,649		1,745,779			1,801,307
BNDES	TLP		8.6		26,275			18,404			436,516		441,233		462,791			459,637
BNDES	Fixed		5.1		36,027			39,325			68,982		77,333		105,009			116,658
BNDES	SELIC		6.0		79,187			78,458			705,981		718,017		785,168			796,475
FINAME	Fixed		6.5		4,005			4,781			8,881		9,564		12,886			14,345
BNB	Fixed		6.7		35,321			37,815			148,134		156,904		183,455			194,719
CRA (“Agribusiness Receivables Certificates”)	CDI/IPCA		4.6		2,901,906			2,860,938			2,978,865		2,952,451		5,880,771			5,813,389
NCE (Export credit note)	CDI		6.7		52,762			131,914			1,271,734		1,270,065		1,324,496			1,401,979
Rural producer Certificate	CDI		9.2		1,187			5,840			273,372		273,303		274,559			279,143
Export credits (“Pre payment”)	Fixed		8.1		41,828			77,694			1,312,855		1,312,586		1,354,683			1,390,280
FCO (“Central West Fund”), FDCO (“Central West Development Fund”) and FINEP	Fixed		8.0		85,315			76,596			475,976		475,905		561,291			552,501
Others (Revolving Cost, Working capital and Industrial Development Fund (“FDI”) and fair value adjustment on business combination	Fixed		0.4		(56,794	)		(62,302	)		4,641		4,559		(52,153	)		(57,743	)
Debentures	CDI		7.1		56,005			9,997			5,412,791		5,412,035		5,468,796			5,422,032
					3,551,768			3,563,118			14,555,763		14,621,604		18,107,531			18,184,722
					6,523,908			6,227,951			69,257,752		57,456,375		75,781,660			63,684,326

Interest on financing					658,966			886,886					136,799		658,966			1,023,685
Non-current funding					5,864,942			5,341,065			69,257,752		57,319,576		75,122,694			62,660,641
					6,523,908			6,227,951			69,257,752		57,456,375		75,781,660			63,684,326

The variation is due to the increase in the exchange rate in the three-month period ended March 31, 2020.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

18.2.

Rollforward in loans, financing and debentures

	March 31, 2020			December 31, 2019
Beginning balance		63,684,326			35,737,509
Amounts from the business combination with Fibria ⁽¹⁾					20,667,096
Reclassification - accounts payable from lease operations					(18,225	)
Fundraising		3,663,623			18,993,837
Interest accrued		886,270			3,362,250
Exchange rate variation, net		13,187,550			1,781,562
Settlement of principal		(4,503,548	)		(13,994,708	)
Settlement of interest		(1,167,141	)		(2,977,957	)
Amortization of fundraising costs		25,250			185,807
Other		5,330			(52,845	)
Ending balance		75,781,660			63,684,326

1)	Business combination with Fibria its subsidiaries held on January 3, 2019, Note 1.2.2.

Suzano S.A.

Notes to the Unaudited condensed consolidated interim financial information
Three-month period ended March 31, 2020

(In thousands of R$, unless otherwise stated)

18.3.

Breakdown by maturity – non current

	2022		2023		2024		2025		2026		2027		2028 onwards		Total
In foreign currency
BNDES - Currency basket		4,546		12,878		10,732										28,156
Bonds								3,099,772		3,071,688		3,628,144		24,533,126		34,332,730
Export credits (ACC pre-payment)		94,956		2,395,102		9,549,643		4,556,435		3,259,393		485,574				20,341,103
		99,502		2,407,980		9,560,375		7,656,207		6,331,081		4,113,718		24,533,126		54,701,989
In local currency
BNDES – TJLP		203,997		268,788		268,023		239,884		292,572		169,102		14,669		1,457,035
BNDES – TLP		14,149		18,866		18,866		18,866		17,618		20,120		328,031		436,516
BNDES – Fixed		21,709		24,558		18,602		4,113								68,982
BNDES – Selic		57,472		74,067		97,309		89,264		212,549		175,320				705,981
FINAME		2,868		2,786		1,656		1,198		373						8,881
BNB		26,351		33,081		35,199		33,080		10,258		10,165				148,134
CRA (“Agribusiness Receivables Certificates”)				1,496,085		1,482,780										2,978,865
Export credit note										636,366		635,368				1,271,734
Rural producer certificate										136,789		136,583				273,372
Export credits (“Pre payment”)								1,312,855								1,312,855
FCO (“Central West Fund”), FDCO (“Central West Development Fund”) and FINEP		68,053		67,986		67,987		67,987		67,987		67,987		67,989		475,976
Others (Revolving costs, working capital, FIDC and FDI)		4,641														4,641
Debentures										2,326,833		2,336,846		749,112		5,412,791
		399,240		1,986,217		1,990,422		1,767,247		3,701,345		3,551,491		1,159,801		14,555,763
		498,742		4,394,197		11,550,797		9,423,454		10,032,426		7,665,209		25,692,927		69,257,752

18.4.

Breakdown by currency

	March 31, 2020		December 31, 2019
Brazilian Reais		17,297,622		17,362,903
U.S. Dollar		57,627,985		45,460,138
Selic ⁽¹⁾		795,605		807,358
Currency basket		60,448		53,927
		75,781,660		63,684,326

Contractual definition of currency in contracts with Brazilian National Bank for Economic and Social Development (“Banco Nacional de Desenvolvimento Econômico e Social or “BNDES”) that are in Brazilian Reais plus SELIC interest.

18.5.

Fundraising costs

The fundraising costs are amortized based on terms agreements and effective interest rate.

					Balance to be amortized
Nature	Cost		Amortization		March 31, 2020		December 31, 2019
Bonds		343,642		98,784		244,858		201,467
CRA and NCE		125,222		82,046		43,176		47,443
Export credits (ACC pre-payment)		94,863		33,144		61,719		40,382
Debentures		24,467		6,159		18,308		19,065
BNDES (“IOF”) ⁽¹⁾		53,730		16,840		36,890		38,447
Others		18,147		13,747		4,400		4,590
		660,071		250,720		409,351		351,394

Tax on Financial Operations

18.6.

Relevant transactions entered into the period

18.6.1.

Export Prepayment Agreements (“EPP”)

On February 14, 2020, Suzano, through its wholly-owned subsidiaries Suzano Pulp and Paper Europe S.A., Suzano Austria GmbH and Fibria Overseas Finance Ltd., entered into a syndicated export prepayment agreement in the amount of US$850,000 (equivalent to R$3,668,855), with a term of six years and maturity in February 2026, grace period of 4 years, quarterly interest payments of 1.15% p.a. plus LIBOR 3M. This transaction is fully and unconditionally guaranteed by Suzano S.A.

18.7.

Relevant transactions settled in the period

18.7.1.

Export Prepayment Agreements (“EPP”)

On February 14, 2020, Suzano, through its wholly-owned subsidiary Suzano Pulp and Paper Europe S.A., voluntarily prepaid the export prepayment agreement in the amount of U.S.$755,864 (equivalent to R$3,262,534), with quarterly interest payments of 1.15% p.a. plus quarterly LIBOR, which was scheduled to mature in February 2023.

18.7.2.

Make-whole Senior Notes (“Notes 2021”)

On March 31, 2020, the Company through its wholly-owned subsidiary Suzano Trading Ltd., redeem all of the outstanding of Senior Notes 2021 in the total amount of US$199,864 (equivalent to R$1,039,032) considering redemption price of 104.287% plus interest proportional to the period.

18.8.

Guarantees

Some loan and financing agreements have guarantees clauses, in which the financed equipment or other property, plant and equipment are offered by the Company, as disclosed in Note 15.1.

The Company does not have contracts with restrictive financial clauses (financial covenants) to be complied with.

19.

LEASE

19.1.

Right of use

The rollforward of three-month period ended March 31, 2020 is set forth below:

	Lands and Farms			Machines and Equipment’s			Buildings			Ships and boats			Vehicles			Total
Balance as of December 31, 2018
Initial adoption on January 1, 2019		1,762,943			143,685			41,570			1,408,640			1,012			3,357,850
Additions		260,982			1,529			39,794			612,022						914,327
Amortization ⁽¹⁾		(254,280	)		(15,163	)		(35,365	)		(116,207	)		(925	)		(421,940	)
Balance as of December 31, 2019		1,769,645			130,051			45,999			1,904,455			87			3,850,237
Additions		176,781			3,501			9,046						63			189,391
Amortization ⁽¹⁾		(44,236	)		(1,041	)		(4,082	)		(33,725	)		(240	)		(83,324	)
Balance as of March 31, 2020		1,902,190			132,511			50,963			1,870,730			(90	)		3,956,304

¹⁾

The amount of R$43,994 (R$53,832 as of March 31, 2019) related to land is reclassified to biological assets to compose the formation cost.

For the three-month period ended March 31, 2020, the Company is committed to lease agreements not yet in force for ships expected to be delivered one unit in first quarter 2020.

19.2.

Lease liabilities

The balance of lease payables for the three-month period ended March 31, 2020, measured at present value and discounted by the respective discount rates are set forth below:

Nature of agreement	Average rate - % p.a. ⁽¹⁾		Maturity ⁽²⁾	Present value of liabilities
Lands and farms		10.89	November 2046		2,040,361
Machines and Equipment’s		10.15	July 2032		247,986
Buildings		10.92	April 2027		31,393
Ships and boats		10.76	February 2039		2,407,566
Vehicles		8.99	April 2020		55
					4,727,361

To determine the discount rates, quotes were obtained from financial institutions for agreements with characteristics and average terms similar to the lease agreements.

Refers to the original maturities of the agreements and, therefore, do not consider eventual renewal clause.

On March 12 and April 12, 2020, for a period of 10 months, two of the ships leased by the Company were made available for chartering from third parties. In the amount of U.S.$.7,500 (equivalent to R$38,990)

The rollforward in the balances in the year ended December 31, 2019 and the three-month period ended March 31, 2020 are as follows:

Balance as of December 31, 2018
Initial adoption on January 1, 2019	3,428,897
Additions	914,327
Payments	(646,487	)
Accrual of financial charges ⁽¹⁾	275,404
Exchange rate variation	11,929
Balance as of December 31, 2019	3,984,070
Additions	189,391
Payments	(157,209	)
Accrual of financial charges ⁽¹⁾	114,781
Exchange rate variation	596,328
Balance as of March 31, 2020	4,727,361

Current	664,651
Non-current	4,062,710

1)	The amount of R$19,057 related to interest expenses on leased lands is capitalized to biological assets to compose the formation cost.

The maturity schedule of future payment not discounted to present value related to lease liabilities is disclosed in Note 4.2.

19.2.1.

Amounts recognized in the statement of income for the period

In the three-month period ended March 31, 2020 and 2019, the amounts recognized in the unaudited condensed consolidated interim financial information, are set for the below:

	March 31, 2020		March 31, 2019
Expenses relating to short-term assets		3,527		14,790
Expenses relating to low-value assets		1,577		2,251
		5,104		17,040

20.

PROVISION FOR JUDICIAL LIABILITIES

The Company and its subsidiaries are involved in certain legal proceedings arising from the normal course of business, which include tax, labor and civil risks.

The Company classifies the risk of unfavorable decisions in the legal proceedings as probable, possible or remote. The Company records provisions for losses classified as probable, as determined by the Company’s Management, based on legal advice, which reflect the estimated probable losses. Contingencies classified as possible loss are disclosed based on reasonably estimated amounts.

The Company’s management believes that, based on the elements existing at the base date of these unaudited condensed consolidated interim financial information, its provision for tax, civil, commercial and other, as well for labor risks, accounted for according to IAS 37 is sufficient to cover estimated losses related to its legal proceedings, as set forth below:

20.1.

Provisions for probable losses

The rollforward of provisions according to lawsuit natures is set forth below:

	March 31, 2020
	Judicial deposits			Provision		Provision, net
Taxes		(129,426	)		3,139,677		3,010,251
Labor		(53,632	)		237,747		184,115
Civil		(3,305	)		269,312		266,007
		(186,363	)		3,646,736		3,460,373

	December 31, 2019
	Judicial deposits			Provision		Provision, net
Taxes		(124,133	)		3,176,503		3,052,370
Labor		(50,464	)		227,139		176,675
Civil		273			283,159		283,432
		(174,324	)		3,686,801		3,512,477

The change in the provision according to the nature of the proceedings is set forth below:

	March 31, 2020
	Tax			Labor			Civil and environment			Total
Beginning balance		3,176,503			227,139			283,159			3,686,801
Payments		(22,662	)		(9,858	)		(13,784	)		(46,304	)
Write-off		(23,540	)		(7,731	)		(7,461	)		(38,732	)
Additions		5,199			18,969			5,792			29,960
Monetary adjustment		4,176			9,229			1,606			15,011
Ending balance		3,139,676			237,748			269,312			3,646,736

	December 31, 2019
	Tax			Labor			Civil and environment			Total
Beginning balance		296,869			50,869			3,532			351,270
Business combination with Fibria ⁽¹⁾		139,462			185,157			64,974			389,593
Payments		(34	)		(34,794	)		(5,532	)		(40,360	)
Write-off		(3,875	)		(55,730	)		(13,434	)		(73,039	)
Additions		46,603			50,521			10,100			107,224
Monetary adjustment		13,388			31,116			5,257			49,761
Fair value adjustment on business combination with Fibria		2,684,090						218,262			2,902,352
Ending balance		3,176,503			227,139			283,159			3,686,801

1)	Business combination with Fibria and its subsidiaries held on January 3, 2019.

20.1.1.

Tax

For the three-month period ended March 31, 2020, the Company was a defendant in 44 administrative proceedings as well as tax lawsuits in which the disputed matters related, CSLL, IRRF, PIS, COFINS, ICMS, Tax on Services (“ISS”), among others whose amounts are provisioned for when the likelihood of loss is deemed probable by the Company’s external legal counsel and the Management.

20.1.2.

Labor

For the three-month period ended March 31, 2020, the Company was a defendant in 1,306 labor lawsuits.

In general, labor lawsuits are related primarily to matters frequently contested by employees in agribusiness companies, such as certain wages and/or severance payments, in addition to suits filed by outsourced employees of the Company.

20.1.3.

Civil and environment

For the three-month period ended March 31, 2020, the Company is a defendant in approximately 27 civil and environmental lawsuits.

Civil proceedings are related primarily to payment of damages, such as those resulting from contractual obligations, traffic-related injuries, possessory actions, environmental restoration obligations, claims and others.

20.2.

Provisions for possible losses

The Company is involved in tax, civil and labor lawsuits, for which losses have been assessed as possible by management with the support from legal counsel and therefore no provision was recorded:

	March 31, 2020		December 31, 2019
Taxes ⁽¹⁾		8,244,746		7,504,398
Labor		320,143		279,934
Civil ⁽¹⁾		2,898,659		2,995,576
		11,463,548		10,779,908

1)	Amounts net of the fair value adjustment on business combination with Fibria related to possible contingencies, as mentioned above.

Main nature of these contingencies are disclosed in the annual financial statements for the year ended December 31, 2019 and have not been significantly changed during this period.

21.

EMPLOYEE BENEFIT PLANS

The Company offers supplementary pension plan and defined benefit plan, such as medical assistance and life insurance. The characteristics of such benefits were disclosed in the annual financial statements for the year ended December 31, 2019 and have not been changed during this period.

21.1.

Pension plan

Contributions made by the Company, for Suzano Prev pension plan managed by BrasilPrev, for the three-month period ended March 31, 2020 amounted R$1,732 (R$5,993 as of December 31, 2019) recognized in under cost of sales, selling and general and administrative expenses.

Contributions made by the Company, for Senador José Ermírio de Moraes Foundation (FUNSEJEM) pension plan, for the three-month period ended March 31, 2020 amounted to R$2,214 (R$9,920 as of December 31, 2019), recognized under cost of sales, selling and general and administrative expenses.

21.2.

Defined benefits plan

The Company offers the following post-employment in addition to the pension plans, which are measured by actuarial calculation and recognized in the unaudited condensed consolidated interim financial information.

The rollforward of actuarial liability prepared based on actuarial report, are set forth below:

Balance at December 31, 2017	351,263
Interest on employee benefits	35,920
Actuarial loss	69,305
Benefits paid in the year	(26,061	)
Balance at December 31, 2018	430,427
Business combination with Fibria ⁽¹⁾	147,877
Interest on employee benefits	44,496
Actuarial loss	147,640
Benefits paid in the year	(34,261	)
Balance on December 31, 2019	736,179
Interest on employee benefits	13,195
Benefits paid in the period	(9,779	)
Balance on March 31, 2020	739,595

1)	Business combination with Fibria its subsidiaries held on January 3, 2019, Note 1.2.2.

22.

SHARE-BASED COMPENSATION PLAN

For the three-month period ended March 31, 2020, the Company had 3 (three) share-based, long-term compensation plans, (i) Phantom stock option plan (“PS”) and (ii) Share Appreciation Rights (“SAR”), both settled in local currency and (iii) common stock options, settled in shares.

The characteristics and measurement method of such each plan were disclosed in the annual financial statements for the year ended December 31, 2019 and have not been changed during this period.

22.1

Long term compensation plans (“PS and SAR”)

The rollforward is set forth below:

	March 31, 2020			December 31, 2019
Number of shares in the beginning balance		5,996,437			5,045,357
Granted during of the period					2,413,038
Exercised ⁽¹⁾		(61,851	)		(827,065	)
Exercised due to resignation ⁽¹⁾					(106,983	)
Abandoned / prescribed due to resignation		(48,654	)		(527,910	)
Number of shares in the ending balance		5,885,932			5,996,437

1)	The average price for share options exercised and exercised due to termination of employment, for the three-month period ended March 31, 2020 was R$38.97 (R$31.75 as of December 31, 2019).

22.2

Common stock option plan

The position is set forth below:

Program

Date of grant

Deadline for the options to become exercisable

Price on grant date

Shares Granted

Restricted year for transfer of shares

Program 4

01/02/2018

01/02/2019

39.10

130,435

01/02/2022

22.3

Balances and result

The amounts corresponding to the services received and recognized in the unaudited consolidated interim financial information are set forth below:

	Liabilities and equity			Income Statement
		March 31, 2020	December 31, 2019		March 31, 2020		March 31, 2019
Non-current liabilities
Provision for phantom stock plan		160,949	136,505		(25,337	)	(16,209	)
Shareholders' equity
Stock option granted		6,279	5,979		(300	)	(1,421	)
Total general and administrative expenses from share-based transactions					(25,637	)	(17,630	)

LIABILITIES FOR ASSETS ACQUISITIONS AND SUBSIDIARIES

	March 31, 2020		December 31, 2019
Lands and forests acquisition
Real estate receivables certificates ⁽¹⁾		77,851		78,345
		77,851		78,345
Business combination
Facepa ⁽²⁾		43,220		42,533
Vale Florestar Fundo de Investimento em Participações ("VFFIP") ⁽³⁾		512,700		420,737
		555,920		463,270
		633,771		541,615

Current liabilities		116,792		94,414
Non-current liabilities		516,979		447,201

Refers to obligations with the acquisition of land, farms, reforestation and houses built in Maranhão, restated by the IPCA.

Acquired in March 2018, for the amount of R$307,876, upon payment of R$267,876 and the remaining restated at the Amplified Consumer Price Index (“IPCA”), adjusted by any losses incurred through the payment date, with maturities in March 2023 and March 2028.

On August 2014, the Company acquired the Vale Florestar S.A. through VFFIP, for the total amount of R$528,941 with a upon payment of R$44,998 and remaining with maturity to August 2029. The monthly settlements are subject to interest and restated at the variation of the U.S. dollar exchange rate and partially restated by variation of the IPCA.

SHAREHOLDERS’ EQUITY

24.1

Share capital

On March 31, 2020, the Suzano’s share capital is R$9,269,281 divided into 1,361,263,584 common shares, all nominative, book-entry shares without par value. The share capital is net of the public offering expenses of R$33,735.

The breakdown of the share capital is set forth below:

	Ordinary
Shareholder		Quantity	(%)
Controlling Shareholders
Suzano Holding S.A.		367,612,329	27.01
Controller		194,809,797	14.31
Managements		35,564,742	2.61
Alden Fundo de Investimento em Ações		26,154,741	1.92
		624,141,609	45.85
Treasury		12,042,004	0.88
BNDESPAR		150,217,425	11.04
Votorantim S.A.		75,180,059	5.52
Other shareholders		499,682,487	36.71
		1,361,263,584	100.00

By resolution of the Board of Directors, the share capital may be increased, irrespective of any amendment to the Bylaws, up to the limit of 780,119,712 common shares, all exclusively book-entry shares.

For the three-month period ended March 31, 2020, SUZB3 common shares ended the period quoted at R$35.75 (R$39.68 on December 31, 2019).

24.2

Treasury shares

The Company has 12,042,044 common shares of own issuance held in treasury, with an average cost of R$18.13 (eighteen Brazilian Reais and thirteen cents) per share, with historical value of R$218,265 and market value corresponding to R$430,503. For the three-month period ended March 31, 2020, there was no movement of purchase or sale.

EARNINGS (LOSS) PER SHARE

25.1

Basic

The basic (loss) earnings per share is measured by dividing the profit attributable to the Company’s shareholders by the weighted average common shares issued during the period, excluding the common shares acquired by the Company and held as treasury shares.

	March 31, 2020			March 31, 2019
Resulted of the period attributable for controlling shareholders’		(13,422,530	)		(1,226,803	)
Weighted average number of shares in the period		1,361,264			1,321,529
Weighted average treasury shares		(12,042	)		(12,042	)
Weighted average number of outstanding shares		1,349,222			1,309,487
Basic loss per common share - R$		(9.94835	)		(0.93686	)

25.2

Diluted

The diluted earnings per share is measured by adjusting the weighted average of outstanding common shares, assuming the conversion of all common shares that would cause dilution.

	March 31, 2020			March 31, 2019
Resulted of the period attributed to controlling shareholders’		(13,422,530	)		(1,226,803	)
Weighted average number of shares in the period (except treasury shares)		1,349,222			1,309,487
Adjustment by stock options
Weighted average number of shares (diluted)		1,349,222			1,309,487
Diluted loss per common share - R$		(9.94835	)		(0.93686	)

Due to the loss in the periods, the Company does not consider the dilution effect in the measurement.

NET FINANCIAL RESULT

	March 31, 2020			March 31, 2019
Financial expenses
Interest on loans, financing and debentures ⁽¹⁾		(885,584	)		(823,352	)
Amortization of fundraising costs		(25,569	)		(31,574	)
Amortization of fair value adjustment on business combination		(5,330	)		(2,167	)
Other financial expenses		(169,941	)		(135,711	)
		(1,086,424	)		(992,804	)
Financial income
Marketable securities and cash equivalents		70,052			140,055
Amortization of fair value adjustment on business combination		23,809
Other financial income		26,893			9,267
		120,754			149,322
Income from derivative financial instruments
Income		34,803			507,466
Expenses		(9,093,595	)		(1,144,400	)
		(9,058,792	)		(636,934	)
Monetary and exchange rate variation, net
Exchange rate variation on loans, financing and debentures		(13,187,550	)		(305,531	)
Lease		(596,328	)		(16,037	)
Other assets and liabilities ⁽²⁾		1,364,292			(134,159	)
		(12,419,586	)		(455,727	)
		(22,444,048	)		(1,936,143	)

Does not include the amount of R$3,803 arising from capitalized interest for the three-month period ended March 31, 2020 (R$606 as of March 31, 2019). Includes the amount of R$3,118 endorsement and guarantee in the three-month period ended March 31, 2020 (R$662 on March 31, 2019)

Includes effects of exchange rate variations of customers, suppliers, cash and cash equivalents, marketable securities and others.

27	NET SALES

	March 31, 2020			March 31, 2019
Gross sales		8,257,293			6,885,416
Sales deductions
Adjustment to present value					(5,518	)
Returns and cancelations		(21,673	)		(23,592	)
Discounts and rebates ⁽¹⁾		(945,349	)		(794,495	)
		7,290,271			6,061,811

Taxes on sales		(309,478	)		(362,812	)

Net sales		6,980,793			5,698,999

1)	The customer contracts of Fibria, a wholly-owned subsidiary incorporated on April 1, 2019, provide for contractual discounts that were maintained and that, therefore, impacted the Company's income in 2019.

SEGMENT INFORMATION

28.1

Criteria for identifying operating segments

In the financial statements for the year ended December 31, 2019, the information by segment used by the Company was disclosed, which did not change during the period.

28.2

Information of operating segments

	March 31, 2020
	Pulp			Paper			Not segmented			Total
Net sales		5,886,723			1,094,070						6,980,793
Domestic market (Brazil)		398,367			763,672						1,162,039
Foreign market		5,488,356			330,398						5,818,754
Asia		3,099,243			23,159						3,122,402
Europe		1,616,602			53,657						1,670,259
North America		651,503			53,567						705,070
South and Central America		97,420			184,597						282,017
Africa		23,588			15,418						39,006
Cost of sales		(4,129,175	)		(690,824	)					(4,819,999	)
Gross profit		1,757,548			403,246						2,160,794
Gross margin (%)		29.9	%		36.9	%					31.0	%

Operating income (expenses)		(631,643	)		(180,687	)					(812,330	)
Selling		(418,221	)		(96,715	)					(514,936	)
General and administrative		(224,053	)		(90,783	)					(314,836	)
Other operating, net		16,592			139						16,731
Income from associates and joint ventures		(5,961	)		6,672						711
Operating profit before net financial income (“EBIT”) ⁽¹⁾		1,125,905			222,559						1,348,464
Operating margin (%)		19.1	%		20.3	%					19.3	%

Financial result, net								(22,444,048	)		(22,444,048	)

Net income (loss) before taxes		1,125,905			222,559			(22,444,048	)		(21,095,584	)

Income taxes								7,676,523			7,676,523

Net income (loss) for the period		1,125,905			222,559			(14,767,525	)		(13,419,061	)
Profit (loss) margin for the period (%)		19.1	%		20.3	%					(192.2	)%
Result of the period attributable to controlling Shareholders		1,125,905			222,559			(14,770,994	)		(13,422,530	)
Result of the period attributed to non-controlling shareholders								3,469			3,469

Depreciation, depletion and amortization		1,539,864			108,338						1,648,202

Earnings before interest and tax.

	March 31, 2019
	Pulp			Paper			Not segmented			Total
Net sales		4,601,986			1,097,013						5,698,999
Domestic market (Brazil)		505,535			807,671						1,313,206
Foreign market		4,096,451			289,342						4,385,793
Asia		1,754,884			23,904						1,778,788
Europe		1,556,894			50,077						1,606,971
North America		773,128			71,049						844,177
South and Central America		11,545			133,004						144,549
Africa					11,308						11,308
Cost of sales		(3,980,055	)		(744,838	)					(4,724,893	)
Gross profit		621,931			352,175						974,106
Gross margin (%)		13.5	%		32.1	%					17.1	%

Operating income (expenses)		(596,505	)		(192,789	)					(789,294	)
Selling		(354,200	)		(87,103	)					(441,303	)
General and administrative		(228,760	)		(102,005	)					(330,765	)
Other operating, net		(13,545	)		(5,339	)					(18,884	)
Income from associates and joint ventures					1,658						1,658
Operating profit before net financial income (“EBIT”) ⁽¹⁾		25,426			159,386						184,812
Operating margin (%)		0.5	%		14.5	%					3.0	%

Financial result, net								(1,936,143	)		(1,936,143	)
Net income (loss) before taxes		25,425			159,387			(1,936,143	)		(1,751,331	)

Income taxes								522,199			522,199

Net income (loss) for the period		25,425			159,387			(1,413,944	)		(1,229,132	)
Profit (loss) margin for the period (%)		0.3	%		14.5	%					(21.7	)%
Result of the period attributable to controlling Shareholders		25,425			159,387			(1,411,615	)		(1,226,803	)
Result of the period attributed to non-controlling shareholders								(2,329	)		(2,329	)

Depreciation, depletion and amortization		2,351,650			119,635						2,471,285

Earnings before interest and tax.

28.3

Net sales by product

The following table set forth the breakdown of consolidated net sales by product:

Products	March 31, 2020		March 31, 2019
Market pulp (1)		5,886,723		4,601,986
Printing and writing paper (2)		881,758		909,555
Paperboard		197,446		176,635
Other		14,866		10,823
Net sales		6,980,793		5,698,999

Revenue from fluff pulp represents (around 0.5% of total net sales) and, therefore, was included in market pulp sales.

Tissue is a recently launched product and its revenues represent less than 2.6% of total net sales. Therefore, it was included in the sales of printing and writing paper.

28.4

Goodwill based on expected future profitability

The goodwill based on expected future profitability arising from the business combination were allocated to the disclosable segments, which correspond to the Company's cash-generating units (“CGU”), considering the economic benefits generated by such intangible assets. The allocation of intangibles is set forth below:

	March 31, 2020		December 31, 2019
Pulp		7,942,486		7,942,486
Consumer goods		119,332		119,332
		8,061,818		8,061,818

EXPENSES BY NATURE

	March 31, 2020			March 31, 2019
Cost of sales ⁽¹⁾
Personnel expenses		(236,980	)		(369,144	)
Variable cost		(1,720,594	)		(1,350,556	)
Logistics cost		(1,007,721	)		(537,430	)
Depreciation, depletion and amortization		(1,381,201	)		(2,235,330	)
Other		(473,503	)		(232,433	)
		(4,819,999	)		(4,724,893	)
Selling expenses
Personnel expenses		(43,930	)		(59,257	)
Services		(28,799	)		(20,814	)
Logistics cost		(182,515	)		(117,999	)
Depreciation, depletion and amortization		(233,679	)		(217,413	)
Other ⁽²⁾		(26,013	)		(25,820	)
		(514,936	)		(441,303	)
General and Administrative expenses
Personnel expenses		(186,008	)		(189,283	)
Services		(67,651	)		(65,600	)
Depreciation, depletion and amortization		(25,101	)		(14,936	)
Other ⁽³⁾		(36,076	)		(60,946	)
		(314,836	)		(330,765	)
Other operating (expenses) income net
Rents and leases		1,080			133
Result from sale of other products, net		18,977			3,561
Result from sale and disposal of property, plant and equipment and biological assets, net		(4,488	)		(15,770	)
Insurance reimbursement					6,461
Provision for loss of judicial deposits					(3,284	)
Amortization and depletion		(8,221	)		(5,564	)
Other operating income (expenses), net		9,383			(4,421	)
		16,731			(18,884	)

Includes the amount of R$92,868, related to idle capacity and maintenance downtime (there were no expenses as of March 31, 2019).

Includes expected credit losses, insurance, materials of use and consumption, expenses with travel, accommodation, participation in trade fairs and events.

Includes corporate expenses, insurance, materials of use and consumption social projects and donations, expenses with travel and accommodation.

SUBSEQUENT EVENTS

30.1

Disbursement of Revolving Credit Facilities

On April 2, 2020, the Company through its wholly-owned subsidiary Suzano Pulp and Paper Europe S.A, disbursement of US$500,000 (equivalent to R$2,632,550) of its revolving credit facility characterized as an export prepayment loan with quarterly payments of 1.30% plus quarterly LIBOR and maturity in February 2024.

The disbursement is in line with the preventive measures that the Company has been taking to mitigate eventual impacts resulting from the COVID-19 pandemic and aims to bring even more strength to the liquidity position of the Company, contributing for Suzano to go through the challenges resulting from such pandemic on a consistent manner.