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Fibria Celulose S.A.

Consolidated financial statements at December 31, 2013 and report of independent registered public accounting firm

Report of independent registered public accounting firm


To the Board of Directors and Shareholders Fibria Celulose S.A.

In our opinion, the accompanyin consolidated balance sheets and the related consolidated statements of profit or loss, comprehensi!e income, chan es in shareholders" e#uity and cash flo$s present fairly, in all material respects, the financial position of Fibria Celulose S.A. and its subsidiaries at December %1, 2&1%, December %1, 2&12 and 'anuary 1, 2&12, and the results of their operations and their cash flo$s for each of the three years in the period ended December %1, 2&1% in conformity $ith International Financial (eportin Standards as issued by the International Accountin Standards Board. Also in our opinion, the Company maintained, in all material respects, effecti!e internal control o!er financial reportin as of December %1, 2&1%, based on criteria established in Internal Control ) Inte rated Frame$or* +1,,2- issued by the Committee of Sponsorin .r ani/ations of the Tread$ay Commission +C.S.-. The Company0s mana ement is responsible for these financial statements, for maintainin effecti!e internal control o!er financial reportin and for its assessment of the effecti!eness of internal control o!er financial reportin , included in the accompanyin mana ement0s report on internal control o!er financial reportin . .ur responsibility is to e1press opinions on these financial statements and on the Company0s internal control o!er financial reportin based on our inte rated audits. 2e conducted our audits in accordance $ith the standards of the 3ublic Company Accountin .!ersi ht Board +4nited States- and International Standards on Auditin . Those standards re#uire that $e plan and perform the audits to obtain reasonable assurance about $hether the financial statements are free of material misstatement and $hether effecti!e internal control o!er financial reportin $as maintained in all material respects. .ur audits of the financial statements included e1aminin , on a test basis, e!idence supportin the amounts and disclosures in the financial statements, assessin the accountin principles used and si nificant estimates made by mana ement, and e!aluatin the o!erall financial statement presentation. .ur audit of internal control o!er financial reportin included obtainin an understandin of internal control o!er financial reportin , assessin the ris* that a material $ea*ness e1ists, and testin and e!aluatin the desi n and operatin effecti!eness of internal control based on the assessed ris*. .ur audits also included performin such other procedures as $e considered necessary in the circumstances. 2e belie!e that our audits pro!ide a reasonable basis for our opinions. A company0s internal control o!er financial reportin is a process desi ned to pro!ide reasonable assurance re ardin the reliability of financial reportin and the preparation of financial statements for e1ternal purposes in accordance $ith enerally accepted accountin principles. A company0s internal control o!er financial reportin includes those policies and procedures that +a- pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company5 +b- pro!ide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance $ith enerally accepted accountin principles, 2

and that receipts and e1penditures of the company are bein made only in accordance $ith authori/ations of mana ement and directors of the company5 and +c- pro!ide reasonable assurance re ardin pre!ention or timely detection of unauthori/ed ac#uisition, use, or disposition of the company0s assets that could ha!e a material effect on the financial statements. % Because of its inherent limitations, internal control o!er financial reportin may not pre!ent or detect misstatements. Also, pro6ections of any e!aluation of effecti!eness to future periods are sub6ect to the ris* that controls may become inade#uate because of chan es in conditions, or that the de ree of compliance $ith the policies or procedures may deteriorate. S7o 3aulo, 'anuary 2,, 2&18

9s9 3rice$aterhouseCoopers Auditores Independentes C(C 2S3&&&1:&9.);

Inde Financial statements Consolidated balance sheet Consolidated statement of profit or loss Consolidated statement of comprehensi!e income Consolidated statement of chan es in shareholders0 e#uity Consolidated statement of cash flo$s >otes to the consolidated financial statements 1 .perations and current de!elopments 2 3resentation of financial statements and summary of si nificant accountin policies 2.1 Financial statements ) basis of preparation 2.2 Consolidation 2.% Se ment reportin 2.8 Forei n currency translation 2.; Cash and cash e#ui!alents 2.: Financial assets 2.< Deri!ati!e financial instruments and hed in acti!ities 2.= Trade accounts recei!able 2., In!entory 2.1& Current and deferred income ta1 and social contribution 2.11 Intan ible assets 2.12 3roperty, plant and e#uipment 2.1% ?eases 2.18 Biolo ical assets 2.1; Business combination 2.1: Impairment of non)financial assets, other than ood$ill 2.1< Trade payables 2.1= ?oans and financin 2.1, .ther assets and liabilities +current and non)current2.2& @mployee benefits 2.21 Contin ent assets and contin ent liabilities and le al obli ations 2.22 Asset retirement obli ations 2.2% (e!enue reco nition 2.28 Di!idend distribution 2.2; >on)current assets held for sale and discontinued operations 2.2: Adoption of ne$ standards, amendments and interpretations issued by IASB and C3C 2.2< >e$ standards, amendments and interpretations not yet adopted % Critical accountin estimates and assumptions 8 (is* mana ement 8.1 @n!ironmental ris*s 8.2 Financial ris*s ; Sensiti!ity analysis : Fair !alue estimates :.1 Fair !alue of loans and financin :.2 Fair !alue measurement of deri!ati!e financial instruments < Financial instruments by cate ory = Credit #uality of financial assets , Cash and cash e#ui!alents % ; : < = 1& 1< 1< 1< 22 22 22 22 2; 2; 2: 2: 2< 2= 2= 2, 2, %& %& %& %& %1 %2 %2 %2 %% %% %8 %; %: %, 8& 81 8< 8= ;1 ;2 ;8 ;8 ;<

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1& 11 12 1% 18 1; 1: 1< 1= 1, 2& 21 22 2% 28 2; 2: 2< 2= 2, %& %1 %2 %% %8 %; %: %< %=

Aar*etable securities Deri!ati!e financial instruments Trade accounts recei!able In!entory (eco!erable ta1es Ta1es on income Si nificant transactions and balances $ith related parties In!estments Biolo ical assets 3roperty, plant and e#uipment Intan ible assets Finance and operatin lease a reements Ad!ances to suppliers ) forestry partnership pro rams ?oans and financin Contin encies Ta1 Amnesty and (efinancin 3ro ram +B(@FISB?on )term commitments Shareholders0 e#uity @mployee benefits Compensation pro ram based on shares Asset retirement obli ations (e!enue Financial results @1penses by nature Insurance @arnin s per share Current assets held for sale and discontinued operations Impairment tests Subse#uent e!ents

;< ;= :% :; :: :< <1 <: << <, =1 =2 =8 =; ,8 1&1 1&2 1&2 1&% 1&; 1&< 1&= 11& 111 112 112 11% 11; 11:

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Fibria Celulose S.A.


Consolidated balance sheet at
In thousands of Reais

Assets Current Cash and cash equivalents (Note 9) Marketable securities (Note 10) Derivative instruments (Note 11) Trade accounts receivable, net (Note 12) Accounts receivable - land and building sold (Note 1(e)) Inventory (Note 13) Recoverable taxes (Note 14) Assets held for sale (Note 36) Other assets

December 31, 2013

December 31, 2012


(Restated)(*)

January 1 , 2012
(Restated)(*)

st

1,271,752 1,068,182 22,537 382,087 902,584 1,265,730 201,052 589,849 103,228 5,807,001

943,856 2,351,986 18,344 754,768 1,183,142 209,462 589,849 194,526 6,245,933

381,915 1,677,926 31,638 945,362 1,178,707 327,787 644,166 108,062 5,295,563

Non-current Marketable securities (Note 10) Derivative financial instruments (Note 11) Related parties receivables (Note 16) Recoverable taxes (Note 14) Advances to suppliers (Note 22) Judicial deposits (Note 24) Deferred taxes (Note 15) Other assets Investments (Note 17) Biological assets (Note 18) Property, plant and equipment (Note 19) Intangible assets (Note 20)

48,183 71,017 7,142 743,883 726,064 197,506 968,116 252,135 46,922 3,423,434 9,824,504 4,634,265 20,943,171

26,475 6,245 657,830 740,310 157,567 879,606 172,612 40,674 3,325,604 11,174,561 4,717,163 21,898,647 28,144,580

43,446 5,469 677,232 760,611 137,060 995,368 95,060 7,506 3,264,210 11,841,247 4,809,448 22,636,657 27,932,220

Total assets
(*) Refer to Note 2.26 for the effects of the restatements.

26,750,172

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Fibria Celulose S.A.


Consolidated balance sheet at
In thousands of Reais (continued)

Liabilities and shareholders' equity Current Loans and financing (Note 23) Trade payable Payroll, profit sharing and related charges Taxes payable Derivative financial instruments (Note 11) Liabilities related to the assets held for sale (Note 1(d)(i)) Dividends payable Other payables

December 31, 2013

December 31, 2012


(Restated)(*)

January 1 , 2012
(Restated)(*)

st

2,972,361 586,541 129,386 55,819 106,793 470,000 2,374 125,081 4,448,355

1,138,005 435,939 128,782 41,368 54,252 470,000 2,076 204,833 2,475,255

1,092,108 373,692 134,024 53,463 163,534 1,520 142,367 1,960,708

Non-current Loans and financing (Note 23) Derivative financial instruments (Note 11) Taxes payable Deferred taxes (Note 15) Provision for contingencies (Note 24) Other payables

6,800,736 451,087 159 235,896 128,838 193,847 7,810,563

9,629,950 263,646 77,665 227,923 104,813 194,521 10,498,518 12,973,773

10,232,309 125,437 76,510 739,878 101,594 163,096 11,438,824 13,399,532

Total liabilities Shareholders' equity (Note 27) Share capital (Note 27(a)) Share capital reserve Treasury shares Statutory reserves (Note 27(c)) Other reserves Equity attributable to shareholders of the Company Equity attributable to non-controlling interests Total shareholders' equity Total liabilities and shareholders' equity
(*) Refer to Note 2.26 for the effects of the restatements.

12,258,918

9,729,006 2,688 (10,346 ) 3,109,281 1,614,270 14,444,899 46,355 14,491,254 26,750,172

9,729,006 2,688 (10,346 ) 3,815,584 1,596,666 15,133,598 37,209 15,170,807 28,144,580

8,379,397 2,688 (10,346) 4,520,290 1,611,837 14,503,866 28,822 14,532,688 27,932,220

The accompanying notes are an integral part of these consolidated financial statements. 4 of 117

Fibria Celulose S.A.


Consolidated statement of profit or loss Years ended December 31
In thousand of Reais, except for the income per shares

2013 Continuing operations Revenues (Note 31) Cost of sales (Note 33) Gross profit Operating income (expenses) Selling expenses (Note 33) General and administrative (Note 33) Equity in losses of associate Other operating income (expenses), net (Note 33) 6,917,406 (5,382,688 ) 1,534,718

2012

2011

6,174,373 (5,237,258 ) 937,115

5,854,300 (5,124,269) 730,031

(347,538) (300,131) 823,398 175,729

(298,052) (286,002) (592) 354,026 (230,620) 706,495 167,646 (944,405) (184,465) (735,001) (1,696,225 ) (989,730)

(294,928) (310,425) (414) 253,395 (352,372) 377,659 217,000 (873,005) (276,877) (935,789) (1,868,671) (1,491,012)

Income before financial income and expenses Financial income (Note 32) Financial expenses (Note 32) Result of derivative financial instruments (Note 32) Foreign exchange loss (Note 32)

1,710,447 110,723 (1,016,526 ) (215,313) (932,907) (2,054,023 )

Losses from continuing operations before income taxes Income taxes Current (Note 15) Deferred (Note 15) Net losses from continuing operations Discontinued operations Net income from discontinued operations (Note 36) Net losses for the year Attributable to Shareholders of the Company - continuing operations Shareholders of the Company - discontinuing operations Non-controlling interest Net losses for the year Basic and diluted loss per share - continuing operations (in Reais) (Note 35) Basic and diluted (loss) earnings per share - discontinued operations (in Reais) (Note 35)

(343,576)

(619,606) 265,600 (697,582)

(42,167) 333,927 (697,970)

67,835 314,408 (1,108,769)

240,655 (697,582) (697,970) (868,114)

(706,422) 8,840 (697,582)

(704,706) 6,736 (697,970)

(1,113,277) 240,655 4,508 (868,114)

(1.28)

(1.34)

(2.38)

0.51

The accompanying notes are an integral part of these consolidated financial statements.

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Fibria Celulose S.A.


Consolidated statement of comprehensive income Years ended December 31
In thousand of Reais, except for the income per shares

2013

2012 (Restated)(*) (697,970)

2011 (Restated)(*) (868,114)

Net losses for the year Other comprehensive income Items that will not be reclassified to profit or loss, net of taxes (*) Actuarial gains/(losses) of post employment benefit obligations - Fibria Share of other comprehensive income - actuarial losses of post employment benefit obligation of Veracel

(697,582)

14,919 (781) 14,138

(15,171)

(6,987)

(15,171)

(6,987)

Items that may be subsequently reclassified to profit or loss, net of taxes Foreign exchange effect on available-for-sale financial assets, net of tax Other comprehensive income (loss) for the year, net of taxes Total comprehensive losses for the year, net of taxes

3,466 17,604 (679,978) (15,171) (713,141) (6,987) (875,101)

Attributable to Shareholders of the Company - continuing operations Shareholders of the Company - discontinued operations Non-controlling interest

(688,818) 8,840 (679,978)

(719,877) 6,736 (713,141)

(1,120,264) 240,655 4,508 (875,101)

(*) The actuarial losses of post employment benefit obligations in 2012 and 2011, in the amount of R$ 15,171 and R$ 6,987, respectively, refer to the adjustment made in those years due to the retrospective impact of the adoption of IAS 19 (R), as Note 2.26.

The accompanying notes are an integral part of these consolidated financial statements.

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Fibria Celulose S.A.


Statement of changes in shareholders' equity
In thousands of Reais, unless otherwise indicated

Capital As at January 1, 2011 Total loss Net (loss)/ income Other comprehensive loss for the year (impact of the adoption of IAS 19 (R)) Transactions with shareholders Capital increase Realization of revaluation reserve, net of tax Lapsed dividends Investment reserve appropriation As at January 1, 2012 - restated Total loss Net (loss)/ income Other comprehensive loss for the year Transactions with shareholders Capital increase (Note 27(a)) Transaction costs Dividends declared - non-controlling interest (Portocel) Investment reserve appropriation As at December 31, 2012 - restated Total loss Net income (loss) Other comprehensive income for the year Transactions with shareholders Reversal of dividends Capital increase of non-controlling interest Portocel Dividends declared - non-controlling interest (Portocel) Investment reserve appropriation As at December 31, 2013 9,740,777 1,361,380 8,379,397 8,379,397

Capital Transaction costs to the capital increase

Capital reserve 2,688

Treasury shares (10,346)

Other reserves Other comprehensive Income 1,627,903

Statutory reserves Legal 303,800 Investments 5,077,971

Retained earnings (accumulated losses)

Total 15,381,413

Noncontrolling interest 23,433

Total 15,404,846

(872,622) (6,987) (6,987) (9,079) (861,481) 2,688 (10,346) 1,611,837 303,800 4,216,490 (704,706) (15,171) (15,171) (11,771) (704,706 ) 9,740,777 (11,771 ) 2,688 (10,346 ) 1,596,666 303,800 3,511,784 (706,422 ) 17,604 17,604 119 (706,422 ) 704,706 (704,706) (872,622) 9,079 2,062 861,481

(872,622) (6,987) (879,609)

4,508 4,508 881

(868,114) (6,987) (875,101) 881 2,062

2,062

14,503,866 (704,706) (15,171) (719,877) 1,361,380 (11,771)

28,222 6,736 6,736 3,335 (1,684)

14,532,688 (697,970) (15,171) (713,141) 1,364,715 (11,771) (1,684) 15,170,807 (697,582 ) 17,604 (679,978 ) 119

15,133,598 (706,422 ) 17,604 (688,818 ) 119

37,209 8,840 8,840

2,405 (2,099 ) (706,422 ) (11,771 ) 2,688 (10,346 ) 1,614,270 303,800 2,805,481 706,422 14,444,899 46,355

2,405 (2,099 )

14,491,254

The accompanying notes are an integral part of these consolidated financial statements.

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Fibria Celulose S.A.


Consolidated statement of cash flows Years ended December 31
In thousand of Reais

2013 Loss from continuing operations before income taxes Adjusted by Income before taxes on discontinued operations (Note 36) Depreciation, depletion and amortization Depletion of wood from forestry partnership programs Foreign exchange losses, net Change in fair value of derivative financial instruments Equity in losses of associate Gain on sale of land and building - Asset Light project (Note 1(e)) Gain on sale of others investments Gain on sale of investments (CONPACEL, KSR and Piracicaba) (Note 36(b)(iii)) Accretion of present value - payable for Aracruz acquisition Loss (gain) on disposal of property, plant and equipment Interest and gain and losses in marketable securities Interest expense Change in fair value of biological assets (Note 18 and Note 33) Financial charges of Bonds partial repurchase transaction Impairment of recoverable ICMS Tax credits IPI credit premium (Note 24 (d)(i)) Reversal of provision for contingencies and other Provisions and other Decrease (increase) in assets Trade accounts receivable Inventory Recoverable taxes Related parties Other assets/advances to suppliers Increase (decrease) in liabilities Trade payable Taxes payable Payroll, profit sharing and related charges Other payable Cash provided by operating activities Interest received Interest paid Income taxes paid Net cash provided by operating activities Cash flows from investing activities Proceeds from sale of land and building - Asset Light project (Note 1(e)) Installments paid for acquisition of Aracruz Installments paid for acquisition of Ensyn Acquisition of property, plant and equipment and intangible assets and forest Advance for wood acquisition from forestry partnership program Marketable securities, net Proceeds from sale of investments (CONPACEL, KSR and Piracicaba) (Note 36(a)(iii)) (343,576)

2012

2011

(989,730) (1,491,012)

1,751,947 111,214 932,907 215,313 (799,040) (3,201)

1,720,067 128,241 735,001 184,465 592

364,629 1,838,827 45,368 935,922 276,877 414

220,936 (90,014) 575,877 (102,265) 350,295 91,192 (13,531) (77,486) (116,042) 50,526

(64,419 ) (143,809 ) 681,840 (297,686 ) 150,917 90,248 (93,152 ) 109,955

(532,850) 40,893 (25,361) (178,895) 660,084 (145,884)

124,632

446,371 (62,662) (144,192) (3,642)

246,798 45,236 (16,875 ) (20,857 )

160,940 (148,446) (177,117) (161) 63,506

106,817 (18,464) 603 (35,402) 3,044,481 144,486 (602,112) (423,325) 2,163,530

57,762 (38,475 ) (5,241 ) (32,182 ) 2,448,696 131,637 (651,288 ) (14,712 ) 1,914,333

5,916 (26,321) 22,386 (78,829) 1,735,518 198,880 (582,047) (4,151) 1,348,200

500,000 (1,481,569) (40,674 ) (1,189,716) (1,001,711 ) (1,240,189) (96,968) (76,556 ) (176,479) 1,204,356 (660,951 ) (56,978) 2,076,143

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Fibria Celulose S.A.


Consolidated statement of cash flows Years ended December 31
In thousand of Reais (continued)

2013 Proceeds from sale of property, plant and equipment Advances received from the disposal of assets (Losango) (Note 35) Derivative transactions settled (Note 11(c)) Others Net cash provided by (used in) investing activities Cash flows from financing activities Borrowings Repayments - principal amount Net of capital increase (Note 27) Dividends paid Treasury stock acquisition Premium on Bonds repurchase transaction Other Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 36,543 (24,065) 3,699 433,849

2012 274,743 470,000 (126,368) 714 (1,160,803)

2011 82,491 69,982 (1,067) (727,666)

1,279,414 864,334 2,707,265 (3,320,157) (2,410,719 ) (3,109,589) 1,343,546 (263,902) (236,536) 1,288 (2,275,991) 6,508 327,896 943,856 1,271,752 (62,158 ) 6,747 (258,250) 66,661 561,941 381,915 943,856

17,093 (649,133) (20,949) (49,548) 431,463 381,915

The accompanying notes are an integral part of these consolidated financial statements.

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Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

1 &a'

$perations and current de%elopments (eneral information Fibria Celulose S.A. is incorporated under the la$s of the Federal (epublic of Bra/il, as a publicly)held company. Fibria Celulose S.A. and its subsidiaries are referred to in these financial statements as the BCompanyB, BFibriaB, or B$eB. 2e ha!e the le al status of a share corporation, operatin under Bra/ilian corporate la$. .ur head#uarters and principal e1ecuti!e office is located in S7o 3aulo, S3, Bra/il. 2e are listed on the stoc* e1chan e of S7o 3aulo +BACFB.D@S3A- and the >e$ Eor* Stoc* @1chan e +>ES@- and $e are sub6ect to the reportin re#uirements of the Bra/ilian Comisso de Valores Mobilirios +CDA- and the 4nited States Securities and @1chan e Commission +S@C-. .ur acti!ities are focused on the ro$th of rene$able and sustainable forests and the manufacture and sale of bleached eucalyptus *raft pulp. 2e operate in a sin le operatin se ment, $hich is the producin and sellin of short fiber pulp. .ur bleached pulp is produced from eucalyptus trees, resultin in a !ariety of hi h #uality hard$ood pulp $ith short fibers, $hich is enerally used in the manufacturin of toilet paper, uncoated and coated paper for printin and $ritin , and coated cardboard for pac*a in . 2e use different ener y sources includin thermal and electric, includin blac* li#uor, biomass deri!ed from $ood debar*in , bar* and scraps. .ur business is affected by lobal pulp prices, $hich are historically cyclical and sub6ect to si nificant !olatility o!er short periods. The most common factors that affect lobal pulp prices areF +i- lobal demand for products deri!ed from pulp, +ii- lobal production capacity and the strate ies adopted by the main producers, +iii- a!ailability of substitutes for these products and +i!- fluctuations on 4S dollar. All of these factors are beyond our control. In 2&12, $e established a strate ic alliance $ith @nsyn Corporation +B@nsynB-, throu h the ac#uisition of appro1imately :G of its capital stoc* for an amount of 4SH 2&,&&& +e#ui!alent to (H 8&,:<8 at the date-, $ith the purpose of le!era in our forestry e1pertise and our competiti!e position in Bra/il and to de!elop alternati!es $ith hi h added !alue to complement our lobal leadership position and e1cellence in the production of pulp. 2e belie!e that the combination of our e1pertise and @nsyn0s technolo y can enerate a rele!ant business in the biofuels se ment in the future.

&b'

$perating facilities and forest base The Company operates the follo$in facilities as of December %1, 2&1% to produce bleached eucalyptus *raft pulp $ith a total annual capacity of appro1imately ;.% million tonsF
)ulp production facilit* Aracru/ TrJs ?a oas 'acareI Deracel +LAnnual production capacit* . tons 2,%8&,&&& 1,%&&,&&& 1,1&&,&&& ;:&,&&& ;,%&&,&&&

+ocation &,ra-il' @spIrito Santo Aato Krosso do Sul S7o 3aulo Bahia

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Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

+L- (epresents ;&G of the annual production capacity of the 6ointly)controlled entity Deracel Celulose S.A.

Fibria produces hard$ood pulp from planted eucalyptus trees $hich $e refer to as forests and the a!era e e1traction cycle of the forest is bet$een si1 and se!en years and are located in si1 Bra/ilian States, consistin of appro1imately ,:2 thousand hectares as of December %1, 2&1%, includin reforested and protected areas, as follo$s +in thousand hectares-F Area of forest State S7o 3aulo Ainas Kerais (io de 'aneiro Aato Krosso do Sul Bahia @spIrito Santo /otal area

<=,11< 1%,&&, 1,:%= 228,,11 1%8,;=% 1&8,;%< ;;:,<,;

188,,;2 2<,%8, %,%:= %81,,&8 2:8,&&1 1=&,&,< ,:1,:<1

The forest base of the ?osan o pro6ect in the State of (io Krande do Sul is e1cluded from the table abo!e as such assets #ualify as assets held for sale and are bein presented as such as detailed in item +d-+iiand >ote %:. &c' +ogistics The pulp produced for e1port is deli!ered to customers by means of sea !essels on the basis of lon )term contracts $ith the o$ners of these !essels. The company operates in t$o ports, Santos and Barra do (iacho. The port of Santos is located on the coast of the State of S7o 3aulo and seeps the pulp produced in the 'acareI and TrJs ?a oas plants. The port is operated under a concession from the Federal Ko!ernment, throu h the Companhia Docas do @stado de S7o 3aulo +MC.D@S3N-. The concession period of one of the terminals at the port of Santos ends in 2&1<. Oo$e!er, $e are loo*in for alternati!e means for shippin the pulp produced, in order to maintain our e1port capacity in the lon term. The port of Barra do (iacho is a port speciali/in in the transportation of pulp, located appro1imately three *ilometers from the Aracru/ unit, in the State of @spIrito Santo, and seeps the pulp produced in the Aracru/ and Deracel plants. This port is operated by 3ortocel ) Terminal @speciali/ado Barra do (iacho S. A. +B3ortocelB- ) a company controlled by Fibria +$hich has a ;1G interest in its share capital-. 3ortocel operates $ith the authori/ation of the federal o!ernment, throu h a contract si ned on >o!ember 18, 1,,;. In .ctober 2&1&, four lon )term contracts $ere si ned $ith the South Porean 3an .cean Co. ?td. +former STQ 3an .cean-, !alid for a period of 2; years for the construction of 2& sea !essels. Fi!e ha!e been already deli!ered, of $hich, four are already dedicated to the transportation of pulp and the remainin one, is e1pected to be in its acti!ities as from February 2&18.

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Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Due the 3an .cean"s financial difficulties, the lon )term contracts are in process of rene otiation bet$een the parties in!ol!ed +Fibria, ban*s and 3an .cean-. Due to the rene otiation in pro ress, it is e1pected that the e1ports of pulp and the related lo istics costs $ill not be impacted, since the Company has contracts of affrei htment $ith other lo istics companies, $hich $ill be able to meet the e1port demand, $ith uaranteed of ser!ice #uality and cost efficiency. &d' Current assets "eld for sale Durin the years presented the Company appro!ed and consummated the sale of certain Cash Keneratin 4nits +CK4s- and of certain assets, as presented in the follo$in tableF
Date #"en classified for accounting purposes Date #"en t"e sale #as consummated

C(01Asset C.>3AC@? CK4 PS( CK4 3iracicaba CK4 ?osan o pro6ect assets Forests and land located in the south of the Bahia State

Reference >ote %:+b- and >ote 1+d-+i>ote %:+b- and >ote 1+d-+i>ote %:+b- and >ote 1+d-+i>ote 1+d-+ii- and >ote %:+a>ote 1+e- and >ote %:+b-

Classification for accounting purposes Assets held for sale and discontinued operations Assets held for sale and discontinued operations Assets held for sale Assets held for sale

December 2&1& December 2&1& 'une 2&11 'une 2&11

'anuary 2&11 February 2&11 September 2&11 >ot yet consummated

Assets held for sale

Aarch 2&12

December 2&12

&i'

Sale of C$!)AC2+, 3SR and )iracicaba .n December 21, 2&1&, the Board of Directors appro!ed the disposal of the follo$in CK4sF ConsRrcio 3aulista de 3apel e Celulose ) C.>3AC@? and PS( Distribuidora. The C.>3AC@? pulp and paper mill consisted of a pulp mill $ith an annual production capacity of :;& *ilotons and a paper mill $ith an annual production capacity of %,& *ilotons, and appro1imately <1 thousand hectares of timberland, %& thousand hectares of protected forest, a distribution business unit $hich operates 1, branches throu hout Bra/il and a distribution $arehouse located in the State of S7o 3aulo. The Company concluded the sale of the net assets of C.>3AC@? and PS( on 'anuary %1, 2&11 and February 2=, 2&11, respecti!ely, for an a re ate sale consideration of (H 1.; billion, throu h the e1ecution of the sales and purchase a reement $ith Su/ano 3apel e Celulose S.A. +BSu/anoB-, meetin the terms and conditions precedent of the sale and purchase a reement and throu h the payment of sellin price by Su/ano. The Company also concluded the sale of the net assets of the CK4 3iracicaba on September 2,, 2&11, consistin of a plant to produce thermal papers, coated and carbonless, located at the city of 3iracicaba, in the State of S7o 3aulo, $ith an annual capacity of o!er 1:& thousand tons, to 12 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

.6i 3aper C.., ?TD. +B.6iB- for an a re ate sale consideration of 4SH %1% million, e#ui!alent to (H ;:<,%<; at that date. The sale $as consummated throu h the transfer of the net assets of the unit to 3iracicaba IndSstria de 3apTis @speciais e 3articipaUVes ?tda. and the subse#uent sale of the #uotas of such entity to .6i. The disposal of these CK4s is consistent $ith our strate y of concentratin acti!ities in the pulp business and stren thenin our focus in the pulp mar*et. 2e used the proceeds of those sales to reduce our indebtedness le!el. Information on the assets, liabilities, profit and loss and cash flo$s of the CK4s sold are presented in >ote %;. &ii' +osango pro4ect assets .n 'une %&, 2&11, $e decided to classify as Mheld for saleN the assets related to the ?osan o pro6ect assets. .n December 2=, 2&12, the Company and CA3C Celulose (io randense ?tda. +BCA3CB- si ned the definiti!e 3urchase and Sale A reement for the sale of all of the ?osan o pro6ect assets, comprisin appro1imately 1&& thousand hectares of land o$ned by Fibria and appro1imately %, thousand hectares of planted eucalyptus and leased land, all located in the State of (io Krande do Sul, in the amount of (H :1; million. .n this date the first installment of the purchase price, amountin to (H 8<& million, $as paid to us. The second installment, amountin to (H 18& million, $as deposited in an escro$ account and $ill be released to us once additional o!ernment appro!als are obtained. The final installment of (H ; million is payable to us upon the completion of the transfer of the e1istin land lease contracts for the assets, and the applicable o!ernment appro!als. The sale and purchase a reement establishes a period of 8= months, rene$able at the option of C3AC for an additional 8= months, to obtain the re#uired o!ernment appro!als. If this appro!al is ultimately not obtained, $e $ill be re#uired to return to CA3C the first installment it paid to us, plus interests, and the escro$ deposits made by CA3C $ill re!ert. 2e ha!e recorded the amount of the first installment recei!ed as a liability under BAd!ances recei!ed in relation to assets held for saleB. Since the si nin of the 3urchase and Sale A reement $ith CA3C, $e ha!e been $or*in to obtain the appro!als needed, as $ell as the fulfillment of all other conditions precedent, $ith an emphasis on obtainin the documentation to be presented to the applicable o!ernment a encies. The completion of the sale depends on these o!ernment appro!als, the assets continue to be classified as assets held for sale as at December %1, 2&1%, and $ill remain so until the sale is completed. 4pon classification as assets held for sale, the carryin amounts of the assets held for sale $ere compared to their estimated fair !alues less cost of sale, and no impairment losses $ere identified. The ?osan o assets did not enerate any si nificant impact in the profit or losses in 2&1% and 2&12. The carryin amounts of the assets related to items +i- and +ii- abo!e, are disclosed in >ote %:. &iii' Forests and land located in t"e sout" of ,a"ia .n Aarch =, 2&12, as part of our strate y to stren then our capital structure, $e entered into a bindin a reement $ith Fundo Florestas do Brasil +the BFundB-, throu h its subsidiary Cara!elas Florestal S.A., for the sale of certain forests and land located in the south of Bahia, consistin of 1:,1;2 thousand 1% of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

hectares of forests of eucalyptus for timber and pulp $ith an a!era e annual production of ::& thousand cubic meters of $ood. .n 'une 2,, 2&12, Fibria si ned a purchase and sale a reement for these assets by the total amount of (H 2&& million, $hich $as recei!ed on the same date. .n December <, 2&12, the transaction $as completed upon receipt of an acceptance notice si ned by the buyer. A ain on sale of (H 1,,;;1 +net of ta1es- $as reco ni/ed in the statement of profit and loss in 2&12. Further details are presented in >ote %: +b-. &e' Asset +ig"t pro4ect .n >o!ember 1;, 2&1%, the Company +throu h the 3arent Company Fibria Celulose S.A. and its subsidiary Fibria)AS Celulose Sul Aato)Krossense ?tda.- entered into a Share 3urchase A reement and .ther Co!enants $ith the company 3ar*ia 3articipaUVes S.A. +M3ar*iaN-, for the sale of certain land located in the states of S7o 3aulo, Aato Krosso do Sul, Bahia and @spIrito Santo, for a total of appro1imately 21& thousand hectares. .n December %&, 2&1%, after obtainin the mandatory re ulatory appro!als as $ell as the completion of an audit by 3ar*ia, the First Amendment to the Share 3urchase A reement and .ther Co!enants $as concluded and si ned, under $hich the total area sub6ect to the transaction $as ad6usted to appro1imately 2&: thousand hectares of lands, for the total amount of (H 1,8&2,;=8, of $hich (H ;&&,&&& has been recei!ed by the Company upon si nin the a reement. The remainin balance, in the amount of (H ,&2,;=8, $ill be recei!ed after the fulfillment of certain obli ations and le al re isters, to be performed by the Company. See >ote %=. An additional !alue, limited to (H 28<,;1;, may be recei!ed by the Company in three separated payments, of up to one third of the !alue each payment, on the <th, 18th and 21st anni!ersaries of the a reement. The collection of this !alue is contin ent to the appreciation of the land in each of the anni!ersaries, measured accordin to predefined measurement assumptions established in the a reement and ad6usted by the !ariation of the IK3)A inde1 throu h the actual payment dates. .n December %&, 2&1%, the Company also si ned $ith the 3ar*ia"s subsidiaries +MCounterpartyN- a Forestry 3artnership A reement and a Standin Timber Supply A reement, both $ith a term up to 28 years +or four har!estin cycles of appro1imately < years-, durin $hich the Company $ill continue to operate its forests located in the sold areas. The a reement does not pro!ide any rene$al or e1tension pro!isions to its ori inal term. In e1chan e for the ri ht to use the land by the Company for its forestry acti!ities, the forestry partnership a reement rants to the Counterparty and land o$ner, the ri ht to recei!e 8&G of the !olume of $ood +in cubic meters W m%-, produced by the Company on the land durin each har!estin cycle, limited to a McapN contractually established. As established in the standin timber supply a reement, the Company $ill ac#uire the 8&G $ood !olume that the Counterparty has the ri ht to pursuant to the forestry partnership a reement at a m% price established in each a reement. The m% price is determined in 4SD and $ill be read6usted based on the consumer price inde1 of the 4.S. economy ) 4S)C3I inde1. The payments $ill be due on a #uarterly basis. At the end of each har!estin cycle, any difference bet$een the total #uarterly payments paid by the Company and the e#ui!alent to 8&G of the actual timber har!ested durin the har!estin cycle $ill be settled, only in the e!ent that the #uarterly payments made by the Company $ere hi her than the 18 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

e#ui!alent to 8&G of the actual timber har!ested at the end of the har!estin cycle, in $hich case the Company $ill be reimbursed for the e1cess amount. The Share 3urchase A reement has a clause that allo$s 3ar*ia to $ithdra$ up to %&G of the total land sub6ect to the forestry partnership a reement and the standin timber supply a reement, pursuant to a pre)defined $ithdra$al schedule. Additionally, in relation to the areas not sub6ect to the $ithdra$al, Fibria has a first refusal ri ht to ac#uire the land at mar*et !alue in the e!ent 3ar*ia recei!es an offer to sell the land to a third party. In case of the sale of any portion of lands for a third party, re ardin the lands not included in the %&G mentioned abo!e, the ne$ land o$ner is committed $ith all ri hts and obli ations of the a reements si ned bet$een Fibria and former land o$ner until the end of the period of the forestry a reement. The Share 3urchase A reement does not pro!ide the Company $ith a ri ht to repurchase the land durin or at the end of the term of the a reement. Accounting treatment of the transaction The share purchase a reement, the forestry partnership and standin timber supply a reements result in a #uarterly payment obli ation by the Company to$ards the Counterparty for the ri ht to use of the land, $ith a settlement pro!ision based on the pre)cuttin $ood in!entory counts. The final settlement amount payable is limited to the McapN defined in the a reements. The annual estimated payment by the Company under the transaction is appro1imately 4SH 8: million. Fibria has the contractual ri ht to operate the land or direct others to operate the land durin the term of the a reement in a manner it determines $hile ultimately retainin 1&&G of the har!ested timber in such land, throu h the :&G that Fibria $ill contractually retain and the rest of the 8&G that it $ill purchase from the Counterparty. Based on the abo!e, for accountin purposes, and accordin to IF(IC 8, Determinin $hether an Arran ement Contains a ?ease, the contracts are deemed to be $ithin the scope of the technical pronouncement IAS 1< +(1- W ?eases. Therefore, the Company accounts for this transaction as a sale leasebac* transaction. The lease is considered to be an operatin in nature, $ith e1clusi!ely contin ent payments. In accordance $ith IAS %,, Financial InstrumentsF (eco nition and Aeasurement, the Company the transaction contains an embedded deri!ati!e embedded in the standin timber supply a reement, correspondin to the 4SD m% price $hich is ad6usted by the 4.S.)C3I inde1, that is not closely related to the economic en!ironment $here the areas are located. Since the a reements $ere si ned on December %&, 2&1%, the fair !alue of the embedded deri!ati!e on December %1, 2&1% is close to /ero. The Company did not reco ni/e separately the fair !alue of the embedded deri!ati!e re ardin to the price in 4S dollar from the standin timber supply a reement due to the fact of the functional currency of the Counterparty is the 4S dollar and, conse#uently, the embedded deri!ati!e is considered to be closely related to the host a reement.

Gain on sale The Company reco ni/ed a ain on sale, as described in the follo$in tableF 1; of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Sale amount +e1cludin the contin ent asset amount+)- Cost of net assets dereco ni/ed Fi1ed Assets W ?ands and impro!ements +Consolidated- +>ote 1,+)- .thers +X- Kain on sale before income ta1 and social contribution +)- Income ta1 and social contribution e1pense +X- Kain on sale, net of income ta1 and social contribution

1,8&2,;=8 +;,:,;2=+<,&1:<,,,&8& +2<1,:<8;2<,%::

&f'

C"ange in t"e international corporate structure In >o!ember 2&11, mana ement appro!ed, sub6ect to certain conditions, a pro6ect for the corporate restructurin of our international acti!ities. .n 'uly 1st, 2&1% the current commercial, operational, lo istical, administrati!e and financial operations of Fibria Tradin International PFT $ere transferred to another subsidiary, located in Austria, Fibria International Trade KmbO. In December 2&1%, the direct in!estment held in Fibria, International Trade KmbO, $as contributed to Fibria International Celulose KmbO, a $holly o$ned subsidiary of Fibria. This international corporate reor ani/ation and restructurin has different sta es, and it is e1pected to be completed by December 2&1;. Oo$e!er, the implementation of the steps of the planned total restructurin is sub6ect to the appro!al from the local authorities of each country in!ol!ed.

&g'

5erged Compan* #it"out effect on t"e consolidated financial statements .n September %&, 2&1%, the subsidiary >ormus @mpreendimentos e 3articipaUVes ?tda. +M>ormusN- $as mer ed by the Company. The Company held a 1&&G interest in >ormus, $hich $as located in Bra/il. As a result the indirect subsidiaries Fibria International Trade KmbO+L-, Fibria .!erseas Ooldin PFT and Fibria International Celulose KmbO became direct subsidiaries of the Company.
+L- As mentioned in >ote 1+f- abo!e, this direct in!estment $as contributed to Fibria International Celulose KmbO in December 2&1%.

&"'

)ublic offering of common s"ares .n April %&, 2&12, $e concluded a primary public offerin of common shares, obtainin of (H 1,%:1,%=& +the B3ublic .fferin B-. ross proceeds

The 3ublic .fferin $as carried out in accordance $ith our strate y to stren then the capital structure and to impro!e our le!era e ratios. The details of this operation are described in >ote 2<+a-. 1: of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2 2.1 &a'

)resentation of financial statements and summar* of significant accounting policies Financial statements . basis of preparation Accounting policies adopted The Company0s consolidated financial statements ha!e been prepared and are bein presented in accordance $ith and in compliance $ith International Financial (eportin Standards +IF(S- as issued by the International Accountin Standards Board +IASB-.

&b'

Appro%al of t"e financial statements The consolidated financial statements $ere appro!ed by the Board of Directors and Fibria"s Aana ement on 'anuary 2,, 2&18.

2.2 2.2.1 &a'

Consolidation Consolidated financial statements Subsidiaries Subsidiaries are all entities +includin special)purpose entities- o!er $hich the Kroup has the po$er to o!ern the financial and operatin policies of the entity, enerally accompanyin a shareholdin of more than half of the !otin ri hts. The Company controls an entity $hen the Company is e1posed to, or has ri hts to, !ariable returns from its in!ol!ement $ith the entity and has the ability to affect those returns throu h its po$er o!er the entity. The e1istence and effect of potential !otin ri hts that are currently e1ercisable or con!ertible are considered $hen assessin $hether Fibria controls another entity. Subsidiaries are fully consolidated from the date on $hich control is transferred to Fibria and de) consolidated from the date that control ceases. The e1clusi!e or controlled in!estment fund is consolidated. Intercompany transactions, balances and unreali/ed ains and losses on transactions bet$een roup companies are eliminated. 4nreali/ed losses are also eliminated unless the transaction pro!ides e!idence of a loss of !alue +impairment- of the asset transferred. Accountin policies of subsidiaries ha!e been chan ed $here necessary to ensure consistency $ith the policies adopted by the Company. The application of the pro!ision of IF(S 119C3C 1,+(2- did not ha!e a material impact in the Company"s financial position and result of operations as compared to December %1, 2&12.

&b'

6oint operations As of 'anuary 1, 2&1%, the companies Deracel Celulose S.A., Asapir 3roduU7o Florestal e ComTrcio ?tda. and D.T. W Dotorantim .!erseas Tradin .perations ID ?imited met the definition of 6oint operations under IF(S 11 and C3C 1,+(2- ) M'oint Arran ementsN, accordin ly, assets, liabilities, re!enue and e1penses are reco ni/ed in relation to the interest in the 6oint operation. The chan es in the classification of the companies as 6oint operations did not impact the financial position and result of operations of the Company compared to the proportional consolidation method allo$ed by the standard 1< of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

until December %1, 2&12. Intercompany transactions, balances and unreali/ed ains and losses on transactions bet$een roup companies are eliminated. 4nreali/ed losses are also eliminated unless the transaction pro!ides e!idence of a loss of !alue +impairment- of the asset transferred. Accountin policies of subsidiaries ha!e been chan ed $here necessary to ensure consistency $ith the policies adopted by the Company. >one of the 6ointly)operated entities ha!e publicly traded shares. Additionally, the Company does not ha!e any si nificant restriction or commitment $ith re ards to its 6ointly)operated entities. The balance of current and non)current assets, current and non)current liabilities, profit and loss at December %1, 2&1% and 2&12 of the 6ointly)operations mentioned abo!e are presented as follo$F

1= of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2013 7eracel 1008 Assets Current assets Cash and cash e#ui!alents .thers current assets >on)current assets Total assets ?iabilities and shareholders0 e#uity Current liabilities ?oans and financin Suppliers and other account payables .thers >on)current liabilities ?oans and financin Suppliers and other account payables .thers Shareholders0 e#uity Total liabilities and shareholder0s e#uity 3rofit and loss (e!enue Cost of sales Kross profit Keneral and administrati!e Sellin e1penses .ther operatin e1penses, net .peratin income +lossFinancial loss, net ?osses before income ta1es >et income ta1es >et loss of the year 908 1008 Asapir 908 1008 7$/$ I7 908

;,,8: :=2,;%8 :==,8=& %,&8<,&<2 %,<%;,;;2

2,,<% %81,2:< %88,28& 1,;2%,;%: 1,=:<,<<:

2<= %,,%8 8,212 2,& 8,;&2

1%, 1,,:< 2,1&: 18; 2,2;1

;8,%,8 ;8,%,8 <81,<;2 <,:,18:

2<,1,< 2<,1,< %<&,=<: %,=,&<%

%1=,:;& ;1,&,8 2&,;1= %,&,2:2 8;:,<<2 =<= ;1,8,= ;&,,18= 2,=%:,182 %,<%;,;;2

1;,,%2; 2;,;8< 1&,2;, 1,;,1%1 22=,%=: 8%, 2;,<8, 2;8,;<8 1,81=,&<1 1,=:<,<<:

2;2 2,18= 2,8&&

12: 1,&<8 1,2&& <2=,%88 %:8,1<2 12,%%< %<:,;&, 21,;:8 %,=,&<%

1,:=: 1,:=: 81: 8,;&2

=8% =8% 2&= 2,2;1

28,:<; <;%,&1, 8%,12< <,:,18:

1,&1=,<<2 +=:1,:2&1;<,1;2 +%:,;82+%:,%=&+2,,1&=;;,122 +<1,=%2+1:,<1&+1,&2,+1<,<%,-

;&,,%=: +8%&,=1&<=,;<: +1=,2<1+1=,1,&+18,;;82<,;:1 +%;,,1:+=,%;;+;18+=,=:,+=,&+;,:+1,8=:+,&&+2,%=:+2,%=:+88;+2,=+<8%+8;&+1,1,%+1,1,%+22,=:8+22,=:8+22,=:8+11,8%2 +11,8%2 +11,8%2-

.nly the 6ointly)operated entity Deracel reco ni/ed e1penses of depreciation, amorti/ation and depletion for an amount of (H 1,1,%28 for the year ended December %1, 2&1% +correspondin to ;&G of our partnership-.

1, of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2012 7eracel 1008 Assets Current assets Cash and cash e#ui!alents .thers current assets >on)current assets Total assets ?iabilities and shareholders0 e#uity Current liabilities ?oans and financin Suppliers and other account payables .thers >on)current liabilities ?oans and financin Suppliers and other account payables Shareholders0 e#uity Total liabilities and shareholder0s e#uity 3rofit and loss (e!enue Cost of sales Kross profit Keneral and administrati!e Sellin e1penses .ther operatin income +e1penses-, net .peratin income +lossFinancial +loss-9income, net Income +loss- before income ta1es >e income ta1es >et income +loss- of the year 908 1008 Asapir 908 1008 7$/$ I7 908

8,1:2 8;:,,&2 8:1,&:8 %,2<<,%8= %,<%=,812

2,&=1 22=,8;1 2%&,;%2 1,:%=,:<8 1,=:,,2&:

1&& 8%,<:8 8%,=:8 8&: 88,2<&

;& 21,==2 21,,%2 2&% 22,1%;

8,%28 1,,%& :,2;8 =2,,::2 =%;,,1:

2,1:2 ,:; %,12< 818,=%1 81<,,;=

%8=,;%8 8<,;<& 2=,1<: 828,2=& %;2,:&& 1&:,&== 8;=,:== 2,=;;,888 %,<%=,812

1<8,2:< 2%,<=; 18,&== 212,18& 1<:,%&& ;%,&88 22,,%88 1,82<,<22 1,=:,,2&:

2:& 1,<%8 1,,,8

1%& =:< ,,< <<=,8,8 %=,,28< %=,,28< 2=,<11 81<,,;=

;,8<8 ;,8<8 %:,=&2 88,2<&

2,<%< 2,<%< 1=,8&1 22,1%;

<<=,8,8 ;<,822 =%;,,1:

,==,882 +=8&,<%218<,<1& +%8,;1&+2:,1,28;,8=% 1%2,8,1 +:=,:22:%,=:, +1:,&188<,=;;

8,8,221 +82&,%::<%,=;; +1<,2;;+1%,&,:22,<82 ::,28: +%8,%11%1,,%; +=,&&<2%,,2=

+2,<2=+2,<2=+1,%<8+8,1&2+8,1&2-

+1,%:8+1,%:8+:=<+2,&;1+2,&;11,<82 1,<82 1,<82 =<1 =<1 =<1

.nly the 6ointly)operated entity Deracel reco ni/ed e1penses of depreciation, amorti/ation and depletion for an amount of (H 1,8,<<1 for the year ended December %1, 2&12+correspondin to ;&G of our partnership-. The 6ointly)operated entity Deracel is located in the south of Bahia State, in the city of @unYpolis, the Company"s partnership o$nership is ;&G and the remainin ;&G is o$ned by the S$edish)Finnish Stora @nso Amsterdam B.D. 2& of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

The 6ointly)operated entity Deracel $as established on 'uly 1;, 1,,1 and its main acti!ities are the sil!iculture operations, production and sale of paper, pulp and $ood. &c' Associated companies Associates are all entities o!er $hich the company has si nificant influence but not control or 6oint control, enerally $ith an o$nership percenta e bet$een 2&G and ;&G of the !otin ri hts. In!estments in associates are accounted for usin the e#uity method of accountin . 4nder the e#uity method, the in!estment is initially reco ni/ed at cost, and the carryin amount is increased or decreased to reco ni/e the in!estor0s share of the profit or loss of the in!estee after the date of ac#uisition. At December %1, 2&1%, 2&12 and 'anuary 1, 2&12, our only associate is Bahia 3rodutos de Aadeira S.A. +pre!iously called Aracru/ 3rodutos de Aadeira S.A.-. The application of the pro!ision of IF(S 119C3C 1,+(2- did not ha!e a material impact in the Company"s financial position and result of operations as compared to December %1, 2&12. &d' Subsidiaries and 4ointl*.operated entities included in t"e consolidated financial statements The subsidiaries and 6ointly)operated entities included in the consolidation are as follo$sF
)ercentage of total capital 2013 Direct Companies located in Bra/il >ormus @mpreendimentos e 3articipaUVes ?tda. +iFibria)AS Celulose Sul Aato)Krossense ?tda. Fibria Terminais 3ortuYrios S.A. 3ro6etos @speciais e In!estimentos S.A. 3ortocel ) Terminal @speciali/ado de Barra do (iacho S.A. Deracel Celulose S.A. +iiAsapir 3roduU7o Florestal e ComTrcio ?tda. +iiAbroad D.T. ) Dotorantim .!erseas Tradin .perations ID ?imited +iiFibria Tradin International PFT Fibria .!erseas Ooldin PFT >e$ar* Financial Inc. +iFibria .!erseas Finance ?td. Fibria International Trade KmbO. Fibria Celulose +4SA- Inc. Fibria +@urope- S.A. Fibria International Celulose KmbO. Kreen 3arrot BD +i- Companies li#uidated9mer ed as detailed in >ote 1+e-. +ii- 'ointly)operated entities. Indirect /otal 2012 /otal 2011 /otal

1&& 1&& 1&& ;1 ;& ;&

1&& 1&& 1&& ;1 ;& ;&

1&& 1&& 1&& 1&& ;1 ;& ;&

1&& 1&& 1&& 1&& ;1 ;& ;&

;& 8=,% 1&& 1&&

;1,<

;& 1&& 1&& 1&& 1&& 1&& 1&& 1&& 1&&

;& 1&& 1&& 1&& 1&& 1&& 1&&

1&& 1&& 1&& 1&& 1&&

;& 1&& 1&& 1&& 1&& 1&& 1&& 1&&

21 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2.3

Segment reporting The financial statements do not include se ment reportin for the reason that the Company operates only the pulp se ment.

2.: &a'

Foreign currenc* translation Functional and presentation currenc* The Bra/ilian (eal +B(ealB, B(eaisB or B(HB- is the functional currency of the Company and all its subsidiaries, and is also the currency used for the preparation and presentation of the consolidated financial statements of the Company.

&b'

/ransactions and balances Forei n currency transactions are translated into the functional currency usin the e1chan e rates pre!ailin at the dates of the transactions or the date of !aluation for items that are re)measured. Forei n e1chan e ains and losses resultin from the settlement of such transactions and from the translation at year)end e1chan e rates of monetary assets and liabilities denominated in forei n currencies are reco ni/ed in the statement of profit or loss, presented as BForei n e1chan e ain +loss-B.

2.9

Cas" and cas" e;ui%alents Cash and cash e#ui!alents include cash, ban* deposits, and hi hly li#uid short)term in!estments, $hich ha!e ori inal maturities up to three months and are readily con!ertible into a *no$n amount of cash and sub6ect to an immaterial ris* of chan e in !alue.

2.< 2.<.1

Financial assets Classification The Company classifies its financial assets in the follo$in cate oriesF +a- at fair !alue throu h profit or loss +b- held)to)maturity in!estments, +c- loans and recei!ables, and +d- a!ailable for sale financial assets. The classification depends on the purpose for $hich the financial assets $ere ac#uired. Aana ement determines the classification of its financial assets at initial reco nition.

&a'

Financial assets at fair %alue t"roug" profit or loss Financial assets at fair !alue throu h profit or loss are financial assets held for tradin . Deri!ati!e financial instruments, includin embedded deri!ati!es, are classified as held for tradin e1cept $hen they #ualify for hed e accountin . A financial asset is classified in this cate ory if ac#uired principally for the purpose of sellin in the short term. Assets in this cate ory are classified as current assets if e1pected to be settled $ithin 12 months, other$ise they are classified as non)current. Chan es in fair !alue are reco ni/ed in the statement of profit or loss under BFinancial incomeB or BFinancial e1pensesB for non) deri!ati!e instruments and under B(esult of deri!ati!e financial instrumentsB for deri!ati!e instruments.

22 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&b'

=eld.to.maturit* in%estments The in!estments in non)deri!ati!e instruments that the Company has the ability and intention to hold until maturity are classified as in!estments held to maturity and are measured initially at fair !alue, includin cost of the transaction and subse#uently at amorti/ed cost. The Company e!aluates $hether there is ob6ecti!e e!idence that a financial asset or a roup of financial assets is re istered abo!e its reco!ery !alue. 2hen applicable, a pro!ision for impairment is reco ni/ed.

&c'

+oans and recei%ables ?oans and recei!ables are non)deri!ati!e financial assets $ith fi1ed or determinable payments that are not #uoted in an acti!e mar*et. They are included in current assets, e1cept for those $ith maturities reater than 12 months after the end of the reportin period. ?oans and recei!ables are classified as non) current assets and are recorded at amorti/ed cost based on the effecti!e interest rate of the transaction. The effecti!e interest rate is the contractual rate ad6usted by the related transaction costs. The Company0s loans and recei!ables are comprised of BTrade account recei!ablesB, B(elated parties recei!ablesB and BCash and cash e#ui!alentsB.

&d'

A%ailable.for.sale financial assets A!ailable)for)sale financial assets are non)deri!ati!e instruments that are either desi nated in this cate ory or not classified in any of the other cate ories. They are included in non)current assets unless the in!estment matures or mana ement intends to dispose of it $ithin 12 months after the end of the reportin period.

2.<.2 Recognition and measurement (e ular purchases and sales of financial assets are reco ni/ed on the trade date ) the date on $hich Fibria commits to purchase or sell the asset. In!estments are initially reco ni/ed at fair !alue plus transaction costs for all financial assets not measured at fair !alue throu h profit or loss. Financial assets measured at fair !alue throu h profit or losses are initially reco ni/ed at fair !alue, and the transaction costs are recorded in the Statement of profit and loss. Financial assets are dereco ni/ed $hen the ri hts to recei!e cash flo$s from the in!estments ha!e e1pired or ha!e been transferred but only if Fibria has transferred substantially all ris*s and re$ards of o$nership. Financial assets measured at fair !alue throu h profit or losses are recorded at fair !alue. ?oans and recei!ables are subse#uently carried at amorti/ed cost usin the effecti!e interest method. The chan es in the fair !alue of the a!ailable for sale financial asset are reco ni/ed as follo$F +i- the effect of the e1chan e forei n currency and chan es in the fair !alue of the in!estment are reco ni/ed directly in @#uity, in M.ther comprehensi!e incomeN and, +ii- the effect of the e1chan e forei n currency and chan es in the fair !alue of the $arrant of ac#uire shares are reco ni/ed in profit or loss of the year. 2.<.3 $ffsetting financial instruments Financial assets and liabilities are offset and the net amount is reported in the balance sheet $hen there is a le ally enforceable ri ht to offset the reco ni/ed amounts and there is an intention to settle on a net basis, or reali/e the asset and settle the liability simultaneously.

2% of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2.<.: Impairment of financial assets &a' Assets carried at amorti-ed cost The Company assesses at the end of each reportin period $hether there is ob6ecti!e e!idence that a financial asset or roup of financial assets is impaired. A financial asset or a roup of financial assets is impaired and impairment losses are only if there is ob6ecti!e e!idence of an impairment as a result of one or more e!ents that occurred after the initial reco nition of the asset +a Bloss e!entB- and that loss e!ent +or e!ents- has an impact on the estimated future cash flo$s of the financial asset or roup of financial assets that can be reliably estimated. The criteria that the Company uses to determine $hether there is ob6ecti!e e!idence of an impairment loss includeF . . . . . . si nificant financial difficulty of the issuer or debtor5 a breach of contract, such as a default or delin#uency in interest or principal payments5 Fibria, for economic or le al reasons relatin to the borro$er0s financial difficulty, rants to the borro$er a concession that the lender $ould not other$ise consider5 it becomes probable that the borro$er $ill enter ban*ruptcy or other financial reor ani/ation5 the disappearance of an acti!e mar*et for that financial asset because of financial difficulties5 obser!able data indicatin that there is a measurable decrease in the estimated future cash flo$s from a portfolio of financial assets since the initial reco nition of those assets, althou h the decrease cannot yet be identified $ith the indi!idual financial assets in the portfolio, includin F .. ad!erse chan es in the payment status of borro$ers in the portfolio5 .. national or local economic conditions that correlate $ith defaults on the assets in the portfolio. The amount of an impairment loss is measured as the difference bet$een the carryin amount of the asset and the present !alue of estimated future cash flo$s discounted at the financial asset0s ori inal effecti!e interest rate. If the financial asset is impaired the carryin amount of the asset is reduced and a loss is reco ni/ed in the statement of profit and loss. If a loan has a !ariable interest rate, the discount rate for measurin any impairment loss is the current effecti!e interest rate determined under the contract. As a practical e1pedient, Fibria may measure impairment on the basis of an instrument0s fair !alue usin an obser!able mar*et price. If, in a subse#uent period, the impairment loss decreases and the decrease can be related ob6ecti!ely to an e!ent occurrin after the impairment $as reco ni/ed +such as an impro!ement in the debtor0s credit ratin -, the re!ersal of the pre!iously reco ni/ed impairment loss is reco ni/ed in the statement of profit or loss. &b' Assets classified as a%ailable for sale The Company assesses at the end of each reportin period $hether there is ob6ecti!e e!idence that a financial asset or a roup of financial assets is impaired. In the case of in!estments classified as a!ailable for sale, a si nificant or prolon ed decline in the fair !alue of the e#uity belo$ its cost is also e!idence 28 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

that the assets are impaired. If any such e!idence e1ists for a!ailable for sale financial assets, the cumulati!e loss W measured as the difference bet$een the ac#uisition cost and the current fair !alue, less any impairment loss on that financial asset pre!iously reco ni/ed in profit or loss W $ill be reco ni/ed in profit or loss. 2.> Deri%ati%e financial instruments and "edging acti%ities Deri!ati!es are initially reco ni/ed at fair !alue on the date the deri!ati!e contract is entered into and are subse#uently re)measured at fair !alue. Chan es in fair !alue are recorded in the statement of profit or loss, in the line M(esult of deri!ati!e financial instrumentsN. @mbedded deri!ati!es in non)deri!ati!e host contracts are re#uired to be separated $hen their ris*s and characteristics are not)closely related to those of host contracts and these are not measured at fair !alue throu h profit or loss. >on)option embedded deri!ati!e are separated from the host contract in accordance $ith its stated or implied substanti!e terms, so that they ha!e /ero fair !alue on initial reco nition. @!en thou h the Company uses deri!ati!es to miti ate ris*s, hed e accountin has not been applied in the periods presented. The fair !alue of deri!ati!e instruments is disclosed in >ote 11. 2.? /rade accounts recei%able Trade accounts recei!able correspond to the amounts recei!able from sales made in the course of the Company0s normal business. If collection is e1pected in one year or less, the accounts recei!able are classified as current assets, other$ise, they are classified as non)current assets. Accounts recei!able are initially reco ni/ed at fair !alue and, subse#uently, measured by the effecti!e interest rate method less a pro!ision for impairment, if necessary. Accounts recei!able from customers abroad are presented based on the e1chan e rates at the balance sheet date. A pro!ision for impairment is reco ni/ed $hen there is ob6ecti!e e!idence that Fibria $ill not be able to collect all the amounts due in accordance $ith the ori inal terms of the accounts recei!able. The calculation of the pro!ision is based on a reasonable estimate to co!er e1pected probable losses on the reali/ation of recei!ables, considerin the situation of each customer and the respecti!e uarantees. In performin such analysis of impairment our Treasury Department, e1amines on a monthly basis the maturity of recei!ables from domestic and forei n customers and identifies those customers $ith balances o!er due and assesses the specific situation of each client, a and e1ercises 6ud ment on the ris* of loss in!ol!ed, considerin the e1istence of contracted insurance, letters of credit, e1istence of collateral, the customer financial situation, and the status of le al processes in the e!ent of e1ecution. As a result of this analysis mana ement determines a percenta e that is applied to the outstandin balances due by the client and determines the amount to be recorded as an impairment. The reco nition and re!ersal of a pro!ision for trade recei!ables is recorded as BSellin e1pensesB in the statement of profit or loss.

2; of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2.@

In%entor* In!entory is stated at the lo$er a!era e purchase or production cost and the net reali/able !alue. Finished products and $or*)in)process consist of ra$ materials, direct labor, other direct costs and eneral production e1penses. The ra$ materials deri!ed from biolo ical assets are measured based on their fair !alue less cost to sell at the point of har!est, $hen transferred from biolo ical assets to in!entory. Imports in transit are stated at the accumulated cost of each import. The net reali/able !alue is the estimated sales price in the normal course of business, less the applicable !ariable sellin e1penses.

2.10

Current and deferred income ta and social contribution Ta1 e1pense for the year comprises current and deferred ta1. Ta1 is reco ni/ed in the statement of profit or loss, e1cept to the e1tent that it relates to items reco ni/ed in other comprehensi!e income. In this case the ta1 is reco ni/ed directly in shareholders0 e#uity in other comprehensi!e income. The current income ta1 char e is calculated based on the ta1 la$s enacted or substanti!ely enacted at the balance sheet date in the countries $here the Company operates and enerates ta1able income. Aana ement periodically e!aluates positions ta*en in ta1 returns $ith respect to situations in $hich applicable ta1 re ulation is sub6ect to interpretation. It establishes pro!isions $here appropriate on the basis of amounts e1pected to be paid to the ta1 authorities. Deferred income ta1 is reco ni/ed, usin the liability method, on temporary differences arisin bet$een the ta1 bases of assets and liabilities and their carryin amounts in the consolidated financial statements. Oo$e!er, deferred ta1 liabilities are not reco ni/ed if they arise from the initial reco nition of ood$ill5 deferred income ta1 is not reco ni/ed if it arises from initial reco nition of an asset or liability in a transaction that is not a business combination and that at the time of the transaction affects neither accountin nor ta1able profit or loss. Deferred income ta1 is determined usin ta1 rates +and la$s- that ha!e been enacted or substantially enacted at the balance sheet date and are e1pected to apply $hen the related deferred income ta1 asset is reali/ed or the deferred income ta1 liability is settled. Deferred income ta1 assets are reco ni/ed only to the e1tent that it is probable that future ta1able profit $ill be a!ailable a ainst $hich the temporary differences can be utili/ed. Deferred income ta1 is pro!ided on temporary differences arisin on in!estments in subsidiaries, e1cept $here the timin of the re!ersal of the temporary difference is controlled by Fibria and it is probable that the temporary difference $ill not be re!ersed in the foreseeable future. Deferred income ta1 assets and liabilities are offset $hen there is a le ally enforceable ri ht to offset current ta1 assets a ainst current ta1 liabilities and $hen the deferred income ta1es assets and liabilities relate to income ta1es le!ied by the same ta1ation authority on either the same ta1able entity or different ta1able entities $here there is an intention to settle the balances on a net basis.

2: of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2.11 &a'

Intangible assets (ood#ill Kood$ill arises on the ac#uisition of subsidiaries and represents the e1cess of the consideration transferred o!er the Company0s interest in the net fair !alue of identifiable assets, liabilities and contin ent liabilities ac#uired and the fair !alue of the non)controllin interest in the ac#uired. Kood$ill is recorded as intan ible assets. Kood$ill impairment re!ie$s are underta*en annually or more fre#uently if e!ents or chan es in circumstances indicate a potential impairment. The carryin !alue of ood$ill is compared to the reco!erable amount, $hich is the hi her of !alue in use and the fair !alue less costs to sell. An impairment is reco ni/ed immediately as an e1pense and is not subse#uently re!ersed. Kood$ill is allocated to CK4s or roups of CK4s. The allocation is made to the CK4s or roup of CK4s $hich $ill benefit9from the business combination ori inatin the ood$ill. @ach CK4 or roup of CK4s to $hich the ood$ill is allocated represents the lo$est le!el $ithin the entity at $hich the ood$ill is monitored for internal mana ement purposes.

&b'

Database The database represents the technical *no$led e accumulated o!er se!eral years and the database of forestry and industrial technolo ies ori inatin from the Aracru/ ac#uisition. These assets are the bases for impro!ements in the producti!ity per hectare of eucalyptus and also in the industrial process of pulp production. The database $as reco ni/ed at fair !alue at the ac#uisition date, it has a definite useful life and is recorded at cost less accumulated amorti/ation. The amorti/ation is calculated on a strai ht)line basis, at the annual rate of 1&G, and recorded in the Statement of profit and loss in B.ther operatin income +e1penses-, netB. The database of forestry and industrial technolo ies comprisesF documentation center +C@D.C-, information base for research and process +BI3-, soft$are utili/ed in *no$led e mana ement +PD3- and Aicrobacia +sensors and mar*ers $hich capture the effects of rain in the planted areas durin their cycle-.

&c'

)atent A re istered patent $as ac#uired in the Aracru/ business combination and corresponds to the pulp process for a specific application and customer. The patent $as initially recorded at fair !alue on the ac#uisition date and is subse#uently stated at cost less accumulated amorti/ation. Amorti/ation is calculated on a strai ht)line basis at an annual rate of 1;.,G.

&d'

Relations"ip #it" suppliers It relates to the contracts that the Company has for the supply of diesel oil, ethanol fuel and chemical products, arisin from the Aracru/ ac#uisition. This asset $as recorded at fair !alue on the ac#uisition date, it has a definite useful life and is 2< of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

subse#uently recorded at cost less accumulated amorti/ation. Amorti/ation is calculated on a strai ht) line basis, at the annual rates of 2&G for the supply of diesel oil and ethanol fuel and of :.%G for chemical products. &e' De%elopment and implementation of s*stems &soft#are' The costs associated $ith the maintenance of soft$are are reco ni/ed as e1penses, as incurred. The costs directly attributable to the de!elopment and testin of identifiable and uni#ue soft$are, controlled by Fibria, are reco ni/ed as intan ible assets $hen the follo$in criteria are metF +i- it is technically feasible to complete the soft$are for it to be a!ailable for use5 +ii- mana ement intends to complete the soft$are and use or sell it5 +iii- there is an ability to use or sell the soft$are product5 +i!- it $ill pro!ide probable future benefits that can be demonstrated5 +!- suitable technical, financial and other resources are a!ailable to conclude its de!elopment and to use or sell it5 +!i- the attributable e1penditure durin its de!elopment can be reliably measured. .ther de!elopment e1penditures $hich do not meet these criteria are reco ni/ed as e1penses, $hen incurred. The de!elopment costs that ha!e been reco ni/ed as e1penses are not capitali/ed in subse#uent periods. Soft$are de!elopment costs are amorti/ed o!er their estimated useful li!es at an annual rate of 2&G. 2.12 )ropert*, plant and e;uipment 3roperty, plant and e#uipment are stated at cost and depreciated on a strai ht)line basis, in accordance $ith the estimated economic useful li!es of the related assets. Annual depreciation rates are described in >ote 1,. ?and is not depreciated. The cost of ma6or reno!ations is capitali/ed if the future economic benefits e1ceed the performance standard initially estimated for the asset. (eno!ations are depreciated o!er the remainin useful life of the related asset. (epairs and maintenance are e1pensed $hen incurred. Financin costs are capitali/ed durin the period necessary to e1ecute and prepare the asset for its intended use. The residual !alues and useful li!es of assets are re!ie$ed and ad6usted, if appropriate, at the end of each year. An asset0s boo* !alue is immediately $ritten do$n to its reco!erable amount if it is reater than its estimated reco!erable amount. Kains and losses on disposals are determined by comparin the proceeds $ith the boo* !alue and are reco ni/ed as B.ther operatin income +e1penses-, netB in the statement of profit or loss. 2.13 +eases At the inception of an a reement the Company determines $hether a contract or set of contracts is or contains a lease. This is the case if the follo$in t$o conditions are metF +i- performance of the contract is dependent upon the use of that specified asset and, +ii- the contract i!es the Company the ri ht of use 2= of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

of the asset. ?eases of property, plant and e#uipment in $hich the Company assumes substantially all the ris*s and benefits of o$nership are classified as finance leases. Finance leases are recorded as a financed purchase, initially reco ni/ed as property, plant and e#uipment $ith a correspondin leasin liability. ?eases in $hich substantially all of the o$nership ris*s and benefits are retained by the lessor are classified as operatin leases. The minimum payments for operatin leases +net of any incenti!es recei!ed from the lessor- are e1pensed on the strai ht)line method o!er the lease term. The contin ent !alues of payment +those that are not a fi1ed amount but are based in the future amount of a factor such as !olume of standin timberare accounted in the periods $here they are incurred. Financial or operational leases are reco ni/ed in profit and loss e1cept for those related to land leased for forest plantations $hich are capitali/ed as part of the cost of biolo ical assets. 2.1: ,iological assets Biolo ical assets are measured at fair !alue, net of estimated costs to sell. Depletion is calculated based on the total !olume e1pected to be har!ested. Biolo ical assets consist of eucalyptus forests e1clusi!ely from rene$able plantations and intended for the production of bleached pulp. As a result of impro!ements in forest mana ement techni#ues, includin the enetic impro!ement of trees, the cycle of har!estin throu h replantin occurs o!er appro1imately si1 to se!en years. Fair !alue is determined usin the discounted cash flo$ method, ta*in into consideration the !olume of $ood, se re ated by plantation year, measured at the sales price of standin timber. The a!era e sales price $as estimated based on local mar*et prices based on research of actual transactions, ad6usted to reflect the forest price. The !olumes used in the !aluation are consistent $ith the annual a!era e har!est for each re ion. See >ote 1=. The Company has a policy of carryin out semi)annual appraisals of the fair !alue of these assets. 2.19 ,usiness combination The Company applies the ac#uisition method to account for business combinations. The consideration transferred for the ac#uisition of a subsidiary is the fair !alue of the assets transferred, e#uity instruments issued and liabilities incurred or assumed at the date of e1chan e. Ac#uisition)related costs are e1pensed as incurred. The consideration transferred includes the fair !alue of any asset or liability resultin from a contin ent consideration arran ement. The identifiable assets ac#uired and liabilities assumed are measured at fair !alue on the ac#uisition date. The non)controllin interest in the company ac#uired is !alued at the fair !alue of the total net identifiable assets or at the proportionate share of the fair !alue of such net identifiable assets. The e1cess of the ac#uisition cost in relation to the fair !alue of identifiable assets ac#uired and liabilities assumed is recorded as ood$ill +>ote 2.11+a-- and, if the ac#uisition cost is lo$er than such fair !alue, the difference is recorded as a bar ain purchase ain in the Statement of profit and loss on the ac#uisition date. 2, of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

If the business combination is achie!ed in sta es, the ac#uisition date carryin !alue of the ac#uirer0s pre!iously held e#uity interest in the ac#uire is re)measured to fair !alue at the ac#uisition date5 any ains or losses arisin from such re)measurement are reco ni/ed in profit or loss. 2.1< Impairment of non.financial assets ot"er t"an good#ill Assets that are sub6ect to amorti/ation are re!ie$ed for impairment $hene!er e!ents or chan es in circumstances indicate that the carryin amount may not be reco!erable. An impairment loss is reco ni/ed for the amount by $hich the asset0s carryin amount e1ceeds its reco!erable amount. The reco!erable amount is the hi her of an asset0s fair !alue less costs to sell and !alue in use. For the purposes of assessin impairment, assets are rouped at the lo$est le!els for $hich there are separately identifiable cash flo$s +cash) eneratin units-. >on)financial assets other than ood$ill that suffered impairment are re!ie$ed for possible re!ersal of the impairment at each reportin date. 2.1> /rade pa*ables Trade payables are obli ations to pay for oods or ser!ices that ha!e been ac#uired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due $ithin one year or less. If not, they are presented as non)current liabilities. Trade payables are reco ni/ed initially at fair !alue and subse#uently measured at amorti/ed cost usin the effecti!e interest method. In practice, they are usually reco ni/ed at the amount of the related in!oice. 2.1? +oans and financing ?oans and financin are initially reco ni/ed at fair !alue, net of transaction costs incurred, if si nificant, and are subse#uently stated at amorti/ed cost. Any difference bet$een the proceeds and the redemption !alue is reco ni/ed in the Statement of profit and loss o!er the period of the loans and financin usin the effecti!e interest rate method. Costs of loans and financin directly attributable to the ac#uisition, construction or production of a #ualifyin asset are an inte ral part of the cost of such asset. .ther costs of loans and financin are reco ni/ed as e1penses, on the accrual basis. 2.1@ $t"er assets and liabilities &current and non.current' An asset is reco ni/ed in the balance sheet $hen it is probable that it $ill enerate future economic benefits for the Company, and its cost or !alue can be reliably measured. A liability is reco ni/ed in the balance sheet $hen the Company has a le al or constructi!e obli ation as a result of a past e!ent and it is probable that an outflo$ of funds $ill occur. ?iabilities include contractual char es, inde1ation char es or e1chan e rate chan es incurred, $hen applicable. 3ro!isions are reco ni/ed based on the best estimates of the ris* in!ol!ed. Assets and liabilities are classified as current $hen their reali/ation or settlement is li*ely to occur $ithin 12 months after the balance sheet date. .ther$ise, assets and liabilities are presented as non)current.

%& of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2.20 &a'

2mplo*ee benefits )ension obligations The Company participates in pension plans, mana ed by a pri!ate pension entity, $hich pro!ide post)employment benefits to employees, classified as defined contribution plans. It consists in a pension plan under $hich the Company pays fi1ed contributions to a separate entity and has no le al liabilities for ma*in additional contributions if the fund does not ha!e sufficient assets to honor the benefits related to employee ser!ice for the current and pre!ious period. Contributions represent net costs and are recorded in the Statement of profit and loss in the period in $hich they are due.

&b'

=ealt" care &post.retirement' Some Fibria"s subsidiaries used to pro!ide post)retirement health care benefits to their employees. This policy established a lifetime benefits to a determined roup of employees. This benefit has been discontinued for o!er fi!e years, hence the plan is no lon er a!ailable to ne$ participants since 'uly 2&&<. The liability related to the health care plan for retired employees is stated at the present !alue of the obli ation. The defined benefit obli ation is estimated annually by independent #ualified actuaries. The present !alue of the defined benefit obli ation is determined throu h an estimate of the future cash outflo$, utili/in the discount rate disclosed in >ote 2=+c-. Chan es in the present !alue of the liabilities of the plan re ardin the interest accrued are immediately reco ni/ed in the Statement of profit and loss. The chan es in the present !alue of the liabilities of the plan re ardin the actuarial ain and loss are reco ni/ed directly in shareholder"s e#uity, in M.ther comprehensi!e incomeN.

&c'

)rofit.s"aring and bonus plans Fibria reco ni/es a liability and an e1pense for bonuses and profit)sharin in the Statement of profit and loss. These pro!isions are calculated based on #ualitati!e and #uantitati!e tar ets established by mana ement and are recorded in the statement of profit or loss as BBenefit to employeesB.

&d'

S"are.based compensation The Company offers a compensation plan in $hich the amount of the benefit is determined based on chan es in the #uoted mar*et price of its shares, based on a predetermined floor price and an established measurement date. The plan consists of cash payments, not in!ol!in the issue and9or deli!ery of shares for purposes of the plan. The Company0s C@. and e1ecuti!e officers are eli ible for the plan. The obli ations are recorded as a pro!ision for amounts payable to the C@. and e1ecuti!e officers, $ith a correspondin entry to the statement of profit or loss, based on the fair !alue of the benefits ranted and the !estin period. The fair !alue of this liability is re)measured at each reportin period.

%1 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2.21

Contingent assets and contingent liabilities The accountin practices for the accountin and disclosure of contin ent assets and contin ent liabilities and le al obli ations are as follo$sF

+a-

Contin ent assets are reco ni/ed only $hen there is e!idence that reali/ation is !irtually certain, enerally $hen fa!orable, final and unappealable court decisions ha!e been obtained and $hich the !alue is possible to be measured. Contin ent assets $ith probable success are only disclosed in the notes to the financial statements. Contin ent liabilities are pro!ided to the e1tent that the Company e1pects that is probable that $ill disburse cash and the amount can be reliably estimated. Ta1 and ci!il proceedin s are accrued $hen losses are assessed as probable and the amounts in!ol!ed can be reliably measured. 2hen the e1pectation of loss is possible, a description of the processes and amounts in!ol!ed is disclosed in the notes to the financial statements. ?abor proceedin s are pro!ided based on the historical percenta e of disbursements. Contin ent liabilities assessed as remote losses are neither accrued nor disclosed. Asset retirement obligations It is, primarily, related to future costs for the decommissionin of industrial landfill cells, $ith the completion of the acti!ities and decommissionin of assets lin*ed to landfills. A pro!ision is recorded as a lon )term obli ation a ainst an item of fi1ed asset. The pro!ision and the correspondin asset are initially recorded at fair !alue, based on the present !alue of estimated cash flo$s for future cash payments discounted by an ad6usted ris*)free rate. The lon )term obli ation accrues interest usin a lon )term discount. The asset is depreciated on a strai ht)line basis o!er the useful life of the principal. Depreciation is recorded in profit and loss.

+b-

2.22

2.23

Re%enue recognition Fibria reco ni/es re!enue $henF +i- the amount of re!enue can be reliably measured5 +ii- it is probable that future economic benefits $ill flo$ to the entity5 and +iii- $hen specific criteria ha!e been met for each of the Company sales includin transfer of property and transfer of the ris* of the product to the client based on the specific BIncotermB +pre)defined commercial terms published by the International Chamber of Commerce- used and confirmation of a!ailable credit by the customer in order for the sale to be consummated. (e!enue is the net amount after deduction of ta1es, discounts and sales returns.

&a'

Sale of products The reco nition of re!enue for domestic and e1port pulp sales is based on the follo$in principlesF

+i-

3ulp ) domestic mar*et ) sales are mainly made on credit, payable in a!era e in 12 days. (e!enue is reco ni/ed $hen the customer recei!es the product, $hether on the carrier0s premises or on its o$n premises, at $hich point ris* and re$ards on o$nership are transferred. 3ulp ) e1port mar*et ) e1port orders are normally supplied from third party $arehouses located near strate ic mar*ets, sales are mainly made on credit, payable in a!era e in 28 days. (e!enue is reco ni/ed $hen the ris* of o$nership of the pulp has been transferred to the client in accordance $ith the specific terms of the transaction. @1port sale a reements enerally establish transfer of ris* based on BIncotermsB +2&1&- and the moment of transfer of ris* as per the correspondin BIncotermB is the moment on $hich re!enue is reco ni/ed. %2 of 11<

+ii-

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

3rior to the sale of C.>3AC@?, PS( and 3iracicaba, as described in >ote 1+d-, Fibria operated in the paper se ment and reco ni/ed sales from this se ment as follo$sF +iii3aper ) domestic mar*et ) sales $ere made at si ht or on credit +usually payable in %&, :& or ,& days-. (e!enue reco nition $as consistent to the criteria that the Company applies for the pulp sale in the domestic mar*et. 3aper ) e1port mar*et ) e1port orders $ere normally supplied from o$n or third party $arehouses located near strate ic mar*ets. (e!enue $as reco ni/ed $hen the products $ere deli!ered to the carrier and ris* and benefits transferred to the customer. Financial income Financial income is reco ni/ed on an accrual basis, usin the effecti!e interest method, and to the e1tent that reali/ation is probable. 2.2: Di%idend distribution Di!idend distribution to the Company0s shareholders is reco ni/ed as a liability in Fibria0s financial statements at year)end based on the Company"s by)la$s. Any amount that e1ceeds the minimum mandatory di!idend is only pro!ided on the date it is appro!ed by the shareholders at the eneral meetin . 2.29 !on.current assets "eld for sale and discontinued operations The Company records assets held for sale as non)current assets $hen the asset +or disposal roup of assets- is a!ailable for immediate sale in its present condition and sub6ect only to terms that are usual and customary for sales of such assets and the sale is hi hly probable. For the sale to be hi hly probable, the appropriate le!el of mana ement must be committed to a plan to sell the asset +or disposal roup of assets-, and an acti!e pro ram to locate a buyer and a complete plan must ha!e been initiated. Further, the asset +or disposal roup of assets- must be acti!ely mar*eted for sale at a price that is reasonable in relation to its current fair !alue. In addition, the sale is e1pected to #ualify for reco nition as a completed sale $ithin one year from the date of classification, unless completion beyond one year is caused by e!ents outside the Company0s control. Such circumstances include $hen at the date the Company commits to a plan to sell it has a reasonable e1pectation that other parties that are not the buyer +such as re ulators or le al re#uirements- impose conditions that $ill e1tend the period to complete the sale beyond one year and bothF +a- actions re#uired to meets those conditions cannot be in until a firm purchase commitment is obtained, and +b- a firm purchase commitment is hi hly probable $ithin one year. The Company measures the assets held for sale +or roup of assets- at the lo$er of its carryin amount and fair !alue less costs to sell. If the carryin amount e1ceeds the fair !alue less costs to sell an impairment loss is reco ni/ed in the statement of profit or loss. Any subse#uent re!ersal of impairment is reco ni/ed only to the e1tent of the loss pre!iously reco ni/ed. The depreciation of an asset +or roup of assets- stops $hen it is classifies as held for sale. The assets and liabilities of a disposal roup classified as held for sale are presented separately and are not offset and presented as a sin le amount. %% of 11<

+i!-

&b'

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

The effects on the Statement of profit and loss and the cash flo$ statement from discontinued operations are presented separately from the continuin operations, includin the related income ta1es and any impairment e1pense, if applicable. The operatin , in!estin and financin cash flo$s related to the discontinued operations are presented in >ote %:. 2.2< Adoption of ne# standards, amendments and interpretations issued b* IAS, and C)C and ad4ustments to comparati%e financial information A number of ne$ standards and amendments to standards and interpretations $ere issued by the IASB and C3C +MComitJ de 3ronunciamentos ContYbeisN-, and are effecti!e for annual periods be innin as from 'anuary 1, 2&1%, as follo$F IAS 19C3C 2:+(1- ) 3resentation of financial statements IAS 1, +(-9C3C %%+(1- ) @mployee benefits IAS 2=+(-9C3C 1=+(2- ) In!estments in associates IF(S <9C3C 8&+(1- ) Financial instrumentsF Disclosures IF(S 1&9C3C %:+(%- ) Consolidated financial statements IF(S 119C3C 1,+(2- ) 'oint Arran ements IF(S 129C3C 8; ) Disclosure of interest in other entities IF(S 1%9C3C 8: ) Fair !alue measurement

As a result of the ne$ standards, amendments and interpretations issued by the IASB and the C3C mentioned abo!e, are applicable to usF IAS 19C3C 2:+(1- ) 3resentation of financial statements, $ith the main chan es reflected in the Company"s statement of other comprehensi!e income5 IF(S <9C3C 8&+(1- ) Financial instrumentsF Disclosures, $ithout rele!ant effect5 IF(S 1&9C3C %:+(%- ) Consolidated financial statements, $ithout rele!ant effect5 IF(S 119C3C 1,+(2- ) 'oint Arran ements, $ith the effect described in >ote 2.2.1 +b-5 IF(S 129C3C 8; ) Disclosure of interest in other entities, $ith impacts of disclosure in these financial statements5 IF(S 1%9C3C 8: ) Fair !alue measurement, $ith impacts of disclosure in these financial statements5 and, IAS 1,+(-9C3C %%+(1- ) @mployee benefits, $ith the effect described belo$F

IAS 1@&R'1C)C 33&R1' A 2mplo*ee benefits 4ntil December %1, 2&12 the Company boo*ed actuarial ains and losses usin the McorridorN approach, and such actuarial ains and losses $ere reco ni/ed in the income statement if they e1ceeded the McorridorN carryin amount, and amorti/ed o!er the remainin estimated a!era e life of the indi!iduals eli ible to the benefit, considerin that the actuarial ains and losses do not e1ceed the McorridorN amount. As a result, actuarial ains and losses $ere not immediately reco ni/ed in profit or loss, and the the carryin amount reco ni/ed as liability $as different from the estimated present !alue of the obli ations calculated based on the amount of actuarial ains and losses not yet reco ni/ed. .n December %1, 2&1%, the Company adopted the ne$ pro!isions of IAS 1,. The main impact of the adoption of the amendments on the financial statements for the year ended December %1, 2&1%, $ith retrospecti!e effect on the financial statements for the year ended December %1, 2&12, and the respecti!e %8 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

openin balances as at 'anuary 1, 2&12, is to immediately reco ni/e all actuarial ains and losses directly in M.ther comprehensi!e incomeN, $ith the e1tinction of the Mcorridor methodN for the reco nition of actuarial ains and losses resultin from re)measurement. The reconciliation of the ad6usted actuarial obli ations as at December %1, 2&12 and the openin balance as at 'anuary 1, 2&12, impacted by the adoption of the ne$ pro!isions, are as follo$F December 31, 2012 3resent !alue of actuarial obli ations from pre!ious accountin practices Impact of the adoption of IAS 1,+(-9C3C %%+(13resent !alue of actuarial obli ations after adoption +L6anuar* 1st, 2012

:&,%:2 %%,;<2 ,%,,%8

;;,<1; 1&,;=< ::,%&2

+L- The actuarial obli ation is recorded as non)current M.ther payablesN, at December %1, 2&1% and December %1, 2&12 and 'anuary 1st, 2&12.

As a result of the ad6ustments described abo!e, the balances of MDeferred ta1esN classified as non)current assets, M.ther payablesN classified as non)current liabilities and M.ther reser!esN in shareholders" e#uity as at December %1, 2&12 and 'anuary 1st, 2&12, in the comparati!e period $ere ad6usted as follo$F
December 31, 2012 $riginal balance >on)current assets Deferred assets >on)current liabilities .ther payables Shareholders" e#uity .ther reser!es Ad4ustment Restated balance $riginal balance 6anuar* 1st, 2012 Ad4ustment Restated balance

=:=,1,2 1:&,,8, 1,:1=,=28

11,818 %%,;<2 +22,1;=-

=<,,:&: 1,8,;21 1,;,:,:::

,,1,<:= 1;2,;&, 1,:1=,=28

%,:&& 1&,;=< +:,,=<-

,,;,%:= 1:%,&,: 1,:11,=%<

2.2> &a'

!e# standards, amendments and interpretations not *et adopted !e# and amended standards adopted There are no IF(Ss or IF(IC interpretations for $hich the initial adoption $as effecti!e on fiscal years be innin on or after 'anuary 1, 2&12 that had a material impact on the Company.

&b'

!e# standards and interpretations not *et adopted A number of ne$ standards and amendments to standards and interpretations are effecti!e for annual periods be innin after 'anuary 1, 2&1%, and ha!e not been yet adopted in these consolidated financial %; of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

statements. >one of these are e1pected to ha!e a si nificant impact on the consolidated financial statements of the Company, e1cept for the follo$in F . IF(S ,, ZFinancial instruments", addresses the classification, measurement and reco nition of financial assets and financial liabilities. IF(S , $as issued in >o!ember 2&&, and .ctober 2&1&. It replaces the parts of IAS %, that relate to the classification and measurement of financial instruments. IF(S , re#uires financial assets to be classified into t$o measurement cate oriesF those measured as at fair !alue and those measured at amorti/ed cost. The determination is made at initial reco nition. The classification depends on the entity"s business model for mana in its financial instruments and the contractual cash flo$ characteristics of the instrument. For financial liabilities, the standard retains most of the IAS %, re#uirements. The main chan e is that, in cases $here the fair !alue option is ta*en for financial liabilities, the part of a fair !alue chan e due to an entity"s o$n credit ris* is recorded in other comprehensi!e income rather than the income statement, unless this creates an accountin mismatch. The Company is currently assessin of the impacts of IF(S ,"s adoption. The Company $ill also consider the impact of the remainin phases of IF(S , $hen completed by the Board. IF(IC 21, Z?e!ies", pro!ides uidance on $hen to reco ni/e a liability for a le!y imposed by a o!ernment, both for le!ies that are accounted for in accordance $ith IAS %< 3ro!isions, Contin ent ?iabilities and Contin ent Assets and those $here the timin and amount of the le!y is certain. It does not include income ta1es. Since the Company is not currently sub6ect to si nificant le!ies it e1pects that the adoption of this ne$ standard $ill not be material.

There are no other IF(Ss or IF(IC interpretations that are not yet effecti!e that the Company e1pect to ha!e a material impact on the Company"s financial position and results of operations. 3 Critical accounting estimates and assumptions @stimates and assumptions are continually e!aluated and are based on historical e1perience and other factors, includin e1pectations of future e!ents that are belie!ed to be reasonable under the circumstances. The accountin estimates $ill seldom e#ual the related actual results. The estimates and assumptions that ha!e a si nificant ris* of resultin in a material ad6ustment to the carryin amount of assets and liabilities $ithin the ne1t fiscal year are described belo$. &a' Income ta and social contribution The Company reco ni/es deferred ta1 assets and liabilities based on the temporary differences bet$een the financial statement carryin amounts and the ta1 basis of assets and liabilities. If $e or one of our subsidiaries operate at a loss or are unable to enerate sufficient future ta1able income, or if there is a material chan e in the actual effecti!e ta1 rates or time period $ithin $hich the underlyin temporary differences become ta1able or deductible, our deferred ta1 asset could be reduced and, then the effecti!e ta1 rate $ould increase. The Company has a history of recurrin ta1able income, $hich is usually compensated $ith ta1 loss deferred ta1 assets. The Company"s mana ement belie!es, based on pro6ections of income appro!ed by the appropriate le!el of Corporate Ko!ernance that, the reali/ation of the deferred ta1 assets its probable %: of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

for the ne1t years. As further disclosed in >ote 1;+e-, in >o!ember 2&11 the Company decided to transfer certain operations bet$een subsidiaries outside Bra/il $hich resulted in uncertainties $ith respect to the reali/ation of deferred ta1 assets recorded by the subsidiary affected by the restructurin and, therefore, its reali/ation no lon er can be considered probable. 4ltimate reali/ation of deferred ta1 assets by such subsidiary depends on the le!el of ta1able income that it $ill enerate. As a result, the Company reco ni/ed a loss to reduce the deferred ta1 assets for (H 2<=,8=:. &b' 2mplo*ee benefits The current !alue of the obli ations under the healthcare plan depends on a number of factors that are determined based on actuarial calculations usin !arious assumptions. The discount rate is one of the assumptions used in determinin the net cost +re!enue- of the actuarial obli ations balances. 2e consider appropriate the use of the discount rate that is based on the return offered by the Ko!ernment, $hich are denominated in the currency in $hich the benefits $ill be paid and that ha!e terms to maturity similar to the terms of the obli ations of the healthcare plan. Further information, includin a sensibility analyses, are disclosed in >ote 2=. The liability for stoc*)based compensation is recorded at its estimated fair !alue $hich is calculated by the Company usin the Binomial Tree model)Trinomial. Any chan es in the assumptions used for calculatin the liability $ill affect the amount recorded at the balance sheet date. &c' Fair %alue of deri%ati%es and ot"er financial instruments The fair !alue of financial instruments that are not traded in an acti!e mar*et is determined by usin !aluation techni#ues. Fibria uses 6ud ment to select a !ariety of methods and ma*e assumptions that are mainly based on mar*et conditions e1istin at the end of each reportin period. The Company also uses its 6ud ment to define scenarios and fi ures presented in the sensiti!ity analysis included in >ote ;. Any chan es to the assumptions used for calculations in!ol!in the fair !alue of financial instruments could si nificantly affect the financial position of the Company. See >ote ; for the sensibility analyses of the deri!ati!e financial instruments and other financial instruments as at December %1, 2&1%. &d' ,iological assets The calculation of the fair !alue of biolo ical assets ta*es into consideration !arious assumptions $ith a hi h de ree of 6ud ment, as the sales price, cubic !olume of $ood and9or the annual a!era e har!est for each re ion. Any chan es in these assumptions used, $ould ha!e an impact on the discounted cash flo$ result, resultin in an appreciation or de!aluation of these assets. The main premises used by Aana ement to calculate the fair !alue of the biolo ical assets and the correlation bet$een chan es in such premises and the fair !alue of the biolo ical assets, are described as follo$F

%< of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

)remises used Actual planted area +hectareA!era e annual ro$th +IAA- ) m%9hectare >et a!era e sale price ) (H9m% (emuneration of o$n contributory assets ) G Discount rate ) G

Impact in t"e fair %alue of t"e biological assets Increase of the premise, increase the fair !alue Increase of the premise, increase the fair !alue Increase of the premise, increase the fair !alue Increase of the premise, decrease the fair !alue Increase of the premise, decrease the fair !alue

&e'

Re%enue recognition and allo#ance for doubtful accounts The Company reco ni/es re!enue and associated costs of sales at the time our products are deli!ered to our customers or $hen title and associated ris*s pass to our customers. (e!enue is recorded net of ta1 deductions, discounts and sales returns. The allo$ance for doubtful accounts is recorded in an amount $e consider sufficient to co!er any probable losses on reali/ation of our accounts recei!able from our customers and is included in sellin e1penses. .ur accountin policy for establishin the allo$ance for doubtful accounts reser!e re#uires that all in!oices be indi!idually re!ie$ed by the le al, collection and credit departments, in order to determine the amount of the probable e1pected losses.

&f'

Re%ie# of t"e useful li%es and reco%erabilit* of long.li%ed assets The Company re!ie$s its lon )li!ed assets to be held and used in its acti!ities, for possible impairment $hene!er e!ents or chan es in circumstances indicate that the carryin !alue of an asset or roup of assets may not be reco!erable on the basis of future cash flo$s. The Company reduces the net boo* !alue if the carryin amount e1ceeds the reco!erable amount. Durin the year ended December %1, 2&1% the Company performed impairment tests and sensibility analyses o!er the main assumptions as detailed in >ote %<.

&g'

Contingent assets, contingent liabilities and legal obligations The Company is currently in!ol!ed in certain labor, ci!il and ta1 proceedin s. The pro!ision for contin encies are recorded based on mana ement0s e!aluation and on the ad!ice of internal and e1ternal le al counsel, and are sub6ected to a hi h le!el of 6ud ment.

&"'

(ood#ill impairment The Company performs at lease annually or more fre#uently, impairment tests $hen e!ents or chan es in circumstances may indicate that the carryin amount of cash) eneratin units to $hich ood$ill has been allocated mi ht not be reco!erable. See >ote 2.1:. The reco!erable amount of 4KCs is determined based on calculations of the !alue in use, $hich in!ol!es si nificant estimates. See >ote %< for further details and sensibility analyses o!er main premises used on the impairment testin .

%= of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

RisB management The Company0s ris* mana ement is carried out by the Ko!ernance, (is*s and Compliance department $hich performs ris* mana ement acti!ities, Corporati!e Ko!ernance, internal controls, internal audit, compliance and ombudsman areas. The ob6ecti!e is to promote syner y bet$een the areas, addin !alue to the business and stren thenin the Company"s o!ernance. This area reports directly to the C@. and its acti!ities are monitored by the Statutory Audit Committee, an ad!isory body of the Board of Directors. In 2&1&, an @nterprise (is* Aana ement +@(A- pro ram $as implemented to perform analysis, treatment and monitorin of ris*s. For those ris*s defined as a priority +those $ith hi h le!el of potential impacts and hi h probability of occurrence- different $or* streams ha!e been implemented by the Company, as definition of action plans and Pey (is* Indicators +P(Is- ha!e been de!eloped. The Company0s acti!ities e1pose it to a !ariety of ris*s. As such, ris* mana ement classifies the ris*s inherent to its business in the follo$in cate oriesF

+a-

Financial ris*s ) corresponds to inade#uate cash mana ement, use of resource in ne$ operations, un*no$n, $ith reat comple1ity and9or hi h ris*. Details re ardin the policies of mar*et ris* mana ement, credit ris* and li#uidity ris* are presented in the items 8.2.1+a-, 8.2.1+b- and 8.2.1+c-, respecti!ely. Compliance ris* ) corresponds to le al or re ulatory penalties, financial losses or reputational dama e that the Company may face due to a re ulatory noncompliance. In order to mana e this ris*, the Company continually monitors compliance $ith la$s, standards and re ulations, implements contin ency plans and se re ation of duties in order to a!oid conflicts of interest and to facilitate the assessment of ris* and the related internal controls of the Company. These assessments include en!ironmental, labor and ta1 ris*s assessments. The monitorin process includes communication and reportin of issues to senior mana ement. .perational ris* ) results from the lac* of consistency or ade#uacy of information systems, processin and operational controls, asset mana ement failures, or cash flo$ mana ement, or from frauds that affect the acti!ities of the Company. Fibria has implemented a matri1 system in $hich $e perform materiality analysis accompanyin the Company[s strate y in order to desi n controls to monitor the most si nificant accounts and processes of Fibria. The Company performs #uarterly the !alidation of the ris* matri1 and controls throu h MK(C 3rocess ControlN, a tool that ma*e easier the process of assurance re ardin the effecti!eness of the control, the reportin and correction of de!iations in the process, considered this a unified strate y that uides mana ers, standardi/es and inte rates K(C processes at e!ery le!el of the or ani/ation, $ith the final product a uni#ue repository of the ris*s, a sin le ta1onomy and the more commitment of top mana ement in the letter of controls. The acti!ity made by the Controls and Compliance Aana ement, $hich $or*s to ether $ith business mana ers to see* compliance of internal controls, carried out by monitorin the processes, miti atin factor bein the occurrence of operational ris* for the ade#uacy controls the acti!ity. Strate ic ris* ) results from internal and e1ternal e!ents that affect the reputation and sustainability of the Company, such as the ris*s related to the lac* of capability or ability by the Company in response to chan es that can impact the achie!ement of the strate ic sub6ects. The Company monitors these ris* e!ents to identify and anticipate potential ris* e!ents that $e are e1posure.

+b-

+c-

+d-

%, of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

:.1 &a'

2n%ironmental risBs RisBs associated #it" climate c"anges .ur acti!ities e1pose us to climate chan es, $hich can affect the e#uilibrium of the ecosystems, the producti!ity of the forest and the a!ailability of the necessary !olume of $ater and ener y for the factories. Fibria adopts a cautionary approach in mana in and operatin its forest and industrial acti!ities throu h the adoption of controls and monitorin tools, such as a ronomic studies, enetic impro!ement in the production of eucalyptus that contemplates the adaptation of species in different climatic conditions, monitorin of $ater consumption in forested areas, amon others.

&b' +i-

2n%ironmental risBs Aana ement of $ater resources ) Fibria constantly monitors the situation in the $atersheds $here it operates $ith respect to $ater #uantity and #uality and mi ht be the effect of the Company0s forest mana ement. 4se of $ater by the factories is o!erned by the en!ironmental le islation of each location and the licensin re#uirements of each plant. @ach of our facilities operates under proper and !alid licenses. Forest protection ) protection of the forests a ainst pests, disease, $eeds and fires is based on a strate y in!ol!in continuous cycles of pre!ention, monitorin and control. The Company has on oin efforts to select and plant increasin ly resistant plant strains, and is also concerned $ith preser!in an ecolo ical balance and ac#uirin *no$)ho$ to impro!e its forest mana ement. Biodi!ersity ) the Company0s forestry acti!ities are licensed by the rele!ant re ulatory bodies and are socio en!ironmental plannin acti!ities are performed. (ele!ant areas of nati!e forest species are interspersed $ith eucalyptus plantations. Fibria tries to maintain its protected areas in the le al form of ?e al (eser!es, 3ermanent 3reser!ation Areas +A33s- and 3ri!ate >atural Oerita e (eser!es +(33>sthrou h the protection, restoration, mana ement and inte ration of those areas $ith its forest acti!ities. The Company also see*s to minimi/e e1ternal factors and de radation factors that may affect these areas. 2aste ) Fibria is underta*in efforts to recycle pulp production $aste by transformin them in products that can be used in the forestry area. This practice enerates both en!ironmental and economic benefits, $ith reduction in disposal of $aste in landfills and replacin supplies $ith recycled $aste in the sil!iculture operations. Impacts on communities Fibria is committed to the communities $ith different economic, social and cultural bac* rounds, $hich are affected positi!ely or ne ati!ely $ith !aryin de rees by the culti!ation of eucalyptus. In order to maintain a positi!e relationship $ith all communities, the Company has de!eloped a plan to monitor these nei hborin populations and classified them based on the intensity of the relationship $ith the Company. The relationship model has been implemented in all the forestry operations $ith respect to the sil!iculture and har!est acti!ities.

+ii-

+iii-

+i!-

&c'

8& of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&d'

Contracting #it" suppliers In order to miti ate the ris* of ha!in our suppliers hirin child or forced labor, Fibria re#uires its suppliers to pro!ide a formal confirmation $ith respect to this matter. T$o other mandatory re#uirements to en a e our suppliers are compliance $ith the en!ironmental policies of Fibria and $ith the criteria for safe transportation +Safe (oad 3ro ram-. All contracts $ith suppliers and other business partners incorporate our Code of Conduct or refer to it. The Code reinforces the prohibition of discriminatory practices or !iolation of e1istin le islation. The process to appro!e suppliers is performed e!ery t$o years.

:.2 :.2.1

Financial risBs Factors of financial risBs Fibria0s acti!ities e1pose it to a number of financial ris*sF mar*et ris* +includin currency ris*, fair !alue interest rate ris*, cash flo$ interest rate ris*, price ris* and commodity price ris*-, credit ris* and li#uidity ris*. The ma6ority of Fibria0s sales are denominated in 4S dollars, $hile costs are predominantly incurred in (eais. Accordin ly, there is a currency mismatch bet$een Fibria0s costs and re!enues. Fibria0s o!erall ris* mana ement pro ram focuses on minimi/in , miti atin or transferrin e1posures to mar*et ris*s. In this conte1t, deri!ati!es are used e1clusi!ely for economic hed e purposes as follo$sF +i- cash flo$ hed e a ainst currency mismatchin 5 +ii- cash flo$ hed e of debt and interest payments a ainst interest and e1chan e rate !olatility5 and +iii- hed e a ainst !olatility in the price of pulp or other ris* factors. The e1ecution of the operations to miti ate mar*et ris*s is carried out by a central Treasury department follo$in policies appro!ed by the Board of Directors. The control of ris*s and monitorin of compliance $ith the policies is performed by the Keneral Ko!ernance, (is*s and Compliance area, $hich reports directly to the C@. and to the Finance Committee and has independence to report non)compliance $ith the policies, to measure and to assess mar*et ris*s. The Keneral Ko!ernance, (is* and Compliance area monitors all mar*et ris* e1posures and ensures compliance $ith our policies. The Treasury department identifies, e!aluates and hed es financial ris*s follo$in the policies established. The Board of Directors re!ie$s on an annual basis the policies and principles for the o!erall ris* mana ement, definition of the areas in!ol!ed, use of deri!ati!e financial instruments and non)deri!ati!e financial instruments, and in!estment of e1cess li#uidity. )olicies for t"e use of deri%ati%e financial instruments .n December 1%, 2&12, the Company0s Board of Directors appro!ed the annual re!ision of the Aar*et (is* Aana ement 3olicy, !alid from 'anuary 1, 2&1%. The use of deri!ati!e financial instruments should follo$ such policy. The use of deri!ati!e financial instruments follo$ is in the !ie$ of mana ement a conser!ati!e policy and e!ery deri!ati!e contracted should be matched to an underlyin ris* enerated by a hed ed item $hich in turn results from operational transactions and e1pose the Company to ris*s related to chan es in the price of commodities or ris*s arisin from debt. Accordin ly, deri!ati!e transactions are only permitted if related to an e1istin e1posure +hed e- and le!era ed financial instruments are not allo$ed. 81 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&a'

5arBet risB It is related to chan es in prices or rates includin interest rates, e1chan e rates and commodities prices. These chan es may affect the e1pected return of an in!estment, of a financial in!estment, of re!enue of probable sales, of the cash flo$ and fair !alue of principal and interest on debts. Indicators $ere de!eloped to measure those ris*s. An internal assessment tool $as de!eloped to measure those ris*s. .ne internal tool $as de!eloped to assess the impacts of stressed scenarios and to perform sensiti!ity analysis and analysis of aps. The Ko!ernance, (is* and Compliance area de!eloped a compliance tool to monitor compliance $ith the appro!ed policies.

&i'

Foreign e c"ange risB The Company operates internationally and is e1posed to forei n e1chan e ris* arisin from !arious currency e1posures, mainly $ith respect to the 4S dollar. The Company0s financial policy establishes that the purpose of its operations $ith deri!ati!es is to reduce costs, miti ate cash flo$s !olatility, hed e forei n e1chan e e1posure and a!oid currency mismatches. The follo$in table presents the carryin amount of the assets and liabilities denominated in 4S dollarsF
2013 Assets in forei n currency Cash and cash e#ui!alents +>ote ,Aar*etable securities +>ote 1&Trade accounts recei!able +>ote 122012

1,28<,8&8 ,=,1;% %<;,<11 1,<21,2:=

=,1,&8: 8%2,<&: <18,182 2,&%<,=,8

?iabilities in forei n currency ?oans and financin +>ote 2%Trade payables Deri!ati!e instruments +>ote 11-

<,2=1,1<< ,=,,,: 8:8,%2: <,=88,8,,

=,;82,=;1 1&;,1,8 2<%,&<, =,,21,128 +:,==%,2%&-

?iability e1posure

+:,12%,2%1-

The Company calculates its net e1posure to each ris* factor. 2hen the ris* factor is an e1posure to 4S dollar or euro, ma1imum hed e limits are determined for e1posure of up to 1= months. Oed in the e1posure of transactions for periods bet$een 12 and 1= months re#uires a recommendation by the Finance Committee. The Company0s e1posure to forei n currency enerates mar*et ris*s associated $ith chan es in the e1chan e rates. ?iabilities in forei n currency include loans obtained, mainly, in 4S dollars. The ma6ority of the Company0s sales abroad are denominated in 4S dollars, $hile the sales of pulp in Bra/il are in (eais. Accordin ly, the Company0s liabilities act as a natural hed e for currency e1posure in relation to e1port re!enue, miti atin the mismatch bet$een assets and liabilities. 82 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&ii'

Cas" flo# and fair %alue interest rate risB As Fibria has no si nificant interest)bearin assets, Fibria0s net income and operatin cash flo$s are substantially independent of chan es in mar*et interest rates on such assets. Fibria0s interest rate ris* arises from its debt. ?oans issued at !ariable rates e1pose Fibria to cash flo$ interest rate ris*. ?oans issued at fi1ed rates e1pose Fibria to fair !alue interest rate ris*. Fibria0s policy on the use of deri!ati!es establishes that, $ith respect to interest rate ris*, transactions $ith terms and amounts matchin the correspondin hed e debt may be entered into. The Company must maintain at least ;&G of its debt sub6ect to fi1ed interest rates. Fibria mana es its cash flo$ interest rate ris* by usin s$aps follo$in the terms and conditions imposed by the appro!ed policies.

&iii'

Commodit* price risB This ris* is related to the !olatility in the price of pulp, $hich is considered a commodity. 3rices fluctuate dependin on demand, producti!e capacity, in!entories, commercial strate ies adopted by the ma6or forestry companies, paper producers, and a!ailability of substitutes for these products in the mar*et. This ris* is mana ed throu h different strate ies. The Company has a speciali/ed team, $hich continuously monitors the price of pulp and analy/es future trends, ad6ustin Fibria0s estimates, in order to assist in the process of ta*in pre!enti!e actions to best deal $ith the !arious scenarios. There are no li#uidity in the mar*et to miti ate a substanti!e portion of the ris* to $hich Fibria0s operations are e1posed. 3ulp price deri!ati!es a!ailable in the mar*et are dri!en by their lo$ li#uidity, lo$ !olume and as a result prices may be sub6ect to si nificant distortion. Currently, the Company has no deri!ati!e to hed e a ainst the fluctuation of the pulp price.

&b'

Credit risB Credit ris* is the ris* of one counterparty failin to dischar e its obli ation. For e!ery type of credit e1posure and type of a reement a specific modelin is de!eloped in order to e!aluate the ris*s, identifyin the e1posure and performin sensiti!ity analysis of credit limits. A monthly report is prepared by the Ko!ernance, (is* and Compliance area #uantifyin credit ris* e1posure arisin from all the relationships of Fibria. Credit ris* is mana ed on a consolidated basis. Credit ris* arises from cash e#ui!alents +includin ban* deposits-, deri!ati!e financial instruments, instruments recorded under mar*etable securities +Bra/ilian federal o!ernment securities, Ban* Deposit Certificates +CDBs-, Fi1ed Income Bo1 +CDB Bo1-, re!erse repurchase a reements-, letters of credit, insurance companies, customers +considerin the payment terms a reed-, suppliers +$ith respect to ad!ances made for ne$ pro6ects- and others.

8% of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&i'

,anBs and financial institutions \uantitati!e measures of credit ris* $ere de!eloped for e1posures $ith ban*s and financial institutions +in!estments, current accounts and deri!ati!e financial instruments-. The e1pected !alue of the e1posure B@1pected Credit @1posure +@C@-B and the $orst e1pected e1posure B2orst Credit @1posure +2C@-B of all e1posures $ith counterparties are measured. 2e disclose the credit ratin s of these entities in >ote =. Fibria has a policy of contractin $ith pri!ate entities $hich ha!e a minimum credit ratin issued by one of the follo$in ratin a enciesF Fitch, Aoody"s or Standard C 3oor"s. The minimum ratin re#uired for the counterparties is BAA)B +or BAa%B at the local le!el- or BAB +or BaA2Bat the lobal le!el-. The e1posure to a sin le pri!ate counterparty cannot e1ceed none of the follo$in limitsF 2&G of Fibria0s total cash and cash e#ui!alents plus mar*etable securities, 1&G of the shareholders0 e#uity of the counterparty +based on the most recent information published by the counterparty-, or 1;G of the Company0s shareholders0 e#uity +based on the most recent information a!ailable-.

&ii'

Clients and ad%ance to suppliers In the case of credit ris* arisin from customer credit e1posure, Fibria assesses, throu h the Credit Committee, the credit #uality of the customer, ta*in into account mainly past e1perience and defines indi!idual credit limits, $hich are continuously monitored. Fibria ma6or customers are lar e solid companies and, for a lar e part, $ith more than 2& years of relationship $ith the Company, reducin the credit ris*. Credit analyses are performed on a re ular basis and $hen considered necessary, and letters of credit or credit insurance co!era e is obtained to protect the Company. The ma6ority of e1port sales to @urope and Asia are co!ered by letters of credit or credit insurance $ith the Compagnie Franaise d' Assurance pour le Commerce Ext rieur +C.FAC@-! The allo$ance for doubtful accounts is recorded at an amount sufficient to co!er e1pected probable losses on the collection of trade accounts recei!able and is recorded in BSellin e1pensesB +>ote 12-.

&c'

+i;uidit* risB 2ith respect to li#uidity ris*, the Company0s policy is to maintain balances of cash and financial in!estments of at least an amount e#ui!alent to the operational cash needs outflo$ for the follo$in t$el!e months plus debt ser!ice for a period of also t$el!e months. @1cess of cash is in!ested in instruments that enerally ha!e current a!ailability and the appro!ed policies allo$ for a minor portion to be in!ested in instruments $ith maturity not e1ceedin %:; days. All deri!ati!es instruments are o!er)the)counter deri!ati!es and do not re#uire to post mar in deposits as collateral. The table belo$ presents Fibria0s financial liabilities into rele!ant maturity roupin s based on the remainin period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flo$s and as such they differ from the amounts presented in the consolidated balance sheet.

88 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

+ess t"an one *ear At December %1, 2&1% ?oans and financin Deri!ati!e instruments Trade and other payables

,et#een one and t#o *ears

,et#een t#o and fi%e *ears

$%er fi%e *ears

%,2;,,<2& ,,,2;, <1&,1,= 8,&:,,1<<

2,%<;,8<% 1%:,&<2 %8,=<% 2,;8:,81=

8,&81,8<: 8<,,=12 28,:1< 8,;8;,,&;

1,,22,8;, 1<%,&88 8%,&=& 2,1%=,;=%

At December %1, 2&12 ?oans and financin Deri!ati!e instruments Trade and other payables

1,<%,,1%, 88,=;% ;:8,1<2 2,%8=,1:8

2,==1,12; ;&,<%, ;8,2%8 2,,=:,&,=

8,1:%,;:: 28:,<1& 18,;1: 8,828,<,2

;,=<=,=<& 11<,<=; %1,8;2 :,&2=,1&<

At 'anuary 1, 2&12 ?oans and financin Deri!ati!e instruments Trade and other payables

1,:%:,:%; 1%8,==: ;1:,&:1 2,2=<,;=2

2,<2%,8&% :,%21 8<,1,< 2,<<:,,21

%,,1,,:&; 1&8,,1% 18,;1: 8,&%,,&%8

<,,1:,,2; 1:,&,, %;,&=1 <,,:=,1&;

:.2.2 Capital risB management Aana ement monitors indebtedness on the basis of a consolidated indebtedness ratio. This ratio is calculated as net debt di!ided by net income before interest, income ta1es includin social contribution, depreciation and amorti/ation and other items as further described belo$ +BAd6usted @BTIDAB-. >et debt represents total loans, less cash and cash e#ui!alents and mar*etable securities and the fair !alue of deri!ati!e financial instruments. The Indebtedness and ?i#uidity Aana ement 3olicy set uidelines $ith the ultimate ob6ecti!e of re ainin and subse#uently maintainin an in!estment rade ratin issued by SC3, Aoody0s and Fitch. Achie!in better ratin in!estment rade $ould enable Fibria to di!ersify its financin sources, allo$ timely access to the capital mar*ets, lo$er financin costs, and ultimately create !alue to sta*eholders. This policy reinforces Fibria0s corporate o!ernance and is part of its internal controls. This policy supplements the BAar*et (is* Aana ement 3olicyB referred to abo!e. The Ko!ernance, (is* and Compliance area has the discretion to monitor and report, independently from the Treasury area, about the compliance $ith the re#uirements of the policy. Fibria0s policy predicts the relation bet$een net debt "ersus ad6usted @BITDA ratio $ithin the ran e of 2.&1 and 2.;1. In spite of such stated ob6ecti!e, Fibria may reach a ma1imum le!era e ratio up to %.;1 dependin on the point of the e1pansion cycle. The mana ement and strate ic decisions of the Company should not imply that this ratio e1ceeds %.;1. The net debt to ad6usted @BITDA ratio shall be computed on the last day of each #uarter as the di!ision of net debt at the measurement date by accumulated ad6usted @BITDA durin the precedin four #uarters. In the e!ent the ratios e1ceed the limits 8; of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

established by the policy due to e1ternal factors, all efforts shall be ta*en to brin them bac* to compliance. The Company should maintain a minimum cash balance, as defined belo$, in order to minimi/e the ris* that cash flo$ mismatches affect the ability of the Company to meet its commitments. The minimum cash balance is defined as the sum ofF +i- the minimum operatin cash used durin the cash con!ersion cycle of the Company5 plus +ii- the cash needs to meet financial debt obli ation +principal and interestfor the ne1t 12 months. In addition, the Company may see* additional li#uidity, throu h re!ol!in credit facilities, to meet the minimum cash balance re#uired by ratin a encies methodolo ies. Fibria0s li#uidity is mainly monitored throu h 12 months pro6ected cash flo$s. Cash flo$ pro6ections comprise stress tests considerin e1o enous mar*et ris* factors such as chan es in forei n e1chan e rates, interest rates and pulp prices, as $ell as endo enous factors. Aana ement of debt and li#uidity should also consider the contractual financial co!enants, contemplatin a safety mar in in order to a!oid them bein e1ceeded. The Company prioriti/es fundin in the same currency of its cash eneration, thus see*in a natural currency hed e for its cash flo$. Instruments shall be compatible $ith the Company0s desired debt profile. All sources of funds shall be appro!ed by the bodies $hich are re#uired by the current Byla$s, and also appro!ed by those indi!iduals and bodies established in the internal policies and procedures. Treasury is responsible for de!elopin contin ency plans, $hich should specify all necessary actions to address potential non)compliance. The plan shall be submitted to the Finance Committee and monitored by all parties in!ol!ed in this process. The indebtedness ratios at December %1, 2&1%, 2&12 and 2&11 $ere as follo$s measured in (eaisF 5illions of Reais 2012 2011 1&,<:= ,88 +2<%2,%;2 <,<8; 2,2;% %.8 %.% 11,%28 %=2 +2181,:<= ,,8<= 1,,=1 8.= 8.2

2013 ?oans and financin +>ote 2%3ayable ) Aracru/ ac#uisition ?ess ) cash and cash e#ui!alents +>ote ,?ess +plus- ) deri!ati!e instruments +>ote 11?ess ) mar*etable securities +>ote 1&>et debt Ad6usted @BITDA Indebtedness ratio in (eais Indebtedness ratio in Dollar ,,<<% 1,2<2 +8:81,11: <,=8, 2,<,: 2.= 2.:

The indebtedness ratio decreased from 8.= in 2&11 to %.8 at December 2&12, mainly due to increase in cash re ardin of the sale of assets and capital increase and reduction on le!el of ross indebtedness in the period. 8: of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

The indebtedness ratio decreased from %.8 in 2&12 to 2.= at December 2&1%, mainly due to increase in cash re ardin of the sale of land and a reduction on le!el of ross indebtedness due prepayments in the period. As from 'une 2&12 debt financial co!enants includin the indebtedness ratio are measured in 4S dollars as further described in >ote 2%. Since the ratios used abo!e for the year ended December %1, 2&1% and 2&12 are measured in (eais there are differences bet$een the ratio presented abo!e and the ratio measured follo$in the debt financial co!enant re#uirements. The Company continues to focus on actions includin reductions in fi1ed and !ariable costs, sellin e1penses, capital e1penditure and impro!ements in $or*in capital. 2e ha!e also focused on actions that may result in the additional li#uidity throu h the disposal of non)strate ic assets. These actions are intended to stren then the capital structure of the Company, resultin in an impro!ed >et Debt to Ad6usted @BITDA ratio. 9 Sensiti%it* anal*sis The analysis belo$ presents the sensiti!ity analysis of the effects of chan es in rele!ant ris* factors to $hich the Company is e1posed to at the end of the year. Accordin to the local CDA Instruction no 8<;9&=, the follo$in tables present the chan e in the fair !alue of deri!ati!e financial instruments, loans and financin s and mar*etable securities, in t$o ad!erse scenarios, that could enerate si nificant ain or losses to the Company. #ensiti"it$ anal$sis of changes in foreign currenc$ The Company"s si nificant ris* factor, considerin the period of three months for the e!aluation is its 4S Dollar e1posure. 2e adopted as the probable scenario the fair !alue considerin the mar*et yield as at December %1, 2&1%. Considerin this pro6ected scenario compared $ith the a!era e e1chan e rate of (H 2.1;<, obser!ed durin the year ended December %1, 2&1%, net re!enue $ould ha!e increased by =G, representin an appro1imate amount of (H ;;; million o!er a 12 month period considerin the !olume and sale prices of the year 2&1%. To calculate the probable scenario the closin e1chan e rate at the date of these consolidated financial statement $as used +(H 1 4SD X 2.%82:-. As the amounts are already reco ni/ed in the consolidated financial statement, there are no additional effects in the income statement in this scenario. The probable scenario $as stressed considerin an additional 2;G and ;&G $ith respect to the probableF
Impact of an appreciation of t"e real against t"e 0S dollar on t"e fair %alue )robable . RC 2.3:2< Deri!ati!e instruments ?oans and financin Aar*etable securities Total impact )ossible &298' . RC 2.@2?3 +=:,,,<8+1,<%1,&12%%:,%=, +2,2:8,;,<Remote &908' . RC 3.913@ +1,,==,<&&+%,8:2,&28:<2,<<, +8,<<<,,8;-

8< of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

#ensiti"it$ anal$sis in changes in interest rate 2e adopted as the probable scenario the fair !alue considerin the mar*et yield as at December %1, 2&1%. As the amounts are already reco ni/ed in the consolidated financial statement, there are no additional effects in the income statement in this scenario. The probable scenario $as stressed considerin an additional 2;G and ;&G $ith respect to the probableF
Impact of an appreciation of t"e interest rate on t"e fair %alue )robable Deri!ati!e instruments ?oans and financin +aAar*etable securities +bTotal impact )ossible &298' +;%,%,&+%,=,2%%,<1< +2%,;:;Remote &908' +1&%,&<,+:,2&<:<,111 +82,1<;-

+a- .nly our e1posure re ardin loans and financin , for $hich $e did not enter into deri!ati!e financial instruments to hed e our e1posure, $as considered in sensiti!ity analysis abo!e. +b- .nly mar*etable securities inde1ed to post)fi1ed rate $ere considered in the sensiti!ity analysis abo!e.

<

Fair %alue estimates The assets and liabilities measured at fair !alue in the balance sheet are classified in the follo$in le!els based on the fair !alue hierarchyF

+a-

?e!el 1 ) #uoted prices +unad6usted- in acti!e mar*ets for identical assets or liabilities. The fair !alue of the assets and liabilities traded in acti!e mar*ets is based on #uoted mar*et prices at the balance sheet date. A mar*et is re arded as acti!e if #uoted prices are readily and re ularly a!ailable from an e1chan e, dealer, bro*er, industry roup, pricin ser!ice, or re ulatory a ency, and those prices represent actual and re ularly occurrin mar*et transactions on an arm0s len th basis. The Company has only the mar*etable securities comprised by the Bra/ilian federal o!ernment securities, classified as ?e!el 1.

+b-

?e!el 2 ) inputs other than #uoted prices included $ithin ?e!el 1 that are obser!able for the asset or liability, either directly +that is, as prices- or indirectly +that is, deri!ed from prices-. The fair !alue of assets and liabilities that are not traded in an acti!e mar*et +for e1ample, o!er)the) counter deri!ati!es- is determined by usin !aluation techni#ues. These !aluation techni#ues ma1imi/e the use of obser!able mar*et data $here it is a!ailable and rely as little as possible on entity specific estimates. If all si nificant inputs re#uired to fair !alue an asset or liability are obser!able, the asset or liability is included in ?e!el 2.

+c-

?e!el % ) inputs for the asset or liability that are not based on obser!able mar*et data +that is, unobser!able inputs-. If one or more of the si nificant inputs is not based on obser!able mar*et data, the asset or liability is 8= of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

included in ?e!el %. Specific !aluation techni#ues used to calculate the fair !alue of the assets and liabilities areF . . . . . #uoted mar*et prices or dealer #uotes for similar instruments5 the fair !alue of interest rate s$aps is calculated as the present !alue of the estimated future cash flo$s based on obser!able yield cur!es5 the fair !alue of for$ard forei n e1chan e contracts is determined usin for$ard e1chan e rates at the balance sheet date, $ith the resultin !alue discounted bac* to present !alue5 other techni#ues, such as discounted cash flo$ analysis, are used to determine fair !alue for the remainin assets and liabilities. the fair !alue of future contracts on inflation rate +such as embedded deri!ati!e contained on contracts accounted for as capital leases described in >ote 1 +e-- based on future inflation rates at the balance sheet date, $ith the resultin !alue discounted to present !alue.

8, of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

The table belo$ presents the assets and liabilities measured by the fair !alue as atF
December 31, 2013 +e%el 1 Recurring fair %alue measurements Assets At fair !alue throu h profit and loss Deri!ati!e instruments +>ote 112arrant to ac#uire @nsyn0s shares +>ote 1<Aar*etable securities +>ote 1&A!ailable for sale financial assets .ther in!estments ) fair !alue method Biolo ical asset +>ote 1=- +LTotal assets ?iabilities At fair !alue throu h profit and loss Deri!ati!e instruments +>ote 11Total liabilities ;=,,:&; ;<2,1%1 ,%,;;8 <,&,= ;=,,:&; 8<=,;<< ,%,;;8 <,&,= 1,&:=,1=2 +e%el 2 +e%el 3 /otal

%,,=28 %,82%,8%8 %,8<&,%;:

%,,=28 %,82%,8%8 8,:%2,&,2

;;<,==& ;;<,==&

;;<,==& ;;<,==& December 31, 2012

+e%el 1 Recurring fair %alue measurements Assets At fair !alue throu h profit and loss Deri!ati!e instruments +>ote 112arrant to ac#uire @nsyn0s shares +>ote 1<Aar*etable securities +>ote 1&A!ailable for sale financial assets .ther in!estments ) fair !alue method Biolo ical asset +>ote 1=- +LTotal assets ?iabilities At fair !alue throu h profit and loss Deri!ati!e instruments +>ote 11Total liabilities ;:<,2:;

+e%el 2

+e%el 3

/otal

88,=1, :,1&1 ;:<,2:; 1,<=8,<21

88,=1, :,1&1 2,%;1,,=:

%8,;<% %,%2;,:&8 1,=2,,;8&

%8,;<% %,%2;,:&8

%1<,=,= %1<,=,=

%1<,=,= %1<,=,=

;& of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

6anuar* 1st, 2012 +e%el 1 Recurring fair %alue measurements Assets At fair !alue throu h profit and loss Deri!ati!e instruments +>ote 11Aar*etable securities +>ote 1&Biolo ical asset +>ote 1=- +LTotal assets ?iabilities At fair !alue throu h profit and loss Deri!ati!e instruments +>ote 11Total liabilities %:2,,,= 1,%,&,&12 <;,&=8 1,%18,,2= %,2:8,21& %,2:8,21& <;,&=8 1,:<<,,2: %,2:8,21& ;,&1<,22& +e%el 2 +e%el 3 /otal

%:2,,,=

2==,,<1 2==,,<1

2==,,<1 2==,,<1

+L- See the chan es in the fair !alue of the biolo ical assets in >ote 1=.

There $ere no transfers bet$een le!els 1 and 2 durin the years presented. <.1 Fair %alue of loans and financing The fair !alue of loans and financin , $hich are measured at amorti/ed cost in the balance sheet, is estimated as follo$sF +a- bonds, for $hich fair !alue is based on the obser!ed #uoted price in the mar*et +based on an a!era e of closin prices pro!ided by Bloomber -, and +b- for the other financial liabilities that do not ha!e a secondary mar*et, or for $hich the secondary mar*et is not acti!e, fair !alue is estimated by discountin the future contractual cash flo$s by current mar*et interest rates, also considerin the Company"s credit ris*. The follo$in table presents the fair !alue of loans and financin F

;1 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Dield used to discount &E' \uoted in the secondary mar*et In forei n currency Bonds ) D.T. ID Bonds ) D.T. III Bonds ) Fibria .!erseas @stimated based on discounted cash flo$ In forei n currency @1port credits @1port credits +ACC9AC@FI>IA3 ?easin @1port credits +Finn!era@IB @urope In!. Ban* .thers In local currency B>D@S W T'?3 Currency bas*et FI>@3 FI>AA@ >C@ in (eais Accounts payable ) stoc*s ac#uisition Aid$est Fund

2013

2012

2011

82=,%2, %,%<2,=8% ?IB.( 4SD DDI ?IB.( 4SD ?IB.( 4SD ?IB.( 4SD ?IB.( 4SD DI 1 DI 1 DI 1 DI 1 DI 1 DI 1 DI 1 2,===,28& 8;;,181 2%8,=&,

;&1,8%& 8,,2=,11& 2,,%<,2:2 ::1,%:% 2:2,;11

81=,<;< 12:,:<: 8,=;2,2%% %,&;<,<,2 :1=,<,: 18,,82 2=<,%;, <=1 1,888,,,8 2%=,&,: 1,==: ,,&1% :2<,;,& :%,&<& 11,<:1,,=;

1,%&8,:88 2,<,,:8 1,,<& 1%,:8% ,%=,28= 82,,&2 ,,,<=,<%%

1,8:,,;8, 2:8,:&2 2,8=< 18,8;& <2:,<2< ;:,,:& 11,=2;,8;1

+L- 4sed to calculate the present !alue of the loans.

<.2

Fair %alue measurement of deri%ati%e financial instruments &including embedded deri%ati%e' Deri!ati!e financial instruments +includin embedded deri!ati!e- are recorded at fair !alue as detailed in >ote 11. All deri!ati!e financial instruments are classified as ?e!el 2 in the fair !alue hierarchy. The Company estimates the fair !alue of its deri!ati!e financial instruments and ac*no$led es that it may differ from the amounts payable9recei!able in the e!ent of early settlement of the instrument. This difference results from factors such as li#uidity, spreads or the intention of early settlement from the counterparty, amon others. The amounts estimated by mana ement are also compared $ith the Aar*) to)Aar*et +AtA- pro!ided as reference by the ban*s +counterparties- and $ith the estimates performed by an independent financial ad!isor. Aana ement belie!es that the fair !alue estimated for those instruments follo$in the methods described belo$, reliably reflect fair !alues. The methods used for the measurement of the fair !alue of the deri!ati!e financial instruments +includin embedded deri!ati!e- used by the Company consider methodolo ies commonly used in the mar*et and $hich are based on $idely tested theoretical bases. The methodolo ies used to estimate the AtA and to record the financial instruments is defined in the manual de!eloped by the Company0s ris* and compliance mana ement area. ;2 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

A summary of the methodolo ies used for purposes of determinin fair !alue by type of instrument is presented belo$. . >on)deli!erable for$ards ) a pro6ection of the future e1chan e rate is made, usin the obser!able forei n currency coupon and the obser!ed fi1ed yield cur!e in (eais at each maturity date. The difference bet$een the for$ard e1chan e rate obtained throu h this method and the contractual for$ard e1chan e rate is determined. This difference is multiplied by the notional amount of each contract and discounted to present !alue usin the obser!ed fi1ed yields in (eais. S$ap contracts ) the present !alue of both the asset and liability le s are estimated throu h the discount of forecasted cash flo$s usin the obser!ed mar*et interest rate for the currency in $hich the s$ap is denominated. The contract fair !alue is the difference bet$een the asset and liability. .ptions +]ero Cost Collar- ) the fair !alue $as calculated based on the Karman)Pohlha en model. Dolatility information and interest rates are obser!able and obtained from BACFB.D@S3A e1chan e information to calculate the fair !alues. S$ap 4S)C3I ) the cash flo$ of the liability position is pro6ected usin the yield of the 4S)C3I inde1, obtained throu h the implicit rates in the American titles inde1ed to the inflation +TI3S-, issued by the Bloomber . The cash flo$ of the asset position is pro6ected usin the fi1ed rate established in the embedded deri!ati!e instrument. The fair !alue of the embedded deri!ati!e instrument is the present !alue of the difference bet$een both positions.

The yield cur!es used to calculate the fair !alue in December %1, 2&1% are as follo$sF
Interest rate cur%es ,ra-il 7erte 1A :A 1E 2E %E ;E 1&E Rate &p.a.' . 8 ,.,< 1&.2= 1&.;= 11.:2 12.2= 12.=% 1%.22 7erte 1A :A 1E 2E %E ;E 1&E 0nited States Rate &p.a.' . 8 &.1= &.2: &.%1 &.8< &.=; 1.<= %.1< 7erte 1A :A 1E 2E %E ;E 1&E Dollar coupon Rate &p.a.' . 8 )2.;2 &.=, 1.:8 2.&1 2.81 %.;2 :.&2

;% of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

>

Financial instruments b* categor* The Company0s financial instruments by cate ory are presented belo$F
December 31, 2013 Assets ?oans and recei!ables Cash and cash e#ui!alents +>ote ,Trade accounts recei!able +>ote 12Accounts recei!able W land and buildin sold +>ote 1+e-.ther December 31, 2012 +restated6anuar* 1st, 2012 +restated-

1,2<1,<;2 %=2,&=< ,&2,;=8 %;;,%:% 2,,11,<=:

,8%,=;: <;8,<:= %:<,1%= 2,&:;,<:2

%=1,,1; ,8;,%:2 2&%,122 1,;%&,%,,

At fair !alue throu h profit and loss Deri!ati!e instruments +>ote 11Aar*etable securities +>ote 1&2arrant to ac#uire @nsyn0s shares +>ote 1<-

,%,;;8 1,&:=,1=2 <,&,= 1,1:=,=%8

88,=1, 2,%;1,,=: :,1&1 2,8&2,,&:

1,:<<,,2: 1,:<<,,2:

Oeld)to)maturity in!estments Aar*etable securities +>ote 1&A!ailable for sale financial assets .ther in!estments ) fair !alue method +>ote 1<?iabilities At amorti/ed cost ?oans and financin +>ote 2%Trade and other payables

8=,1=% %,,=28 %8,;<%

,,<<%,&,< ,&;,8:, 1&,:<=,;::

1&,<:<,,;; =%;,2,% 11,:&%,28=

11,%28,81< :<,,1;; 12,&&%,;<2

At fair !alue throu h profit and loss Deri!ati!e instruments +>ote 11-

;;<,==&

%1<,=,=

21%,==<

Credit ;ualit* of financial assets The credit #uality of financial assets can be assessed by reference to e1ternal credit ratin s +$hen a!ailable- or to historical information about counterparty default rates, analysis of its financial position and information about ne ati!e credit e!ents. 2ith respect to credit #uality of counterparties that are financial institutions +such as amounts recorded in cash and cash e#ui!alents, mar*etable securities and deri!ati!e financial instruments- the Company considers the lo$est ratin of the counterparty as rated by the three main international a encies +Aoody0s, Fitch and Standard C 3oor"s- in accordance $ith the internal policy of mar*et ris* mana ementF

;8 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

December 31, 2013

December 31, 2012

6anuar* 1st, 2012

Trade accounts recei!able Counterparties $ith e1ternal credit ratin +SC3 ) Standard 3oor0s and DCB ) Dun C BradstreetSC3 ) AA) SC3 ) A SC3 ) BBB^ SC3 ) BBB SC3 ) BB DCB ) 2 Counterparties $ithout e1ternal credit ratin A ) ?o$ ris* B ) A!era e ris* C ) A!era e to hi h ris* D ) Oi h ris* Total trade accounts recei!able Cash and cash e#ui!alents and mar*etable securities brAAA brAA^ brAA brAA) +iiA +ii.ther +iTotal cash and cash e#ui!alents and mar*etable securities +>otes , and 1&Assets ) deri!ati!e financial instruments brAAA brAA^ .thers

1=,,:; =8,;<: 1&,1<8 :,&&: ;=:

128,1== <8,2%: ::,<2: <;,,1%

1;=,:2= 18,,<%; 21,;2% 2<,%8< 8&,22& 12=,=1, 2=<,1,; 1%1,,=; <:,212 1,&21,;<8

1&1,%,, 11<,1;1 8%,2%& 12,1;= %,8,28;

2:1,12, 12;,1<8 2<,8&2 :1,,;; =1:,<2%

2,18&,<8: 12 1<&,=28 1&,18; 2<,88, %=,,81 2,%==,11< =<,18; :,8&, ,%,;;8

2,:81,:&2 2%1,%%% 1,8,&8< <&,&;2 :8,2;2 ,8,;;: %,2,;,=82 8&,:&% %,:;& ;:: 88,=1,

1,;<=,2=2 2<8,&1; ;<,&&: 11,,&,: 28,2:: <,1<: 2,&;,,=81 :%,1=% <,,;< %,,88 <;,&=8

+i- Includes counterparties $ithout e1ternal credit ratin by none of the three main ratin a encies. +ii- Transaction appro!ed by the Finance Committee, ad!isory of the Board of Directos.

;; of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

The ris* ratin of the main financial institutions to $hich $e are e1posed is presented belo$F Rating used for credit risB anal*sis AA.br AA.br AAA.br AA.br AAA.br AA.br AAA.br AAA.br A AAA.br AAA.br AAA.br AA^.br BBB BBB^ AAA.br AAA.br AAA.br A) AAA.br BBB^ AAA.br A^ BBB A AA.br AA.br Rating agenc* Fitch Fitch Fitch Fitch Fitch Fitch Fitch Fitch SC3 Fitch Fitch SC3 Fitch Aoody0s Aoody0s SC3 Fitch SC3 SC3 Fitch Aoody0s Aoody0s Fitch Aoody0s Aoody0s Fitch Fitch

Counterpart* Banco ABC Brasil S.A. Banco Alfa de In!estimento S.A. Banco Bradesco S.A. Banco BTK 3actual S.A. Banco Credit A ricole Brasil S.A. Banco Dayco!al S.A. Banco do Brasil S.A. Banco ItaS BBA Banco Ai/uho do Brasil S.A. Banco Safra S.A. Banco Santander Brasil S.A. Banco Dol*s$a en S.A. Banco Dotorantim S.A. Ban* of America Corp Ban* of Austria B>3 3aribas Brasil Cai1a @conomica Federal Citiban* Brasil Credit Suisse AK Deutsche Ban* S.A.) Banco Alem7o Koldman Sachs Kroup Inc. OSBC Brasil '3Aor an Chase Ban* >A Aor an Stanley Standard Chartered 3?C Banco ABC Brasil S.A. Banco Alfa de In!estimento S.A. The internal ris* ratin re ardin customers is as follo$sF . . . .

A ) ?o$ ris* ) customer $ith hi hly solid financial position, $ith no mar*et restrictions and $ith no historical default e1perience, $ith a lon time of relationship, or co!ered by credit insurance. B ) A!era e ris* ) customer $ith solid financial position, $ith no mar*et restrictions and $ith no default history. C ) A!era e to hi h ris* ) customer $ith reasonable financial position, $ith moderate mar*et restrictions and lo$ default history. D ) Oi h ris* ) customer $ith $ea* financial position, $ith moderate throu h hi h mar*et restrictions and ne ati!e default history $ith the Company.

>one of the financial assets that are fully performin has been rene otiated in the last year. >one of the loans to related parties is past due or impaired. ;: of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Cas" and cas" e;ui%alents A%erage *ield . 8 Cash and ban*s Forei n currency Fi1ed)term deposits W CDB Cash and cash e#ui!alents December 31, December 31, 2013 2012 28,%8= &.%2 1,28<,8&8 1,2<1,<;2 ;2,=1& =,1,&8: ,8%,=;: 6anuar* 1st, 2012 :2,,=, %1=,,2: %=1,,1;

10

5arBetable securities Aar*etable securities include financial assets classified as tradin as follo$sF December 31, December 31, 2013 2012 Bra/ilian federal o!ernment securities, includin under re!erse repurchase a reements ?FT ?T>).!er >T>)F >T>)B+L.ther 3ri!ate securities includin securities under re!erse repurchase a reements (e!erse repurchase a reements CDB CDB Bo1 (DB ) fi1ed interest rate In forei n currency 3ri!ate securities includin securities under re!erse repurchase a reements Time deposits Aar*etable securities Current >on)Current 6anuar* 1st, 2012

;2,1;1 8<,:8; 8=,,=&, 8=,1=%

2:=,,=8 111,,&< 1=:,%<8

2&=,:&2 18,,<%& 8,:::

281,&=8 1%=,%8& 1,&&&

<::,2=1 ;=8,<%8 1,&&&

1,2=2,2%: %1,<;& ,82

,=,1;% 1,11:,%:; 1,&:=,1=2 8=,1=%

8%2,<&: 2,%;1,,=: 2,%;1,,=: 1,:<<,,2: 1,:<<,,2:

+L- These >otes, issued by the Bra/ilian federal o!ernment, are classified as held)to)maturity in!estments, they bear an a!era e interest rate of ;.,<G p.a. and a ha!e a maturity date of Au ust 1;, 2&2&.

3ri!ate securities are mainly composed of short)term in!estments in CDB and re!erse repurchase a reements $hich ha!e immediate li#uidity and bear interest based on the Interban* Deposit ;< of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Certificate +CDI- interest rate. Ko!ernment securities are composed of >ational Treasury Bills and >otes all issued by the Bra/ilian federal o!ernment. The a!era e yield of mar*etable securities in the year of 2&1% $as 1&2.;:G of the CDI +1&2.::G of the CDI as at December %1, 2&12 and 1&2.8<G of the CDI as at 'anuary 1, 2&12-. Securities in forei n currency correspond to time deposits $ith maturity o!er ,& days. 11 Deri%ati%e financial instruments The follo$in tables presents the Company"s deri!ati!e instruments, se re ated by type, presentin both asset and liability position of s$ap contracts, by hed e strate y adopted, and the maturity schedule based on contractual terms. &a' Deri%ati%e financial instruments b* t*pe
Reference %alue &notional' . in 0S dollars /*pe of deri%ati%e .perational hed e Cash flo$ hed es of e1ports >DF +4SH]ero cost dollar Oed es of debts Oed es of interest rates S$ap ?IB.( 1 Fi1ed +4SHOed es of forei n currency S$ap '3E 1 4SH +'3ES$ap DI 1 4SH +4SHS$ap T'?3 1 4SH +4SHS$ap 3re 1 4SH +4SHDecember 31, December 31, 2013 2012 6anuar* 1st, 2012 December 31, 2013 December 31, 2012 Fair %alue 6anuar* 1st, 2012

1,122,&&&

1<&,&&& 81&,&&&

,21,,&& 1:2,&&&

+12,8;1-

+2:,8%21,1<1

+1%8,2&:+:,,;8-

;8&,%&,

;:8,&12

22<,=,1 8;,&&& 2%%,;;& 81:,8<= 81,<2;

1;,%%2

+=,18;-

+1&,:;;2<,=&8 11,%<% +,2,1:;+,,&=8+21%,==<%1,:%= 8%,88: +1:%,;%8+12;,8%<+21%,==<-

822,,8: 2<;,<12 2<%,8<2

%&:,22: %8,,=:& ,<,<%<

+18,,=&<+22;,%8&+,2,&:&+8:8,%2:-

+<=,%8;+18=,12%+1%,2&;+2<%,&<,1=,%88 2:,8<; +;8,2;2+2:%,:8:+2<%,&<,-

Classified In current assets In non)current assets In current liabilities In non)current liabilities Total, net

22,;%< <1,&1< +1&:,<,%+8;1,&=< +8:8,%2:-

;= of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&b'

Deri%ati%e financial instruments b* t*pe and broBen do#n b* nature of t"e e posure &asset and liabilit* e posure for s#aps'
Reference %alue &notional' . in currenc* of origin /*pe of deri%ati%e December 31, 2013 December 31, 2012 6anuar* 1, 2012 December 31, 2013 December 31, 2012 Fair %alue 6anuar* 1, 2012

Future contracts ) >DF Cash flo$ hed e +4SHS$ap contracts Asset '3E fi1ed rate +'3E to 4SD4SD ?IB.( +?IB.( to fi1edB(? fi1ed rate +B(? to 4SDB(? T'?3 +B(? to 4SDB(? 3re +B(? to 4SD?iability 4SD fi1ed rate +'3E to 4SD4SD fi1ed rate +?IB.( to fi1ed4SD fi1ed rate +B(? to 4SD4SD fi1ed rate +B(? T'?3 to 4SD4SD fi1ed rate +B(? to 4SDTotal of s$ap contracts .ptions Cash flo$ hed e ) /ero cost collar

1<&,&&&

,21,,&&

+2:,8%2-

+1%8,2&:-

;8&,%&, =22,1:= 88<,,2; ;;,,%;% ;8&,%&, 822,,8: 2<;,<12 2<%,8<2

;:8,&12 ;;1,1,; ;:,,<&= 1=%,82< ;:8,&12 %&:,22: %8,,=:1 ,<,<%<

8,<;8,:1; 22<,=,1 %,,,%<& :<,,<=8 ::,8:= 8;,&&& 22<,=,1 2%%,;;& 81:,8<=

1,2::,,8& 1,&%:,&22 82;,81% 8;&,&:: +1,2;1,:&=+1,1=;,=2,+:;&,<;%+;82,12:+8;1,=<;-

1,1;%,82& <&:,%8, ;<2,1<< 1<&,,%8 +1,1:1,;:;+<=8,:,8+<2&,%&&+1=8,1%,+28<,=1=1,1<1 +2<%,&<,-

1%:,&<< 82<,=8% ;18,2;< :11,&,1 :8,%,1 +1&=,2<%+8%=,8,=+;&2,==8+<&%,2;:+<%,8<;+<2,<2<+:,,;8+21%,==<-

81,<2;

1,122,&&&

81&,&&&

1:2,&&&

+12,8;1+8:8,%2:-

&c'

Deri%ati%e financial instruments b* t*pe of economic "edge strateg*


Fair %alue /*pe of deri%ati%e .perational hed es Cash flo$ hed es of e1ports Oed es of debts Oed es of interest rates Oed es of forei n currency
December 31, 2013 December 31, 2012 6anuar* 2012 1st,

7alue &paid' or recei%ed


December 31, 2013 December 31, 2012

+12,8;11;,%%2 +8:<,2&<+8:8,%2:-

+2;,2:1+=,18;+2%,,:<%+2<%,&<,-

+181,1:&+1&,:;;+:2,&<2+21%,==<-

+18,;;8+1&,<:<1,2;: +28,&:;-

+1;1,1&,+=,<8%%%,8=8+12:,%:=-

&d'

Fair %alue of deri%ati%e financial instruments b* maturit* date and counterpart* The follo$in tables present information about deri!ati!e financial instruments rouped by maturity and counterparty.

;, of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

The follo$in table presents the fair !alues by month of maturityF


December 31, 2013 201: 'anuary February Aarch April Aay 'une 'uly Au ust September .ctober >o!ember December +%,,2%+<,:%2+;,881+:,;88+1&,%&<+,,<&1+;,&:%+=,2::+;,%:&+:,1&:+<,,:<+<,,8<+=8,2;<2019 +:,2=;+=,==,+:,2<=+<,1=<+,,:%<+1&,1=2+:,8&<+=,=1&+1;,1==+:,:<:+=,,:1+,,88&+1&%,,8&201< +;,21;+:,:;2+8,&,<+8,=&2+:,<<2+<,,:=+%,82%+;,2;%+12,;<8+%,;%;+;,2<:+:,8=8+<2,&;1201> +%,=18+;,2,:+%,;,&+8,&<8+;,%;%+:,=%2+:,%+2,<%2+;;,<&&+%,<:=+2,<8,+8,%%8+,=,,%;201? +=;<2,12: +1,8:=+1,1221<% +1,:%<+1,8<8+1:,,;%+%%,<%8+1,:11+%<1+1,:;:+;=,;=8201@ +1,:,=82, +1,<;,+1,<<<+1,1<:+1,=%2+1,=:2+1=,2222020 81, 2021 /otal +21,<,2+2;,8,;+22,:%%+2;,;&:+%%,&<2+%=,1;2+1=,,22+<,,%1<+122,;;:+21,:,:+2;,%28+2,,=:1+8:8,%2:-

+1,,&=1-

+2<,=,<-

+1=,::2-

December 31, 2012 2013 'anuary February Aarch April Aay 'une 'uly Au ust September .ctober >o!ember December +11,=<;+1&,12&+2,&,2+%,1,;+1,=<%,% +1,&;=+1,,:;<<& +1,8;,+1,=1%+1,%2&+%;,,&<201: +2,:;2+%,1==+1,=;:+%,&,;+%,;,&+%,;<=+%,8;%+%,,,%+2,111+%,<,1+8,1=,+8,;8:+8&,&822019 +8,&:;+8,;=:+2,<=8+8,;11+8,,1;+;,1;8+%,=;2+8,1<:+<,%&8+%,,=&+8,22=+8,8:;+;8,&2&201< +8,&:<+%,==2+2,8&%+%,,%2+%,,;2+8,8,,+%,&<<+2,,:,+:,:%<+%,2&2+%,&;1+%,;:<+8;,2%=201> +%,%11+2,,<:+2,2%=+%,82&+2,,=<+%,:<8+1,:=%+1,2%1+2<,::=+1,<22+1,2==+1,=1=+;8,&1:201? 1,:;1 +=&1; :2= +11:+,,1<&+1;,<1:;&& +22,2==+,,::;+11,,&%201@ 1,&,: 2<, +11,&8&+12,1,;2020 2,2 /otal +2;,,<&+21,<1%+11,8;%+1=,1%=+1:,81&+1:,,2=+1%,12%+8:,<%,+;=,:::+18,1;8+18,&:,+1;,<1:+2<%,&<,-

:& of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Additionally, $e present a table brea*in do$n the notional and fair !alue by counterpartyF
December 31, 2013 !otional A in 0S Dollars
Banco ItaS BBA S.A. Deutsche Ban* S.A. Banco CreditA ricole Brasil S.A. Banco Citiban* S.A. Ban* of America Aerrill ?ynch Banco Santander Brasil S.A. Banco Safra S.A. Banco B>3 3aribas Brasil S.A. OSBC Ban* Brasil S.A. Banco Bradesco S.A. Banco '. 3 Aor an S.A. Koldman Sachs do Brasil Banco Dotorantim S.A. Banco Ai/uho do Brasil S.A. Aor an Stanley C C.. Banco ABC Brasil S.A. (aboban* Brasil S.A. Banco Standard de In!estimentos Standard Chartered Ban* Banco ItaS BBA S.A. %<1,=&& %82,8;& 28;,8;< 2%8,<%2 22,,:;< 211,,;= 2&,,;;, 2&<,&&& 1,&,=1& 181,:1= 12;,&&& :8,:;& 2<,,:: 2&,&&& 11,<=2

December 31, 2012 !otional A in 0S Dollars


28%,2:1 18%,8;& 21%,,;& 1%=,1=1 28=,,1= 221,22: 12;,&&& 1;8,:&1 =;,&&& 12%,2;& 82,&=: ;=,,12 ;&,&&& %;,&&&

6anuar* 1st, 2012 !otional A in 0S Dollars


%=2,=12 %<,;&& 28&,%<: ,:,8&& 2;;,;;: 2%%,;;& 1%;,&8:

Fair %alue
+88,;:=28< +=,8<%+:;,<=%1,12& +18%,%<1+1&2,12<+%,%%:+81,2<1+8;,,:&2<8 +1,&<%+,,::=+1,;+182-

Fair %alue
+1<,=:;+2,&%%+%,=88+%,,<%8+,%,<%8+;;,1%1=;% +21,1&1+2%,218+%,1&<2&& +1,<8<+2,%=,+:,=21+1<,=:;+2<%,&<,-

Fair %alue
+8,,,<;+%,:,,+:,:,;+2&,&81+;<,1%,11,%<2 +22,8:&-

1=:,=;& 8;,;&& 22,,&82

+1<,;&<+2,;21+22,81;-

%<1,=&& 2,:%8,8%,

+88,;:=+8:8,%2:-

28%,2:1 1,=,<,=%;

18,;&& ;<,;&& %=2,=12 2,&8,,1%2

+1,<,1+=,2=;+8,,,<;+21%,==<-

Fair !alue does not necessarily represent the cash re#uired to immediately settle each contract, as such disbursement $ill only be made on the date of maturity of each transaction, $hen the final settlement amount $ill be determined. The outstandin contracts at December %1, 2&1% are not sub6ect to mar in calls or anticipated li#uidation clauses resultin from mar*)to)mar*et !ariations. All operations are o!er)the)counter and re istered at C@TI3 +a clearin house-. Find belo$ the description of the types of contracts and ris*s bein hed ed. &i' !on.Deli%erable For#ards &!DF' The Company entered into 4S dollar for$ards in order to hed e part of its future e1port re!enue, $hich is considered hi hly probably to occur, a ainst a de!aluation of the real a ainst the 4S dollar. &ii' +I,$R %ersus fi ed rate s#ap The Company has plain)!anilla s$aps of #uarterly ?IB.( !ersus fi1ed rates $ith the ob6ecti!e of hed in debt carryin interest based on ?IB.( a ainst any increase in ?IB.(. &iii' DI %ersus 0S dollar s#ap The Company has plain)!anilla s$aps of Interban* Deposit +DI- !ersus the 4S dollar $ith the ob6ecti!e of chan in our debt e1posure in (eais, sub6ected to DI into a debt in 4S dollars $ith fi1ed interest. The s$aps are matched to debt $ith respect to underlyin amounts, maturity dates and cash flo$s. :1 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&i%'

/6+) %ersus 0S dollar s#ap The Company has plain)!anilla s$aps of ?on )term Interest (ate +T'?3- !ersus the 4S dollar $ith the ob6ecti!e of chan in our debt e1posure in (eais sub6ect to interest based on T'?3, to debt in 4S dollars $ith fi1ed interest. The s$aps are matched to the related debt $ith respect to underlyin amounts, maturity dates and cash flo$s.

&%'

Fero cost collar The Company entered into a /ero cost collar +a purchased option +put- to purchase dollars and a $ritten option +call- to sell dollars- $ith no le!era e, $ith the ob6ecti!e of protectin our e1posure to e1port sales denominated in 4S Dollar, $ith a stri*e price of the put +floor- and the call +ceilin - results in a floor and cap of the dollar e1chan e rate.

&%i'

)re s#ap %ersus 0S dollar s#ap The Company has plain)!anilla s$aps to transform fi1ed interest debt in (eais to a debt in 4S dollar $ith fi1ed rate. The s$aps are matched to debt $ith respect to underlyin amounts, maturity dates and cash flo$s.

&%ii'

Fair %alue measurement of deri%ati%e financial instruments As >ote :.2, the Company estimates the fair !alues of its deri!ati!e financial instruments, and ac*no$led es that these may differ from the amounts payable9recei!able in the e!ent of the early settlement of the instrument. This difference arises due to factors such as li#uidity, spreads or the intention re ardin early settlement by the counterparties, amon other factors. The amounts estimated by mana ement are also compared to the Aar*)to)Aar*et +MAtAN- prices pro!ided as a reference by the ban*s +counterparties-, and to estimates performed by an independent financial ad!isor.

&%iii'

=edge of recei%able from t"e sale of in%estments The Company entered into 4S dollar for$ards in order to hed e its future cash inflo$, in (eais, from the collection of the amount in 4S dollar, re ardin the sale of the 3iracicaba CK4. The notional amount is e#ui!alent to the sale price of 4SH %1% million and $as contracted $ith an e1chan e rate of (H 1.:1=1 resultin in an e#ui!alent amount in (eais of (H ;&:,8;;. The operation $as settled on September 2,, 2&11.

&e'

2mbedded deri%ati%e in forestr* partners"ip and standing timber suppl* agreements As described in >ote 1+e-, the forestry partnership and standin timber supply a reements si ned on December %&, 2&1% determine that the price of the $ood !olume to be purchased by Fibria from the Counterparty, be denominated in 4S Dollars per m% of standin timber read6usted accordin to the 4S) C3I inde1. The 4S)C3I inde1 is not closely related to inflation of the economic en!ironment $here the land is located. The embedded deri!ati!e is a s$ap of sale of the 4S)C3I !ariations durin the term of the forestry partnership and $ood supply a reements. Considerin that the price of the lease is contin ent +determined as 8&G of the !olume of timber that is actually har!ested in each har!estin cycle, multiplied by the purchase price of standin timber per m%, as established in the a reement-, the :2 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Company has considered as the notional !alue of the embedded deri!ati!e, the ma1imum possible payment amount contractually a reed +the BcapB-. The notional !alue of the deri!ati!e is reduced as the payments are made by the Company e!ery #uarter. Since it is an embedded deri!ati!e, there $ere no disbursements or recei!ables relatin to the deri!ati!e, and the disbursements $ill only be related to the correspondin standin timber supply pursuant to the contractual terms. Considerin that the forestry partnership and standin timber a reements $ere si ned in December %&, 2&1%, the fair !alue of the embedded deri!ati!e at December %1, 2&1% is close to /ero, therefore, $as not recorded. The follo$in table presents the chan e in the fair !alue of embedded deri!ati!e, in t$o ad!erse scenarios, that could enerate si nificant losses to the Company. To calculate the probable scenario, $as considered the 4S)C3I inde1 at the date of the sin in of the forestry partnership and standin timber a reements. Since the fair !alue of the embedded deri!ati!e at December %1, 2&1% is estimated to be /ero, the Company has not reco ni/ed any effects in the income statement. The probable scenario $as stressed considerin an additional impact of 2;G and ;&G.
Impact of an appreciation of t"e 0S.C)I at t"e fair %alue )robable @mbedded deri!ati!e in forestry partnership and standin timber supply a reements +LTotal impact )ossible &298' +1&,,81&+1&,,81&Remote &908' +22<,%,&+22<,%,&-

+L- The reference !alue +notional- in!ol!ed in this transaction is 4SH ,%< million, as at December %1, 2&1%.

12 &a'

/rade accounts recei%able ,reaBdo#n of t"e balance b* t*pe of customer


December 31, 2013 Domestic customers Intercompany @1port customers 18,;;% %,,=1 %<;,<11 %,8,28; Allo$ance for doubtful accounts +12,1;=%=2,&=< December 31, 2012 ,,,:&1 2,,=& <18,182 =1:,<2% +:1,,;;<;8,<:= 6anuar* 1st, 2012 1&2,%&; 2,=<= ,1:,%,1 1,&21,;<8 +<:,212,8;,%:2

In 2&1%, $e made some factorin transactions $ithout recourse for certain customers" recei!ables, in the amount of (H 1,%%1,=,= +(H :=:,:1, at December %1, 2&12 and (H %&:,<=< at 'anuary 1, 2&12-, that $ere dereco ni/ed from accounts recei!able in the balance sheet.

:% of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&b'

,reaBdo#n of t"e balance b* maturit* and allo#ance for doubtful accounts The follo$in table presents a brea*do$n of trade recei!ables by maturityF
December 31, 2013 December 31, 2012 6anuar* 1st, 2012

>ot past due 4p to t$o months T$o to si1 months Si1 to t$el!e months 3ast due 4p to t$o months T$o to si1 months Si1 to t$el!e months .!er one year

1;;,%82 1:;,&1,

8%=,&:, 28<,2,< ;<, :%,;<: 1,,:2 2,&:, 1,21: <;8,<:=

;11,&<, %&:,811 1: 12;,%:% %%& :&, 1,;;8 ,8;,%:2

:1,<2:

%=2,&=<

At December %1, 2&1%, trade accounts recei!able of (H :1,<2: +(H :=,=2% at December %1, 2&12 and (H 12<,=;: at 'anuary 1, 2&12- $ere past due but not impaired. Aana ement has a process to mana e collections and does not e1pect to reco ni/e any losses on these recei!ables. The recei!ables are related to se!eral unrelated customers for $hom there is no recent history of default. At December %1, 2&1%, trade accounts recei!able of (H 12,1;= +(H :1,,;; at December %1, 2&12 and (H <:,212 at 'anuary 1, 2&12- $ere impaired and included in the allo$ance for doubtful accounts. The indi!idually impaired trade accounts recei!able mainly relate to customers under 6udicial collection $ith a lo$ probability of reco!ery. Chan es in the allo$ance for doubtful accounts are as follo$sF 2013 At the be innin of the year (e!ersal +pro!isionTrade accounts recei!able $ritten off durin the year as uncollectible, related to pre!ious years @1chan e effect (eclassification to assets held for sale At the end of the year &c' 5ain customers For the year ended December %1, 2&1%, the Company has three customers that represent ;&G of the Company0s net re!enue +%2G in 2&12 and 2,G in 2&11, represented by t$o customers-. +:1,,;;1,,;& 8<,=8< 2012 +<:,212%,%<: 1&,,8& +;,+:1,,;;2011 +;:,118+22,2%<2,1%,

+12,1;=-

+<:,212-

:8 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&d'

,reaBdo#n of t"e balance b* currenc* Fibria0s trade accounts recei!able are denominated in the follo$in currenciesF
December 31, 2013
(eal 4S dollar @uro :,%<: %:<,8<; =,2%: %=2,&=<

December 31, 2012


81,%8; <&<,:&, ;,=18 <;8,<:=

6anuar* 1st, 2012


2,,:%2 ,18,&8= 1,:=2 ,8;,%:2

&e'

(uarantees in Compror operations and factoring of trade recei%ables The Company is a uarantor in factorin Compror operations, performed $ith selected customers in Bra/il. The amount uaranteed by Fibria at December %1, 2&1% $as (H %:,=2; +(H :<,%=, at December %1, 2&12 and (H =8,%<: at 'anuary 1, 2&12-. Fair !alue of these uarantees is not si nificant considerin the hi h credit #uality of those selected customers, as $ell as no history of default. The Company ma*es factorin transactions $ithout credit recourse for certain customers" recei!ables. These assets $ere dereco ni/ed from accounts recei!able in the balance sheet

13

In%entor*
December 31, 2013 Finished oods At plants9$arehouses in Bra/il .utside Bra/il 2or* in process (a$ materials Supplies Imports in transit Ad!ances to suppliers 12=,=,% ;=<,&%2 1;,;,2 %=;,88< 18&,=<% <,;=< %&: 1,2:;,<%& December 31, 2012 1%1,=&: 8<&,&=2 1%,8%= 822,2== 182,2== 2,%%% ,&< 1,1=%,182 6anuar* 1st, 2012 1%;,11& ;1=,%&; %1,181 %:&,8<% 12,,2,= 2,18& 2,28& 1,1<=,<&<

:; of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

1:

Reco%erable ta es
December 31, 2013 December 31, 2012 6anuar* 1st, 2012

2ithholdin ta1 and prepaid Income Ta1 +I(3'- and Social Contribution +CS??Dalue)added Ta1 on Sales and Ser!ices +ICAS- on purchases of property, plant and e#uipment Dalue)added Ta1 on Sales and Ser!ices +ICAS- on purchases of ra$ materials and supplies Social Inte ration 3ro ram +3IS- and Social Contribution on (e!enue +C.FI>S- (eco!erable 3ro!ision for the impairment of ICAS credits

22:,81& 1<,=:, =1:,<2< ;82,2%< +:;=,%&=,88,,%;

1=<,,81 1:,18& <1;,,&8 ;2:,81& +;<,,1&%=:<,2,2 2&,,8:2 :;<,=%&

2&=,,,% 1,,;2& :18,2<8 ::,,=&; +;&<,;<%1,&&;,&1, %2<,<=< :<<,2%2

Current >on)current

2&1,&;2 <8%,==%

Fibria has been accumulatin ICAS credits in the States of @spIrito Santo and Aato Krosso do Sul since its sales are mostly to forei n customers. The Company0s mana ement re!ised the estimates for the reali/ation of such credits and reco ni/ed an impairmentF +i- for the full amount for the Aato Krosso do Sul unit due to the lo$ probability of reali/ation5 and +ii- a partially for the @spIrito Santo unit for appro1imately =&G of the total amount. 2hen the partial pro!ision $as recorded mana ement had already ta*en actions in order to reco!er these ta1es, $hich are bein reco!ered throu h the operations in the state. Based on the bud et appro!ed by the Company0s mana ement, substantially all the ta1 credits are e1pected to be reali/ed by the end of 2&2&F
Amount In the ne1t 12 months In 2&1; In 2&1: In 2&1< In 2&1= In 2&1, In 2&2& 2&1,&;2 1<8,:,8 1,1,881 <<,1%= 1&,,,,< %&,%;; 8;,&&1 =2,,:<= 3IS and C.FI>S related to property, plant and e#uipment +L11;,2;< ,88,,%; )ercentage 28 21 2% 1& 1% 8 ; 1&&

+L- These credits $ere not included in the schedule abo!e, since they $ill be reali/ed o!er the useful li!es of the property, plant and e#uipment.

:: of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Chan es in the pro!ision for impairment of the Company0s reco!erable ta1es are as follo$sF
2013 At the be innin of the year 3ro!ision for impairment (e!ersal At the end of the year +;<,,1&%+<,,2&;+:;=,%&=2012 +;&<,;<%+<1,;%&+;<,,1&%2011 +8=1,;2<+8:,,812&,=,; +;&<,;<%-

The pro!ision and re!ersal of the pro!ision for impaired ICAS credits $ere recorded in the Statement of profit and loss under BCost of salesB. 19 Income ta es The Company and the subsidiaries located in Bra/il are ta1ed based on their ta1able income +profit-. The subsidiaries located outside of Bra/il use methods established by the respecti!e local re ulations. Income ta1es ha!e been calculated and recorded considerin the applicable statutory ta1 rates enacted at the date of the financial statements. &a' Deferred ta es Deferred income ta1 and social contribution ta1 assets arise from ta1 loss carryfor$ards and temporary differences related to +i- the effect of forei n e1chan e ains9losses mainly of loans and financin s +$hich for ta1 purposes are ta1ed9deductible on a cash basis-5 +ii- ad6ustment to fair !alue of deri!ati!e instruments5 +iii- pro!isions not currently deductible for ta1 purposes5 +i!- in!estments in rural acti!ity5 and +!i- temporary differences arisin from the adoption of IF(S9C3Cs.

:< of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

December 31, 2013 Ta1 loss carryfor$ards +L3ro!ision for contin encies Sundry pro!isions +impairment, operational and other(esults of deri!ati!e contracts reco ni/ed on a cash basis for ta1 purposes @1chan e !ariations ) reco ni/ed on a cash basis for ta1 purposes Ta1 amorti/ation of ood$ill Actuarial ains on medical assistance plan +S@3AC.Ta1 depreciation (eforestation costs already deducted for ta1 purposes Fair !alues of biolo ical assets @ffects of business combination ) ac#uisition of Aracru/ Ta1 benefit of ood$ill not amorti/ed for accountin purposes .ther pro!isions Total deferred ta1es, net Deferred ta1es ) asset +net by entityDeferred ta1es ) liability +net by entity1<2,;1, 11=,2%< 81<,;<8 1;<,=<1 :8:,2=: 11&,,8& %,<2, +,,;1=+%11,,:;+1,,,=:1+1%,,<2+%;<,=%;+1,<=;<%2,22& ,:=,11: 2%;,=,:

December 31, 2012 %8,,&1& :;,;<= 8&1,11% ,2,=8< 8<&,=2; 11%,1<= 11,818 +11,%,1+2,,,:%2+2%,,&,8+%1,,,=+2:=,%<:+1,<,1:;1,:=% =<,,:&: 22<,,2%

6anuar* 1st, 2012 %2&,,=2 %&,;&: %=%,%,; <2,;%< <%,812 11&,,%: %,:&& +18,,=:+2=8,&2&+218,,;2+8;,212+1<=,,1<+1,<,12;;,8,& ,,;,%:= <%,,=<=

+L- The balance as at December %1, 2&1% includes the amount of (H 2<=,8=: +(H 2%=,2&1 in 2&12 and (H 2&&,<11 in 2&11- related to the pro!ision for impairment, as detailed in item +e- belo$.

.n >o!ember 2<, 2&1%, the Company applied (H 1<8,,=; of credits from ta1 loss carryfor$ards and ne ati!e basis of social contribution for the payment of the debts related to the (@FIS, as >ote 2;+a- and +b-. Ta1 loss carryfor$ards and deferred credits from temporary differences are e1pected to be reali/ed in accordance $ith the follo$in scheduleF Amount In the ne1t 12 months In 2&1; In 2&1: In 2&1< In 2&1= Bet$een 2&1, to 2&2& Bet$een 2&21 to 2&22 After 2&2% 1:1,282 1,8,;1& 1;2,;1< 21;,1;2 212,%:& 2=:,<=8 18;,8:= 2;,,12% 1,:2<,1;: )ercentage 1& 12 , 1% 1% 1= , 1: 1&&

Durin the ne1t 12 months, the Company e1pects to reali/e (H 11:,<<& related to deferred ta1 liabilities. := of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Chan es in the pro!ision for impairment of the Company0s forei n ta1 credits are as follo$sF December 31, December 31, 2013 2012 At the be innin of the year 3ro!ision @1chan e currency At the end of the year +2%=,2&1+8&,2=;+2<=,8=:+2&&,<11+2&&,<11+%<,8,&+2%=,2&1+2&&,<116anuar* 1st, 2012

Chan es in the net balance of deferred income ta1 are as follo$sF


2013 At the be innin of the year Ta1 loss carryfor$ards 3ro!ision for impairment of forei n deferred ta1 assets Temporary differences re ardin pro!isions Deri!ati!e financial instruments ta1ed on a cash basis Amorti/ation of ood$ill (eforestation costs @1chan e ains9losses ta1ed on a cash basis Fair !alue of biolo ical assets Actuarial ains +losses- on medical assistance plan +S@3AC..ther At the end of the year :;1,:=% +1%:,2&:+8&,2=;:,,12& :;,&28 +,1,:,< +1&,8:&1<;,8:1 %,,2%% +<,:=;1=,&%2 <%2,22& 2012 2;1,=,& 2=,;;= +%<,8,&;2,<,& 2&,%1& +=<,21<+12,&1=8%8,%<% +28,18111,818 1%,218 :;1,:=% 2011 1&,,::; +1=&,:%8+2&&,<11+::,28111<,<&, +<=,118+=,,&;:;%,,&:, =2,%21 %,:&& 1<,==2 2;;,8,&

:, of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&b'

Reconciliation of income ta and social contribution benefit &e pense'


2013 ?oss from continuin operations ta1es on income Income ta1 and social contribution benefit +e1penseat statutory nominal rate ) %8G (econciliation to effecti!e e1pense 2012 2011

+%8%,;<:11:,=1:

+,=,,<%&- +1,8,1,&12%%:,;&= ;&:,,88

Adherence to (efis +3ro!isional Aeasure n_ :2<92&1%- +>ote 2; +a->on)ta1able e#uity in earnin s +losses- of associates Transaction costs ) capital increase 3ro!ision for impairment of forei n deferred ta1 credits assets +i-

+;:&,8;8+2&1+:,&:%+181+2&&,<11-

Ta1es from forei n subsidiaries


Difference in ta1 rates of forei n subsidiaries @ffects of the elimination of the intercompany transactions 3resent !alue ad6ustment ) Aracru/ ac#uisition .ther, mainly non)deductible pro!isions Income ta1 and Social Contribution +e1pense- benefit for the year +L@ffecti!e rate ) G

+1;,%&:8,88: 118,1=1 +1%,:=,+%;8,&&:+1&%.&-

+,1,,:%-

<8,,2%
+21,8882,1,<:& 2,.;

1%<,81; +2:,%2,+1%,1;:+21,<<,%=2,28% 2;.:

+i- See item +e- belo$.


+L- In 2&1%, the amount of (H %;8,&&: includes (H +;:&,8;8- (efis related payments recorded in current income ta1es and (H +2&:,88=- of current income ta1 e1pense for the year and (H 2:;,:&& related to deferred income ta1 and social contribution benefit. In 2&12, the amount of (H 2,1,<:& includes (H +82,1:<- of current income ta1es e1pense for the year and (H %%%,,2< related to deferred income ta1 and social contribution benefit. In 2&11, the amount of (H %=2,28% includes (H :<,=%; of current income ta1es benefits for the year and (H %18,8&= related to deferred income ta1 and social contribution benefit.

&c'

/ransitional /a S*stem &R//' For purposes of determinin income ta1es and social contribution on net income for 2&1% and 2&12, the Company in Bra/il elected to adopt the pro!isions of the (TT, in $hich it is allo$ed to annul the accountin effects of ?a$ 11,:%=9&< and 3ro!isional Aeasure +A3- 88,9&=, con!erted into ?a$ 11,,819&,, and control reconcilin items in the Ta1able Income Assessment Boo* +?A?4(- or au1iliary records, $ithout affectin the statutory accountin records. .n >o!ember 11, 2&1%, the 3ro!isional Aeasure +A3- :2<91% $as issued repealin the Transitional Ta1 System +(TT- and re ulates the ta1ation for residents in Bra/il in relation to profits from forei n companies. .ne of the oals of the A3 is to establish the ad6ustments that must be made in the ta1 boo*s for calculatin the basis the income ta1 and social contribution, $ith the end of the ta1 neutrality to ne$ accountin methods and criteria introduced by ?a$ 11,:%=9&< and ?a$ 11,,819&,. Fibria"s mana ement analy/ed the potential effects of the application of the ne$ standard, and considers them to be immaterial, and is a$aitin for the A3 to become ?a$ to determine its early adoption startin 2&18. <& of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&d'

Income ta on business combinations The Company has ta1able temporary differences associated $ith a ain on bar ain purchase resultin from the asset e1chan e $ith International 3aper, for $hich a deferred ta1 liability, in the amount of (H :&;,;8&, $as not reco ni/ed, since the reali/ation of such ain is under the control of mana ement and there are no plans for reali/in such ain in the foreseeable future. Ta1 ood$ill resultin from the ac#uisition of Aracru/ has been attributed to e1pectation of future profitability and amounts to (H 1,%;,,82&, representin a ta1 benefit for income ta1 and social contribution of (H 8:2,2&%, to be reco ni/ed o!er :2 months.

&e'

Reco%erabilit* of ta loss carr*for#ards As mentioned in >ote %+a-, the subsidiary Fibria Tradin International PFT, has ta1 loss carryfor$ards amountin to 4SH 1%%,;;& thousand, e#ui!alent to (H %12,=;8 as of December %1, 2&1%, for $hich reali/ation is not probable as result of the decision to transfer its current operations to Fibria International Trade KmbO. Aana ement performed a reco!erability analysis based on the estimated ta1able income. As a result, the Company recorded a loss for a substantial portion of the pre!iously reco ni/ed deferred ta1 assets $ith the loss amountin to 4SH 11=,:<, thousand, e#ui!alent to (H 2<=,8=;, as of December %1, 2&1% +4SH 11:,;:; thousand, e#ui!alent to (H 2%=,2&1, as of December %1, 2&12 and 4SH 1&<,&&& thousand, e#ui!alent to (H 2&&,<11, as of 'anuary 1, 2&12-. Such e1pense has been $ithin BIncome ta1 and social contribution ) DeferredB in the Statement of profit and loss.

1<

Significant transactions and balances #it" related parties Related parties The Company is o!erned by a Shareholders A reement entered into bet$een Dotorantim Industrial S.A. +BDIDB-, $hich holds 2,.82G of our shares, and B>D@S 3articipaUVes S.A. +BB>D@S3A(B-, $hich holds %&.%=G of our shares +to ether the BControllin shareholdersB-. The Company0s commercial and financial transactions $ith its subsidiaries, associates, companies of the Dotorantim Kroup and other related parties are carried out at normal mar*et prices and conditions, based on usual terms and rates applicable to third parties. Balances and transactions $ith related parties are as follo$sF

&a'

<1 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&i'

,alances recogni-ed in assets and liabilities


,alances recei%able &pa*able' !ature Transactions $ith controllin shareholders Dotorantim Industrial S.A. B>D@S December 31, 2013 December 31, 2012 6anuar* 1st, 2012

(enderin of ser!ices Financin

+<1:+1,<,:,<;<+1,<,<,8<%-

+<22+1,<8<,2<2+1,<8<,,,8-

+:%+1,<<%,=82+1,<<%,,&;-

Transactions $ith associates Bahia 3rodutos de Aadeira S.A. Transactions $ith Dotorantim Kroup companies D.T. III Dotener ) Dotorantim Comerciali/adora e @ner ia

Sales of $ood

%,=1;

2,,=&

2,=<=

Bonds @ner y supplier Financial in!estments and financial instruments @ner y supplier Input supplier Sales of land Sales of $aste @ner y supplier Chemical products supplier ?easin of land ?easin of land +%==-

+11<,<:<+%==-

Banco Dotorantim S.A. Dotorantim Cimentos S.A. Dotorantim Cimentos S.A. Dotorantim Cimentos S.A. Dotorantim Siderur ia S.A. Sitrel Siderur ia TrJs ?a oas Dotorantim Aetais Dotorantim Aetais Companhia Brasileira de AlumInio +CBA-

+,,::=<8 +%828 2:< +281+<==+%<+1&,8&%-

1,<,<=2 +11%1,%:2 ;< +22=+1,8<:+%%22<,&:; +1,;1<,,8,-

1<:,1;: +=<8< +218+%%;<,<18 +1,<1%,%1%-

>et

+1,=&8,&:1-

3resented in the follo$in lines In assets Aar*etable securities +>ote 1&Trade accounts recei!able +>ote 12(elated parties ) non)current .ther assets ) current In liabilities ?oans and financin +>ote 2%Deri!ati!e financial instruments +>ote 11Suppliers

%,,=1 <,182 +1,<,:,<;<+,,::=+=,<;,+1,=&8,&:1-

1,1,;%< 2,,=& :,28; %1,%:2 +1,<8<,2<2+2,=&1+1,;1<,,8,-

1<&,:=< 2,=<= ;,8:, +1,=,1,:&,+<%=+1,<1%,%1%-

<2 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&ii'

/ransactions recogni-ed in t"e Statement of profit and loss


Income &e pense' !ature Transactions $ith controllin shareholders Dotorantim Industrial S.A. Banco >acional de Desen!ol!imento @con`mico e Social +B>D@S2013 2012 2011

(enderin of ser!ices Financin

+1&,:=2+1:;,<<8+1<:,8;:-

+1&,<<:+1;:,%%,+1:<,11;-

+1&,81=+1<&,21%+1=&,:%1-

Transactions $ith associates Bahia 3rodutos de Aadeira S.A. Transactions $ith Dotorantim Kroup companies D.T. III Dotener ) Dotorantim Comerciali/adora de @ner ia Banco Dotorantim S.A.

Sales of $ood 11,%%2 ,,:18 1&,<,:

Bond +8&,82;+2,;=,<,<;% +;&%=% 1,&%8 +8,%:%+,,1:8+881+8=,:1;-

<,,,8 +1,,;8:1:,%<2 22 +%,:%1,%:2 1%; +;,;:&+,,<&,+%,82&,2=&

22,;28 +%1,2:<2&,<=& +1,11%-

@ner y supplier In!estments and financial instruments Dotorantim Cimentos S.A. @ner y supplier Dotorantim Cimentos S.A. ?easin of lands Dotorantim Cimentos S.A. Sale of lands Dotorantim Siderur ia S.A. Sale of $aste Sitrel Siderur ia TrJs ?a oas @ner y supplier Dotorantim Aetais ?tda. Chemical products supplier Dotorantim Aetais ?tda. ?easin of lands Companhia Brasileira de AlumInio +CBA- ?easin of lands

+=,,2,+<,&:<+8&1+;,8<%-

Comments on t"e main transactions and contracts #it" related parties The follo$in is a summary of the nature and conditions of the transactions $ith the related partiesF . Controlling s"are"olders The Company has a contract $ith DID related to ser!ices pro!ided by the Dotorantim Shared Ser!ice Center, $hich pro!ides outsourcin of operational ser!ices relatin to administrati!e acti!ities, 3ersonnel department, bac* office, accountin , ta1es and the information technolo y infrastructure shared by the companies of the Dotorantim Kroup. The contract pro!ides for an o!erall remuneration of (H 1&,<&: and has a one)year term, $ith annual rene$al upon formal confirmation by the parties. Additionally, DID pro!ide !arious ser!ices related to technical ad!ice, trainin s, includin mana ement impro!ement pro rams. These ser!ices are also pro!ided to the entire Dotorantim Kroup and the Company reimburses DID at cost for the char es related to the ser!ices used. The Company has financin contracts $ith B>D@S, the ma6ority shareholder of B>D@S3A(, for the purpose of financin in!estments in infrastructure and the ac#uisition of e#uipment and machines, <% of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

as $ell as the e1pansion and moderni/ation of its plants +>ote 2%-. Aana ement belie!es that these transactions $ere contracted at terms consistent $ith those entered $ith independent parties, based on technical studies performed $hen these contracts $ere e1ecuted. . Associates The Company has balance recei!able of (H %,=1; from Bahia 3rodutos de Aadeira S.A., correspondin to sale of $ood, $ith maturity in 2&1,, rene$able for 1; years. . 7otorantim (roup companies The Company has a contract to purchase ener y from Dotener ) Dotorantim Comerciali/adora de @ner ia ?tda. to supply our unit in 'acareI. The total amount contracted is (H 1;,&&&, uaranteein 11;,<&& me a$att)hours, and maturin in fi!e years throu h December %1, 2&18. Should either party re#uest an early termination of the contract, that party is re#uired to pay ;&G of the remainin contract amount. In addition, the Company entered into a contract to purchase ener y from Dotener, e1pirin on December %1, 2&18, to supply the TrJs ?a oas and Aracru/ units. Since these units already enerate its o$n ener y, the contract has the purpose of ma1imi/in the competiti!eness of the ener y matri1. The total amount contracted may chan e based on the needs and consumption of ener y by those plants. The Company maintains in!estments in CDB and securities purchased under a reement to resell +Bre!erse reposB- issued by Banco Dotorantim S.A., $ith a!era e remuneration of 1&%.;G of the CDI and diary li#uidity as from September 2&1% and final maturity in April 2&1;. The Company0s cash mana ement policy is intended to pro!ide efficiency in in!estment returns and to ma1imi/e li#uidity, based on mar*et practices. The Company has also entered into deri!ati!e financial instruments contracts $ith Banco Dotorantim. The Shareholders A reement limits the intercompany in!estments to (H 2&& million for securities and (H 1&& million of notional !alue for deri!ati!e instruments. .n 'anuary, 2&12, the Company entered into a contract to purchase sulfuric acid ,=G from Dotorantim Aetais, for (H 1=,;&&, in e1chan e for the supply of %:,&&& metric tons of acid for t$o years, up to December %1, 2&1%. The Company has an a reement $ith Dotorantim Cimentos for the supply of road construction supplies, such as roc* and calcareous roc*, in the appro1imate amount of (H 11,<&: throu h December 12, 2&18. This a reement may be terminated at any time $ith prior notice of %& days, $ithout any contractual penalties. .n December, 2&12, the Company entered into a contract $ith Dotorantim Cimentos to sale of lands, in the amount of (H %1,%:2, $hich $as settled in >o!ember, 2&1%. The Company has land lease a reements, for appro1imately 22,8&& hectares, $ith Dotorantim Aetais ?tda., $hich matures in 2&1,, totalin (H <:,8,:. The Company has land lease a reements, for appro1imately 2,&:2 hectares, $ith Companhia Brasileira de AlumInio ) CBA and Dotorantim Cimentos, $hich mature in 2&2%, totalin (H 8,&:2. In the years ended December %1, 2&1%, 2&12 and 2&11, no pro!ision for impairment $as reco ni/ed on assets in!ol!in related parties. <8 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&b'

Remuneration of officers and directors The total annual amount authori/ed by the Annual Keneral Aeetin on April 2<, 2&12 for the remuneration of Board of @1ecuti!e .fficers, Board of Directors, Fiscal Council, Audit, (is*, Compensation and Sustainability Committees for 2&12 $as (H 8%,8=1. The remuneration e1penses, includin all benefits, are summari/ed as follo$sF 2013 Short)term benefits to officers and directors (escission of contract benefits ?on )term benefits to officers and directors Benefit pro ram ) 3hantom Stoc* .ptions 2%,,%% 1,;=< :,%=8 ;,82; %<,%2, 2012 28,8,; 2,=%, %,==< 8<1 %1,:,2 2011 21,:28 =,228

2,,=8=

Short)term benefits include fi1ed compensation +salaries and fees, !acation pay and 1%th month salary-, social char es and contributions to the >ational Institute of Social Security +I>SS-, the Ko!ernment Se!erance Indemnity Fund for @mployees +FKTS- and the !ariable compensation pro ram. The lon ) term benefits refer to the !ariable compensation pro ram. In the third #uarter of 2&1&, the Company appro!ed a benefit pro ram based on the ri hts based on the increase in the !alue of its shares +>ote 2=-. Short)term benefits to officers and directors do not include the compensation for the Audit, (is*, Compensation and Sustainability Committees0 members of (H1,2=: for the year ended December %1, 2&1% +(H ,1< for the year ended December %1, 2&12 and (H ,&= for the year ended December %1, 2&11-. The Company does not ha!e any additional post)employment acti!e plan and does not offer any other benefits, such as additional paid lea!e for time of ser!ice. The balances to be paid to the Company"s officers and directors are recorded in the follo$in lines items of the current and non)current liabilitiesF December 31, December 31, 2013 2012 Current liability 3ayroll, profit sharin and related char es >on)current liability .ther payables 6anuar* 1st, 2012

=,&=& 12,=2< 2&,,&<

<,81= 8,=:1 12,2<,

:,82< %1% :,<8&

<; of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

1>

In%estments December 31, 2013 In!estment in associate ) e#uity method +a3ro!ision for impairment of in!estments +a.ther in!estment W at fair !alue +b:,,1% +:,,1%8:,,22 8:,,22 December 31, 2012 :,,1% +:,,1%8&,:<8 8&,:<8 6anuar* 1st, 2012 <,;&:

<,;&:

&a'

In%estment in associate
$ur o#ners"ip AssociateGs information )rofit and loss $n e;uit* 6anuar* 1st, 2012 $n profit and loss

2;uit* Associate recorded under the e#uity method Bahia 3rodutos de Aadeira S.A. 3ro!ision for impairment Bahia 3rodutos de Aadeira S.A.

December 31, 2013

December 31, 2012

2013

2012

2011

2&,<8&

%%.%

:,,1%

:,,1%

<,;&:

+;,2 -

+818 -

+:,,1%-

+:,,1%<,;&: +;,2 +818 -

>one of the associates or 6ointly)operated entity has publicly traded shares. There are no contin ent liabilities related to the Company"s interest in the associate. The pro!isions and contin ent liabilities related to the 6ointly)operated entities of the Company are described in >ote 28. Additionally, the Company does not ha!e any si nificant restriction $ith re ards to its associate and 6ointly)operated entities and does not ha!e any commitment related to its 6ointly)operated entities. &b' $t"er in%estment 2e ha!e, appro1imately, :G of o$nership in @nsyn"s share capital. 2e performed an assessment re ardin the ri hts related to these shares and concluded that $e do not ha!e a si nificant influence o!er @nsyn, as such this in!estment has been recorded at fair !alue. Fair !alue chan ed in our interest in @nsyn $as not si nificant bet$een the date of ac#uisition of our in!estment +.ctober 2&12, as mentioned in >ote 1+h-- and December %1, 2&1%, therefore, the carryin amount as of December %1, 2&1% e#uals the cost of the in!estment. See belo$ the chan es in the in!estment for the year ended December %1, 2&1%F

<: of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2013 At the be innin of the year Fair !alue of the $arrants, reco ni/ed in the profit and loss Forei n e1chan e of the $arrants, reco ni/ed in the profit and loss Forei n e1chan e of the shares, reco ni/ed in the M.ther comprehensi!e incomeN At the end of the year 1? ,iological assets The Company0s biolo ical assets are substantially comprised of ro$in forests, intended for the supply of $ood for pulp production. Forests in formation are located in the states of S7o 3aulo, Aato Krosso do Sul, Ainas Kerais, (io de 'aneiro, @spIrito Santo and Bahia. The reconciliation of the boo* balances at the be innin and at the end of the year is as follo$sF 2013 At the be innin of the year Oistorical cost Fair !alue 2012 2011 8&,:<8 <& ,2< ;,2;1 8:,,22

2,8;1,:12 =<%,,,2 %,%2;,:&8 =:&,1%8 +;=&,1,2+2=%,%%%1&2,2:;

2,8<<,2<1 <=:,,%, %,2:8,21& <;;,;%1 +;&2,:,1+%:;,<2:2,<,:=:

2,8,,,&&1 1,&;1,:%; %,;;&,:%: <:1,;&2 +;:,,=1%+8&;,:1<12;,&;% +281,;,;-

Additions Oar!ests in the period Oistorical cost Fair !alue Chan e in fair !alue (eclassification to assets held for sale C.>3AC@? ?osan o Assets on the south of Bahia State Transfer At the end of the year Oistorical cost Fair !alue

+=22+222%,82%,8%8 2,<%&,;1& :,2,,28

+12,,<8;:,%%, %,%2;,:&8 2,8;1,:12 =<%,,,2

88,&88 %,2:8,21& 2,8<<,2<1 <=:,,%,

In determinin the fair !alue of biolo ical assets, the discounted cash flo$ model DCF $as used, $ith pro6ections based on a sin le scenario, $ith producti!ity and area of plantation +eucalyptus trees- for a har!est cycle of si1 to se!en years. The pro6ected cash flo$s is consistent $ith area0s ro$in cycle. The !olume of production of eucalyptus to be har!ested $as estimated considerin the a!era e producti!ity in cubic meters of $ood from each plantation per hectare at the time of har!est. The a!era e producti!ity !aries accordin to the enetic material, climate and soil conditions and the forestry mana ement pro rams. This pro6ected !olume is << of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

based on the a!era e annual ro$th +IAA- by re ion. The a!era e net sales price $as pro6ected based on the estimated price for eucalyptus in the local mar*et, throu h a mar*et study and research of actual transactions, ad6usted to reflect the price of standin timber by re ion. The a!era e estimated cost contemplates e1penses for sellin , chemical control of ro$th, ant and other pest control, compostin , road maintenance, inputs and labor ser!ices. Ta1 effects based on current rates, as $ell as the contribution of other assets, such as property, plant and e#uipment and land $ere considered in the estimated based on a!era e rates of return for those assets, based on the a!era e of the e1istin lease a reements. The !aluation model considers the net cash flo$s after income ta1es and the discount rate used also considers the ta1 effects. The follo$in table presents the main inputs considered in estimatin the fair !alue of biolo ical assetsF
December 31, 2013 Actual planted area +hectareA!era e annual ro$th +IAA- ) m%9hectare >et a!era e sale price ) (H9m% (emuneration of o$n contributory assets ) G Discount rate ) G 88:,;88 81 ;:.;% ;.: :.2: December 31, 2012 88:,1:= 81 ;%.=: ;.: :.8; 6anuar* 1st, 2012 ;;1,,;, 81 ;&,<& ;.: <.,

The increase in the fair !alue of biolo ical assets durin the year ended December %1, 2&1% $as the result of the combined fluctuation of the inputs presented abo!e $hich resulted in a ain of (H 1&2,2:;. The chan es in the fair !alue of the biolo ical assets are reco ni/ed in the profit and loss, $ithin M.ther operatin income +e1penses-N +>ote %%-.
December 31, 2013 Fair !alue of the reno!ation of forests in the year Kro$in of plantation +IAA, area and a eDariation of price and discount rate +1%,12<+==,<%=2&8,1%& 1&2,2:; December 31, 2012 188,<2, ,,1,< 18%,<:& 2,<,:=: 6anuar* 1st, 2012 1;2,8&; +,;,18%:<,<,1 12;,&;%

Fair !alues of biolo ical assets as of December %1, 2&1%, 2&12 and 'anuary 1, 2&12 $as estimated by mana ement. The biolo ical assets are classified $ithin ?e!el% of the fair !alue hierarchical le!el. There $ere no transfers bet$een le!els durin 2&1%. As detailed in >otes %: and 1+d-, the Company reclassified forest assets and land located in the south of Bahia state for assets held for sale. The Company has no biolo ical assets pled ed as of December %1, 2&1%. In 2&1%, the !olume of har!ested $ood from the Company"s biolo ical assets $as 1;,<,: million of m%.

<= of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

1@

)ropert*, plant and e;uipment


5ac"iner*, e;uipment and facilities =,;1:,=%1 18,2<2 +2=,%%,+:<%,;8:+82=+2:1,1288&=,&&, <,,<;,:<; 2,==: +18,;&,+:<:,;<:11;,2&1 <,8&2,:<< Ad%ances to suppliers 2=&,8;; +%,&<;Construction in progress %,1,::< 8%:,%&2

+and At December %1, 2&1& Additions Disposals Depreciation Ta1 credits (eclassification to assets held for sale +?osan o and 3iracicabaTransfers and others +LAt December %1, 2&11 Additions Disposals Depreciation Transfers and others +LAt December %1, 2&12 Additions Disposals Depreciation Disposals related Asset ?i ht pro6ect +>ote 1+e-Transfers and others +LAt December %1, 2&1% 2,11,,%2; 1;,&:: +1<,=:2-

,uildings 1,:1=,188 1,;<= +<,,&2+122,28<-

$t"er ;%,&&, %,<1< +=8<+1:,81,-

/otal 12,,<,,8%1 8<&,,%; +;=,&2;+=12,212+82=+:%1,1:8+1&<,2,&11,=81,28< 2%<,<&% +<:,,,:+=18,2%%+1%,1:&11,1<8,;:1

+2=%,=:<2&,;=1 1,=;%,28% %2 +;:,<:=1,,1<, 1,=1;,:=:

+:&,2%<1%2,<=8 1,;:2,12& 2,, +;,2&1+122,2:=;8,=&, 1,8=,,<;,

+<1,;,<2&;,<=% %,&:1

+2&,8;:+:&,,:8<1,<,=:: 2%&,8<;

+;,8=&12,;=& 8:,;:& ,;& +;1=+1;,%=,11,;:= 8%,1<1

:% 2&=,,&<

+21%,,=&218,%:1

+%1,2&2+;88,12:=,,<8 1,28,,%%2

%82 +%,:81+121,=%1+;2,8&2118,%:; 1,82:,;,2

18,%1& +,<,88%+:<:,%=:2;,,;;, :,,&2,<1<

+%;,:28+18=,,::-

%8<,=%<

2,:,: +1%,:&=+1;,12%1%,%=1 %&,;1<

+%<1,1:,28,%1< 1,1,&2,

%2,,;:1 +2,8,=:&+=1%,%8&+;,:,;2=2;,11& ,,=28,;&8

+L- (efer to ad!ances reclassified to biolo ical assets roup and non)current ad!ances.

<, of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

+and At December %1, 2&1% Cost Accumulated depreciation >et

,uildings

5ac"iner*, e;uipment and facilities

Ad%ances to suppliers

Construction in progress

$t"er

/otal

1,28,,%%2

2,:;&,<;& +1,228,1;=1,82:,;,2

1%,21,,;2, +:,%1:,=12:,,&2,<1<

28,%1<

1,1,&2,

22%,:2% +1,%,1&:%&,;1<

1<,;;=,;=& +<,<%8,&<:,,=28,;&8

1,28,,%%2

28,%1<

1,1,&2,

At December %1, 2&12 Cost Accumulated depreciation >et

1,=1;,:=:

2,::%,&;< +1,1<%,2,=1,8=,,<;,

1%,1,2,<&1 +;,<,&,&28<,8&2,:<<

2&=,,&<

218,%:1

2%:,<<2 +1,%,:&18%,1<1

1=,%%1,8=8 +<,1;:,,2%11,1<8,;:1

1,=1;,:=:

2&=,,&<

218,%:1

At 'anuary 1st, 2&12 Cost Accumulated depreciation >et

1,=;%,28%

2,:1,,,11 +1,&;<,<,11,;:2,12&

1%,188,,2= +;,1:,,2;%<,,<;,:<;

2&;,<=%

1,<,=::

22:,,21 +1=&,%:18:,;:&

1=,28=,:;2 +:,8&<,8&;11,=81,28<

1,=;%,28%

2&;,<=%

1,<,=::

=& of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

The annual a!era e depreciation rates for property plant and e#uipment as of December %1, 2&1%, based on their useful life, are as follo$F A!era e rates Buildin s Aachinery, e#uipment and facilities .thers 8G ;.;G 1&G to 2&G

The balance of construction in pro ress is comprised mainly of e1pansion and optimi/ation pro6ects of the Company0s industrial units, bein (H ;2,1&8 in the 'acareI unit, (H 1<,<&& of forest area, (H8,,=;= of Fibria ) AS, (H ;1,1,< in the Aracru/ unit, (H 1%,2&1 in Deracel. Borro$in costs capitali/ed $ere calculated based on the $ei hted a!era e cost of the related debt. Durin the first si1 months of 2&1%, the rate applied $as %.:1G p.a., and, in accordance $ith our internal policy, it $as re!ised in 'uly to %.=8G p.a. In 2&12, the rate used $as ;.&=G p.a. in the first semester and %.==G p.a. in the second semester. The amounts related to depreciation, depletion and amorti/ation e1penses $ere recorded in the statement of operations in BCost of salesB, BSellin e1pensesB and BKeneral and administrati!e e1pensesB and are disclosed in >ote %%. 3roperty, plant and e#uipment i!en as collateral are disclosed in >ote 22. The amount re ardin the disposals related to ad!ances to suppliers refers, substantially, to KuaIba 3ro6ect $hich $as canceled. The Company currently does not ha!e items of fi1ed assets for $hich it e1pects to abandon or dispose of or for $hich pro!ision for asset retirement obli ations $ould be re#uired. 20 Intangible assets
Annual amorti-ation rate . 8 Kood$ill ) CK4 Aracru/ Systems de!elopment and deployment Intan ible assets ac#uired in the business combination Databases 3atents (elationship $ith suppliers Diesel and ethanol Chemical products .ther December 31, 2013 Accumulated amorti-ation !et 8,2%&,8;& +1;:,228%2,%8, December 31, 2012 !et 8,2%&,8;& 8&,&&8 6anuar* 1st, 2012 !et 8,2%&,8;& 8,,1,,

Cost 8,2%&,8;&

2&

1==,;<%

1& 1;., 2& :.%

8;:,&&& 12,,&&& 2,,&&& 1:;,&&& 8,22= ;,2&2,2;1

+22=,&&&+1&%,2&&+2,,&&&+;1,;:2+;:<,,=:-

22=,&&& 2;,=&&

2<%,:&& 8:,=2& 2,::= 12%,82& 2&1 8,<1<,1:%

%1,,2&& :<,%:; ,,2;1 1%%,=1; 1:= 8,=&,,88=

11%,8%= 8,22= 8,:%8,2:;

=1 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&a'

Roll for#ard of net booB %alue


2013 At the be innin of the year Chan es in intan ible asset from business combinations ) CK4 Aracru/ Amorti/ation of databases, patents and suppliers (eclassification of ood$ill to assets held for sale +C.>3AC@?Ac#uisition and disposal of soft$are, net .ther At the end of the year 2012 2011 8,,&:,88% +=%,12%+1%,1=&+:,28,=&,,88=

8,<1<,1:% 8,=&,,88= +<,,2<1+<,:=<8,&:& 8,:%8,2:; +=%,128+,,1,2%1 8,<1<,1:%

Amorti/ation of intan ible assets $as recorded in BKeneral and administrati!e e1pensesB and B.ther operatin income +e1penses-, netB. The impairment test for the ood$ill related to the CK4 Aracru/ is described in >ote %<. 21 &a' Finance and operating lease agreements Financial leases Financial leases correspond to the purchase of forestry e#uipment for cuttin and transport of timber and also for the purchase of industrial e#uipment for processin of chemicals and o1y en. The financial lease a reements ha!e purchase option at the end of period of the leasin . The assets are reco ni/ed substantially under BAachinery, e#uipment and facilitiesB $ithin property, plant and e#uipment and its respecti!e obli ation is reco ni/ed under M.ther payableN.
December 31, 2013 Accumulated depreciation !et +1%,8;%+%2,::1+8:,118%22 ;:,%2, ;:,:;1 December 31, 2012 !et =,2&; :<,:=, <;,=,8 6anuar* 1st, 2012 !et 1<,%=: <%,%:, ,&,<;;

Cost Forestry e#uipment .1y en and chemical facilities 1%,<<; ==,,,& 1&2,<:;

=2 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

The follo$in is a detail of the present !alue and future minimum payments for each of the periods indicated belo$F Dears 2&18 2&1; to 2&1, After 2&1, )resent %alue 1&,,8& 8;,&%2 2=,1%< =8,1&, There are no restrictions imposed by financial lease a reements. &b' (i) $perating leases Minimum non-cancellable payments . ?and leasin ) the Company leases land for plantin forests based on third)party operational leases as a source of ra$ materials for its production. The leases are for a period up to 21 years. ?ease payments, e#ui!alent to mar*et !alue are made accordin to the contract. The land lease a reements ha!e rene$al options of the lease period at mar*et !alue. Sea domestic transport ) the Company is party to a lon )term contract to recei!e sea frei ht ser!ices for 2& years, for the sea domestic transport of ra$ materials utili/in pushers and maritime bar es from the Terminal of Cara!elas +BA- to 3ortocel +@S-. @1port transport ) the Company is also a party to lon )term contracts $ith STQ 3an .cean Co. ?td. to recei!e sea frei ht ser!ices for 2; years for transportation of pulp from Bra/il to se!eral ports in @urope, >orth America and Asia. Future %alue 11,%%: ;:,:<: 8=,1<% 11:,1=;

At December %1, 2&12, minimum payments of future operatin leases are as follo$sF Dears 2&18 2&1; to 2&1: 2&1< to 2&1, After 2&2& +and leasing ,<,,28 1=8,1<= 2:;,:2: 8,8,2;8 1,&81,,=2 (ii) Contingent payments . Forestr$ partnership agreements W as e1plained in >ote 1+e-, on December %&, 2&1%, the Company entered into a forestry partnership and a standin timber supply a reement for a ma1imum term of 28 years, $ith contin ent payments related to the repurchase of the standin timber !olume that the counterparty has the ri ht to recei!e. The purchase price is established in 4S dollars, as defined in the contract, and ad6usted accordin to the 4S)C3I inde1. Sea domestic transport 8,,,=; ,,,,:, 18,,,;8 1,,,,%= 8,,,=8: 2 port transport <&,22% 18&,88: 21&,::, 1,2=1,;<& 1,<&2,,&=

=% of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Since there is not a mandatory !olume of timber determined by the forestry partnership a reement that could uarantee a minimum payment to the counterparty, there are no minimum future payments to be disclosed by the Company. Durin the year ended December %1, 2&1% the Company did not reco ni/e any contin ent payment $ith re ards to this a reement. 22 Ad%ances to suppliers . forestr* partners"ip programs The pro ram, $hich commenced in 1,,&, in the States of @spIrito Santo and e1panded to Bahia, Ainas Kerais, (io Krande do Sul and (io de 'aneiro, is directed to$ards plantin eucalyptus forests on the land of partners. 4nder the pro ram, the Company pro!ides technolo y, technical assistance, inputs and fundin dependin on the type of a reement, and is uaranteed $ood for its pulp production. These ad!ances $ill be reimbursed throu h deli!ery of $ood by forest producers. The table belo$ presents the mo!ement durin the yearsF December 31, December 31, 2013 2012 At the be innin of the year Ad!ances made 2ood har!ested Transfers to forest and others (e!ersal +reclassification- of assets held for sale +LAt the end of the year +L- (elated to the ?osan o 3ro6ect +>ote 1 +d-+i--. <8&,%1& 1%8,&%; +111,218+%<,&:<<:&,:11 =<,;&& +12=,281+12,<1&%%,1;& <8&,%1& 6anuar* 1st, 2012 :,%,8,& 1<:,8<, +8;,%:=+%1,;;<+%2,8%%<:&,:11

<2:,&:8

=8 of 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

23 &a'

+oans and financing ,reaBdo#n of t"e balance b* t*pe of loan


Current
A%erage annual interest rate . 8 December 31, 2013 December 31, 2012 6anuar* 1st, 2012 December 31, 2013 December 31, 2012

!on. current
6anuar* 1st, 2012 December 31, 2013 December 31, 2012

/otal
6anuar* 1st, 2012

/*pe1purpose In forei n currency B>D@S ) currency bas*et @1port credits +Finn!eraBonds ) 4SH Bonds ) '3E @1port credits +prepayment@1port credits +ACC9AC@@IB @urope In!. Ban* ?easin

;., %.; <.% %.& 2.%

;%,&%= ;2,21& 1,;8<,<&= 8;<,;2% 8;1,<1=

8,,&<; 8:,%1, :;,<:% 21=,::2 88&,:&8

8=,<,& 82,<%1 %8,;<; 2,22% 2,,&;1 :2%,:%2 <=8 =,<<% <,&,;;,

%&8,&,1 1<%,288 1,=1:,%=; 2,82;,2:&

2%%,%,< 1,%,,;, 8,;<<,1,< 2,;&%,%&= 218,;:<

22&,8<1 21<,21= ;,1&%,=%, 11;,;88 2,<<<,&&% ;,,;=

%;<,12, 22;,8;8 %,%:8,&,% 2,==2,<=% 8;1,<1=

2=2,8<2 28&,2<= 8,:82,,:& 2,<21,,<& :;;,1<1

2:,,2:1 2;,,,8, ;,1%=,818 11<,<:< 2,=&:,&;8 :2%,:%2 <=8 18,<%1 ,,2%&,;,2

2,;:2,1,<
In (eais B>D@S ) T'?3 FI>AA@ >C@ Aid$est (e ion Fund +FC. and FI>@3-

=2&,82%

8,<1=,,=&

<,<22,82=

=,88&,&%%

<,2=1,1<<

=,;82,=;1

<.< 8.2 12.1 =.2

%8:,;,% 8,=;% 8:,<<& 11,,8= 81&,1:8 2,,<2,%:1

28=,<%1 <,8=% 8,,%88 12,&28 %1<,;=2 1,1%=,&&; 11<,,,2 111,=,= ,&=,11; 1,1%=,&&;

282,%21 2,%%: 8;,2&% 11,:=, %&1,;8, 1,&,2,1&= 118,8%2 ,=,::< =<,,&&, 1,&,2,1&=

1,&,%,&%; 1&,81& ,82,::; %;,:8: 2,&=1,<;: :,=&&,<%: %;,%%< :,<:;,%,, :,=&&,<%:

1,21:,&:, <,1=2 :%:,,=2 8<,2=, 1,,&<,;22 ,,:2,,,;& 1&;,&;% ,,;28,=,< ,,:2,,,;&

1,2:2,2:& <,;1: 8:%,,=< ;=,;1% 1,<,2,2<: 1&,2%2,%&, :;,=2= 1&,1::,8=1 1&,2%2,%&,

1,8%,,:2= 1;,2:% ,=,,8%; 8<,;,8 2,8,1,,2& ,,<<%,&,< 1%&,2=% ,,:82,=18 ,,<<%,&,<

1,8:8,=&& 18,::; :=:,%2: ;,,%1% 2,22;,1&8 1&,<:<,,;; 22%,&8; 111,=,= 1&,8%%,&12 1&,<:<,,;;

1,;&8,;=1 ,,=;2 ;&,,1,& <&,2&2 2,&,%,=2; 11,%28,81< 1=&,2:& ,=,::< 11,&8;,8,& 11,%28,81<

Interest Short)term borro$in ?on )term borro$in

,8,,8: 2&,:<& 2,=8<,<8; 2,,<2,%:1

The a!era e rates $ere calculated based on the for$ard yield cur!e of benchmar* rates to $hich the loans are inde1ed, $ei hted throu h the maturity date for each installment, includin the issuin 9contractin costs, $hen applicable. =; de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&b'

,reaBdo#n b* maturit* >on)current portion of the debt at December %1, 2&1% by maturityF
2019 In forei n currency B>D@S ) currency bas*et @1port credits +Finn!eraBonds ) 4SH @1port credits +prepayment201< 201> 201? 201@ 2020 2021 2022 2023 /otal

8=,,=: 8,,81, 2=;,8;; %=%,=:&

%=,&%< 8,,81, 882,,82 ;%&,%,=

;&,;=2 8,,81, :;&,2:2 <;&,2:%

8:,%&= 28,,=< 8=2,;22 ;;%,=1<

%2,,<; 18%,;8< 8;<,;,< :%8,11,

8;,%&8 %:,,8%, 1&:,8=2 ;21,22;

%=,&1, 1,%&%,%,,

%,==&

%&8,&,1 1<%,288 1,=1:,%=; 2,82;,2:& 8,<1=,,=&

1,%81,81=

%,==&

In (eais B>D@S ) T'?3 FI>AA@ >C@ Aid$est (e ion Fund +FC. e FI>@3-

%1<,282 8,,;, 11:,82; 11,:8% 8;&,2:, =%8,12,

1<:,:8, %,22; 1&<,=8: 11,:8% 2,,,%:% =2,,<:1

1:2,&1& 2,&;, %2,,=:< 11,:8% ;&;,;<, 1,2;;,=82

11,,:=8 1:< %&2,&<, 8&, 822,%%, ,<:,1;:

=8,=<< 8%,22; %&= 12=,81& <:2,;2,

1&:,&8= 8%,22%

,,,:22

22,2=<

8,:1:

1,&,%,&%; 1&,81& ,82,::; %;,:8: 2,&=1,<;: :=&&,<%:

18,,2<1 :<&,8,:

,,,:22 1,881,&8&

22,2=< 2:,1:<

8,:1: 8,:1:

=: de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&c'

,reaBdo#n b* currenc* and interest rate ?oans and financin are bro*en)do$n in the follo$in currenciesF Currenc* December 31, December 31, 2013 2012 (eal Dollar '3E Currency bas*et 2,8,1,,2& :,,28,&8= %;<,12, ,,<<%,&,< ?oans and financin are bro*en)do$n by interest rateF Interest rate December 31, December 31, 2013 2012 CDI T'?3 ?ibor Currency bas*et Fi1ed ,=,,8%; 1,%,<,8:% %,1&<,&18 %;<,12, %,,22,&;: ,,<<%,&,< :=:,%2: 1,88,,;=< 2,<;:,1;& 2=2,8<2 ;,;,%,82& 1&,<:<,,;; 6anuar* 1st, 2012 ;&,,1,& 1,;&8,8,1 2,,2,,,<& 2:,,2:1 :,111,;&; 11,%28,81< 2,22;,1&8 =,2:&,%<, 2=2,8<2 1&,<:<,,;; 6anuar* 1st, 2012 2,&,%,=2; =,=8%,;:8 11<,<:< 2:,,2:1 11,%28,81<

&d'

Amorti-ation of transaction costs The table belo$ presents the annual effects of the amorti/ation of transaction costs in the effecti!e interest rate methodF
December 31, 2013 After 201@

Description @1port credits +Finn!eraBond ) 4SD @1port credits +prepayment-

201:

2019

201<

201>

201?

/otal

=%& :8,%1& :,82: <1,;::

=%& 1%,8&& 1,8&< 1;,:%<

=%& 1%,8&& 1,8&< 1;,:%<

=%& 1%,8&& 1,8&< 1;,:%<

1%= 1%,8&& 1,&,% 18,:%1

1,,,1= 2<; 2&,1,%

%,8;= 1%<,=2= 12,&1; 1;%,%&1

The capitali/ation of transaction costs for loans and financin increases the a!era e effecti!e cost of the debt in &.8&G p.a. =< de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&e'

Roll for#ard The roll for$ard of the carryin amounts at the presented period is as follo$sF
2013 At the be innin of year Borro$in s Interest e1pense Forei n e1chan e (epayments ) principal amount Interest paid @1pense of transaction costs of Bonds early redeemed .ther +LAt the end of the year
+L- Includes amorti/ation of transactions costs.

2012 11,%28,81< =:8,%%8 :=1,=8& =&%,:81 +2,81&,<1,+:;1,2====,<;, ::,,<1 1&,<:<,,;;

2011 1&,;=1,8;< 2,<&<,2:; ::&,&=8 1,&%:,2<8 +%,1&,,;=,+;=2,&8<%&,,<% 11,%28,81<

1&,<:<,,;; 1,2<,,818 ;<;,=<< ,2<,2<= +%,%2&,1;<+:&2,11211%,<;, %1,&=% ,,<<%,&,<

&i'

2 port credits &prepa*ments' In April 2&1%, the Company, throu h Fibria Tradin International PFT., entered into an e1port prepayment contract $ith three ban*s in the amount of 4SH 1&& million +e#ui!alents to (H 2&1,;8&-, $ith maturity until 2&1= and an initial interest rate of 1.:%G p.a. o!er the #uarterly ?IB.(. .n September 2&12, the Company entered into e1port prepayment contracts in the amount of 4SH 1&; million +e#ui!alents then to (H 212,,;&-, $ith maturity on September 2&18 and interest rate of 2.,;G p.a. .n Au ust 2&12, $e early repaid, $ith a!ailable funds, the amount of 4SH 1&& million +e#ui!alent then to (H 2&2,&,&- of a prepayment contract entered into in 'anuary 2&11, $ith an ori inal maturity in April 2&1= and fi1ed interest rate of 2.,;G p.a. In the first #uarter of 2&12, Deracel entered into e1port prepayment contracts in the amount of 4SH 8% million +e#ui!alents then to (H <:,,%,-, $ith maturity bet$een Au ust 2&12 and September 2&1% and interest rate bet$een %.%;G and 8.<;G p.a. .n February 2&12, Deracel entered into the e1port prepayment contract, in the amount of 4SH %% million +e#ui!alent then to (H ;:,:,8-, $ith semiannual payment of interest, at ;G p.a. plus ?IB.( and a sin le payment of the principal $ith maturity in 2&1<. .n February 2&12, Deracel early repaid fi!e e1port prepayment contracts ACC in the amount of 4SH 18 million +e#ui!alent then to (H 28,%18- $hich $ere contracted in September and December 2&11 $ith maturity in Aarch 12, 2&12. .n 'une 2&11, the Company si ned si1 e1port prepayment contracts in the amount of 4SH 12; million +e#ui!alent then to (H 1,<,;<;-, $ith maturity in 'anuary 2&1% and fi1ed interest rate, of $hich 4SH <; million at 2.&;G p.a. and 4SH ;& million at 2.&,G p.a. .n Aay, 2&11, the Company si ned an e1port prepayment contract $ith ele!en ban*s in the amount of 4SH %&& million +e#ui!alent then to (H 8==,=;&-, bearin #uarterly ?IB.( plus 1.=&G p.a., $hich can be reduced to 1.:&G, dependin on the le!el of le!era e and ris* ratin of the Company $ith a ei ht) year term, annual installments of 4SH 1; million in 2&125 4SH %& million in 2&1;5 4SH 1; million == de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

in 2&1:5 4SH ,& million in 2&1= and 4SH 1;& million in 2&1,. .n 'anuary 2&11, the Company si ned three e1port prepayment contracts in the amount of 4SH ;& million each for a total of 4SH 1;& million +e#ui!alent then to (H 28=,:8&-, $ith maturity in 'une 2&12 and fi1ed interest rate at 2.&,G p.a. .n Aarch 2&12, the Company early repaid the total amount of 4SH ;& million, e#ui!alent to (H ,&,:<;, correspondin to one contract and, on September 2&12, the Company repaid the remainin contracts in the total amount of 4SH 1&& million, e#ui!alent to (H 211,18%. .n September %&, 2&1&, the Company si ned an @1port Credit Contract $ith 11 ban*s in the amount of 4SH =&& million +e#ui!alent then to (H 1,%;;,%:&-, $ith maturities throu h 2&1=, bearin #uarterly ?IB.( plus 2.<;;G p.a., $hich can be reduced to 2.%&G, dependin on the le!el of le!era e and ris* ratin of the Company. The loans are uaranteed by e1port contracts, and the installments mature on shipment dates. This line $as used to repay debt $ith hi her costs and less fa!orable maturities. In Aarch 2,, 2&11, the company prepaid the amount of 4SH :&& million +e#ui!alent then to (H ,,2,<:&-, $ith funds from the C.>3AC@? sale and the issuance of the Fibria 2&21 Bond. .n September 2,, 2&1&, the Company si ned a bilateral @1port Credit Contract in the amount of 4SH 2;& million +e#ui!alent then to (H 82%,;;&-, $ith maturities throu h 2&2&, bearin semi)annual ?IB.( plus 2.;;G p.a., $hich can be reduced to 2.%&G, dependin on the le!el of le!era e and ris* ratin of the Company. The loans are uaranteed by e1port contracts, and the installments mature on shipment dates. This line $as used to repay debt $ith hi her costs and less fa!orable maturities. In Aarch 2&1&, the Company si ned a bilateral @1port Credit Contract in the amount of 4SH ;%; million thousand +e#ui!alent then to (H ,;:,1;2-, bearin #uarterly ?IB.( plus 2.,;G p.a., $ith maturities throu h 2&1<. The loans are uaranteed by e1port contracts, and the installments mature on shipment dates. At Aarch %1, 2&1& funds totalin 4SH %18 million +e#ui!alent then to (H ;;=,,,1- $ere released, and the remainin balance of 4SH 221 million +e#ui!alent then to (H %=,,%1&- $as released on April :, 2&1&. This line $as fully used to repay debt $ith hi her costs and less fa!orable maturities. In April, 2&11, the company prepaid the amount of 4SH 1&& million +e#ui!alent then to (H 1:&,,<&-, and ne otiated a lon er term for payment of the remainin balance +from 2&1% until 2&1=, $ith #uarterly depreciation-. There $ere no chan es in interest rates char ed. In 2&12, the Company prepaid the amount of 4SH 2&& million, $ith no chan es on the other conditions of the contract. The Company has e1port prepayment contracts $ith Banco Bradesco in the amount of 4SH 1;& million, bearin interest of ?IB.( plus &.<=G, maturin in 2&18. The Company has e1port prepayment contracts $ith >ordea ban* in the amount of 4SH ;& million, bearin interest of ?IB.( plus &.=&G, maturin in 2&1%. &ii' +oans . 7$/$ III &,onds' .n 'anuary 1:, 2&&8, Dotorantim .!erseas Tradin .perations III +BD.T. IIIB-, a $holly)o$ned subsidiary of Dotorantim 3articipaUVes S.A. +BD3A(B-, raised in the international capital mar*ets 4SH %&& million +e#ui!alent then to (H =<%,&&&-, maturin in ten years and bearin annual interest of 8.2;G. The Company recei!ed 1;G of the total funds raised, i.e., 4SH 8;,&&& million, e#ui!alent then to (H 1%1,&&&. .n December 2&12, the Company prepaid 1&&G of the outstandin balance. &iii' +oans . 7$/$ I7 &,onds' .n 'une 28, 2&&;, Dotorantim .!erseas Tradin .perations ?imited ID +BD.T. IDB-, a company 6ointly)controlled to ether $ith Dotorantim 3articipaUVes, raised 4SH 8&& million in the international capital mar*ets +e#ui!alent then to (H ,;;,&&&-, maturin on 'une 28, 2&2& and bearin annual =, de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

interest of =.;&G. The Company recei!ed ;&G of the total funds raised, i.e., 4SH 2&& million, e#ui!alent then to (H 8<<,&&& million. In 2&1% the Company prepaid the total amount of 4SH 82 million +e#ui!alents to (H ,%,&%8-. As a result of the early redemption, $e reco ni/ed financial e1penses amountin to (H 1%,8,:, of $hich (H 12,%81 related to the premiums paid in the repurchase transaction and (H 1,1;; relatin to the proportional amorti/ation of the transaction costs of the Bonds. &i%' +oans . Fibria 2020 and Fibria 2021 &,onds' Durin 2&1%, Fibria prepaid and canceled a total of 4SH =;; million +e#ui!alents to (H 1,<;=,1;;related to the Bonds MFibria 2&2&N and MFibria 2&21N issued in Aay 2&1& and Aarch 2&11, $ith ori inal maturities in Aay 2&2& and Aarch 2&21, $ith fi1ed interest rates of <.;G and :.<;G per year, respecti!ely. As a result of the early redemption, $e reco ni/ed financial e1penses amountin to (H %%:,<,,, of $hich (H 228,1,; related to the premiums paid in the repurchase transaction and (H 112,:&8 relatin to the proportional amorti/ation of the transaction costs of the Bonds. The remainin balance of the Bond MFibria 2&2&N in the amount of (H 1,:1: million, is recorded as current liabilities due to the Aana ement"s Company of early redeem, as >ote %=. .n 'uly 2&12, the Company made a tender offer to early redeem Fibria 2&2& Bonds and as a result early prepaid, the amount of 4SH ;18 million +e#ui!alent then to (H 1,&88,:,=- of debt issued under the Fibria 2&2& Bond, $ith proceeds from the public offerin of shares. The early repurchase enerated a loss of (H 1;&,,1< recorded under BFinancial @1pensesB correspondin to (H :2,1;= of the premium offered to the bondholders for the early redemption and (H ==,<;, of transaction costs e1pensed upon repurchase +>ote %1-. In Aarch 2&11, the Company, throu h Fibria .!erseas Finance ?td., raised 4SH <;& million +BFibria 2&21B e#ui!alent then to (H 1,28&,=<;- in the international mar*ets, maturin in ten years, $ith a repurchase option startin 2&1:, accruin semi)annual interest at :.<;G p.a. In Aay 2&1&, throu h Fibria .!erseas Finance ?td., the Company raised 4SH <;& million +BFibria 2&2&B e#ui!alent then to (H 1,%%,,:;&- in the international mar*ets, maturin in ten years and $ith a repurchase option startin 2&1;, accruin semi)annual interest at <.;&G p.a. In .ctober 2&&,, the Company, throu h Fibria .!erseas Finance ?td., raised 4SH 1 billion +BFibria 2&1,B e#ui!alent then to (H 1,<88,&&&- in the international mar*ets, maturin in ten years, accruin semi)annual interest at ,.2;G p.a. In Aay 2&1&, the Company announced an offer to e1chan e the Fibria 2&1, Bonds for the Fibria 2&2& Bonds, in order to reduce interest cost, impro!e the li#uidity of the security and rene otiatin co!enant clauses. The participation in the e1chan e offer $as ,8G. The a!era e effecti!e interest rate on these operations listed abo!e, includin the transaction costs, is =.::G p.a. &%' ,!D2S In 2&1%, Fibria entered into four contracts throu h the credit limit of (H 1.< billion defined in 2&11, in the amounts of (H 8,,.% million +forestry pro6ects financin -, (H 8,., million +industries in!estments financin -, (H %&.< million +IT pro6ects financin - and (H 1:<.= million +reforest financin in areas of preser!ation-. A total amount of (H 2:<.82< $ere released re ardin these contracts, correspondin to %:G of the total. .n December %1, 2&1%, includin the e1istin contracts since 2&&;, the outstandin balance of the contracts si ned $ith B>D@S $as (H 1.<,< billion, bein , (H 1.88& billion sub6ect to interest rate from T'?3 and, (H %;< million to a Currency bas*et. ,& de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

.n December %1, 2&1%, considerin only the ;&G of our partnership, Deracel had total principal amount outstandin of (H =:,:18, repayable from 2&18 to 2&21, $ith a portion sub6ect to interest ran in from T'?3 plus 1.=G to %.%G p.a. and 4AB>D@S plus 1.=G p.a. In the first semester of 2&&,, a financin a reement in the amount of (H :<%,2,8 $as appro!ed, bearin interest for a portion at the ?on )term Interest (ate +T'?3- plus &G to 8.81G and for the remainin portion at the B>D@S Aonetary 4nit +4AB>D@S- plus 2.21G p.a, $ith the maturity to 'uly 2&1<. (e ardin this financin a reement, ,%G of this total amount had been released and the remainin balance $ill not be used by us. 4AB>D@S is an inde1 based on a bas*et of currencies, substantially the 4S dollar. In the second semester of 2&&=, a financin a reement $ith B>D@S totalin (H ;8&,&&& $as appro!ed, bearin T'?3 plus 1.%:G to 1.<:G for part of the loan and 4AB>D@S plus 2.8;G p.a., $ith the final maturity to April 2&1;. (e ardin this financin a reement, :2G of this amount had been released and the remainin balance $ill not be used by us. .n .ctober 2&&<, a financin a reement $as e1ecuted $ith B>D@S totalin (H 21,<&1, inde1ed by the T'?3 plus 1.=G and 4AB>D@S plus 1.%G p.a., $hich $as paid by the Company on 'uly 2&12. .n >o!ember 2&&:, a financial a reement $as e1ecuted into $ith B>D@S, in the amount of (H ;,: million, of $hich, ,&&G has already been released in December %1, 2&12, bearin interest at the T'?3 plus &G e 2.,G p.a. for portion of the loan and 4AB>D@S plus 1.8G to 2.8G p.a. for the other portion, maturin from 2&&, to 2&1:. In 2&&;, three a reements $ere entered into $ith B>D@S, in December, Au ust and Aay. In the contract si ned in December, the total funds released $ere (H 1%,,2=8, repayable from 2&&< to 2&1:, sub6ect to interest ran in bet$een T'?3 plus /ero to 8.;G p.a. and 4AB>D@S plus 2.&G to %.&G p.a. In the Au ust a reement, the total funds released $ere (H ;;,222, of $hich a portion is inde1ed to the T'?3 plus %.;G to 8.;G and a portion is inde1ed to 4AB>D@S plus %G p.a. The final maturity of this a reement is 2&1;. In the Aay a reement, the total funds released $ere (H ,,,1&,, of $hich a portion is inde1ed to T'?3 plus 8.;G p.a. and a portion is inde1ed to 4AB>D@S plus 8.;G p.a. The final maturity of the principal amount is 2&1;. The Company has i!en the pulp plant located in TrJs ?a oas +AS- and in 'acareI +S3- as the main collateral for these financin s. &%i' +eases In December 2&&,, the Company rene otiated the terms and the amount outstandin of its finance lease $ith Banco SociTtT KTnTrale, ori inally entered in 2&&=, for the ac#uisition of forest machinery and e#uipment. The ori inal maturity of this contract $as 2&1%. Oo$e!er, on 'une 2&12, the Company prepaid 1&&G of the lease contracts related to the ac#uisition of forest machinery and e#uipment. Finance lease liabilities are uaranteed by a statutory lien on the assets leased. &%ii' 2 port Credit !ote &!C2' In 'une 2&1%, the Company entered into a contract $ith Banco do Brasil a >C@, in the total amount of (H 8,<,<8;, $ith final maturity in 2&1= and interest rate of 1&;.=; of CDI. This contract is also lin*ed to a s$ap contract in order to e1chan e the currency (eais to Dollar and chan e of the !ariable rate to fi1ed rate, bein the final cost 8.1:G p.a. plus forei n e1chan e currency. ,1 de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

.n September 2&12, the Company si ned an >C@ totalin (H 1<2,=,,, $ith semiannual payment of interest of 1&&G of CDI and amorti/ation of the principal in four annual settlements as from 2&1<. .n September 2=, 2&1&, the Company si ned an >C@ totalin (H 82<,;&&, maturin in 2&1= and bearin char es of CDI plus 1.=;G p.a. In connection $ith this >C@ a s$ap $as contracted to con!ert the floatin rate in (eais to a fi1ed rate of ;.8;G in 4S dollar. In December 2&&=, the Company contracted, throu h its subsidiary 3ortocel, an >C@ $ith Banco OSBC in the amount of (H ,8,&18, $ith final maturity in December 2&1% and char es of 1&&G of the CDI. The contract $as settled on the maturity date. &%iii' 2 port credit &Finn%era' .n September %&, 2&&,, the Company entered into a loan a reement $ith FI>>D@(A +Finnish De!elopment A ency, $hich pro!ides credit to companies committed to sustainability pro rams- in the amount of a 12; million at semi)annual ?IB.( plus %.%2;G p.a., maturin in ei ht)and)a)half years. &i ' Fund for t"e financing of t"e ,ra-ilian 5id#est Region &FC$' .n December %1, 2&&,, the Company entered into a loan a reement for (H <%,&&& $ith Banco do Brasil throu h its subsidiary Fibria ) AS, maturin in December 2&1<, $ith a si1)month race period, at a rate of =.;G p.a. & ' Co%enants Some of the financin a reements of the Company contain co!enants establishin ma1imum indebtedness and le!era e le!els, as $ell as minimum co!era e of outstandin amounts. Co%enants re;uirements as of December 31, 2013 .n 'une :, 2&12, the Company concluded the rene otiation of the debt financial co!enants, $hich resulted on the follo$in chan esF +a- co!enants are measured based on consolidated information translated into 4S dollars +as opposed to consolidated financial information in (eais-, and +b- the indebtedness ratio +>et debt to @BITDA- $as increased to a ma1imum ratio of 8.;1 as from 'une 2&12. The measurement of the ratios based on information translated into 4S dollars reduces the of effects chan es in e1chan es rates as compared to ratios based on information measured in (eais. A substantial portion of the debt of the Company is denominated in 4S dollars and as a result particularly depreciation of the real a ainst the 4S dollar had si nificant impacts on the ratio $hen measured in (eais. 4nder the prior computation criteria in the e!ent of a depreciation the amount of net debt as of the end of the period $ould increase $hen measured in (eais. 4nder the re!ised criteria by translatin the @BITDA from (eais to 4S dollar at the a!era e e1chan e rate of each #uarter the impact of the depreciation of the Bra/ilian real is miti ated.

,2 de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

The follo$in table presents the financial co!enant ratiosF December, 2012 and after (atio of debt ser!ice co!era e +i- ) Ainimum ratio Indebtedness ratio +ii-) Aa1imum ratio Aore than 1.&& ?ess than 8.;&

+i- The ratio of debt ser!ice co!era e is defined as +a- ad6usted @BITDA +for the last four social #uartersin accordance $ith practices adopted in Bra/il and ad6usted translated into 4S dollars at the a!era e e1chan e rate of each #uarter, plus the balance of cash, cash e#ui!alents and mar*etable securities at period)end translated into 4S dollar at period)end e1chan e rates di!ided by +b- debt ser!ice payment re#uirements for the follo$in four consecuti!e #uarters plus interest paid durin the past four #uarters translated into 4S dollars at the a!era e e1chan e rate of each #uarter. +ii- The indebtedness ratio is defined as +a- consolidated net debt translated into 4S dollars at the period)end closin rate di!ided by +b- Ad6usted @BITDA for the last four social #uarters translated into 4S dollars at the a!era e e1chan e rate of each #uarter. The Company is in full compliance $ith the co!enants established in the financial contracts at December %1, 2&1%, for $hich the debt ser!ice ratio totaled 1.8 +2.% not ta*in into consideration the effects of the reclassification from non)current liabilities to current liabilities re ardin the early redeem of Fibria"s 2&2& Bond, as >ote %=+b-- and indebtedness ratio totaled 2.:. The debt a reements that ha!e debt financial co!enants also ha!e the follo$in e!ents of defaultF . . . . . & i' >on)payment, $ithin the stipulated period, of the principal or interest. Inaccuracy of any declaration, uarantee or certification pro!ided. Cross)default and cross)6ud ment default, sub6ect to an a reed minimum of 4SH ;& million. Sub6ect to certain periods for resolution, breach of any obli ation under the contract. Certain e!ents of ban*ruptcy or insol!ency of the Company, its main subsidiaries or Deracel Celulose S.A.

+oans and financing guarantees At December %1, 2&1%, certain loans and financin are uaranteed mainly by property, plant and e#uipment items from TrJs ?a oas +State of Aato Krosso do Sul-, 'acareI +State of S7o 3aulo- and Aracru/ +State of @spIrito Santo- units, $ith a net boo* !alue of (H :,,::,&;: +December %1, 2&12 ) (H <,,;8,2&: and 'anuary 1, 2&12 ) (H =,8;:,,%<-, considered sufficient to co!er the correspondin loans and financin amounts.

& ii'

0nused credit lines In April 2&1%, the Company obtained a re!ol!in credit facility $ith Banco Bradesco, in the amount of (H %&&,&&& $ith a!ailability for fi!e years and an interest rate of 1&&G of the CDI plus 1.;G p.a., $hen ,% de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

fully used. Durin the unused period, the Company $ill pay a commission in (eais of &.&;G p.a. #uarterly. The Company has not used this credit facility. In Aay 2&11, the Company, throu h its international subsidiary Fibria Tradin International ?td. obtained a re!ol!in credit facility $ith ele!en forei n ban*s, in the amount of 4SH ;&& million $ith a!ailability of four years and interest payable #uarterly at #uarterly ?IB.( rate plus from 1.8&G to 1.<&G o!er the disbursed amounts. For unused amounts the Company is char ed an e#ui!alent to %;G of the a reed interest cost on a #uarterly basis. The total amount paid related to unused credit lines until December %1, 2&1% $as (H =,=<%. 2: Contingencies The Company is party to labor, ci!il and ta1 la$suits at !arious court le!els. The pro!isions for contin encies a ainst probable unfa!orable outcome of claims in pro ress are established and updated based on mana ement e!aluation, as supported by e1ternal le al counsel. 3ro!isions and correspondin 6udicial deposits are as follo$sF
December 31, 2013 6udicial deposits >ature of claims Ta1 ?abor Ci!il 6udicial deposits December 31, 2012 6udicial deposits 6anuar* 1st, 2012

)ro%ision

!et

)ro%ision

!et

)ro%ision

!et

=:,,21 ;;,2;& ,,;&% 1;1,:<8

1&2,,&: 1;2,882 2;,1:8 2=&,;12

1;,,=; ,<,1,2 1;,::1 12=,=%=

12%,<,1 8<,<&% :,;2& 1<=,&18

1:2,222 1&=,&18 12,;,1 2=2,=2<

%=,8%1 :&,%11 :,&<1 1&8,=1%

11,,;<2 8<,=1, =21 1:=,212

1<%,=2% ==,=%8 <,18, 2:,,=&:

;8,2;1 81,&1; :,%2= 1&1,;,8

The Company has ta1 and ci!il claims arisin in the normal course of business that is assessed as of possible +but not probable- loss by mana ement, as supported by outside le al counsel. >o pro!ision has been recorded to co!er possible unfa!orable outcomes from these claims. At December %1, 2&1%, these claims amount toF ta1 (H 8,%=%,2%: and ci!il (H ,;2,,==. The chan e in the pro!ision for contin encies is as follo$sF 2013 At the be innin of the year (e!ersal >e$ liti ation Accrual of financial char es At the end of the year 2=2,=2< +12;,2&%:&,:%% :2,2;; 2=&,;12 2012 2:,,=&: +%,,12,=,,2% 8%,22< 2=2,=2<

&a'

Comments regarding probable ta contingencies The ta1 processes $ith probable loss are represented by discussions related to federal, state and municipal ta1es, for $hich, substantially, there are 6udicial deposits as collateral, so there is no material e1posure for the Company. ,8 de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&b'

Comments regarding possible ta contingencies 2e present belo$ comments on possible ta1 contin encies for $hich the Company has not reco ni/ed any pro!ision. In the table belo$ $e present a detail of the amounts of these contin encies as of December %1, 2&1%F Amount Income ta1 assessment ) >ormus +iTa1 incenti!e ) a ency for the de!elopment +iiI(3'9CS? ) partial appro!al +iiiI(3'9CS?? ) >e$ar* +i!Income ta1 assessment ) I(3'9CS?? ) s$ap of industrial and forestry assets +!Income ta1 assessment W I(3'9CS?? ) Fibria Tradin International +!i.ther ta1 liabilities +a- +!iiTotal possible ta1 contin encies
+a- Includes the amount of (H ,;,18& related to the process of our 6ointly)controlled entity Deracel.

1&1,1:% 18;,&&& 221,;:, 1,<,=,2&< 2<8,=%; 1,,%<,:&2 8,8<=,%<:

+i- Income ta1 assessment ) Fibria Celulose +M>ormusN.n December 2&&<, Fibria0s subsidiary >ormus @mpreendimentos e 3articipaUVes ?tda., incorporated by Fibria on September %&, 2&1%, recei!ed an income ta1 assessment from the Bra/ilian Federal (e!enue Ser!ice +%eceita Federal do &rasil- char in Income Ta1 +'mposto de %enda- and Social Contribution +Contribuio #ocial sobre o (ucro ()*uido- o!er earnin s of its forei n subsidiaries, durin the period from 2&&2 to 2&&:. .n .ctober 2&11, the assessment $as re!ised by the Ta1 Federal Administrati!e Court +Conselho Administrati"o de %ecursos Fiscais- $hich decided to maintain the assessment throu h a castin !ote after a tie of three !otes fa!orable to Fibria and three !otes a ainst Fibria by the si1 members of the court. The Company appealed of this decision +Aotion of Clarification- and, at the moment, the ta1 assessment still $aitin for 6ud ment. .n September 2&11, >ormus recei!ed a ne$ ta1 assessment char in Income Ta1 +'mposto de %enda- and Social Contribution +Contribuio #ocial sobre o (ucro ()*uido-, but this time for the year 2&&<. In Aarch 2&1%, >ormus recei!ed another income ta1 assessment from the Bra/ilian Federal (e!enue Ser!ice +(eceita Federal do Brasil- $here Bra/ilian Federal (e!enue Ser!ice claimed Income Ta1 +Imposto de (enda- and Social Contribution +ContribuiU7o Social sobre o ?ucro ?I#uido- on the earnin s of its forei n subsidiary for the year 2&&=. The subsidiary, domiciled in Oun ary, $as responsible for the sales of pulp and paper in the lobal mar*et. ,; de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Based on the position of outside le al counsel, mana ement understands that this Oun arian subsidiary $as sub6ect to ta1ation in its country of incorporation and the position ta*en by the ta1 authorities !iolates pre!ision of Bra/ilian ta1 la$, in particular the Bra/ilian)Oun arian treaty to a!oid double ta1ation, $hich precludes double ta1ation by Bra/ilian ta1es of net income of a Bra/ilian company for operations in Oun ary. In 2&11 a 4nconstitutionality 3rocess +Ao +ireta de 'nconstitucionalidade +ADI-- $as filed by the >ational Industry Association +Confederao ,acional da 'nd-stria +C>I-- $ith the Supreme Federal Court +#upremo .ribunal Federal +STF-- challen in the constitutionality of article <8 of 3ro!isional Aeasure 2,1;= $hich establishes the ta1ation for income ta1 and social contribution purposes of income earned by subsidiaries and associates incorporated outside Bra/il irrespecti!e of $hether such income $as made a!ailable to the shareholder in Bra/il. .n its session of Au ust 1<, 2&11 the STF considered the ADI $ith fi!e members !otin for the constitutionality of article <8 and four members !otin for the unconstitutionality of such article. The session $as suspended until 'ustice 'oa#uim Barbosa casts its !ote $hich is the only !ote not yet casted. Considerin the outcome of the session of the STF indicated abo!e internal and e1ternal le al counsel ha!e re!ie$ed their probability assessment $hich pre!iously $as of a remote loss, in 2&11 $as considered as reasonably possible the probability of loss. Oo$e!er, as disclosed in >ote 2; +a-, the income ta1 assessments abo!e mentioned $ere included in the refinancin pro ram +(@FIS- established by ?a$ n_ 12,=:;91% and by the 3ro!isional Aeasure n_ :2<91% in the form of cash payment, settled in >o!ember 2<, 2&1%, by the total amount of (H ;:&,8;%. The Company filed in the records of each administrati!e process, correspondin $ai!er re#uest statin its inclusion in (@FIS, so a$aitin the appro!al of such applications and the filin of the records. +ii- Ta1 incenti!es ) A ency for the De!elopment of >ortheastern Bra/il +AD@>@The Company has business units located $ithin the re ional de!elopment area of AD@>@. For that reason, considerin that the paper and pulp industry is deemed to be a priority for re ional de!elopment +Decree 8,21%, of April 1:, 2&&2-, in December 2&&2, the Company re#uested and $as ranted by the Bra/ilian Federal (e!enue Ser!ice +%eceita Federal do &rasil- the ri ht to benefit from reductions in corporate income ta1 and non)refundable surchar es calculated on operatin profits +as defined- for Aracru/ plants A and B +period from 2&&% to 2&1%- and plant C +period from 2&&% to 2&12-, $hen the #ualification reports for the ta1 reductions are appro!ed by AD@>@. .n 'anuary ,, 2&&8, the Company $as ser!ed .fficial >otice 1,8&:9&% by the li#uidator of the former Superintendence for the De!elopment of the >ortheast +S4D@>@-, $ho reported that, Bbased on the re!ie$ carried out by the ?e al Ad!isory .ffice of the Ainistry of Inte ration as re ards the special e1tent of the incenti!e, the ri ht to use the benefit pre!iously ranted is unfounded and $ill be cancelledB. Durin 2&&8 and 2&&;, !arious AD@>@ determinations $ere issued to cancel the ta1 benefits. Such determinations $ere challen ed and9or refuted by the Company, but no final court decision has been announced in relation to the merits of the case. >e!ertheless, the Bra/ilian Federal (e!enue Ser!ice +%eceita Federal do &rasil- ser!ed the Company ,: de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

an assessment notice in December 2&&; re#uirin the payment of the amounts of the ta1 incenti!e used, plus interest, but $ithout imposin any fine, amountin to (H %1:,%;;. The Company challen ed such assessment notice, $hich $as deemed to be !alid at the administrati!e le!el. The Company filed an appeal a ainst that assessment and in Au ust 2&11, the Ta1 Federal Administrati!e Court +Conselho Administrati"o de %ecursos Fiscais- considered that part of the assessment needed to be upheld. Therefore, the portion of the assessment related $ith 2&&% benefits $as canceled and the portion related $ith 2&&8 $as upheld. Because this rulin , the amount of the assessment $as reduced to (H 1&1,1:% +updated throu h December %1, 2&1% for monetary correction-. Company0s mana ement, supported by its le al counsel, belie!es that the decision to cancel the ta1 benefits is erroneous and should not pre!ail, $hether $ith respect to benefits already used, or $ith respect to future periods. 2ith respect to the benefits obtained throu h 2&&8, based on the position of its le al counsel, mana ement belie!es that the ta1 payment demanded is not 6ustified, since the Company used the benefits strictly in accordance $ith the le al re#uirements and in conformity $ith the Bra/ilian Federal (e!enue Ser!ice +%eceita Federal do &rasil- determinations and AD@>@0s #ualifyin reports. Considerin that the CA(F maintained the assessment $ith respect to the benefits used durin 2&&8 amountin to (H <%,1&&, the Company offered to pro!ide a ban* uarantee for the amount bein challen ed and e1pects for the collection phase of the le al process $here it $ill challen e the amount of the assessment. 2ith respect to the remainin incenti!e period, e1tendin to 2&12 +plant C- and 2&1% +plants A and B-, based on the opinion of its le al counsel, mana ement belie!es that it is ille al re!o*e the ta1 benefits, because the benefits ranted $ere conditional to achie!in certain pre)established re#uirements +implementation, e1pansion or moderni/ation of industrial enterprise- and the benefits $ere ranted throu h the end of the term established in the ?a$ and related re ulations. Althou h the Company is confident that it $ill pre!ail, considerin the facts that occurred in 2&&8 and 2&&;, $hich indicate that AD@>@ and the Bra/ilian Federal (e!enue Ser!ice +%eceita Federal do &rasil- intend to cancel the ta1 benefits, the Company decided to cease the use of ta1 benefits as from 2&&;, until a final court decision is obtained on the matter. Since the benefits used throu h 2&&% $ere maintained by the decision of CA(F they are currently under discussion the benefits for the year 2&&8 and those after 2&&; for $hich the Company has not used the benefits. The ta1 contin ency is considered as of possible loss and therefore no pro!ision has been recorded. +iii- Income ta19CS?? ) partial appro!al The Company has three re#uests for the appro!al of income ta1 credits $ith the Bra/ilian Federal (e!enue Ser!ice +(eceita Federal do Brasil-, referrin to 1,,<, 1,,, and the fourth #uarter of 2&&&, totalin (H 1%8 million, of $hich only (H =% million $as appro!ed, creatin a contin ency of (H 18; million updated throu h December %1, 2&1%. The Company timely appealed the re6ection of the ta1 credits. 2ith respect to the year 1,,<, the claim is pendin a decision from the first trial court ++elegacia %egional de /ulgamento- of the !oluntary resource re#uested by the Company. 2ith respect to the ,< de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

fourth #uarter of 2&&&, the Company is a$aitin a decision from Ta1 Federal Administrati!e Court +Conselho Administrati"o de %ecursos Fiscais-, and $ith respect to 1,,, it a$aits a decision on an appeal to the Oi h Court of 'ustice. Based on the position of le al counsel, mana ement understands that the li*elihood of an unfa!orable outcome for these trials is possible and therefore no pro!ision has been recorded. +i!- Income ta19CS?? ) >e$ar* Fibria recei!ed, in December 2&&< and December 2&1&, t$o ta1 assessments in the amount, to ether, of (H 221 million $here Bra/ilian Federal (e!enue Ser!ice char ed Income Ta1 and Social Contribution of >e$ar* Financial Inc., an offshore company controlled by DC3 @1portadora e 3articipaUVes ?tda. +succeeded by Fibria- $ith respect to the fiscal year 2&&;. Based on ad!ice from internal and e1ternal counsel the probability of loss for the first ta1 assessment +December 2&&< ) (H 12& million- is remote and the probability of loss for the second ta1 assessment +December 2&1& ) (H 1&1 million- is possible. Accordin ly, no pro!ision has been recorded $ith respect thereto. +!- Ta1 assessment ) I(3'9CS?? ) S$ap of industrial and forestry assets .n December 2&12, the Company recei!ed a ta1 assessment notice from the Bra/ilian Federal (e!enue Ser!ice +%eceita Federal do &rasil- $ith respect to the collection of income ta1 and social contribution on profits in the amount of (H 1,::: million, of $hich (H ;;: million corresponds to the alle ed ta1 due and (H 1,11& million corresponds to fines and interest. The Ta1 Authorities in#uire a probable ain of capital in operation made on February 2&&<, in $hich the Company e1ecuted an a reement $ith International 3aper for the s$ap of industrial and forestry assets bet$een both companies. .n 'anuary ,, 2&1%, the Company filed an appeal on the Bra/ilian Federal (e!enue Ser!ice Dele acy. .n >o!ember 1%, 2&1% a decision $as issued by the (e ional .ffice of 'ud ment from BrasIlia W Federal District, in fa!or to the appeal filed by the Company, e1oneratin the ta1 credit in discussion. It is important to note that this decision $as issued by first administrati!e instance and an appeal mi ht occur by the Ta1 Federal Administrati!e Court +MConselho Administrati!o de (ecursos Fiscais W CA(FN-. Based on the re!ie$ of the Company internal and e1ternal le al ad!isors the probability of loss $as classified as possible $ithout the need to account any pro!ision. The updated amount of the ta1 assessment is (H 1,<,=,2&< as at December %&, 2&1%. +!i- Ta1 assessment ) I(3'9CS?? ) Fibria Tradin International .n .ctober 2&1%, the Company recei!ed a ta1 assessment notice $ith respect to the earnin s of Fibria Tradin International, related to 2&1&, $hich $as reco nised by Fibria accordin to e#uity method. Therefore, for this ta1 assessment $ere not considered by the Bra/ilian Federal (e!enue Ser!ice the accumulated losses in pre!ious years. The updated !alue of the cause is (H 2<8,=%;, as at December %1, 2&1%. Based on our internal and e1ternal le al ad!isors, the probability of loss $as classified as possible, $ithout the need to account pro!ision. +!ii- .thers ta1 liabilities $ith probability of loss classified as possible Fibria has more than ;<& trials for indi!idual amounts of less than (H 1&& million. The amount in!ol!ed in all of these trials is (H 1,,%<,:&2. The a!era e !alue of each trail is (H %.8 million.

,= de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&c'

Comments on labor1ci%il proceedings The Company is a party to appro1imately ;,=%; labor la$suits filed by former employees, third parties and unions, claimin the payment of se!erance pay, health and safety premiums, o!ertime, commutin time, occupational illnesses and $or*ers0 compensation, tan ible and moral dama es, understated inde1ation on the fine of 8&G of the Ko!ernment Se!erance Indemnity Fund for @mployees +FKTS-, and 1,&<; ci!il la$suits, most of $hich refer to claims for compensation by former employees or third parties for alle ed occupational illnesses and $or*ers0 compensation, collection la$suits and ban*ruptcy situations, reimbursement of funds claimed from delin#uent lando$ners and possessory actions filed in order to protect the Company0s e#uity. The Company has insurance for public liability that co!ers, $ithin the limits set in the policy, unfa!orable sentences in the ci!il courts for claims for compensation of losses.

&i'

Ci%il proceeding #it" probabilit* of loss classified as possible .n 'une 2&12, a 3ublic Ci!il Action $as filed by the Federal 3ublic Ainistry from Distrito Federal, aimin a prohibition for the Company of tra!el in any federal hi h$ay o!er$ei ht, under a penalty, $hich $as ranted by the 'ud e of first instance as $ell as the action claimin the payment of moral and material dama es due to alle ed dama e to federal hi h$ays, the en!ironment and economic order. The amount of (H ==,,1,1 $as i!en by the Federal 3ublic Ainistry for the proceedin . The Company appealed $ith success a ainst the decision and also filed appeal for the others matters of the Action. The proceedin is in the initial sta e and, accordin to the Company0s le al ad!isors, the probability of loss $as classified as possible and for that reason, no pro!ision $as recorded.

&ii'

Class action In >o!ember 2&&=, a securities class action la$suit $as filed a ainst the Company and some of its current and former officers and directors on behalf of purchasers of the Company0s AD(s bet$een April < and .ctober 2, 2&&=. The complaint alle es !iolations of the 4S Securities @1chan e Act, assertin that the Company failed to disclose information in connection $ith, and losses arisin from, certain deri!ati!es transactions. Durin our Board of Directors meetin in December 2&12, the Company ratified the a reement under 6udicial mediation, $here the Company and the other co)defendants a reed to pay the full amount of 4SH %<.; million +e#ui!alent to (H <:.: million- to all holders of American Depositary (eceipts +MAD(sN-, from April < to .ctober 2, 2&&=. .n Aarch 2=, 2&1%, Fibria paid an amount of 4SH %<.; million +e#ui!alent to (H <;.8 million- and $as reimbursed under the DC. policy, as a reed by the Company and the other co)defendants in 2&12.

&d' +i-

Rele%ant comments regarding ta proceeding MCrTdito)3rJmio de I3IN The Company entered on 'anuary 1,,;, $ith a 6udicial ta1 proceedin , aimin the reimbursement of the Ta1 Incenti!e denominated BCr dito01r2mio de '1'B. After final decision fa!orable for us, $hich determined the reimbursement of that credit, $e reco ni/ed the amount of (H 1<&,:%= +bein (H <<,8=: in 2&1% and (H ,%,1;2 in 2&12-, under the B.ther assetsB, in the B>on)current assetsB a ainst B.ther operational re!enueB, net of the la$yer fees. The Company submitted a formal re#uest for the issuance of precatory related to the 6udicial process. ,, de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

+ii-

B@FI@Q 3ro ram The Company obtained a fa!orable court decision, $hich became final on .ctober 2&1% in in6unction proposed in 2&&2 aimed the reco ni/in the ri ht to I3I premium credit, due to ta1 incenti!es on e1ports in the period bet$een December of 1,,% and Aay of 1,,<, in the duration of B@FI@Q pro ram. The I3I 3remium Credit $as a fiscal financial benefit to e1portin companies, established as a form of compensation paid in the ac#uisition of ra$ materials. This benefit $as re ulated by Decree n_ :8,=%%9:,, after bein introduced by Decree 8:19:,, bein *ept until the year of 1,=%, the year of termination under the la$. Oo$e!er, the rules $hich o!erned the deadline for the use of the benefit, ho$e!er, $ere repealed by Decree ) ?a$ n_ 1,<289<, and 1,=,89=1, so that there $as no mention o!er the deadline of use the benefit. Subse#uently, the Decree)la$s $ere declared unconstitutional, $hich led to numerous le al disputes about the date of termination of the benefit. The precedent is consolidatin to limit the use of such credits by the year of 1,,&, ho$e!er, the case of the Company differs from this discussion, since it 6oined the B@FI@Q 3ro ram, $hich in the case of ta1 benefit ranted under specific conditions and for a definite period resulted in !ested ri ht, as reco ni/ed in the records of the in6unction mentioned abo!e. >o primeiro semestre de 2&18 a Companhia protocolarY pedido de habilitaU7o do crTdito obtido por meio da decis7o mencionada acima. ApRs a anYlise do pedido de habilitaU7o por parte da (eceita Federal do Brasil, o !alor do crTdito serY conhecido In the first half of 2&18, the Company $ill file application for #ualification of this credit mentioned abo!e. After the appro!al of the application for #ualification by the Federal Ta1 authority, the !alue of the credit $ill be *no$n and boo*ed by us.

&e'

Remaining 4udicial deposits &consolidated' The Company has at December %1, 2&1% the amount of (H 1&:,&:& +(H 1;<,;:< in December %1, 2&12 and 1%<,&:& in 'anuary 1, 2&12- deposited 6udicially in cases classified by e1ternal le al ad!isors as of remote or possible loss, for $hich no pro!ision ha!e been recorded. The contin encies refer to 3IS, C.FI>S, Income ta1es and to contributions to the I>SS, amon others of smaller amount. Additionally, it includes the amount of (H ;%,2&, of the credit balance of (@FIS, as detailed in >ote 2;.

&f'

Significant contingencies resol%ed Durin the year 2&1% the Company had an amount of (H 2,,1<= accrued on the assessment recei!ed in Au ust 2&&,, of the S7o 3aulo State (e!enue Ser!ice +Fa/enda do @stado de S7o 3aulo- in the ori inal amount of (H 21,=81 , includin penalties and interest. Such notice $as issued $ith the reasonin that the Company conducted operations in issuin the Federal District as a destination of oods , and they ha!e not left the state territory claimed, $hich enerated differential bet$een applied rates and those $hich $ould apply . 2hereas the pro nosis of loss classified as probable, in 'une of 2&1%, the Company opted to 6oin the Special Installment 3ro ram, for payment of the debt to reduce penalties and interest, ha!e been paid the amount of (H 18,= million, in 'uly 2&1%.

1&& de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&g'

Dra#bacB Suspension ta benefit . 7eracel Durin the construction of the pulp mill of the Deracel, part of the mill $as ac#uired from a specific supplier. The mill $as eli ible to the ta1 benefit entitled Dra$bac* Suspension $hich $ould pro!ide e1emptions on imports, in case the funds recei!ed to pay the supplier $ere recei!ed abroad. Oo$e!er, part of the mill $as financed $ith funds from Bra/il and, for this reason, the Federal Ta1 authority issued a ta1 assessment to the supplier and canceled the Dra$bac* benefit. Deracel"s supplier entered an appeal accordin to the assessment recei!ed, $hich is still pendin for 6ud ment, and in parallel, the supplier filed an arbitration proceedin a ainst Deracel in order to determine $hich company $ould be responsible for e!entual dama es in case supplier is considered uilty. In September 2&1%, the International Chamber of Commerce Arbitration Court decided that Deracel and its supplier shall share the potential dama es in a ratio of <;G to Deracel and 2;G to its supplier. In >o!ember 2&1%, Deracel 6oined the (@FIS to proceed $ith the payment in a sin le installment in order to re ulari/e the debt, $ith impact of (H 22 million for the Company +correspondin to ;&G of our partnership-.

29 &a'

/a Amnest* and Refinancing )rogram &HR2FISH' +a# 12,?<9113 and )ro%isional 5easure <2>113 A Foreign earnings As per ?a$ 12=:;91% and 3ro!isional Aeasure :2<91%, issued in .ctober and >o!ember 2&1%, respecti!ely, the Ta1 (efinancin 3ro ram +(@FIS- $as established, arisin from ta1 assessments o!er forei n earnin s of Bra/ilian controlled or associated entities. Based on the (@FIS, the Company decided on >o!ember 2;, 2&1%, to 6oin the pro ram in the $ay of cash payment for debts arisin from ta1 assessments recei!ed by its former subsidiary >ormus, described in >ote 28 +b-+i-, discounted %&G of the principal upon use of credits from ta1 losses and ne ati!e basis of social contribution on net income, and 1&&G reduction of fines, craft or isolated, of the interest of arrears and le al char es. The amount paid in 6oinin the (@FIS $as (H ;:&,8;%, $here (H 1:=,1%: upon the use of credits from ta1 losses and ne ati!e basis of social contribution on net income and (H %,2,%1< in cash disbursements on >o!ember 2<, 2&1%.

&b'

+a# 11,@:110@ In >o!ember 2&&,, the Company 6oined the (@FIS introduced by ?a$ 11,819&,, the ob6ecti!e of $hich is the settlement of fiscal liabilities throu h a special system for payment of ta1 and social security debt in installments. .n 'une 2=, 2&11, all amounts under the pro ram $ere consolidated after meetin all formal re#uirements established in the le islation.

1&1 de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

The follo$in is a summary of the amounts included in the pro ram, as $ell the benefits obtainedF
Detail of amounts Total updated debts included in the pro ram Benefits for reduction of fines and interest Fines and interest offset a ainst ta1 loss and ne ati!e basis Total debt payable 3ayments made Balance of debt Total of 6udicial deposits updated Credit balance ;%2,<%8 +<=,&%&+12,,%,<%2;,%&< +21,%;:%&%,,;1 %8,,=&2 8;,=;1

Considerin the le al ri ht to offset 6udicial deposits related to the debts included in the pro ram and since 6udicial deposits e1ceed the outstandin debt +after the reductions established by the pro ram- the remainin balance in fa!or of the Company, at December %1, 2&1% is (H ;%,2&,, $hich is monthly updated by S@?IC, the interest rate applicable to ta1 debts, and it is presented $ithin non)current assets under other accounts recei!able and monthly. 2ith the reopenin of the period for adherence to (@FIS re ardin the ?a$ 11,,819&,, established by the ?a$ 12,=:;91% on .ctober ,, 2&1%, the Company decided to include 1% processes, in the $ay of cash payment in a sin le payment. The total amount for payment, after the discounts permitted by the ?a$ $as (H 1%,1:=, of $hich (H :,=8, $as settled upon use of credits from ta1 losses and ne ati!e basis of social contribution on net income and (H :,%1, in cash disbursements on >o!ember 2<, 2&1%. 2< +ong.term commitments /aBe or pa* arrangements The Company entered into lon )term ta*e)or)pay a reements $ith po$er, transportation, diesel, and chemical and natural as suppliers effecti!e for an a!era e period of ,.= years. These a reements contain termination and supply interruption clauses in the e!ent of default of certain essential obli ations. Kenerally, the Company purchases the minimums a reed under the a reements, and for that reason there is no liability accounted for at December %1, 2&1%. The contractual obli ations assumed at December %1, 2&1% correspond to (H 22=,&;< per year +(H 2;=,:,8 at December %1, 2&12 and (H %&1,11< at 'anuary 1, 2&12-. 2> &a' S"are"oldersG e;uit* Capital At December %1, 2&1% and 2&12, fully subscribed and paid)up capital is represented by ;;%,,%8,:8: nominati!e common shares $ithout par !alue +8:<,,%8,:8: nominati!e common shares $ithout par !alue as of 'anuary 1, 2&12-. .n April %&, 2&12, the Company completed the issuance of =:,&&&,&&& common shares $ithout par !alue, throu h a public offerin of shares. The net proceeds obtained from the public offerin of shares is presented belo$F

1&2 de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

!umber of s"ares .ffered throu h American Depositary Shares outside Bra/il .ffered as common shares in Bra/il Total shares offered9 ross proceeds Total amount of transaction costs +LIncome ta1 on transaction costs Total amount of transaction costs, net Total capital increase +L- Transactions costs are mainly represented by commission and fees for la$yers and auditors. 12,%1,,,<2 <%,:=&,&2= =:,&&&,&&&

(ross proceeds 1,;,&2; 1,1::,%;; 1,%:1,%=& +1<,=%8:,&:% +11,<<11,%8,,:&,

&b'

Di%idends and interest on o#n capital The Company0s by)la$s pro!ide for a minimum annual di!idend of 2;G of net income, ad6usted by the chan es in reser!es, as determined by Bra/ilian Corporate ?a$. >o di!idends $ere declared for the years ended December %1, 2&1%, 2&12 and 2&11 as the Company enerated losses.

&c'

Re%enue reser%es The le al reser!e is constituted throu h the appropriation of ;G of the net income for the year. The in!estment reser!e, correspondin to the balance of retained earnin s, after the appropriation of the le al reser!e, mainly relates to earnin s reser!ed to meet the in!estment plans, moderni/ation and maintenance of plants, as appro!ed by the Statutory Audit Committee and the Board of Directors.

&d'

/reasur* s"ares The Company has %82,=28 common shares $ith unit !alue of (H %&.1= per share, $hich corresponds to (H 1&,%8:.

2? &a'

2mplo*ee benefits 7ariable remuneration program The Company maintains a performance based bonus pro ram for its employees, $hich is tied to its performance plans and the attainment of specific ob6ecti!es based on cash eneration, $hich are established and a reed upon at the be innin of each year. The amount recorded as e1penses for the year ended December %1, 2&1% $as (H ;;,<82 +December %1, 2&12 ) (H ;:,8&2 and December %1, 2&11 ) (H :8,;,<-.

&b'

Defined contribution pension plan In 2&&&, the Company became a sponsor of the Senador 'osT @rmIrio de Aoraes Foundation +F4>S@'@A-, a not)for)profit pension fund for the employees of the Dotorantim Kroup. 4nder the fund0s rules, the Company matches employees0 contributions to F4>S@'@A, $hich may ran e from &.;G to :G of nominal salary. The Company0s contributions for the year ended December %1, 2&1% amounted to (H =,=2, +(H =,;1, as of December %1, 2&12 and (H =,=%; as of December %1, 2&11-. 1&% de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&c'

5edical assistance pro%ided to retirees The Company entered into an a reement $ith the S7o 3aulo State 3ulp and 3aper Industry 2or*ers0 4nion to pro!ide the fundin for a lifetime medical assistance plan +S@3AC.- for all of the Company0s employees, their dependents, until they come of a e, and their spouses, for life. The Company0s policy determines that the cost of the benefit be allocated from the date of hirin to the date on $hich the employee becomes eli ible to recei!e the medical assistance benefit. The re!ised employee benefit standard +IAS 1,+(- ) B@mployee BenefitsB- introduces chan es to the reco nition, measurement, presentation and disclosure of post)employment benefits. The standard also re#uires net interest e1pense 9 income to be calculated as the product of the net defined benefit liability 9 asset and the discount rate as determined at the be innin of the year. The effect of this is to remo!e the pre!ious concept of reco ni/in an e1pected return on plan assets. Also, the McorridorN approach $as e1tin uished, and re!ised standard re#uires the Company to reco ni/e the actuarial results directly $ithin M.ther Comprehensi!e IncomeN. The amount recorded as e1penses for the year ended December %1, 2&1% $as (H 8,&:; +(H 8,:8< as of December %1, 2&12 and (H 8,211 as of December %1, 2&11-. The actuarial methods are based on economic and biometric assumptions, as follo$sF
Actuarial assumptions December 31, 2013 Discount rate ) G (eal ro$th rate of medical costs ) G (ate of increase of utili/ation of medical assistance ) G ?on )term inflation ) G Biometric table of eneral mortality Biometric table of eneral mortality for in!alids :.2; %.& %.& ;.& AT)2&&& IA3B ;< December 31, 2012 8.& %.& %.& 8.2; AT)=% IA3B ;< December 31, 2011 ;.; %.& %.& 8.2; AT)=% IAB3;<

The sensibility analysis of the obli ation related to the healthcare plan re ardin chan es in the main premises is the follo$sF
C"ange in premises Discount rate ) G Trend rate of medical costs ) G Aortality &.;&G &.;&G 1 year Increase in premises Decrease of ;.;G Increase of :.8G Increase of 8.%G Decrease in premises Increase of :.1G Decrease of ;.,G Decrease of 8.2G

The sensibility analysis is based on chan es in 6ust one premise $hile the other premises still unchan ed. The actuarial obli ation, recorded under M.ther payablesN, is as follo$sF

1&8 de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2013

2012
+(estated-

2011
+(estated-

(econciliation of liabilities 3resent !alue of actuarial obli ations at be innin of the period Cost of current ser!ice fromF Interest on actuarial obli ations Benefits paid Actuarial + ain- losses in the M.ther comprehensi!e incomeN 3resent !alue of actuarial obli ations at end of the period

,%,,%8 <,<;& +%,:=8+21,821<:,;<,

::,%&2 =,:1= +%,,<122,,=; ,%,,%8

;1,;&8 <,8<2 +%,2:11&,;=< ::,%&2

&d'

2mplo*ee benefits e penses 2013 3ayroll, profit sharin and related char es FKTS and other rescission indemnifications I>SS .thers ;&1,8;% %<,,<2 1<,=== 28,=&1 ;=2,118 2012 8,<,%2< %:,;<2 =2,<&1 1%,<1< :%&,%1< 2011 8<&,%<: %<,&1& ==,228 1=,&&< :1%,:1<

2@

Compensation program based on s"ares )"antom StocB $ptions &)S$' .n April 2=, 2&1&, the Board of Directors appro!ed the ?on )term Incenti!e 3ro ram, $hich consists of a plan to rant 3hantom Stoc* .ptions, the 2&&, and 2&1& 3ro rams, $ith the purpose of incenti!i/e e1ecuti!es in the Company ro$th in the medium and lon term, allo$in their participation in the increase in !alue of the Company0s shares. The pro ram is based on the 3S. concept, $hich consists of an a$ard in cash based on the appreciation, of the shares of the Company, as compared to a predetermined price durin a predetermined period. The $ards cannot be settled in shares. The Company0s C@. and the @1ecuti!e .fficers are eli ible for the plan. At the time of each a$ard, the participants under the plan $ill recei!e a #uantity of 3S., to be defined based on a tar et re$ard and on the e1pectation of an increase in the !alue of the Company. The tar et for the appreciation of the shares of the Company is established by the Board of Directors and the number of 3S. a$arded $ill be calculated in such a manner that, if the appreciation tar et is attained, the resultin re$ard $ill be e#ual to the tar et !alue. The 3S.s can only be e1ercised after a !estin period of three years, as from the a$ard date established in the contracts, and the ma1imum period for the e1ercise of the option is fi!e years since ranted. @1ceptionally, the first a$ard, denominated as the 3ro ram 2&&,, has a raded !estin period. The e1ercise price of the options at the a$ard date is calculated by reference to the a!era e price of the FIB(% shares, in accordance $ith the !olume traded in the three months prior to the date of the a$ard. 1&; de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

The 3ro rams a$arded up to December %1, 2&1% are presented belo$, as follo$F )rograms )rogram 2&&, 2&&, 2&&, 2&1& 2&11 2&12 2&1% A#ard date &=.2:.1& &=.2:.1& &=.2:.1& &=.2:.1& &1.&2.12 &1.&2.12 &1.&2.1% 7esting period &=.2<.1& 12.2:.1& 1&.2<.11 &=.2=.1% &1.&2.18 &1.&2.1; &1.&2.1: 2 piration date 12.%1.1: 12.%1.1: 12.%1.1: 12.%1.1< 12.%1.1= 12.%1.1, 12.%1.2& $ptions 1<,==, 1<,==, 1<,==, %<,,,< :<,:;: 2<=,<28 281,&%2 2 ercise price 2<.;; 2<.;; 2<.;; 2<.;; 2=.%1 18.&, 2&.%<

Assumptions and calculation of fair %alue of options granted The pricin of options $as based on the Binominal Trinomial Trees +BTT- model, due to its easy implementation, !alidation and consideration of the specific terms of the pro ram. This BTT model is a numerical appro1imation of the ris*)neutral or e#ui!alent martin ale methodolo y $hich is fre#uently utili/ed in the !aluation of instruments that cannot ha!e a closed)form pricin formula. The follo$in economic assumptions $ere used at December %1 of each yearF
December 31, 2013 Annuali/ed !olatility of share price ) G +i(is* free return rate ) G +iiA!era e price of shares +a!era e of three prior months.ptions e1ercise price 2ei hted)a!era e term of !estin of option +months2ei hted)a!era e term of life of option +monthsFair !alue of option resultin from the model +a!era e%.%; ,.<< to 1%.22 2<.,& 1,.;; 1%.:, <1.,1 ;.1, December 31, 2012 %.<< :.;; to =.;= 1=.:% 21.;< 1;.2< <%.11 1.=2 6anuar* 1st, 2012 1&.&& 1&.&& to 11.;; 18.&, 2<.;; 11.=< %1.,:

+i- Based on the daily !olatility price for a three)month period. +ii- The cur!e of fi1ed)DI interest rate +Bra/il- at the measurement date $as utili/ed.

As result of the increase in the #uoted mar*et price of the FIB(% shares in 2&1% the fair !alue of the options as of December %1, 2&1% $as (H ;,82; +(H 8<1 as of December %1, 2&12-. The settlement of this benefit plan for e1ecuti!es $ill be made by the Company in cash $hen the options are e1ercised. The chan e in the number of S3. and their correspondin $ei hted a!era e prices for the period are presented belo$F

1&: de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2013 Ieig"ted a%erage price for e ercise of options . Reais

2012 Ieig"ted a%erage price for e ercise of options . Reais

!umber of S)$ .utstandin at the be innin of the year Kranted durin the year Forfeited .utstandin at the end of the year @1ercisable options at the end of the year

!umber of S)$

:&<,%,, 281,&%2 +1:,,%;::<,,&<;

21.;< 2&.%< 2<.,8 1,.;;

%<,,=;1 ;;%,<1& +%2:,1:2:&<,%,,

2<.;; 21.1; 2<.=% 21.;<

828,8,1

2&.88

%;%,;11

28.2;

For the year ended December %1, 2&1% compensation e1pense of (H ;,82; $as recorded in BKeneral and administrati!e e1pensesB and the correspondin pro!ision in B.ther payablesB +for December %1, 2&12, not compensation e1pense $as reco ni/ed as the pro!ision balance $as reduced for (H 8<1-. 30 Asset retirement obligations The Company uses 6ud ment and !arious assumptions $hen determinin the assets retirement obli ation. @n!ironmental obli ations relate to future obli ations to restore9reco!er the en!ironment arisin from the ri ht of use of the asset, $hich causes en!ironmental dama es as a results of the acti!ities of the pro6ect or from re ulatory re#uirements of the en!ironmental a encies, and $hich are re#uired to be compensated. The dismantlin and retirement of an asset occur $hen is permanently retired, throu h its shutdo$n, sale or disposal. This future lon term obli ation accrues interest $hich is recorded as a financial e1pense in profit and loss and it is also ad6usted for inflation. Depreciation e1pense of the asset retirement obli ation asset is recorded in profit and loss. The balance of the pro!ision for asset retirement obli ations as of December %1, 2&1% amounted to (H 18,%1; and it is included in non)current M.ther payablesN, a ainst the fi1ed assets in the same amount.

1&< de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

31 &a'

Re%enue Reconciliation
2013 Kross amount Sales ta1es Discounts and returns +L>et re!enues +L- (elated mainly to the e1port customers0 performance rebate. =,&;%,&%= +1%&,1<;+1,&&;,8;<:,,1<,8&: 2012 <,2&=,8;2 +1%=,=2&+=,;,2;,+:,1<8,%<%2011 :,=:1,&81 +28;,<;,+<:&,,=2;,=;8,%&&

1&= de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&b'

Information about products 2013 3ulp Dolumes +tonsDomestic mar*et Forei n mar*et 2012 2011

88<,82, 8,<;&,%%< ;,1,<,<::

;%&,;:: 8,=2;,,,& ;,%;:,;;:

;&<,;;, 8,:%%,8&2 ;,18&,,:1

3ulp re!enue Domestic mar*et Forei n mar*et

;&%,:8, :,%81,<<2 :,=8;,821

;&=,;%% ;,;,<,<2; :,1&:,2;= 1,18&

8=:,28= 8,,=&,;<& ;,8::,=1= 1,&:%

A!era e price +in (eais per ton(e!enue Domestic mar*et Forei n mar*et 3aper Ser!ices

1,%1<

;&%,:8, :,%81,<<2 <1,,=; :,,1<,8&:

;&=,;%% ;,;,<,<2; :=,11; :,1<8,%<%

8=:,28= 8,,=&,;<& %28,122 :%,%:& ;,=;8,%&&

&c'

Information b* geograp"ic areas The eo raphic areas are determined based on the customer location. The Company0s re!enue classified by eo raphic areas is described belo$F 2013 @urope >orth America Asia Bra/il and others 2,:<,,<&; 1,,%&,=,% 1,<&=,%:= ;,=,88& :,,1<,8&: 2012 2,;%,,218 1,;=1,&21 1,8;8,,:% ;,,,1<; :,1<8,%<% 2011 2,%8%,2=8 1,%,;,&&, 1,2:2,1,1 =;%,=1: ;,=;8,%&&

1&, de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

32

Financial results
2013 Financial e1penses Interest on loans and financin Appropriation of interest)ac#uisition of Aracru/ shares ?oans commissions Financial char es in the partial repurchase of Bond .thers 2012 2011

+;<;,=<<+22,11=+%;&,2,;+:=,2%:+1,&1:,;2:-

+:=1,=%,+<2,=8&+1;&,,1<+%=,=8=+,88,8&;-

+::&,&=8+8&,=,%+=8,=::+=<,1:2+=<%,&&;-

Financial income Financial in!estment earnin s (e!ersal of inde1ation char es on contin ent liabilities .thers

,:,,82 1%,<=1 11&,<2%

1;1,<2= 1;,,1= 1:<,:8:

1=&,%<< %:,:2% 21<,&&&

Kains +losses- on deri!ati!e financial instruments Kain ?osses

%<:,<;& +;,2,&:%+21;,%1%-

8%=,=,: +:2%,%:1+1=8,8:;-

;;:,<:: +=%%,:8%+2<:,=<<-

Forei n e1chan e and +loss- ain ?oans and financin .ther assets and liabilities +L-

+,1&,%1:+22,;,1+,%2,,&<-

+=&%,:81:=,:8& +<%;,&&1+1,:,:,22;-

+1,&%:,2<81&&,8=; +,%;,<=,+1,=:=,:<1-

>et financial result

+2,&;8,&2%-

+L- Includes the effect of e1chan e forei n on cash and cash e#ui!alents, trade accounts recei!able, trade payable and others.

11& de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

33

2 penses b* nature
2013 Cost of sales Depreciation, depletion and amorti/ation Frei ht ?abor e1penses Dariable costs 2012 2011

+1,=%%,;8=+<<8,=;1+812,:28+2,%:1,::;+;,%=2,:==-

+1,=11,,<8+:,1,,,8+882,8;,+2,2,&,=%1+;,2%<,2;=-

+1,=12,=;;+:11,2<%+8<%,82:+2,22:,<1;+;,128,2:,-

Sellin e1penses ?abor e1penses Commercial e1penses +L.perational leasin Depreciation and amorti/ation char es .ther e1penses

+1,,==1+2,,,,<,+1,<;=+:,,;<+1=,,:%+%8<,;%=-

+1<,;81+2:&,%2:+1,%1&+12,:&,+:,2:;+2,=,&;2-

+1=,;:8+2%,,<=<+,&<+11,<<,+2%,=,1+2,8,,2=-

Keneral and administrati!e and directors0 compensation e1penses ?abor e1penses Third)party ser!ices +consultin , le al and othersContin encies Depreciation and amorti/ation char es Donations and sponsorship Ta1es and contributions .peratin leases and insurance .ther e1penses

+122,22%+111,8=&+22,:;:+;,:,&+;,=;1+,,1,=+2%,&%%+%&&,1%1-

+11%,,1;+1&%,18,+2%,<2;+,,8&2+8,:2=+=,:;<+22,;2:+2=:,&&2-

+121,:2<+12<,=,1+2%,:<8+<,:1<+8,811+=,=&2+1:,8&%+%1&,82;-

.ther operatin e1penses, net 3ro ram of !ariable compensation to employees Capital ain ) 3iracicaba disposal Capital ain of land and buildin sold ) Asset ?i ht +>ote 1+e-Ta1 credits Capital ain ) I3I credit premium +>ote 28 +d-+i-?oss + ain- on disposal of property, plant and e#uipment Chan e in fair !alue of biolo ical assets +>ote 1=(e!ersal of pro!ision for contin encies .thers

+;;,<82<,,,&8& 2,,,<% <<,8=: +22&,,%:1&2,2:; 11:,&82 +28,<%&=2%,%,=

+;:,8&2-

+:&,&<11<;,:;8

,%,1;2 :8,81, 2,<,:=: +88,=2,%;8,&2:

18;,==8 +=,&<22;%,%,;

+L- Includes handlin e1penses, stora e and transportation e1penses and sales commissions, amon others.

111 de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

3:

Insurance The Company has insurance co!era e for operational ris*s, $ith a ma1imum co!era e of (H ;,&&& million. Additionally, the Company has insurance co!era e for ci!il eneral liabilities in the amount of 4SH 2; million correspondin to (H ;=,;:; on December %1, 2&1%. Fibria0s mana ement considers these amounts to be sufficient to co!er any potential liability, ris*s and dama es to its assets and loss of profits. The Company does not ha!e insurance co!era e for its forests. To miti ate the ris* of fire, the Company maintains internal fire bri ades, a $atchto$er net$or*, and a fleet of fire truc*s. There is no history of material losses from forest fires. The Company has a domestic and international +import and e1port- transportation insurance policy effecti!e until 'anuary %1, 2&18, rene$able for additional 12 months. In addition, Fibria has insurance co!era e for ci!il responsibility of its directors and officers for amounts considered to be ade#uate by mana ement.

39 &a'

2arnings per s"are ,asic The basic earnin s per share is calculated by di!idin net income +loss- attributable to the Company0s shareholders by the $ei hted a!era e of the number of common shares outstandin durin the period, e1cludin the common shares purchased by the Company and maintained as treasury shares.
Continued operations 2013 >et +loss- income attributable to the shareholders of the Company 2ei hted a!era e number of common shares outstandin Basic earnin s per share +in (eais+<&:,822;;%,;,1,=22 +1.2=2012 +<&8,<&:;28,,2;,1;< +1.%82011 +1,11%,2<<8:<,;,1,=28 +2.%=Discontinued operations 2011 28&,:;; 8:<,;,1,=28 &.;1

The $ei hted a!era e number of shares in the presented periods is represented by a total number of shares of ;;%,,%8,:8: issued and outstandin for the year ended December %1, 2&1% and 2&12, $ithout considerin treasury shares, for total of %82,=28 shares in the year ended December %1, 2&1% and %82,=22 shares in the year ended December %1, 2&12. Durin the year 2&1% there $as no chan es in the number of shares of Company.
S"ares outstanding 2013 'anuary to April Aay to December 2ei hted a!era e ;;%,;,1,=22 ;;%,;,1,=22 ;;%,;,1,=22 2012 8:<,;,1,=28 ;;%,;,1,=28 ;28,,2;,1;<

112 de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&b'

Diluted The Company has no con!ertible securities or share purchase options that $ould ha!e a diluted effect in earnin s per share.

3<

Assets "eld for sale and discontinued operations As mentioned in >ote 1+d-+ii-, the CK4s Conpacel, PS( and 3iracicaba $ere sold in 2&11 and the forest and lands located in the south of Bahia $ere sold in 2&12. 2e ha!e also classified the ?osan o pro6ect assets as assets held for sale since 'une 2&11. The forest and lands located in the south of Bahia do not meet the definition of discontinued operations because they do not represent a ma6or separate line of business or eo raphical area.

&a'

Assets "eld for sale The assets held for sale are related to the ?osan o pro6ect, as detailed in >ote 1+d-+ii- and +iii-F
December 31, 2013 ?osan o 3ro6ect Biolo ical assets 3roperty, plant and e#uipment ) substantially lands .thers 2=8,21< %&;,:%2 ;=,,=8, December 31, 2012 2=8,21< %&;,:%2 ;=,,=8, 6anuar* 1st, 2012 2:,,,1= %81,<=8 %2,8:8 :88,1::

4pon classification as assets held for sale, the carryin amount of the assets held for sale $as compared to their estimated fair !alues less cost of sale, and no impairment losses $ere reco ni/ed. &b' Discontinued operations &Conpacel, 3SR and )iracicaba' and assets on sout" of ,a"ia State The results of discontinued operations re ardin the year ended December %1, 2&11 are summari/ed on the follo$in table. The results earned $ith the sale of 3iracicaba unit and assets on south of Bahia State $ere not presented as discontinued operations due to the fact that the !alues are not si nificant compared to the Company0s income.

11% de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

&i'

Discontinued operations . Conpacel and 3SR . information on Statement of profit and loss
2011 >et re!enue Cost of sales Kross profit Sellin and administrati!e e1penses Financial results Kain on disposal .thers Income before income ta1es Income ta1es >et income from discontinued operations :;,:8& +81,:8=2%,,,2 +1%.;<;+1&:%;<.1,: +2.=<=%:8,:2, +12%,,<828&,:;;

&ii'

Discontinued operations . Conpacel and 3SR . information on cas" flo#s 2011 >et cash pro!ided by operatin acti!ities >et cash pro!ided by in!estin acti!ities >et cash used in financin acti!ities +L%:,==: 1,;;=,<:= +1,;,;,:;8-

+L- The Conpacel and PS( treasury operations $ere centrali/ed by the Company. This amount represents the proceeds from the sale transferred to the Company net of in!estments reali/ed. &iii' (ain on disposal of discontinued operations, )iracicaba and assets on sout" of ,a"ia State 2e present bello$ the ain recorded in the year ended December %1, 2&12 and 2&11 for the disposal of the CK4s assets on south of Bahia State +in 2&12- and Conpacel, PS( and 3iracicaba +in 2&11-F

118 de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

2012 Assets in t"e sout" of ,a"ia State Sellin price +)- >et carryin amount of disposed Fi1ed assets and biolo ical assets Kood$ill Fair !alue +IF(S %+(-9C3C 1; and IAS 819C3C 2,In!entories .ther assets and liabilities .ther e1penses +X- Kross ain reco ni/ed before ta1es +)- Income ta1es +X- >et ain after ta1es 21&,&&& +1%,,%,,+2,,%1,+=8,&;;+%,1;=+11,::&2,,:22 +1&,&<81,,;;1 %;<,1,: +121,88<2%;,<8, 1<;,:;8 +;,,<2211;,,%2 +,&,18%+1&,&&&Conpacel and 3SR &i' )iracicaba &ii' 1,;&=,<:= +;==,,8:+8<;,81%;:<,%<; +2,1,;<=-

2011

(ain 2,&<:,18% +==&,;28+8<;,81%+1<8,1,=+1%,1;=;%2,=;& +1=1,1:,%;1,:=1

+i- The ain is included as part of net income from discontinued operations. +ii- The ain is included in B.ther operatin e1penses, netB. &c' Indemnification liabilities In connection $ith the sale of CK4s and assets described abo!e the Company assumed indemnification commitments $ith respect to potential losses, as a reed in the correspondin sale a reements $hich ha!e specific limits, period for the indemnification commitments and procedures for the other party to re#uire the indemnification. 3> Impairment testing Follo$in the accountin policy described in >ote 2.11+a-, as of December %1, 2&1% and 2&12, the Company performed its annual impairment test of the CK4s to $hich ood$ill is allocated as described on the item +a- belo$. In addition, as of December %1, 2&12 and 2&11 the boo* !alue of the Company"s net assets e1ceeded its !alue as per mar*et capitali/ation, therefore, an impairment analysis of lon ) li!ed assets $as performed. As a result, as described in the item +b- belo$, the Company performed an impairment analysis of the lon li!ed assets of the CK4s 'acareI ) S3 and TrJs ?a oas ) AS. &a' C(0s #it" good#ill allocated . AracruIn December 2&1%, the Company assessed the need for performin an impairment analysis of the carryin amount of ood$ill based on the !alue in use of the roup of CK4s $here ood$ill $as allocated. Dalue in use $as estimated usin a discounted cash flo$ model for the roup of CK4s. The process of estimatin the !alue in use in!ol!es assumptions, 6ud ments and estimates for future cash flo$s $hich represent the Company0s best estimate appro!ed by mana ement. The impairment test did not result in the need to reco ni/e an impairment loss. Kood$ill allocated to the roup of CK4s +Aracru/ and Deracel- amounted to (H 8,2%&,8;& at December %1, 2&1%.

11; de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

Future estimated cash flo$s for each period are discounted to present !alue usin a discount rate that best reflects the 2ei hted A!era e Cost of Capital +2ACC- for the CK4. This rate ta*es into consideration the !arious components of financin , debt and o$n capital used by the Company to finance its acti!ities. The cost of capital of the CK4 $as determined usin the Company0s o$n capital cost throu h the Capital Asset 3ricin Aodel. Cash flo$s for a period of ten years $ere considered and an additional amount $as calculated for the perpetuity of the cash flo$ of the tenth year, discounted to present !alue usin the 2ACC rate less the estimate of ro$th of Bra/ilian Kross Domestic 3roduct. A ten)year period $as used as mana ement considers that lobal price of pulp can be affected by se!eral factors $hich enerally are identified in periods lon er than the production cycle of forest, $hich is appro1imately se!en years. The main assumptions used in determinin !alue in use at December %1, 2&1%, are as follo$sF Assumptions @1chan e rate in the period ) (H A!era e ross mar in ) G Discount rate ) 2ACC + ross and net from ta1 credits- ) G 2.1; 8;.8 12.1& and :.2:

Aana ement determined the ross mar in based on past performance and on its e1pectations of mar*et de!elopment. The $ei hted a!era e ro$th rates used are consistent $ith the forecasts included in industry reports. Aana ement belie!es to be reasonably possible that future chan es in the pulp price combined $ith chan es in the e1chan e rate could result in the reco!erable amount of the 4KCs to be different. For purposes of the sensiti!ity analysis, an isolated reduction of 1&G in the pulp price and in the e1chan e rate +4S Dollar- for the ne1t four years of discounted cash flo$s, $ould result in the 4KC reco!erable amount to be hi her than its !alue in use at December %1, 2&1%, not bein necessary the reco nition of a pro!ision for impairment. The reco!erable !alue of the 4KC as per the impairment test e1ceeds its boo* !alue by (H ;.8 billion. &b' /rJs +agoas and 6acareK At December %1, 2&1% the Company assessed $hether the !alue in use of the 4KCs 'acareI and TrJs ?a oas e1ceeded its carryin amount. Dalue is use $as measured usin the discounted cash flo$s method. The processes to estimate the !alue in use follo$ed the same assumptions and 6ud ments described in item +a-. The impairment test did not result in the need to reco ni/e an impairment loss. 3? +aSubse;uent e%ents (and #ale %ecei"able 0 Asset (ight pro3ect As stated in >ote 1+e- as of December %1, 2&1%, (H ,&2,;=8 of the purchase price of the sale of land $as pendin payment and sub6ect to the fulfillment of certain obli ations and le al administrati!e processes. In 'anuary, $e recei!ed in cash (H :&8,:1=. The remainin balance of (H 2,<,,:: $ill be recei!ed as follo$sF (H1&:,&=8 in one installment on 'anuary %&, 2&18 and the balance of (H 1,1,==2, no later than the end of the first #uarter of 2&18. 11: de 11<

Fibria Celulose S.A.


!otes to t"e consolidated financial statements at December 31, 2013
In t"ousands of Reais, unless ot"er#ise indicated

+b-

Fibria 4545 &ond Earl$ %edeem In 'anuary 2&18, the Company"s Aana ement appro!ed the early redeem 1&&G of the Fibria"s 2&2& Bond, that bear an interest rate of <.;G p.a. As of December %1, 2&1%, the outstandin balance of the bonds amounted to (H 1,:1: million +4SH :,& million-. The Company e1pects to complete this transaction in Aarch of 2&18 and, conse#uently, the balance is recorded as current liabilities..

11< de 11<

2013 MANAGEMENT REPORT

MESSAGE FROM THE MANAGEMENT

Over the 2013 year we moved forward with our business strategy and financial strengthening, focusing mainly on obtaining investment grade status. This is consolidate with the announcement of the monetizing of 206 thousand hectares of land to an investment fund, allowing us to maintain end to end management of our forests without, however, owning 100! of the lands where we o"erate. The total "otential amount of this transaction is #$1.6% billion and in &ecember 30, 2013 we received the amount of #$%00 million and until 'anuary 2(, 201) we received more #$60% million. The "ayment of the remaining balance of #$2(* million is e+"ected to be received in 1,1), after fulfillment of some legal obligations and registrations. -ibria may also receive an additional #$2)* million, which is contingent u"on the a""reciation of the land during a "eriod of 21 years.

.arning admiration for the shared value we generate is our greatest goal. -or this, we must maintain our "hiloso"hy of o"erating e+cellence, focus on com"etitive cost control and invest in innovative solutions to meet the demands of our clients and find new sources to create value from our assets.

One of the levers of value that ins"ired -ibria/s creation was the o""ortunity to 0ee" valuing the mar0et disci"line. The wood availability, in a com"etitive way, is evaluated by us continuously, such as obtaining license and the search for new frontiers of growth. 1owever, we believe that, des"ite the challenges, the consolidation growth "resents undis"uted benefits.

2n 2013, the "ul" mar0et saw new ca"acity come on stream, an effect minimized by saw closures announced throughout the "eriod, re"resenting a""ro+imately 1.1 million t 3net increase of a""ro+imately %1% thousand t4. On the demand side, there was an increase of %.6! in eucaly"tus "ul" shi"ments in the year, es"ecially to 5hina and 6orth 7merica.

Over the year -ibria had its rating u"graded to 889 by :;< while -itch and =oody/s changed its outloo0 to >"ositive?. The 5om"any is currently one notch away from obtaining the investment grade by the three rating agencies.

2n line with the strategy of reducing debt, in 2013, -ibria re"urchased #$1.( billion in bonds with unattractive rates, which will "rovide an annual savings of @:$6A million in interest "ayments.

The dollar stabilization in a more valued level over 2013 contributed for a record, since -ibria/s ince"tion, net revenue and adBusted .82T&7, totaling #$ 6.( billion and #$2.* billion, res"ectively. The free cash flow generation from our o"erations totaled #$1.3 billion in 2013, u" %2! over the "revious year, re"resenting a return on the mar0et value of our shares of *.3! on &ecember 31, 2013.

Cith a higher .82T&7 and the initial "ayment of #$ %00 million related to the land sale -ibria/s leverage, as measured by net debtD.82T&7 in dollars 3which is the metrics used for covenants "ur"ose4, went down to 2.6+ in 2013, the lowest historical level since the 5om"anyEs ince"tion. 2ncluding the recei"t of the second "ayment from the land sale in the amount of #$(03 million, most of it received in 'anuary 201), the ratio would be 2.3+ in dollars.

2n the social and environmental dimensions, we "rogressed with our community relations, where old conflicts gave way to coo"eration. -ibria/s engagement "roBects with the community, such as the #ural 7reas &evelo"ment <rogram 3<&#T4, sustainability "rogram Tu"iniFuim Guarani and 5olmeias held steadily and attended around 3,600 families. -ibria also strengthened its social activities su""orting the Redes "rogram, a "ro"osal that united the Hotorantim 2nstitute and 86&.:, and continued to lead the #es"onsible 6etwor0 "rogram agenda, together with clients, su""liers and "artners, aiming to increase the investments in im"roving the local Fuality of life.

Ce also would li0e to highlight that -ibria/s e+ecutive office was 100! renewed in the last three years due to, in most cases, the retirement "rocess that were "redicted. The re"ositions were, in *0! of the cases, fulfilled internally, valuing and reinforcing even more the beliefs in meritocracy and talent growth.

Our wor0 was also recognized in maBor awards, including 5om"any of the Iear in the Halor 1000 7ward, industry leadershi" in the &ow 'ones :ustainability 2nde+ 3&':24, and best industry com"any according to Exame :ustainability Guide. 7mong other ac0nowledgements, -ibria was a highlight of the To" 10 Game 5hangers, naming the world/s leading com"anies im"roving the "lanet through cor"orate action. 2

Ce would li0e to than0 everyone J em"loyees, clients, 6GOs, sta0eholders, su""liers, investors J who contributed to our e+cellent results earned thus far. .ach of you "lays a fundamental role in the success story -ibria has been building.

=arcelo :trufaldi 5astelli 5hief .+ecutive Officer

'osK Luciano <enido 5hairman of the 8oard of &irectors

MARKET OVERVIEW

The "ositive e+"ectations for the "ul" mar0et in 2013 were confirmed throughout the year. &es"ite the new "ul" ca"acities, factory closures in several regions ameliorated the mar0et im"act of these new volumes coming on stream as new "a"er "roduction ca"acities drove "ul" demand for im"ortant mar0ets.

The solid "erformance of the world "ul" mar0et was chiefly driven by the increase in 8.M< sales, which corres"ond to a""ro+imately *0! of these additional volumes. .ucaly"tus "ul" sales were u" %.6! or *)) thousand t in 2013, mainly due to the @nited :tates 3911.(!4 and 5hina 3923.0!4, where most of the new "a"er ca"acities were installed in the year.

PERFORMANCE ANALYSIS

2n 2013, -ibria/s pulp produc !o" totaled %.3 million t. The 1! decline as com"ared to 2012 is "rimarily due to the reduced number of "roduction days in 2013 and the im"act of the &ecember rains at the 7racruz @nit.

The 2013 pulp #$l%# &olu'% reached %.2 million t, down 3! over the "revious year due to the need to normalize "ul" inventory levels in 2013, in addition to the lesser number of days in the year. -ibria/s sales mi+ by final use and region reflected the 5om"any/s commercial strategy of focusing on industry leaders who will sustain and increase their mar0et shares. :ales to the Tissue segment re"resented %3! of total sales in 2013, followed by 30! to <rinting ; Criting and 1A! for :"ecialties. .uro"e remained the to" destination at 3(! of total sales, followed by 6orth 7merica at 2*!, 7sia with 2)! and (! to 8razilDothers.

-ibriaEs "% op%r$ !"( r%&%"u% totaled #$6.( million in 2013, u" 12! over 2012. This increase is "rimarily e+"lained by the average "ul" "rice in reais, which rose 16!, in turn due to the 3

average foreign e+change a""reciation of 11! in the "eriod and the %! increase in the average "ul" "rice in dollars.

The co# o) (ood# #old *COGS+ totaled #$%.) billion, u" #$1)6 million or 3! as com"ared to the "revious year, driven byN 3i4 the increased cash cost of "roduction and 3ii4 the im"act of foreign e+change variations on logistics costs.

Ad'!"!# r$ !&% %,p%"#%# totaled #$300 million, rising %! over 2012 as a result of increased e+"enses with charges, indemnifications and advisory services. These factors offset the "ositive effect of the lower "ayroll ta+es announced by the government for 2013 and 201).

S%ll!"( %,p%"#%# grew 1A! over the "revious year to #$3)* million, chiefly e+"lained by greater e+"enses at terminals and also the dollarEs 11! average a""reciation against the real. 2t should be noted that the ratio of selling e+"enses over net income remained stable 3%!4 over the "revious year.

2n 2013, -ibria/s $d-u# %d E.IT/A was #$2.* billion with margin at )0!. 7s com"ared to the "revious year, there was a 2)! rise in .82T&7 to the best result since the 5om"any/s creation, and a ) ".". margin e+"ansion. This result is "rimarily e+"lained by the 16! increase in the average "ul" "rice in reais, in turn driven by the 11! average rise in the dollar in the "eriod and %! hi0e in the average "ul" "rice in dollars.

The )!"$"c!$l r%#ul totaled an e+"ense of #$2 billion, com"ared to an e+"ense of #$1.A billion in 2012. This difference was due toN 3i4 the im"act of foreign e+change variation with the closing dollar u" 1%! in 2013, greater than the (! rise in 2012, on total dollar denominated debt, which re"resents a significant "ortion of the 5om"anyEs debt due to its nature as an e+"orter and 3ii4 greater e+"enses with financial charges deriving from the re"urchase of bonds in 2013 in the amount of #$1.( billion, com"ared to #$1 billion re"urchased in 2012.

2n 2013, -ibria/s ris0 factors related to ta+ contingencies were substantially reduced. 2n &ecember of 2013, we announced that we had chosen to "ay our ta+ debts "ayable as at &ecember 31, 2012 to the 8razilian -ederal #evenue :ervice related to 5or"orate 2ncome Ta+ 32#<'4 and :ocial 5ontribution on 6et 2ncome 35:LL4 on earnings abroad. The total amount "ayable, with a 100! reduction in fines and "enalties, was #$%60 million and of this, -ibria effectively disbursed cash in the amount of #$3(2 million after using ta+ loss and negative social contribution base credits to offset #$16* million or 30! of the "rinci"al. )

2n 2013, -ibria recorded a lo## of #$6(* million, "rimarily e+"lained by the rising dollar against the real in the "eriod and income ta+ and social contribution with e+"enses related to adherence to #.-2:.

STRATEGY

2n 2013, -ibria advanced with its strategy of strengthening its ca"ital structure, consolidated through monetization of "art of its lands to an investment fund. This transaction allows the 5om"any to demobilize "art of the lands where it o"erates, maintaining end to end management of its forests. The total "otential value of the sale is #$1.6% billion, with #$%00 million received as a down "ayment on &ecember 30, 2013 and until 'anuary 2(, 201) we

received more #$60% million. The "ayment of the remaining balance of #$2(* million is
e+"ected to be received in 1,1) after fulfillment of some legal obligations and registrations. -ibria may also receive an additional #$2)* million, which is contingent u"on the a""reciation of the land during a "eriod of 21 years and, if owed, will be "aid in three "ayments on the Ath, 1)th and 21st anniversaries of the transaction, counted from &ecember 30, 2013.

2n addition, maintaining its strategic focus on growth with disci"line, -ibria is "re"ared to e+"and its "roduction ca"acity at the o""ortune moment with the e+"ansion "roBect at the TrOs Lagoas @nit in =ato Grosso do :ul :tate.

CAPITAL INVESTMENTS

2n 2013, -ibria/s ca"ital investments totaled #$1.3 billion, in line with its guidance. -or 201), the 5om"any/s =anagement "lans to invest #$1.% billion, an 1*! increase reflecting forest "artner contracts signed as a result of the &ecember, 2013 land sale and a non recurring im"act related to wood "urchases, e+"ected to continue for 2 to 2.% years before returning to normal levels.

LIA.ILITY MANAGEMENT
2n 2013, -ibria maintained its focus on reducing its debt and increasing free cash flow to return to investment grade according to ratings agencies. -ibria re"urchased and cancelled #$1.( billion in bonds with unattractive rates during 2013. The total re"urchases will "rovide an %

annual savings of @:$6A million in interest "ayments. -ree cash flow reached #$1.3 billion in the year, u" %2! over the "revious year for a return on the mar0et value of its shares of *.3! on &ecember 31, 2013.

-ibria closed 2013 with a solid financial "osition. The 5om"any/s cash, including the mar0 to mar0et of hedge instruments, totaled #$1.( billion. :ince =ay of 2011, the 5om"any has maintained revolving credit facilities in the total amount of @:$%00 million with availability for four years. 2n addition, in 7"ril of 2013, a new revolving credit line was contracted in the total amount of #$300 million with a term of % years and cost of 100! of the 5&2 9 1.%! ".a. when used 3when not in use, the cost in reais will be 0.%! ".a.4. .ven though they are not in use, these funds hel" im"rove the 5om"any/s liFuidity, such that, in addition to the current cash of #$1.( billion, -ibria also has #$1.% billion in unused contracted funds from these stand by credit facilities with immediately liFuidity. Therefore, the ratio of cash 3including these stand by credit facilities4 to short term debt was 2.3+ on &ecember 31, 2013, not considering the reclassification of the bond 2020 from the long term to the short term, due to the redem"tion scheduled for =arch 26, 201).

6et debt closed the year at #$A.* billion, u" 1! as com"ared to 2012, chiefly the result of the dollar/s 1%! a""reciation against the real. -ibria/s net debtD.82T&7 ratio in dollars was 2.6+ at the end of 2013. 5onsidering the recei"t of the remaining #$(03 million, most of it received in 'anuary 201), net debtD.82T&7 would be 2.3+ in dollars and 2.%+ in reais.

/IVI/EN/S

The 5om"any/s bylaws reFuire a minimum annual dividend of 2%! of net income, adBusted for allocations to the ca"ital reserves as "rovided by 8razilian cor"orate law. 6o dividends were "ro"osed for the year ended &ecember 31, 2013, considering the loss of #$6(* million in the year.

CAPITAL MARKETS

-ibria/s shares listed on the 8=;-8oves"a/s Novo Mercado under the tic0er symbol -28#3 rose 23! in the year to #$2A.6%. On the 6ew Ior0 :toc0 .+change 36I:.4, the 5om"any/s level 222 7&#s traded under tic0er symbol -8# closed u" 3! in the year to @:$11.6*. The average daily trade volume in 2013 on the 8=;-8oves"a and 6I:. was 2.* million, down 21! over 2012. 6

The average daily financial volume of -ibria/s shares was @:$31.( million, u" A! over the "revious year.

Total outstanding shares 7&# 37merican &e"ositary #ecei"t4 =ar0et Halue on &ecember 31, 2013

%%3,(3),6)6 common shares 3O6s4 1 7&# P 1 common share #$1%.3 billion Q @:$6.% billion

-ibria/s stoc0 is included in the 8oves"a 2nde+, re"resenting 1!. 2n addition, -ibria was included on the 8=;-8oves"a/s 5or"orate :ustainability 2nde+ 32:.4 for the fifth consecutive year.

CORPORATE GOVERNANCE

The year was mar0ed by the continued "ursuit for im"roved governance at -ibria. Ce elaborated a #elated <arty Transaction <olicy, as well as an 7nti 5orru"tion <olicy, both of which were a""roved by the 8oard of &irectors, to 0ee" our business in line with the highest standards of integrity and trans"arency.

7lso in 2013, we instituted the :tatutory 7udit 5ommittee, a Boint decision ma0ing body directly advising the 5om"anyEs 8oard of &irectors. The :tatutory 7udit 5ommittee was created to oversee the Fuality and integrity of financial re"orts, adherence to legal, statutory and regulatory reFuirements, the a""ro"riateness of ris0 management "rocesses and the internal and e+ternal auditors. The :tatutory 7udit 5ommittee and the wor0 of its inde"endent members re"resent trans"arency, reliability and im"ortant tool in ris0 management.

7fter the elaboration of the 5risis =anagement =anual and the establishment of the regional commissions of crisis management in 2012, the com"any moved forward in 2013 with the following initiativesN establishment of the 5or"orate 5ommission of 5risis =anagement, crisis scenarios and events ma""ing, sta0eholder ma" u"date, construction of emergency and business continuity "lans. -ibria 0ee"s a "roactive attitude wor0ing with "revention, trying to antici"ate the "roblems and solve them with efficiency and s"eed, avoiding negative im"acts to the business.

2n addition, in 2013, -ibria im"lemented a 5ontrol and 5om"liance management under the Governance #is0 and 5om"liance general management, reinforcing the im"ortance of these matters within the organization. Obligations arising from internal rules, e+ternal reFuirements A

and contractual obligations are monitored "eriodically such as to allow monitoring of com"liance ris0 e+"osure and ta0e action to mitigate them andDor reduce their im"act. =onitoring is done by an inde"endent structure with functional re"orting to the :tatutory 7udit 5ommittee.

S0STAINA.ILITY

-ibria is the first lin0 in a long value chain that begins in the forest, where neighboring communities are sometimes very "oor, and e+tends to world consumers of various ty"es of broadly used "a"ers. These consumers are increasingly demanding with social and environmental "ractices of manufacturers J our clients J and their su""liers. Throughout this chain, which involves o"erations in 2)2 8razilian cities and relations with a broad range of sta0eholders the 5om"any wor0s to ensure best "ractices in "lanting trees, industrial "roduction and a trans"ortation and distribution logistics com"le+. -ocused on innovation, eco efficiency, and dialogue with sta0eholders, the com"any wor0s to mitigate its negative im"acts and e+"and its contribution to society for good, in addition to its core business. 2n 2013, this commitment to sustainability and sharing value drove im"ortant ac0nowledgements both nationally and internationally, such as the Exame :ustainability Guide and >R"oca 6egScios 360T.? -ibria was also named industry leader in the 2013D201) "ortfolio of the &ow 'ones :ustainability 2nde+ Corld 3&':2 Corld4 and &ow 'ones :ustainability 2nde+ .merging =ar0ets of the 6ew Ior0 :toc0 .+change, in addition to having been chosen by #obeco:7= 3evaluating com"any for the &ow 'ones :ustainability 2nde+4 as one of the 10 Game 5hanger of the -uture com"anies in the world, and the only in the Latin 7merica.

The advances made in 2013 reinforce -ibria/s focus on matters that are im"ortant to the 5om"any and to society, e+"ressed as commitments in the Long Term :ustainability Goals identified in the =ateriality =atri+ 314 develo"ed in 200( and which considers both business and sta0eholder interests.

(1) Considering the transformations in society and the Companys own evolution !i"ria updated this matrix for a more current approach to priority topics in its operations and will "e discussed in the #$1% &ustaina"ility Report'

2m"act of "lantations on biodiversityN -ibria conserves 3*! of its land via "rotection, recovery, management and integration with the forest "lantation base, also see0ing to minimize e+ternal "ressures and degradation factors that could affect these fragments. -ibria established as long term goal to "romote the environmental restoration in )0 thousand hectares of own lands, between 2012 and 202%. The biodiversity in our forest areas is the subBect of research to discover, "rotect and e+"and s"ecies and "o"ulations of native flora and fauna. 7dditionally, the 5om"any monitors the environmental Fuality of its "ro"erties.

5ertifications and voluntary commitmentsN -ibria/s Fuality, environmental, occu"ational health and safety and forest management systems are all certified. 7ll units are -orest :tewardshi" 5ouncilU 3-:5U4 and 5erflorD<.-5 certified. The 5om"any also "artici"ates, voluntarily, in several forums, associations or wor0ing grou"s such as the Corld 8usiness 5ouncil for :ustainable &evelo"ment 3C85:&4, The -orests &ialogue 3T-&4, the @6/s Global 5om"act and the <act for the #estoration of the 7tlantic #ainforest.

.thicsN -ibria/s 5or"orate 5ode of 5onduct establishes the standards of behavior reFuired in "rofessional and "ersonal relationshi"s and is a""licable to all direct and indirect em"loyees, irres"ective of their level of seniority. Ce have an Ombudsman with three e+ternal channels of communication 3tele"hone, <.O. bo+ and internet4 and one internal channel 3intranet4 to receive re"orts of violations of the 5ode of 5onduct, or consultations with guarantee of confidentiality and secrecy of information. 2n 2013 the ombudsman received 103 valid records, being %* anonymous and )% identified. Only 11 records wasn/t closed in 2013. To reinforce the a""lication of the 5ode of 5onduct, an .thics and 5onduct 5ommittee com"osed of members of the e+ecutive board and management e+amines "ossible violations, ensures that criteria are a""lied uniformly in assessing cases, establishes measures for matters not addressed in the 5ode and ensures effective o"eration of the Ombudsman. 5ases of fraud, embezzlement or "ro"erty damage are handled by the 2nternal 7udit and :tatutory 7udit 5ommittee. The com"any too0 im"ortant ste"s to consolidate the ethics in its business environment in 2013 with the im"lementation of the anticorru"tion "rogram, encom"assing, among other actions, in class and online training to its em"loyees.

Cater @seN -ibria continuously monitors the hydrogra"hic watersheds in its areas of o"eration to avoid or minimize any im"act on the Fuantity and Fuality of the water caused by forest management. The most recent data indicate that forestry o"erations have had no significant im"act on the water reserves in the regions where the 5om"any o"erates. @sing state of the art technology for hydric resource management and ado"ting effective "revention and control (

"rocedures we can reach high levels of water reuse. 7s a member of the Cater -oot"rint 6etwor0, -ibria is a "ioneer in the 8razilian "ul" and "a"er industry in terms of its water foot"rint, based on managing water resources in the value chain of the "ul"ing "rocess. Cater used to su""ly the "lants is collected via grants in accordance with the a""licable environmental legislation of each location and the units/ o"erating licenses. 7ll industrial units com"ly with international standards for water consum"tion and effluent Fuality.

:trategyDcommitment to sustainabilityN -ibria/s business strategies are based on the res"onsible use of natural resources, su""ort for the develo"ment and well being of neighboring communities, and "reservation and recu"eration of native eco systems. :ustainability management is reinforced by the :ustainability 5ommittee, which advises the 8oard of &irectors and is com"osed of 5om"any re"resentatives and various e+ternal and inde"endent s"ecialists, which, in 2013, created tas0 forces to e+"lore best "ractices and trends in 5limate 5hange, 8iodiversity and .cosystem :ervices. :ustainability management also has the 2nternal :ustainability 5ommission com"osed of several de"artment managers that guarantees and monitors the e+ecution of the 5om"any/s commitments.

:ustainability goals are re"resented by a set of long term goals, in addition to annual goals, which are "ublic commitments regarding issues such as o"timized land use, "rotecting biodiversity, minimizing climate change, eco efficiency and the Fuality of our relationshi" with society, including our contribution to the sustainable community develo"ment.

#elationshi" with neighboring communitiesN #efle+ of its broad geogra"hic foot"rint, -ibria is in contact with communities that vary significantly in economic, social and cultural terms and which are "ositively or negatively affected to varying degrees by "lantation and industrial o"erations. Our relationshi" with neighboring communities follows a model based on engagement with the communities, which is defined according to the intensity of the activities of the o"eration in these communities. 7mong these "roBects, the highlight is the #ural Territory &evelo"ment <rogram 3<&#T4, realized in a "artnershi" with "ublic bodies. The "rogram obBective is to "rovide s"ecialized technical assistance to residents and guidance for the sale of "roducts under federal family agriculture incentive "rograms. .+"anded in 2013, the <&#T reached 11)6 families from )0 communities in 8ahia and .s"Vrito :anto states, 610 families in A communities in =ato Grosso do :ul :tate. 2n :Wo <aulo state, the "rogram began in 2013 and benefited 6A families in 3 communities. The average monthly household income from <&#T activities increased ))! in the states of 8ahia and .s"Vrito :anto and 2)! in =ato Grosso do :ul state, com"aring the years of 2012 and 2013. To 8ahia and .s"Vrito :anto this 10

re"resented an increase of #$ 1,1%% in the household income, while in =ato Grosso do :ul the increase was of #$ 2,100.

-orest <artner <rogram 3wood su""liers4N 2n addition to reducing "ro"erty needs, the su""ly of timber by inde"endent "roducers is a way of including local "roducers into -ibria/s value chain and "romotes income generation and Bob creation, as well as agricultural diversity. -ibria has, nowadays, 2,(1) contracts with forest "artners distributed in *6,%1* hectares which in 2013 re"resented 1(! of the wood used by the com"any in its "roductive "rocess. The average contract area is 2(.A hectares. The -orest <roducer "rogram o"erated in .s"Vrito :anto, 8ahia, =inas Gerais and #io de 'aneiro states covers most of the forest "artner "rogram. 2n other states, the "rogram for guaranteeing third "arty timber su""ly is 0nown as the -orestry :avings <lan, whereby rural "ro"rietors are motivated to "roduce timber for -ibria via long term contracts and guaranteed financing, "rovision of sa"lings and a "urchase agreement for the end of the cultivation cycle, which lasts for an average of seven years.

.nvironmental #is0sN -ibria has a #is0 =anagement <olicy that "rovides guidelines for the 5om"any, and a #is0 =anagement area which hel"s identify significant ris0s and analyze and recommend how they should be addressed. &ifferent ty"es of ris0 3factors to which the com"any is e+"osed that im"act cor"orate results and reFuire constant monitoring considering growth targets and "rofitability e+"ectations4 are ta0en into account, including mar0et, o"erating and credit ris0s, ris0s to re"utation, social and environmental ris0s, ris0s of natural and "hysical events and regulatory ris0s. 5limate change can affect -ibria/s economic and financial results due to the very nature of our business, which reFuires the use of natural resources. The 5om"any is also e+"osed to ris0 arising from climate change that can affect the balance of the eco systems, "roductivity and water availability for manufacturing. -ibria has ado"ted the "rinci"le of "recaution in managing and e+ecuting its industrial and forestry o"erations, through "roduction control and monitoring measures such as agronomic studies, classical genetic im"rovement in eucaly"tus "roduction, including ada"ting s"ecies to different climate conditions and water consum"tion monitoring in forest areas, closed circuit industrial effluent systems, and reusing water in manufacturing.

.missions, effluents and wasteN -ibria has a "ositive balance between carbon dio+ide eFuivalent emissions from its forestry, industrial and logistics o"erations and carbon seFuestration by its "lantations and native forests. -or each ton of "ul" "roduced, -ibria removes 1.* tons of carbon eFuivalent. 2n addition to see0ing to reduce and control the sources of odors 3eFui"ment and "rocesses4, the 5om"any has established an Odor <erce"tion 11

6etwor0 3#<O4 com"osed of volunteers from neighboring communities who are trained to identify the odor and notify the 5om"any when one is detected near the "lants, in addition to other communication channels with sta0eholders. 2n 2013 )% occurrences was recorded related to odor trough #<O and other sta0eholders. 7ligned with the long term goal, the com"any established a goal of, until 202%, (1! of the solid waste volume destined to land fields. -ibria has been wor0ing to ma0e use of "ul" manufacturing waste, co "rocessing and transforming it into "roducts used in correcting the soil acidity in the eucaly"tus "lantations. 2n 2013, the 'acareV and TrOs Lagoas units began recycling biological sludge, a waste in effluent treatment system to be burned in biomass boilers, obtaining e+"ressive environmental gains with the reduction of landfill waste. 7 total of %3,1)6 tons of waste 3dregs, grit, lime mud and boiler ash4 was reused in 2013, saving about #$*.% million.

#elationshi" with s"ecific communities1 2n some communities located in the "oorer regions of northern .s"Vrito :anto and southern 8ahia states, there are social conflicts arising from causes that sometimes have nothing to do with the 5om"any and that it is freFuently inca"able of resolving. This is a com"le+ challenge, but -ibria considers resolving these conflicts a "riority and has been dealing directly with the communities in this regard, in addition to other "layers who may be able to contribute li0e government, 6GOs and other com"anies. :ome communities warrant s"ecial attention in the develo"ment of s"ecific social inclusion "roBects, often with the "artici"ation of government agencies and inde"endent social and environmental entities. 7 case in "oint are the blac0 communities where residents have been formally identified as former esca"ed slave communities or claim to be so, in addition to communities of Tu"iniFuim and Guarani indigenous tribes, members of the Landless Cor0ers =ovement 3=:T4 and traditional fishing communities. -ibria has as long term goal to hel" the community to became, until 202%, A0! of the income generation "roBects su""orted by the com"any and to reach *0! of a""roval in the neighboring communities. One of the main evaluation tools of the inde+ evolution is the favorability research, realized with the communities in the first semester of 2013. 7ccording to this survey, A2! of the consulted residents a""roved -ibria/s activities.

TECHNOLOGICAL INNOVATION

-ibria is one of the to" industry investors in research and develo"ment and has done this consistently for more than )0 years. 2n 2013, it invested a""ro+imately #$)% million in a "ortfolio of research "roBects that ranges from im"roving "lants and advances in forest management to the develo"ment of new "roducts. 7t the -ibria Technology 5enter, 12

technologies are develo"ed toN 3i4 increase forest "roductivityX 3ii4 im"rove the Fuality of wood used as raw materialX 3iii4 increase the efficiency of "roduction "rocesses and industrial "roductionX and 3iv4 sustainably develo" high Fuality, innovative "roducts. 2n 2013, the -orest =anagement and 6atural #esources area assisted the forest business with the develo"ment of "recision silviculture systems that monitor soil fertility and conservation and o"timize the allocation of available resources, bringing cost reduction, increase forest biomass "roduction. 7lso, there was im"rovements in the "lantations "lanning and conservation areas, in the Fuantification of ecosystem services, and the calibration and a""lication of hydrological models. The identification of areas with high conservation values, im"rovements in the forest restructuring "rogram and the resumed develo"ment of agro forestry systems hel"ed add value to the 5om"any/s natural resources management, in addition to o"ening new o""ortunities related to the e+isting forest conservation base. 2n forest "rotection, the continued focus on the use of biological "lague control contributed to the strategy of reducing chemical use, in line with -ibriaEs su""ort for develo"ing a "olicy for chemical use in the -:5 system. The advances in Genetic .ngineering and 8iotechnology were e+"ressive in the year. The u"dated recommendation of genetic material for all -ibria units, which included new solutions see0ing ma+imum ada"tation of eucaly"tus clones to different environmental conditions with minimized ris0 of susce"tibility to biotic and abiotic stresses, ma+imized "otential "roductivity. <romising "reliminary results were also obtained in the develo"ment of a 8road Genome :election, technology that could allow us to antici"ate gains from the genetic engineering "rogram through the selection of su"erior clones based on variations in &67 "atters 3molecular mar0ers4. There were also advances in the develo"ment of a new technology for clone "ro"agation that involves the "roduction of micro sta0es in tem"orary immersion bioreactors, for which "atents have been filed in 8razil and the @.:., a conce"t that should change standards in forest nurseries regarding the Fuality of the "lant and duration of "roduction cycles. 7lso in 2013, -ibria maintained its "rogram for research into genetic transformation of eucaly"tus involving national and international "artners and strictly following legal and certification recommendations to evaluate the "otential benefit of this technology for the business and society. 2n the industrial area, develo"ments "rioritize both the creation of new "roducts and the im"rovement of e+isting "roducts. 6ew alternatives were offered to clients to im"rove the "erformance of their "rocesses andDor "roducts, es"ecially regarding im"roved softness and durability, allowing -ibria to "rovide e+clusive technologies in a commodities mar0et. This strategy certainly contributed to ma0ing -ibria, according to some of our most im"ortant clients, the best commercial and #;& "artner in 2013. The develo"ment of bio "roducts and 13

biofuels from biomass and sub "roducts of the Mraft "rocess has also continued to be an im"ortant to"ic in -ibria/s research "ortfolio, with significant investments in eFui"ment that allow us to "rocess the raw material into new "roducts 3biofuels and lignins4. :trategic alliances allowed -ibria to accelerate research and develo"ment in bio refinery. -or e+am"le, bio oil "roduced by .nsyn 3'oint Henture with -ibria4 using forest biomass was tested in "artnershi" with "otential clients and strategic "artners with e+cellent results. 2n 2013, we announced two im"ortant "artnershi"s in innovationN with .mbraer for technological coo"eration in the renewable materials segment, and with :weTree Technologies for the develo"ment of better eucaly"tus clones.

2n the "rocess innovation area -ibria encourages its em"loyees to develo" innovative ideas, offering financial rewards to the authors of a""roved "ro"osals through its i( "rogram. 2n 2013, )(% suggestions were made to reduce cost, increase revenue, increase "roductivity, sim"lify o"erating "rocesses or some other ty"e of im"rovement to wor0 routines. Of these, 2** were considered viable and im"lemented, 210 classified as Fuantitative for "roviding some ty"e of savings to the com"any. -or every real invested, return on investment 3#O24 was #$61.

S0PPLIERS

Ce see0 to engage the "roduction chain and share social and environmental best "ractices to identify and reduce carbon emissions, use natural resources res"onsibly and ensure that wor0ers/ rights are res"ected. :u""liers are also given guidance on the im"ortance of minimizing negative social and environmental im"acts created by their activities.

-ibria was the first forestry com"any in the world to Boin the 5arbon &isclosure <roBect 35&<4 :u""ly 5hain. -or the fourth consecutive year, through the 5&< :u""ly 5hain, -ibria continues to see0 a "ositive influence over its value chain, raising awareness among its "artners on the need for action with regards to disclosing and reducing carbon emissions in the value chain. 2n 2013, -ibria raised the "ercentage of res"ondents to (1! of the su""liers invited, against a sti"ulated target of (0!.

PEOPLE

The 1uman and Organizational &evelo"ment area 3&1O4 has had its o"erational strategy reinforced since 2011, based on our =anagement, 5ulture and Organizational :trategy 8eliefs. 1)

-ibria ho"es to ma0e a "ositive im"act on the organizational climate and thereby enhance its ability to attract, engage and retain em"loyees.

-ibria is strongly committed with safety and health of its "rofessionals and su""liers in all of its o"erations. 2ts wor0 health and safety management system contem"lates tools and "ractices that instruct to "revent accidents, incidents and occu"ational diseases. These "ractices su""ort the reFuirements of O1:7: 1*.001 rule 3"ort of :antos4 and the sustainable forest management certificationN 5.#-LO# and -:5 3!orest &tewardship Council4. The advance is shown by the freFuency ta+ considering loss of time of 0,(1 accidents "er million of men hour wor0ed in 2013. @nfortunately, des"ite all the efforts, 2 fatal accidents involving logistics trans"ortation, wood and "eo"le drivers ha""ened.

The <ersonnel &evelo"ment and #ecruitment area has been wor0ing to consolidate the de"artment/s main obBectives, which areN 3i4 to continuously create value for the organization through its "eo"leX 3ii4 to su""ort and motivate managers in creating a culture based on the =anagement 8eliefsX 3iii4 to facilitate and stimulate self develo"mentX 3iv4 to identify and influence changes in structure and in organizational "rocesses to increase -ibria/s com"etitive ca"acityX and 3v4 to wor0 together with management to build a cause that ins"ires and engages both "eo"le and teams.

-ibria continued the <erformance =anagement 5ycle for e+ecutives and e+"anded it to the administrative and o"erational levels. The "rocess has resulted in feedbac0 for those involved and the "re"aration of 2ndividual &evelo"ment <lans 3<&2s4 intended to guide and "rioritize "rofessional develo"ment actions through "lans and goals so that the current and future e+ecutive and organizational obBectives can be attained. This has also made it "ossible to develo" a general overview of these grou"s and create a succession "lan for the organization, "utting s"ecific develo"ment "rocedures into action. The internal u"ta0e inde+ at the management level for 2013 was A6!.

8ased on the results of the second -ibria 5limate :tudy done in 2012, actions "lans contributed to continuous im"rovement and the creation of a culture of climate management. Mey cor"orate actions were focused on im"roving "eo"le management, includingN the "erformance management cycle develo"ed for the 7dministrative and O"erational levels, as mentioned above, and the "re"aration of first level leaders who manage "eo"le to train and develo" -ibria/s "rofessionals, "roviding 0nowledge and s0ills to su""ort role "erformance and contributing to -ibriaEs sustainability and achievement of its goals. 1%

2n addition, we increased investments in training and develo"ment "rograms by 3)!.

RELATIONSHIP WITH IN/EPEN/ENT A0/ITORS

2n com"liance with the "rovisions of 8razilian :ecurities and .+change 35H=4 2nstruction 3*1D2003, we state that, during the year ended &ecember 31, 2013, we contracted our 2nde"endent 7uditors to carry out wor0 other than that related to e+ternal auditing related to a review of ancillary ta+ liabilities and others. These services were "rovided over a "eriod of less than one year and the corres"onding fees did not e+ceed %! of the amount of consolidated fees relating to -ibria/s e+ternal audit. 5onsidering the sco"e of these services and the "rocedures carried out, these services did not affect the inde"endence or obBectivity of the 2nde"endent 7uditors.

The 5om"any/s "olicy for contracting services not related to the e+ternal audit from our inde"endent auditors is based on "rinci"les that "reserve these auditors/ inde"endence. These "rinci"les are internationally acce"ted and are as followsN 3a4 auditors shall not audit their own wor0, 3b4 auditors shall not "erform management activities for their client and 3c4 auditors shall not "romote their client/s interests.

-urthermore, the 5om"any/s financial statements as of &ecember 31, 2013, were audited by <ricewaterhouse5oo"ers 7uditores 2nde"endentes.

16

To the FIBRIA CELULOSE S.A. shareholders

Capital Expenditure Budget Proposal


According to the terms provided in the article 196 of Law no. 6.404/76, with the wording settled by Law no. 10.303 of October 31st, 2001, the Fibria Celulose S.A. ("Fibria" or "Company") Management hereby presents the Capital Expenditure budget proposal.

The capital expenditure budget plan for 2014, dully approved in the Board of Directors meeting held on December 12, 2013, totals the amount of R$ 1,520 million, as per detailed below:

R$ Million Maintenance Expansion Modernization Research & Development Information Technology Forestry Expansion Florestry Renewal Safety/Environment Total Capital Expenditure 234 37 24 5 14 95 1,082 29 1,520

The above mentioned budget will be executed with the priority use of Companys own funds (obtained through its operational activities along the fiscal year) /Third parties.

Sources and Uses Summary Table:


Sources Own funds (obtained through its operational activities along the fiscal year)/Third parties R$ million

1,520

There being the capital expenditure budget proposal to be presented, the Management stands at the entire disposal of its shareholders to provide further clarification if needed.

So Paulo, January 29, 2014.

THE MANAGEMENT