Profit for the Year Attributable to Owners of the Parent Company

B. External Liquidity Sources Our primary external sources of liquidity are short and

long-term bank loans, two-step loans, bonds and notes payable. In 2014 we used external liquidity bank loans of Rp6,626 billion and other borrowings of Rp3,580 billion.

C. Outstanding Liquidity Sources We had undrawn loan facilities which include the following

sources of unused liquidity: - CIMB Niaga loan facility in the amount of Rp820 billion; - BNI loan facility in the amount of Rp234 billion; - BRI loan facility in the amount of Rp6 billion; - Danamon Bank loan facility in the amount of Rp20 billion; - Bank Ekonomi Raharja loan facility in the amount of Rp70 billion; - Syndicated loan facility of BNI, BRI and Bank Mandiri in the amount of Rp103 million. WORKING CAPITAL Net working capital, calculated as the difference between current assets and current liabilities, amounted to Rp4,638 billion as of December 31, 2013 and Rp1,976 billion US160 million as of December 31, 2014. The decrease in net working capital was primarily due to: - A decrease of Rp4,075 billion in other current financial assets; - A decrease of Rp48 billion in asset held for sale; - A decrease of Rp35 billion in inventories – net of provision for obsolescene; and - A decrease of Rp12 billion in other receivable - net of provision for impairment of receivable. This was partially offset by: - An increase of Rp1,378 billion in short-term bank loan; - An increase of Rp806 billion in current marturities of long-term liabilities; - An increase of Rp473 billion in unearned income; and - An increase of Rp286 billion in trade payable – third parties. We believe that our working capital is sufficient for our present requirements. We expect that our working capital will continue to be addressed by various funding sources, including cash from operating activities and bank loans. SOLVENCY Our solvency or our ability to meet our short-term and long-term obligations highly influenced by our source of liquidity. Refer to explanation on “Liquidity”. A. Current Liabilities Our ability to pay our current liabilities is indicated by the ratios on the table below: Ratios 2014 2013 2012 Current ratio 106.2 116.3 116.0 Quick ratio 104.7 114.5 113.6 Cash ratio 64.4 75.8 74.4 B. Non-Current Liabilities Our ability to pay our debt is indicated by the ratios on the table below Ratios 2014 2013 2012 Debt to equity ratio 34.6 33.5 37.4 Debt to EBITDA 50.4 46.4 48.0 Times interest earned ratio 25.6 times 29.0 times 19.5 times For detail discussion about our debt, see Notes 17-21 to our Consolidated Financial Statements. 133 2014 Annual Report PT Telkom Indonesia Tbk Persero RECEIVABLE COLLECTIBILITY Our receivable collectability, indicated by the ratios average collection period that show an average of days that we take to collect our receivable and receivable turnover that show how many times in average the funds invested in receivable are turned in one year. Our average collection period were 25.4 days in 2014 and 24.7 days in 2013. Our receivable turnover for 2014 and 2013 were 14.4 and 14.8. We have made provision for impairment of receivables based on the collectability amount of the historical impairment rates and individual account of its customers’ credit quality and credit history, amounted to Rp3.096 in 2014 and Rp2.872 billion in 2013. As of December 31, 2014 and 2013, the carrying amount of our receivables considered past due but not impaired amounted to Rp3.355 billion and Rp2.418 billion, respectively. We concluded that past due but not impaired receivables, along with receivables that are neither past due nor impaired, are due from customers with good debt history and are expected to be recoverable. For detail discussion about our receivable, see Note 6 to our Consolidated Financial Statements. CAPITAL STRUCTURE Our capital structure as of December 31, 2014 is described as follows: Amount Portion Rp billion Short Term 1,810 1.99 Long Term 21,642 23.76 Debt 23,452 25.75 Equity 67,807 74.25 Total Invested Capital 91,259 100 We take a qualitative approach towards our capital structure and debt levels. Under our syndicated loan agreement with BNI and BRI, we are required to maintain a debt to equity ratio of not more than 2.0 and debt service coverage ratio of more than 1.25. As of December 31, 2014, our debt to equity ratio was 34.6 and our debt service coverage ratio was 4.8 times, indicating our strong ability to meet our debt obligations. Our debt levels are primarily driven by our plans to develop our existing and new strategic businesses. In determining our optimum debt levels, we also consider our debt ratios with reference to regional peers in the telecommunications industry. For detail discussion about management policy on capital structure, see Note 45 to our Consolidated Financial Statements. CAPITAL ExPENDITURES In 2014, we incurred capital expenditures of Rp24,661 billion US1,991 million. Our capital expenditures are grouped into the following categories for planning purposes: Broadband services, which consist of broadband, IT, application and content and service node; Network infrastructure, which consists of core transmission network, metro-ethernet and Regional Metro Junction “RMJ”, IP backbone and satellite; Optimizing legacy, for fixed lines; and Capex supports. 134 2014 Annual Report PT Telkom Indonesia Tbk Persero FINANCIAL AND PERF ORMANCE HIGHLIGHT MANA GEMENT REPOR T PREF A GENERAL INF ORMA TION OF TELK OM INDONE SIA MANA GEMENT’S DISCUSSION AND ANAL Y SIS CORPORA TE GO VERNANCE SOCIAL AND ENVIRONMENT AL RE SPONSIBILITY APPENDICE S