ACQUISITION OF KSO INVESTORS AND KSO IV continued c. AWI continued

PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED DECEMBER 31, 2004 AND 2005 Figures in tables are presented in millions of Rupiah, unless otherwise stated - 36 5. ACQUISITION OF KSO INVESTORS AND KSO IV continued d. Amendment of the Joint Operation Scheme in Regional Division IV “KSO IV” continued The purchase price for this transaction was approximately US390.7 million or equivalent to Rp3,285,362 million which represents the present value of fixed monthly payments totaling US517.1 million to be paid to MGTI beginning in February 2004 through December 2010 using a discount rate of 8.3 plus direct cost of the business combination. The allocation of the acquisition cost was as follows: Rp Property, plant and equipment 2,377,134 Intangible assets 908,228 Total purchase consideration 3,285,362 The allocation of the acquisition cost described above was based on an independent appraisal of fair values. Intangible assets identified from this acquisition represent right to operate the business in the KSO area and the amount is being amortized over the remaining term of the KSO agreement of 6.9 years Note 15. There was no goodwill arising from this acquisition. The Company’s consolidated results of operations include the operating results of KSO IV since February 1, 2004 being the nearest convenient balance date. As of December 31, 2004 and 2005, the remaining monthly payments to be made to MGTI, before unamortized discount, amounted to US462.9 million Rp4,305,125 million and US393.3 million Rp3,868,433 million and is presented as “Liabilities of business acquisitions” Note 25.

e. Pro forma operating results related to acquisition of KSO investors and KSO IV

The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if the acquisition of AWI and KSO IV had taken place on January 1, 2003. The pro forma information includes adjustments for amortization of intangible assets, depreciation expense on property, plant and equipment based on the allocated purchase price, interest expense on incremental borrowings and income taxes. The pro forma financial information is not necessarily indicative of the results of operations as it would have been had the transactions been effected on the assumed dates or indicative of future operations. 2003 2004 Operating revenues 28,343,447 34,020,663 Operating income 11,687,955 13,916,465 Income before tax 11,399,321 12,071,780 Net income 6,509,255 6,117,619 Net income per share - in full Rupiah amount 322.88 303.45 Net income per ADS - in full Rupiah amount 12,915.19 12,138.13 Unaudited PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED DECEMBER 31, 2004 AND 2005 Figures in tables are presented in millions of Rupiah, unless otherwise stated - 37

6. CASH AND CASH EQUIVALENTS

2004 2005 Cash on hand 8,631 6,070 Cash in banks Related parties Rupiah Bank Mandiri 192,056 89,128 Bank Negara Indonesia 158,519 54,590 Bank Rakyat Indonesia 10,712 5,095 Bank Pos Nusantara 1,278 879 Total 362,565 149,692 Foreign currencies Bank Mandiri 98,951 55,797 Bank Negara Indonesia 1,765 2,701 Bank Rakyat Indonesia 612 657 Total 101,328 59,155 Total - related parties 463,893 208,847 Third parties Rupiah ABN AMRO Bank 81,184 34,453 Deutsche Bank 9,173 15,954 Bank Bukopin 10,190 15,800 Bank Central Asia 5,906 8,398 Citibank NA 362 1,595 Lippo Bank 2,265 1,361 Bank Mega 689 1,321 Bank Buana Indonesia 4 1,189 Bank Muamalat Indonesia 75 601 Ban 5 k Niaga 1,884 498 Bank Danamon 114 324 Bank Bumi Putra Indonesia - 242 Bank Internasional Indonesia 26 53 Total 111,913 81,789 Foreign currencies ABN AMRO Bank 95 54,575 Citibank NA 4,416 5,737 Deutsche Bank 541 5,309 Bank Central Asia 3 142 Stan 9 dard Chartered Bank 322 99 Bank Internasional Indonesia 31 30 The Bank of Tokyo Mitsubishi 22 46 Total 5,466 65,938 Total - third parties 117,379 147,727 Total cash in banks 581,272 356,574