Cash Flows from Operating Activities Net cash provided by operating activities in 2013 was

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 Of our Rp24,661 billion capital expenditure in 2014, Telkom, as parent company, incurred capital expenditures of Rp8,099 billion US654 million, Telkomsel incurred capital expenditures of Rp13,002 billion US1,050 million and our other subsidiaries incurred capital expenditures of Rp3,560 billion US287 million as follows: Table of realization of our capital expenditure Years Ended December 31, 2014 2013 2012 Rp billion Rp billion Rp billion Telkom parent company 8,099 5,313 4,040 Subsidiaries Telkomsel 13,002 15,662 10,656 Others 3,560 3,923 2,576 Subtotal for subsidiaries 16,562 19,585 13,232 Total for Telkom Group 24,661 24,898 17,272 The realization of the future capital expenditures may differ from the amounts indicated above due to various factors, including but not limited to the Indonesian and global economy environments, the RupiahUS Dollar or other applicable foreign exchange rates, the availability of supply or vendor or other financing on terms acceptable to us, and also any technical or other problems in the implementation. MATERIALITY LIMITATIONS Materiality in our Consolidated Financial Statement was based on BAPEPAMLK decision letter No. KEP-347 BL2012 about Presentation and Disclosure of Financial Statements Public Company dated June 25, 2012, with appendix Regulation No. VIII.G.7 about Presentation of Financial Statements of the Company or Public Company where 5 of the total assets for asset accounts, 5 of the total liability for the liabilities accounts, 5 of the total equity for equity accounts, 10 of revenue for items of comprehensive income, and 10 of the profit from continuing operations before taxes for the effect of an event or transaction. MATERIAL COMMITMENT FOR CAPITAL INVESTMENT

A. Purpose of the Commitment As of December 31, 2014, we had material commitments

for capital expenditures under certain contractual arrangements of Rp16,195 billion, principally relating to procurement and installation of the broadband network, transmission equipment and cable system. These include for cooper wire access modernization through Trade InTrade Off method project, Luwuk- Tutuyan Cabel System project, Outside Plant Fiber To The Home OSP FTTH project, Sulawesi Maluku Papua Cable System SMPCS project, expansion and Maintenance Support MS Service for Metro Ethernet Platform ALU project, expansion of DWDN platform ALU project, WIFI CISCO project, IP Radio Equipment for Backhaul Node-B project, Cabel System for Broadband Network Division 2014 project, Telkom-3 Subtitution T3S Satelite System project. Our subsidiary, Telkomsel, has material commitment for capital expenditures related , among others, the combined 2G and 3G CS Core Network Rollout project, 2G BSS and 3G UTRAN Rollout agreement for the provision of 2G GSM BSS and 3G UMTS Radio Access Network project, Next Generation Convergence “NGC” IP RAN Rollout and Technical Support project, Maintenance and procurement of equipment and related service agreement for NGC Core Transport Rollout and Technical Support project, Online Charging System “OCS” and Service Control Points “SCP” System Solution Development project, OCS dan CSP technical support project, Customer Relationship Management dan Contact Center Solutions project, CS Core System Rollout dan CS Core System Technical Support project, OSDSS Solution project, GGSN service complex rollout project, Gateway GPRS Support Node Service Complex technical support project. 135 2014 Annual Report PT Telkom Indonesia Tbk Persero