Expenses Total expenses increased by Rp3,693 billion, or 6.4,

b. Depreciation and Amortization Expenses Depreciation and amortization expenses increased by Rp1,324 billion, or 9.2, from Rp14,456 billion in 2012 to Rp15,780 billion in 2013 primarily due to increased in depreciation expense by Rp1,476 billion, or 10.8, from Rp13,635 billion in 2012 to Rp15,109 billion in 2013. The increase in depreciation expense primarily related to depreciation of transmission installation and equipment amounting to Rp1,065 billion, or 14.0, and an increase of loss in impairment of Rp349 billion, or 141.3, compare to prior year. c. Personnel Expenses Personnel expenses decreased by Rp53 billion, or 0.5, from Rp9,786 billion in 2012 to Rp9,733 billion in 2013 due to no early retirement programs were offered in 2013 that cause a decrease by Rp699 billion or 100.0 in early retirement program expenses. This decrease above was partially offset by an increase in salaries and related benefits by Rp296 billion or 9.1 from Rp3,257 billion in 2012 to Rp3,553 billion in 2013 and an increase in net periodic post-retirement health care benefit costs by Rp284 billion, or 315.6. d. Interconnection Expenses Interconnection expenses increased by Rp260 billion, or 5.6, from Rp4,667 billion in 2012 to Rp4,927 billion in 2013 primarily due to an increase of Rp256 billion, or 7.4, in domestic interconnection and transit interconnection expenses, in line with an increase of 13.5 in domestic interconnection and transit revenues. e. Marketing Expenses Marketing expenses decreased by Rp50 billion, or 1.6, from Rp3,094 billion in 2012 to Rp3,044 billion in 2013 primarily due to a decrease in advertising and promotion expenses by Rp93 billion, or 3.8, due to using selective media for promotion and increasing group synergy. f. General and Administrative Expenses General and administrative expenses increased by Rp1,119 billion, or 36.9, from Rp3,036 billion in 2012 to Rp4,155 billion in 2013 due in part to an increase in provision for impairment of receivables by Rp674 billion, or 73.7.0, from Rp915 billion in 2012 to Rp1,589 billion in 2013. This increase primarily resulted from current year individual and collective assessment for impairment of receivables. The increased also contribute by a 59.1 increased in training, education and recruitment by Rp153 billion and a 28.1 increased by Rp148 billion in general expenses. This increase above was partially offset by a 34.1 decreased in social contribution expenses by Rp44 billion, or 34.4. g. Gain loss on Foreign Exchange – net Loss on foreign exchange - net increased by Rp60 billion, from Rp189 billion in 2012 to Rp249 billion in 2013. The increase was primarily due to the appreciation of the US Dollar by 26.3. h. Other expenses Other expenses decreased by Rp1,493 billion, from Rp1,973 billion in 2012 to Rp480 billion in 2013. The decrease primarily related to derecognition in 2012 of the carrying value of the Telkom-3 Satellite, which was built and launched, but failed to reach usable orbit, amounting to Rp1,606 billion. 3. Operating Profit and Operating Profit Margin As a result of the foregoing, operating profit increased by Rp2,148 billion, or 8.4, from Rp25,698 billion in 2012 to Rp27,846 billion in 2013. Operating profit margin increased from 33.3 in 2012 to 33.6 in 2013. 4. Profit before Income Tax and Pre - Tax Margin As a result of the foregoing, profit before income tax increased by Rp2,921 billion, or 12.1, from Rp24,228 billion in 2012 to Rp27,149 billion in 2013. Pre - tax margin increased from 31.4 in 2012 to 36.7 in 2013. 128 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

5. Income Tax Expense Income tax expense decreased by Rp993 billion, or

16.9, from Rp5,866 billion in 2012 to Rp6,859 billion in 2013, following the increase in profit before income tax. 6. Other Comprehensive Income Expenses - Net Other comprehensive expenses increased by Rp86 billion, or 330.8, from Rp26 billion in 2012 to Rp112 billion in 2013 due to increase in foreign currency translation by Rp89 billion offset by decrease in change in fair value of available-for-sale financial assets by Rp3 billion.

7. Profit for the Year Attributable to Owners of the Parent Company

Profit for the year attributable to non-controlling interest increased by Rp573 billion, or 10.4, from Rp5,512 billion in 2012 to Rp6,085 billion in 2013. 8. Profit for the Year Attributable to Non-controlling Interest Profit for the year attributable to owners of the parent company increased by Rp1.355 billion, or 10.5, from Rp12,850 billion in 2012 to Rp14,205 billion in 2013. 9. Comprehensive Income for the year Comprehensive income for the year increased by Rp2,014 billion, or 11.0, from Rp18,388 billion in 2012 to Rp20,402 billion in 2013. 10. Net Income per Share Net income per share increased by Rp14, or 10.4, from Rp133.84 in 2012 to Rp147.42 in 2013. 129 2014 Annual Report PT Telkom Indonesia Tbk Persero