internal liquidity Sources To fulill our obligations we rely primarily on our

152 PT Telkom Indonesia Persero Tbk Capital Structure Our capital structure as of December 31, 2015 is described as follows: We take a qualitative approach towards our capital structure and debt levels. Periodically, the Company conducts debt valuation to assess possibilities of reinancing existing debts with new ones which have more eicient cost that will lead to more optimized cost- of-debt. the Company also maintains its capital structure at the level it believes will not risk its credit rating and which is comparable with its competitors. The Company is required to maintain a certain debt-to- equity ratio and debt service coverage ratio by the lenders. In 2015, our debt to equity ratio was 0.37 and our debt service coverage ratio was 3.9 times, indicating our strong ability to meet our debt obligations. During the years ended December 31, 2015, the Company has complied with the externally imposed capital requirements. For detail discussion about management policy on capital structure, see Note 43 to our Consolidated Financial Statements. Capital expenditures In 2015, we incurred capital expenditures of Rp26,401 billion US1,915 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 ixed lines; and • Capex supports. Of our Rp26,401 billion capital expenditure in 2015, Telkom, as parent company, incurred capital expenditures of Rp9,641 billion US699 million, Telkomsel incurred capital expenditures of Rp11,321 billion US821 million and our other subsidiaries incurred capital expenditures of Rp5,439 billion US395 million as follows: Amount Rp billion Portion Short Term 602 0.5 Long Term 34,010 31.0 Debt 34,612 31.5 Equity 75,136 68.5 Total Invested Capital 109,748 100.0 Table of Realization of Our Capital Expenditure Years Ended December 31, 2015 2014 2013 Rp billion US million Rp billion Rp billion Telkom parent company 9,641 699 8,099 5,313 Subsidiaries Telkomsel 11,321 821 13,002 15,662 Others 5,439 395 3,560 3,923 Subtotal for subsidiaries 16,760 1,216 16,562 19,585 Total for Telkom Group 26,401 1,915 24,661 24,898