Business Context and Reporting Period
This Form 6-K filing by Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk ("TELKOM") dated February 10, 2004, announces the finalization of restated consolidated financial statements for the years ended December 31, 2000, 2001, and 2002. The company confirmed that PricewaterhouseCoopers (PwC) and Deloitte Touche & Tohmatsu have issued unqualified audit reports for these restated periods. TELKOM intends to file its Annual Report on Form 20-F with the U.S. SEC and an amended report with BAPEPAM in Jakarta.
Key Financial Metrics (Restated)
The following metrics reflect the restated consolidated financial statements under Indonesian GAAP (amounts in Rp. billion unless noted):
| Metric | 2002 | 2001 | 2000 |
|---|---|---|---|
| Total Operating Revenues | 20,803 | 16,284 | 12,190 |
| Operating Income | 9,130 | 7,420 | 5,596 |
| Net Income (Indonesian GAAP) | 8,040 | 4,068 | 2,775 |
| Net Income (U.S. GAAP) | 8,587 | 4,298 | 2,216 |
| Total Assets | 44,307 | 33,036 | 32,019 |
| Long-term Debt | 12,006 | 9,730 | 9,546 |
| Stockholders' Equity | 14,614 | 9,081 | 14,473 |
Note: The filing does not provide specific cash flow statement data or explicit margin percentages; these must be calculated from the provided revenue and income figures.
Material Changes vs. Prior Reported Figures
The restatement resulted in significant downward adjustments to previously reported net income and stockholders' equity due to the recognition of previously unrecorded liabilities and accounting corrections.
- Net Income Adjustments: Restated net income decreased by 3.7% for 2002, 4.3% for 2001, and 7.8% for 2000 compared to previously reported figures.
- Equity Adjustments: Stockholders' equity decreased by 8.1% as of December 31, 2002, 2.6% as of December 31, 2001, and 2.9% as of December 31, 2000.
- Primary Drivers of Decrease:
- Employee Benefits: New provisions for long service, housing, and transport allowances reduced 2002 net income by Rp. 151.8 billion.
- Post-Retirement Healthcare: Re-evaluation of actuarial assumptions for pensioner healthcare reduced 2002 net income by Rp. 414.6 billion.
- Deferred Taxes: Adjustments to prior tax calculations reduced 2002 net income by Rp. 286.2 billion.
- Acquisition Accounting: Consolidation of Pramindo (100% control despite 30% legal ownership) and Dayamitra reduced 2002 net income by Rp. 55.8 billion.
- Offsetting Increases:
- AriaWest Settlement: Reversal of provisions following the 2003 arbitration settlement increased 2002 net income by Rp. 332.9 billion.
- Loan and Tax Corrections: Corrections to double-recorded loan balances and over-accrued VAT increased 2002 net income by Rp. 117.1 billion and Rp. 75.8 billion, respectively.
- Telkomsel Gain: Realization of gains from past equity transactions increased 2002 net income by Rp. 65.2 billion.
Outlook, Risks, and Management Commentary
Management Commentary: President Director Kristiono emphasized TELKOM's commitment to fulfilling obligations to shareholders and complying with U.S. SEC and NYSE rules. The company plans to hold an Extraordinary General Meeting to ratify the restated financial statements for 2000, 2001, and 2002.
Outlook: TELKOM intends to focus on preparing its 2003 Annual Report on Form 20-F, due by June 30, 2004.
Risks and Contingencies: The filing includes standard forward-looking statement disclaimers regarding risks and uncertainties. The restatement itself highlights risks related to complex actuarial calculations for post-retirement benefits and the interpretation of accounting principles regarding acquisitions and revenue recognition.
Investor Verification Checklist
- Restatement Impact: Verify the specific impact of the new provisions for long service and post-retirement healthcare on future cash flow obligations.
- Acquisition Control: Confirm the legal and operational status of the 100% consolidation of Pramindo despite 30% legal ownership.
- Revenue Recognition: Review the adjustments made to revenue sharing agreements and amortization of unearned revenue to ensure future reporting accuracy.
- Debt Levels: Monitor the increase in long-term debt from Rp. 9.7 trillion (2001) to Rp. 12.0 trillion (2002) and its effect on liquidity.
- GAAP Differences: Compare the restated Indonesian GAAP net income (Rp. 8.04 trillion) with U.S. GAAP net income (Rp. 8.59 trillion) for 2002 to understand the magnitude of accounting standard differences.