CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS  (In Millions of New Taiwan or U.S. Dollars) PART III F-8 (Continued) Year Ended December 31 2009 2010 2011 NT$ NT$ NT$ US$ (Note 3) Acquisition of intangible assets $  (274) $  (278) $  (556) $  (18) Decrease (increase) in restricted assets (91) 31 12 ─ Increase in other assets (914) (2,682) (1,010) (33) Net cash used in investing activities (29,471) (17,363) (33,104) (1,094) CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term loans 485 (648) (40) (1) Increase (decrease) in short-term note payable ─ 230 (230) (8) Increase in long-term loans 400 3,238 ─ ─ Repayment of long-term loans (124) (119) (1,697) (56) Decrease in customers’ deposits (118) (81) (895) (30) Increase (decrease) in other liabilities (198) 61 48 2 Cash dividends paid (37,139) (39,369) (42,855) (1,416) Capital reduction (19,116) (9,697) (19,394) (641) Proceeds from exercise of employee stock option granted by  subsidiary 58 97 94 3 Decrease in minority interest (697) (675) (769) (25) Net cash used in financing activities (56,449) (46,963) (65,738) (2,172) EFFECT OF EXCHANGE RATE CHANGES (7) (63) 111 4 EFFECT OF CHANGE ON CONSOLIDATED SUBSIDIARIES 613 (2,764) (113) (4) NET INCREASE (DECREASE) IN CASH AND CASH  EQUIVALENTS (8,029) 17,616 (23,485) (776) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 81,288 73,259 90,875 3,002 CASH AND CASH EQUIVALENTS, END OF YEAR $  73,259 $  90,875 $  67,390 $  2,226 SUPPLEMENTAL INFORMATION Interest paid (excluding capitalized interest expense) $  14 $  98 $  41 $  1 Income tax paid 13,024 8,841 9,574 316 NON-CASH FINANCING ACTIVITIES Current portion of long-term loans $  117 $  309 $  702 $  23 Reclassification from common capital stock to due to  stockholders for capital reduction $  9,697 $  19,394 $  ─ $  ─ CASH AND NON-CASH INVESTING ACTIVITIES Increase in property, plant and equipment $  25,151 $  23,250 $  28,257 $  934 Decrease (increase) in payables to suppliers 359 1,356 (1,354) (45) Prepayments for equipment (32) 11 (27) (1) $  25,478 $  24,617 $  26,876 $  888