CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF INCOME  (In Millions of New Taiwan or U.S. Dollars, Except Earnings Per Share that are in New Taiwan or U.S. Dollars)  Year Ended December 31  2008 2009 2010 Notes NT$ NT$ NT$ US$ (Note 3) NET REVENUES 29 $  201,670  $  198,361  $  202,430  $  6,947  OPERATING COSTS 29 113,546  112,736  115,332  3,958  GROSS PROFIT 88,124  85,625  87,098  2,989  OPERATING EXPENSES 29 Marketing 22,732  22,293  22,469  772  General and administrative 3,680  3,765  4,012  138  Research and development 3,144  3,173  3,250  111  Total operating expenses 29,556  29,231  29,731  1,021  INCOME FROM OPERATIONS 58,568  56,394  57,367  1,968  NON-OPERATING INCOME AND GAINS 29 Interest income 1,916  479  475  16  Equity in earnings of equity method  investees, net 64  — 151  5  Valuation gain on financial instruments,  net 551  99  — — Foreign exchange gain, net 336  89  Others 509  755  406  14  Total non-operating income and  gains 3,376  1,422  1,032  35  NON-OPERATING EXPENSES AND LOSSES Loss on disposal of property, plant and  equipment, net 278  7  216  7  Loss on disposal of financial instruments,  net 672  142  157  5  Impairment loss on assets 1,168  110  125  4  Interest expense 4  15  107  Loss arising from natural calamities — 149  19  1  Foreign exchange loss, net — 17  — Valuation loss on financial instruments,  net — — 11  — Equity in losses of equity method  investees, net — 23  — — Others 138  132  60  3  Total non-operating expenses and  losses 2,260  578  712  24  INCOME BEFORE INCOME TAX 59,684  57,238  57,687  1,979  INCOME TAX EXPENSE 2, 26 13,892  12,743  9,129  313  CONSOLIDATED NET INCOME  $  45,792  $  44,495  $  48,558  $  1,666  ATTRIBUTABLE TO: Stockholders of the parent $  45,011  $  43,757  $  47,609  $  1,633  Minority interests 781  738  949  33  $  45,792  $  44,495  $  48,558  $  1,666  (Continued)  F-4