PART I Operating Costs and Expenses  Operating Costs  Marketing  General and administrative  Research and development  International leased line and international data services.  Our international leased line and international  data revenues increased by 19.1% from NT$1.68 billion in 2009 to NT$2.00 billion in 2010 (US$ 68.70 million).  The increase was mainly because of the overseas market expansion and the increased demand of multinational  corporations.  Our operating costs and expenses increased by 2.2% from NT$142.0 billion in 2009 to NT$145.0 billion  (US$4.9 billion) in 2010. This increase was primarily due to the increases in costs of handsets sold. As a  percentage of revenues, operating costs and expenses increased from 71.5% in 2009 to 71.7% in 2010.  Operating costs include depreciation and amortization expense, personnel expenses, cost of goods sold,  interconnection and service expense, costs of materials and maintenance and spectrum usage and license fees.  Our operating costs increased by 2.3% from NT$112.7 billion in 2009 to NT$115.3 billion (US$3.9 billion)  in 2010. This increase was principally a result of an increase of NT$3.0 billion (US$104.3 million) in cost of  goods sold, an increase of NT$1.2 billion (US$39.8 million) in personnel expenses mainly due to increase in  bonus expense because of net income growth, and a NT$0.6 billion (US$21.4 million) increase in ICT costs due  to the increase in revenue, partially offset by a decrease of NT$2.2 billion (US$75.4 million) in depreciation.  Our marketing expenses, which include personnel expenses, expenses relating to advertising and marketing- related activities and provision for bad debt increased by 0.8% from NT$22.3 billion in 2009 to NT$22.5 billion  (US$0.8 billion) in 2010. This increase was principally a result of a NT$0.5 billion (US$18.4 million) increase in  bonus, partially offset by a decrease of NT$0.3 billion (US$10.8 million) in expenses relating to advertising and  other marketing-related activities.  Our general and administrative expenses increased by 6.6% from NT$3.8 billion in 2009 to NT$4.0 billion  (US$0.1 billion) in 2010. This increase was principally a result of a NT$0.1 billion (US$4.6 million) increase due  to the consolidation of our subsidiaries previously accounted for under the equity method, and a NT$0.1 billion  (US$2.4 million) increase in bonus.  Our research and development expenses remained flat at NT$3.2 billion (US$0.1 billion) in 2009 and 2010.  Operating Costs and Expenses by Business Segment  Domestic  Fixed  Communications Mobile  Communications Internet International  Fixed  Communications Others Adjustment Total (in billions of NT$) For the year ended  December 31, 2010 Operating costs and expenses 67.0  62.1  15.8  14.5  6.1  (20.5) 145.0  Depreciation and amortization 21.9  8.2  2.2  1.4  0.3  — 34.0  For the year ended  December 31, 2009 Operating costs and expenses 67.6  58.3  15.1  14.2  4.6  (17.8) 142.0  Depreciation and amortization 24.0  8.4  2.3  1.4  0.2  —  36.3  76