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## Depreciation and Amortization Expense 

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Depreciation expense rose $1.8 million in 2010 and $3.7 million in 2009. The increase in 2010 reflects incremental expense from acquisitions and accelerated depreciation expense related to our existing office space in China, in advance of moving into new office space. The increase in 2009 was primarily from higher depreciation expense associated with our new corporate headquarters in Chicago. Amortization expense increased $5.9 million in 2010 and $2.3 million in 2009, reflecting amortization of intangible assets related to acquisitions. 

As a percentage of revenue, depreciation and amortization expense increased 0.4 percentage points in 2010. 

We expect that amortization of intangible assets will be an ongoing cost for the remaining life of the assets. Based on acquisitions completed through December 31, 2010, we estimate that aggregate amortization expense for intangible assets will be $25.7 million in 2011. Our estimates of future amortization expense for intangible assets may be affected by changes to the preliminary purchase price allocations associated with our 2010 acquisitions. 

## Stock-Based Compensation Expense 

Stock-based compensation expense mainly relates to grants of restricted stock units (RSUs) and, beginning in 2010, includes expense related to restricted stock. 

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Restricted Stock Units:  Our stock-based compensation expense related to RSUs has increased over the past three years, reflecting annual grants. We began granting RSUs in May 2006 and have made additional grants each year since then. We recognize the expense related to RSUs over the vesting period, which is generally four years. We estimate forfeitures for these awards and typically adjust the estimated forfeitures to actual forfeiture experience in the second quarter, which is when most of our larger equity grants typically vest. We have not recorded any significant changes to stock-based compensation related to these adjustments. 

Restricted Stock:  Beginning in 2010, we began recording expense related to restricted stock issued with the acquisition of Realpoint. In May 2010, we issued 199,174 shares that will vest over five years from the date of grant. This grant resulted in an expense of approx- imately $1.2 million in 2010. We amortize this value to stock-based compensation expense ratably over the vesting period. We have assumed that all of the restricted stock will ultimately vest, and therefore haven’t incorporated a forfeiture rate in this portion of our stock-based compensation expense. 

Stock options:  Stock-based compensation expense related to stock options has declined over the past three years, as stock options granted in previous years were fully vested as of January 1, 2010. 

Stock-based compensation expense is included in each of our oper- ating expense categories, as shown below: 

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Based on grants made through December 31, 2010, we anticipate that total stock-based compensation expense will be $13.5 million in 2011. This amount is subject to change based on additional equity grants or changes in our estimated forfeiture rate related to these grants. 

