Question-and-Answer Session
Operator
Thank you. (Operator instructions). We’ll take our first question from Gary Bisbee with Barclays Capital.
Gary Bisbee – Barclays Capital
Hi guys, good morning. I guess a couple of questions on the cost. First of all, just to be clear, the savings on rent from the sublease agreement, is that marginally going to fall in G&A or will a component of it also be within depreciation and amortization?
Rich Lindahl
Yes, that's actually going to be spread across the cost categories of cost of service, G&A, and member and marketing expense.
Gary Bisbee – Barclays Capital
Okay. When we look at the G&A, what was a real strong job bringing down the cost base this quarter, is there anything within that line item that's not likely to continue as we look for the back half because assuming you get the benefit from the leases and you were able to keep what you did this quarter? I have a hard time staying within the guidance range. What could change in the -- if anything, on the G&A line?
Rich Lindahl
Yes, I think the number that you have for G&A is a pretty good proxy for what we would expect for the rest of the year with some additional reduction to be found. I think in terms of your comment about the guidance range, I mean I think we have made good progress in the first half of the year and certainly have taken a number of actions to protect our margin position, the lease and voluntary separation being two examples.
But as you know, there is a lot of operating leverage in our model and where we end the year will really depend in large measure on how our bookings and revenue fall in the second half of the year. And as Tom indicated, while we are certainly feeling more hopeful about the overall state of the economy, it's still a volatile environment and we are also in the early stages of getting traction on our new account management model. So at this stage, we feel the ranges we provided are appropriate.
Gary Bisbee – Barclays Capital
Okay. Within member relations expense, I believe I heard you say that your expectation is that for the year, as a percent of revenue, that expense line would likely be at least up a little bit year-over-year, which is a big change from the first half where it come down. Are there new investments that are planned? I heard you say the process is investing more in Asia and potentially the government verticals. Is that something that would fall there, what are you expecting to change in terms of the cost on the member relations line?
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