budget first cut taking existing budget numbers desk level key assumptions behind cost allocations direct costs group went group gas ops allocated houston gas power ops allocated east west power based commercial headcount costs allocated gas east power west power canada ooc based commercial headcount hundred ways could exercise saying right way least able break costs calculated ebit desk funded bonus pool paid bonuses non commercial people figured bonus pool would look like desk based proforma values necessarily saying way think one way view world upon make whatever changes adjustments deem necessary initial conclusions reactions proforma produces bonuses commercial employees equal roughly 6 gross margin number high relative 1 2 used considerably lower 8 12 appears available market costs way high every dollar direct commercial expenses four dollars allocations seems way hand model sells lower costs current costs hard time convincing people portland looks good relative people alternatives think need lot discussions next week new organization would managed see debate nail bunch things next week example allocate var best performing traders market offers best opportunity time need incent desk heads based netco earnings compensate traders based desk earnings carve bonus pool choices gets var right places properly incents teamwork best manage costs send appropriate cost signals sunk costs variable costs need strong professional operations manager steeped cost accounting efficiency quality control leadership science operations management seen applied enron example cost us schedule mw average marginal cost us run book cost us settle transactions package going able offer incent people stay start talking discuss management team look like three people five people ten people want make thing work clear first choice 2002 team want contructive helpful possible achieving end commit unequivically sp sort numbers feel like sell portland team know comp looks like key people portland feel like adjustments proforma clear understanding 2002 comp probably get us want houston visit move tim