Earnings for the first quarter of 2007 are expected to be lower than in the fourth quarter of 2006.
Containerboard export sales volumes are expected to decline due to scheduled first-quarter maintenance outages.
Sales volumes for U. S.  converted products will be higher due to more shipping days, but expected softer demand should cause the shipments per day to decrease.
Average sales price realizations are expected to be comparable to fourthquarter averages.
An additional containerboard price increase was announced in January that is expected to be fully realized in the second quarter.
Costs for wood, energy, starch, adhesives and freight are expected to increase.
Manufacturing costs will be higher due to costs associated with scheduled maintenance outages in the containerboard mills.
European Container operating results are expected to improve as seasonally higher sales volumes and improved margins more than offset slightly higher manufacturing costs.
Consumer Packaging Demand and pricing for Consumer Packaging products correlate closely with consumer spending and general economic activity.
In addition to prices and volumes, major factors affecting the profitability of Consumer Packaging are raw material and energy costs, manufacturing efficiency and product mix.
CONSUMER PACKAGING net sales increased 9% compared with 2005 and 7% compared with 2004.
Operating profits rose 8% from 2005, but declined 15% from 2004 levels.
Compared with 2005, higher sales volumes ($9 million), improved average sales price realizations ($33 million), reduced lack-of-order downtime ($18 million), and favorable mill operations ($25 million) were partially offset by higher raw material costs ($19 million) and freight costs ($21 million), unfavorable mix ($14 million) and other costs ($21 million).
## Table 0 ##
COATED PAPERBOARD net sales of $1.5 billion in 2006 were higher than $1.3 billion in 2005 and $1.1 billion in 2004.
Sales volumes increased in 2006 compared with 2005, particularly in the folding carton board segment, reflecting improved demand for coated paperboard products.
In 2006, our coated paperboard mills took 4,000 tons of lack-of-order downtime, compared with 82,000 tons of lack-of-order downtime in 2005.
Average sales price realizations were substantially improved in the current year, principally for folding carton board and cupstock board.
Operating profits were 51% higher in 2006 than in 2005, and 7% better than in 2004.
The impact of the higher sales prices along with more favorable manufacturing operations due to strong performance at the mills more than offset higher input costs for energy and freight.
FOODSERVICE net sales declined to $396 million in 2006, compared with $437 million in 2005 and $480 million in 2004, due principally to the sale of the Jackson, Tennessee plant in July 2005.
Sales volumes were lower in 2006 than in 2005, although average sales prices were higher due to the realization of price increases implemented during 2005.
Operating profits for 2006 improved over 2005 and 2004 levels largely due to the benefits from higher sales prices.
Raw material costs for bleached board were higher than in 2005, but manufacturing costs were more favorable due to increased productivity and reduced waste.
SHOREWOOD net sales of $670 million were down from $691 million in 2005 and $687 million in 2004.
Sales volumes in 2006 were down from 2005 levels due to weak demand in the home entertainment and consumer products markets, although demand was strong in the tobacco segment.
Average sales prices for the year were lower than in 2005.
Operating profits were down significantly from both 2005 and 2004 due to the decline in sales, particularly in the higher margin home entertainment markets, higher raw material costs for bleached board and certain inventory adjustment costs.
Entering 2007, coated paperboard first-quarter sales volumes are expected to be seasonally stronger than in the fourth quarter 2006 for folding carton board and bristols.
Average sales price realizations are expected to rise with a price increase announced in January.
It is anticipated that manufacturing costs will improve versus an unfavorable fourth quarter.
Foodservice earnings for the first quarter of 2007 are expected to decline due to seasonally weaker volume.
However, sales price realizations will be slightly higher, and the seasonal switch to hot cup containers will have a favorable impact on product mix.
Shorewood sales volumes for the first quarter of 2007 are expected to seasonally decline, but the earnings impact will be partially offset by pricing improvements and an improved product mix.
Distribution Our Distribution business, principally represented by our xpedx business, markets a diverse array of products and supply chain services to customers in
Under certain circumstances, this rule could limit the ability of Bancshares to withdraw capital from Alliant Partners and limit the ability of Silicon Valley Bank to withdraw capital from SVB Securities.
As broker-dealers, Alliant Partners and SVB Securities are also subject to other regulations covering the operations of their respective businesses, including sales and trading practices; use of client funds and securities; and conduct of directors, officers, and employees.
Brokerdealers are also subject to regulation by state securities administrators in the states where they do business.
Violations of the stringent regulations governing the actions of a broker-dealer can result in the revocation of broker-dealer licenses; the imposition of censures or fines; the issuance of cease and desist orders; and the suspension or expulsion from the securities business of a firm, its officers, or its employees.
The SEC and the national securities exchanges, in particular, emphasize the need for supervision and control by broker-dealers of their employees.
Available Information Our Internet address is http://www.
svb.
com.
We make available free of charge through our Internet website our annual report on Form 10- K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13 (a) or 15(d) of the Exchange Act as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.
Bancshares was incorporated in Delaware in 1999.
ITEM 2.
PROPERTIES Our corporate headquarters are located at 3003 Tasman Drive, Santa Clara, California in three buildings, approximating 215,000 square feet in total.
The leases related to our corporate headquarter facilities in Santa Clara expire in May 2005.
In 2002, we exited leased premises, located in Santa Clara, California, approximating 18,000 square feet.
The lease on the building will expire in August 2005.
Our management determined that the premises would have no future economic value to our operations, except for any potential future sub-lease arrangement.
Therefore, during 2002, we incurred charge-offs of approximately $2.5 million related to the exit of these premises.
We currently operate 26 regional offices.
We operate throughout the Silicon Valley with offices in Fremont, Santa Clara, Palo Alto, and on Sand Hill Road, which is the center of the venture capital community in California.
Other regional offices in California include: Irvine, Los Angeles, Napa Valley, San Diego, San Francisco, Santa Barbara, and Sonoma.
Office locations outside of California include: Phoenix, Arizona; Boulder, Colorado; Atlanta, Georgia; Chicago, Illinois; Boston, Massachusetts; Minneapolis, Minnesota; New York, New York; Durham, North Carolina; Portland, Oregon; Philadelphia, Pennsylvania; Austin, Texas; Dallas, Texas; Northern Virginia; and Seattle, Washington.
All of our properties are occupied under leases, which expire at various dates through 2011, and in most instances include options to renew or extend at market rates and terms.
We also own leasehold improvements, equipment, furniture, and fixtures at our offices, all of which are used in our business activities.
ITEM 3.
LEGAL PROCEEDINGS There were no legal proceedings requiring disclosure pursuant to this item pending at December 31, 2003, or at the date of this report.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote by the stockholders of Silicon Valley Bancshares’ common stock during the fourth quarter of 2003.
ITEM 5.
MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Market Information Our common stock is traded over the counter on the National Association of Securities Dealers Automated Quotation (Nasdaq) national market under the symbol “SIVB.
” The following table shows the high and low sales prices for our common stock for each quarterly period during the last two years, based on the daily closing price as reported by the Nasdaq national market.
## Table 1 ##
Stockholders There were 705 registered holders of our stock as of December 31, 2003.
Additionally, we believe there were approximately 8,194 beneficial holders of common stock whose shares are held in the name of brokerage firms or other financial institutions.
We are not provided with the number or identities of all of these stockholders, but we have estimated the number of such stockholders from the number of stockholder documents requested by these brokerage firms for distribution to their customers.
SILICON VALLEY BANCSHARES AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 14.
Segment Reporting (Continued)
## Table 2 ##
(5) For operating segment reporting purposes, the Company reports net charge-offs as the provision for loan losses.
(6) Noninterest income (loss) presented in other column included warrant income of $8.5 million.
(7) Commercial Bank column included depreciation and amortization of $8.5 million.
(8) Total assets presented in other column included goodwill, which was primarily related to Alliant Partners of $96.4 million.15.
Common Stock Repurchases $160.0 million share repurchase program authorized by the board of directors, effective May 7, 2003 On May 7, 2003, the Company’s announced that its board of directors authorized a stock repurchase program of up to $160.0 million.
This program became effective immediately and replaced previously announced stock repurchase programs.
Under this program, the Company repurchased in aggregate 4.5 million shares of common stock totaling $113.2 million in 2003.
On May 20, 2003, the Company purchased 1.3 million shares of common stock for approximately $33.4 million in conjunction with the Company’s convertible note offering.
Additionally, during the second quarter of 2003, the Company entered into an accelerated stock repurchase agreement (ASR) for 3.2 million shares at an initial price of $79.9 million.
The Company completed its settlement obligations under this ASR agreement in the third quarter of 2003.
See below for terms of this ASR, which are substantially the same as ASR agreements entered into in January 2003 and November 2002.
$100.0 million share repurchase program authorized by the board of directors on September 16, 2002 From its inception through its termination on May 7, 2003, the Company repurchased 5.2 million shares of common stock totaling $94.3 million in conjunction with the $100.0 million share repurchase program.
Under this program, the Company had repurchased 3.3 million shares of common stock totaling $59.7 million during 2002.
A portion of the shares repurchased under this program was completed under an ASR agreement; see below for terms of this agreement.84 SILICON VALLEY BANCSHARES AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 15.
Common Stock Repurchases (Continued) $50.0 million share repurchase program authorized by the board of directors on March 21, 2002 During 2002, the Company repurchased 2.3 million shares of common stock totaling $50.2 million in conjunction with this program.
Accelerated Stock Repurchase Agreements In May 2003, January 2003, and November 2002, the Company entered into accelerated stock repurchase (ASR) agreements to facilitate the repurchase of shares of its common stock.
As of December 31, 2003, the Company had completed all of its settlement obligations under these ASRs.
The Company repurchased 3.2 million, 1.7 million, and 2.3 million shares of its common stock from the counterparties for $79.9 million, $29.9 million, and $40.0 million under the ASR agreements of May 2003, January 2003, and November 2002, respectively.
These agreements had a five-year term.
During the term of the agreements, the Company had an obligation to sell shares to the counterparty equal to the number of shares the Company purchased from them at the outset of the agreement.
The Company had the option to fulfill its obligation either by buying shares in the open market and selling those shares to the counterparty at forward prices specified in the agreement or by
SILICON VALLEY BANCSHARES AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 18.
Employee Benefit Plans (Continued) The table below provides stock option information related to the 1989 stock option plan and the 1997 Plan:
## Table 3 ##
The following table summarizes information about stock options outstanding as of December 31, 2003:
## Table 4 ##
At December 31, 2003, options for 1,110,729 shares were available for future grant under the Company’s 1997 plan.
There were no shares available for future grant under the Company’s 1983 and 1989 stock option plans.
The Company’s 1997 Plan provides for the granting of shares of the Company’s common stock to directors, employees, and certain other parties.
Shares granted to employees under this plan may be subject to certain vesting requirements and resale restrictions (restricted stock).
For restricted stock, unearned compensation equivalent to the market value of the Company’s common stock on the date of grant is charged to stockholders’ equity and amortized into noninterest expense over the vesting term.
In 2003, 116,777 shares of restricted stock were issued to employees at a weighted-average fair value of $17.24 per share.
In 2002 and 2001, the Company did not issue restricted stock.
At December 31, 2003, there were 293,673 shares of restricted stock outstanding, and the vesting of these shares occurs at various periods through the years 2004 and 2005.
The Company recognized $1.1 million, $0.8 million and $1.7 million in employee stock-based compensation costs resulting from the amortization of unearned compensation related to restricted stock,
SILICON VALLEY BANCSHARES AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 18.
Employee Benefit Plans (Continued) stock options and other miscellaneous employee stock awards during 2003, 2002, and 2001, respectively.
The weighted-average fair values of options granted to employees, directors and certain other parties were $12.08, $10.69 and $14.96 per share in 2003, 2002, and 2001, respectively.
Had compensation cost related to both the Company’s stock option awards to employees and directors and to the ESPP been determined under the fair value method prescribed under SFAS No.123, the Company’s net income, basic earnings per share and diluted earnings per share would have been the pro forma amounts shown in “Item 8.
Consolidated Financial Statements and Supplementary Data—Note 1 to the Consolidated Financial Statements—Summary of Significant Accounting Policies—Stock-based Compensation.
” The fair value of the stock option grants in 2003, 2002, and 2001 used in determining the pro forma net income and the basic and diluted earnings per share amounts were estimated using the Black-Scholes option-pricing model with the following assumptions:

<table><tr><td><i>In millions</i></td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td>Sales</td><td>$2,455</td><td>$2,245</td><td>$2,295</td></tr><tr><td>Operating Profit</td><td>$131</td><td>$121</td><td>$155</td></tr></table>
<table><tr><td> </td><td colspan="2"> 2003</td><td colspan="2"> 2002</td></tr><tr><td> Quarter</td><td> Low</td><td> High</td><td> Low</td><td> High</td></tr><tr><td>First</td><td>$15.71</td><td>$19.63</td><td>$21.17</td><td>$31.25</td></tr><tr><td>Second</td><td>$18.11</td><td>$27.00</td><td>$25.30</td><td>$33.87</td></tr><tr><td>Third</td><td>$22.66</td><td>$31.00</td><td>$16.75</td><td>$27.01</td></tr><tr><td>Fourth</td><td>$27.46</td><td>$37.25</td><td>$14.58</td><td>$19.94</td></tr></table>
<table><tr><td> </td><td> Commercial  Banking</td><td>Other</td><td> Total</td></tr><tr><td> </td><td colspan="3"> (Dollars in thousands)</td></tr><tr><td> 2001</td><td></td><td></td><td></td></tr><tr><td>Net interest income</td><td>$257,947</td><td>$5,038</td><td>$262,985</td></tr><tr><td>Provision for loan losses-5</td><td>18,149</td><td>-1,425</td><td>16,724</td></tr><tr><td>Noninterest income (loss)(6)</td><td>69,748</td><td>1,085</td><td>70,833</td></tr><tr><td>Noninterest expense-7</td><td>168,977</td><td>14,511</td><td>183,488</td></tr><tr><td>Minority interest in net losses of consolidated affiliates</td><td>—</td><td>7,546</td><td>7,546</td></tr><tr><td>Income (loss) before income taxes</td><td>140,569</td><td>583</td><td>141,152</td></tr><tr><td>Total assets-8</td><td>3,890,736</td><td>281,341</td><td>4,172,077</td></tr></table>
<table><tr><td> </td><td colspan="2"> 2003</td><td colspan="2"> 2002</td><td colspan="2"> 2001</td></tr><tr><td> </td><td>Shares</td><td> Weighted- Average Exercise Price</td><td>Shares</td><td> Weighted- Average Exercise Price</td><td>Shares</td><td> Weighted- Average Exercise Price</td></tr><tr><td>Outstanding at January 1,</td><td>6,234,638</td><td>$22.63</td><td>5,174,741</td><td>$20.80</td><td>4,579,574</td><td>$17.93</td></tr><tr><td>Granted</td><td>1,780,162</td><td>29.11</td><td>2,147,709</td><td>24.73</td><td>1,460,900</td><td>25.95</td></tr><tr><td>Exercised</td><td>-728,277</td><td>15.56</td><td>-562,982</td><td>11.90</td><td>-613,609</td><td>8.17</td></tr><tr><td>Forfeited</td><td>-626,556</td><td>27.13</td><td>-524,830</td><td>26.49</td><td>-252,124</td><td>29.98</td></tr><tr><td>Outstanding at December 31,</td><td>6,659,967</td><td>$24.58</td><td>6,234,638</td><td>$22.63</td><td>5,174,741</td><td>$20.80</td></tr><tr><td>Exercisable at December 31,</td><td>2,764,034</td><td>$21.18</td><td>2,184,186</td><td>$19.05</td><td>1,736,527</td><td>$14.85</td></tr></table>
<table><tr><td> </td><td colspan="3"> Options Outstanding</td><td colspan="2"> Options Exercisable</td></tr><tr><td> Ranges of Exercise Prices</td><td> Number Outstanding</td><td> Weighted- Average Remaining Contractual Life in Years</td><td> Weighted- Average Exercise Price</td><td> Number Exercisable</td><td> Weighted- Average Exercise Price</td></tr><tr><td>$7.88-15.03</td><td>940,700</td><td>4.26</td><td>$10.73</td><td>940,700</td><td>$10.73</td></tr><tr><td>15.15-19.20</td><td>749,958</td><td>8.10</td><td>16.96</td><td>215,500</td><td>16.84</td></tr><tr><td>19.24-22.50</td><td>404,625</td><td>8.27</td><td>21.63</td><td>90,876</td><td>21.80</td></tr><tr><td>22.97-23.69</td><td>697,923</td><td>6.30</td><td>23.68</td><td>496,554</td><td>23.69</td></tr><tr><td>23.76-24.57</td><td>134,500</td><td>6.78</td><td>24.36</td><td>21,376</td><td>24.41</td></tr><tr><td>24.80-25.17</td><td>739,575</td><td>4.55</td><td>25.15</td><td>8,625</td><td>24.82</td></tr><tr><td>25.29-26.06</td><td>917,015</td><td>7.54</td><td>26.01</td><td>435,064</td><td>26.03</td></tr><tr><td>26.24-31.29</td><td>967,321</td><td>7.92</td><td>30.59</td><td>304,013</td><td>30.42</td></tr><tr><td>31.45-34.84</td><td>212,475</td><td>6.75</td><td>33.12</td><td>155,325</td><td>33.17</td></tr><tr><td>35.26-58.25</td><td>895,875</td><td>5.10</td><td>37.08</td><td>96,001</td><td>47.94</td></tr><tr><td>$7.88-58.25</td><td>6,659,967</td><td>6.41</td><td>$24.58</td><td>2,764,034</td><td>$21.18</td></tr></table>

Question: What will Outstanding at January 1 for Weighted- Average Exercise Price in 2004 if it continues to grow at its current rate?
Answer: 24.621