PART II Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
The Company’s common stock is listed on the New York Stock Exchange.
Prior to the Separation of Alcoa Corporation from the Company, the Company’s common stock traded under the symbol “AA.
” In connection with the separation, on November 1, 2016, the Company changed its stock symbol and its common stock began trading under the symbol “ARNC.
” On October 5, 2016, the Company’s common shareholders approved a 1-for-3 reverse stock split of the Company’s outstanding and authorized shares of common stock (the “Reverse Stock Split”).
As a result of the Reverse Stock Split, every 3 shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, without any change in the par value per share.
The Reverse Stock Split reduced the number of shares of common stock outstanding from approximately 1.3 billion shares to approximately 0.4 billion shares, and proportionately decreased the number of authorized shares of common stock from 1.8 billion to 0.6 billion shares.
The Company’s common stock began trading on a Reverse Stock Split-adjusted basis on October 6, 2016.
On November 1, 2016, the Company completed the Separation of its business into two independent, publicly traded companies: the Company and Alcoa Corporation.
The Separation was effected by means of a pro rata distribution by the Company of 80.1% of the outstanding shares of Alcoa Corporation common stock to the Company’s shareholders.
The Company’s shareholders of record as of the close of business on October 20, 2016 (the “Record Date”) received one share of Alcoa Corporation common stock for every three shares of the Company’s common stock held as of the Record Date.
The Company retained 19.9% of the outstanding common stock of Alcoa Corporation immediately following the Separation.
The following table sets forth, for the periods indicated, the high and low sales prices and quarterly dividend amounts per share of the Company’s common stock as reported on the New York Stock Exchange, adjusted to take into account the Reverse Stock Split effected on October 6, 2016.
The prices listed below for the fourth quarter of 2016 do not reflect any adjustment for the impact of the separation of Alcoa Corporation from the Company on November 1, 2016, and therefore are not comparable to pre-separation prices from earlier periods.
## Table 0 ##
The number of holders of record of common stock was approximately 12,885 as of February 23, 2017.
Asia Pacific Net Sales The following table presents Asia Pacific net sales (dollars in millions):
## Table 1 ##
Changes in foreign exchange rates positively affected knee sales by 5 percent and pasitively affected hip sales by 2 percent.
Reported decreases in average selling prices negatively affected hip sales by 3 percent.
The NexGen Complete Knee Solution product line, including NexGen Trabecular Metal ibial Components, the Ne.
xGen CR-Flex Knee and the NexGen LPS-Flex Knee led knee sales.
Launch of the Gender Solutions Knee Femoral Implant in Australia also contributed to strong knee sales for the year.
The continued conversion to porous stems, including the Fiber Metal Taper Stem from the VerSys Hip System, the Allocdassic Zueymaller Hip System and the CL.
S Spotormo Stem led hip stem sales.
Sales of Longevity Highly Crosslinked Polyethylene Liners and Trabecular Metal Acetabular Cups also exhibited growth.
Extremities sales increased due to stronger sales of our shoulder and elbow products.
The Tapered Scre-Vent Implant System led dental sales.
Trauma sales were led by strong growth in Zimmer Periarticular Plates and ZimmerPlates and Screws, but were partialy ofset by a reported 5 percent decrease in average selling prices during 2007.
A registration issue with the ST360 Spinal Fixation System in Japan resulted in a decrease in sales of this device, contributing to the negative growth in Spine sales for 2007.
Powered surgical instruments led OSP sales.
Gross Profit Gross profit as a percentage of net sales was 77.5 percent in 2007, compared to 77.7 percent in 2006.
The following table reconciles the gross margin for 2006 to 2007:
## Table 2 ##
The unfavorable effect of year over year changes in foreign currency hedge gains and losses were partially ofset by lower unit manufacturing costs due to productivity gains as well as favorable geographic sales mix.
These gains werefurther ofset by increased inventory charges due to the impact of our newer products on aging product lines.
Operating Expenses Research and Development, or R&D, as a percentage of net sales was 5.4 percent for 2007, which is unchanged from 2006.
R&D increased to $209.6 million for 2007 from $188.3 million in 2006, reflecting increased spending on new product development across all of our product segments.
In 2007, we continued to make investments in our research and development facilities in Warsaw, Indiana.
We continued working with our third party partners on genetically engineered tissues for regenerative therapies, including soft tissue biological repair and replacement.
New products, which we define as those introduced into a market in the preceding thirty-six months, accounted for approximately 25 percent of net sales in 2007 compared with 24 percent in 2006.
In the fourth quarter of 2007, we announced FDA approval of the Zimmer NexGen LPS-Flex Mobile Knee.
Additionally, in the second half of 2007, we launched several new products, including the Gender Solutions Natural-Knee Flex System, and the Zimmer M/L Taper Prosthesis with Kinectiv Technology.
We continue to target our R&D spending at the high end of what we believe to be an industry average of 4- 6 percent.
Selling, general and administrative, or SG&A, as a percentage of net sales was 38.2 percent for 2007, compared to 38.8 percent in 2006.
The improvement in SG&A as a percent of net sales from the prior year is due to sales growth and well controlled spending.
Settlement expense of $169.5 million for 2007 relates to the settlement of the federal investigation into financial relationships between major orthopaedic manufacturers and consulting orthopaedic surgeons.
Acquisition, integration and other items for 2007 were $25.2 million compared to $6.1 million in 2006.
The acquisition, integration and other expenses recorded during 2007 reflect in-process research and development write-offs related to acquisitions, costs related to the integration of acquired U. S.  distributors, estimated settlements for certain pre-acquisition product liability claims, integration consulting fees and costs for integrating information technology systems.
The acquisition, integration and other expenses recorded during 2006 included $27.7 million of income related to three unrelated matters – the sale of the former Centerpulse Austin land and facilities for a gain of $5.1 million and the favorable settlement of two pre-acquisition contingent liabilities.
Operating Profit, Income Taxes and Net Earnings Operating profit for 2007 decreased 3 percent to $1,127.6 million, from $1,165.2 million in 2006.
The decrease is due principally to the $169.5 million settlement expense.
Without the settlement expense, operating profit would have been favorable to 2006 due to increased sales and controlled operating expenses.
The effective tax rate on earnings before income taxes and minority interest increased to 31.6 percent for 2007, up from 28.6 percent in 2006.
The increase in the effective tax rate is primarily due to the effect of the $169.5 million settlement expense in 2007 for which no tax benefit has been
goodwill in connection with the acquisition.
The acquisition of ORTHOsoft bolsters our SmartTools strategic initiative to bring innovative tools to the marketplace that will help create better and more reproducible outcomes for surgeons and patients.
Endius Incorporated In April 2007, we acquired Endius Incorporated (Endius), a privately held spinal products company based in Massachusetts, for an aggregate value of approximately $80 million in cash, before adjustments for debt repayment and other items.
We recorded $42.3 million in goodwill in connection with the acquisition.
Endius develops and manufactures minimally invasive spine surgery products, implants and techniques to treat spine disease.
The acquisition of Endius has expanded our spine product portfolio to include innovative minimally invasive instruments and implants.
Musculoskeletal Management Systems, LLC In June 2006, we acquired Musculoskeletal Management Systems, LLC, more commonly known as the Human Motion Institute (HMI), a privately-held, hospital-focused consulting company based in Pennsylvania for a cash purchase price of $15.0 million.
We recorded $13.0 million of goodwill in connection with the acquisition.5.
INVENTORIES Inventories at December 31, 2007 and 2006, consist of the following (in millions):
## Table 3 ##
Reserves for excess and obsolete inventory were $143.7 million and $129.5 million at December 31, 2007 and 2006, respectively.6.
PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment at December 31, 2007 and 2006, was as follows (in millions):
## Table 4 ##
Depreciation expense was $182.6 million, $155.0 million and $144.0 million for the years ended December 31, 2007, 2006 and 2005, respectively.7.
GOODWILL AND OTHER INTANGIBLE ASSETS The following table summarizes the changes in the carrying amount of goodwill for the years ended December 31, 2007 and 2006 (in millions):

<table><tr><td></td><td>2016</td><td>2015</td></tr><tr><td>Quarter</td><td>High</td><td>Low</td><td>Dividend</td><td>High</td><td>Low</td><td>Dividend</td></tr><tr><td>First</td><td>$30.66</td><td>$18.42</td><td>$0.09</td><td>$51.30</td><td>$37.95</td><td>$0.09</td></tr><tr><td>Second</td><td>34.50</td><td>26.34</td><td>0.09</td><td>42.87</td><td>33.45</td><td>0.09</td></tr><tr><td>Third</td><td>32.91</td><td>27.09</td><td>0.09</td><td>33.69</td><td>23.91</td><td>0.09</td></tr><tr><td>Fourth (Separation occurred on November 1, 2016)</td><td>32.10</td><td>16.75</td><td>0.09</td><td>33.54</td><td>23.43</td><td>0.09</td></tr><tr><td>Year</td><td>$34.50</td><td>$16.75</td><td>$0.36</td><td>$51.30</td><td>$23.43</td><td>$0.36</td></tr></table>
<table><tr><td></td><td colspan="2">Year Ended December 31,</td><td></td></tr><tr><td></td><td>2007</td><td>2006</td><td>% Inc (Dec)</td></tr><tr><td>Reconstructive</td><td></td><td></td><td></td></tr><tr><td>Knees</td><td>$197.2</td><td>$167.5</td><td>18%</td></tr><tr><td>Hips</td><td>201.2</td><td>191.7</td><td>5</td></tr><tr><td>Extremities</td><td>6.9</td><td>5.5</td><td>27</td></tr><tr><td>Dental</td><td>30.8</td><td>26.4</td><td>17</td></tr><tr><td>Total</td><td>436.1</td><td>391.1</td><td>12</td></tr><tr><td>Trauma</td><td>41.8</td><td>39.4</td><td>6</td></tr><tr><td>Spine</td><td>5.5</td><td>5.7</td><td>-4</td></tr><tr><td>OSP and Other</td><td>56.1</td><td>51.6</td><td>8</td></tr><tr><td>Total</td><td>$539.5</td><td>$487.8</td><td>11</td></tr></table>
<table><tr><td>Year ended December 31, 2006 gross margin</td><td>77.7%</td></tr><tr><td>Foreign exchange impact, net</td><td>-0.3</td></tr><tr><td>Other</td><td>0.1</td></tr><tr><td>Year ended December 31, 2007 gross margin</td><td>77.5%</td></tr></table>
<table><tr><td></td><td> 2007</td><td> 2006</td></tr><tr><td>Finished goods</td><td>$564.2</td><td>$489.1</td></tr><tr><td>Work in progress</td><td>50.3</td><td>46.4</td></tr><tr><td>Raw materials</td><td>113.3</td><td>102.8</td></tr><tr><td>Inventories, net</td><td>$727.8</td><td>$638.3</td></tr></table>
<table><tr><td></td><td>2007</td><td>2006</td></tr><tr><td>Land</td><td>$19.4</td><td>$17.6</td></tr><tr><td>Building and equipment</td><td>855.3</td><td>724.6</td></tr><tr><td>Capitalized software costs</td><td>98.7</td><td>59.1</td></tr><tr><td>Instruments</td><td>903.8</td><td>768.5</td></tr><tr><td>Construction in progress</td><td>98.7</td><td>105.3</td></tr><tr><td></td><td>1,975.9</td><td>1,675.1</td></tr><tr><td>Accumulated depreciation</td><td>-1,004.0</td><td>-868.0</td></tr><tr><td>Property, plant and equipment, net</td><td>$971.9</td><td>$807.1</td></tr></table>

Question: As As the chart 3 shows,which year is the value of the Raw materials higher?
Answer: 2007