Our sales in Europe in 2014 were generally flat with 2013, with currency movements having a nominal impact. Our Of f- Highway segment has a significant European presence.  The weaker demand in the markets served by this segment contributed  to reduced sales of around $60. Lar gely offsetting the weaker of f-highway demand were stronger production levels in the light  vehicle market where light engine build was up 3% and light truck production was higher by about 6%. Our sales in Europe in  2014 also benefited from new Light  Vehicle programs coming on line during the year . South America sales in 2014 were significantly reduced by currency ef fects from a weaker Brazilian real and  Argentine  peso along with devaluation of the Venezuelan bolivar. Adjusted for currency ef fects, 2014 sales in South America were down  $42 or about 4%. Production levels were down in our light and commercial vehicle end markets – light truck production of f  12%, light vehicle engine build down about 16% and medium/heavy truck production lower by more than 25%. Partially  offsetting the effects of lower demand levels was cost recovery pricing for material and other cost inflation. Asia Pacific sales were 11% lower than in 2013. Adverse currency effects resulted principally from a weakening of the  Indian rupee, Thai baht, Australian dollar and Japanese yen. The organic sales reduction of 7% is primarily due to  comparatively weaker economic environments in India and  Thailand, along with reduced demand on a scheduled light vehicle  program roll-off in Australia. Cost of sales and gross margin  — Cost of sales for 2014 was 3% lower than in 2013, with cost of sales as a percent of sales of  85.7% lower than the 86.4% realized in 2013. The reduction in cost is consistent with the decline in sales, due principally to  weaker international currencies and slightly lower overall net sales volume. Cost of sales in 2014 was increased by higher  material commodity costs of about $35, higher warranty expense of $14 and inflationary increases on other costs, principally in  our South America and South Africa markets. More than of fsetting these increases were the ef fects of continued supplier  rationalization and engineering design actions, which contributed to material cost reductions of approximately $66, and reduced  depreciation and amortization expense of $20.  Gross margin in 2014 of $945, which excludes pension settlement char ges, increased $25 from 2013, representing 14.3%  of sales – 70 basis points higher than last year's gross mar gin percentage of 13.6%. The gross margin improvement was  attributable to the reduced cost of sales as a percent of sales discussed in the preceding paragraph. Selling, general and administrative expenses (SG&A)  — SG&A expenses in 2014 were $411 (6.2% of sales) as compared to  $410 (6.1% of sales) in 2013. Salary and benefits expense in 2014 was approximately $7 less than in 2013, nearly of fsetting an  increase of $8 in selling expense and other discretionary spending. Restructuring charges  — Restructuring charges of $21 in 2014 primarily represent the impact of headcount reduction  initiatives in our Commercial Vehicle and Light Vehicle businesses in South America and Europe, including the closure of our  Commercial Vehicle foundry in Argentina and other severance and exit costs associated with previously announced initiatives. Restructuring charges of $24 in 2013 include the impact of headcount reduction initiatives, primarily in our Light  Vehicle and  Commercial Vehicle businesses in Argentina and Australia as well as in our Off-Highway business in Europe. Restructuring  charges in 2013 also include severance and exit costs associated with previously announced initiatives, of fset in part by a $10  reversal of previously accrued obligations. New customer programs and other developments in our Light  Vehicle and Power  Technologies businesses in North America and a decision by our Off-Highway business in Europe to in-source the  manufacturing of certain parts were the primary factors leading to the reversal of previously accrued severance obligations. Loss on disposal group held for sale  — During the fourth quarter of 2014, we entered into an agreement to sell our operations  in Venezuela. We completed the sale in January 2015. The divested business was determined to be held for sale at December  31, 2014, resulting in the recognition of a loss of $80 to reduce the assets and liabilities of this business to their fair value less  cost to sell. Reference is made to Operations in  Venezuela in this Item 7 and to Note 2 of the consolidated financial statements  in Item 8 for additional disclosures regarding this transaction. Pension settlement charges  — We completed two actions in the fourth quarter of 2014 that reduced our pension plan  obligations. Lump sum payments to deferred vested salaried participants in our U.S. pension plans under a voluntary program  resulted in a settlement charge of $36, while completion of a wind-up of certain Canadian pension plans resulted in a char ge of  $6. See Note 11 of the consolidated financial statements in Item 8 for additional discussion of these two actions. Loss on extinguishment of debt  — In connection with a refinancing of long-term debt obligations in the fourth quarter of 2014,  we recognized expense for the call premium incurred and the write-of f of the unamortized financing costs associated with the  extinguished obligations. See Note 13 of the consolidated financial statements in Item 8 for additional disclosure surrounding  this debt refinancing. 21