Kevin March, SVP & Chief Financial Officer
Thanks Dave and good afternoon everyone. Gross profit in the quarter was $1.90 billion or 58% of revenue. Gross profit increased 16% from the year ago quarter. This gross profits reflects higher revenue, increased factory loadings and an improved products portfolio focused on analog and embedded processing that benefits from our efficient manufacturing strategy. Moving to operating expenses, combined R&D and SG&A expenses $740 million was down $67 million from the year ago. The decline primarily reflects the targeted reductions of embedded processing in Japan that were previously announced. That restructuring is now essentially complete and we achieved a little more of our estimated annualized savings.
Acquisition charges were $82 million almost all of which were the ongoing amortization of intangibles and non-cash expense. Restructuring and other charges were a $27 million benefit due to gains on sales of assets. Operating profit was $1.10 billion or 33.6% of revenue. Operating profit was up 60% from a year ago quarter. Operating margin for analog was 38.7%. Operating margin for embedded processing was 17.0%, more than double in from a year ago as we benefit from our investments for growth, and as we executed our restructuring plan to better align resources with the opportunities that we are pursuing. While this is a solid progress, we still have more to do in this business.
We expect embedded operating margins to continue to increase as our investments in R&D and SG&A will continue to drive top line growth while we hold these expenses flat. Net income in the fourth quarter was $825 million or $0.76 per share. As a reminder, earnings per share included a $0.05 benefit for the reinstatement for the federal research tax credit, and a benefit of $0.02 from the gains on sales of assets.
Let me now comment on our capital management results starting with our cash generation. Cash flow from operations was $1.27 billion in the quarter. Inventory days were 117, slightly above our model range but a number we are quite comfortable with. It is consistent with the growing portion of our product demands be in support of this consignment inventory versus customer-owned inventory. We believe this consignment arrangements give us better real-time feedback to end market demand allowing us to better manage our factories and maintain short lead times. We expect consignment inventory to continue to increase over the coming years as distributions becomes a growing portion of our business. We will monitor the appropriateness of our current model of 105 to 115 days of inventory, and possibly update this model in the next year or so.
Capital expenditures were $125 million in the quarter. In 2014 cash flows from operations was $3.89 billion up, 15% from the same period a year ago. For the year, capital expenditures were $385 million or 3% of revenue. As a reminder, our long term expectations is for capital expenditures to be about 4% of revenue. Free cash flow for the year was $3.50 billion or 27% of revenue. Free cash flow was 18% higher than a year ago. As we have said, we believe free cash flow growth, especially on a per share basis is most important to maximizing shareholder value in the long term and will be valued only for if it is returned to shareholders or productively reinvested in the business. As we have noted, our intentions to return 100% of our free cash flow plus any proceeds we receive from exercise of equity compensation minus net debt retirement.
