Turning to cash, our cash plus short-term and long-term marketable securities totaled $81.6 billion at the end of the September quarter compared to $76.2 billion at the end of the June quarter, a sequential increase of $5.4 billion. This increase was net of cash paid for the acquisition of Nortel patent and the Nokia settlement during the September quarter. Cash flow from operations was $10.4 billion, an increase of 84% year-over-year.
As we move ahead into the December quarter I'd like to review our outlook which includes the types of forward-looking information that Nancy referred to at the beginning of the call. I'd also like to remind you that approximately once every six years we add a week to the December quarter to align our fiscal periods with the December calendar. So, this December quarter will stand 14 weeks rather than 13, and will end on December 31.
We expect revenues to be about $37 billion compared to $26.7 billion in the December quarter last year. We expect gross margin to about 40% reflecting approximately $60 million related to stock-based compensation expense. We expect OpEx to be about $3.25 billion including about 350 million related to stock-based compensation. We expect OI&E to be about $85 million and we expect the tax rate to be about 24.25%. We are targeting EPS of about $9.30.
In closing, we're extremely pleased with the strong conclusion to our record-breaking fiscal 2011. Over the course of the year, we generated revenues of over $108 billion, an increase of $43 billion or 66% over our fiscal 2010 results. We grew past historical records by selling over 72 million iPhones, 32 million iPads, and almost 17 million Macs in fiscal 2011. We expanded our reach by opening 40 new retail stores, adding scores in new carrier and reseller relationship and broadening our presences through Apple Stores and App Store around the world.
Last but not least, we generated almost $26 billion in net income during the year, and increase of 85% year-over-year, which was even faster than our revenue growth. We're thrilled to begin selling iPhone 4S and to bring iOS 5 and iCloud to our customers this month, and we remain very enthusiastic about our new product pipeline.
With that, I'd like to open the call to questions.