Operator: Good day, ladies and gentlemen, and welcome to the Second Quarter 2013 JDSU Earnings Conference Call. My name is Jeff and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Later, we will facilitate a question-and-answer session. As a reminder, this conference is being recorded for replay purposes.
I would now like to turn the conference over to your host for today, Ms. Cherryl Valenzuela, Senior Director of Investor Relations. And you have the floor, ma'am.
Cherryl Valenzuela - IR: Thank you, Jeff, and welcome to JDSU's fiscal 2013 second quarter earnings call. Joining me today are Tom Waechter, CEO; and Rex Jackson, CFO. Alan Lowe, President of CCOP will join us for Q&A.
I'd like to remind you that this call will include forward-looking statements about the Company's future financial performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to look at our most recent filings with the SEC, particularly the Risk Factors section in Part I, Item 1A of our current report on 8-K filed December 14, 2012. The forward-looking statements, including guidance provided during this call are valid only as of today. JDSU undertakes no obligation to update these statements.
Please also note that all results are non-GAAP unless otherwise stated. We include a detailed reconciliation of these non-GAAP results to our GAAP results, as well as a discussion of their usefulness and limitation in today's earnings press release. The release plus our supplementary slides and historical financial tables are available on our website. Finally, we are recording this call today and we'll make the recording available promptly on our website.
I'd now like to turn the call over to Tom.
Thomas Waechter - President and CEO: Thank you, Cherryl, and good afternoon, everyone. JDSU delivered a strong second quarter with revenue at the high end of our guidance range and operating margin that significantly exceeded guidance.
Revenue was $429.4 million, up from last quarter, and as expected, did not include any contribution from seasonal budget flush activity as service providers continued to spend cautiously and selectively. Gross margin was 48%, the highest in eight quarters, primarily driven by record gross margin in CommTest.
Operating expenses of $157.2 million were up only slightly from the previous quarter, resulting in operating income of $49 million or 11.4% of revenue. This exceeded our guidance and represented our highest operating margin in six quarters. In fact, all three business segments outperformed our operating margin guidance.
Our balance sheet and working capital structure are solid. We generated $59.4 million of cash from operations, the highest in eight quarters, and reported total cash at the end of the quarter of $740.2 million.
We are well positioned for calendar 2013. Recent announcements in customer dialog point to increased global network infrastructure investment this year. We're pleased that announced new spending plans will target areas where JDSU offers market-leading and differentiated solutions, such as broadband network build-out, network visibility, mobility, Ethernet deployment and 100G. Based on our current visibility, we expect to see the impact of increased network investments in our June quarter.