Operator: Good day, everyone and welcome to the Apple Incorporated Second Quarter Fiscal Year 2014 Earnings Release Conference Call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Nancy Paxton, Senior Director of Investor Relations. Please go ahead, ma'am.
Nancy Paxton - IR: Thank you. Good afternoon, and thanks to everyone for joining us today. Speaking first today are Apple's CEO, Tim Cook; and Vice President and Corporate Controller, Luca Maestri; and they will joined by CFO, Peter Oppenheimer for the Q&A session with Analysts.
Please note that some of the information you'll hear during our discussion today will consist of forward-looking statements, including without limitation, those regarding revenues, gross margins, operating expenses, other income and expense, stock-based compensation expense, taxes, future products and capital allocation plans. Actual results or trends could differ materially from our forecast.
For more information, please refer to the risk factors discussed in Apple's Form 10-K for 2013, the Form 10-Q for the first quarter of fiscal 2014 and the Form 8-K filed with the SEC today, along with the associated press releases. Apple assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
I'd now like to turn the call over to Tim for introductory remarks.
Tim Cook - CEO: Thanks, Nancy. Good afternoon everyone. We have a lot to share with you over the next hour and I'd like to start right away with the very strong results we're reporting for the March quarter. We generated $45.6 billion in revenue, which was ahead of our expectations and represents a new March quarter record and is our strongest non-holiday quarter ever.
Our underlying business performance was even stronger than our reported results imply when you take into account changes in channel inventory this year versus last year and foreign exchange headwinds that we faced in several of our international market. Setting foreign exchange and inventory changes aside, our underlying growth rate would have been close to double digit. These strong revenue results combined with our best gross margin percentage since September of 2012 resulted in earnings per share growth of 15%, which is our highest earnings growth rate in the last six quarters.
iPhone was key in driving our stronger than expected results. We sold almost 44 million iPhones setting a new March quarter record. These strong results were broad-based both from a product point of view with demand for each of our three iPhone stronger than its predecessor and from a geographic standpoint. We gained smartphones share in many developed and emerging markets including the U.S., the U.K., Japan, Canada, Germany, France, Vietnam and Greater China, just to mention a few. In fact, we established a new all-time record for total iPhone sales in the BRIC countries.
iTunes, software and services revenue continue to grow at a double-digit rate, thanks to an incredible ecosystem and our very large loyal and engaged customer base. With its strong momentum and growing profitability, iTunes is very important driver of our business, not only here in the United States, but around the world.