Total company gross margin was 36.6%, which was 260 basis points better than our guidance. There were two groups of factors that were the primary causes of this difference. First, we sold more Snow Leopard, had a better product mix, and spent less on the iPod transition than planned.
Second, component costs did increase, but not to the level we had expected, and we benefited from leverage on the higher revenue and lower freight and other costs than planned. Operating expenses were $1.42 billion and included $151 million of stock based compensation expense. OI&E was $45 million and the tax rate for the quarter was 26%.
Turning to cash, our cash, plus short-term and long-term marketable securities totaled $34 billion at the end of the September quarter, compared to $31.1 billion at the end of the June quarter, an increase of $2.9 billion.
Cash flow from operations was $3.1 billion and that was net of our $500 million prepayment to Toshiba early in the September quarter to secure future supply of NAND flash. Our investment priority for the cash continues to be preservation of capital, which has served us well in the current environment. We are continuing to focus on short-dated high-quality investments and remain comfortable with our investment portfolio.
Looking ahead to the December quarter, I would like to review our outlook, which includes the types of forward-looking information that Nancy referred to at the beginning of the call.
On September 23, the Financial Accounting Standards Board ratified EITF 09-3, which will change the way we account for iPhone and Apple TV today. Under EITF 09-3, only the estimated sales value of future upgrade rights to iPhone and Apple TV software are required to be deferred at the time of sale with the balance of the iPhone and Apple TV sales price being recognized immediately as revenue. The deferred amounts will be recognized over the 24-month estimated lives of the product, similar to the way we have applied subscription accounting to these product sales today.
We don''t know at this time the specific amount of revenue deferral for each iPhone and Apple TV sold under EITF 09-3, but we do believe a substantial portion of the revenue will be recognized for these products at the time of sale. We are very pleased with the FASB''s adoption of this new rule, as we believe it will enable us to more closely align our reported results with the economics of the iPhone and Apple TV sales.
We will be required to adopt the new accounting rule no later than the first quarter of our fiscal 2011, a year from now. But we do have the option of adopting earlier than that sometime in our fiscal 2010. We are currently assessing impact of the new rule on our accounting and reporting systems and processes.
Making this change will be complex and as of now, we are uncertain as to the timing of our adoption. Therefore, we don''t have anything more specific to discuss with you today about this change. The guidance for the December quarter that we are providing today is based on the subscription accounting treatment that we have applied to date for the iPhone and Apple PV sales.
In other words, it is based on the assumption that the full amounts of revenue and product costs for past and future iPhone and Apple TV sales continue to be recognized ratably over the estimated 24-month lives of the products.
Forecasting the current macroeconomic environment remains challenging, so we will continue to provide a range of guidance for the December quarter. For the December quarter, we expect revenues to be between about $11.3 billion and $11.6 billion. We expect gross margin to be about 34%, reflecting approximately $33 million related to stock-based compensation expense.
We expect OpEx to be about $1.64 billion, including about $178 million related to stock-based compensation. We expect OI&E to be about $30 million, reflective of the short-term interest rate environment and we expect a tax rate to be about 30%. We are targeting EPS in the range of about $1.70 to $1.78.
In closing, we are thrilled with our outstanding September quarter results and with our record fiscal 2009. For the year, we generated $36.5 billion in revenue and $5.7 billion in net income. That''s 12% annual revenue growth and 18% net income growth in extraordinary challenging economic times.
During the year, we continue to introduce incredibly innovative products, including the new aluminum unibody MacBook Pro, the iPhone 3GS and the iPhone OS 3.0, MacOS X Snow Leopard and of course the wildly popular new features and offerings in iTunes and the App Store.
As we begin our fiscal 2010, we''re looking forward to delivering additional exciting new products and are confident in our new product pipeline. We remain focused on our strategy of bringing the best and most innovative products and solutions to our customers, and we are very enthusiastic about the year ahead.
With that, I would like to open the call to questions.
Question-and-Answer Session
Operator
Ladies and gentlemen, the question-and-answer session will be conducted electronically. If you would like to ask the question, please do so by pressing the star key followed by the digit one on your touchtone telephone. Ladies and gentlemen that is star one to ask a question.
Your first question will come from Richard Gardner with Citigroup.
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