and a loss on refinery operations of $116 million, or $0.03 per gallon. The higher salaries expense represents wage increases and shows the continued investment we are making in our employees. Delta relies on its employees for its operational and financial success. As a result of our success in 2013, we will pay our employees record profit sharing of $506 million, which represents over 8% of an employee's annual pay, and is a 36% year-over-year increase.  

 

Income Tax . We have released the tax valuation allowance that placed a reserve against certain tax assets. We now believe that, given the company's financial performance, we will be able to use these tax assets to offset future cash income tax liabilities. We recognized an $8.0 billion tax benefit primarily as a result of releasing the valuation, which was recorded in income tax benefit (provision) in our Consolidated Statement of Operations. Beginning in 2014, we expect to record income tax expense with an effective rate of approximately 38%. As of December 31, 2013, we have more than $15 billion of net operating loss carryforwards ("NOLs") that will be used to offset cash income taxes due on future earnings.  

 

The non-GAAP financial measure CASM-Ex used in this section is defined and reconciled in "Supplemental Information" below. Average fuel price per gallon, adjusted is defined and reconciled in "Results of Operations - Year Ended 2013 and 2012 - Operating Expense" below.  

 

Company Initiatives  

 

Increasing Shareholder Value  

 

We continue to focus on cash flow generation with the goal of further strengthening our balance sheet. We finished 2013 with $5.7 billion in unrestricted liquidity (consisting of cash, cash equivalents, short-term investments and undrawn revolving credit facility capacity). During 2013, we generated $4.5 billion in cash from operating activities, reduced debt by $1.4 billion and funded capital expenditures of $2.6 billion and returned $350 million to shareholders, while maintaining a solid liquidity position.  

 

In May 2013, we announced a plan to return more than $1 billion to shareholders over the next three years. As part of this plan, our Board of 

Directors initiated a quarterly dividend program and declared a $0.06 per share dividend for shareholders of record as of August 9, 2013 and 

November 6, 2013. These dividends were paid in September 2013 and November 2013 and each totaled $51 million . In addition, the Board of Directors authorized a $500 million share repurchase program, to be completed no later than June 30, 2016 . During 2013 , we repurchased and retired approximately 10 million shares at a cost of approximately $250 million . On February 7, 2014, our Board of Directors declared a $0.06 dividend for shareholders of record on February 21, 2014 and payable on March 14, 2014.  

 

Network Strategy  

 

We are implementing several strategies that are designed to strengthen and expand our global network and presence. These include our investment in and joint venture with Virgin Atlantic, improvements at our hubs at LaGuardia and JFK in New York and the creation of an international gateway in Seattle.  

 

Virgin Atlantic