Maryann T. Mannen
Executive Vice President and Chief Financial Officer at Marathon Petroleum
Thanks, Mike. Slide five provides a summary of our third quarter financial results. This morning, we reported earnings per share of $1.09, and adjusted earnings per share of $0.73. Adjusted earnings exclude $48 million of pretax charges primarily related to Hurricane Ida, impairments and idling cost. Additionally, the adjustments include an incremental $272 million of tax expense which adjusts all results to a 24% tax rate. Our year-to-date effective rate is just under 2%.
We, therefore, expect to retain the tax benefits realized in 2021. We will continue to make this tax rate adjustment for the fourth quarter of 2021. Adjusted EBITDA was $2.4 billion for the quarter, which is approximately $500 million higher from the prior quarter. Cash from operations, excluding working capital and a voluntary pension contribution was nearly $1.8 billion, which is an increase of $230 million from the prior quarter. During the quarter, we paid $575 million into our pension plan. We elected to contribute this additional amount, as it was beneficial from a tax perspective. This amount covers nearly three years of estimated contributions, and we forecast the plan would be fully funded at year-end. This also increased the CARES Act benefit to a total of $2.3 billion. Similar to last quarter, we generated ongoing operating cash flow that exceeded the needs of the business and capital commitments as well as covered our dividend and distributions.
Finally, we returned nearly $1.3 billion of capital to shareholders this quarter through dividend payments and share repurchases. Slide six illustrates the progress we have made towards lowering our cost structure. Since the beginning of 2020, we have taken almost $1.5 billion out of the company's total costs. Refining has been lowered by approximately $1 billion. Midstream reduced by $300 million and corporate cost by about $100 million. Regardless of the margin environment, our EBITDA is directly improved by this $1.5 billion. We continue to emphasize our safe, reliable and low-cost focus the organization. While we do not see further cost reductions of the same magnitude that we have already taken out, there are still opportunities for us to reduce cost. Natural gas prices were higher in the third quarter and continue into the fourth quarter. For every $1 change in natural gas prices, we anticipate there is an approximate $360 million impact to annual EBITDA to our R and M segment.
Based on current prices, we estimate that in the fourth quarter, higher natural gas prices have the potential to impact our business by an incremental $0.30 per barrel. As we have previously mentioned, our refining cost in 2020 began at $6 per barrel and are now trending at a quarterly average of roughly $5 per barrel for 2021 as we continue -- and we continue to believe these are structural reductions. While our results reflect our focus on cost discipline, every day we remain steadfast in our commitment to safely operate our assets and protect the health and safety of our employees, customers and the communities in which we operate. As we have shared with you previously, our cost reductions should be sustainable, not impact revenue opportunities and in no way, jeopardize the safety of our people or our operations. Slide seven shows the reconciliation from net income to adjusted EBITDA as well as the sequential change in adjusted EBITDA from second quarter 2021 to third quarter 2021. Adjusted EBITDA was approximately $500 higher quarter-over-quarter, driven primarily by refining and marketing, but also benefiting from our strength in midstream. $48 million of pretax charges during the quarter reflected in the adjustment column. Moving to our segment results. Slide eight provides an overview of our Refining and Marketing segment.
The business reported continuing improvement from last quarter with adjusted EBITDA of $1.2 billion -- This was an increase of $444 million when compared to the second quarter of 2021. The increase was driven primarily by higher refining margins, especially in the Gulf Coast region, as that region's crack improved 34% from the second quarter. As Mike mentioned, our Garyville refinery was impacted by Hurricane Ida. We estimate the cost impact was $19 million this quarter with an additional $11 million to be incurred in the fourth quarter. We estimate the lost opportunity from the hurricane to be approximately $80 million. The Garyville refinery was down for about 10 days and took another 10 days to ramp back up to full production. The throughput impact was approximately 8.3 million barrels. We also believe there was an additional $10 million of lost opportunity impact associated with the earthquake at our Los Angeles refinery, which was back to the planned rate after roughly one week. Utilization was 93% for the quarter flat with the second quarter, we saw lower utilization in the Gulf Coast compared to the second quarter due to hurricane impacts.
The Mid-Con region continued its strong utilization and West Coast strengthened as reopening in California continued to increase demand. If adjusted to include capacity, which was idled in 2020, utilization would have been approximately 88% in the third quarter of 2021. Operating expenses were higher in the third quarter, primarily due to higher natural gas prices. Slide nine shows the change in our Midstream EBITDA versus the second quarter of 2021, our Midstream segment continues to demonstrate earnings resiliency and stability with consistent results from the previous quarter. This strong cash flow profile and lower capital spending supported the decision to return more cash to unitholders. Today, MPLX announced a 2.5% increase in the partnerships based quarterly distribution and a special distribution amount of approximately $600 million. As I mentioned earlier, this quarter, our midstream assets in the region were also impacted by Hurricane Ida. We estimate the cost impact was $4 million this quarter, with an additional $7 million to be incurred in the fourth quarter. Slide 10 presents the elements of change in our consolidated cash position for the third quarter. Operating cash flow was $1.765 billion in the quarter.
As I mentioned earlier, this excludes changes in working capital and an incremental payment of approximately $575 million into our pension plans. Also, this amount does changes to our CARES tax receivable in the quarter, which was a $500 million source of cash and is included in the income taxes bar of this chart. Working capital was really flat this quarter. During the quarter, MPLX reduced its third-party debt by $1 billion, funded by borrowing an additional $877 million under the MPC or Marathon intercompany loan agreement. Our income tax balances represented a use of cash, primarily driven by a decrease in accrued taxes. We made a tax payment due for the Speedway gain of $2.9 billion, out of a total of $4.2 billion we have accrued. We were able to offset about $400 million of the amount using our CARES tax receivable. There were about $100 million of other charges in our tax balances. During the quarter, we adjusted our CARES tax refund up to $2.3 billion from $2.1 billion last quarter. We have identified a total of about $700 million that can be offset against our Speedway tax obligation, including the $400 million we used this quarter and $300 million that we expect to use in the fourth quarter of 2021 to offset remaining balances for taxes due from our Speedway transaction. We received $1.55 billion of the CARES Act refund in October.
There is about $60 million of the refund remaining, which we expect to receive in the first half of 2022. With respect to capital return, MPC returned $370 million to shareholders through our dividend and repurchased $928 million worth of shares in the quarter using Speedway's proceeds. At the end of the quarter, MPC had $13.2 billion in cash and higher returning short-term investments, such as commercial paper and certificates of deposit. Last quarter, we promised to continue to provide status updates on our progress, deploying Speedway proceeds. We have repurchased an incremental $1.5 billion in shares since the end of the second quarter. This is comprised of $928 million of repurchase in the third quarter plus additional shares purchased through the end of October.
As Mike indicated, we are approximately 25% complete with our $10 billion share repurchase program. We are continuing to use a program that allows us to buy on an ongoing basis, and we will provide updates on the progress during our earnings calls. To meet our $10 billion share repurchase commitment, we are progressing steps to be able to complete the remaining repurchases of approximately $7.5 billion by the end of 2022, the options we have previously discussed remain available to us to complete this objective. Today, we also announce that we intend to redeem an additional $2.1 billion of debt. This entails two tranches of notes that mature in 2023. Given the current interest rate environment as well as our cash position, it makes economic sense to redeem these notes early, and we anticipate this will lead to roughly $20 million of savings. This short-term cash management provides immediate interest payment savings and we'll have the ability to reissue notes at the appropriate time. With this redemption, we have no maturities over the next three years. Our third quarter debt-to-capital ratio for MPC, excluding MPLX was approximately 24%. The redemption of these notes will continue to lower this ratio. As we manage our balance sheet, we continue to ensure that we maintain our investment-grade credit portfolio. Turning to guidance.
On Slide 12, we provide our fourth quarter outlook. We expect total throughput volumes of roughly 2.8 million barrels per day, planned turnaround costs are projected to be approximately $200 million in the fourth quarter. The majority of the activity will be in the Mid-Con region. Total operating costs are projected to be $5.40 barrel for the quarter. Based on the current prices, we estimate that in the fourth quarter, higher natural have the potential to impact our business by an incremental $0.30 per barrel. As we have previously mentioned, our turnaround activity is back half-way to this year. Other operating expenses are coordinated to occur during these time periods as well. Distribution costs are expected to be approximately $1.3 billion for the fourth quarter. Corporate costs are expected to be $170 million reflecting the approximately $100 million in cost that have been removed on an annual basis.
With that, let me turn the call back over to Kristina.
