Maryann T. Mannen
Executive Vice President and Chief Financial Officer at Marathon Petroleum
Thanks, Mike. Slide 6 provides a summary of our fourth quarter financial results. This morning, we reported earnings per share of $1.27 and adjusted earnings per share of $1.30. Adjusted earnings exclude $132 million of pretax charges related to make-whole premiums for the $2.1 billion in senior notes we redeemed in December. Additionally, the adjustments include an incremental $112 million of tax expense, which adjusts all results to a 24% tax rate.
Beginning with our first quarter 2022 results, we will be reporting our effective tax rate on an actual basis and will no longer adjust our actual results to a 24% tax rate. Adjusted EBITDA was $2.8 billion for the quarter, which is approximately $400 million higher from the prior quarter. Cash from operations, excluding working capital, was $2 billion, which is an increase of almost $300 million from the prior quarter.
Finally, during the quarter, we returned $354 million to shareholders through dividend payments and approximately $2.7 billion in share repurchases. In the 3 months since our last earnings call, we have repurchased approximately $3 billion of shares.
Slide 7 illustrates the progress we have made towards lowering our cost structure over the past two years. As we think about our strategy on cost structure, I want to emphasize a few things. We will never compromise the safety of employees or the integrity of our assets. And we are committed to ensure the current cost reductions are sustainable, even during periods of general cost pressures.
Since the beginning of 2020, we have been able to maintain roughly $1.5 billion of cost reductions that have been taken out of the company's total cost. Refining has been lowered by approximately $1 billion. Our refining operating costs in 2020 began at $6 per barrel. While we were able to finish 2021 with a full year operating cost per barrel that was $5. Additionally, midstream was reduced by $400 million and corporate cost by about $100 million. However, regardless of the margin environment, our EBITDA is directly improved by this $1.5 billion. This improvement is expected to make the company more resilient in future downcycles, while having more bottom line profitability and upcycles.
Turning to Slide 8. We would like to highlight our financial priorities for 2022. First, sustaining capital as we remain steadfast in our commitment to safely operate our assets, protect the health and safety of our employees and support the communities in which we operate. Second, we're committed to the dividend. As we continue to purchase shares, we will reduce the share count and increase the potential of returnable cash flow. Third, we continue to believe this is both a return on and return of capital business and we will continue to invest capital where we believe there are attractive returns.
In traditional refining, we're focused on investments that are resilient and reduce cost. In renewables, current spend is primarily focused on our Martinez renewable fuel conversion. We believe that share repurchases can be used to meaningfully return capital to shareholders. In order to successfully execute the strategies guided by these priorities, MPC needs a strong balance sheet as a foundation. We continue to manage our balance sheet to an investment-grade credit profile.
Moving to another key focus area. Slide 9 highlights our focus on strict capital discipline. Today, we announced our 2022 capital outlook for MPC. MPC's 2022 capital investment plan totals approximately $1.7 billion. As we continue to focus on strict capital discipline, our overall spend remains approximately 30% below 2019 spending levels.
Sustaining capital is approximately 20% of capital spend, underpinning our commitment to safety and environmental performance. Of the remaining 80% for growth, approximately 50% of this $1.3 billion supports the conversion of Martinez into a renewable fuels facility. The remainder of the growth capital is for other projects already underway. At our refineries, the growth capital is primarily for projects that enhance returns at MPC's large coastal assets with a focus on completing Galveston Bay STAR project as well as smaller projects at Garyville and Los Angeles. Going forward, we expect growth capital will continue to have a significant portion for renewables and projects that will help us reduce future operating cost.
Slide 10 shows the reconciliation from net income to adjusted EBITDA as well as the sequential change in adjusted EBITDA from the third quarter 2021 to fourth quarter 2021. Adjusted EBITDA was higher quarter-over-quarter, driven primarily by a $354 million increase from Refining & Marketing. The adjustment column reflects $132 million of pretax charges for make-whole premiums for debt redemption during the quarter, which has also been excluded from the interest column.
Moving to our segment results. Slide 11 provides an overview of our Refining & Marketing segment. The business reported continued improvement from last quarter with adjusted EBITDA of $1.5 billion. Fourth quarter EBITDA increased $354 million when compared to the third quarter of 2021. The increase was driven primarily by higher refining margins in the U.S. Gulf Coast and West Coast regions. U.S. Gulf Coast production increased by 14%, recovering from storm-related downtime last quarter and solid margin per barrel increased 31% due to higher export sales and higher sales of light product inventory. The West Coast margin per barrel increased 40% associated with increased demand and refinery outages.
Utilization was 94% for the quarter, slightly improved from the third quarter. The higher Gulf Coast throughput was offset by lower throughput in the Mid-Con for planned turnaround activity. Operating expenses were higher in the fourth quarter, primarily due to higher natural gas prices. There was also higher routine maintenance and planned project expense. Additionally, we saw natural gas prices softened during the quarter, coming off highs in the $5 to $6 range and ending in the $3 to $4 range.
Slide 12 shows the change in our Midstream EBITDA versus the third quarter of 2021. Our Midstream segment continues to demonstrate earnings resiliency and stability with consistent results from the previous quarter.
Slide 13 presents the elements of change in our consolidated cash position for the fourth quarter. Operating cash flow was approximately $2 billion in the quarter. This excludes changes in working capital and also excludes the cash we received for our CARES tax refund in the quarter, which was approximately $1.6 billion source of cash and is included in the income tax part of the chart.
Working capital was an approximate $1.3 billion source of cash this quarter, driven primarily by reduction in crude and product inventory. As we announced on last quarter's call, MPC redeemed $2.1 billion in senior notes in December. Under income taxes, we received approximately $1.6 billion of our CARES tax refund in the fourth quarter. We also used about $300 million to offset against our Speedway tax obligation. There is about $60 million of the refund remaining, which we expect in the first half of 2022. We paid approximately $1.2 billion for our Speedway income tax obligation. All that remains is about $50 million of state and local taxes.
With respect to capital return during the quarter, MPC returned $354 million to shareholders through our dividend and repurchased approximately $2.7 billion worth of shares. At the end of the quarter, MPC had approximately $10.8 billion in cash and short-term investments.
Slide 14 provides our capital investment plan for 2022 which reflects our continuing focus on strict capital discipline. MPC's investment plan, excluding MPLX, totals approximately $1.7 billion. The plan includes $1.6 billion for Refining & Marketing segment, of which approximately $300 million or roughly 20% is related to maintenance and regulatory compliance spending. Our growth capital plan is approximately $1.3 billion, split between renewables and ongoing projects. Within renewable spending, the majority is allocated for the Martinez conversion. Ongoing projects in our Refining & Marketing segment will enhance the capability of our refining assets, particularly in the Gulf Coast and also support our focus on growing the value recognized from our Marathon and ARCO marketing brands. Also included is approximately $100 million of corporate spending to support activities we believe will enhance our ability to lower future costs and capture commercial value.
This morning, MPLX also announced their 2022 capital investment plan of $900 million. Their plan includes approximately $700 million of growth capital, $140 million of maintenance capital and $60 million for the repayment of their share of the Bakken Pipeline joint venture's debt due in 2022.
On Slide 15, we review our progress on our return of capital. Since our last earnings call at the beginning of November, we have repurchased approximately $3 billion of company shares. This puts us at approximately 55% complete on our initial $10 billion repurchase program commitment, leaving approximately $4.5 billion remaining. We remain committed to complete the $10 billion program by the end of 2022. And as we are ahead of pace given our recent repurchases, could foresee completion sooner than initially planned.
As part of our long-term commitment to return capital, we announced an incremental $5 billion share repurchase authorization today, increasing our recent repurchase authorizations to $15 billion. We plan to continue using open market repurchase programs, although all of the programs we have previously discussed remain available to us to complete our commitment. We intend to use programs that allow us to buy on an ongoing basis, and we will provide updates on the progress during our earnings call.
As we have said many times, we believe a strong balance sheet is essential to being successful in a competitive commodity business. It's the foundation allowing us to execute our strategy.
Slide 16 highlights some of the key points about our balance sheet. MPC ended the year with approximately $10.8 billion of cash and short-term investments. But longer term, we believe that we will need to maintain about $1 billion of cash on the balance sheet. Additionally, we will always ensure that we have enough liquidity to endure market fluctuations.
Currently, we have a $5 billion bank revolver that is undrawn. We continue to manage our balance sheet to an investment-grade profile. At year-end, MPC's gross debt-to-capital ratio is 21% and our long-term gross debt-to-capital target is approximately 30%. As we continue to execute our share repurchase program, we will see that ratio increase. After the recent redemption in December, our current structural debt is approximately $6.5 billion, and we do not have any maturities until 2024.
Turning to guidance. Slide 17, we provide our first quarterly outlook. We expect total throughput volumes of roughly 2.9 million barrels per day. Planned turnaround costs are projected to be approximately $155 million in the first quarter. The majority of the activity will be in the Gulf Coast region. Our 2022 planned turnaround activity is back half-weighted this year. Total operating costs are projected to be $5.10 per barrel for the quarter. Distribution costs are expected to be approximately $1.3 billion for the quarter. Corporate costs are expected to be $170 million.
With that, let me turn the call back over to Kristina.