Maryann T. Mannen
Executive Vice President and Chief Financial Officer at Marathon Petroleum
Thanks, Mike. Moving to our sustainability efforts. In June, we published our annual sustainability report and our annual perspective on climate scenarios report. We continue to make progress on our greenhouse gas reduction targets. And through 2021, we have achieved a 23% reduction in our Scope one and Scope two intensity emissions, and an 11% reduction in our absolute Scope 3, Category 11 greenhouse gas emissions. Our perspectives on climate-related scenarios which is aligned with TCFD standards, provides insight into some of the strategic considerations we take to set meaningful objectives, dedicate resources to accomplish them and then hold ourselves accountable and demonstrate results. Our sustainability report shows continued progress on the sustainability goals that we have set for ourselves, which we have been reporting on since 2011. We believe our investors and other interested stakeholders will find that the extensive disclosures in these reports illustrate our company's financial strength, adaptiveness and resilience to climate-related risks. Moving to second quarter results.
Slide five provides a summary of our second quarter financial results. This morning, we reported adjusted earnings per share of $10.61. This quarter's results were adjusted to exclude a $230 million benefit related to changes in the 2020 and 2021 RVO requirements published by the EPA. Adjusted EBITDA was nearly $9.1 billion for the quarter and cash flow from operations, excluding favorable working capital changes was almost $7 billion. During the quarter, we returned $313 million to shareholders through dividend payments and repurchased approximately $3.3 billion of shares. Through the end of July, we have repurchased $4.1 billion of shares since our last earnings call. Slide six shows the reconciliation between net income and adjusted EBITDA, and as well as the sequential change in adjusted EBITDA from first quarter 2022 to the second quarter of 2022. Adjusted EBITDA was higher sequentially and driven primarily by an approximately $6.4 billion increase from Refining & Marketing. Our tax rate for the second quarter was 22%, resulting in a tax provision of $1.8 billion. The tax rate is higher this last quarter due to refining end marketing representing a larger component of earnings in the quarter.
Moving to our segment results. Slide seven provides an overview of our Refining & Marketing segment. During the quarter, our R&M team was focused on supplying transportation fuels to meet market demand. Refining ran at 100% utilization processing approximately 2.9 million barrels of crude per day at our 13 refineries safely and reliably. This is the same level of throughput achieved back in 2019 pre-pandemic before the closures of Gallup and Martinez. Capture was 96%, reflecting a strong result from our commercial team in a volatile market. Operating expenses were higher in the second quarter, driven primarily by natural gas prices, which were approximately $3 per MMBtu higher in the second quarter versus the first quarter. While we have been able to mitigate some of the impact of higher prices, the cost increase we have seen in the first half of the year has been almost entirely driven by higher energy cost. We continue to believe the cost reductions we made to bring our structural operating costs down to approximately $5 per barrel are sustainable. With higher natural gas prices, we would expect operating costs to remain elevated in the third quarter.
Distribution costs were modestly higher in the second quarter versus the first quarter due to higher refinery utilization, which resulted in higher system volumes. Turning to slide eight, which provides an overview of our refining and marketing margin capture this quarter, our capture results this quarter were impacted by a few key factors. Secondary products continue to be a headwind as prices lag higher light product prices. This was partially offset by strong gasoline and distillate margins as well as higher volumetric gain due to higher product prices. Product backwardation created a headwind during part of the quarter. But during this time, we were able to leverage our robust logistics capabilities to translate a portion of our physical barrels into the market on a more prompt basis. And our ability to capture 96% of the market indicator across an incredibly volatile three months was in part due to our commercial responses. Slide nine shows the change in our Midstream EBITDA versus the first quarter of 2022. Our Midstream segment continues to demonstrate earnings resiliency and stability with consistent results from the previous quarter. Performance is underpinned by strong operations and a commitment to strict capital discipline.
MPLX remains a source of durable earnings in the MPC portfolio. As MPLX continues to generate free cash flow, we believe it will have the capacity to return significant capital to its unitholders. Today, MPLX announced an incremental $1 billion unit repurchase authorization. Slide 10 presents the elements of change in our consolidated cash position for the second quarter. Operating cash flow was approximately $7 billion in the quarter, which excludes changes in working capital. Working capital was roughly flat for the quarter as we saw benefits from an increase in crude oil payables related to higher refining throughput, offset by a build in crude oil inventories. Since the first quarter of 2021, working capital related to increasing prices has been a source of cash flow. Capital expenditures and investments totaled $546 million this quarter. We continue to spend on our STAR project, which is projected to increase crude capacity at the Galveston Bay refinery by 40,000 barrels per day. This project is expected to be completed early 2023. We are progressing the conversion of Martinez renewable fuel facility and expect the first phase to be mechanically complete by year-end.
During the quarter, MPC returned $313 million to shareholders through our dividend and repurchased approximately $3.3 billion worth of shares. At the end of the second quarter, MPC had approximately $13.3 billion in cash and short-term investments. As Mike mentioned earlier, we remain committed to a secure, competitive and growing dividend. Our objective has been to complete the $15 billion repurchase program no later than the end of this year. We remain on track to meet this commitment. Upon completion of the program, we will reassess our dividend level. Since the launch of this program in May 2021, we have repurchased approximately 12.1 billion shares at an average share price of approximately $74 per share. Over this time, we have reduced MPC share count by approximately 162 million shares or over 24%. We've received the Board's approval for a separate and incremental $5 billion share repurchase authorization. We'll work through our capital allocation priorities and continue to assess the market environment to determine how we might execute against this authorization. Turning to guidance. On slide 11, we provide our third quarter outlook. We expect crude throughput volumes of roughly 2.7 million barrels per day representing 94% utilization. Utilization is forecasted to be lower than second quarter due to higher planned turnaround activity.
Planned turnaround expense is projected to be approximately $400 million in the third quarter with activity spread across all three regions. As we've mentioned on previous earnings calls, our planned turnaround activity is back half weighted for 2022. Turnaround activity is reflected in our third quarter throughput guidance we expect this elevated level of activity may reduce our light product yields. We'll optimize to minimize the impacts, but we think our capture rate for the third quarter could be lower than the second quarter. In coordinating maintenance work, we'll always try to maximize turnaround and catalyst cycles to the economic optimum, but we also do not compromise on safety or asset integrity and ensure work is scheduled to achieve this balance Total operating costs are projected to be $5.50 per barrel for the quarter. We are expecting higher operating costs in the third quarter. This is primarily driven by the elevated cost of natural gas as well as slightly higher project expense work, which we normally coordinate to occur during turnarounds to limit the impact on throughput reduction.
As a reminder, natural gas has historically represented approximately 15% of operating costs. Our natural gas sensitivity of approximately $330 million of annual EBITDA for every $1 change per MMBtu. This equates to a sensitivity of approximately $0.30 per barrel of cost. Distribution costs are expected to be approximately $1.3 billion for the third quarter. Corporate costs are expected to be $170 million representing the sustained reductions that we have made in this area. In closing, we will continue to optimize our system to provide as much transportation fuel to the market as demand requires. We remain committed to advancing our low-cost initiatives and focused on areas to drive continued commercial outperformance, and we will stay steadfast in our plan to execute against our capital allocation priorities to drive shareholder value.
Let me turn the call back to Kristina.