Susan Hardwick
President and Chief Executive Officer at American Water Works
Thanks, Aaron, and good morning, everyone. Let's turn to slide Five, and I'll start by covering some highlights of the first half of the year. As we announced yesterday, we delivered solid financial results in the second quarter and first half of 2024. Earnings were $1.42 per share for the quarter compared to $1.44 for the same period last year. In the first six months of 2024 and 2023, earnings were $2.37 per share. The results for both periods were in line with our expectations. Our expectations were based on the timing of revenue increases from several general rate case proceedings and infrastructure mechanism filings expected to be effective in the latter half of 2024, which I'll speak more about shortly.
With our year-to-date execution and customer usage declines being a bit less than we had planned for so far in 2024, we have raised our 2024 EPS guidance by narrowing it to the top half of the guidance range. Our expectations for 2024 are now $5.25 per share to $5.30 per share. John will share more about our results and guidance a bit later.Moving on to some of our other key accomplishments so far in 2024. We invested $1.4 billion in capital projects year-to-date, again, reflecting great work by our teams responsible for planning and completing these investments. We were also very pleased to add 43,000 customers in our first half of the year from acquisitions and organic growth.
Our outlook for future acquisitions remains very strong as we have nearly $500 million in acquisitions under agreement. And earlier this week, we were pleased to publish our company's latest sustainability report for 2023. It reflects how we are fulfilling our mission of providing safe, clean, reliable and affordable water and wastewater service in a very sustainable manner to American Water customers. This has been our mission for over 135 years and counting.
Turning to slide six and back to the topic of regulatory recovery. I want to acknowledge the great work of our state and corporate regulatory teams as they continue to successfully execute on our regulatory strategy. We have completed four cases already in 2024 in Indiana, West Virginia, Kentucky and Pennsylvania, all of which authorized 100% of the capital investments we have made or will make in each state. We also have several other general rate cases and timely infrastructure recovery mechanisms currently in front of regulators that I'm confident will be reasonably decided. Cheryl will provide some additional updates on our active general rate cases a little later.
Let's zoom out for a minute though. I want to remind investors that we strategically choose to operate in a diverse set of regulatory environments that we believe have been and will remain supportive of water and wastewater utility investments and consolidation. As I told you earlier this year, American Water continues to receive tremendous support at the state and federal level for the work that we do across our footprint. Policymakers in our states often understand that historic $20 or $30 per month water bills don't equate to adequately invested systems or the highest quality services for residents. Those relatively low legacy rates often signal significant underinvestment below average reliability and/or water quality, wastewater overflow issues or all of the above. That's why policymakers frequently encourage American Water to keep growing, keep investing and keep solving problems in their states.
We often are called on by regulators and policymakers when there is a need for experts to take over a failing community water system. We have a very recent example of just that in the state of Pennsylvania. As you know, we just completed our rate case in Pennsylvania, and the commission released its order in that case on July 22. It was a case that reflected $1 billion of investments since our last case, which was decided just a short 18 months ago. It's important to note that the commission approved 100% of the capital invested or to be invested by the end of the future test year of June 30, 2025.
There is no dispute about the investments being made and the absolute need for the investment to continue to update our systems to ensure that citizens of Pennsylvania, where we operate are confident in their water and wastewater service. Certainly, we received comments about the pace of our regulatory strategy in Pennsylvania. What drives that pace is the need, plain and simple. And of course, that pace of investment leads to increased customer bills. We are focused on that issue in every aspect of our regulatory planning and the efforts we continue to drive to ensure customer affordability, from cost management and driving efficiencies to innovative tariff approaches to a direct customer assistance. At the end of the day, though, the need for investment is not decreasing.
As you assess the recent Pennsylvania order outcome, it's helpful to understand the reconciliation of the order findings to our request. Really, there are only two or three things that reconcile the full difference. If you recall that we requested a revenue increase of about $200 million and an ROE of 10.95%. An ROE request, which is fully reflective of an increasingly risky business because of higher capital costs, new and emerging regulations and an increasing need for resiliency to name just a few of the drivers. The ROE differential between our request and the Commission's unprecedented and, frankly, unsupported finding of 9.45% is $71 million of revenue.
Additionally, the Butler Area Sewer Authority acquisition, though fully approved by the Commission previously was removed from the revenue requirement because the transaction has not yet closed. That impact is $23 million of requested revenue. The remaining $11 million delta from our request to the final authorized revenue requirement is made up of a few cost of service items.
In summary, the order found our request to be fully reasonable, but for the ROE finding. We will continue to be very present in Pennsylvania as we serve our customers, but we will evaluate what the -- what this result means to our overall allocation of capital investment among our various states. Investors certainly expect a fair return, and it is part of our mission to provide that opportunity while fully serving our customers.
Selectively, we believe there is a very long runway of investment opportunities in the communities we serve across our 14 states for organic capex and for growth through acquisitions. And further, we believe the regulatory and legislative environments in our 14 states continue to be conducive to earning a fair and reasonable return on the investments we're making and that you, our investors, are counting on. We do all of this while keeping customer bills affordable and staying true to our high value of quality service and sustainable operations, which leads us to slide seven and what I believe are the drivers of American Water's very competitive and sustainable shareholder return, built on the foundation of the regulatory execution I just discussed.
This quarter, we are again affirming our long-term targets, including both earnings and dividend growth targets at an industry-leading pace of 7% to 9% over the next five years and beyond. This affirmation is based on our clear top tier growth -- capital growth plan and our solid regulatory and operational execution. Our track record of execution on these fronts gives us confidence and should give investors confidence in our ability to achieve our short-term and our long-term financial targets.
Finally, let me spend just a few minutes on the leadership news we detailed in our earnings release. I'm excited to relay John has been named President of American Water. This is a decision of the American Water Board, and I have worked on for some time, and it really is about our intentional effort to build a pipeline of talent through career development to ensure we have a strong leadership foundation for the long term. With this shift, I will continue to lead the overall strategic direction of our company as the CEO and as an American Water Board member. John will lead the continued execution of our strategies and daily operations. He will continue to report to me and our executive leadership team will report to John.
Cheryl will expand her COO role and now lead business development. When you consider how she has led our increased capital program, her extensive water quality expertise given the ever-increasing regulations and her reputation in this industry, this is a natural expansion of her role as we continue to bring solutions to even more communities across the country.David Bowler, who you will hear from next quarter, has been named Executive Vice President and CFO; and Nick Furia has been named Vice President and Treasurer.
Let me just say a few words about John, Cheryl, David and Nick as we are really pleased to have all four expand their roles. You know John well. He has more than 25 years of industry knowledge and expertise and significant experience in leading high-performance teams, strategy development and execution. Most importantly, he has a deep understanding of our company's purpose, and a strong commitment to our customers, employees and shareholders.
Cheryl has more than 35 years of experience and expertise. She has led our lab, served as President in three of our states and does an incredible job leading all areas of our operations. She too has a strong sense of the purpose of American Water.David has nearly 20 years of deep experience in the utility industry and has been our Deputy CFO and Treasurer since 2022. He has significant experience in all aspects of financial management and strategy, including finance strategy and planning, treasury, accounting, enterprise risk and capital markets.
And Nick Furia has 10 years of experience with American Water and has served as our Assistant Treasurer since 2021, overseeing key treasury-related functions including financing, cash flow, liquidity, overall CAP structure management. He also served as the Director of acquisitions at American Water and has nearly 20 years of experience in accounting and finance roles.
All have a strong commitment to the success of our company and are well suited for their new and expanded roles. We firmly believe we have further solidified an already top talent leadership team. Our leadership team and the American Water Board of Directors are excited about these changes and highly confident this team will support the execution of our plans now and well into the future. And with that, I'll turn it over to Cheryl to talk more about our recent regulatory updates, affordability and the capital plan. Cheryl?
