CHARLESTON, W.Va. -- American Water Works, the $7.8 billion parent company of West Virginia American Water Co., considers lawsuits resulting from the Elk River chemical leak one of several "risk factors" that the company faces, according to the company's annual report.
In the report, filed Thursday with the federal Securities and Exchange Commission, the water utility says it will "vigorously contest" the 50 lawsuits that have been filed against the company and its affiliates.
"WVAWC and other company-affiliated entities named in any of the lawsuits have valid, meritorious defenses," the report says. "Nevertheless, an adverse outcome in one or more of the lawsuits could have a material adverse effect on the company's financial condition, results of operations, cash flows, liquidity and reputation."
The company also says that it can't predict how ongoing investigations and pending legislation may impact it.
The annual report does not say if any money has been set aside for the lawsuits, but says that the company will have "substantial defense costs."
The report lists 26 risk factors that "should be considered in evaluating our business and future prospects."
The risk factor related to the West Virginia leak says that the company's water sources could be contaminated, resulting in service interruption and human exposure to hazardous substances. This could subject the company to civil or criminal penalties, private litigation and cleanup obligations.
Most of the 50 lawsuits filed against the water company also name Freedom Industries, the company responsible for the leak, as a defendant.
But Freedom filed for bankruptcy soon after the leak and has said it will shut down entirely once it wraps up its affairs and finishes cleaning up its tank farm on the Elk River. So several lawyers have dropped Freedom as a defendant, predicting that the lawsuits will never come to fruition. Those lawsuits now charge only the water company.
As of Wednesday, West Virginia American Water had spent about $4.5 million on its response to the water crisis, including testing, flushing pipes, providing bottled water and bulk water, among other items, said spokeswoman Laura Jordan.
American Water Works is the largest for-profit water company in the country.
It brought in more than $2.9 billion in revenue in 2013, according to the annual report. It had net profits of more than $369 million. It has total assets; most of which are property, treatment plants and equipment; worth more than $15 billion.
The company's stock price has gone up $2.15 per share, about 5 percent, since the Jan. 9 leak.