Annual Report Disclosures Surrounding the Restructuring of the Electric Utilities Industry

This paper examines information disclosed in annual reports in a period surrounding the restructuring of the electricity industry. The purpose of the restructuring was to increase product market competition in both the wholesale and retail distribution sectors. We construct a 22-item disclosure index, which is partitioned into four components: background data, current operating data, forward-looking data and segment data. We hypothesize and find that firms that are subject to increasing competition will reduce disclosure levels. In general we find that firms reduce forward-looking data and segment data. While some increases in background and current data occurs, firms reduce information on their current derivative positions