Annual Report Disclosures Surrounding the Restructuring of the Electric Utility 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. A 22-item disclosure index is partitioned into four components: background data, current operating data, forward-looking data and segment data. We find that firms reduce forward-looking data and segment data components when competition increases, while only some decreases in background and current data occur (e.g., firms reduce information on their current derivative positions). We also find that the decrease in forward-looking data in the wholesale industry reforms is only temporary.