Edison Mission Energy Reaches Agreement to Facilitate Consensual Equity Turnover and Substantial Debt Reduction

  Edison Mission Energy Reaches Agreement to Facilitate Consensual Equity
  Turnover and Substantial Debt Reduction

      Company Commences Chapter 11 Reorganization to Implement Financial

                     Operations to Continue Uninterrupted

    EME to Operate as Independent Entity Upon Completion of Restructuring

    Restructuring to Position EME for Profitability and Long-Term Success

Business Wire

SANTA ANA, Calif. -- December 17, 2012

Edison Mission Energy (“EME” or “the Company”) today announced that it has
reached an agreement with the holders of a majority of EME’s $3.7 billion of
outstanding public indebtedness (“the Noteholders”) and its parent company,
Edison International (NYSE: EIX), that, pursuant to a plan of reorganization
and pending court approval, would transition Edison International’s equity
interest to EME’s creditors, retire existing public debt and enhance EME’s
access to liquidity. As EME implements its financial restructuring, which will
ultimately result in a substantial deleveraging of the Company’s balance
sheet, its operations are expected to continue in the normal course without

Under the agreement, Edison International will, among other things,
consensually transfer its 100% equity interest in EME to unsecured creditors,
including the Noteholders, and continue certain tax sharing agreements through
December 31, 2014. The continuation of the tax sharing agreements results in
the potential recognition of a substantial amount in tax sharing payments to
EME. As part of the restructuring process, Edison International and EME will
begin immediately to negotiate agreements to ensure EME’s smooth and effective
transition to operating as an independent entity following its separation from
Edison International, which is anticipated to occur by December 2014.

To implement the restructuring, EME and several of its subsidiaries today
filed voluntary petitions with the U.S. Bankruptcy Court for the Northern
District of Illinois under Chapter 11 of the United States Bankruptcy Code.
The Company’s agreement with the Noteholders and Edison International is
subject to Bankruptcy Court approval.

“We are pleased to have reached this agreement, which we believe reflects the
long-term value potential of our organization,” said Pedro Pizarro, president
of EME. “This is an important first step in the process to reduce our debt,
enhance our liquidity profile and position EME for continued operation and
future success while preserving our ability to generate power safely and
reliably at our electric facilities across the country. Throughout this
process, business operations will continue in the normal course, and we will
continue to support our customers, suppliers and employees.”

Like other independent power generators, EME has been challenged by depressed
energy and capacity prices and high fuel costs affecting its coal-fired
facilities, combined with pending debt maturities and the need to retrofit its
coal-fired facilities to comply with environmental regulations. EME has taken
numerous actions to address these external challenges, including retiring
uneconomic power plants, implementing labor reductions, significantly reducing
expenses without compromising safety and compliance, diversifying its
portfolio of power generation assets, and developing a cost-effective
environmental compliance program. The Company believes that these efforts,
together with its financial restructuring, will position EME for profitability
and long-term success.

Pizarro continued, “EME is operationally healthy, and with the support of the
Noteholders, we plan to emerge from our restructuring as a recapitalized
company separate from Edison International. We believe this financial
restructuring—coupled with the existing strength of our employees and
assets—will position us to take advantage of new opportunities while
preserving our focus on safe, reliable operations. We appreciate the ongoing
dedication of all our employees, whose commitment, focus and expertise is
essential to our success, and look forward to continuing to work with our
suppliers and project partners.”

The Company filed a number of customary first-day motions requesting authority
to continue operations in the ordinary course. The motions include requests to
make wage and salary payments and provide other normal-course benefits to
employees, as well as to pay all suppliers for goods and services delivered
post-petition. The Company expects to receive Court approval for these
requests, and it has ample liquidity to fund its business as it enters the
restructuring process.

The EME subsidiaries that filed for Chapter 11 protection include Midwest
Generation, which manages the Company's fleet of coal-fired plants in
Illinois. Certain other subsidiaries—including Edison Mission Marketing &
Trading, Edison Mission Operation & Maintenance, and the Company's wind energy
projects—were not included in the filings.

Kirkland & Ellis LLP is serving as legal counsel to EME, Perella Weinberg
Partners, LP is acting as financial advisor and McKinsey Recovery &
Transformation Services U.S., LLC is acting as restructuring advisor.

About Edison Mission Energy (EME)

EME’s companies own, operate and lease a portfolio of more than 40 electric
generating sites that are powered by wind, natural gas, biomass and coal, as
well as an energy marketing and trading operation based in Boston.

Forward-Looking Statements

This press release contains forward-looking statements within the “safe
harbor” provisions of the Private Securities Litigation Reform Act of 1995.
These statements reflect EME’s current expectations and projections about
future events based on EME's knowledge of present facts and circumstances and
assumptions about future events and include any statement that does not
directly relate to a historical or current fact. The words "expects,"
"believes," "anticipates," "estimates," "projects," "intends," "plans,"
"probable," "may," "will," "could," "would," "should," and variations of such
words and similar expressions, or discussions of strategy or plans, are
intended to identify forward-looking statements. Such statements necessarily
involve risks and uncertainties that could cause actual results to differ
materially from those anticipated.

Some of the risks, uncertainties and other important factors that could cause
results to differ from those currently expected, or that otherwise could
impact EME or its subsidiaries, include but are not limited to, those
described under the heading “Item 1A. Risk Factors” in EME’s most recent
Annual Report on Form 10-K and in subsequent Quarterly Reports on Form 10-Q.
In addition to the risks and uncertainties set forth in EME’s SEC filings, the
forward-looking statements contained in this press release could be affected
by, among other things: (i) the ability of the Debtor Entities to continue as
going concerns; (ii) the Debtor Entities’ ability to obtain Bankruptcy Court
approval with respect to motions in the chapter 11 case; (iii) the ability of
the Debtor Entities to prosecute, develop and consummate one or more plans of
reorganization with respect to the chapter 11 cases; (iv) the effects of the
chapter 11 cases on the Debtor Entities and the interests of various
creditors, equity holders and other constituents; (v) Bankruptcy Court rulings
in the chapter 11 cases and the outcome of the cases in general; (vi) the
length of time the Debtor Entities may operate under the chapter 11 cases;
(vii) risks associated with third-party motions in the chapter 11 cases, which
may interfere with the Debtor Entities’ ability to develop and consummate one
or more plans of reorganization; (viii) the potential adverse effects of the
chapter 11 proceedings on the Debtor Entities’ liquidity or results of
operations; (ix) the ability to execute the Debtor Entities’ business and
restructuring plan; (x) increased legal costs and other expenses related to
the Bankruptcy Filing and other litigation; and (xi) the Debtor Entities’
ability to maintain contracts that are critical to its operation, to obtain
and maintain normal terms with customers, suppliers and service providers and
to retain key executives, managers and employees.


Media Relations Contact:
Edison Mission Energy
Douglas McFarlan
312-583-6024 / 312-583-6039
Press spacebar to pause and continue. Press esc to stop.