Edision Mission Energy Unsecured Noteholders (Jan.2013Update) Post
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Presentation to Senior Unsecured Noteholders
January 9, 2013
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Disclaimer
The information in this presentation has been provided by the Company and Perella Weinberg Partners has not assumed any
responsibility for independently verifying such information. The information contained in this presentation is subject to
change without notice. Accordingly, this presentation does not purport to be all-inclusive. No representation or warranty,
express or implied, is or will be made, and no responsibility or liability is or will be accepted, by the Company or Perella
Weinberg Partners or by any of their respective officers, directors or agents as to or in relation to the accuracy or
completeness of this presentation or any other written or oral information made available to any interested party or its
advisers and any liability therefore is hereby expressly disclaimed. In particular, no representation or warranty is given as to
the achievement or reasonableness of any future projections, management estimates, prospects or returns. Only those
particular representations and warranties which may be made in definitive agreements when and if they are finally executed,
and subject to such limitations and restrictions as may be agreed, shall have any legal effect
Statements contained in this presentation about future performance, including without limitation capital investments,
financial projections, and other statements that are not purely historical, are forward-looking statements. These forward-
looking statements reflect current expectations, but also involve risks and uncertainties. Actual results could differ materially
from current expectations. In furnishing this presentation, the Company and Perella Weinberg Partners undertake no
obligation to provide the recipient with access to additional information or to update this presentation or additional
information or correct any inaccuracies therein, and reserve the right, without advance notice, to change the procedure for
pursuing a transaction or terminate negotiations at any time prior to the signing of any binding agreement for a Transaction
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Agenda
SECTION PRESENTER
I. Introduction
Pedro Pizarro
II. Business Overview
1. Project Summaries
2. Environmental Compliance Overview
3. California Market Overview
4. Operational and Safety Overview
Maria Rigatti, John Kennedy
Douglas McFarlan, Fred McCluskey
Andrew Hertneky, Paul Weiss
John Kennedy
III.Financial Overview
Maria Rigatti
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I. Introduction
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Overview of Edison Mission Energy
Edison Mission Energy (―EME‖) and subsidiaries are engaged in the business of developing,
acquiring, owning or leasing, operating and selling energy and capacity from independent
power production facilities
EME’s subsidiaries include:
Midwest Generation
Edison Mission Marketing & Trading
Various subsidiaries that own interests in gas plants
Various subsidiaries that own interests in wind projects
EME’s generation capacity includes:
4,354 MW Coal
1,269 MW Natural Gas
1,735 MW Wind
153 MW Other
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as of December 31, 2012
1. Includes EME’s share of projects owned or operated. Natural gas includes oil-fired peakers; other includes Doga in Turkey (144 MW) and Huntington biomass (9 MW), which are not shown on the map
2. Excludes Fisk (326 MW), Crawford (532 MW) stations shut down in September 2012
3. Includes Capistrano Wind Partners operating projects reflected on a net basis based on EME’s interest to reflect Capistrano Wind Partners closing in the quarter ended 12/31/12. Sale of Broken Bow to Capistrano Wind Partners expected to be completed in January 2013
4. Deliveries under the power sales agreement are expected to commence in 2013
5. Owned or under exclusive agreement
67 44
19
244 190
357
4,314
150
225
305
40
144 240
964 479
55
EME Business Platform
Type MW %
Owned and Operated (1)
Coal (2) 4,354 58
Natural Gas 1,269 17
Wind (3)
1,735 23
Other 153 2
Total 7,511 100
Under Construction
Natural Gas (4)
479 NA
Wind Development
Pipeline (5)
~650 NA
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as of December 31, 2012
Bolingbrook, IL
68 employees
Santa Ana, CA
123 employees
EME Office Sites
Boston, MA
90 employees
Santa Ana, CA
Corporate headquarters
Finance, Human Resources, IT, Legal
Development activities for wind and gas
New project construction & engineering project management activities
Bolingbrook / Chicago, IL
Operations activities for coal, gas and wind portfolio
Technical, environmental and permitting support
Coal fleet construction & engineering project management activities
Regulatory and Public Affairs
Legal
Boston, MA
Merchant and contracted asset management
Proprietary trading
Dispatch and scheduling
Risk management
Chicago, IL
13 employees
Note: Total headcount is 1,286 with 751 and 535 non-represented and represented, respectively
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II. Business Overview
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1) Project Summaries
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Overview of Edison Mission Energy
Edison International
Edison Mission
Marketing & Trading
Big 4 Projects
Kern River (50%)
Midway-Sunset (50%)
Sycamore (50%)
Watson (49%)
Edison Mission Group Inc.
Midwest Generation EME, LLC
Edison Mission Midwest Holdings
Edison Mission Energy
Westside Projects (50%)
Coalinga Mid-Set Salinas
River Sargent
Canyon
Other(3)
Big Sky Goat Wind High
Lonesome Laredo
Ridge Sleeping
Bear Storm
Lake Taloga American
Bituminous Doga
(Turkey) Other wind
projects Other
projects
Sunrise Project (50%)
Capistrano Wind
Partners(2)
Cedro Hill Mountain
Wind I Mountain
Wind II Crofton
Bluffs
Broken Bow
Midwest Generation
LLC
Powerton Joliet Crawford(4)
Fisk(4)
Waukegan Will County
denotes equity-method investments
1. Walnut Creek currently under construction and expected to begin operations by January 2013
2. EME, through its subsidiaries, owns 100% of Class A equity interests, with Class B preferred equity interests owned by 3rd parties
3. 80MW+ projects listed
4. Crawford and Fisk closed in September 2012
Viento Funding II
Wildorado San Juan
Mesa Elkhorn
Ridge
Mission Energy Holding Co. (“MEHC”)
Walnut Creek
(1)
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Summary – Midwest Generation (cont’d)
Midwest Generation, LLC
(“Facility Lessee”)
• Subordination Agreements • Facility Lease • Participation Agreements
Edison Mission Energy
Powerton Owner Lessors/Owner Trusts
• Powerton Trust I • Powerton Trust II
Joliet Owner Lessors/Owner Trusts
• Joliet Trust I • Joliet Trust II Ground Sub-
Lease + Facility Lease
Ground Lease + All Rent
Payments
Ground Sub-Lease + Facility
Lease
Ground Lease + All Rent
Payments
Proceeds of PoJo Loaned to EME
($1.4BN)
Inter-Company Notes ($1.4BN)
100%
Midwest Generation EME
Edison Mission Midwest Holdings
100%
100%
PSEG
Resources Equity
Investor
Associates Capital
Investment (Citigroup)
Equity Investor
PSEG
Resources Equity
Investor
Associates Capital
Investment (Citigroup)
Equity Investor
Color Denotes Non-EME Entity
Color Denotes EME Entity
Midwest Generation LLC:
Lessee of Powerton and Joliet from the Owner Trusts pursuant to the Facility Leases
Lessor and sublessee of property on which the Powerton and Joliet facilities are located pursuant to the Facility Site Subleases
Key Players:
Owner Trusts/Owner Lessors: PSEG and Associates own 63.6% and 36.4% of the lease equity, respectively, through Owner Trusts
Owner Trusts also issued $814MM of debt; $345MM outstanding at 12/31/12 with a final maturity of 7/2/16
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Joliet Powerton Waukegan Will County
Location Joliet, IL
NIHub
Pekin, IL
NIHub
Lake County, IL
NIHub
Will County, IL
NIHub
Capacity (MW) Total: 1,326
Unit 6: 290
Units 7 & 8: 1,036
Total: 1,538 MW Total: 681
Unit 7: 328
Unit 8: 353
Total: 761
Unit 3: 251
Unit 4: 510
COD Unit 6: 1959
Unit 7: 1965
Unit 8: 1966
Unit 5: 1972
Unit 6: 1975
Unit 7: 1958
Unit 8: 1962
Unit 7: 1958
Unit 8: 1962
Fuel Coal Coal Coal Coal
Max Load Heat Rate
(Btu/kWh) (2)
10,050 10,650 9800 9800
EME % Ownership
100% 100% 100% 100%
Accounting Method Consolidated Consolidated Consolidated Consolidated
Summary – Midwest Generation(1)
1. Fisk and Crawford stations were shut down in September 2012 2. Average annual heat rate across all units
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Kern River Sycamore Midway-Sunset Watson
Location ►Oildale, CA (near Bakersfield)
►SP15(SP26)
►Oildale, CA (near Bakersfield)
►SP15(SP26)
►Fellows, CA (near Taft) ►ZP26
►Carson, CA ►SP15(SP26)
Oil Field Location ►Kern River ►Kern River ►Midway Sunset ►n/a (Carson Refinery)
Nameplate Capacity ►300 MW ►300 MW ►225 MW ►400 MW
COD ►1985 ►1988 ►1989 ►1988
EME Share ►50% ►50% ►50% ►49%
Partner/Steam Host ►Chevron Subsidiary ►Chevron Subsidiary ►Aera Energy ►BP Subsidiaries
Primary Power Purchaser
►SCE ►SCE ►PG&E (SCE before Nov 2010)
►SCE
Secondary Power Purchaser(s)
►- ►- ►Aera ►BP
Plant Operator ►EMOMI ►EMOMI ►EMOMI ►BP
Fuel Manager ►Chevron Natural Gas ►Chevron Natural Gas ►Chevron Natural Gas ►BP Energy Services
Generation Equipment1
►4 GE Frame 7EA CTGs ►4 GE Frame 7EA CTGs
►3 GE Frame 7EA CTGs ►4 GE Frame 7EA CTGs ►2 35 MW STGs
Environmental Controls
►DLN 1+ ►DLN 1+ ►DLN & SCR ►Steam injection & SCR
Accounting Method ►Equity method ►Equity method ►Equity method ►Equity method
Summary – Big Four
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Coalinga Mid-Set Salinas River Sargent Canyon
Location ►Coalinga, CA
►NP15
►Fellows, CA (near Taft)
►ZP26
►San Ardo, CA
►NP15
►San Ardo, CA
►NP15
Oil Field Location ►Coalinga ►Midway Sunset ►San Ardo ►San Ardo
Nameplate Capacity ►39 MW ►39 MW ►41MW ►41 MW
COD ►1992 ►1989 ►1992 ►1992
EME Share ►50% ►50% ►50% ►50%
Partner ►Chevron Subsidiary ►Chevron Subsidiary ►Chevron Subsidiary ►Chevron Subsidiary
Steam Host
►50% Aera
►50% Chevron
►Chevron ►Aera ►Aera
Primary Power Purchaser
►PG&E ►PG&E ►PG&E ►PG&E
Plant Operator ►EMOMI ►EMOMI ►EMOMI ►EMOMI
Fuel Manager ►Chevron Natural Gas ►Chevron Natural Gas ►Chevron Natural Gas ►Chevron Natural Gas
Generation Equipment
►1 GE Frame 6B CTG ►1 GE Frame 6B CTG ►1 GE Frame 6B CTG ►1 GE Frame 6B CTG
Environmental Controls
►Water Injection / SCR ►Water Injection / SCR ►DLN / SCR ►DLN / SCR
Accounting Method ►Equity method ►Equity method ►Equity method ►Equity method
Summary – Westsides
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Sunrise Walnut Creek
Location ►Fellows, CA (near Taft)
►ZP26
►Industry, CA
►SP15(SP26)
Oil Field Location ►N/A ►N/A
Nameplate Capacity ►586 MW ►500 MW
COD ►2001 ►2013
EME Share ►50% ►100%
Partner ►Chevron Subsidiary ►N/A
Primary Power Purchaser
►Merchant ►SCE
Plant Operator ►EMOMI ►EMOMI
Fuel Manager/Plant Manager
►Chevron/EMMT ►SCE (Tolling)
Generation Equipment
►2 160 GE Frame 7FA CTG
►1 181 MW STG + 92 MW DF
►5 GE LMS 100 CTG
Environmental Controls
►DLN / SCR ►Water injection/SCR CO catalyst
Accounting Method ►Equity method ►Consolidated
Summary – Sunrise and Walnut Creek
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Viento Big Sky Goat Wind
Wildorado San Juan Mesa Elkhorn Ridge
Location ►Vega, TX ►Elida, NM ►Bloomfield, NE ►Ohio, IL ►Sterling City, TX
Customer ►Southwestern Public Services
►Southwestern Public Services
►NPPD ►PJM
►Merchant
►ERCOT
►Merchant
Nameplate Capacity ►161 MW ►120 MW ►80 MW ►240 MW ►150 MW
EME % Ownership ►99.9% ►75% ►67%(1) ►100% ►99.9%
Accounting Method ►Consolidated ►Equity method ►Equity method ►Consolidated ►Consolidated
Summary – Wind Portfolio
1. Based upon EME’s investment contribution
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High
Lonesome
Laredo Ridge
Sleeping Bear Taloga Pinnacle Other Wind
Projects
Location ►Willard, NM ►Petersburg, NE
►Woodward, OK
►Putnam, OK
►Keyser, WV ►Varied: IA, MN, PA, UT
Customer ►Arizona Public Service Company
►NPPD ►Public Service Company of Oklahoma
►Oklahoma Gas and Electric
►Maryland Department of General Services / University System of Maryland
►Varied: 13 PPA and 1 Merchant
Nameplate Capacity ►100 MW ►80 MW ►95 MW ►130 MW ►55 MW ►14 projects totaling 399 MW (EME pro rata)
EME % Ownership ►100% ►100% ►100% ►100% ►100% ►Varied (75 – 100%)
Accounting Method ►Consolidated ►Consolidated ►Consolidated ►Consolidated ►Consolidated ►Consolidated
Summary – Wind Portfolio (cont’d)
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American Bituminous Doga
(Turkey)
Other
Projects
Location ►Grant Town, WV ►Near Istanbul, Turkey
►Chicago, IL (Oil)
►Huntington, NY (Biomass)
Capacity ► 80 MW ► 180 MW ► 315 MW oil peakers
► 9 MW biomass2 (EME pro rata)
Fuel ►Waste coal ►Natural gas ►Oil and biomass(1)
EME % Ownership ► 50% ► 80% ► 100% oil
► 38%
Accounting Method ►Consolidated ►Cost ►Oil: consolidated
►Biomass: equity method2
Summary – Other
1. EME has 38% stake in Covanta Huntington, L.P., which owns a 25 MW waste-to-energy facility
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Broken Bow (1)
Cedro Hill Crofton Bluffs Mountain
Wind I Mountain Wind II
Location ►Custer County, NE ►Webb County, TX ►Knox County, NE ►Uinta County, WY ►Uinta County, WY
Customer ►Nebraska Public Power District (―NPPD‖) (A credit rating)
►City Public Service of San Antonio (AA credit rating)
►NPPD (A credit rating)
►PacifiCorp (A- credit rating)
►PacifiCorp (A- credit rating)
Nameplate Capacity ►80 MW
►150 MW
►40 MW ►61 MW
►80 MW
EME % Ownership ►100%
►31%(2) ►31%(2) ►31%(2) ►31%(2)
Accounting Method ►Consolidated
►Consolidated ►Consolidated ►Consolidated ►Consolidated
Summary – Capistrano Wind Partners
1. Sale of Broken Bow to Capistrano Wind Partners expected to be completed in January 2013 2. Based upon EME’s share of CWP’s purchase price
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Capistrano Transaction Overview
Economics (2)
Projects sold by EME to CWP at Fair Market Value
Investors’ funding portion set by formula
Tax sharing agreement directly between MEHC and Capo Wind (Holdco of CWP)
Capo Wind allocates 99% of tax attributes to MEHC and agrees to contribute 90% of cash tax payments received from EIX to Capistrano with remaining 10% indirectly paid to EME
CWP uses project cash flows and tax sharing contributions to make distributions to partners
Investors get priority distributions until flip date
Thereafter, 55% to Edison and 45% to Investors
CWP and/or Projects also pay EME additional fees for management
Roles
EME/affiliates develop/build/operate projects and manage CWP
Investors generally passive with protective voting rights and covenants
Overview
Capistrano Wind Partners (CWP) formed February 13, 2012 by EMG, TIAA-CREF, and CIRI (an Alaskan native corporation) $460 million commitment for wind development:
Operating projects transferred – Cedro Hill, Texas (150 MW) and Mountain Wind I and II, Wyoming (141 MW) & the initial transaction netted EME ~$235 million in liquidity at completion of final projects
Additional Projects being transferred into CWP – Crofton Bluffs Nebraska (40MW) completed in Dec 2012 and Broken Bow I, Nebraska (80 MW) is expected in Jan 2013. Through these transfers EME recovers $140 million (less transaction costs) previously used to fund construction
In Dec. 2012, AMP Capital Investors (via Rest Infrastructure Trust) has been added as an additional investor
EME retains an economic interest and will continue to operate and consolidate projects
Capitalization ($ Millions)
Total Committed Capital (1)
$460.0 Total Investors:
$460.0
Funded At Closing
$238.0 Cedro:
MW I:
MW II:
$105.9
$50.8
$81.3
Fund Upon Project COD and CPs
$140.4 Broken Bow:
Crofton:
$94.0
$46.4
Remaining Committed
$81.6 Available for future projects:
$81.6
1. Prior to Feb 2014, Total Committed Capital can be increased from $460 million to $560 million at EME/MEHC’s sole discretion 2. Simplified cash flow waterfall
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2) Environmental Compliance Overview
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Regulatory Framework – Illinois
The Combined Pollutant Standard (―CPS‖) for air emissions is the key environmental framework for the Illinois assets
Addresses Mercury, NOx and SO2
Entered into in 2006 with the Illinois EPA and adopted as a formal state rule in 2007
CPS was crafted to anticipate potential federal regulations
Status: NOx retrofits complete on all units; Mercury control installations complete on all units utilizing Activated Carbon Injection; Construction of SO2 controls is underway at Powerton (unit 6), preliminary engineering, technical analysis underway on balance of units as needed
Strategy: Ensure CPS satisfies all Federal rules and that additional state and federal water regulations do not mandate additional, material capital expenditures
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NOx
SO2
Construction timeline
Fleet-wide average emission rate (lb/mmbtu)
Construction timeline
Fleet-wide average emission rate (lb/mmbtu)
Mercury
Construction timeline
Fleet-wide average emission rate (lb/GWh)
2013 2014 2015 2016 2017 2018 2019
0.11
Waukegan 7
Waukegan 8 Joliet, Powerton,
Will County
Waukegan 7 0.008 or 90% reduction
Will County 3
2012 Emissions1
ACI $45 million
Completed
0.0074 or 87.8% reduction for
fleet
0.10
0.43 0.41 0.28
0.195 0.15
0.13 0.11
Fleet-wide requirement
Unit-specific requirement
SNCR $105 million
US EPA MATS Deadline
1. Based on tests administered closest to year ended December 31, 2012, and submitted to Illinois EPA for compliance
EME 2006 Illinois CPS Agreement
0.44
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Proposed variance from CPS filed with Illinois Pollution Control Board November 30
If granted, would defer approximately $200.0 million CapEx from 2013-14 (short term liquidity improvement relative to projections)
Illinois EPA fully briefed
Public hearing January 29; environmental opposition expected; due for board order in early April
Proposed variance would extend deadline to retrofit Waukegan Unit 8 from end of 2014 to May 31, 2015, with unit offline as of December 31, 2014 until work completed
Proposed variance would provide relief from current SO2 emission rate limit in 2015 and 2016
Emission rate cap of 0.38 lbs./MMbtu in each year compared to current limits of 0.28 in 2015 and 0.195 in 2016
Proposed variance would set annual SO2 tonnage cap for 2013-16 (consistent with internal outlook) to guarantee "no environmental harm"
Resumes current CPS schedule in 2017 to comply with federal regulations
Pending Illinois Pollution Control Board rulemaking on thermal discharge limits into waterways adjacent to plants will impact Will County and Joliet stations
Managing appeals from U.S. Department of Justice in New Source Review litigation
USEPA rules allow for one-year extension for compliance with Mercury and Air Toxics Standards (from April 2015 to April 2016) subject to certain conditions
Ongoing Efforts to Achieve Regulatory Relief / Certainty
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Federal Regulatory Framework
Potential Compliance Technologies
Pollutant(s) Regulations Timing
SO2
EPA Cross State Air Pollution Rule (CSAPR)
Dry Sorbent Injection, Wet Limestone or Dry Flue
Gas Desulphurization (―FGD‖)
Final CSAPR – July 2011 CSAPR Phase 1 – 20121
CSAPR Phase 2 – 2014 Remanded by court to
USEPA
NOX EPA CSAPR1 SCR, SNCR
Final CSAPR – July 2011 Implementation – 2012 Remanded by court to
USEPA
Mercury Air Toxics Standards (―MATS‖), Acid
Gases and Metals
EPA National Emission Standard for Hazardous Air Pollutants
(―NESHAP‖)
ACI, FGD, Baghouses, Electrostatic Precipitators (―ESP‖)
Proposal – Mar 2011 Final – Dec 2011
Implementation – Jan 2015
SO2, NO2, PM2.5 and Ozone
National Ambient Air Quality Standard (―NAAQS‖)
FGD, SNCR/SCR, Baghouses, ESPs Initial Rules – 2010-12
Implementation – 2015-22
Greenhouse Gases EPA New Source Performance Standard (―NSPS‖)/Legislation
Unknown EPA NSPS Proposal – March
2012 Legislation – Unknown
Water Quality EPA’s Clean Water Act Section
316(b) Rule Modified Traveling Screens, Closed
Loop Cooling Proposed Rule – March 2011
Final Rule – July 2013
Coal Ash Coal Combustion Residuals
Rule
Ash Handling System Replacement, Pond Closure or Relining, Leachate
Collection
Proposed Rule – June 2010 Final Rule – may be delayed
to as late as 2014
1. CSAPR implementation pending ruling on court appeal expected this summer
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Environmental Compliance Summary
Compliance plans to satisfy CPS and MATS may include multiple approaches based on market conditions
Plant closures
Plant derates
Utilization of ultra-low sulfur coal
Dry scrubbing with sodium based sorbents
Upgrades to particulate removal systems
Plant closures:
In February 2012, MWG decided to shut down its Crawford and Fisk stations in September 2012
Joliet 6 economics are challenging due to market dynamics, unit size and need to retrofit SO2 controls in support of post-2018 CPS requirements
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Midwest Generation Compliance
1. Will County 3 requires particulate removal upgrades in 2015 to comply with the CPS requirements
Unit Operating
Capacity (MW)
2011 Generation
(GWh)
% of Regional
Fleet
IL EPA SO2 Compliance
Deadline
Notes (for illustrative purposes only – subject to further evaluation and refinement)
Crawford 532 2,400 8.5%
Fisk 326 1,589 5.6%
Waukegan 7, 8 689 3,898 13.9% 2013/2014 ► Unit 7: TBD ► Unit 8: SO2 CPS solution to be
implemented by 2015
Joliet 6 290 1,675 5.9% 2018 ► Potentially derated 10-20% in 2015
Joliet 7, 8 1,036 5,907 21.0% 2018 ► SO2 CPS solution to be implemented by 2015
Will County 3, 4 761 3,492 12.4% 2018(1) ► Unit 3: TBD ► Unit 4: SO2 CPS solution to be
implemented by 2015
Powerton 5, 6 1,538 9,184 32.7% 2018 ► SO2 CPS solution to be implemented by 2015
Total 5,172 28,145
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Potential Portfolio SO2 CPS Solution
2013 2014 2015 2016 2017 2018 2019
JO 6 TBD
JO 7 Trona+Ext ESP
JO 8 Trona+Ext ESP
PO 5 Trona+Ext ESP
PO 6 Trona+ ESP
WA 7
WA 8 Trona+Ext ESP
WC 3 Derate
WC 4 Trona+Ext ESP
Capex ($ MM) 109 328 148
2013 2014 2015 2016 2017 2018 2019
JO 6 TBD
JO 7 Trona+Ext ESP
JO 8 Trona+Ext ESP
PO 5 Trona+Ext ESP
PO 6 Trona+ ESP
WA 7
WA 8 Trona+Ext ESP
WC 3 Derate
WC 4 Trona+Ext ESP
Capex ($ MM) 52 117 316 115
Derate
TBD
TBD
Current CPS Compliance
Delayed CPS Compliance
Derate
TBD
TBD
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Mercury Control
Activated carbon injection systems installed and commissioned in accordance with CPS
Crawford, Fisk and Waukegan systems operational July 2008
Balance of plants operational July 2009
Norit is the original equipment supplier
Extensive work has been completed to date to maximize mercury removal, increase system reliability and reduce PAC consumption
Changes in lance design, injection location, injection fan capacity and testing of different sorbent types
Installation of mercury sorbent traps in progress as part of compliance verification program prior to opting in under CPS 90% rule
All units except Waukegan 7 and Will County 3 now achieving 90% removal or 0.008 lbs/GwH standard and already comply with federal mercury rules that take effect in April 2015
Waukegan 7 and Will County 3 system performance is limited by hot side precip which will be addressed by conversion to cold side precip or the addition of a baghouse under CPS
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SNCR Projects – NOx Control
CPS NOx compliance achieved via the installation of SNCRs on all units within the fleet except Fisk (shutdown 9/2012) and Waukegan
Fleet performance through end of 2012 averaging 0.100 lbs/mmbtu NOx
Waukegan 7&8 averaging 0.113 and 0.112 respectively without SNCRs
Current plan is to average Waukegan with the broader Illinois portfolio
Do not anticipate having to install additional controls at Waukegan
Contingencies: Additional boiler tuning to reduce baseline NOx
Retractable lances at Powerton for full load NOx reduction
Relocate SNCR system(s) from Crawford station after shutdown
New SNCRs at Waukegan $21.6MM
SNCRs supplied by FuelTech, a leader in SNCR Technology
BOP engineering and construction by GSL (Graycor – Sargent & Lundy)
All systems installed and operational; tuning and optimization will continue
Yara is under contract to supply solutionized urea under a multi year option agreement
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31
SO2 Control – Dry Sorbent Injection
Dry Sorbent Injection (―DSI‖) utilizing trona has been selected as the preferred SO2 control technology
Low capital cost and short implementation time table
Deployable in 18-22 months versus 38-46 months for conventional DFGD
Can achieve 90%+ SO2 removal
Co-benefit of improved ESP performance and acid gas removal (MATS)
Competitive VOM when used in conjunction with ultra low sulfur PRB coals
Accepted by USEPA under final HAP MACT and IEPA under CPS
Waukegan 7 construction permit received, and IL Pollution Control Board approved extension for completion of Trona installation from end of 2013 to end of 2014
Powerton construction permits received February 2011 and Powerton unit 6 construction is underway, completion of Phase 1 estimated to be Sept 2013
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32
SO2 Control – Dry Sorbent Injection (cont’d)
A number of important considerations must be taken into account when using DSI
Particulate removal to address HAP MACT standards
Transportation, storage and milling of trona on-site
Screening of qualified vendors has focused on capital cost, life cycle cost including O&M and trona consumption associated with SO2 removal linked to grind particle sizing
Mill technology and proof of mills in this application has been a key variable in the review process
United Conveyor Corp (―UCC‖) / O’Brien & Gere selected as equipment supplier
Waukegan construction started October 2011 to preserve construction permit. Construction suspended after receipt of one year permit extension from IEPA
Powerton unit 6 construction underway, implementation is broken into two phases to maximize deferral of capital; Phase 1 up to 50% SO2 removal; Phase 2 greater than 50% SO2 removal
Phase I will be completed and operational September 2013
Phase II will be implemented at a later date as needed to meet CPS
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33
SO2 Control – Dry Sorbent Injection (cont’d)
Current plans are to deploy a number of particulate control upgrades as part of the DSI program
High frequency Transformer Rectifiers (―TR‖) sets
All units
Rigid Electrodes (select units on an as-needed basis)
Added ESP fields and potentially adding height to increase volume
Waukegan 8, Crawford 7&8, Fisk, and Will County 3
The ―hot to cold‖ ESP Conversion at Waukegan 7 and Will County 3 is anticipated to significantly improve existing ESP performance negating the need for baghouses
Currently don’t anticipate having to add polishing baghouses but analysis is still underway
Objective is to optimize particulate removal efficiency at the lowest overall capital cost
Sargent & Lundy and Southern Environmental (SEI) are currently engaged to complete unit level review of ESPs
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34
City of Chicago Agreement (February 2012)
Negotiated agreement with mayor’s office and environmental advocates on date-certain shutdowns of Fisk and Crawford included dismissal of certain litigation pursued by environmental groups, neutrality from environmental groups on extension of Waukegan Unit 7 retrofit deadline under CPS, and creation of a mayor’s task force to solicit public comment on future of sites and encourage redevelopment
Company will adhere to city codes in maintaining properties
USEPA conducted air monitoring around sites in December at request of environmental justice groups
EME is currently negotiating the sale of the Fisk/Crawford properties including all associated plant equipment and liabilities associated with the future demolition and reclamation of the property
Initiated sales process with 40 prospective buyers, prequalified 25 to bid
Currently negotiating final terms with three finalists; value ranges up to $9MM
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3) California Market Overview
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36
CHP Settlement – Procurement
The California Public Utilities Commission (―CPUC‖) approved the Combined Heat and Power (―CHP‖) Settlement in December 2010 and it became effective November 23, 2011
CHP Settlement sets 3000 MW procurement target for IOUs
Each IOU is to conduct three CHP-only RFOs during the Initial Period—the first round has been completed
PPA Term of up to 7 years for existing or expanded capacity; up to 12 years for new or repowered capacity
Former CHP may bid
Includes 150 MW at Sycamore, 225 MW at Kern River, and 75 MW at Midway-Sunset that are not in current cogeneration operation
Pricing as agreed by the parties in competitive bid
Curtailment for system emergencies or overgeneration
Bilateral PPA negotiations are also permitted
Kern & Sycamore succeeded in obtaining new 7 year PPAs in first round
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37
Gas Portfolio Status
Contracted Long Term - Midway Sunset (2016), Westsides (2016), Sycamore (2020), Kern (2020), Walnut Creek (2023)
Midway Sunset bidding in CHP RFOs to extend PPA and sell peaking capacity from idle turbine
Contracted Short Term - Watson
Watson – Executed a Transition PPA through June 2015; will bid for 7 year CHP RFO through 2021
Extend facility Contracts as required- steam sales, power sales, water supply, etc.
Uncontracted- Sunrise
Merchant energy sales managed by EMMT (power) and Chevron (gas)
Cold standby in Feb-May due to seasonal low margins
Seeking later tolling opportunities with IOU or marketer
Jul-Sep 2013 Resource Adequacy (―RA‖) sold to PG&E & SDG&E; marketing future RA
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38
CA IOU PPA Opportunities
Capacity
Executed Transition
PPA(1)
Eligible for RFO PPA(2)
Executed SCE
RFO PPA
Executed PG&E
RFO PPA
Kern 75 MW Cogen 1 2013 Through 2020
225 MW CT 2,3,4 2013 Through 2020
Sycamore 150 MW Cogen 1,2 2013 Through 2020
150 MW CT 3,4 2013 Through 2020
Watson 416 MW Cogen Through mid-2015
√ 7 yr term
Westsides 160 MW Cogen Through 2016
Midway Sunset 150 MW Cogen 1,2 √ 1 Cogen to 2020
Through 2016
75 MW Idle CT √ to 2020
Sunrise 586 MW CC, DB
Walnut 479 MW CTs Through 2023
1. Transition PPA ends when CHP PPA is executed but no later than July 2015
2. Three CHP RFOs issued annually starting 1Q2012 (approximate timing) √ eligible
Periodic ―All Source‖ RFOs provide limited opportunity for a Sunrise PPA
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4) Operational and Safety Overview
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40
Coal & Gas Fleet Performance – Equivalent Unplanned Outage Rate (“EUOR”)
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41
UI TPC
Median 78.90 42.44
Best Quartile 84.24 35.36
For similar utilized units MWG has lower Total Production Cost.
Total Production Costs vs. Utilization Index for PJM Coal Units with >25% Capacity Factor (2009-2011)
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42
Most EME units have better than median EUOR; Non-fuel O&M is above median for most units.
EUOR NFOM
Median 13.08 14.19
Best Quartile 7.68 9.91
Non-fuel O&M Costs vs. EUOR for PJM Coal Units with >25% Capacity Factor (2009-2011)
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43
Benchmark Results – Small Units (40 – 200 MW)
Best
Quartile
EAF NFOM
Median 90.64 9.41
Best Quartile 95.22 7.19
EAF levels for most EME units were at or better than best quartile levels with Non-fuel O&M costs lower/better than median
levels
Small Unit Gas Plant Benchmarks
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Nov-12
44
Wind Fleet Performance – Equivalent Availability Factor
November 2012 Wind EAF – 12 Month Rolling
Better
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45
EME Fleet Performance - Safety
12 Month Rolling Trend
0.42
7
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46
Edison Mission Marketing & Trading (EMMT)
EMMT activities are a key element in optimizing the value of the EME portfolio
Manages merchant assets and provides bidding, scheduling and dispatch services for the
EME merchant generating fleet
Sells output in open market for merchant plants
Manages gross margin and recommends and implements hedge strategies
Manages fuel procurement and hedging
Manages contracted assets
Manages partnerships
Manages and administers power purchase agreements
Manages stakeholder issues, e.g., local landowner issues
Proprietary trading across a range of energy products
Also responsible for market policy activities and advocacy
Assessment of new policies
Critical understanding is a key component to optimizing plant values by enabling
favorable regulatory outcomes and for proprietary trading activities
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47
$150
$101 $107 $88
$29
$82 $66 $70
$0
$50
$100
$150
$200
2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012E
Edison Mission Marketing & Trading (EMMT)
Proprietary trading in markets where it is active in merchant generation
Primarily trade congestion products in west and eastern markets
Increasingly active in coal, gas and weather markets
Closely aligned to underlying analysis required to manage the merchant coal plants
Additional activities targeting transmission upgrades to relieve bottlenecks
Benefits in the form of congestion and capacity rights
Trading group of 15 individuals
Supported by analytical and market policy resources
Controls on types and sizes of exposures
VaR; stress and scenario testing; volumetric, duration, and credit limits
EMMT Proprietary Trading Revenue EMMT Proprietary Trading
$ in mm
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48
EMMT FTR Trading Performance
EMMT is among top performers in PJM and MISO FTR trading Significant market participation since 2007
Approximately 150 market participants in PJM Approximately 100 market participants in MISO
EMMT has consistently been among the top 10 most profitable participants as measured by realized gross P&L(1)
1. Other than 2009 PJM results
2. Summary includes all positions for delivery in a given calendar year. Gross P&L calculated as day-ahead settlement price minus original auction price. Costs not included in calculation: underfunding charges, capital costs, and other administrative costs
Mark
et
Gro
ss P
&L (
$M
M)
Mark
et
Gro
ss P
&L (
$M
M) E
MM
T G
ross P
&L ($
MM
)
PJM FTR Gross P&L: EMMT vs. Market (2) MISO FTR Market Gross P&L: EMMT vs. Market (2)
EM
MT G
ross P
&L ($
MM
)
$17
$9
$(1)
$10
$21
$16
$(50)
$(40)
$(30)
$(20)
$(10)
$-
$10
$20
$(1,200)
$(1,000)
$(800)
$(600)
$(400)
$(200)
$-
$200
$400
$600
2007 2008 2009 2010 2011
Bottom 10 Participants Total Gross P&L ($MM)
Top 10 Participants Total Gross P&L ($MM)
Middle Participants Total Gross P&L ($MM)
EMMT Gross P&L ($MM)
$61
$21
$10 $13 $8
$33
$(45)
$(30)
$(15)
$-
$15
$30
$45
$60
$75
$90
$(200)
$(100)
$-
$100
$200
$300
$400
$500
2007 2008 2009 2010 2011
Bottom 10 Participants Total Gross P&L ($MM)Top 10 Participants Total Gross P&L ($MM)Middle Participants Total Gross P&L ($MM)EMMT Gross P&L ($MM)
2012 2012
$ in mm
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III. Financial Overview
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50
Edison Mission Corporate Organization & Principal Obligations(1)
Edison International
Midwest
Generation EME,
LLC
Viento Funding II
Credit
Agreement
(2016)
($200MM debt)
Edison Mission
Marketing &
Trading
Big 4 Projects
Kern River (50%)
Midway-Sunset (50%)
Sycamore (50%)
Watson (49%)
Edison Mission Group Inc.
Edison Mission
Midwest Holdings
Viento Subs Edison Mission Midwest
Mission Wind New
Mexico
Mission Wind Texas
Mission Wind Wildorado
Midwest Generation
LLC
Participation agreement
Facility lease with Powerton & Joliet lessors
Westside
Projects (50%)
Coalinga Mid-Set Salinas River Sargent
Canyon
Other
Big Sky
($219MM debt)
Goat Wind
High Lonesome
($69MM debt)
Laredo Ridge
($72MM debt)
Sleeping Bear
Storm Lake
Taloga
American
Bituminous
($46MM debt)
Doga (Turkey)
Tapestry
($212MM debt)
Other projects
($49MM debt)
Powerton & Joliet
Lessors
•Lease indenture (due
2016)
•$345MM lessor notes
outstanding
MEHC
Edison Mission Energy
Sunrise Project
(50%)
Capistrano Wind
Partners
Cedro Hill
Term Loan
($126MM debt)
Broken Bow
($52MM debt)
and
Crofton Bluffs
($27MM debt)
Walnut Creek
$319MM debt Additional
$51MM at WCEP Holdings
Future Amount: $495MM
1. Principal obligations in italics; debt balances as of 12/20/12 and exclude letters of credit and working capital facilities; Letter of credit facilities of various project financings amounted to approx. $164.0 million
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51
Capitalization Summary
Source: Company financials
1. Debt balances as of 12/20/12 and exclude letters of credit and working capital facilities; Letter of credit facilities of various project financings amounted to approx. $164.0 million
2. All amounts illustrated based on contractual spread as of 12/20/12, however, term loans are subject to traditional rate step ups. In addition, many floating rate notes are also subject to swap agreements locking in LIBOR rates
Issue
Amount
Outstanding (1)
Maturity Coupon (2)
Big Sky Wind Vendor Financing $219.4 10/02/14 L + 350 bps
Broken Bow Wind Term Loan 52.0 12/21/27 L + 288 bps
Cedro Hill Wind Term Loan 125.8 12/31/25 L + 300 bps
Crofton Bluffs Term Loan 27.0 12/14/27 L + 288 bps
Laredo Ridge Term Loan 72.2 03/31/26 L + 275 bps
Tapestry Wind Term Loan 211.6 12/21/21 L + 250 bps
Viento Funding II Term Loan 199.6 12/31/20 L + 275 bps
Walnut Creek Energy Construction Loan 319.0 06/30/13 L + 225 bps
WCEP Holdings Construction Loan 51.5 06/30/13 L + 400 bps
American Bituminous Power Partners Bonds 46.0 10/01/17 Tax-Exempt Weekly
High Lonesome Mesa Bonds 69.3 11/01/17 685 bps
Total Project Debt $1,393.4
Senior Unsecured Notes due 2013 $500.0 06/15/13 7.50%
Senior Unsecured Notes due 2016 500.0 06/15/16 7.75%
Senior Unsecured Notes due 2017 1,200.0 05/15/17 7.00%
Senior Unsecured Notes due 2019 800.0 05/15/19 7.20%
Senior Unsecured Notes due 2027 700.0 05/15/27 7.63%
Total Recourse Debt $3,700.0
Total Debt $5,093.4
$ in mm
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52
Historical Financials
Source: Company filings
1. Includes Homer City plant impairment, Midwest Generation Stations impairment, Wind projects impairment and other charges, and other charges
Fiscal Year Ending December 31,
(US$ in millions) 2006A 2007A 2008A 2009A 2010A 2011A
Total Operating Revenues $2,239 $2,580 $2,811 $2,377 $2,423 $2,180
Operating Expenses
Fuel $645 $684 $747 $796 $809 $799
Plant Operations 511 584 621 579 654 709
Plant Operating Leases 176 176 176 177 178 177
Depreciation and Amortization 144 162 194 236 248 310
Administrative and General 140 204 207 196 182 180
Other 0 6 14 4 45 1,746
Total Operating Expenses $1,616 $1,816 $1,959 $1,988 $2,116 $3,921
Operating Income $623 $764 $852 $389 $307 ($1,741)
Other Income (Expense)
Equity Income from Unconsolidated Affiliates 186 200 122 100 104 86
Interest Income 97 85 26 7 2 1
Interest Expense (279) (273) (279) (296) (263) (323)
Other Income (Expense), Net (123) (142) 22 17 28 45
Total Other Income (Expense) ($119) ($130) ($109) ($172) ($129) ($191)
Income (Loss) From Continuting Operations Before Tax and Minority Interest 504 634 743 217 178 (1,932)
Provision (Benefit) for Income Taxes 189 219 243 16 19 (856)
Minority Interest 1 1 0 3 1 1
Income (Loss) From Continuing Operations $316 $416 $500 $204 $160 ($1,075)
Income from Disc. Ops. and Effect of Change in Accounting 98 (2) 1 (7) 4 (3)
Net Income Attributable to EME Common Shareholder $414 $414 $501 $197 $164 ($1,078)
EBITDA $831 $985 $1,190 $745 $688 ($1,300)
Production Tax Credits 16 27 44 56 62 66
Plus: Asset Impairment / Other ¹ 146 161 14 4 45 1,746
Adjusted EBITDA $993 $1,173 $1,248 $805 $795 $512
(1)
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Gas Production Increased production to better calibrate to actual historical production; long-run production trend
similar; long term demand reflects coal retirements (including through coal to gas switching)
Gas Demand Reflects near term weather impacts
LNG Exports Addition of 3Bcfd of exports from the U.S. Gulf Coast by 2019
Coal Prices Reduced pricing as a result of lower demand due to coal retirements and update of extraction /
transportation costs
Operating Model Assumptions
EME has developed its operating model using a combination of forward market pricing as of September 28, 2012 (through 2015) and ICF’s fundamental forecast(1) for 2016 onwards
Projections reflect actual results of RPM capacity auction through planning year 2015/2016
For illustrative purposes, financial projections and tax payments are illustrated based on publicly disclosed information in the 8-K dated 12/17/12 and do not reflect any potential changes subsequent to that date (including changes to bonus depreciation for tax year 2013)(2)
Projections assume tax sharing payments by EIX will continue though 2014 as indicated in the draft plan support agreement
Projections include the following recent and near term considerations:
1. ICF Forecast (with no National CO2 Policy) as of Q2 2012. Projections developed prior to CSAPR ruling but are not expected to change materially as a result of the new ruling
2. On 01/01/13, fiscal cliff legislation extended 50% bonus depreciation for one year (through 2013). Based on preliminary analysis, this extension is anticipated to result in a reduction in tax sharing payments to EME of approximately $400 million in 2014
53
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Base Case and Downside Case Sensitivity Assumptions
EME’s financial projections have been sensitized based on a number of key variables
CASE DETAILS
REGULATORY
FRAMEWORK AND TIMING
CAPITAL COSTS GAS ENERGY AND PEAK
DEMAND GROWTH COAL RETIREMENTS
Base Case CSAPR 2013; assurance provisions 2014
MATS retire by 2015/retrofit by 2016
No National CO2 Policy
Latest ICF Capital Costs
10 year book life for retrofits
LNG exports total 5 Bcfd by 2020 (3 from Gulf Coast, 2 from BC)
Some new regulations on fracking water disposal, but no major restrictions
E&P cost increase at 1.7% per year
U.S. Energy AAGR of 1.3% (2012 – 2035)
PJM Energy AAGR of 1.2% (2012 – 2035)
38 GW economic retirements based on fundamentals gas curves through 2015
Downside Potential (High Technological Advancement Case)
Same as Base Case Lower capital costs due to assumed technological improvements
Decreased power sector demand due to lower load growth
No US LNG exports; 0.5 Bcfd from BC
Increased access in NY State increases Marcellus growth by 1 Bcfd
E&P cost increase at 1.3% per year
Lower EIA load growth (0.8% U.S. wide between 2012 and 2035)
87 GW retirements based economic retirements through 2015
54
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Financial Projections – Key Assumptions
$3.8
$4.2$4.4
$5.2
$5.6
$4.7$4.9
$3.0
$4.0
$5.0
$6.0
2013 2014 2015 2016 2017
Base Case Downside Case
Henry Hub Natural Gas ($ / MMbtu)
$37.9
$38.9
$39.3
$40.4
$42.2
$37.8
$39.2
$39.2$38.9
$40.3
$34.0
$37.0
$40.0
$43.0
2013 2014 2015 2016 2017
Base Case Downside Case
Delivered Coal Price ($ / ton)
$30.6 $31.3$32.3
$42.2$45.3
$26.3 $26.3 $25.4
$37.3$38.7
$12.0
$20.0
$28.0
$36.0
$44.0
$52.0
2013 2014 2015 2016 2017
Base Case Downside Case
NI Hub Flat Prices ($ / MWh)
22.5
19.8
16.7
22.9 23.1
18.5
16.0
12.8
22.7 22.4
5.0
10.0
15.0
20.0
25.0
30.0
2013 2014 2015 2016 2017
Base Case Downside Case
MWG Generation (TWh)
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EBITDAR Summary
$ in mm, except where otherwise stated
EBITDAR Summary
Source: Company filings; 8-K dated 12/17/12
1. For illustrative purposes only, projections assume Powerton and Joliet leases remain in place and are not modified in connection with the Company’s Chapter 11. No determination has been made regarding the assumption or rejection of the financing or treatment of the financing in connection with the Chapter 11
2. Includes capacity revenues of $35 million, $141 million and $193 million in 2013, 2014 and 2015, respectively. Capacity revenues after 2015 based on ICF International’s forecast
3. 2015 through 2017 includes an annual $15 million reduction for pension and PBOP expenses
4. Amount represents EME’s proportional EBITDA share in the Big Four, Westsides and Sunrise projects
5. Excludes production tax credits and operational cash flows associated with the Big Sky Project after 2013. Includes Capistrano and EME’s proportional EBITDA share in Elkhorn Ridge and San Juan Mesa
6. Consists of American Bituminous, Doga (Turkey) and the Huntington Waste-to-Energy Project
7. Represents standalone operations and excludes any hedging activities related to the other business segments and excludes certain costs associated with the EMMT operations which are included in Corporate G&A
8. Excludes restructuring costs and net of other EME corporate revenues. 2013 through 2017 includes an annual $6 million reduction of EIX overhead proposed to be eliminated as part of the restructuring. 2015 through 2017 includes an annual $11 million reduction for pension and PBOP expenses proposed to be assumed by EIX, including the liabilities retained by EME, as part of the restructuring
Base Case 2013E 2014E 2015E 2016E 2017E
Midwest Generation (1)(2)(3) ($119) ($72) ($20) $168 $200
Walnut Creek 68 83 84 84 84
Other Gas Projects (4) 39 59 48 49 60
Wind Projects (5) 178 181 182 184 185
Other Projects (6) 15 21 16 17 14
EMMT (7) 65 65 65 65 65
Corporate G&A (8) (105) (107) (99) (101) (103)
Base Case Adjusted EBITDAR $141 $230 $276 $465 $505
Plus: Production Tax Credits 80 79 80 75 58
Base Case EBITDAR $221 $309 $356 $540 $563
Base Case NI Hub Flat Energy Prices ($/MWh) $30.60 $31.30 $32.30 $42.20 $45.30
Base Case Power Generation (TWh) 23 20 17 23 23
Midwest Generation Downside Case EBITDAR (1)(2)(3) ($230) ($202) ($171) $70 $78
Downside Case NI Hub Flat Energy Prices ($/MWh) $26.30 $26.30 $25.40 $37.30 $38.70
Downside Case Power Generation (TWh) 19 16 13 23 22
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Capital Expenditures Summary
$ in mm
Capital Expenditures Summary
Source: Company filings; 8-K dated 12/17/12
1. MWG environmental capex as shown is for illustrative purposes only and assumes the Powerton and Joliet leases remain in place with no modifications in connection with the Company’s Chapter 11. No determination has been made regarding the assumption or rejection of the financing or treatment of the financing in connection with the Chapter 11
2. Funded by project level debt at Walnut Creek
2013E 2014E 2015E 2016E 2017E
MWG Environmental CapEx (1) $109 $328 $148 $0 $0
MWG Station CapEx 22 37 31 0 0
Natural Gas Project CapEx (2) 65 0 0 0 0
Other CapEx 21 17 15 19 18
Total Capital Expenditures $217 $382 $194 $19 $18
Capital expenditures remain static across the Base and Downside Cases
On November 30, 2012 EME filed a petition with the Illinois Pollution Control Board to request a variance to its CPS requirements. Any variance granted by the Illinois Pollution Control Board could result in a material deferral of MWG environmental capital expenditures
The table below does not reflect this potential deferral and is subject to material change
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Base Case Cash Flow Summary
Base Case Cash Flow Summary
Source: Company filings; 8-K dated 12/17/12
1. For illustrative purposes only, projections assume Powerton and Joliet leases remain in place and are not modified in connection with the Company’s Chapter 11. No determination has been made regarding the assumption or rejection of the financing or treatment of the financing in connection with the Chapter 11
2. Tax payments are preliminary in nature and subject to revision and to changes in law. Excludes any audit payments related to outstanding tax disputes. On 01/01/13, fiscal cliff legislation extended 50% bonus depreciation for one year (through 2013). Based on preliminary analysis, this extension is anticipated to result in a reduction in tax sharing payments to EME of approximately $400 million in 2014
3. Represents a combination of working capital, deferred revenues, cash taxes paid after deconsolidation and other cash items
4. Excludes transaction fees
5. Includes approximately $200 million of cash that management believes is required to operate the Company in the ordinary course
6. Adjusted to exclude Midwest Generation EBITDAR, capex and PoJo payments. No adjustments made for changes in working capital or Corporate G&A
7. Includes Capistrano debt in the amount of $198 million as of December 31, 2013 with annual amortization per the terms of the indentures. 2014 includes a reduction of $222 million associated with certain operations ceasing to be part of continuing operations
8. Includes restricted cash at various subsidiaries and margin and collateral deposits at EMMT. Some portion of restricted cash is anticipated to be released upon emergence from bankruptcy
2013E 2014E 2015E 2016E 2017E
Adjusted EBITDAR $141 $230 $276 $465 $505
Less: PoJo Payments (1) (151) (151) (67) (26) (1)
Less: Capital Expenditures (217) (382) (194) (19) (18)
Plus: EIX Tax Refund to EME (2) 80 622 0 0 0
Less: Project Level Debt Amortization (17) (111) (113) (109) (106)
Less: Project Level Interest Payments (83) (75) (71) (67) (61)
Plus: Distributions from Uncons. Affiliates, Net (1) 2 (8) (2) 2
Minority Interests, Net (Including Capistrano) (3) (59) 20 (4) (29)
Other Cash Flows (3) 140 111 (61) (76) (32)
Less: Restructuring Costs (4) (36) (36) 0 0 0
Free Cash Flow ($148) $150 ($218) $163 $261
Beginning Cash Balance 670 522 672 455 618
Ending Cash Balance (5) $522 $672 $455 $618 $879
Illustrative Free Cash Flow Excluding MWG (6) $253 $739 $48 $22 $61
Beginning Cash Balance Excluding MWG 595 848 1,586 1,634 1,656
Illustrative Ending Cash Balance Excl. MWG $848 $1,586 $1,634 $1,656 $1,716
Total Project Level Debt (7) $1,461 $1,129 $1,016 $907 $801
December 31, 2012 Projected Unrestricted Cash Balances
Corporate Cash $401
EMMT 120
Midwest Generation 75
Other Project Level 75
Total Unrestricted Cash $670
Restricted Cash (8) $285
$ in mm
EDISON MISSION ENERGY®
0 / 106 / 83
255 / 208 / 69
118 / 120 / 123
59
Downside Case Cash Flow Summary
Downside Case Cash Flow Summary
Source: Company filings; 8-K dated 12/17/12
1. For illustrative purposes only, projections assume Powerton and Joliet leases remain in place and are not modified in connection with the Company’s Chapter 11. No determination has been made regarding the assumption or rejection of the financing or treatment of the financing in connection with the Chapter 11
2. Tax payments are preliminary in nature and subject to revision and to changes in law. Excludes any audit payments related to outstanding tax disputes. On 01/01/13, fiscal cliff legislation extended 50% bonus depreciation for one year (through 2013). Based on preliminary analysis, this extension is anticipated to result in a reduction in tax sharing payments to EME of approximately $400 million in 2014
3. Represents a combination of working capital, deferred revenues, cash taxes paid after deconsolidation and other cash items
4. Excludes transaction fees
5. Includes approximately $200 million of cash that management believes is required to operate the Company in the ordinary course
6. Adjusted to exclude Midwest Generation EBITDAR, capex and PoJo payments. No adjustments made for changes in working capital or Corporate G&A
7. Includes Capistrano debt in the amount of $198 million as of December 31, 2013 with annual amortization per the terms of the indentures. 2014 includes a reduction of $222 million associated with certain operations ceasing to be part of continuing operations
8. Includes restricted cash at various subsidiaries and margin and collateral deposits at EMMT. Some portion of restricted cash is anticipated to be released upon emergence from bankruptcy
2013E 2014E 2015E 2016E 2017E
Adjusted EBITDAR $29 $101 $125 $368 $383
Less: PoJo Payments (1) (151) (151) (67) (26) (1)
Less: Capital Expenditures (217) (382) (194) (19) (18)
Plus: EIX Tax Refund to EME (2) 81 644 0 0 0
Less: Project Level Debt Amortization (17) (111) (113) (109) (106)
Less: Project Level Interest Payments (83) (75) (71) (67) (61)
Plus: Distributions from Uncons. Affiliates, Net (1) 2 (8) (2) 2
Minority Interests, Net (Including Capistrano) (3) (64) 4 17 (29)
Other Cash Flows (3) 71 120 35 (85) (4)
Less: Restructuring Costs (4) (36) (36) 0 0 0
Free Cash Flow ($329) $47 ($288) $77 $166
Beginning Cash Balance 664 335 383 95 172
Ending Cash Balance (5) $335 $383 $95 $172 $338
Illustrative Free Cash Flow Excluding MWG (6) $184 $765 $128 $33 $88
Beginning Cash Balance Excluding MWG 589 773 1,538 1,666 1,699
Illustrative Ending Cash Balance Excl. MWG $773 $1,538 $1,666 $1,699 $1,788
Total Project Level Debt (7) $1,461 $1,129 $1,016 $907 $801
December 31, 2012 Projected Unrestricted Cash Balances
Corporate Cash $401
EMMT 114
Midwest Generation 75
Other Project Level 75
Total Unrestricted Cash $664
Restricted Cash (8) $285
$ in mm
EDISON MISSION ENERGY®
0 / 106 / 83
255 / 208 / 69
118 / 120 / 123
60
Assumed Pension & PBOP Liabilities
$ in mm
Illustrative Pension & PBOP Liabilities Assumed in Proposed Restructuring
Source: Company filings; 8-K dated 12/17/12
1. Excludes $14 million underfunded liability assumed by EIX in connection with certain discontinued operations
2. Reflects adjustment to account for the difference between Accumulated Benefit Obligation and Projected Benefit Obligation
Total Liability Transferred Under
as of 12/31/11 Proposed Restructuring Retained by EME
Non-Executive Retirement Plans ($91) $91 $0
Total PBOP (103) 51 (52)
Executive Retirement Plans (10) 10 0
Deferred Compensation (11) 11 0
Total Pension & PBOP ($215) $163 ($52)
Adjustment for Projected Benefit Obligation (2) 33 (33) 0
Net Pension & PBOP ($182) $130 ($52)
In connection with the proposed restructuring, EIX has agreed to assume all EME non-executive retirement plan liabilities ($91 million), executive retirement and executive deferred compensation plan liabilities ($21 million) and certain PBOP liabilities ($51 million). The schedule below summarizes the liabilities proposed to be assumed by EIX and those anticipated to be retained by EME under the proposed restructuring
Under the proposed restructuring, EIX would assume certain unfunded pension & PBOP liabilities upon completion of the bankruptcy. EME is obligated to continue to fund such benefits during the bankruptcy proceeding. The above table provides the estimated liabilities at December 31, 2011 for reference purposes. The Assumed Liabilities at the end of the bankruptcy proceeding will differ
These liabilities, including the liabilities retained by EME, correspond to an average cash funding requirement potential savings of approximately up to $26 million per year from 2015 to 2017
(1)