<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                                   Form 10-Q
 
[x]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
       EXCHANGE ACT OF 1934
 
       For the quarterly period ended    March 31, 1999
                                      ---------------------
 
                      or
 
[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
       EXCHANGE ACT OF 1934

       For the transition period from ___________________ to __________________



                        Commission File Number 1-13434



                             EDISON MISSION ENERGY
            (Exact name of registrant as specified in its charter)

                 CALIFORNIA                              95-4031807
       (State or other jurisdiction of      (I.R.S. Employer Identification No.)
        incorporation or organization)

            18101 VON KARMAN AVENUE
            IRVINE, CALIFORNIA                             92612
       (Address of principal executive offices)          (Zip Code)

      Registrant's telephone number, including area code:  (949) 752-5588



     Indicate by check mark whether the registrant (1) has filed all reports
     required to be filed by Section 13 or 15(d) of the Securities Exchange Act
     of 1934 during the preceding 12 months (or for such shorter period that the
     registrant was required to file such reports), and (2) has been subject to
     such filing requirements for the past 90 days.  YES   x      NO _______
                                                         ------

     Number of shares outstanding of the registrant's Common Stock as of May 13,
     1999:  100 shares (all shares held by an affiliate of the registrant).
<PAGE>
 
                               TABLE OF CONTENTS



<TABLE> 
<CAPTION> 
Item                                                                    Page
----                                                                    ----
<S>                                                                     <C> 

                        PART I - FINANCIAL INFORMATION

1.  Financial Statements................................................   1

2.  Management's Discussion and Analysis of Financial Condition and
    Results of Operations...............................................  13


                          PART II - OTHER INFORMATION

5.  Other Information...................................................  23

6.  Exhibits and Reports on Form 8-K....................................  23


                                   PART III


    Signatures..........................................................  24
</TABLE> 
<PAGE>
 
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                    EDISON MISSION ENERGY AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                                (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                             (Unaudited)
                                                         Three Months Ended
                                                              March 31,
                                                -------------------------------------
                                                      1999                1998
                                                -----------------  ------------------
<S>                                             <C>                <C>
OPERATING REVENUES                              
   Electric revenues                              $      196,853       $     198,797
   Equity in income from energy projects                  60,745              17,567
   Equity in income from oil and gas                       3,642               5,465
   Operation and maintenance services                      8,516              10,077
                                                  --------------       -------------
                                                
       Total operating revenues                          269,756             231,906
                                                  --------------       -------------
OPERATING EXPENSES                              
   Fuel                                                   54,075              48,637
   Plant operations                                       34,371              29,598
   Operation and maintenance services                      6,470               7,391
   Depreciation and amortization                          24,146              22,782
   Administrative and general                             36,497              24,172
                                                  --------------       -------------
                                                
       Total operating expenses                          155,559             132,580
                                                  --------------       -------------
                                                
   Income from operations                                114,197              99,326
                                                  --------------       -------------
                                                
OTHER INCOME (EXPENSE)                          
   Interest and other income                               7,792              13,776
   Interest expense                                      (44,519)            (45,725)
   Dividends on preferred securities                      (3,233)             (3,297)
                                                  --------------       -------------
                                                
       Total other income (expense)                      (39,960)            (35,246)
                                                  --------------       -------------
                   
   Income before income taxes                             74,237              64,080

   Provision for income taxes                             16,301              26,380
                                                  --------------       -------------
                                                
INCOME BEFORE CHANGE IN ACCOUNTING PRINCIPLE      $       57,936       $      37,700
                                                
Cumulative effect on prior years of change in   
accounting for start-up costs                            (13,840)                  -
                                                  --------------       -------------
                                                
NET INCOME                                        $       44,096       $      37,700
                                                  ==============       =============
</TABLE>

 The accompanying notes are an integral part of these consolidated financial 
                                  statements.

                                       1
<PAGE>
 
                    EDISON MISSION ENERGY AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                  (Unaudited)
                                                                              Three Months Ended
                                                                                   March 31,
                                                                           -----------------------------
                                                                               1999              1998  
                                                                           -----------        ----------
<S>                                                                        <C>                <C>
NET INCOME                                                                 $    44,096        $   37,700
Other comprehensive income (expense), net of tax:
   Foreign currency translation adjustments, net of income
       tax benefit (expense) of  $1,378 and $(1,099) in 1999
      and 1998, respectively                                                   (12,625)            8,315
                                                                           -----------        ----------
 
COMPREHENSIVE INCOME                                                       $    31,471        $   46,015
                                                                           ===========        ==========
</TABLE>

 The accompanying notes are an integral part of these consolidated financial 
                                  statements.

                                       2
<PAGE>
 
                    EDISON MISSION ENERGY AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                (IN THOUSANDS)
                                        
<TABLE>
<CAPTION>
                                                      (Unaudited)
                                                       March 31,           December 31,
                                                         1999                  1998
                                                     ------------          ------------
<S>                                                  <C>                   <C>       
ASSETS                                             
CURRENT ASSETS                                     
   Cash and cash equivalents                           $  387,119            $  459,178
   Accounts receivable - trade                             94,042                74,403
   Accounts receivable - affiliates                         5,679                13,871
   Inventory                                               55,463                13,000
   Prepaid expenses and other                              37,684                46,864
                                                     ------------          ------------
             
       Total current assets                               579,987               607,316
                                                     ------------          ------------
                                                   
INVESTMENTS                                        
 Energy projects                                        1,210,409             1,163,597
 Oil and gas                                               64,980                62,949
                                                     ------------          ------------
                                                   
     Total investments                                  1,275,389             1,226,546
                                                     ------------          ------------
                                                   
PROPERTY, PLANT AND EQUIPMENT                           4,921,468             3,125,747
   Less accumulated depreciation and amortization         269,600               250,934
                                                     ------------          ------------
                                                   
       Net property, plant and equipment                4,651,868             2,874,813
                                                     ------------          ------------
                                                   
OTHER ASSETS                                       
   Goodwill                                               297,230               308,051
   Restricted cash and other                              126,757               141,390
                                                     ------------          ------------
                                                   
       Total other assets                                 423,987               449,441
                                                     ------------          ------------
                                                   
TOTAL ASSETS                                           $6,931,231            $5,158,116
                                                     ============          ============
</TABLE>

 The accompanying notes are an integral part of these consolidated financial 
                                  statements.

                                       3
<PAGE>
 
                    EDISON MISSION ENERGY AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                      (Unaudited)
                                                                       March 31,            December 31,
                                                                          1999                  1998
                                                                     -------------        ---------------    
<S>                                                                  <C>                  <C>
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
   Accounts payable - affiliates                                        $   13,595             $    8,339
   Accounts payable and accrued liabilities                                126,182                 99,062
   Accrued incentive compensation                                          112,652                112,652
   Interest payable                                                         37,306                 56,708
   Short-term obligations                                                1,525,574                 29,930
   Current maturities of long-term obligations                             198,570                194,586
                                                                        ----------             ----------
 
       Total current liabilities                                         2,013,879                501,277
                                                                        ----------             ----------
 
LONG-TERM OBLIGATIONS NET OF CURRENT MATURITIES                          2,575,715              2,366,430
                                                                        ----------             ----------
 
LONG-TERM DEFERRED LIABILITIES
   Deferred taxes and tax credits                                          604,980                613,009
   Deferred revenue                                                        505,489                490,471
   Other                                                                    92,137                 79,369
                                                                        ----------             ----------
 
       Total long-term deferred liabilities                              1,202,606              1,182,849
                                                                        ----------             ----------
 
TOTAL LIABILITIES                                                        5,792,200              4,050,556
                                                                        ----------             ----------
 
COMPANY - OBLIGATED MANDATORILY REDEEMABLE
   SECURITY OF PARTNERSHIP HOLDING SOLELY PARENT
   DEBENTURES                                                              150,000                150,000
                                                                        ----------             ----------
 
COMMITMENTS AND CONTINGENCIES (Note 5)
 
SHAREHOLDER'S EQUITY
   Common stock, no par value; 10,000 shares
     authorized; 100 shares issued and outstanding                          64,130                 64,130
   Additional paid-in capital                                              629,406                629,406
   Retained earnings                                                       278,441                234,345
   Accumulated other comprehensive income                                   17,054                 29,679
                                                                        ----------             ----------
 
TOTAL SHAREHOLDER'S EQUITY                                                 989,031                957,560
                                                                        ----------             ----------
 
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                              $6,931,231             $5,158,116
                                                                        ==========             ==========
</TABLE>

 The accompanying notes are an integral part of these consolidated financial 
                                  statements.

                                       4
<PAGE>
 
                    EDISON MISSION ENERGY AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                 (Unaudited)
                                                                             Three Months Ended
                                                                                  March 31,
                                                                        ------------------------------
                                                                            1999              1998
                                                                        ------------      ------------
<S>                                                                     <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                           $    44,096        $    37,700
   Adjustments to reconcile net income to net cash provided
      by operating activities:
       Equity in income from energy projects                                (60,745)           (17,567)
       Equity in income from oil and gas                                     (3,642)            (5,465)
       Distributions from energy projects                                    28,888             37,264
       Depreciation and amortization                                         24,146             22,782
       Deferred taxes and tax credits                                         3,142             24,904
       Cumulative effect on prior years of change in accounting 
       for start-up costs                                                    13,840                 --    
   (Increase) decrease in accounts receivable                               (11,947)             7,251
   Decrease in prepaid expenses and other                                    10,297              2,958
   Increase in accounts payable and accrued liabilities                      34,455             15,390
   Decrease in interest payable                                             (19,402)            (2,306)
   Other, net                                                                (4,025)           (19,548)
                                                                        -----------        -----------
       Net cash provided by operating activities                             59,103            103,363
                                                                        -----------        -----------
CASH FLOWS FROM FINANCING ACTIVITIES
   Borrowings on long-term obligations                                      234,878             20,133
   Payments on long-term obligations                                        (22,583)           (22,832)
   Short-term financing, net                                              1,496,522                  -
                                                                        -----------        -----------
       Net cash provided by (used in) financing activities                1,708,817             (2,699)
                                                                        -----------        -----------
CASH FLOWS FROM INVESTING ACTIVITIES
   Investments in energy projects                                            (6,184)              (227)
   Loans to energy projects                                                 (14,815)           (15,400)
   Purchase of generating station                                        (1,800,355)                --
   Purchase of common stock of acquired companies                                 -             (4,109)
   Capital expenditures                                                     (27,512)           (28,209)
   Decrease in restricted cash                                               27,527             32,956
   Other, net                                                               (12,787)            (1,478)
                                                                        -----------        -----------
       Net cash used in investing activities                             (1,834,126)           (16,467)
                                                                        -----------        -----------
 
Effect of exchange rate changes on cash                                      (5,853)             2,631
                                                                        -----------        -----------
                                                      
Net increase (decrease) in cash and cash equivalents                        (72,059)            86,828
Cash and cash equivalents at beginning of period                            459,178            585,883
                                                                        -----------        -----------
 
Cash and cash equivalents at end of period                              $   387,119        $   672,711
                                                                        ===========        ===========
</TABLE>

 The accompanying notes are an integral part of these consolidated financial 
                                  statements.

                                       5
<PAGE>
 
                    EDISON MISSION ENERGY AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                MARCH 31, 1999


NOTE 1. GENERAL

  All adjustments, including recurring accruals, have been made that are
necessary to present fairly the consolidated financial position and results of
operations for the periods covered by this report.  The results of operations
for the three months ended March 31, 1999, are not necessarily indicative of the
operating results for the full year.

  Edison Mission Energy's (EME) significant accounting policies are described in
Note 2 to EME's Consolidated Financial Statements as of December 31, 1998 and
1997, included in its 1998 Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 31, 1999.  EME follows the same accounting
policies for interim reporting purposes.  This quarterly report should be read
in connection with such financial statements.

  Certain prior period amounts have been reclassified to conform to the current
period financial statement presentation.

NOTE 2. INVESTMENTS

  The following table presents summarized financial information of the
investments in energy projects and oil and gas accounted for by the equity
method:


<TABLE>
<CAPTION>
                                                      (In thousands)          
                                                        (Unaudited)           
                                                    Three Months Ended        
                                                         March 31,            
                                                 ------------------------- 
                                                   1999             1998       
                                                 --------         -------- 
<S>                                              <C>              <C>    
ENERGY PROJECTS                                                            
Operating Revenues                               $442,844         $343,057 
Income from Operations                            172,246           59,931 
Net Income                                        140,951           36,321 
                                                                           
OIL AND GAS                                                                
Operating Revenues                               $ 43,167         $ 57,465 
Income from Operations                              8,172           15,688 
Net Income                                          7,274           12,480 
</TABLE>

                                       6
<PAGE>
 
NOTE 3.  ACQUISITION

  In March 1999, EME Homer City Generation L.P. EME Homer City, an indirect,
wholly owned affiliate of EME, completed a transaction with GPU, Inc., New York
State Electric & Gas Corporation and their respective affiliates to acquire the
1,884-MW Homer City Electric Generating Station and certain facilities and other
assets associated therewith (collectively, Homer City).

  Consideration for Homer City consisted of a cash payment of approximately $1.8
billion, which was partially financed by $1.5 billion of new loans (see Note 4).
Pursuant to the Asset Purchase Agreement, EME guarantees all obligations of EME
Homer City under the Asset Purchase Agreement.

  The acquisition was accounted for utilizing the purchase method.  EME's
consolidated statement of income for the three months ended March 31, 1999
reflects the operations of Homer City beginning on March 18, 1999.

NOTE 4.  FINANCIAL INSTRUMENTS

  In March 1999, Edison Mission Energy Holdings Co. (EME Holdings), parent
company of EME Homer City, closed a $1.1 billion financing and EME closed a $700
million financing.  The EME Holdings financing consists of (1) an $800 million,
364-day interest only term loan, (2) a $250 million, five-year interest only
construction term loan and (3) a $50 million, five-year interest only revolving
loan.  These loans are structured on a limited-recourse basis, in which the
lenders look primarily to the cash generated by EME Holdings and its
subsidiaries to repay the debt and have taken a security interest in the assets
of EME Holdings and its subsidiaries.  The EME financing consists of a $700
million, 364-day interest only revolving credit facility, structured on a
recourse, unsecured basis.  The proceeds of EME Holdings' $800 million loan and
EME's $700 million loan combined with cash and corporate revolver borrowings
totaling approximately $300 million, were used to finance the acquisition of
Homer City.

NOTE 5. COMMITMENTS AND CONTINGENCIES

FIRM COMMITMENTS FOR ASSET PURCHASES

<TABLE> 
<CAPTION> 

PROJECTS                                                    U.S. ($ IN MILLIONS)
--------                                                    --------------------
<S>                                                         <C>                 
Commonwealth Edison Co. (i)                                       $ 5,000 
Contact Energy Ltd. (Contact) (ii)                                    625      
</TABLE> 

(i) A wholly owned subsidiary of EME executed an Asset Sale Agreement to
    purchase the fossil-fuel generating assets of Commonwealth Edison Co.,
    totaling 9,772 MW located in the midwestern United States.  The closing of
    the transaction is subject to receipt of various state and federal
    regulatory approvals and is expected to be completed by year end 1999.

                                       7
<PAGE>
 
(ii) A wholly owned subsidiary of EME executed a Sale and Purchase Agreement to
     purchase 40% of Contact.  Contact owns and operates hydroelectric,
     geothermal and natural gas-fired power generating plants in New Zealand
     with a total generating capacity of 2,371 MW.  Contact also supplies gas
     and electricity to customers in New Zealand and has minority interests in
     two power projects in Australia. The acquisition is conditional on the New
     Zealand government completing an initial public offering of the remaining
     60% of Contact, planned for May 1999.

FIRM COMMITMENTS TO CONTRIBUTE PROJECT EQUITY

<TABLE>
<CAPTION>
PROJECTS                             LOCAL CURRENCY                   U.S. ($ IN MILLIONS)
--------                             --------------                   --------------------
<S>                                <C>                                <C>
ISAB (i)                           244 billion Italian Lira                  $ 136
Paiton (ii)                                                                     35
EcoElectrica (iii)                                                              34
Tri Energy (iv)                                                                 25
Doga (v)                                                                         4
</TABLE>

(i)   ISAB is a 512-MW integrated gasification combined cycle power plant under
      construction near Siracusa in Sicily, Italy. A wholly owned subsidiary of
      EME owns a 49% interest. Equity will be contributed at commercial
      operation, which is currently scheduled for late 1999.

(ii)  Paiton is a 1,230-MW coal-fired power plant under construction in East
      Java, Indonesia. A wholly owned subsidiary of EME owns a 40% interest.
      Equity contributions are currently being made and will continue until
      commercial operation, which is currently scheduled for 1999.

(iii) EcoElectrica is a 540-MW liquefied natural gas combined-cycle cogeneration
      facility under construction in Penuelas, Puerto Rico. A wholly owned
      subsidiary of EME owns a 50% interest. Equity will be contributed at
      commercial operation, which is currently scheduled for late 1999.

(iv)  Tri Energy is a 700-MW gas-fired power plant under construction in the
      Ratchaburi Province, Thailand. A wholly owned subsidiary of EME owns a 25%
      interest. Equity will be contributed at commercial operation, which is
      currently scheduled for mid-2000.

(v)   Doga is a 180-MW gas-fired power plant under construction near Istanbul,
      Turkey. A wholly owned subsidiary of EME owns an 80% interest. Equity
      contributions are currently being made and will continue until commercial
      operation, which is currently scheduled for the second quarter of 1999.

     Firm commitments to contribute project equity could be accelerated due to
certain events of default as defined in the non-recourse project financing
facilities.  Management has no reason to believe that these events of default
will occur to require acceleration of the firm commitments.

                                       8
<PAGE>
 
CONTINGENT OBLIGATIONS TO CONTRIBUTE PROJECT EQUITY

<TABLE> 
<CAPTION> 

PROJECTS                                                   U.S. ($ IN MILLIONS)
--------                                                   --------------------
<S>                                                        <C>    
Paiton (i)                                                         $141  
Tri Energy (ii)                                                      20    
Doga (ii)                                                            14    
Contact (ii)                                                         13    
All Other                                                            18    
</TABLE> 

(i)  Contingent obligations to contribute additional project equity (Contingent
     Equity) would be based on events principally related to capital cost
     overruns during the plant construction, certain partner obligations or
     events of default. These contingent obligations are to be cancelled (if
     unused) as of the date of term financing by the Export-Import Bank of the
     United States. Term financing by the Export-Import Bank of the United
     States is the subject of a comprehensive set of conditions and is scheduled
     to be achieved by October 1999. A dispute involving a slope adjacent to the
     Paiton site will require Contingent Equity to be contributed for amounts
     not otherwise covered by insurance. EME's share of the total costs related
     to the slope failure are currently estimated to be between $16 and $44
     million.

(ii) Contingent obligations to contribute additional equity to the project would
     be based on events principally related to capital cost overruns during
     plant construction, certain EME or partner obligations or events of
     default.
 
  Other than as noted above, management is not aware, at this time, of any other
contingent obligations or obligations to contribute project equity.

OTHER COMMITMENTS AND CONTINGENCIES

  Certain of EME's subsidiaries entered into indemnification agreements whereby
the subsidiaries agreed to repay capacity payments to the projects' power
purchasers, in the event the projects unilaterally terminate their performance
or reduce their electric power producing capability during the term of the power
contract.  Obligations under these indemnification agreements as of March 31,
1999, if payment were required, would be $252 million.  Management has no reason
to believe that the projects will either terminate their performance or reduce
their electric power producing capability during the term of the power
contracts.

  Paiton is a 1,230-MW coal-fired power plant under construction in East Java,
Indonesia.  A wholly owned subsidiary of EME owns a 40% interest and has a $349
million investment at March 31, 1999.  Construction on the two-unit Paiton
project is nearing completion.  The tariff is higher in the early years and
steps down over time.  The tariff for the Paiton project includes infrastructure
to be used in common by other units at the Paiton complex. The plant's output is
fully contracted with the state-owned electricity company, PT Perusahaan Listrik
Negara (PLN).  Payments are in Indonesian Rupiah, with the portion of such
payments intended to cover non-Rupiah project costs (including 

                                       9
<PAGE>
 
returns to investors) indexed to the Indonesian Rupiah/U.S. dollar exchange rate
established at the time of the Power Purchase Agreement in February 1994. PLN's
payment obligations are supported by the Government of Indonesia. The projected
rate of growth of the Indonesian economy and the exchange rate of Indonesian
Rupiah into U.S. dollars have deteriorated significantly since the Paiton
project was contracted, approved and financed. The project received substantial
finance and insurance support from the Export-Import Bank of the United States,
The Export-Import Bank of Japan, the U.S. Overseas Private Investment
Corporation and the Ministry of International Trade and Industry of Japan. The
Paiton project's senior debt ratings have been reduced from investment grade to
speculative grade based on the rating agencies' perceived increased risk that
PLN might not be able to honor the electricity sales contract with Paiton. The
Government of Indonesia has arranged to reschedule sovereign debt owed to
foreign governments and has entered into discussions about rescheduling
sovereign debt owed to private lenders. PLN has announced its intentions to
commence discussions with independent power producers to renegotiate the power
supply contracts, however it is not yet known what form the renegotiation may
take. The initial meeting on these renegotiations is scheduled in May 1999. Any
material modifications of the contract could also require a renegotiation of the
Paiton project's debt agreement. The impact of any such renegotiations with PLN,
the Government of Indonesia or the project's creditors on EME's expected return
on its investment in Paiton is uncertain at this time, however, management
believes that it will ultimately recover its investment in the project.

  Brooklyn Navy Yard is a 286-MW gas-fired cogeneration power plant in Brooklyn,
New York.  A wholly owned subsidiary of EME owns 50% of the project.  In
February 1997, the construction contractor asserted general monetary claims
under the turnkey agreement against Brooklyn Navy Yard Cogeneration Partners,
L.P. (BNY) for damages in the amount of $136.8 million.  BNY has asserted
general monetary claims against the contractor.  In connection with a $407
million non-recourse project refinancing in 1997, EME agreed to indemnify BNY
and its partner from all claims and costs arising from or in connection with the
contractor litigation, which indemnity has been assigned to the lenders.  EME
believes that the outcome of this litigation will not have a material adverse
effect on its financial position or results of operations.

  EME's projected construction expenditures that will be funded utilizing non-
recourse project financing are $14 million at March 31, 1999.

LITIGATION

  EME is routinely involved in litigation arising in the normal course of
business.  While the results of such litigation cannot be predicted with
certainty, management, based on advice of counsel, does not believe that the
final outcome of any pending litigation will have a material adverse effect on
EME's financial position or results of operations.

                                       10
<PAGE>
 
ENVIRONMENTAL MATTERS

     EME is subject to environmental regulation by federal, state and local
authorities in the U.S. and foreign regulatory authorities with jurisdiction
over projects located outside the U.S.  EME believes that it is in substantial
compliance with environmental regulatory requirements and that maintaining
compliance with current requirements will not materially affect its financial
position or results of operations.

     EME completed a partial review of its sites in 1995 and does not believe
that a material liability exists as of March 31, 1999. The implementation of
Clean Air Act Amendments is expected to result in increased operating expenses;
however, these increased operating expenses are not expected to have a material
impact on EME's financial position or results of operations.

NOTE 6. BUSINESS SEGMENTS

     EME operates predominately in one line of business, electric power
generation, with reportable segments organized by geographic region: Americas,
Asia Pacific and Europe, Central Asia, Middle East and Africa. EME's plants are
located in different geographic areas, which mitigate the effects of regional
markets, economic downturns or unusual weather conditions. These regions take
advantage of the increasing globalization of the independent power market.

     Electric power and steam generated domestically is sold primarily under
long-term contracts to electric utilities and industrial steam users located in
the U.S. Excluding the U.K. and a project in Australia, electric power generated
overseas is sold primarily under long-term contracts to electric utilities
located in the country where the power is generated. Projects located in the
U.K. and a project in Australia sell their energy and capacity production
through a centralized electricity pool. These projects enter into short- and/or
long-term contracts to hedge against the volatility of price fluctuations in the
pool. Intercompany transactions have been eliminated in the following segment
information.

<TABLE>
<CAPTION>
                                                                       Europe,     
          (In thousands)                                            Central Asia,  
        Three Months Ended                             Asia          Middle East      Corporate/                       
          March 31, 1999              Americas        Pacific         and Africa       Other/(i)/      Total              
          --------------              --------       ---------        ----------       --------        -----               
<S>                                 <C>              <C>              <C>            <C>             <C> 
Operating revenues                  $     83.4       $    51.0        $  135.4        $     --       $  269.8            
Net income (loss)                         31.2            (5.5)           22.7            (4.3)          44.1            
Total assets                           2,973.6         1,745.6         2,212.0              --        6,931.2            
                             
          March 31, 1998     
          --------------     
Operating revenues                  $     29.4       $    54.1        $  148.4        $     --       $  231.9            
Net income (loss)                         10.2             5.2            27.6            (5.3)          37.7            
Total assets                             901.3         1,779.5         2,421.5              --        5,102.3            
</TABLE>

(i)  Includes corporate net interest expense

                                       11
<PAGE>
 
NOTE 7. SUBSEQUENT EVENTS

     In April 1999, EME entered into agreements to acquire the Ferrybridge and
Fiddler's Ferry electric generating plants from the U.K.'s PowerGen for
approximately $2 billion. Each plant has a generating capacity of approximately
2,000 MW.

     The purchase is subject to regulatory approval in accordance with U.K.
merger control legislation pursuant to an undertaking given by PowerGen to the
U.K. Government last year that allowed PowerGen to buy the East Midlands
Electricity Regional Electricity Company. EME plans to finance the acquisition
with a combination of debt secured by the project, corporate debt, cash and
funding from Edison International. The transaction is expected to close in the
second quarter of 1999.

                                       12
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     This Quarterly Report on Form 10-Q includes certain forward-looking
statements, the realization of which may be affected by certain important
factors discussed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" thereunder and elsewhere herein.

GENERAL
-------

     Edison Mission Energy (EME) is a leading global power producer. Through its
subsidiaries, EME is engaged in the business of developing, acquiring, owning
and operating electric power generation facilities worldwide. EME's current
investments include 53 projects totaling 12,399 megawatts (MW) of generation
capacity, of which 9,237 are in operation and 3,162 are under construction. In
addition, three operating projects totaling 16,280 MW of generating capacity are
pending acquisition.

     EME's operating revenues are derived primarily from electric revenues and
equity in income from energy projects.  Operating revenues also include equity
in income from oil and gas investments and revenue attributable to operation and
maintenance services.

     Electric revenues are derived from consolidated results of operations of
one domestic and several international entities. Equity in income from energy
projects relates to EME's ownership interest of 50% or less voting stock in
projects. The equity method of accounting is generally used to account for the
operating results of entities over which EME has a significant influence but in
which it does not have a controlling interest. With respect to entities
accounted for under the equity method, EME recognizes its proportional share of
the income or loss of such entities.

ACQUISITION
-----------

     In March 1999, EME Homer City Generation L.P. (EME Homer City), an
indirect, wholly owned affiliate of EME, completed a transaction with GPU, Inc.,
New York State Electric & Gas Corporation and their respective affiliates to
acquire the 1,884-MW Homer City Electric Generating Station and certain
facilities and other assets associated therewith (collectively, Homer City).

     Consideration for Homer City consisted of a cash payment of approximately
$1.8 billion. Pursuant to the Asset Purchase Agreement, EME guarantees all
obligations of EME Homer City under the Asset Purchase Agreement.

     The acquisition was accounted for utilizing the purchase method. EME's
consolidated statement of income for the three months ended March 31, 1999
reflects the operations of Homer City beginning on March 18, 1999.

                                       13
<PAGE>
 
RESULTS OF OPERATIONS
---------------------

OPERATING REVENUES  Operating revenues increased $37.9 million for the first
quarter of 1999, compared with the first quarter of 1998, resulting primarily
from an increase in equity in income from energy projects. Equity in income from
energy projects increased $43.2 million during the first quarter of 1999,
compared with the same prior year period. This increase was primarily the result
of higher revenues from several cogeneration projects due to a final settlement
on energy pricing for prior years and from one cogeneration project as the
result of a gain on termination of a power sales agreement.

OPERATING EXPENSES  Operating expenses increased $23 million for the first
quarter of 1999, compared with the same prior year period. This increase was due
to higher fuel, plant operations and administrative and general expenses. The
increases in fuel expense and plant operations are primarily the result of the
acquisition of Homer City in March 1999. The administrative and general expense
increase was primarily related to increased project development/acquisition
costs.

OTHER INCOME (EXPENSE)  Interest and other income decreased $6 million for the
first quarter of 1999, compared with the first quarter of 1998.  The decrease
was primarily due to less interest earned on lower cash balances.

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE In April 1998, the American
Institute of Certified Public Accountants issued Statement of Position (SOP) 98-
5, "Reporting on the Costs of Start-Up Activities", which became effective in
January 1999.  The Statement requires that certain costs related to start-up
activities be expensed as incurred and that certain previously capitalized costs
be expensed and reported as a cumulative change in accounting principle.  The
impact of adopting SOP 98-5 on EME's net income was $13.8 million, after-tax.

PROVISION FOR INCOME TAXES  EME recorded an effective tax provision rate of 22%
for the three months ended March 31, 1999, compared with a 41% rate for the same
prior year period.  The decrease in the 1999 effective tax rate was primarily
due to lower foreign income taxes that result from the permanent reinvestment of
earnings from foreign affiliates located in different foreign tax jurisdictions.

LIQUIDITY AND CAPITAL RESOURCES  For the three months ended March 31, 1999, net
cash provided by operating activities decreased to $59.1 million from $103.4
million for the same period in 1998.  The 1999 decrease primarily reflects
higher income taxes, lower distributions from energy projects and higher working
capital requirements.

     Net cash provided by financing activities totaled $1,708.8 million during
the first quarter of 1999, compared to net cash used in financing activities of
$2.7 million in 1998 for the same prior year period. The 1999 increase is
primarily due to the Edison Mission Energy Holding Co., parent company of EME
Homer City, borrowing of $800 million,

                                       14
<PAGE>
 
EME financing of $700 million, and borrowing on the corporate revolver of $220
million, the proceeds of which were used to purchase Homer City.

     Net cash used in investing activities increased to $1,834.1 million for the
three months ended March 31, 1999 from $16.5 million for the three months ended
March 31, 1998. The increase is primarily due to the purchase of Homer City.

     At March 31, 1999, EME had cash and cash equivalents of $387.1 million and
had available $224 million of borrowing capacity under a $500 million revolving
credit facility that expires in 2001. This borrowing capacity under the
revolving credit facility may be reduced by borrowings for firm commitments to
contribute project equity and to fund capital expenditures and construction
costs of its project facilities.

FIRM COMMITMENTS FOR ASSET PURCHASES

<TABLE> 
<CAPTION> 

PROJECTS                                                    U.S. ($ IN MILLIONS)
--------                                                    --------------------
<S>                                                         <C> 
Commonwealth Edison Co. (i)                                       $ 5,000
Contact Energy Ltd. (Contact) (ii)                                    625   
</TABLE> 

(i)  A wholly owned subsidiary of EME executed an Asset Sale Agreement to
     purchase the fossil-fuel generating assets of Commonwealth Edison Co.,
     totaling 9,772 MW located in the midwestern United States. The closing of
     the transaction is subject to receipt of various state and federal
     regulatory approvals and is expected to be completed by year end 1999.

(ii) A wholly owned subsidiary of EME executed a Sale and Purchase Agreement to
     purchase 40% of Contact.  Contact owns and operates hydroelectric,
     geothermal and natural gas-fired power generating plants in New Zealand
     with a total generating capacity of 2,371 MW.  Contact also supplies gas
     and electricity to customers in New Zealand and has minority interests in
     two power projects in Australia. The acquisition is conditional on the New
     Zealand government completing an initial public offering of the remaining
     60% of Contact, planned for May 1999.

FIRM COMMITMENTS TO CONTRIBUTE PROJECT EQUITY

<TABLE> 
<CAPTION> 

PROJECTS                    LOCAL CURRENCY                  U.S. ($ IN MILLIONS)
--------                    --------------                  --------------------
<S>                      <C>                                <C> 
ISAB (i)                 244 billion Italian Lira                    $136
Paiton (ii)                                                            35
EcoElectrica (iii)                                                     34
Tri Energy (iv)                                                        25
Doga (v)                                                                4
</TABLE> 

(i)  ISAB is a 512-MW integrated gasification combined cycle power plant under
     construction near Siracusa in Sicily, Italy. A wholly owned subsidiary of
     EME owns a 49% interest. Equity will be contributed at commercial
     operation, which is currently scheduled for late 1999.

                                       15
<PAGE>
 
(ii)  Paiton is a 1,230-MW coal-fired power plant under construction in East
      Java, Indonesia. A wholly owned subsidiary of EME owns a 40% interest.
      Equity contributions are currently being made and will continue until
      commercial operation, which is currently scheduled for 1999.

(iii) EcoElectrica is a 540-MW liquefied natural gas combined-cycle cogeneration
      facility under construction in Penuelas, Puerto Rico. A wholly owned
      subsidiary of EME owns a 50% interest. Equity will be contributed at
      commercial operation, which is currently scheduled for late 1999.

(iv)  Tri Energy is a 700-MW gas-fired power plant under construction in the
      Ratchaburi Province, Thailand. A wholly owned subsidiary of EME owns a 25%
      interest. Equity will be contributed at commercial operation, which is
      currently scheduled for mid-2000.

(v)   Doga is a 180-MW gas-fired power plant under construction near Istanbul,
      Turkey. A wholly owned subsidiary of EME owns an 80% interest. Equity
      contributions are currently being made and will continue until commercial
      operation, which is currently scheduled for the second quarter of 1999.

      Firm commitments to contribute project equity could be accelerated due to
certain events of default as defined in the non-recourse project financing
facilities.  Management has no reason to believe that these events of default
will occur to require acceleration of the firm commitments.

CONTINGENT OBLIGATIONS TO CONTRIBUTE PROJECT EQUITY

<TABLE> 
<CAPTION>  

PROJECTS                                                   U.S. ($ IN MILLIONS)
--------                                                   --------------------
<S>                                                        <C>  
Paiton (i)                                                        $141 
Tri Energy (ii)                                                     20
Doga (ii)                                                           14
Contact (ii)                                                        13
All Other                                                           18 
</TABLE> 

(i)   Contingent obligations to contribute additional project equity (Contingent
      Equity) would be based on events principally related to capital cost
      overruns during the plant construction, certain partner obligations or
      events of default. These contingent obligations are to be cancelled (if
      unused) as of the date of term financing by the Export-Import Bank of the
      United States. Term financing by the Export-Import Bank of the United
      States is the subject of a comprehensive set of conditions and is
      scheduled to be achieved by October 1999. A dispute involving a slope
      adjacent to the Paiton site will require Contingent Equity to be
      contributed for amounts not otherwise covered by insurance. EME's share of
      the total costs related to the slope failure are currently estimated to be
      between $16 and $44 million.

                                       16
<PAGE>
 
(ii) Contingent obligations to contribute additional equity to the project would
     be based on events principally related to capital cost overruns during
     plant construction, certain EME or partner obligations or events of
     default.

     Other than as noted above, management is not aware, at this time, of any
other contingent obligations or obligations to contribute project equity.

OTHER COMMITMENTS AND CONTINGENCIES

     Certain of EME's subsidiaries entered into indemnification agreements
whereby the subsidiaries agreed to repay capacity payments to the projects'
power purchasers, in the event the projects unilaterally terminate their
performance or reduce their electric power producing capability during the term
of the power contract. Obligations under these indemnification agreements as of
March 31, 1999, if payment were required, would be $252 million. Management has
no reason to believe that the projects will either terminate their performance
or reduce their electric power producing capability during the term of the power
contracts.

     Paiton is a 1,230-MW coal-fired power plant under construction in East
Java, Indonesia. A wholly owned subsidiary of EME owns a 40% interest and has a
$349 million investment at March 31, 1999. Construction on the two-unit Paiton
project is nearing completion. The tariff is higher in the early years and steps
down over time. The tariff for the Paiton project includes infrastructure to be
used in common by other units at the Paiton complex. The plant's output is fully
contracted with the state-owned electricity company, PT Perusahaan Listrik
Negara (PLN). Payments are in Indonesian Rupiah, with the portion of such
payments intended to cover non-Rupiah project costs (including returns to
investors) indexed to the Indonesian Rupiah/U.S. dollar exchange rate
established at the time of the Power Purchase Agreement in February 1994. PLN's
payment obligations are supported by the Government of Indonesia. The projected
rate of growth of the Indonesian economy and the exchange rate of Indonesian
Rupiah into U.S. dollars have deteriorated significantly since the Paiton
project was contracted, approved and financed. The project received substantial
finance and insurance support from the Export-Import Bank of the United States,
The Export-Import Bank of Japan, the U.S. Overseas Private Investment
Corporation and the Ministry of International Trade and Industry of Japan. The
Paiton project's senior debt ratings have been reduced from investment grade to
speculative grade based on the rating agencies' perceived increased risk that
PLN might not be able to honor the electricity sales contract with Paiton. The
Government of Indonesia has arranged to reschedule sovereign debt owed to
foreign governments and has entered into discussions about rescheduling
sovereign debt owed to private lenders. PLN has announced its intentions to
commence discussions with independent power producers to renegotiate the power
supply contracts, however it is not yet known what form the renegotiation may
take. The initial meeting on these renegotiations is scheduled in May 1999. Any
material modifications of the contract could also require a renegotiation of the
Paiton project's debt agreement. The impact of any such renegotiations with PLN,
the Government of Indonesia or the project's creditors 

                                       17
<PAGE>
 
on EME's expected return on its investment in Paiton is uncertain at this time,
however, management believes that it will ultimately recover its investment in
the project.

     Brooklyn Navy Yard is a 286-MW gas-fired cogeneration power plant in
Brooklyn, New York. A wholly owned subsidiary of EME owns 50% of the project. In
February 1997, the construction contractor asserted general monetary claims
under the turnkey agreement against Brooklyn Navy Yard Cogeneration Partners,
L.P. (BNY) for damages in the amount of $136.8 million. BNY has asserted general
monetary claims against the contractor. In connection with a $407 million non-
recourse project refinancing in 1997, EME agreed to indemnify BNY and its
partner from all claims and costs arising from or in connection with the
contractor litigation, which indemnity has been assigned to the lenders. EME
believes that the outcome of this litigation will not have a material adverse
effect on its financial position or results of operations.

     EME's projected construction expenditures that will be funded utilizing 
non-recourse project financing are $14 million at March 31, 1999.

     EME and its subsidiaries may incur additional obligations to make equity
and other contributions to projects in the future. EME believes that it will
have sufficient liquidity on both a short- and long-term basis to fund pre-
financing project development costs, make equity contributions to partnerships,
pay corporate debt obligations and pay other administrative and general expenses
as they are incurred from (1) distributions from energy projects and dividends
from investments in oil and gas, (2) proceeds from the repayment of loans to
energy projects and (3) funds available from EME's revolving credit facility.

CHANGES IN INTEREST RATES, CHANGES IN ELECTRICITY POOL PRICING, FOREIGN CURRENCY
FLUCTUATIONS AND OTHER CONTRACTUAL OBLIGATIONS    Changes in interest rates,
changes in electricity pool pricing and fluctuations in foreign currency
exchange rates can have a significant impact on EME's results of operations.
Interest rate changes affect the cost of capital needed to construct and finance
projects.  EME has mitigated the risk of interest rate fluctuations by arranging
for fixed rate financing or variable rate financing with interest rate swaps or
other hedging mechanisms for the majority of its project financing.  Interest
expense included $6.2 million and $6.1 million for the three months ended March
31, 1999, and 1998, respectively, as a result of interest rate swap and collar
agreements.  EME has entered into several interest rate swap and collar
agreements whereby the maturity date of the swaps and collars occurs prior to
the final maturity of the underlying debt.  EME does not believe that interest
rate fluctuations will have a material adverse effect on its financial position
or results of operations.

     Projects in the U.K. sell their electrical energy and capacity through a
centralized electricity pool, which establishes a half-hourly clearing price
(also referred to as the "pool price") for electrical energy.  The pool price is
extremely volatile and can vary by as much as a factor of ten or more over the
course of a few hours, due to the large differentials in demand according to the
time of day.  First Hydro mitigates a portion of the market risk of the pool by
entering into contracts for differences (electricity rate swap 

                                       18
<PAGE>
 
agreements), related to either the selling or purchasing price of power, whereby
a contract specifies a price at which the electricity will be traded, and the
parties to the agreement make payments, calculated based on the difference
between the price in the contract and the pool price for the element of power
under contract. These contracts are sold in various structures. These contracts
act as a means of stabilizing production revenues or purchasing costs by
removing an element of First Hydro's net exposure to pool price volatility. On
July 29, 1998, the Director General of Electricity Supply proposed to the
Minister for Science, Energy and Industry that the current structure of
contracts-for-differences and compulsory trading via the pool at half-hourly
clearing prices bid a day ahead be abolished. He proposed in its place, among
other things, the establishment of voluntary forwards and futures markets,
organized by independent market operators and evolving in response to demand; a
short-term bilateral market operating from 24 to 4-hours before a trading
period; a balancing market to enable the system operator to balance generation
and demand and resolve any transmission constraints; a settlement process for
recovering imbalances between contracted and metered volumes with stronger
incentives for being in balance; and a Balancing and Settlement Code Panel to
oversee governance of the short-term bilateral and balancing markets. The
Minister for Science, Energy and Industry has recommended that the proposal be
implemented by April 2000. Further definition of the proposal will be required
before the effects of the changes can be evaluated. Implementation of the
proposal may also require legislation.

     Loy Yang B sells its electrical energy through a centralized electricity
pool (the National Electricity Market) which provides for a system of generator
bidding, central dispatch and a settlements system based on a clearing market
for each half-hour of every day. The Victorian Power Exchange, operator and
administrator of the pool, determines a system marginal price each half-hour. To
mitigate exposure to price volatility of the electricity traded into the pool,
Loy Yang B has entered into a number of financial hedges. From May 8, 1997 to
December 31, 2000, approximately 53% to 64% of the plant output sold is hedged
under "Vesting Contracts" with the remainder of the plant capacity hedged under
the "State Hedge" described below. Vesting Contracts were put into place by the
State Government of Victoria, Australia (State), between each generator and each
distributor, prior to the privatization of electric power distributors in order
to provide more predictable pricing for those electricity customers that were
unable to choose their electricity retailer. Vesting Contracts set base strike
prices at which the electricity will be traded, and the parties to the agreement
make payments, calculated based on the difference between the price in the
contract and the half-hourly pool clearing price for the element of power under
contract. These contracts are sold in various structures. These contracts are
accounted for as electricity rate swap agreements. The State Hedge is a long-
term contractual arrangement based upon a fixed price commencing May 8, 1997,
and terminating October 31, 2016. The State guarantees SECV's obligations under
the State Hedge.

     EME's electric revenues were increased by $23.3 million and $50.7 million
for the three-month period ended March 31, 1999, and 1998, respectively, as a
result of electricity rate swap agreements.

                                       19
<PAGE>
 
     Electric power generated at Homer City is sold under bilateral arrangements
with domestic utilities and power marketers under short-term contracts (two
years or less) or to the Pennsylvania-New Jersey-Maryland Power Pool (PJM) or
the New York Power Pool (NYPP). These pools have short-term markets, which
establish an hourly clearing price. Homer City is situated in the PJM Control
Area and is physically connected to high-voltage transmission lines serving both
the PJM and NYPP markets. Power can also be transmitted to the midwestern United
States. EME has developed risk management policies and procedures which, among
other matters, address credit risk. It is EME's policy to sell to investment
grade counterparties. EME intends on hedging a portion of the electric output of
the plant in order to lock in desirable outcomes. It plans to manage the "spark
spread" or margin, that is the spread between electric prices and fuel prices
when deemed appropriate. It plans to use forward contracts, swaps, futures, or
options contracts to achieve those objectives.

     The electric power generated by EME's domestic operating projects,
excluding Homer City, is generally sold to electric utilities pursuant to long-
term (typically, 15 to 30-year) power sales contracts and is expected to result
in consistent cash flow under a wide range of economic and operating
circumstances. To accomplish this, EME structured its power sales contracts so
that fluctuations in fuel costs would produce similar fluctuations in electric
and/or steam revenues and entered into long-term fuel supply and transportation
agreements.

     Fluctuations in foreign currency exchange rates can affect, on a U.S.
dollar equivalent basis, the amount of EME's equity contributions to, and
distributions from, its foreign projects. As EME continues to expand into
foreign markets, fluctuations in foreign currency exchange rates can be expected
to have a greater impact on EME's results of operations in the future. At times,
EME has hedged a portion of its current exposure to fluctuations in foreign
exchange rates where it deems appropriate through financial derivatives,
offsetting obligations denominated in foreign currencies and indexing underlying
project agreements to U.S. dollars or other indices reasonably expected to
correlate with foreign exchange movements. In addition, EME has used statistical
forecasting techniques to help assess foreign exchange risk and the
probabilities of various outcomes. There can be no assurance, however, that
fluctuations in exchange rates will be fully offset by hedges or that currency
movements and the relationship between certain macro economic variables will
behave in a manner consistent with historical or forecasted relationships.

ENVIRONMENTAL MATTERS  EME is subject to environmental regulation by federal,
state and local authorities in the U.S. and foreign regulatory authorities with
jurisdiction over projects located outside the U.S.  EME believes that it is in
substantial compliance with environmental regulatory requirements and that
maintaining compliance with current requirements will not materially affect its
financial position or results of operations.

     EME completed a partial review of its sites in 1995 and does not believe
that a material liability exists as of March 31, 1999. The implementation of
Clean Air Act 

                                       20
<PAGE>
 
Amendments is expected to result in increased operating expenses; however, these
increased operating expenses are not expected to have a material impact on EME's
financial position or results of operations. 

YEAR 2000 ISSUE   EME has a comprehensive program in place to remediate
potential Year 2000 impacts from critical systems. EME divides its Year 2000
Issue activities into five phases: inventory, impact assessment, remediation,
documentation and certification. EME's plan is for critical systems to be
complete by July 1999. A critical system is defined as those applications and
systems, including embedded processor technology, which if not appropriately
remediated may have a significant impact on customers, the revenue stream,
regulatory compliance, or the health and safety of personnel. EME has
essentially completed all phases of the project and is going through the final
review and approval process, well ahead of the July date.

     Assurances from third party operated plants have been received indicating
aggressive Year 2000 remediation programs.  Monitoring of these efforts is
ongoing.  Plants under construction have obtained assurances from new
construction and development contractors, who have been requested to ensure this
is part of their goals.  General warranty of plants would likely include any
equipment issues that may arise regarding Year 2000 in the current year.

     The other essential component of the EME Year 2000 readiness program is to
identify and assess vendor products and business partners for Year 2000
readiness. EME has a process in place to identify and contact vendors and
business partners to determine their Year 2000 status, and is evaluating the
responses. EME's general policy requires that all newly purchased products be
Year 2000 ready or otherwise designed to allow EME to determine whether such
products present Year 2000 issues.

     Plant contingency plans have been developed and reviewed for any
significant issues and to schedule appropriate testing and/or training. Such
contingency plans include developing strategies for dealing with Year 2000-
related processing failures or malfunctions due to EME's internal systems or
from external parties. EME's contingency plans evaluate reasonably likely worst
case scenarios or conditions. EME does not expect the Year 2000 issue to have a
material adverse effect on its results of operations or financial position.
However, if not effectively remediated, negative effects from Year 2000 issues,
including those related to external systems, vendors, business partners, the
independent system operator, the power exchange or customers, could cause
results to differ.

STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 133  In June 1998, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities", which
will be effective in January 2000.  The Statement establishes accounting and
reporting standards requiring that every derivative instrument be recorded in
the balance sheet as either an asset or liability measured at its fair value.
The Statement requires that changes in the derivative's fair value be recognized
currently in 

                                       21
<PAGE>
 
earnings unless specific hedge accounting criteria are met. A derivative's gains
and losses for qualifying hedges offset related results on the hedged item in
the income statement and a company must formally document, designate and assess
the effectiveness of transactions that receive hedge accounting. The impact of
adopting Statement 133 on EME's financial statements has not been quantified at
this time.

ACQUISITIONS PENDING  In March 1999, EME entered into agreements to acquire the
fossil-fuel generating assets of Commonwealth Edison Co. (ComEd), totaling 9,772
MW.  EME will operate the plants, which are located in the midwestern United
States.  The closing of the transaction is subject to various state and federal
regulatory approvals and is expected to be completed by year end 1999.  EME
plans to finance the approximately $5 billion acquisition with a combination of
debt secured by the project, corporate debt, cash and funding from Edison
International.  The acquisition is expected to have an immaterial effect on
earnings in 1999, 2000 and 2001 as a result of transition contracts whereby
ComEd will retain power purchase agreements with EME, enabling ComEd access to
certain amounts of plant output for the next five years to serve its customers.

     In March 1999, EME entered into agreements to acquire 40% of Contact,
currently owned by the government of New Zealand.  Contact owns and operates
hydroelectric, geothermal and natural gas-fired power generating plants in New
Zealand with a total generating capacity of 2,371 MW.  Contact also supplies gas
and electricity to customers in New Zealand and has minority interests in two
power projects in Australia.  The acquisition is conditional on the New Zealand
government completing an initial public offering of the remaining 60% of
Contact, planned for May 1999.  EME plans to finance the approximately $625
million acquisition with debt secured by the project, corporate debt, cash and
funding from Edison International.  The acquisition is expected to have an
immaterial effect on earnings through 2001.

     In April 1999, EME entered into agreements to acquire the Ferrybridge and
Fiddler's Ferry electric generating plants from the U.K.'s PowerGen for
approximately $2 billion.  Each plant has a generating capacity of approximately
2,000 MW.  The purchase is subject to regulatory approval in accordance with
U.K. merger control legislation pursuant to an undertaking given by PowerGen to
the U.K. Government last year that allowed PowerGen to buy the East Midlands
Electricity Regional Electricity Company.  EME plans to finance the acquisition
with a combination of debt secured by the project, corporate debt, cash and
funding from Edison International.  The transaction is expected to close in the
second quarter of 1999.  The acquisition is expected to contribute to earnings
immediately after closing.

                                       22
<PAGE>
 
PART II - OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

OTHER EVENTS  In April 1999, EME entered into agreements to acquire the
Ferrybridge and Fiddler's Ferry electric generating plants from the United
Kingdom's PowerGen for approximately $2 billion.  Each plant has a generating
capacity of approximately 2,000 MW.

     The purchase is subject to regulatory approval in accordance with U.K.
merger control legislation pursuant to an undertaking given by PowerGen to the
U.K. Government last year that allowed PowerGen to buy the East Midlands
Electricity Regional Electricity Company. EME plans to finance the acquisition
with a combination of debt secured by the project, corporate debt, cash and
funding from Edison International. The transaction is expected to close in the
second quarter of 1999. The acquisition is expected to contribute to earnings
immediately after closing.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A)  EXHIBITS

     EXHIBIT NO.        DESCRIPTION
     -----------        -----------
        2.6        Agreement for the Sale and Purchase of Shares in Contract
                   Energy Limited between Her Majesty the Queen in Right of New
                   Zealand, Edison Mission Energy Taupo Limited and Edison
                   Mission Energy

       27          Financial Data Schedule


(B)  REPORTS ON FORM 8-K

     The registrant filed the following reports on Form 8-K during the quarter
     ended March 31, 1999.

     Date of Report    Date Filed      Item Reported
     --------------    ----------      -------------
     March 18, 1999    April 2, 1999        2

                                       23
<PAGE>
 
                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        EDISON MISSION ENERGY
                                    -----------------------------
                                            (Registrant)

Date: May 12, 1999                  /s/   THOMAS E. LEGRO
------------------                  -----------------------------
                                          THOMAS E. LEGRO,
                                         Vice President and 
                                             Controller         

                                       24