FORM 10-Q


                       SECURlTlES AND EXCHANGE COMMlSSlON
                             WASHINGTON, D. C. 20549


             Quarterly Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


      For the quarterly period ended
                June 30, 1999             Commission File Number  1-8644



                            IPALCO ENTERPRISES, INC.
             (Exact name of Registrant as specified in its charter)

          Indiana                                                35-1575582
 (State or other jurisdiction                               (I.R.S. Employer
   of incorporation or organization)                         Identification No.)

          One Monument Circle
          Indianapolis, Indiana                                    46204
 (Address of principal executive offices)                        (Zip Code)


 Registrant's telephone number, including area code:  317-261-8261



     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 the
filing requirements for at least the past 90 days.  Yes X    No
                                                       ---     ---

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

      Class                                     Outstanding At June 30, 1999
      -----                                     ----------------------------
Common (Without Par Value)                             85,718,614 Shares


<PAGE>

                    IPALCO ENTERPRISES, INC. AND SUBSIDIARIES
                    -----------------------------------------

                                      INDEX
                                      -----



                                                                        Page No.
                                                                        --------

PART I.   FINANCIAL INFORMATION
-------   ---------------------

         Statements of Consolidated Income - Three Months Ended and
          Six Months Ended June 30, 1999 and 1998                             2

         Consolidated Balance Sheets - June 30, 1999 and
            December 31, 1998                                                 3

         Statements of Consolidated Cash Flows -
            Six Months Ended June 30, 1999 and 1998                           4

         Notes to Consolidated Financial Statements                         5-7

         Management's Discussion and Analysis of
            Financial Condition and Results of Operations                  8-16

PART II.  OTHER INFORMATION                                               17-18
--------  -----------------

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>

                    IPALCO ENTERPRISES, INC. and SUBSIDIARIES
                        Statements of Consolidated Income
                     (In Thousands Except Per Share Amounts)
                                   (Unaudited)
<CAPTION>

                                                          Three Months Ended                      Six Months Ended
                                                               June 30                                June 30
                                                        1999               1998                1999               1998
                                                   --------------     --------------      --------------     --------------
UTILITY OPERATING REVENUES:
<S>                                                <C>                <C>                 <C>                <C>
  Electric                                         $     195,843      $     198,539       $     385,455      $     377,448
  Steam                                                    7,167              8,167              18,386             19,579
                                                   --------------     --------------      --------------     --------------
    Total operating revenues                             203,010            206,706             403,841            397,027
                                                   --------------     --------------      --------------     --------------

UTILITY OPERATING EXPENSES:
  Operation:
    Fuel                                                  43,029             43,209              88,943             84,249
    Other                                                 32,762             38,425              63,520             73,346
  Power purchased                                          3,367              2,842               4,028              3,849
  Purchased steam                                          1,668              1,226               3,363              3,116
  Maintenance                                             13,847             15,295              36,827             35,035
  Depreciation and amortization                           26,775             25,378              53,354             50,663
  Taxes other than income taxes                            8,685              8,636              17,621             17,458
  Income taxes - net                                      23,443             22,497              43,500             39,971
                                                   --------------     --------------      --------------     --------------
    Total operating expenses                             153,576            157,508             311,156            307,687
                                                   --------------     --------------      --------------     --------------
UTILITY OPERATING INCOME                                  49,434             49,198              92,685             89,340
                                                   --------------     --------------      --------------     --------------

OTHER INCOME AND (DEDUCTIONS):
  Allowance for equity funds used
      during construction                                    319                260                 670                525
  Other - net                                               (536)             1,148                (664)               722
  Income taxes - net                                       2,592              1,818               4,648              4,670
                                                   --------------     --------------      --------------     --------------
    Total other income - net                               2,375              3,226               4,654              5,917
                                                   --------------     --------------      --------------     --------------
INCOME BEFORE INTEREST AND OTHER CHARGES                  51,809             52,424              97,339             95,257
                                                   --------------     --------------      --------------     --------------

INTEREST AND OTHER CHARGES:
  Interest                                                16,549             16,316              31,900             33,307
  Allowance for borrowed funds used
      during construction                                   (196)              (192)               (417)              (396)
  Preferred stock transactions                               804                491               1,607              1,200
                                                   --------------     --------------      --------------     --------------
    Total interest and other charges - net                17,157             16,615              33,090             34,111
                                                   --------------     --------------      --------------     --------------

NET INCOME                                         $      34,652      $      35,809       $      64,249      $      61,146
                                                   ==============     ==============      ==============     ==============


BASIC EARNINGS PER SHARE (Note 2)                  $        0.40      $        0.40       $        0.74      $        0.68
                                                   ==============     ==============      ==============     ==============

DILUTED EARNINGS PER SHARE (Note 2)                $        0.40      $        0.39       $        0.74      $        0.67
                                                   ==============     ==============      ==============     ==============

See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>

                                 IPALCO ENTERPRISES, INC. and SUBSIDIARIES
                                        Consolidated Balance Sheets
                                               (In Thousands)
                                                (Unaudited)
<CAPTION>
                                                                              June 30            December 31
                              ASSETS                                           1999                 1998
                              ------
                                                                          --------------       --------------
UTILITY PLANT:
<S>                                                                       <C>                  <C>
  Utility plant in service                                                $   2,884,819        $   2,859,899
  Less accumulated depreciation                                               1,252,067            1,202,356
                                                                          --------------       --------------
      Utility plant in service - net                                          1,632,752            1,657,543
  Construction work in progress                                                  87,879               80,198
  Property held for future use                                                   10,719               10,719
                                                                          --------------       --------------
      Utility plant - net                                                     1,731,350            1,748,460
                                                                          --------------       --------------
OTHER ASSETS:
  Nonutility property - at cost, less accumulated depreciation                   70,568               71,834
  Other investments                                                              13,272               12,234
                                                                          --------------       --------------
      Other assets - net                                                         83,840               84,068
                                                                          --------------       --------------
CURRENT ASSETS:
  Cash and cash equivalents                                                      25,199                9,075
  Accounts receivable and unbilled revenue
   (less allowance for doubtful accounts
   1999, $1,186 and 1998, $1,212)                                                37,819               39,702
  Fuel - at average cost                                                         40,109               39,147
  Materials and supplies - at average cost                                       46,178               48,624
  Tax refund receivable                                                           1,807                9,647
  Prepayments and other current assets                                            6,020                4,863
                                                                          --------------       --------------
      Total current assets                                                      157,132              151,058
                                                                          --------------       --------------
DEFERRED DEBITS:
  Regulatory assets                                                             112,651              116,801
  Miscellaneous                                                                  18,464               18,558
                                                                          --------------       --------------
      Total deferred debits                                                     131,115              135,359
                                                                          --------------       --------------
              TOTAL                                                       $   2,103,437        $   2,118,945
                                                                          ==============       ==============

                  CAPITALIZATION AND LIABILITIES
                  ------------------------------
CAPITALIZATION:
  Common shareholders' equity:
    Common stock                                                          $     441,150        $     434,681
    Unearned compensation - restricted stock awards                              (4,041)              (5,384)
    Premium on 4% cumulative preferred stock                                        649                  649
    Retained earnings                                                           651,475              612,941
    Treasury stock, at cost                                                    (557,178)            (468,696)
                                                                          --------------       --------------
      Total common shareholders' equity                                         532,055              574,191
  Cumulative preferred stock of subsidiary                                       59,135               59,135
  Long-term debt (less current maturities and
   sinking fund requirements)                                                   871,403              907,974
                                                                          --------------       --------------
      Total capitalization                                                    1,462,593            1,541,300
                                                                          --------------       --------------
CURRENT LIABILITIES:
  Notes payable - banks and commercial paper                                      6,623               25,200
  Current maturities and sinking fund requirements                               85,025                1,425
  Accounts payable and accrued expenses                                          57,007               71,835
  Dividends payable                                                              13,913               13,392
  Taxes accrued                                                                  36,443               20,723
  Interest accrued                                                               14,510               14,376
  Other current liabilities                                                      13,019               13,731
                                                                          --------------       --------------
      Total current liabilities                                                 226,540              160,682
                                                                          --------------       --------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
  Accumulated deferred income taxes - net                                       322,797              318,327
  Unamortized investment tax credit                                              40,609               41,993
  Accrued postretirement benefits                                                 7,456               10,768
  Accrued pension benefits                                                       38,581               39,953
  Miscellaneous                                                                   4,861                5,922
                                                                          --------------       --------------
      Total deferred credits and other long-term liabilities                    414,304              416,963
                                                                          --------------       --------------

COMMITMENTS AND CONTINGENCIES
              TOTAL                                                       $   2,103,437        $   2,118,945
                                                                          ==============       ==============

See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>

                                IPALCO ENTERPRISES, INC. and SUBSIDIARIES
                                  Statements of Consolidated Cash Flows
                                             (In Thousands)
                                               (Unaudited)
<CAPTION>

                                                                                 Six Months Ended
                                                                                     June 30
                                                                              1999               1998
                                                                         --------------     --------------
CASH FLOWS FROM OPERATIONS:
<S>                                                                      <C>                <C>
  Net income                                                             $      64,249      $      61,146
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                                               55,322             51,666
    Amortization of regulatory assets                                            5,161              5,184
    Deferred income taxes and investment tax credit adjustments - net            1,562             (1,395)
    Allowance for funds used during construction                                (1,087)              (921)
  Change in certain assets and liabilities:
    Accounts receivable                                                          1,883              8,294
    Fuel, materials and supplies                                                 1,484              4,225
    Accounts payable and accrued expenses                                      (14,828)           (12,871)
    Taxes accrued                                                               15,720             14,594
    Accrued pension benefits                                                    (1,372)               993
    Other - net                                                                  2,002             (2,547)
                                                                         --------------     --------------
Net cash provided by operating activities                                      130,096            128,368
                                                                         --------------     --------------

CASH FLOWS FROM INVESTING:
  Construction expenditures - utility                                          (33,761)           (32,525)
  Construction expenditures - nonutility                                          (317)            (1,882)
  Other                                                                         (2,276)             2,505
                                                                         --------------     --------------
Net cash used in investing activities                                          (36,354)           (31,902)
                                                                         --------------     --------------

CASH FLOWS FROM FINANCING:
  Issuance of long-term debt                                                   117,400             -
  Issuance of preferred stock                                                   -                  50,000
  Retirement of long-term debt                                                 (70,400)           (89,000)
  Short-term debt - net                                                        (18,577)           (25,700)
  Common dividends paid                                                        (25,203)           (23,516)
  Issuance of common stock related to incentive compensation plans               8,592              3,852
  Reacquired common stock                                                      (88,482)              (528)
  Other                                                                           (948)             1,913
                                                                         --------------     --------------
Net cash used in financing activities                                          (77,618)           (82,979)
                                                                         --------------     --------------
Net increase in cash and cash equivalents                                       16,124             13,487
Cash and cash equivalents at beginning of period                                 9,075             17,293
                                                                         --------------     --------------
Cash and cash equivalents at end of period                               $      25,199      $      30,780
                                                                         ==============     ==============

----------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash flow information:
  Cash paid during the period for:

    Interest (net of amount capitalized)                                 $      30,075      $      32,769
                                                                         ==============     ==============
    Income taxes                                                         $      16,730      $      17,085
                                                                         ==============     ==============
See notes to consolidated financial statements.
</TABLE>
<PAGE>
                   IPALCO ENTERPRISES, INC. AND SUBSIDIARIES
                   -----------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------


1.      GENERAL

        IPALCO  Enterprises,  Inc.  (IPALCO) owns all of the outstanding  common
        stock of its subsidiaries (collectively referred to as Enterprises). The
        consolidated  financial  statements  include the accounts of IPALCO, its
        utility  subsidiary,  Indianapolis  Power & Light  Company (IPL) and its
        unregulated    subsidiary,    Mid-America   Capital   Resources,    Inc.
        (Mid-America).   Mid-America   is  the  parent   company  of  nonutility
        energy-related businesses.

        The  preparation  of financial  statements in conformity  with generally
        accepted  accounting  principles  requires that  management make certain
        estimates and assumptions that affect the reported amounts of assets and
        liabilities  and disclosure of contingent  assets and liabilities at the
        date of the financial  statements.  The reported amounts of revenues and
        expenses  during  the  reporting  period  may  also be  affected  by the
        estimates and assumptions management is required to make. Actual results
        may differ from those estimates.

        In the opinion of management these  statements  reflect all adjustments,
        consisting of only normal recurring accruals,  including  elimination of
        all  significant  intercompany  balances  and  transactions,  which  are
        necessary  to a fair  statement  of the results for the interim  periods
        covered by such  statements.  Due to the seasonal nature of the electric
        utility business, the annual results are not generated evenly by quarter
        during the year.  Certain  amounts from prior year financial  statements
        have been  reclassified  to conform to the  current  year  presentation.
        These financial  statements and notes should be read in conjunction with
        the audited  consolidated  financial statements included in Enterprises'
        1998 Annual Report on Form 10-K.


2.      CAPITAL STOCK

           Common Stock
                                                 Shares                Amount
                                                 ------                ------

       Balance at December 31, 1998            88,863,026         $434,681,738
           Exercise of stock options              446,318            8,592,007
           Decrease from compensation plans       (61,374)          (2,123,347)
                                                                  ------------
       Balance at June 30, 1999                                   $441,150,398
                                                                  ============
           Less shares reacquired by Treasury  (3,529,356)
                                               ----------
       Shares issued and outstanding
          at June 30, 1999                     85,718,614
                                               ==========

       On  February  23,  1999,  the  IPALCO  Board of  Directors  authorized  a
        two-for-one   stock  split  of  IPALCO's   common   stock   issuable  to
        shareholders  at the close of business on March 5, 1999.  All references
        to share amounts of common stock and per share  information  reflect the
        stock split.

       On March 15, 1999, IPALCO completed its common stock repurchase plan that
        began in 1998.  IPALCO  repurchased  in the open market and in privately
        negotiated  transactions  6 million  shares  or 6.6% of its  outstanding
        stock for a total cost of $154 million.



       The following is a  reconciliation  of the weighted average common shares
        for the basic and diluted earnings per share computations:
<TABLE>
<CAPTION>
                                                            For the Period Ended June 30,
                                                            -----------------------------
                                                  Three Months Ended              Six Months Ended
                                               1999               1998           1999           1998
                                               -----------------------         ----------------------
                                                                     (In thousands)

<S>                                               <C>           <C>              <C>           <C>
       Weighted average common shares             85,718        89,848           86,468        89,762
       Dilutive effect of stock options              784         1,350              840         1,348
                                                  ------        ------           ------        ------
       Weighted average common
          and incremental shares                  86,502        91,198           87,308        91,110
                                                  ======        ======           ======        ======
</TABLE>



3.      LONG-TERM DEBT

        IPALCO's  Revolving  Credit  Facility  was  issued in April  1997 in the
        amount of $401 million.  The proceeds  were used to purchase,  through a
        self-tender offer,  shares of IPALCO's  outstanding common stock. During
        1998, IPALCO replaced the Revolver with a commercial paper facility. The
        Revolver  currently  has no  outstanding  balance but is  available  for
        future  borrowings.  During the second quarter of 1999, IPALCO decreased
        the outstanding balance of commercial paper from $248.6 million at March
        31, 1999, to $244 million at June 30, 1999.  The balance outstanding was
        $197 million at December 31, 1998.  Proceeds from the issue of debt
        during 1999 were  used for  IPALCO's  most  recent  common  stock
        repurchase program completed in March 1999.

        On  June  1,  1999,  Energy  Resources,  a  subsidiary  of  Mid-America,
        refinanced  its $9.5 million  7.25% note due 2011,  and its $9.3 million
        variable  rate  note due 2030,  with the  proceeds  of an $18.8  million
        variable rate note.  The interest rate on the new debt was 3.37% at June
        30, 1999.  The new $18.8  million  note has a $9.5  million  maturity on
        December 1, 2011 and the remainder is due on September 1, 2030.


4.      STOCK-BASED COMPENSATION

       A summary of options  issued  under  IPALCO's  stock  option  plans is as
follows:
<TABLE>
<CAPTION>

                                              Weighted Average           Range of Option             Number of
                                               Price per Share           Price per Share               Shares
                                               ---------------           ---------------               ------
<S>                                                  <C>                  <C>      <C>                <C>
Outstanding, December 31, 1998................       14.80                8.416 -  21.67              2,618,298
   Issued.....................................       23.38                         23.38                 72,000
   Exercised..................................       14.85                9.374 -  20.345              (446,318)
                                                                                                      ---------
Outstanding, June 30, 1999....................       15.07                8.416 -  23.38              2,243,980
                                                                                                      =========
</TABLE>

        Accounting  Principles Board (APB) Opinion No. 25, "Accounting for Stock
        Issued to Employees," and related  interpretations in accounting for the
        stock based plan have been applied by IPALCO.  No compensation  cost has
        been  recognized  for the stock option plans because the option price is
        equal to fair value at the grant  date.  Had  compensation  cost for the
        plans been  determined  based on the fair  value at the grant  dates for
        awards  under  the plans  consistent  with the  method of SFAS No.  123,
        "Accounting for Stock-Based  Compensation,"  Enterprises' net income for
        the six months  ended June 30,  1999,  would have  decreased  from $64.2
        million  ($.74 per share) to the pro forma amount of $64.1 million ($.73
        per  share).  Enterprises'  net  income and  earnings  per share for the
        similar period in 1998 would have decreased from $61.1 million ($.67 per
        share)  to the pro  forma  amount of $60.8  million  ($.67  per  share).
        Enterprises  estimated  the SFAS No.  123 fair  value by  utilizing  the
        binomial options pricing model with the following assumptions:  dividend
        yields of 2.5% to 6.9%,  risk-free rates of 6.4% to 6.9%,  volatility of
        12% to 16% and expected lives of 5 years.

        IPALCO has a Long-Term  Performance and Restricted Stock Incentive Plan.
        On January 4, 1999, an  additional  15,572 shares were issued to reflect
        the  addition  of new  participants.  During the first  quarter of 1999,
        76,946 shares of restricted stock were canceled in order to pay taxes on
        behalf of  participants  or as a result  of a  participant  electing  to
        receive cash in lieu of stock.


5.     SEGMENT REPORTING

       Enterprises has two business segments  (electric and "all other").  Steam
       operations  of IPL and all  subsidiaries  other than IPL were combined in
       the "all  other"  category.  Pretax  operating  income  for the  electric
       segment  was $72.3  million  and $70.6  million  and for the "all  other"
       segment was $3.0  million,  and $2.0  million for the three  months ended
       June 30, 1999, and 1998,  respectively.  Pretax  operating income for the
       electric  segment was $133.1  million and $125.2 million and for the "all
       other"  segment  was $6.1  million,  and $5.6  million for the six months
       ended June 30, 1999, and 1998, respectively.  Steam operations of IPL are
       included in the caption  UTILITY  OPERATING  INCOME.  All other operating
       components of all other  subsidiaries  other than IPL are included in the
       caption   "Other-net".   The  cost  of  property  and  plant,   excluding
       construction in progress and property held for future use, is as follows:

                                                June 30              December 31
                                                 1999                    1998
                                                 ----                    ----
                                                         (In Thousands)

Electric plant in service...............      $ 2,776,175           $ 2,752,539
All other...............................          200,280               198,679
                                             ------------          ------------
       Subtotal.........................      $ 2,976,455           $ 2,951,218
                                              ===========           ===========


6.      NEW ACCOUNTING STANDARD

        Statement  of  Financial   Accounting  Standards  No.  133  (SFAS  133),
        "Accounting  for Derivative  Instruments  and Hedging  Activities,"  was
        issued in June 1998 and was to be effective  for all fiscal  quarters of
        all fiscal years  beginning  after June 15, 1999. The effective date for
        this  standard  was  delayed one year by SFAS 137.  The  standard is now
        effective for all fiscal  quarters of all fiscal years  beginning  after
        June 15, 2000. SFAS 133 establishes  accounting and reporting  standards
        for derivative instruments and for hedging activities.  It requires that
        an entity  recognizes all derivatives as either assets or liabilities in
        the statement of financial  condition and measures those  instruments at
        fair  value.  If  certain  conditions  are  met,  a  derivative  may  be
        specifically  designated as a fair value hedge, a cash flow hedge,  or a
        hedge of a foreign currency exposure.  The accounting for changes in the
        fair value of a derivative  (that is,  gains and losses)  depends on the
        intended use of the derivative and the resulting designation. Management
        has  not  yet   quantified  the  effect  of  the  new  standard  on  the
        consolidated financial statements.



<PAGE>



Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

       In connection with the safe harbor  provisions of the Private  Securities
Litigation  Reform  Act of 1995  (the  Reform  Act),  IPALCO  Enterprises,  Inc.
(Enterprises)  is hereby  filing  cautionary  statements  identifying  important
factors that could cause  Enterprises'  actual results to differ materially from
those projected in  forward-looking  statements of Enterprises.  This Form 10-Q,
and particularly  Management's Discussion and Analysis and our discussion of the
Year 2000 issues, contains  forward-looking  statements.  The Reform Act defines
forward-looking  statements as statements  that express an expectation or belief
and contain a projection, plan or assumption with regard to, among other things,
future  revenues,   income,  earnings  per  share  or  capital  structure.  Such
statements  of  future  events  or  performance  are not  guarantees  of  future
performance  and  involve  estimates,  assumptions,  and  uncertainties  and are
qualified  in their  entirety  by  reference  to,  and are  accompanied  by, the
following  important  factors that could cause  Enterprises'  actual  results to
differ materially from those contained in forward-looking  statements made by or
on  behalf  of  Enterprises.  The  words  "anticipate,"  "believe,"  "estimate,"
"expect,"  "forecast,"   "project,"  "objective"  and  similar  expressions  are
intended to identify forward-looking statements.

       Some important  factors that could cause  Enterprises'  actual results or
outcomes  to differ  materially  from  those  discussed  in the  forward-looking
statements include,  but are not limited to, fluctuations in customer growth and
demand,  weather,  fuel and purchased power costs and  availability,  regulatory
action,   federal  and  state   legislation,   interest  rates,  labor  strikes,
maintenance and capital expenditures and local economic conditions. In addition,
Enterprises'  ability to have  available  an  appropriate  amount of  production
capacity in a timely  manner can  significantly  impact  Enterprises'  financial
performance. The timing of deregulation and competition, product development and
introductions of technology changes are also important  potential factors.  Most
of  these  factors  affect  Enterprises  through  its  wholly-owned  subsidiary,
Indianapolis Power & Light Company (IPL).

       All such factors are difficult to predict,  contain  uncertainties  which
may materially affect actual results and are beyond the control of Enterprises.

       Enterprises'  ability to predict  results or effects of issues related to
the Year 2000 is inherently uncertain,  and is subject to factors that may cause
actual results to differ  materially  from those  projected.  Factors that could
affect the actual results  include the  possibility  that  contingency  plans or
remediation efforts will not operate as intended; Enterprises' failure to timely
or completely identify all software, hardware or embedded chip devices requiring
remediation; unexpected costs; and the uncertainty associated with the impact of
Year 2000 issues on the utility  industry,  including  other electric  utilities
with which Enterprises is interconnected, and on Enterprises' customers, vendors
and others with whom it does  business.  See "Year 2000" for  information  about
Enterprises' efforts.


LIQUIDITY AND CAPITAL RESOURCES

         Material changes in the consolidated financial condition and results of
operations of Enterprises,  except where noted, are attributed to the operations
of IPL. Consequently, the following discussion is centered on IPL.


Overview
--------

     The Board of  Directors  of  Enterprises  on April  28,  1999,  declared  a
quarterly dividend on common stock of 15 cents per share compared to 13.75 cents
per share declared in the second quarter of 1998. The dividend was paid July 15,
1999, to shareholders of record June 18, 1999.

         IPL's  capital  requirements  are  primarily  related  to  construction
expenditures  needed to meet customers'  needs for  electricity  and steam,  for
environmental compliance and for the implementation of an integrated information
system.  Enterprises'  construction  expenditures (excluding allowance for funds
used during  construction)  totaled $18.7 million  during the quarter ended June
30, 1999,  representing a $2.2 million  decrease from the  comparable  period in
1998. Internally generated cash provided by operations was used for construction
expenditures  during  the  second  quarter  of 1999.  Enterprises'  construction
expenditures  (excluding allowance for funds used during  construction)  totaled
$34.1  million  during the six months  ended June 30, 1999,  representing  a $.3
million decrease from the comparable period in 1998.  Internally  generated cash
provided by operations was used for construction  expenditures  during the first
six months of 1999.

         The  three-year   construction   program  has  not  changed  from  that
previously reported in IPALCO's 1998 Form 10-K report. (See "Future Performance"
in Item 7 of  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations in IPALCO's 1998 Form 10-K report for further discussion).

         IPALCO's  Revolving  Credit  Facility  was  issued in April 1997 in the
amount  of  $401  million.  The  proceeds  were  used  to  purchase,  through  a
self-tender offer,  shares of IPALCO's  outstanding  common stock.  During 1998,
IPALCO  replaced the Revolver  with a commercial  paper  facility.  The Revolver
currently has no  outstanding  balance but is available  for future  borrowings.
During the second quarter of 1999,  IPALCO decreased the outstanding  balance of
commercial  paper from $248.6 million at March 31, 1999, to $244 million at June
30,  1999.  The balance outstanding was $197 million at December 31, 1998.
Proceeds  from the issue of debt during 1999 were used for  IPALCO's most recent
common stock repurchase program completed in March 1999.

        On  June  1,  1999,  Energy  Resources,  a  subsidiary  of  Mid-America,
refinanced its $9.5 million 7.25% note due 2011,  and its $9.3 million  variable
rate note due 2030,  with the proceeds of an $18.8  million  variable rate note.
The  interest  rate on the new debt was  3.37% at June 30,  1999.  The new $18.8
million note has a $9.5 million  maturity on December 1, 2011 and the  remainder
is due on September 1, 2030.


OTHER

Market Risk Sensitive Instruments and Positions
-----------------------------------------------

       The primary market risk to which  Enterprises is exposed is interest rate
risk.  Enterprises  uses  long-term  debt as a primary  source of capital in its
business.  A portion of this debt has an  interest  component  that  resets on a
periodic  basis to  reflect  current  market  conditions.  The  following  table
presents the principal cash  repayments and related  weighted  average  interest
rates by maturity date for Enterprises'  long-term fixed-rate debt and its other
types of long-term debt at June 30, 1999:


<TABLE>
<CAPTION>
                                              Maturity Schedule
                                            Period Ending June 30
                                                                                                       Fair
(Dollars in Millions)               2000    2001     2002     2003     2004  Thereafter   Total        Value
---------------------------------------------------------------------------------------------------------------
Long-term debt
<S>                                 <C>     <C>      <C>      <C>      <C>      <C>        <C>         <C>
Fixed rate                          $1.4    $2.4     $3.3     $3.4     $83.8    $450.2     $544.5      $553.7
  Average rate                      7.9%    7.9%     7.9%     7.9%     6.1%     7.0%       6.9%
Variable                            -       -        -        -        -        $168.8     $168.8      $168.8
  Average rate                      -       -        -        -        -        3.7%       3.7%
Recapitalization debt               $83.6   $80.2    $80.2    -        -        -          $244.0      $244.0
  Average rate                      6.7%    6.7%     6.7%     -        -        -          6.7%
</TABLE>

       To manage Enterprises'  exposure to fluctuations in interest rates and to
lower  funding  costs,  Enterprises  constantly  evaluates  the use of,  and has
entered  into,  interest  rate swaps.  Under  these  swaps,  Enterprises  or its
subsidiaries agree with counterparties to exchange, at specified intervals,  the
difference between  fixed-rate and floating-rate  interest amounts calculated on
an agreed  notional  amount.  This  interest  differential  paid or  received is
recognized in the  consolidated  statements of income as a component of interest
expense.

       At June 30, 1999, IPALCO had an interest rate swap agreement  outstanding
with a notional amount of $200 million,  of which the notional amount  decreases
$25 million each quarter.  Enterprises has agreed to pay a fixed rate of 6.3575%
and receive a floating rate based on applicable LIBOR.

       At June 30, 1999, IPL had an interest rate swap agreement with a notional
amount of $40 million,  which  expires in January  2023.  IPL pays interest at a
fixed rate of 5.21% to a swap counter  party and receives a variable  rate based
on the tax-exempt weekly rate.

Year 2000
---------

       Enterprises is potentially  subject to  operational  problems  associated
with the inability of various computer hardware, software and devices containing
embedded  chips to properly  process  the year  change  from 1999 to 2000.  Such
problems could conceivably affect Enterprises'  ability to deliver  electricity,
steam  or  chilled  water to its  customers,  as well as  Enterprises'  internal
operations  such as billing or payroll  functions.  Further,  Year 2000 problems
experienced by other entities,  over which  Enterprises has no control,  such as
certain  suppliers  or  other  electric  utilities  with  which  Enterprises  is
interconnected, could adversely affect Enterprises' operations.

       In 1997,  Enterprises  established  a Year  2000  Committee.  Enterprises
currently  manages the Year 2000 project  through two employee  committees,  the
Compliance Testing Committee and the Contingency Planning Committee, each headed
by corporate officers.  Each of those committees reports to a Year 2000 Steering
Committee composed of officers.  The Year 2000 Steering Committee reports to the
Office of the Chairman, who reports to the Board of Directors. Enterprises has a
formal Year 2000 Plan approved by the Board of Directors.

       The Indiana Utility Regulatory  Commission has ordered all Indiana public
utilities,  including Enterprises,  to "use their best efforts to identify their
mission critical  operations and conduct an inventory of all electronic  devices
that may be  affected  by date  processing  logic,  assess  the  status of these
devices,  take steps to correct  problems in the devices and test the devices to
determine compliance" in order to be "Year 2000 ready."

       The Compliance  Testing Committee is engaged in inventorying,  reviewing,
analyzing,  correcting  and testing  computer-related  systems and embedded chip
devices.  The  Contingency  Planning  Committee  is in the process of  assessing
various  operating  scenarios  associated  with potential Year 2000 problems and
formulating plans by which to operate Enterprises in the event of such problems.
Both the Compliance Testing Committee and the Contingency Planning Committee are
concentrating  first on  systems  critical  to the  continuity  of  Enterprises'
business.  Non-critical  systems  have lower  priorities  in terms of  committee
efforts.

       Enterprises is  participating  in an Electric  Power  Research  Institute
program  on the  Year  2000  issue,  as  well  as the  North  American  Electric
Reliability Council (NERC) system readiness assessments.

       Enterprises'  Year  2000  Plan  includes   attention  to  its  generating
facilities,  energy management systems,  telecommunications  systems, substation
control and protection systems,  transmission and distribution systems, business
information  systems,  financial  systems  and  business  partners.  It includes
efforts such as  assessing  Year 2000 risks to computer  hardware,  software and
embedded  systems;  identifying  options and  solutions;  evaluating  solutions;
repairing,  upgrading and replacing  systems;  testing systems;  and contingency
planning.

State of Readiness

       Enterprises'  subsidiary,  IPL, has reported to NERC that it believes its
mission-critical  systems used to produce and deliver  electricity are ready for
date changes  associated  with the Year 2000. The NERC definition of "Y2K Ready"
is that a system or application has been determined to be suitable for continued
use into the Year 2000.

A. Identification and Assessment

       The  Compliance  Testing  Committee is  coordinating  and  reviewing  the
enterprise-wide use of information  technology and assessing potential Year 2000
problems.  That effort has  involved  making an inventory  of  applications  and
systems and evaluating exposures  associated with, for example,  vendor-provided
software  and  hardware,  Enterprises-developed  software,  and various  devices
containing  embedded chips.  The Committee has also been in contact with vendors
to determine product compliance and vendors' timeframes for compliance. Computer
systems reviewed include  hardware,  machine  microcode and firmware,  operating
systems,  generic  applications  software,   billing  software,   communications
software and financial software.

       The Compliance  Testing Committee has been engaged in assessing  computer
systems and embedded chip devices related to Enterprises':

      Electricity  generating stations and plants producing steam and/or chilled
        water;

      Energy management systems;

      Substation controls, system protection, and transmission and
        distribution systems;

      Telecommunications systems; and

      Business information systems.

       The identification,  inventory and assessment phases for critical systems
are now complete.  The Compliance Testing Committee continues to be vigilant for
issues that may come to light and is also working on non-critical systems.


B. Remediation and Testing

       The Compliance Testing Committee is coordinating,  modifying or replacing
legacy systems which may not be Year 2000  compliant.  Enterprises  has replaced
most of its key financial software  applications.  Although that project was not
specifically  initiated  as a  Year  2000  effort,  it  coincidentally  replaced
non-compliant software.

       The  Compliance  Testing  Committee is also engaged in  establishing  and
operating appropriate testing environments to determine, to the extent possible,
the Year 2000  compliance of existing  systems and/or devices and the compliance
of replacement or upgraded systems and devices. Enterprises has employed various
of the following  techniques:  component  tests,  simulations,  outside testing,
vendor verifications or upgrades or change-outs.  Some devices or systems,  such
as satellite  communication  links, may not be susceptible to testing,  in which
cases Enterprises must rely on the service providers' verifications.

       Enterprises  has  inquired  of its  suppliers  and  vendors of  software,
computer-related  equipment,  devices and services  about Year 2000  compliance.
Some provided the requested information and/or assurances and some did not.

       Enterprises'  operations could be adversely affected by Year 2000-related
failures of other companies,  such as telecommunication  providers,  that supply
Enterprises with  mission-critical  services.  Similarly,  Year 2000 failures of
other utilities with which Enterprises is interconnected  could adversely affect
Enterprises' ability to deliver services to its customers.

       With the exception of one accounting system, testing of which Enterprises
expects to complete before the end of August 1999, Enterprises has completed the
remediation  and testing phases for critical  systems.  Enterprises is operating
its major electricity generating units with clocks set in year 2000. Enterprises
also  participated  in a national  NERC  drill,  testing  utilities'  ability to
operate facilities without normal communication services. No major problems were
encountered.

Costs to Address Enterprises' Year 2000 Issues

       Not including the cost of replacing  Enterprises'  business  software,  a
project not initiated specifically for Year 2000 reasons but which provided Year
2000 benefits through replacing  non-compliant  software,  Enterprises currently
estimates  that  its  costs  of  the  phases  of   identification,   assessment,
remediation  and testing may be  approximately  $4.4 million  which  Enterprises
believes is not material to its results of  operations,  liquidity and financial
condition. Of that figure, Enterprises has currently expended approximately $2.7
million.  A substantial  proportion of the costs of  remediation  are associated
with  functional  areas  of  Enterprises   other  than   Information   Services.
Enterprises  currently  estimates that its cost of contingency  planning efforts
may be approximately $1.5 million.

Risks of Enterprises' Year 2000 Issues

       In light of the  numerous  computer-related  systems  and  embedded  chip
devices present in business and production  equipment used by a utility, and the
interdependent  nature of control  systems,  a large number of conceivable  Year
2000  failure  scenarios  exist,  potentially  involving  Enterprises'  internal
functions (such as billing), as well as its chilled water, steam and electricity
generation and distribution functions. Consequences could conceivably range from
essentially  no operational  problems to a massive  disruption of chilled water,
steam and electric service lasting for a significant period of time. Enterprises
currently  believes the  probability  of outages caused by Year 2000 problems is
small.  Further,  since  Enterprises  does not stand  alone but is  electrically
interconnected  with other utilities across a substantial portion of the nation,
even if Enterprises  experiences no  significant  Year 2000 problems  associated
with its own equipment,  its ability to deliver  electricity  could be adversely
affected by Year 2000 failures  experienced by other  interconnected  utilities.
The probability of such failures is believed to be small.  Enterprises currently
expects to experience at least some,  hopefully minor,  problems associated with
Year 2000. Some conceivable,  though unlikely, Year 2000 failure scenarios could
be material to Enterprises' results of operations.

       There are both external and internal risks associated with Year 2000 that
could affect  Enterprises'  chilled  water,  steam and  electricity  generation,
transmission  and  distribution  operations.  Potential  internal  risk  factors
include, but are not limited to, increased risk of generator trips, inability to
start or restart generators, increased risk of transmission facility trips, loss
of energy management systems, loss of Company-owned  voice/data  communications,
system  protection  (relay) failures  resulting in cascading outages or facility
damage, failure of load-shedding  controls to operate properly,  failure of load
management systems to operate properly,  loss of or incorrect critical operating
data, failure of environmental  control systems, loss of distribution systems or
failure of voltage  control  devices to operate  properly.  Occurrences of those
internal problems,  alone or in combination,  could result in varying effects on
Enterprises'  operations.  Concerns over these  occurrences are minimal based on
testing results that indicate no Year 2000-related  problems with key generation
and transmission  control systems.  Enterprises' major generating units' control
systems  have been tested for  critical  dates and are already  operating in the
year 2000.

       External risk factors  include,  but are not limited to, loss of customer
load,  uncharacteristic load patterns, loss of leased communication  facilities,
failure of  delivery  systems to  maintain  supplies  of fuel and severe or cold
weather. Occurrences of various of those events, alone or in combination,  could
result in varying effects on Enterprises.

       In view of the  unprecedented  nature of the Year 2000 phenomenon,  it is
not clear whether  insurance  policy language in policies  insuring  Enterprises
will be  interpreted  to cover or bar claims,  if any,  arising out of Year 2000
events.

       In light of the many adverse  conditions that could conceivably happen to
Enterprises  associated with Year 2000,  along with the speculation that some or
many of them may not happen,  it is extremely  difficult to  hypothesize  a most
reasonably  likely worst case Year 2000  scenario  with any degree of certainty.
With that in mind,  Enterprises  currently  believes the most reasonably  likely
worst case scenario would be an isolated  partial  reduction in generating  unit
capacity  due to  minor  systems  failures  with no  interruption  of  power  to
Enterprises'  customers.  Enterprises  does  not  believe  that the  worst  case
scenario  will  occur  and,  should  it  occur,  Enterprises  believes  that the
consequences  of that  scenario,  with regard to either  costs of repair or lost
revenues,  are not likely to have a material effect on  Enterprises'  results of
operations, liquidity and financial condition.

Enterprises' Contingency Plans

         The  Contingency  Planning  Committee  has been  engaged  in  reviewing
hypothetical scenarios involving various Year 2000 system or device failures and
has prepared  plans by which to operate  Enterprises in the event those failures
occur.   Enterprises'   contingency   planning   involves  the  phases  of  plan
development,  testing,  execution and recovery  after Year 2000 events.  As with
compliance testing,  contingency  planning has touched essentially every area of
Enterprises' operations,  as well as interactions with interconnected utilities,
customers, critical vendors and emergency and other governmental authorities.

       The planning phase attempts to identify and evaluate potential impacts on
business  operations,  life,  property,  and the environment;  develop emergency
plans including establishing  procedures for mitigation of failures and evaluate
contingency  planning  being done on systems that  interface  with  Enterprises'
systems;   identify  dates  of  action  for  various  contingencies;   establish
responsibility  and authority for various  response  efforts;  and establish and
perform  a  training  program  with  respect  to  responding  to  contingencies,
including  practicing and testing the  contingency  plans and  coordinating  the
efforts with governmental functions.

       Contingency planning includes consideration of potential interruptions in
the supply chain or transportation of critical fuel, water, chemicals,  material
supplies  etc.,  and  acquisition  of  appropriate  extra  supplies,  as well as
potential  failures  of or other  problems  associated  with the  interconnected
electricity  grid.  Enterprises'  existing  disaster  recovery plans have formed
bases for some Year 2000 contingency plans.

       In the testing phase, various drills will be conducted to test the plan's
effectiveness. Modifications will be made where testing indicates a need. In the
execution phase,  Enterprises will operate its contingency  plans in response to
events actually occurring.

       After Year 2000 events,  if any,  Enterprises will execute its post-event
contingency  plans as required.  It will test its system  functions,  review the
results,  restore and restart systems, and notify appropriate authorities of the
resolution of problems.


<PAGE>
RESULTS OF OPERATIONS

         Comparison of Second Quarter and Six Months Ended June 30, 1999
         ---------------------------------------------------------------
             with Second Quarter and Six Months Ended June 30, 1998
             ------------------------------------------------------

         Diluted  earnings per share during the second quarter of 1999 was $.40,
or $.01 above the $.39 attained in the comparable 1998 period. Weighted average,
diluted  shares for the 1999 second  quarter were 86.5 million  compared to 91.2
million  for the same  period in 1998 due to  IPALCO's  repurchase  of 6 million
common shares between  December 1998 and March 1999.  Diluted earnings per share
during the first six months of 1999 was $.74, or $.07 above the $.67 attained in
the comparable 1998 period. Weighted average,  diluted shares for the six months
ended June 30,  1999,  were 87.3  million  compared to 91.1 million for the same
period in 1998. The following discussion  highlights the factors contributing to
the second quarter and six months ended results.

Operating Revenues
------------------

         Operating  revenues  decreased  $3.7 million  during the second quarter
ended June 1999 compared to the similar period last year. Operating revenues for
the six months ended June 1999 increased  $6.8 million from the comparable  1998
period. These results were due to the following:

                                 Increase (Decrease) from Comparable 1998 Period
                                 -----------------------------------------------
                                                    June 30, 1999
                                                    -------------
                                     Three Months Ended         Six Months Ended
                                     ------------------         ----------------
                                                (Millions of Dollars)

Electric:
     Change in retail KWH sales - net of fuel      0.8                 8.4
     Fuel revenue                                  1.0                 1.7
     Wholesale revenue                            (2.9)               (0.2)
     DSM Tracker revenue                            -                  0.1
Steam revenue                                     (1.0)               (1.2)
Other revenue                                     (1.6)               (2.0)
                                               --------            --------
     Total change in operating revenues        $  (3.7)            $   6.8
                                               ========            ========


         The second  quarter  increase in retail KWH sales  compared to the same
period in 1998 was due to economic growth in Indianapolis.  The six months ended
increase in retail KWH sales  compared to the same period in 1998 was  primarily
due to colder weather during the first three months of 1999. Heating degree days
increased  14% during the six months ended June 30,  1999,  compared to the same
period in 1998. The changes in fuel revenues in 1999 from the prior year reflect
changes in total fuel costs billed to  customers.  Wholesale  revenue  decreased
during the second quarter of 1999,  despite  increased KWH sales volume,  due to
lower  wholesale  energy prices than the unusually  high prices that occurred in
second quarter 1998.  Steam revenue  decreased during the second quarter of 1999
primarily due to a decrease in heating  degree days.  During the second  quarter
heating degree days decreased 11% from the similar period in 1998.

Operating Expenses
------------------

         Fuel costs  increased  $4.7 million for the six months ended June 1999,
compared  to the same period  last year.  This  increase  was  primarily  due to
increased total KWH sales.

         Other operating expenses decreased $5.7 million and $9.8 million in the
second  quarter and six months  ended June 1999,  respectively,  compared to the
similar  periods in 1998.  The second  quarter  decrease  was  primarily  due to
decreased  customer service and information  expense of $2.1 million,  decreased
administrative  and  general  expense of $1.4  million  and  increased  sales of
emission allowances of $1.5 million (reduces operating expenses). The six months
ended  decrease was primarily due to increased  sales of emission  allowances of
$4.9  million,  decreased  customer  service  and  information  expense  of $2.3
million,  decreased  administrative  and  general  expense of $1.9  million  and
decreased customer accounts expense of $.9 million.

         Maintenance  expense increased $1.8 million during the six months ended
June 30,  1999,  compared to the similar  period last year.  This  increase  was
primarily due to the overhaul of unit 1 at the Petersburg plant.

         Income  taxes - net,  increased  $.9  million  and $3.5  million in the
second quarter and six months ended periods, respectively, due to an increase in
pretax operating income.

         As a result of the foregoing,  utility  operating  income increased .5%
during the second  quarter of 1999 from the  comparable  1998  period,  to $49.4
million.  Utility  operating  income  during  the six  months  ended  June  1999
increased 3.7% from the comparable 1998 period, to $92.7 million.

Other Income and Deductions
---------------------------

         Other - net, which includes the pretax operating and investment  income
from  operations  other  than IPL,  as well as  non-operating  income  from IPL,
decreased  $1.7  million  and $1.4  million,  during the second  quarter and six
months ended periods, respectively. The decreases were primarily due to expenses
by IPALCO for the  Memorial  Day weekend  activities  (sponsor of the IPALCO 500
Festival  Parade  and  host  for  the  Congressional  Medal  of  Honor  memorial
dedication).

Interest and Other Charges
--------------------------

         Interest  expense  decreased $1.4 million for the six months ended June
30, 1999,  compared to the similar period last year as a result of the reduction
of the principal amount on the  recapitalization  debt facility of IPALCO issued
in April 1997.

New Accounting Pronouncement
----------------------------

         The  Financial  Accounting  Standards  Board has  issued  Statement  of
Financial  Accounting  Standards No. 133, Accounting for Derivative  Instruments
and Hedging Activities," that Enterprises will be required to adopt in 2001 (see
Note  6  in  the  Notes  to  Consolidated   Financial   Statements  for  further
discussion).

<PAGE>


                           PART II - OTHER INFORMATION
                           ---------------------------

Item 1.  Legal Proceedings
-------  -----------------

None

Item 4.  Submission of Matters to a Vote of Security Holders
-------  ---------------------------------------------------

         The Annual Meeting of shareholders of IPALCO Enterprises, Inc. was held
on April 21, 1999.  The following six directors in Class I were elected to terms
of three years which expire in April 2002. Each director  received the following
number of votes as shown opposite his name:

         Director                   Votes for                Votes Withheld
         --------                   ---------                --------------

Daniel R. Coats                     32,991,496                  3,552,092
Mitchell E. Daniels Jr.             33,155,054                  3,388,534
Rexford C. Early                    33,129,650                  3,413,938
John R. Hodowal                     33,234,221                  3,309,367
Michael S. Maurer                   33,181,000                  3,362,588
Thomas S. Sams                      33,205,061                  3,338,527



Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits.  Copies of documents listed below which are
                  identified with an asterisk (*) are incorporated herein by
                  reference and made a part hereof.  The management contracts
                  or compensatory plans are marked with a double asterisk (**)
                  after the description of the contract or plan.

3.1*     Articles of Incorporation of IPALCO Enterprises, Inc., as amended.
          (Exhibit 3.1 to the Form 10-Q dated 6-30-97.)

3.2*     Bylaws of IPALCO Enterprises, Inc, as amended.  (Exhibit 3.2 to the
           Form 10-Q dated 3-31-99.)

4.1*     IPALCO Enterprises, Inc. IPALCO PowerInvest Dividend Reinvestment and
           Direct Stock Purchase Plan. (Exhibit 4.1 to the Form 10-Q
           dated 9-30-96.)

4.2*     IPALCO Enterprises, Inc. and First Chicago Trust Company of New York
           (Rights Agreement as amended and restated). (Exhibit B to the Form
            8-K dated 4-28-98.)

10.1     Directors' and Officers' Liability Insurance Policy No. DO392A1A99
           effective June 1, 1999 to June 1, 2000. **

11.1     Computation of Per Share Earnings.

21.1*    Subsidiaries of the Registrant.  (Exhibit 21.1 to the Form 10-K
           dated 12-31-97.)

27.1     Financial Data Schedule.

         (b)      Reports on Form 8-K.

                           None


<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.



                                                IPALCO ENTERPRISES, INC.
                                              -----------------------------
                                                      (Registrant)



Date:       August 13, 1999                       /s/  John R. Brehm
       ---------------------                  -----------------------------
                                                    John R. Brehm
                                                    Vice President and Treasurer



Date:       August 13, 1999                       /s/  Stephen J. Plunkett
       ---------------------                  -----------------------------
                                                    Stephen J. Plunkett
                                                    Controller