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, 2000            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, 2000
                    -----                 ----------------------------
       Common (Without Par Value)             85,722,469 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, 2000 and 1999                            2

         Consolidated Balance Sheets - June 30, 2000 and
            December 31, 1999                                                3

         Statements of Consolidated Cash Flows -
            Six Months Ended June 30, 2000 and 1999                          4

         Notes to Consolidated Financial Statements                        5-9

         Management's Discussion and Analysis of
            Financial Condition and Results of Operations                10-15

PART II.  OTHER INFORMATION                                              16-18
--------  -----------------
<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
                                                                 2000              1999              2000              1999
                                                             -------------     ------------      -------------     ------------
UTILITY OPERATING REVENUES:
<S>                                                          <C>               <C>               <C>               <C>
  Electric                                                   $    198,188      $   195,843       $    398,716      $   385,455
  Steam                                                             6,512            7,167             17,073           18,386
                                                             -------------     ------------      -------------     ------------
    Total operating revenues                                      204,700          203,010            415,789          403,841
                                                             -------------     ------------      -------------     ------------

UTILITY OPERATING EXPENSES:
  Operation:
    Fuel                                                           44,577           43,029             92,154           88,943
    Other                                                          34,552           32,762             70,391           63,520
  Power purchased                                                   2,520            3,367              3,022            4,028
  Purchased steam                                                   1,557            1,668              3,231            3,363
  Maintenance                                                      23,907           13,847             41,169           36,827
  Depreciation and amortization                                    27,749           26,775             55,304           53,354
  Taxes other than income taxes                                     9,277            8,685             18,577           17,621
  Income taxes - net                                               18,777           23,443             41,987           43,500
                                                             -------------     ------------      -------------     ------------
    Total operating expenses                                      162,916          153,576            325,835          311,156
                                                             -------------     ------------      -------------     ------------
UTILITY OPERATING INCOME                                           41,784           49,434             89,954           92,685
                                                             -------------     ------------      -------------     ------------

OTHER INCOME AND (DEDUCTIONS):
  Allowance for equity funds used during construction                 869              319              1,550              670
  Other - net                                                        (385)            (536)            97,801             (664)
  Income taxes - net                                                1,658            2,592            (37,558)           4,648
                                                             -------------     ------------      -------------     ------------
    Total other income - net                                        2,142            2,375             61,793            4,654
                                                             -------------     ------------      -------------     ------------
INCOME BEFORE INTEREST AND OTHER CHARGES                           43,926           51,809            151,747           97,339
                                                             -------------     ------------      -------------     ------------

INTEREST AND OTHER CHARGES:
  Interest                                                         14,550           16,549             29,574           31,900
  Allowance for borrowed funds used during construction              (408)            (196)              (741)            (417)
  Preferred stock transactions                                        804              804              1,607            1,607
                                                             -------------     ------------      -------------     ------------
    Total interest and other charges - net                         14,946           17,157             30,440           33,090
                                                             -------------     ------------      -------------     ------------

NET INCOME                                                   $     28,980      $    34,652       $    121,307      $    64,249
                                                             =============     ============      =============     ============


BASIC EARNINGS PER SHARE                                     $       0.34      $      0.40       $       1.42      $      0.74
                                                             =============     ============      =============     ============

DILUTED EARNINGS PER SHARE                                   $       0.33      $      0.40       $       1.40      $      0.74
                                                             =============     ============      =============     ============


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                                         2000                1999
                             ------
                                                                        --------------      -------------
UTILITY PLANT:
<S>                                                                     <C>                 <C>
  Utility plant in service                                              $   2,962,262       $  2,922,338
  Less accumulated depreciation                                             1,350,589          1,299,122
                                                                        --------------      -------------
      Utility plant in service - net                                        1,611,673          1,623,216
  Construction work in progress                                               120,212            116,478
  Property held for future use                                                 10,718             10,718
                                                                        --------------      -------------
      Utility plant - net                                                   1,742,603          1,750,412
                                                                        --------------      -------------
OTHER ASSETS:
  Nonutility property - at cost, less accumulated depreciation                 67,611             69,056
  Available-for-sale securities                                                   189            175,202
  Other investments                                                            15,525             13,970
                                                                        --------------      -------------
      Other assets - net                                                       83,325            258,228
                                                                        --------------      -------------
CURRENT ASSETS:
  Cash and cash equivalents                                                    21,251             23,935
  Accounts receivable and unbilled revenue
   (less allowance for doubtful accounts
   2000, $1,521 and 1999, $1,360)                                              49,349             51,357
  Fuel - at average cost                                                       43,759             52,016
  Materials and supplies - at average cost                                     49,076             48,694
  Tax refund receivable                                                             -                770
  Prepayments and other current assets                                          3,774              9,465
                                                                        --------------      -------------
      Total current assets                                                    167,209            186,237
                                                                        --------------      -------------
DEFERRED DEBITS:
  Regulatory assets                                                           102,157            107,948
  Miscellaneous                                                                10,208             13,012
                                                                        --------------      -------------
      Total deferred debits                                                   112,365            120,960
                                                                        --------------      -------------
              TOTAL                                                     $   2,105,502       $  2,315,837
                                                                        ==============      =============

                 CAPITALIZATION AND LIABILITIES
                 ------------------------------
CAPITALIZATION:
  Common shareholders' equity:
    Common stock                                                        $     439,234       $    439,066
    Unearned compensation - restricted stock awards                            (1,659)            (1,979)
    Premium on 4% cumulative preferred stock                                      649                649
    Retained earnings                                                         783,904            690,455
    Accumulated other comprehensive income                                        112            106,733
    Treasury stock, at cost                                                  (556,754)          (557,178)
                                                                        --------------      -------------
      Total common shareholders' equity                                       665,486            677,746
  Cumulative preferred stock of subsidiary                                     59,135             59,135
  Long-term debt (less current maturities and
   sinking fund requirements)                                                 789,532            870,050
                                                                        --------------      -------------
      Total capitalization                                                  1,514,153          1,606,931
                                                                        --------------      -------------
CURRENT LIABILITIES:
  Notes payable - banks and commercial paper                                    6,000             57,578
  Current maturities and sinking fund requirements                             34,431             52,477
  Accounts payable and accrued expenses                                        59,031             56,798
  Dividends payable                                                            14,921             13,859
  Taxes accrued                                                                50,948             22,237
  Interest accrued                                                             13,688             13,767
  Other current liabilities                                                    13,049             13,356
                                                                        --------------      -------------
      Total current liabilities                                               192,068            230,072
                                                                        --------------      -------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
  Accumulated deferred income taxes - net                                     328,209            400,588
  Unamortized investment tax credit                                            37,842             39,226
  Accrued postretirement benefits                                               1,072              4,338
  Accrued pension benefits                                                     26,939             29,018
  Miscellaneous                                                                 5,219              5,664
                                                                        --------------      -------------
      Total deferred credits and other long-term liabilities                  399,281            478,834
                                                                        --------------      -------------

COMMITMENTS AND CONTINGENCIES
              TOTAL                                                     $   2,105,502       $  2,315,837
                                                                        ==============      =============

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
                                                                              2000               1999
                                                                         --------------     --------------
CASH FLOWS FROM OPERATIONS:
<S>                                                                      <C>                <C>
  Net income                                                             $     121,307      $      64,249
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                                               56,838             55,322
    Amortization of regulatory assets                                            7,163              7,002
    Gain from sale of available for sale securities                           (112,638)                 -
    Deferred income taxes and investment tax credit adjustments - net           (7,703)             1,562
    Allowance for funds used during construction                                (2,291)            (1,087)
  Change in certain assets and liabilities:
    Accounts receivable                                                          2,008              1,883
    Fuel, materials and supplies                                                 7,875              1,484
    Accounts payable and accrued expenses                                        2,233            (14,828)
    Taxes accrued                                                               28,711             15,720
    Accrued pension benefits                                                    (2,079)            (1,372)
    Other - net                                                                  2,533              2,002
                                                                         --------------     --------------
Net cash provided by operating activities                                      103,957            131,937
                                                                         --------------     --------------

CASH FLOWS FROM INVESTING:
  Construction expenditures - utility                                          (45,136)           (33,761)
  Construction expenditures - nonutility                                          (103)              (317)
  Proceeds from sale of available for sale securities                          113,833                  -
  Other                                                                            816             (4,117)
                                                                         --------------     --------------
Net cash provided by (used in) investing activities                             69,410            (38,195)
                                                                         --------------     --------------

CASH FLOWS FROM FINANCING:
  Issuance of long-term debt                                                    29,100            117,400
  Retirement of long-term debt                                                (127,695)           (70,400)
  Short-term debt - net                                                        (51,578)           (18,577)
  Common dividends paid                                                        (26,786)           (25,203)
  Issuance of common stock related to incentive compensation plans                 288              8,592
  Reacquired common stock                                                          424            (88,482)
  Other                                                                            196               (948)
                                                                         --------------     --------------
Net cash used in financing activities                                         (176,051)           (77,618)
                                                                         --------------     --------------
Net increase (decrease) in cash and cash equivalents                            (2,684)            16,124
Cash and cash equivalents at beginning of period                                23,935              9,075
                                                                         --------------     --------------
Cash and cash equivalents at end of period                               $      21,251      $      25,199
                                                                         ==============     ==============

----------------------------------------------------------------------------------------------------------
Supplemental  disclosures of cash flow information:
Cash paid during the period for:
    Interest (net of amount capitalized)                                 $      27,940      $      30,075
                                                                         ==============     ==============
    Income taxes                                                         $      65,735      $      16,730
                                                                         ==============     ==============


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 present 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' 1999 Annual Report on Form 10-K.


2.      CAPITAL STOCK

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

       Balance at December 31, 1999               85,727,614       $439,066,102
           Exercise of stock options                  22,000            288,427
           Restricted stock issues / adjustments      25,433          1,065,161
           Restricted stock redeemed                 (52,578)        (1,185,646)
                                                  ----------       ------------
       Balance at June 30, 2000                   85,722,469       $439,234,044
                                                  ==========       ============


       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
                                                 2000          1999            2000          1999
                                                --------------------          --------------------
                                                                     (In thousands)

<S>                                             <C>           <C>              <C>          <C>
       Weighted average common shares           85,713        85,718           85,708       86,468
       Dilutive effect of stock options            888           784              722          840
                                                ------        ------           ------       ------
       Weighted average common
          and incremental shares                86,601        86,502           86,430       87,308
                                                ======        ======           ======       ======
</TABLE>


3.      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, 1999................      $15.170           $8.416 -$23.380          2,349,980
   Issued.....................................       16.570           16.410 - 20.530          2,033,000
   Exercised..................................        9.580            8.416 - 12.670            (22,000)
                                                                                               ---------
Outstanding, June 30, 2000....................       15.850            9.380 - 23.380          4,360,980
                                                                                               =========
</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 was
        equal to fair value at the grant dates.  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,  2000,  would have  decreased  from $121.3
        million  ($1.40  per  share) to the pro forma  amount of $121.2  million
        ($1.40 per share).  Enterprises'  net income and  earnings per share for
        the similar period in 1999 would have decreased from $64.2 million ($.74
        per share) to the pro forma  amount of $64.1  million  ($.73 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 4.0%,  risk-free rates of 5.2% to 6.7%,  volatility of
        13% to 22% and expected lives of 5 years.

        IPALCO has a Long-Term  Performance and Restricted Stock Incentive Plan.
        On  January 3 and  January  21,  2000,  an  additional  2,933 and 22,500
        shares,  respectively,  were  issued  to  reflect  the  addition  of new
        participants.  On January 3, 2000, 2,066 shares of restricted stock were
        redeemed as a result of a reduction  in  participants.  During the first
        quarter of 2000,  50,512  shares of  restricted  stock were  redeemed in
        order to pay  taxes  on  behalf  of  participants  or as a  result  of a
        participant electing to receive cash in lieu of stock.


4.     SEGMENT REPORTING

        Operating  segments are  components of an enterprise  for which separate
        financial  information  is available  and is evaluated  regularly by the
        chief operating decision maker in deciding how to allocate resources and
        in assessing performance.  Enterprises' reportable business segments are
        electric and "all other." Steam  operations of IPL and all  subsidiaries
        other than IPL are combined in the "all other" category.  The accounting
        policies of the identified  segments are consistent  with those policies
        and  procedures  described  in the  summary  of  significant  accounting
        policies  (see Note 1in  Enterprises'  1999 Annual Report on Form 10-K).
        The following tables provide  information  about  Enterprises'  business
        segments:
<TABLE>
<CAPTION>

                                         Three Months Ended                                Six Months Ended
                                             June 30,                                          June 30,
                                  2000                     1999                       2000                     1999
                                   All                      All                        All                      All
                         Electric Other Total     Electric Other Total       Electric Other Total     Electric Other Total
                         -------- ----- -----     -------- ----- -----       -------- ----- -----     -------- ----- -----
                                          (In Millions)                                      (In Millions)

<S>                        <C>    <C>   <C>         <C>    <C>    <C>          <C>    <C>    <C>        <C>    <C>    <C>
Operating Revenues         $198   $ 15  $213        $196   $ 15   $211         $399   $ 34   $433       $385   $ 36   $421
Depreciation and
   Amortization              27      2    29          26      2     28           53      3     56         51      3     54
Pre-tax Operating Income     60     (3)   57          72      -     72          130     (2)   128        133      2    135
Income Taxes                 19     (2)   17          23     (2)    21           41     39     80         43     (4)    39
Capital Expenditures         26      -    26          18      1     19           47      -     47         33      2     35
</TABLE>

        Property - net of  Depreciation  is $1.810 billion and $1.819 billion in
        total  for  the  periods   ending  June,   2000  and   December,   1999,
        respectively.  Within  Property  - net  of  Depreciation,  the  Electric
        segment  is  $1.668  billion  and  $1.674  billion  for 2000  and  1999,
        respectively. The All Other segment is $142 million and $145 million for
        2000  and  1999,  respectively.   Included  within  Property  -  net  of
        Depreciation for the All Other segment is IPL steam plant of $75 million
        and $76 million for the periods  ending June,  2000 and December,  1999,
        respectively.

        Included within  Depreciation and Amortization for the All Other segment
        is IPL steam depreciation of $1 million for both the second quarter 2000
        and 1999.  For each of the six months ended June 30, 2000 and 1999,  IPL
        steam  depreciation  of $2 million is included within  Depreciation  and
        Amortization for the All Other segment.

        Included  within Pre-tax  Operating  Income for the All Other segment is
        IPL steam pre-tax operating income of $.2 million for the second quarter
        of 2000 compared to $.6 million for the same period in 1999. For the six
        months ended June 30, 2000 and 1999, IPL steam pre-tax  operating income
        of $2 million and $3 million,  respectively,  is included within Pre-tax
        Operating Income for the All Other segment.

        Included  within  Income  Taxes for the All Other  segment  is IPL steam
        income taxes of $(.1) million for the second quarter of 2000 compared to
        $.1  million  for the same  period in 1999.  For each of the six  months
        ended June 30, 2000 and 1999,  IPL steam  income  taxes of $1 million is
        included within Income Taxes for the All Other segment.


5.     INVESTMENTS

       During 1998 and 1999,  Enterprises,  through its subsidiary  Mid-America,
       invested $1.2 million in Internet Capital Group, Inc.  (Nasdaq:ICGE),  an
       internet holding  company,  which went public in August 1999. At December
       31, 1999,  Mid-America  held 1,030,600  shares of ICGE.  During  February
       2000,  Mid-America  sold 1 million shares of ICGE resulting in a realized
       gain of $111.95 million. During May 2000, Mid-America sold another 25,500
       shares of ICGE  resulting in a realized  gain of $.7  million.  The total
       realized  gain is offset by related  compensation  of $9.0 million and is
       included in Other Income and  Deductions.  The  after-tax  proceeds  from
       these  sales  were  applied   primarily  to  the  reduction  of  IPALCO's
       outstanding unsecured debt.

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  recognize 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.  In June
        2000,  SFAS  138 was  issued  to  amend  the  accounting  and  reporting
        standards  of  Statement  133 for  certain  derivative  instruments  and
        certain hedging activities. Management has not yet quantified the effect
        of the new standards on the consolidated financial statements.


7.      SALE OF STEAM ASSETS, MID-AMERICA ENERGY RESOURCES AND INDIANAPOLIS
        CAMPUS ENERGY

        During March, 2000,  Enterprises  announced an agreement for the sale of
        certain assets (the "Assets") to Citizens Gas & Coke Utility. The Assets
        include the Perry K Steam Plant and downtown steam  distribution  system
        (Steam)  operated by IPL;  the central city  chilled  water  cooling and
        distribution system owned by Mid-America Energy Resources,  Inc. (MAER),
        and the  chilled  water  cooling  system  owned by  Indianapolis  Campus
        Energy,  Inc. (ICE) that provides  services to Eli Lilly & Company.  The
        anticipated  selling price of the Assets is $161.7 million.  The selling
        price allocated to Steam,  MAER and ICE is approximately  $54.6 million,
        $88.4  million and $18.7  million,  respectively.  Taxes  payable on the
        transaction  are  estimated to be $26.3  million.  This  transaction  is
        expected to result in a net gain to IPALCO on a consolidated  basis. The
        1999  EBITDA  (earnings  before   interest,   taxes,   depreciation  and
        amortization) and net income of the combined entities (Steam, MAER, ICE)
        was $18.7  million and $3.0  million,  respectively.  Approximately  $90
        million of the net  proceeds  will be used to retire  debt  specifically
        assignable  to the  Assets.  The sale is subject  to certain  government
        approvals and the  satisfaction of certain  conditions  precedent in the
        agreement and is expected to be completed during 2000.


8.      AES ACQUISITION OF IPALCO

        On July 15, 2000, IPALCO and The AES Corporation, a Delaware corporation
        ("AES"),  entered  into an  Agreement  and Plan of Share  Exchange  (the
        "Share Exchange  Agreement")  whereby AES will acquire IPALCO for $25.00
        per share in a stock-for-stock transaction valued at approximately $2.15
        billion plus the assumption of $890 million of debt and preferred stock.

        Under  the terms of the  agreement,  the final  exchange  ratio  will be
        determined  five  business  days prior to closing,  based on the average
        daily  closing  prices  of AES  common  stock for the  preceding  twenty
        trading days.  Upon  closing,  each share of IPALCO common stock will be
        exchanged  for AES shares with a market value of $25.00,  so long as the
        average price of AES common stock (determined as described above) is not
        below  $31.50.  If the average price of AES common stock is below $31.50
        per share, IPALCO shareholders will receive a fixed ratio of .794 shares
        of AES common  stock per share of IPALCO  common  stock.  If the average
        price of AES common stock is below $26.45 (an effective  price to IPALCO
        shareholders of $21.00 per share of IPALCO common stock), IPALCO has the
        right to terminate the  transaction.  The  transaction is expected to be
        tax free to IPALCO  shareholders.  Upon  closing,  IPALCO  will become a
        wholly-owned  subsidiary  of AES  with  its  headquarters  remaining  in
        Indianapolis.

        The transaction is subject to certain  conditions,  including receipt of
        the approval of IPALCO shareholders and receipt of regulatory approvals,
        including  that of the  Federal  Energy  Regulatory  Commission  and the
        Securities and Exchange  Commission.  The parties  anticipate  receiving
        regulatory   approvals  and  closing  the  transaction  by  early  2001.
        Additionally,  as part of the  SEC  approval  process,  AES  expects  to
        restructure its ownership  interests in CILCORP,  another  subsidiary of
        AES, within a specified period of time in order to continue as an exempt
        holding company under the Public Utility Holding Company Act of 1935. If
        the  closing of the  transaction  is delayed  beyond  March 31, 2001 for
        failure to receive  necessary  SEC  approvals,  the  purchase  price per
        IPALCO share,  determined as outlined above,  will be increased by $0.15
        plus a daily "ticking fee" equal to $0.375 per calendar quarter.


<PAGE>


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

FORWARD-LOOKING STATEMENTS

       Enterprises  hereby files  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,  contains forward-looking
statements.  Forward-looking  statements  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.  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, the pending  transaction with AES,
including the conditions  thereto,  fluctuations  in customer growth and demand,
weather,  fuel costs,  generating unit  availability,  purchased power costs and
availability,  regulatory  action,  environmental  matters,  federal  and  state
legislation, interest rates, labor strikes, maintenance and capital expenditures
and local economic conditions.  In addition,  IPL's ability to have available an
appropriate  amount of production  capacity in a timely manner can significantly
affect IPL's financial performance.  The timing of deregulation and competition,
product development and technology changes are also important potential factors.
Most of these factors affect  Enterprises  through its wholly owned  subsidiary,
IPL.

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


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  25,  2000,  declared  a
quarterly  dividend on common  stock of 16.25 cents per share  compared to 15.00
cents per share  declared in the second  quarter of 1999.  The dividend was paid
July 15, 2000, to shareholders of record June 16, 2000.

         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 $25.0 million  during the quarter ended June
30, 2000,  representing a $6.3 million  increase from the  comparable  period in
1999.  Internally  generated  cash  provided by operations  funded  construction
expenditures  during  the  second  quarter  of 2000.  Enterprises'  construction
expenditures  (excluding allowance for funds used during  construction)  totaled
$45.2 million during the six months ended June 30, 2000,  representing  an $11.2
million increase from the comparable period in 1999.  Internally  generated cash
provided by operations  funded  construction  expenditures  during the first six
months of 2000.

         IPL's  construction  program for the  three-year  period  2000-2002  is
estimated to cost $294.0  million  including  AFUDC.  The estimated  cost of the
program  by year (in  millions)  is $106.5 in 2000,  $103.9 in 2001 and $83.6 in
2002. It includes $152.2 million for additions,  improvements  and extensions to
transmission  and  distribution  lines,  substations,  power  factor and voltage
regulating equipment,  distribution transformers and street lighting facilities.
The construction  program also includes $6.6 million in 2000 for construction of
a 100-megawatt  combustion turbine. The turbine was placed in service during May
2000, and only $.3 million of related construction costs remain unexpended as of
June 30, 2000.  These  projected  amounts also  include  $20.7  million of costs
during the period associated with new environmental standards promulgated by the
EPA which are  currently  expected to be appealed to the United  States  Supreme
Court. (See also "NOx SIP Call" below.)

         IPALCO's Revolving Credit Facility  (Revolver) 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  repaid the  Revolver  with a  commercial  paper  facility.  The Revolver
currently has no  outstanding  balance but is available  for future  borrowings.
According to the credit  agreement,  IPALCO  could  borrow up to $160.4  million
until March 31, 2001. The final step down provides for the available  borrowings
to decrease to $80.2 million on March 31, 2001, and remain available until March
31, 2002.  The balance of the  commercial  paper facility was $112.6 million and
$211.2 million on June 30, 2000 and December 31, 1999, respectively.


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, 2000:
<TABLE>
<CAPTION>

                                            Maturity Schedule
                                           Period Ending June 30
                                                                                                  Fair
(Dollars in Millions)          2001    2002     2003     2004     2005  Thereafter   Total       Value
----------------------------------------------------------------------------------------------------------
Long-term debt
<S>                            <C>     <C>      <C>      <C>      <C>      <C>        <C>         <C>
Fixed rate                     $3.0    $3.4     $3.6     $83.9    $4.2     $421.8     $519.9      $509.8
  Average rate                 7.8%    7.9%     7.9%     6.1%     7.9%     7.0%       6.9%
Variable                       -       -        -        -        -        $192.3     $192.3      $192.3
  Average rate                 -       -        -        -        -        4.1%       4.1%
Recapitalization debt          $32.4   $80.2    -        -        -        -          $112.6      $112.6
  Average rate                 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, 2000, IPALCO had an interest rate swap agreement  outstanding
with a notional amount of $100 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.  The fair  value of
IPALCO's swap agreement was $0.2 million at June 30, 2000.

       At June 30, 2000, IPL had an interest rate swap agreement with a notional
amount of $40 million, which expires in January 2023. IPL agrees to pay interest
at a fixed rate of 5.21% to a swap  counter  party and  receive a variable  rate
based on the tax-exempt  weekly rate. The fair value of IPL's swap agreement was
$.1 million at June 30, 2000.

National Ambient Air Quality Standards
--------------------------------------

       On July 16, 1997, the United States Environmental Protection Agency (EPA)
promulgated  final rules tightening the National  Ambient Air Quality  Standards
for ozone and creating new fine  particulate  matter  standards.  On October 29,
1999,  after conducting a rehearing of its initial decision of May 14, 1999, the
United States Court of Appeals for the District of Columbia  Circuit  determined
that  the new  ozone  standards  were not  issued  lawfully,  but left  open the
question of future remedy. The Court also determined that the standards for fine
particulate matter were legally deficient in certain respects. The Supreme Court
has  accepted  EPA's  petition to review the Court of Appeals'  decision,  and a
decision is expected by summer 2001.

NOx SIP Call
------------

         On October 27, 1998, EPA issued a final rule calling for Indiana, along
with 22 other jurisdictions in the eastern third of the United States, to impose
more  stringent  limits on nitrogen  oxides (NOx) from  fossil-fuel  fired steam
electric generators, such as those operated by IPL. This rule (the NOx SIP Call)
was based in part on the new ozone  standards  that were later held  unlawful in
the Court of Appeals'  decision  discussed above. In a separate  decision on May
25, 1999, the Court of Appeals  stayed the  compliance  deadlines in the NOx SIP
Call. On March 3, 2000, the Court of Appeals issued a decision largely upholding
the NOx SIP Call, and a petition for rehearing in the Court of Appeals was later
denied.  Litigants,  including IPL, are considering seeking review in the United
States Supreme Court.

       Because power plants emit nitrogen  oxides,  as well as fine  particulate
matter,  existing IPL sources may be required to be retrofitted  with additional
air pollution controls in the future,  either as a result of the EPA regulations
discussed above or future regulatory actions.

       EPA's NOx SIP Call would require operators of coal-fired electric utility
boilers in the affected states to limit NOx emissions to 0.15 pounds per million
BTUs of heat input as a system-wide average. That limit calls for a reduction of
about 85% from 1990 average emissions from coal-fired  electric utility boilers,
and a reduction of about 57% from IPL's current emissions.

       It is not possible to predict  whether EPA's NOx SIP Call will ultimately
survive judicial review.  Nor is it possible at this time to predict  accurately
the costs of compliance. Enterprises' preliminary estimates are that the NOx SIP
Call would necessitate  capital  expenditures of about $160 million.  Only $20.7
million  of such  amount  has  been  included  in IPL's  2000-2002  construction
program; consequently, such program could change substantially.

       As to timing,  if the requirements of the NOx SIP Call became  effective,
they  would  likely  do so  during  the  2000-2001  period  and  would  probably
necessitate deployment of capital during the period between 2000 and 2003. There
can be no certainty about these estimates.

       Enterprises  expects to refine the above estimates as engineering studies
progress and when, as, and if such rules become effective.

Sale of Steam Assets,  Mid-America Energy Resources and Indianapolis Campus
---------------------------------------------------------------------------
Energy
------

       See Note 7 in the Notes to Consolidated Financial Statements.

AES Acquisition of IPALCO
-------------------------

       See Note 8 in the Notes to Consolidated Financial Statements.

<PAGE>


RESULTS OF OPERATIONS

         Comparison of Second Quarter and Six Months Ended June 30, 2000
         ---------------------------------------------------------------
             with Second Quarter and Six Months Ended June 30, 1999
             ------------------------------------------------------

         Diluted  earnings per share during the second quarter of 2000 was $.33,
or $.07 below the $.40 attained in the comparable 1999 period. Weighted average,
diluted shares for the second quarter of 2000 were 86.6 million compared to 86.5
million for the same period in 1999. Diluted earnings per share during the first
six months of 2000 was $1.40,  or $.66 above the $.74 attained in the comparable
1999 period. Weighted average,  diluted shares for the six months ended June 30,
2000,  were 86.4  million  compared to 87.3 million for the same period in 1999.
The  following  discussion  highlights  the factors  contributing  to the second
quarter and six months ended results.

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

         Operating  revenues  increased  $1.6 million  during the second quarter
ended June 2000 compared to the similar period last year. Operating revenues for
the six months ended June 2000 increased  $11.9 million from the comparable 1999
period. These results were due to the following:

                                Increase (Decrease) from Comparable 1999 Period
                                -----------------------------------------------
                                                    June 30, 2000
                                                    -------------
                                     Three Months Ended       Six Months Ended
                                     ------------------       ----------------
                                               (Millions of Dollars)

Electric:
     Change in retail KWH sales - net of fuel      0.5              6.3
     Fuel revenue                                  2.8              3.0
     Wholesale revenue                            (1.9)             2.7
     DSM Tracker revenue                          (0.2)             0.2
Steam revenue                                     (0.6)            (1.3)
Other revenue                                      1.0              1.0
                                               --------         --------
     Total change in operating revenues        $   1.6          $  11.9
                                               ========         ========


         The second  quarter  and six months  ended June 30,  2000  increase  in
retail KWH sales compared to the similar  periods in 1999 resulted from economic
growth in  Indianapolis  impacted  by  changed  weather  conditions.  The second
quarter of 2000  experienced  milder  temperatures  compared to last year.  As a
result,  cooling  degree days decreased  16.3%.  The changes in fuel revenues in
2000  from the  prior  year  reflect  changes  in total  fuel  costs  billed  to
customers.  Wholesale revenue decreased during the second quarter of 2000 due to
reduced  generating unit  availability  related to a planned  overhaul outage of
IPL's Stout unit 7. Steam  revenue  decreased  during the six months  ended 2000
primarily due to a decrease in heating degree days.

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

         Fuel costs  increased  by $1.5  million and $3.2  million in the second
quarter  and six  months  ended June 30,  2000,  respectively,  compared  to the
similar  periods last year.  These  increases  were  primarily  due to increased
kilowatt-hour sales.

         Other operating expenses increased $1.8 million and $6.9 million in the
second quarter and six months ended June 30, 2000, respectively, compared to the
similar  periods in 1999.  The second  quarter  increase  was  primarily  due to
decreased sales of emission allowances of $1.7 million,  which was recorded as a
credit to  operating  expenses  in 1999,  and rental  costs of $1.1  million for
portable  diesel  generators  used to  supplement  generation  during the summer
months.  Also contributing to the variance for the second quarter were increased
transmission  and  distribution  expenses  of $.7  million,  increased  customer
accounts expense of $.4 million,  and increased customer service and information
expense of $.2 million,  offset by decreased  administrative and general expense
of $2.6  million.  The six months ended  increase was primarily due to decreased
sales of emission allowances of $4.7 million,  which was recorded as a credit to
operating expenses in 1999, and rental costs of $1.1 million for portable diesel
generators  used  to  supplement  generation  during  the  summer  months.  Also
contributing  to the six months ended variance were increased  transmission  and
distribution   expenses  of  $1.6  million,   increased   customer  service  and
information  expense of $1.1 million,  increased other  miscellaneous  operating
expenses of $.9 million,  increased  customer  accounts  expense of $.8 million,
offset by decreased administrative and general expense of $3.9 million.

         Power  purchased  decreased  $.8  million and $1.0  million  during the
second quarter and six months ended June 30, 2000, respectively, compared to the
similar  periods last year.  These  decreases  were  primarily due to the milder
temperatures  in the second quarter 2000 versus 1999 resulting a reduced need to
purchase power.

         Maintenance expense increased $10.1 million and $4.3 million during the
second quarter and six months ended June 30, 2000, respectively, compared to the
similar  periods last year.  The increase in expense was due  primarily to costs
associated with the timing of planned generating unit overhauls and outages.

         Income taxes-net  decreased $4.7 million and $1.5 million in the second
quarter and six months ended periods,  respectively,  due to decreases in pretax
operating income.

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,
increased $.2 million and $98.5 million during the second quarter and six months
ended June 30, 2000,  respectively,  compared to the similar  periods last year.
The second quarter  variance was primarily a result of a favorable net change in
miscellaneous  non utility  pretax  revenue and  expense  items of $4.0  million
offset by increased  outside  service  expenditures  on IPALCO parent company of
$3.8  million.  The six months ended  increase was  primarily  due to the $103.6
million gain on the sale of the ICGE investment less related compensation.  (See
Note 5 in the Notes to Consolidated Financial Statements).

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

         Interest  expense  decreased $2.3 million for the six months ended June
30, 2000,  compared to the similar period last year primarily as a result of the
reduction  of the  principal  amount on the  recapitalization  debt  facility of
IPALCO.

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 19,  2000.  The  following  five  directors in Class II were elected to
terms of three years each which expire in April,  2003.  Each director  received
the following number of votes as shown opposite his or her name:

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

Joseph D. Barnette, Jr.      72,883,315                1,493,126
Max L. Gibson                72,827,332                1,499,109
Ramon L. Humke               67,518,182                6,808,259
Andrew J. Paine, Jr.         72,656,395                1,670,046
Sallie W. Rowland            72,484,265                1,842,176

A shareholder proposal regarding executive  compensation was defeated.  The vote
was 7,636,243 in favor, and 51,813,274 against, with 2,650,293 abstaining.

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.

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.)

4.3      Amendment No. 1 dated as of July 15, 2000, to the Rights Agreement
         dated as of June 28, 1990, as amended and restated as of April 28, 1998
         between IPALCO Enterprises, Inc. and First Chicago Trust Company of New
         York, as Rights Agent.  (Exhibit C to Form 8-A/A filed 7-19-00.)

10.1     Second Amendment to the IPALCO Enterprises, Inc. Voluntary Employee
         Beneficiary Association Trust Agreement.

11.1     Computation of Per Share Earnings.

21.1*    Subsidiaries of the Registrant.  (Exhibit 21.1 to the Form 10-K dated
         12-31-99.)

27.1     Financial Data Schedule.

         (b)      Reports on Form 8-K.

                  A Form 8-K was filed on July 17, 2000, reporting item 5, Other
                  Events,  to report the  Agreement  and Plan of Share  Exchange
                  whereby The AES Corporation  will acquire IPALCO  Enterprises,
                  Inc. in a stock-for-stock transaction.


<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 11, 2000                          /s/   John R. Brehm
       ---------------------                  --------------------------------
                                                  John R. Brehm
                                                  Vice President and Treasurer



Date:    August 11, 2000                         /s/    Stephen J. Plunkett
       ---------------------                  --------------------------------
                                                  Stephen J. Plunkett
                                                  Controller