**UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549**

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**FORM 10-Q**

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**QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended September 30, 2003**

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

**Commission file number 1-8644**



|**Indiana**                                                    | **35-1575582**                         
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

**One Monument CircleIndianapolis, IN    46204**(Address of Principal Executive Offices including Zip Code)

**(317) 261-8261**(Registrant's Telephone Number, Including Area Code)

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 reports), and (2) has been subject to such filing
requirements for the past 90 days.   YES [X]    NO [  ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange
Act Rule 12b-2)   YES [  ]    NO [X]

On November 10, 2003, 89,685,177 shares of IPALCO Enterprises, Inc. common stock were
outstanding. All of such shares were owned by The AES Corporation.

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a)
AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.









**IPALCO ENTERPRISES, INC.
                                    FORM 10-Q
                                     INDEX**



|**PART I - Financial Information**                                                                                                          | **Page No.**
|------------------------------------------------------------------------------------------------------------------------------------------- | ------------
|                                                                                                                                            |             
|Item 1:   Financial Statements:                                                                                                             |             
|                                                                                                                                            |             
|                                                                                                                                            |             
|Unaudited Consolidated Statements of Income for the Three-month
        
          and Nine-month Periods Ended September 30, 2003 and 2002 | 3           
|                                                                                                                                            |             
|Consolidated Balance Sheets as of September 30, 2003 (unaudited)
        
           and December 31, 2002                                  | 4           
|                                                                                                                                            |             
|Unaudited Consolidated Statements of Cash Flows for the
        
          Nine-month Periods Ended September 30, 2003 and 2002             | 5           
|                                                                                                                                            |             
|Notes to Unaudited Consolidated Financial Statements                                                                                        | 6           
|                                                                                                                                            |             
|Item 2:   Management's Discussion and Analysis of Financial Condition 
          
and Results of Operations                                 | 9           
|                                                                                                                                            |             
|Item 4:  Controls and Procedures                                                                                                            | 15          
|                                                                                                                                            |             
|**PART II - Other Information**                                                                                                             |             
|                                                                                                                                            |             
|Item 1:  Legal Proceedings                                                                                                                  | 16          
|                                                                                                                                            |             
|Item 6:  Exhibits and Reports on Form 8-K                                                                                                   | 16          
|                                                                                                                                            |             
|Signature                                                                                                                                   | 17          

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**PART I -- FINANCIAL INFORMATION**

Item 1.  Financial Statements

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**IPALCO ENTERPRISES, INC. and SUBSIDIARIES

Unaudited Consolidated Statements of Income

(In Thousands)**

`Three Months Ended   Nine Months Ended
                                                            September 30,        September 30,
                                                        -------------------  -------------------
                                                           2003      2002       2003      2002
                                                        --------- ---------  --------- ---------
ELECTRIC UTILITY OPERATING REVENUES                     $220,990  $226,755   $628,727  $621,393

UTILITY OPERATING EXPENSES:
 Operation:
   Fuel                                                   48,700    46,737    133,762   129,401
   Other operating expenses                               30,646    31,067     87,308    79,849
 Power purchased                                           6,032     9,753     15,565    16,962
 Maintenance                                              16,086    11,665     59,997    45,488
 Depreciation and amortization                            29,778    28,373     89,374    84,309
 Taxes other than income taxes                             6,001     6,261     22,085    24,516
 Income taxes-net                                         32,432    31,771     81,201    81,489
                                                        --------- ---------  --------- ---------
  Total operating expenses                               169,675   165,627    489,292   462,014
                                                        --------- ---------  --------- ---------
UTILITY OPERATING INCOME                                  51,315    61,128    139,435   159,379
                                                        --------- ---------  --------- ---------
OTHER INCOME AND (DEDUCTIONS):
 Allowance for equity funds used during construction       1,263       151      3,193     3,091
 Gain (loss) on sales of assets, net                          --         0       (842)    2,455
 Other-net                                                  (223)     (113)      (732)   (1,235)
 Income tax benefit-net                                    6,711     5,582     19,783    16,152
                                                        --------- ---------  --------- ---------
  Total other income (deductions)-net                      7,751     5,620     21,402    20,463
                                                        --------- ---------  --------- ---------
INCOME BEFORE INTEREST AND OTHER CHARGES                  59,066    66,748    160,837   179,842
                                                        --------- ---------  --------- ---------
INTEREST AND OTHER CHARGES:
 Interest on long-term debt                               27,080    24,146     77,268    72,438
 Other interest                                              241       121        461       382
 Allowance for borrowed funds used during construction      (608)      (72)    (1,536)   (1,451)
 Amortization of redemption premiums and expense on
  debt-net                                                   737       905      2,213     2,794
 Preferred dividends of subsidiary                           803       803      2,410     2,410
                                                        --------- ---------  --------- ---------
  Total interest and other charges-net                    28,253    25,903     80,816    76,573
                                                        --------- ---------  --------- ---------
NET INCOME                                              $ 30,813  $ 40,845   $ 80,021  $103,269
                                                        ========= =========  ========= =========`

See notes to consolidated financial statements.

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**IPALCO ENTERPRISES, INC. and SUBSIDIARIES

Consolidated Balance Sheets

(In Thousands)**

`September 30,  December 31,
                                                          2003          2002
                                                    --------------- ------------
                      ASSETS                          (Unaudited)
UTILITY PLANT:
 Utility plant in service                           $    3,175,040  $ 3,144,472
 Less accumulated depreciation                           1,615,622    1,536,986
                                                    --------------- ------------
     Utility plant in service - net                      1,559,418    1,607,486
 Construction work in progress                             143,012       73,696
 Property held for future use                                7,708        7,708
                                                    --------------- ------------
     Utility plant - net                                 1,710,138    1,688,890
                                                    --------------- ------------
OTHER ASSETS:
 Nonutility property - at cost, less
  accumulated depreciation                                   1,451        1,497
 Other investments                                           9,411       10,033
                                                    --------------- ------------
     Other assets - net                                     10,862       11,530
                                                    --------------- ------------
CURRENT ASSETS:
 Cash and cash equivalents                                  34,821       31,429
 Restricted cash                                            21,905           --
 Accounts receivable and unbilled revenue
   (less allowance for doubtful accounts
    of $1,806 and $1,556, respectively)                     41,539       41,601
 Fuel - at average cost                                     28,441       22,023
 Materials and supplies - at average cost                   46,696       47,874
 Net income tax refunds receivable                           3,006        3,305
 Prepayments and other current assets                        7,604        4,458
                                                    --------------- ------------
     Total current assets                                  184,012      150,690
                                                    --------------- ------------
DEFERRED DEBITS:
 Regulatory assets                                         164,291      140,768
 Miscellaneous                                              29,637       29,037
                                                    --------------- ------------
     Total deferred debits                                 193,928      169,805
                                                    --------------- ------------
             TOTAL                                  $    2,098,940  $ 2,020,915
                                                    =============== ============
          CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
 Common shareholder's deficit:
   Premium on 4% cumulative preferred stock         $          649  $       649
   Paid in capital                                              70           --
   Accumulated deficit                                     (52,918)     (40,477)
   Accumulated other comprehensive loss                    (51,546)     (52,621)
                                                    --------------- ------------
     Total common shareholder's deficit                   (103,745)     (92,449)
 Cumulative preferred stock of subsidiary                   59,135       59,135
 Long-term debt (less current maturities
   and sinking fund requirements)                        1,401,994    1,372,006
                                                    --------------- ------------
     Total capitalization                                1,357,384    1,338,692

CURRENT LIABILITIES:
 Current maturities and sinking
  fund requirements                                         80,294          300
 Accounts payable                                           30,367       31,929
 Accrued expenses                                           18,081       17,258
 Dividends payable                                             880          874
 Accrued taxes                                              28,893       26,009
 Accrued interest                                           36,993       22,788
 Other current liabilities                                  12,915       12,827
                                                    --------------- ------------
     Total current liabilities                             208,423      111,985
                                                    --------------- ------------
DEFERRED CREDITS AND OTHER
 LONG-TERM LIABILITIES:
 Accumulated deferred income taxes - net                   390,984      337,936
 Unamortized investment tax credit                          28,862       30,927
 Accrued postretirement benefits                             5,917        5,965
 Accrued pension benefits                                  100,441      186,761
 Miscellaneous                                               6,929        8,649
                                                    --------------- ------------
     Total deferred credits and other
      long-term liabilities                                533,133      570,238
                                                    --------------- ------------
COMMITMENTS AND CONTINGENCIES (Note 6)

             TOTAL                                  $    2,098,940  $ 2,020,915
                                                    =============== ============`

See notes to consolidated financial statements.

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**IPALCO ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)**

`Nine Months Ended
                                                             September 30,
                                                          ---------- ---------
                                                             2003       2002
                                                          ---------  ---------
Cash Flows from Operations:
 Net income                                              $  80,021  $ 103,269
 Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation and amortization                           89,291     84,966
    Amortization of regulatory assets                        2,142      2,257
    Deferred income taxes and investment tax credit
      adjustments - net                                     27,277     29,186
    (Gain) loss on sales of assets, net                        842     (2,455)
    Impairment on investment                                   165         --
    Allowance for funds used during construction            (4,729)    (4,542)
  Change in certain assets and liabilities:
    Accounts receivable                                         62     (3,887)
    Fuel, materials and supplies                            (5,240)     1,314
    Net income taxes receivable or payable                   2,341    (25,522)
    Accounts payable and accrued expenses                      152    (16,497)
    Accrued other taxes                                        842     (5,679)
    Accrued pension benefits                               (86,320)    (8,088)
    Accrued interest                                        14,205     11,045
    Other - net                                             (3,675)    (4,038)
                                                          ---------  ---------
Net cash provided by operating activities                  117,376    161,329
                                                          ---------  ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Construction expenditures - utility                     (104,753)   (74,622)
  Construction expenditures - nonutility                        --       (107)
  Long term borrowings invested in a restricted account    (21,905)        --
  Proceeds from sales of assets                                 --      4,220
  Other                                                     (3,862)      (883)
                                                          ---------  ---------
Net cash used in investing activities                     (130,520)   (71,392)
                                                          ---------  ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Long term borrowings                                     108,998         --
  Dividends on common stock                                (92,462)  (111,286)
  Other                                                         --       (816)
                                                          ---------  ---------
Net cash provide by (used in) financing activities          16,536   (112,102)
                                                          ---------  ---------
Net change in cash and cash equivalents                      3,392    (22,165)
Cash and cash equivalents at beginning of period            31,429     28,933
                                                          ---------  ---------
Cash and cash equivalents at end of period               $  34,821  $   6,768
                                                          =========  =========
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest (net of amount capitalized)                 $  61,997  $  60,341
                                                          =========  =========
    Income taxes                                         $  42,603  $  65,976
                                                          =========  =========`

See notes to consolidated financial statements.

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IPALCO ENTERPRISES, INC. and SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements



1.  ORGANIZATION

IPALCO Enterprises, Inc. (IPALCO) is a wholly-owned subsidiary of The AES Corporation (AES).
IPALCO owns all of the outstanding common stock of its subsidiaries. These include its regulated
utility subsidiary, Indianapolis Power & Light Company (IPL) and its unregulated subsidiary,
Mid-America Capital Resources, Inc. (Mid-America). IPL is an electric utility with its customer base
concentrated in Indianapolis, Indiana and is the primary subsidiary of IPALCO. Mid-America conducts
IPALCO's unregulated activities.

2.  BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of IPALCO, IPL and
Mid-America. All significant intercompany amounts have been eliminated. The accompanying financial
statements are unaudited; however, they have been prepared in accordance with accounting principles
generally accepted in the United States of America (GAAP) for interim financial information and in
conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly,
they do not include all of the disclosures required by GAAP for complete financial statements. In
the opinion of management, all adjustments necessary for fair presentation, consisting of only
normal recurring adjustments, have been included. 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 unaudited financial statements have been prepared in accordance with the
accounting policies described in IPALCO's audited financial statements for the year ended December
31, 2002 included in its annual report on Form 10-K and should be read in conjunction therewith.

The preparation of financial statements in conformity with GAAP 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.

3.  NEW ACCOUNTING PRONOUNCEMENTS

In 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards No. 143 (SFAS 143), "Accounting for Asset Retirement Obligations." SFAS 143
addresses financial accounting and reporting for obligations associated with retirement of tangible
long-lived assets and the associated asset retirement costs. It requires that the fair value of a
liability for an asset retirement obligation be recognized in the period in which it is incurred if
a reasonable estimate of fair value can be made. The associated asset retirement costs are
capitalized as part of the carrying amount of the long-lived asset. IPALCO implemented this
statement beginning January 1, 2003. The adoption of SFAS 143 did not impact our consolidated
financial position or results of operations, but does require us to provide additional
disclosure.

Included in IPL's retail electric rates are removal costs for certain assets that do not have
legal obligations relating to the asset's retirement. As of September 30, 2003, IPL estimates that
approximately $356 million related to removal costs is included in accumulated
depreciation.

In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149 (SFAS 149),
"Amendment of Statement 133 (SFAS 133) on Derivative Instruments and Hedging Activities." SFAS 149
amends and clarifies financial accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts (collectively referred to as derivatives)
and for hedging activities under SFAS 133. SFAS 149 is effective for contracts entered into or
modified after June 30, 2003, with certain exceptions, and for hedging relationships designated
after June 30, 2003. SFAS 149 does not impact the accounting for any of IPALCO nor its consolidated
subsidiaries current contracts, but could impact the accounting of contracts entered into or
modified in the future.

In May 2003, the FASB issued Statement of Financial Accounting Standards SFAS No. 150 (SFAS
150), "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and
Equity." SFAS 150 requires certain financial instruments that have historically been classified as
equity to be classified as debt (or as an asset in certain circumstances). SFAS 150 is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003, except for mandatorily
redeemable financial instruments of nonpublic entities. Neither IPALCO nor any of its consolidated
subsidiaries has any financial instruments that are within the scope of SFAS 150.

4.  SEGMENT INFORMATION

IPALCO's operations are made up almost entirely of its ownership of IPL, its consolidated
electric utility, which is a reportable business segment. In addition, IPALCO has outstanding $750
million of Senior Secured Notes (the IPALCO Notes); approximately $4.3 million and $6.4 million of
nonutility cash and cash equivalents, as of September 30, 2003 and December 31, 2002, respectively;
nonutility investments at Mid America of $5.8 million and $6.4 million at September 30, 2003 and
December 31, 2002, respectively; and income taxes related to those items. There was no operating
income for any nonutility activities during the periods covered by this report. Nonutility assets
represented less than 2% of IPALCO's total assets as of September 30, 2003 and December 31, 2002 and
nonutility capital expenditures represented less than 1% of IPALCO's total capital expenditures for
the nine month periods ended September 30, 2003 and 2002.

5.  INDEBTEDNESS AND RESTRICTED CASH

In May 2003, IPL extended the maturity of its $45 million committed line of credit to May 21,
2004. In June 2003, IPL executed an agreement which combined its existing $40.6
million liquidity facility (related to $40 million of IPL variable rate bonds, which are remarketed
weekly) and its $30 million committed line of credit into one two-tranche agreement. The new agreement maturesJune 3, 2004.

On August 6, 2003, IPL issued $110 million of 6.30% first mortgage bonds due July 1, 2013. The
net proceeds of approximately $109 million were used primarily to finance a portion of IPL's capital
expenditure program, to reimburse IPL's treasury for expenditures previously incurred in connection
with the capital expenditure program and to repay amounts outstanding on IPL's credit lines. In
addition, $21.9 million remained in a restricted account as of September 30, 2003 to be used only
for capital expenditures in accordance with an order issued by the Indiana Utility Regulatory
Commission approving IPL's 2003-2006 financing program.

On October 29, 2003, IPL Funding Corporation extended the maturity of its Receivables Sale
Agreement to October 27, 2004. The agreement provides for unrelated parties to purchase, on a
revolving basis, up to $50.0 million of accounts receivable that IPL Funding purchased from IPL.

6.  COMMITMENTS AND CONTINGENCIES

Legal

In March 2002, IPALCO and certain former officers and directors of IPALCO were named as
defendants in an Employment Retirement Income Security Act (ERISA) class action lawsuit filed in the
U.S. District Court for the Southern District of Indiana. In May 2002, an amended complaint was
filed asserting that the former members of the pension committee breached their fiduciary duties to
the plaintiffs under ERISA by investing assets of the Thrift Plan in the common stock of IPALCO
prior to the acquisition of IPALCO by AES. On September 30, 2003, the court certified a class
consisting of the Thrift Plan and all plan participants and beneficiaries who held a beneficial
interest in IPALCO stock on or about March 27, 2001, which was exchanged for shares of AES common
stock. On October 31, 2003, the plaintiffs and defendants both moved for summary judgment as to
liability. The court has not yet ruled on those motions. We do not believe the suit is meritorious.
While we cannot predict the outcome, we do not believe that the suit will have a material adverse
effect on IPALCO's financial condition, results of operations or liquidity.

Since May, 2003, IPALCO, IPL, AES and certain former directors and officers of IPALCO and/or IPL
received subpoenas from the Securities Division of the Indiana Secretary of State seeking
information focused largely on circumstances surrounding the acquisition of IPALCO by AES. The
Secretary of State's inquiry is ongoing. IPALCO, IPL, AES and the individuals have produced various
materials in response to the subpoenas.

In September 2002, IPALCO and certain of its former officers and directors were sued in the U.S.
District Court for the Southern District of Indiana in connection with IPALCO's acquisition by AES.
The lawsuit purports to be filed on behalf of all persons who exchanged their shares of IPALCO
common stock for shares of AES common stock. The complaint alleges violations of Section 11 of the
Securities Act; Sections 10(b), 14(a) and 20(a) of the Exchange Act and Rules 10b-5 and 14a-9. In
August 2003, the suit was consolidated with three other actions pending in the same court against,
generally, AES and several former and current AES officers. We believe that the suit is without
merit. While we cannot predict the outcome, we do not believe that the suit will have a material
adverse effect on IPALCO's financial condition, results of operations or liquidity.

In November 2002, IPL, IPALCO, and AES were named as defendants in a Fair Labor Standards Act
(FLSA) collective action lawsuit filed in the U.S. District Court for the Southern District of
Indiana. The complaint alleges that certain former IPL supervisors were not paid overtime pay at the
rate required by the FLSA. IPALCO and AES have been dismissed from the suit. We believe that IPL did
not violate the FLSA. While we cannot predict the outcome, we do not believe the suit will have a
material adverse effect on IPALCO's financial condition, results of operations or liquidity.

IPL has been named as a defendant in approximately 61 pending lawsuits alleging personal injury
or wrongful death stemming from exposure to asbestos and asbestos containing products formerly
located in IPL power plants. IPL has been named as a "premises defendant" in that IPL did
not mine, manufacture, distribute or install asbestos or asbestos containing products. These suits
have been brought on behalf of persons who worked for contractors or subcontractors hired by IPL.
Many of the original primary defendants3⁄4
the asbestos manufacturers3⁄4
have filed for bankruptcy protection. IPL has insurance coverage for many of these claims;
currently, these cases are being defended by counsel retained by various insurers who wrote policies
applicable to the period of time during which much of the exposure has been alleged. Although we do
not believe that any of the pending asbestos suits in which IPL is a named defendant will have a
material adverse effect on IPALCO's business or operations, we are unable to predict the number or
effect any additional suits may have. Accordingly, we cannot assure that the pending or any
additional suits will not have a material effect on our business or operations.

In addition, IPALCO and its consolidated subsidiaries are involved in litigation arising in the
normal course of business. While the results of such litigation cannot be predicted with certainty,
management, based upon advice of counsel, believes that the final outcome will not have a material
adverse effect on IPALCO's consolidated financial statements.

Environmental

With respect to environmental issues, IPL has ongoing discussions with various regulatory
authorities and we continue to believe that IPL is in compliance with its various permits. On
October 27, 1998, the U.S. Environmental Protection Agency issued a final rule, referred to as the
NOx SIP call, which imposes more stringent limits on nitrogen oxide (NOx)
emissions from fossil fuel-fired steam electric generators. IPL's current estimates are that the
NOx SIP call will necessitate capital expenditures of approximately $227 million during
2003-2005 to achieve substantially all of the required NOx emission reductions.

Other

As of September 30, 2003, Mid-America had a commitment to invest additional capital of up
to $4.6 million, upon the call of the general partner, in EnerTech Capital Partners II L.P., a
venture capital fund.

In connection with the sale of certain thermal assets held by subsidiaries of IPALCO in November
2000, the IPALCO subsidiaries agreed to indemnify the buyer on an after-tax basis from and against
all losses arising out of any liabilities excluded from the sale and certain litigation and
environmental matters existing at the closing date, November 2, 2000. IPALCO has guaranteed this
indemnification up to $14.6 million. Claims regarding a breach of an environmental representation or
regarding an excluded liability must be brought on or before November 2, 2004.

7.  RELATED PARTY TRANSACTIONS

Effective September 1, 2003, IPALCO and IPL entered into a property insurance program in
which AES and other AES subsidiaries also participate. The program includes a policy issued by a
third party insurance company for funding losses of the participants up to a total aggregate amount
of $20 million. Funds to pay claims within this limit will be derived from premiums paid to this
third party carrier by the participants and will be deposited into a trust fund owned by AES Global
Insurance Company, a wholly-owned subsidiary of AES, but controlled by the third party carrier.
Claims above the $20 million aggregate will be covered by separate insurance policies issued by a
syndicate of third party carriers. These policies will provide coverage of $600 million per
occurrence.

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q includes "forward-looking statements" including, in particular, the
statements about our plans, strategies and prospects under the heading "Management's Discussion
and Analysis of Financial Condition and Results of Operations." Forward-looking statements
express an expectation or belief and contain a projection, plan or assumption with regard to, among
other things, future revenues, income or capital structure. Such statements of future events or
performance are not guarantees of future performance and involve estimates, assumptions and
uncertainties. The words "could," "may," "predict,"
"anticipate," "would," "should," "believe,"
"estimate," "expect," "forecast," "project,"
"objective," and similar expressions are intended to identify forward-looking
statements.

Some important factors that could cause our actual results or outcomes to differ materially from
those discussed in the forward-looking statements include, but are not limited to; our ownership by
AES, changes in our credit ratings, fluctuations in customer growth and demand, weather and weather-
related damage, fuel costs, generating unit availability and capacity, purchased power costs and
availability, regulatory action, environmental matters, federal and state legislation, interest
rates, availability and cost of capital, capital market performance of pension plan assets, labor
strikes, the timing of deregulation and competition, product development and technology changes,
construction cost overruns, local economic conditions, the ultimate disposition of litigation and
the specific needs of plants to perform unanticipated facility maintenance or repairs or outages.
Most of these factors affect us through our consolidated subsidiary, IPL.

Overview

IPALCO Enterprises, Inc. (IPALCO) is a holding company incorporated under
the laws of the state of Indiana. Our principal subsidiary, Indianapolis Power & Light Company
(IPL), is engaged primarily in generating, transmitting, distributing and selling electric energy to
approximately 450,000 customers in the City of Indianapolis and neighboring cities, towns and
communities, and adjacent rural areas all within the state of Indiana, the most distant point being
approximately forty miles from Indianapolis. IPL has an exclusive right to provide retail electric
service to those customers. IPL owns and operates four generating stations. Two of the generating
stations are primarily coal-fired stations. The third station has a combination of units that use
coal (base load capacity) and natural gas and/or oil (peaking capacity) for fuel to produce
electricity. The fourth station is a small peaking station that uses gas-fired combustion turbine
technology for the production of electricity. IPL's net electric generation capability for winter is
3,342 megawatts and net summer capability is 3,224 megawatts.

RESULTS OF OPERATIONS

Comparison of Quarters Ended September 30, 2003 and September 30, 2002

Our third quarter 2003 net income of $30.8 million decreased $10.0 million from net
income of $40.8 million in the third quarter of 2002. The following discussion highlights the
factors contributing to this change.

Operating Revenues

Operating revenues decreased by $5.8 million during the three-month period ended September
30, 2003 compared to the prior year as a result of the following (dollars in thousands):

|                         |  | 2003      | 2002      | Increase(Decrease) | PercentageChange
|------------------------ |  | --------- | --------- | ------------------ | ----------------
|Retail Revenues          |  | $ 209,847 | $ 216,256 | $   (6,409)        | (3.0)%          
|Wholesale Revenues       |  | 8,740     | 7,963     | 777                | 9.8%            
|Miscellaneous Revenues   |  | 2,403     | 2,536     | (133)              | (5.2)%          
|Total Operating Revenues |  | $ 220,990 | $ 226,755 | $   (5,765)        | (2.5)%          
|                         |  |           |           |                    |                 
|Heating Degree Days      |  | 89        | 22        | 67                 | 304.5%          
|Cooling Degree Days      |  | 685       | 1,029     | (344)              | (33.4)%         

The decrease in operating revenues in the third quarter of 2003 as compared to the same
period in 2002 was primarily due to the $6.4 million decrease in retail revenues, partially offset
by the $0.8 million increase in wholesale revenues. The decrease in retail revenues was primarily
the result of a 6.0% decrease in the number of retail kWh's sold, primarily due to the decrease in
cooling degree days, partially offset by the increase in heating degree days. The increase in
wholesale revenues was due to a 3.9% increase in the number of wholesale kWh's sold and a 5.7%
increase in the average price per wholesale kWh sold. The price of wholesale kWh's is primarily
impacted by the regional demand and supply for electricity coupled with the short term cost for
natural gas and fuel oil.

Operating Expenses

Operating expenses increased $4.0 million, or 2.4% during the three months ended September
30, 2003, as compared to the same period in 2002. This is primarily the result of a $4.4 million
increase in maintenance expenses, a $2.0 million increase in fuel costs and a $1.4 million increase
in depreciation and amortization, partially offset by a $3.8 million decrease in power purchased.
The maintenance expense increase is primarily the result of $1.9 million spent in the third quarter
of 2003 to repair damage caused by severe storms, an insurance settlement in 2002, which reduced
maintenance expenses by $1.1 million and increases associated with the plant maintenance schedule of
the third quarter of 2003 compared to 2002. Maintenance expenses are expected to continue to be
higher in 2003 as more scheduled plant maintenance outages are planned to coincide with our NOx
compliance construction program. The increase in depreciation and amortization is primarily due to a
$1.5 million increase in depreciation resulting primarily from a $144.9 million increase in the
beginning utility plant in service balances between the two periods. The $2.0 million increase in
fuel costs results primarily from a $5.3 million increase in deferred fuel adjustments in the third
quarter of 2003 compared to the same period in 2002, partially offset by decreases of $1.7 million
and $1.1 million in the cost of natural gas and coal burned during the comparative periods,
respectively. The actual costs of natural gas and coal used in the third quarter of 2003 was lower
due to a 5.0% decrease in the number of kWh's produced by IPL during the comparative periods
resulting primarily from the milder temperatures in the third quarter of 2003. The $5.3 million
increase in the deferred fuel adjustments resulted primarily from IPL underestimating the cost of
fuel in 2002 in its fuel adjustment clause. IPL is permitted to recover this underestimate in future
rates through the fuel cost adjustment proceeding and therefore the costs are deferred and amortized
into expense in the same period that IPL's rates are adjusted. The $3.8 million decrease in power
purchased was primarily due to a 40.4% decrease in the number of kWh's purchased during the third
quarter of 2003 as compared to the same period in 2002, resulting primarily from a milder summer in
2003.

In addition, total operating income taxes remained relatively constant, but was the result of a
$3.1 million decrease in federal income tax expense and a $3.8 million increase in state income tax
expense. The decrease in federal income tax expense was due to a decrease in operating federal
taxable income, while the increase in state income tax expense was primarily the effect ($3.7
million) of the increase in the state income tax rate from 4.5% to 8.5%.

Primarily as a result of the foregoing, utility operating income decreased $9.8 million or 16.1%
during the third quarter of 2003 from the same period in 2002.

Other Income and Deductions

Other income and deductions increased 37.9% from income of $5.6 million in 2002 to $7.8
million in 2003. Included in this increase is a $1.1 million increase in the income tax benefit and
a $1.1 million increase in the allowance for equity funds used during construction. The income tax
benefit increase resulted primarily from the increase in the state income tax rate ($0.7 million)
and a $0.4 million favorable variance in federal income taxes resulting from less nonoperating
federal taxable income. The allowance for equity funds used during construction includes $0.6
million related to NOx expenditures in 2003.

Interest and Other Charges

Interest and other charges increased to $28.3 million in the third quarter of 2003 from $25.9
million in the same period in 2002. The increase includes $1.1 million in interest on the $110
million 6.30% first mortgage bonds issued August 6, 2003 and a $1.9 million increase in interest
expense on the IPALCO Notes due to a 50 basis point increase, beginning November 15, 2002, and
another 50 basis points increase, beginning May 15, 2003, in the interest rate on the IPALCO Notes
as a result of ratings downgrades. The allowance for borrowed funds used during construction
includes $0.3 million related to NOx expenditures in 2003.

Comparison of Nine Month Periods Ended September 30, 2003 and September 30, 2002

Net income for the nine months ended September 30, 2003 was $80.0 million, as
compared to $103.3 million for the same period in 2002. The following discussion highlights the
factors contributing to the decrease.

Operating Revenues

Operating revenues increased by $7.3 million to $628.7 million during the nine-month period
ended September 30, 2003 compared to the prior year as a result of the following (dollars in
thousands):

|                         |  | 2003      | 2002      | Increase(Decrease) | PercentageChange
|------------------------ |  | --------- | --------- | ------------------ | ----------------
|Retail Revenues          |  | $ 590,007 | $ 589,259 | $     748          | 0.1%            
|Wholesale Revenues       |  | 31,252    | 24,389    | 6,863              | 28.1%           
|Miscellaneous Revenues   |  | 7,468     | 7,745     | (277)              | (3.6)%          
|Total Operating Revenues |  | $ 628,727 | $ 621,393 | $  7,334           | 1.2%            
|                         |  |           |           |                    |                 
|Heating Degree Days      |  | 3,704     | 3,088     | 616                | 19.9%           
|Cooling Degree Days      |  | 878       | 1,404     | (526)              | (37.5)%         

The increase in operating revenues in the nine months ended September 30, 2003 as compared to the
same period in 2002 was primarily due to the $6.9 million increase in wholesale revenues. The
increase in wholesale revenues was primarily due to a 34.7% increase in the average price per
wholesale kWh sold, partially offset by a 4.9% decrease in the number of wholesale kWh's sold. The
price of wholesale kWh's is primarily impacted by the regional demand and supply for electricity
coupled with the short term cost for natural gas and fuel oil.

Operating expenses increased $27.3 million, or 5.9% during the nine months ended September 30,
2003, as compared to the same period in 2002. This is primarily the result of a $14.5 million
increase in maintenance expenses, a $7.5 million increase in other operating expenses and a $5.1
million increase in depreciation and amortization. The maintenance expense increase is primarily the
result of increases associated with the plant maintenance schedule of 2003 compared to 2002, $1.9
million spent in the third quarter of 2003 to repair damage caused by severe storms and an insurance
settlement in the third quarter of 2002, which reduced maintenance expenses by $1.1 million.
Maintenance expenses are expected to continue to be higher in 2003 as more scheduled plant
maintenance outages are planned to coincide with our NOx compliance construction program. The
increase in other operating expenses is primarily due to a $7.0 million increase in salaries and
wages, a $2.5 million increase in pension and other postretirement expenses and a $1.9 million
increase in IPL's annual property insurance premiums effective September 1, 2002, partially offset
by a $1.0 million increase in gains from the sale of sulfur dioxide allowances. The increase in
depreciation and amortization is primarily due to a $5.6 million increase in depreciation resulting
primarily from a $138.3 million increase in the beginning utility plant in service balances between
the two periods and an additional $30.6 million of utility plant placed in service during 2003, net
of dispositions.

In addition, total operating income taxes remained relatively constant, but was the result of a
$9.9 million decrease in federal income tax expense and a $9.6 million increase in state income tax
expense. The decrease in federal income tax expense was due to a decrease in operating federal
taxable income, while the increase in state income tax expense was primarily the effect ($9.3
million) of the increase in the state income tax rate from 4.5% to 8.5%.

Primarily as a result of the foregoing, utility operating income decreased $19.9 million or 12.5%
during the nine months ended September 30, 2003 from the same period in 2002.

Other Income and Deductions

Other income and deductions increased slightly from income of $20.5 million in the nine
months ended September 30, 2002 to $21.4 million for the same period in 2003. This increase was
primarily due to a $3.6 million increase in the income tax benefit, which resulted primarily from
the increase in the state income tax rate ($1.9 million) and a $1.2 million favorable variance in
federal income taxes resulting from less nonoperating federal taxable income. The decrease in
nonoperating federal taxable income was primarily due to the additional interest expense on the
IPALCO Notes (see below) and the $110 million first mortgage bonds issued August 6, 2003. The income
tax benefit increase was partially offset by a $2.5 million gain in 2002 from the sales of noncore
real estate assets and a $0.8 million loss in 2003 on the sale of 1/3 of our ownership interest in
EnerTech Capital Partners II L.P. The allowance for equity funds used during construction includes
$1.5 million related to NOx expenditures in 2003 and $2.2 million in 2002 related to a gas
combustion turbine placed in service during 2002.

Interest and Other Charges

Interest and other charges increased $4.2 million for the nine months ended September 30,
2003 from the same period in 2002. The increase includes $1.1 million in interest on the $110
million 6.30% first mortgage bonds issued August 6, 2003 and a $3.8 million increase in interest
expense on the IPALCO Notes due to a 50 basis point increase, beginning November 15, 2002, and
another 50 basis points increase beginning May 15, 2003 in the interest rate as a result of ratings
downgrades. In addition, the allowance for borrowed funds used during construction includes $0.7
million related to NOx expenditures in 2003 and $1.0 million in 2002 related to a gas combustion
turbine placed in service during 2002.

LIQUIDITY AND CAPITAL RESOURCES

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

As of September 30, 2003, IPALCO had cash and cash equivalents of $34.8 million and an additional
$21.9 million of cash and cash equivalents restricted for the purpose of funding IPL's capital
expenditures. In addition, IPL has available borrowing capacity of $74.3 million under its existing
$75 million committed credit facilities. All long-term borrowings by IPL must first be approved by
the Indiana Utility Regulatory Commission (IURC) and the aggregate amount of IPL's short-term
borrowings must be approved by the Federal Energy Regulatory Commission. Also, IPL and IPALCO have
restrictions on the amount of new debt they may issue by contractual obligations of the parent
company, AES, and by financial covenant restrictions under existing debt obligations at IPL and
IPALCO. Under such restrictions, IPL is generally allowed to fully draw the amounts available on
IPL's committed credit facilities, refinance existing debt, issue up to $50 million of new long term
debt approved by the IURC and incur certain other indebtedness. We believe that existing cash
balances, cash generated from operating activities and borrowing capacity on IPL's committed credit
facilities will be adequate on a short-term and long-term basis to meet anticipated operating
expenses, interest expense on outstanding indebtedness, recurring capital expenditures and dividends
to AES. Sources for principal payments on outstanding indebtedness and nonrecurring capital
expenditures, including our NOx emissions reduction program, are expected to be obtained from: (i)
existing cash balances; (ii) excess cash generated from operating activities; (iii) borrowing
capacity on IPL's committed credit facilities and (iv) additional debt financing.

In May, IPL extended the maturity of its $45 million committed line of credit to May 21, 2004. In
June, IPL executed an agreement which combined its existing $40.6 million liquidity facility
(related to $40 million of IPL variable rate bonds, which are remarketed weekly) and its $30 million
committed line of credit into one two-tranche agreement. The new agreement matures June 3, 2004.

On August 6, 2003, IPL issued $110 million of 6.30% first mortgage bonds due July 1, 2013. The
net proceeds of approximately $109 million were used primarily to finance a portion of IPL's capital
expenditure program, to reimburse IPL's treasury for expenditures previously incurred in connection
with the capital expenditure program and to repay amounts outstanding on IPL's credit lines. In
addition, $21.9 million remained in a restricted account as of September 30, 2003 to be used only
for capital expenditures, pursuant to the IURC 2003 Financing Order, as defined below.

On October 29, 2003, IPL Funding Corporation extended the maturity of its Receivables Sale
Agreement to October 27, 2004. The agreement provides for unrelated parties (the
"Purchasers") to purchase, on a revolving basis, up to $50.0 million of accounts
receivable that IPL Funding purchased from IPL.

IURC Orders.  On February 12, 2003, the IURC issued an order approving IPL's 2003-
2006 financing program (the IURC 2003 Financing Order), including, among other things, the issuance
of up to $160 million of additional long-term debt to pay, in part, for IPL's construction program
during 2003-2005, and the refinancing of $80 million of long-term debt, which matures in February
2004. In addition, the IURC 2003 Financing Order set forth a process whereby IPL must file a report
with the IURC, prior to declaring or paying a dividend, that sets forth (1) the amount of any
proposed dividend, (2) the amount of dividends distributed during the prior twelve months, (3) an
income statement for the same twelve-month period, (4) the most recent balance sheet, and (5) IPL's
capitalization as of the close of the preceding month, as well as a pro forma capitalization giving
effect to the proposed dividend, with sufficient detail to indicate the amount of unappropriated
retained earnings. If within twenty (20) calendar days the IURC does not initiate a proceeding to
further explore the implications of the proposed dividend, the proposed dividend will be deemed
approved. The IURC 2003 Financing Order stated that such process should continue in effect during
the term of the financing authority, which expires December 31, 2006.

On February 28, 2003, IPL filed a petition for reconsideration, or in the alternative, for
rehearing with the IURC. This petition sought clarification of certain provisions of the IURC 2003
Financing Order. In addition, the petition requested that the IURC establish objective criteria in
connection with the reporting process related to IPL's long term debt capitalization ratio. On March
14, 2003, IPL filed a Notice of Appeal of the IURC 2003 Financing Order, as amended, in the Indiana
Court of Appeals. We subsequently filed a motion to dismiss such appeal.

On April 16, 2003, the IURC issued its order in response to IPL's petition for reconsideration.
The IURC declined to provide objective criteria relating to the dividend reporting process, and did
not set a definitive time frame within which an investigation of a proposed dividend would be
concluded. The IURC did make certain requested clarifications and corrections with regard to the
IURC 2003 Financing Order, including the following: (1) the dividend reporting process applies only
to dividends on IPL's common stock, not on its preferred stock; (2) a confidentiality process is
established to maintain confidentiality of information filed under the dividend reporting process
until such information has been publicly released and is no longer confidential; (3) dividends are
not to be paid until after the twenty calendar days have passed, or the IURC approves the dividend
after initiating a proceeding to explore the implications of a proposed dividend; and (4) certain
technical corrections.

All of the reports IPL has filed with the IURC under the dividend reporting process were deemed
approved after twenty days had elapsed and the IURC did not initiate any proceeding to explore the
implications of the proposed dividends. We continue to believe that IPL will not be prevented from
paying future dividends in the ordinary course of prudent business operations.

Capital Requirements.  Our capital requirements are primarily related to IPL's
construction expenditures needed to meet customers' needs for electricity, for environmental
compliance and for energy and outage management systems. IPL's construction expenditures totaled
$104.8 million during the nine months ended September 30, 2003. This represented an increase of
$30.1 million from the comparable period in 2002, primarily due to expenditures associated with new
environmental standards imposed by the EPA relating to NOx emission reductions. Construction
expenditures during the first nine months of 2003 were financed with internally generated cash
provided by operations, borrowings on IPL's committed credit facilities and the issuance of $110
million of first mortgage bonds by IPL. We estimate total capital expenditures of approximately $160
million in 2003, $170 million in 2004 and $115 million in 2005. These amounts include approximately
$227 million for construction associated with NOx emission reductions.

Pension Plan.  Pension plan assets consist of investments in equity, real estate,
fixed income securities and cash. Funding for the qualified defined benefit pension plan is based
upon actuarially determined contributions that take into account the amount deductible for income
tax purposes and the minimum contribution required under the Employee Retirement Income Security Act
of 1974, as amended, as well as targeted funding levels necessary to qualify under standards of the
Pension Benefit Guaranty Corporation for exemption from certain administrative requirements. Due to
the decline in market value of the investment portfolio over the last few years, assets held in
trust to satisfy plan obligations have decreased. Additionally, recent decreases in long-term
interest rates have the effect of increasing the measured liability for funding purposes. As a
result of these events, together with Voluntary Early Retirement Programs offered in recent years,
our estimate of future funding obligations has increased substantially.

During 2003, we funded $96.0 million to the pension plan. Depending on the timing of
contributions and other factors, to meet our funding target, we anticipate additional program-
related cash contributions for pension benefits of approximately $43.0 to $74.0 million through
2005. These estimates are based on actuarial assumptions using discount rates of 6.65% for 2003,
5.52% for 2004 and 5.32% for 2005. The discount rate assumption is based on our estimate of the
four-year weighted average of 30-year treasury rates and the assumption that pension relief, as
enacted by the United States Congress, will expire after 2003. Such estimates are also based on the
market value of our pension plan assets at December 31, 2002, and an assumed rate of return on our
pension plan assets of 9.0% during 2003 and 2004. If the rate of return on our pension plan assets
for 2003 and 2004 were 0%, our anticipated pension contributions through 2005 that would be
necessary for us to meet the same funding target would increase to a range of $56.0 million to $88.0
million.

Dividends.  IPALCO did not pay any dividends during the first quarter of 2003,
however we did pay total dividends of $63.3 million to AES in the second quarter of 2003 and $29.2
million in the third quarter of 2003. Future distributions will be determined at the discretion of
the Board of Directors of IPALCO and will depend primarily on dividends received from IPL and such
other factors as the Board of Directors of IPALCO deems relevant. Dividends from IPL are affected by
IPL's results of operations, cash flows, financial condition, capital requirements, regulatory
considerations (including compliance with the IURC 2003 Financing Order described above) and such
other factors as the Board of Directors of IPL deems relevant.

Related Party Transactions. Effective September 1, 2003, IPALCO and IPL entered
into a property insurance program in which AES and other AES subsidiaries also participate. The
program includes a policy issued by a third party insurance company for funding losses of the
participants up to a total aggregate amount of $20 million. Funds to pay claims within this limit
will be derived from premiums paid to this third party carrier by the participants and will be
deposited into a trust fund owned by AES Global Insurance Company, a wholly-owned subsidiary of AES,
but controlled by the third party carrier. Claims above the $20 million aggregate will be covered by
separate insurance policies issued by a syndicate of third party carriers. These policies will
provide coverage of $600 million per occurrence. Management believes that the combined cost of these
policies is less than comparable insurance in the marketplace.

Other. In December, 2003, IPL plans to offer 4,050 acres of undeveloped property
near Martinsville, Indiana for sale through public auction. The site was being held as a possible
site for a future power plant. IPL holds an option to purchase 876 acres at a more optimal location
for IPL for use as a potential power plant site.

---

Item 4.	Controls and Procedures

1. Disclosure Controls and Procedures.
2. Internal Control over Financial Reporting.

---

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Please refer to Note 6 of the accompanying consolidated financial statements for a
summary of significant legal proceedings involving IPALCO and/or IPL. We are also subject to routine
litigation, claims and administrative proceedings arising in the ordinary course of business, none
of which is expected to have a material adverse effect on our financial position or results of
operations.

Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits



|**Exhibit No.** | **Document**                                                                                                                                                                                                                                                                                                         
|--------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                |                                                                                                                                                                                                                                                                                                                      
|10.1            | Forty-Seventh Supplemental Indenture dated as of August 1, 2003 to the Mortgage and
Deed of Trust, dated as of May 1, 1940 between IPL and Bank One, National Association, as successor
in interest to American National Bank & Trust Company of Chicago, Trustee                                                    
|                |                                                                                                                                                                                                                                                                                                                      
|10.2            | Tenth amendment dated as of October 29, 2003, to Receivables Sale Agreement among IPL
Funding Corporation as the Seller, ABN AMRO Bank N.V., as the agent, the Liquidity Providers from
time to time party thereto, ABN AMRO Bank N.V. as the enhancer and Windmill Funding Corporation
dated as of December 20, 1996
|                |                                                                                                                                                                                                                                                                                                                      
|31.1            | Certification by Chief Executive Officer required by Rule 13a-14(a) or 15d-14(a).                                                                                                                                                                                                                                    
|                |                                                                                                                                                                                                                                                                                                                      
|31.2            | Certification by Chief Financial Officer required by Rule 13a-14(a) or 15d-14(a).                                                                                                                                                                                                                                    
|                |                                                                                                                                                                                                                                                                                                                      
|32              | Certification required by Rule 13a-14(b) or 15d-14(b).                                                                                                                                                                                                                                                               

(b) Reports on Form 8-K -No reports on Form 8-K were filed during the period covered by this
report.

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**SIGNATURE**



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: November 11, 2003



| |     |                         
| | --- | ------------------------
| | By: | /s/ Hamsa Shadaksharappa

| |                                                                                          
| | -----------------------------------------------------------------------------------------
| |                                                                                          
| | Hamsa Shadaksharappa                                                                     
| | Senior Vice President-Financial Services, 
         Chief Financial Officer and Secretary
| | (Principal Financial and Accounting Officer 
and Duly Authorized Officer)