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
                  March 31, 1998              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 March 31, 1998
           -----                        -----------------------------
  Common (Without Par Value)                 44,928,802 shares








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

                                      INDEX
                                      -----


                                                                   Page No.
                                                                   --------

PART I.   FINANCIAL INFORMATION

         Statements of Consolidated Income -
            Three Months Ended March 31, 1998 and 1997                  2

         Consolidated Balance Sheets - March 31, 1998 and
            December 31, 1997                                           3

         Statements of Consolidated Cash Flows -
            Three Months Ended March 31, 1998 and 1997                  4

         Notes to Consolidated Financial Statements                   5-7

         Management's Discussion and Analysis of
            Financial Condition and Results of Operations            8-10

PART II.  OTHER INFORMATION                                         11-12








                                        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
                                                                              March 31
                                                                1998                    1997
                                                                --------------          -------------
<S>                                                             <C>                     <C>   
UTILITY OPERATING REVENUES:
  Electric                                                      $     178,909           $    183,666
  Steam                                                                11,412                 11,633
                                                                --------------          -------------
    Total operating revenues                                          190,321                195,299
                                                                --------------          -------------

UTILITY OPERATING EXPENSES:
  Operation:
    Fuel                                                               41,040                 41,616
    Other                                                              34,921                 32,633
  Power purchased                                                       1,007                  4,159
  Purchased steam                                                       1,890                  2,219
  Maintenance                                                          19,740                 15,698
  Depreciation and amortization                                        25,285                 25,740
  Taxes other than income taxes                                         8,822                  8,873
  Income taxes - net                                                   17,474                 19,827
                                                                --------------          -------------
    Total operating expenses                                          150,179                150,765
                                                                --------------          -------------
UTILITY OPERATING INCOME                                               40,142                 44,534
                                                                --------------          -------------

OTHER INCOME AND (DEDUCTIONS):
  Allowance for equity funds used during construction                     265                  1,157
  Other - net                                                            (426)                (1,197)
  Income taxes - net                                                    2,852                    735
                                                                --------------          -------------
    Total other income - net                                            2,691                    695
                                                                --------------          -------------
INCOME BEFORE INTEREST AND OTHER CHARGES                               42,833                 45,229
                                                                --------------          -------------

INTEREST AND OTHER CHARGES:
  Interest                                                             16,991                 11,632
  Allowance for borrowed funds used during construction                  (204)                  (246)
  Preferred dividend requirements of subsidiary                           709                    795
                                                                --------------          -------------
    Total interest and other charges - net                             17,496                 12,181
                                                                --------------          -------------
INCOME BEFORE CUMULATIVE EFFECT
   OF ACCOUNTING CHANGE                                                25,337                 33,048

CUMULATIVE EFFECT OF ACCOUNTING CHANGE -
   NET OF TAXES (Note 4)                                                    -                 18,347
                                                                --------------          -------------

NET INCOME                                                      $      25,337           $     51,395
                                                                ==============          =============

BASIC EARNINGS PER SHARE (Note 2)

INCOME BEFORE CUMULATIVE EFFECT
   OF ACCOUNTING CHANGE                                         $        0.57           $       0.58
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (Note 4)                             -                   0.32
                                                                --------------          -------------

NET INCOME                                                      $        0.57           $       0.90
                                                                ==============          =============

DILUTED EARNINGS PER SHARE (Note 2)

INCOME BEFORE CUMULATIVE EFFECT
   OF ACCOUNTING CHANGE                                         $        0.56           $       0.58
CUMULATVE EFFECT OF ACCOUNTING CHANGE (Note 4)                              -                   0.32
                                                                --------------          -------------

NET INCOME                                                      $        0.56           $       0.90
                                                                ==============          =============

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

                            IPALCO ENTERPRISES, INC. and SUBSIDIARIES
                                   Consolidated Balance Sheets
                                         (In Thousands)
                                           (Unaudited)
<CAPTION>
                                                            
                                                                    March 31          December 31
                          ASSETS                                      1998               1997
                          ------                                                                 
                                                                 --------------      -------------
<S>                                                              <C>                 <C>   
UTILITY PLANT:
  Utility plant in service                                       $   2,810,550       $  2,800,446
  Less accumulated depreciation                                      1,143,484          1,121,317
                                                                 --------------      -------------
      Utility plant in service - net                                 1,667,066          1,679,129
  Construction work in progress                                         78,233             77,030
  Property held for future use                                          10,224             10,224
                                                                 --------------      -------------
      Utility plant - net                                            1,755,523          1,766,383
                                                                 --------------      -------------
OTHER ASSETS:
  Nonutility property - at cost, less accumulated                       72,443             72,865
depreciation
  Other investments                                                     13,508             13,023
                                                                 --------------      -------------
      Other assets - net                                                85,951             85,888
                                                                 --------------      -------------
CURRENT ASSETS:
  Cash and cash equivalents                                             46,938             17,293
  Accounts receivable and unbilled revenue
   (less allowance for doubtful accounts
   1998, $1,227 and 1997, $1,202)                                       38,057             47,033
  Fuel - at average cost                                                33,193             35,257
  Materials and supplies - at average cost                              49,015             48,416
  Prepayments and other current assets                                   7,238              9,100
                                                                 --------------      -------------
      Total current assets                                             174,441            157,099
                                                                 --------------      -------------
DEFERRED DEBITS:
  Regulatory assets                                                    124,634            126,784
  Miscellaneous                                                         24,022             19,404
                                                                 --------------      -------------
      Total deferred debits                                            148,656            146,188
                                                                 --------------      -------------
              TOTAL                                              $   2,164,571       $  2,155,558
                                                                 ==============      =============

              CAPITALIZATION AND LIABILITIES
              ------------------------------

CAPITALIZATION:
  Common shareholders' equity:
    Common stock                                                 $     407,751       $    395,851
    Unearned compensation - restricted stock awards                     (7,713)             1,209
    Premium on 4% cumulative preferred stock                               649                649
    Retained earnings                                                  545,714            532,730
    Treasury stock, at cost                                           (403,101)          (403,101)
                                                                 --------------      -------------
      Total common shareholders' equity                                543,300            527,338
  Cumulative preferred stock of subsidiary (Note 2)                     59,135              9,135
  Long-term debt (less current maturities and
   sinking fund requirements)                                          952,660          1,032,846
                                                                 --------------      -------------
      Total capitalization                                           1,555,095          1,569,319
                                                                 --------------      -------------
CURRENT LIABILITIES:
  Notes payable - banks and commercial paper                             8,000             33,700
  Current maturities and sinking fund requirements                      42,294              3,094
  Accounts payable and accrued expenses                                 55,320             66,105
  Dividends payable                                                     13,329             11,523
  Taxes accrued                                                         43,850             22,126
  Interest accrued                                                      11,443             15,493
  Other current liabilities                                             13,737             12,555
                                                                 --------------      -------------
      Total current liabilities                                        187,973            164,596
                                                                 --------------      -------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
  Accumulated deferred income taxes - net                              316,885            314,869
  Unamortized investment tax credit                                     44,085             44,783
  Accrued postretirement benefits                                       15,544             17,144
  Accrued pension benefits                                              40,287             39,821
  Miscellaneous                                                          4,702              5,026
                                                                 --------------      -------------
      Total deferred credits and other long-term                       421,503            421,643
liabilities
                                                                 --------------      -------------

COMMITMENTS AND CONTINGENCIES
              TOTAL                                              $   2,164,571       $  2,155,558
                                                                 ==============      =============



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

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

                                                                                Three Months Ended
                                                                                     March 31
                                                                              1998               1997
                                                                         --------------     --------------
<S>                                                                      <C>                <C>  
CASH FLOWS FROM OPERATIONS:
  Net income                                                             $      25,337      $      51,395
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                                               25,856             25,632
    Amortization of regulatory assets                                            2,591              3,913
    Deferred income taxes and investment tax credit adjustments - net              465              9,185
    Allowance for funds used during construction                                  (469)            (1,403)
    Cumulative effect of accounting change - before taxes                            -            (29,915)
  Change in certain assets and liabilities:
    Accounts receivable - excluding cumulative effect of accounting              8,976              6,581
change
    Fuel, materials and supplies                                                 1,465              6,756
    Accounts payable and accrued expenses                                      (10,785)           (10,188)
    Taxes accrued                                                               21,724             28,820
    Accrued pension benefits                                                       466                830
    Other - net                                                                 (2,164)            (1,740)
                                                                         --------------     --------------
Net cash provided by operating activities                                       73,462             89,866
                                                                         --------------     --------------

CASH FLOWS FROM INVESTING:
  Construction expenditures - utility                                          (13,297)           (13,390)
  Construction expenditures - nonutility                                          (210)              (177)
  Other                                                                         (5,426)            (1,118)
                                                                         --------------     --------------
Net cash used in investing activities                                          (18,933)           (14,685)
                                                                         --------------     --------------

CASH FLOWS FROM FINANCING:
  Retirement of long-term debt                                                 (41,000)                 -
  Short-term debt - net                                                        (25,700)           (38,000)
  Common dividends paid                                                        (11,162)           (21,103)
  Issuance of preferred stock (Note 2)                                          50,000                  -
  Issuance of common stock related to incentive compensation plans               3,180                 56
  Other                                                                           (202)               354
                                                                         --------------     --------------
Net cash used in financing activities                                          (24,884)           (58,693)
                                                                         --------------     --------------
Net increase in cash and cash equivalents                                       29,645             16,488
Cash and cash equivalents at beginning of period                                17,293             19,317
                                                                         --------------     --------------
Cash and cash equivalents at end of period                               $      46,938      $      35,805
                                                                         ==============     ==============

----------------------------------------------------------------------------------------------------------
Supplemental  disclosures of cash flow information:  Cash paid during the period
  for:
    Interest (net of amount capitalized)                                 $      20,489      $      14,372
                                                                         ==============     ==============
    Income taxes                                                         $      (2,652)     $      (2,595)
                                                                         ==============     ==============


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


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

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


1.      GENERAL

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

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

        In the opinion of management these  statements  reflect all adjustments,
        consisting of only normal recurring accruals,  including  elimination of
        all  significant  intercompany  balances  and  transactions,  which  are
        necessary  to a fair  statement  of the results for the interim  periods
        covered by such  statements.  Due to the seasonal nature of the electric
        utility business, the annual results are not generated evenly by quarter
        during the year.  Certain  amounts from prior year financial  statements
        have been  reclassified  to conform to the  current  year  presentation.
        Certain  amounts  have been  restated  due to the change to the unbilled
        revenue method of accounting  (see note 4). These  financial  statements
        and notes should be read in  conjunction  with the audited  consolidated
        financial statements included in Enterprises' 1997 Annual Report on Form
        10-K.

2.      CAPITAL STOCK

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

       Balance at December 31, 1997       44,649,844            $395,851,016
            Compensation plans               189,554               8,910,351
            Exercise of stock options         93,947               3,180,262
           Restricted stock canceled          (4,543)               (190,397)
                                          ----------            ------------ 
       Balance at March 31, 1998          44,928,802            $407,751,232
                                          ==========            ============

     The following is a reconciliation of the weighted average common shares for
the  basic and  diluted  earnings  per share  computations  in  accordance  with
Statement of Financial Accounting Standard (SFAS) No. 128:

                                              For the Quarter Ended March 31,
                                              -------------------------------
                                                  1998                 1997
                                                  ----                 ----
                                                       (In thousands)

       Weighted average common shares             44,839              57,037
       Dilutive effect of stock options              672                 167
                                                --------            --------
       Weighted average common
          and incremental shares                  45,511              57,204
                                                ========            ========
<PAGE>

        Preferred Stock

        On January  13,  1998,  Indianapolis  Power & Light  Company  issued $50
        million of  cumulative  preferred  stock  with a rate of 5.65%.  500,000
        shares were issued at $100 par value each.  The stock will be redeemable
        at par value, subject to certain  restrictions,  in whole or in part, at
        any time on or after January 1, 2008, at the option of IPL.


3.      LONG-TERM DEBT

        IPALCO's  Revolving  Credit  Facility  was  issued in April  1997 in the
        amount of $401 million.  The proceeds  were used to purchase,  through a
        self-tender offer, shares of IPALCO's  outstanding common capital stock.
        During the first  quarter of 1998,  IPALCO  reduced the debt amount by a
        net of $41  million  resulting  in a debt  balance  under the  Revolving
        Credit Facility of $282 million as of March 31, 1998.


4.      CUMULATIVE EFFECT OF ACCOUNTING CHANGE

        Effective  January 1, 1997,  IPL adopted the unbilled  revenue method of
        accounting  for all  electric  and  steam  sales to more  closely  match
        revenues with expenses.  Under this method, IPL accrues revenues for all
        electric  and steam energy  delivered  to  customers  during the period,
        whether billed or not.  Previously IPL recognized these revenues only as
        customers  were billed,  with the service  rendered  after monthly meter
        reading dates through the end of a calendar month recognized as revenues
        in the following month. The cumulative effect of accounting  change, net
        of taxes,  was a one-time  increase of $18.3 million  ($0.32 per share),
        reported as a separate  component  of net income in the  restated  first
        quarter earnings of 1997. The change had the effect of decreasing income
        before  cumulative  effect of accounting  change in the first quarter of
        1997 by $3.1 million ($.05 per share). The results of 1997 were restated
        for the accounting change.


5.      COMPREHENSIVE INCOME

        On January 1, 1998, IPALCO adopted SFAS No. 130, "Comprehensive Income,"
        which requires that changes in the amounts of certain  items,  including
        foreign currency translation adjustments and gains and losses on certain
        securities be shown in the financial statements.  It has been determined
        that  IPALCO  has  no  amounts   which  require   classification   under
        comprehensive income.

6.      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>       
Outstanding, December 31, 1997................       28.27               16.8317 -   31.375          2,045,338
   Exercised..................................       29.55               16.8317 -   31.375            (93,947)
                                                                                                     ---------
Outstanding, March 31, 1998...................       28.21               16.8317 -   31.375          1,951,391
                                                                                                     =========
</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 plans because the stock options price is equal
        to fair value at the grant  date.  Had  compensation  cost for the plans
        been  determined  based on the fair value at the grant  dates for awards
        under the plans consistent with the method of SFAS No. 123,  "Accounting
        for Stock-Based  Compensation," IPALCO's net income for the three months
        ended March 31, 1998 and 1997 would not have changed.  IPALCO  estimated
        the SFAS No. 123 fair value by utilizing  the binomial  options  pricing
        model with the following assumptions: dividend yields of 3.19% to 6.88%,
        risk-free rates of 6.38% to 6.88%, volatility of 12% to 13% and expected
        lives of 5 years.

        IPALCO has a Long-Term  Performance and Restricted Stock Incentive Plan.
        On January 5, 1998,  an  additional  9,432 shares were issued to reflect
        participants'  actual base salaries  during the  three-year  performance
        period from 1995 through 1997.

        On January 15, 1998,  an additional  33,712 shares of restricted  stock,
        and 33,719 shares of unrestricted stock, were issued due to Enterprises'
        performance during the three-year  performance period. The 33,719 shares
        of  unrestricted  stock represent the vesting of one-third of the shares
        following the end of the performance period.

        On January 27, 1998, the Board of Directors amended the 1995 Plan as the
        Long Term  Performance  and Restricted  Stock Incentive Plan (As Amended
        and Restated  effective  January 1, 1998) (1998  Plan).  Pursuant to the
        1998 Plan, an additional  900,000  shares of common stock of IPALCO have
        been  authorized  and reserved for issuance,  for a total of 1.5 million
        shares. Initial awards of 112,691 shares of restricted common stock were
        made to  participating  employees  on January 27,  1998.  These  initial
        grants were made subject to shareholder approval of the 1998 Plan, which
        approval was received on April 15, 1998.  Awards are made on established
        targets for the  participants to reflect the  participant's  actual base
        salary.  The shares remain  restricted and  non-transferable  throughout
        each three-year  performance period,  vesting in one-third increments in
        each of the three years following the end of the performance  period. At
        the end of a  performance  period,  awards are subject to  adjustment to
        reflect  Enterprises'  performance  compared to companies in the S&P 500
        Index with regard to cumulative total return to shareholders  during the
        three-year  performance period.  Depending on Enterprises'  performance,
        final awards may range from 400% of the initial awards to zero.


<PAGE>



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

         Material changes in the consolidated financial condition and results of
operations of IPALCO Enterprises,  Inc.  (Enterprises),  except where noted, are
attributed  to the  operations  of  Indianapolis  Power & Light  Company  (IPL).
Consequently, the following discussion is centered on IPL.


LIQUIDITY AND CAPITAL RESOURCES

Overview
--------

         The Board of Directors of Enterprises on February 24, 1998,  declared a
quarterly  dividend on common stock of 27.5 cents per share compared to 25 cents
per share declared in the first quarter of 1997. The dividend was paid April 15,
1998, to shareholders of record March 20, 1998.

         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 $13.5 million during the first quarter ended
March 31, 1998,  representing a $0.1 million decrease from the comparable period
in  1997.  Internally  generated  cash  provided  by  operations  was  used  for
construction expenditures during the first quarter of 1998.

         The  three-year   construction   program  has  not  changed  from  that
previously reported in IPALCO's 1997 Form 10-K report. (See "Future Performance"
in Item 7 of  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations in IPALCO's 1997 Form 10-K report for further discussion).

         IPALCO's  Revolving  Credit  Facility  was  issued in April 1997 in the
amount  of  $401  million.  The  proceeds  were  used  to  purchase,  through  a
self-tender offer,  shares of IPALCO's  outstanding common capital stock. During
the  first  quarter  of 1998,  IPALCO  reduced  the debt  amount by a net of $41
million  resulting in a debt balance under the Revolving Credit Facility of $282
million as of March 31, 1998.


<PAGE>


RESULTS OF OPERATIONS

         Comparison of Quarters Ended March 31, 1998 and March 31, 1997
         --------------------------------------------------------------

         Diluted  earnings per share during the first quarter of 1998 was $0.56,
or $0.34 below the $0.90 attained in the comparable 1997 period.  Net income for
the first quarter of 1997  included a one-time  positive  after-tax  increase of
$18.3 million  ($0.32 per share) See  "Cumulative  Effect of Accounting  Change"
below.  Also,  weighted average,  diluted shares for the 1998 first quarter were
45.5  million  compared  to 57.2  million  for the  same  period  in 1997 due to
IPALCO's  repurchase of 12.5 million  common shares in April 1997. The following
discussion highlights the factors contributing to the first quarter results.

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

         Operating  revenues  during the first  quarter of 1998  decreased  $5.0
million from the comparable 1997 period.  The decrease in revenues resulted from
the following:

                                                         Increase (Decrease)
                                                         -------------------
                                                       from Comparable Period
                                                       ----------------------
                                                    Three Months Ended March 31
                                                    ---------------------------
                                                        (Millions of Dollars)

         Electric:
              Change in retail KWH sales - net of fuel             (6.6)
              Fuel revenue                                          0.9
              Wholesale revenue                                     0.7
              DSM tracker revenue                                   0.4
         Steam revenue                                             (0.2)
         Other revenue                                             (0.2)
                                                               ---------
              Total change in operating revenues               $   (5.0)
                                                               =========

         The first  quarter  decrease  in retail KWH sales  compared to the same
period in 1997 was due to milder  weather.  Heating  degree days  decreased  17%
during the first  quarter  compared to the same  period in 1997.  The changes in
fuel  revenues in 1998 from the prior year  reflect  changes in total fuel costs
billed to customers.  The increased  wholesale sales during the first quarter of
1998,  as  compared  to the same  period in 1997,  reflect  increased  wholesale
marketing efforts and energy requirements of other utilities.

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

         Other  increased by $2.3 million in the first  quarter  compared to the
same period in 1997.  This  increase was due  primarily  to  increased  electric
distribution  expense of $0.9  million,  increased  administrative  and  general
expenses of $0.6 million and increased  amortization  of demand-side  management
costs.

         Power purchased decreased by $3.2 million in the first quarter compared
to the same period in 1997 primarily due to decreased demand charges.

         Maintenance  expenses  increased  $4.0 million in the first  quarter of
1998  compared to the same period in 1997.  The increase  reflects the timing of
costs  associated  with the  overhaul of unit 6 at the  Pritchard  plant of $2.2
million,  as well as increased  boiler and  electric  plant  maintenance  at the
Petersburg plant of $1.9 million. Due to the mild weather,  overhaul maintenance
was  advanced to the first  quarter in 1998,  compared to the more  conventional
timing of performing overhaul maintenance in the second quarter.

         Income taxes - net, decreased $2.4 million in the first quarter of 1998
compared  to the same  period  in 1997 due to a  decrease  in  pretax  operating
income.

         As a result of the foregoing,  utility  operating income decreased 9.9%
from the comparable 1997 period, to $40.1 million.

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

         Allowance for equity funds used during  construction  decreased by $0.9
million in the first  quarter of 1998  compared to the same period last year. In
August 1997, the amortization of some deferred carrying charges on a plant asset
ended resulting in this decrease.

         Other - net, which includes the pretax operating and investment  income
from  operations  other  than IPL,  as well as  non-operating  income  from IPL,
increased $0.8 million.  This increase was primarily due to decreased  operating
expenses at Mid-America.

         Income taxes - net, which includes taxes on operations  other than IPL,
as well as taxes on  non-operating  income  from  IPL,  decreased  in the  first
quarter of 1998  compared to the same period in 1997 by $2.1  million  primarily
due to decreased nonutility income as a result of increased interest expense.

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

         Interest  expense  increased  $5.4 million in the first quarter of 1998
compared to the same  period in 1997.  This  increase  is  primarily a result of
interest on the  recapitalization  debt facility of IPALCO issued in April 1997.
The interest on the  recapitalization  debt facility during the first quarter of
1998 was $5.1 million.

Cumulative Effect of Accounting Change
--------------------------------------

       A cumulative  effect of accounting change in the amount of $18.3 million,
net of  taxes,  was  effectively  recorded  during  the first  quarter  of 1997.
Effective  January  1,  1997,  IPL  adopted  the  unbilled  revenues  method  of
accounting for electricity and steam delivered  during the period.  Revenues are
accrued for services provided but unbilled at the end of each month.


<PAGE>


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

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

         In February 1998, Region V of the U.S. Environmental  Protection Agency
issued to Cleveland Energy Resources a Notice of Violation (NOV) under the Clean
Air Act. (Cleveland Thermal Energy Corporation  conducts business under the name
Cleveland Energy  Resources.) The NOV alleged that particulate  matter emissions
from four of Cleveland's five boilers exceeded  applicable  limits on five dates
during the period 1993 through 1996,  and that the opacity limit was exceeded on
one date in 1997 based on a visible  emission  reading.  The alleged  violations
during the period 1993 through 1996 were .01-.02  lb/MMBtu  above the applicable
limit,  and the visible  emission  rating was not  statistically  significant at
1.7-2.7% opacity above the applicable  limit.  Representatives  of Cleveland met
with the  Agency on March  16,  1998,  in an  attempt  to  resolve  the  matter.
Additional  stack testing is scheduled  for the fall of 1998. If Cleveland  were
adjudged to have violated  applicable  emission  limits,  it could be subject to
maximum  penalties  of $27,500 per day of  violation.  While the results of this
proceeding  cannot be predicted with certainty,  management,  based on advice of
counsel, believes that the final outcome will not have a material adverse effect
on the consolidated financial statements.

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

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

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

3.2      Bylaws of IPALCO Enterprises, Inc.

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

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

10.1     IPALCO Enterprises, Inc. Long-Term Performance and Restricted Stock
         Incentive Plan (as amended and restated effective January 1, 1998).**

11.1     Computation of Per Share Earnings.

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

27.1     Financial Data Schedule.

         (b)  Reports on Form 8-K.

                    None


<PAGE>


                                   Signatures
                                   ----------

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



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



Date:            May 14, 1998                      /s/  John R. Brehm
                --------------                      -----------------------

                                                        John R. Brehm
                                                        Vice President and
                                                           Treasurer



Date:            May 14, 1998                      /s/  Stephen J. Plunkett
                --------------                      ------------------------
                                                       
                                                        Stephen J. Plunkett
                                                        Controller