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
                September 30, 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 September 30, 1998
                  -----                 ---------------------------------
       Common (Without Par Value)              45,190,399 Shares

<PAGE>

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

                                      INDEX
                                      -----



                                                                   Page No.
                                                                   --------

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

         Statements of Consolidated Income - Three Months Ended
            and Nine Months Ended September 30, 1998 and 1997            2

         Consolidated Balance Sheets - September 30, 1998 and
            December 31, 1997                                            3

         Statements of Consolidated Cash Flows -
            Nine Months Ended September 30, 1998 and 1997                4

         Notes to Consolidated Financial Statements                    5-8

         Management's Discussion and Analysis of
            Financial Condition and Results of Operations             9-17

PART II.  OTHER INFORMATION                                          18-19
--------  -----------------                                         

<PAGE>



             PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>

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

                                                                  Three Months Ended           Nine Months Ended
                                                                     September 30                September 30
                                                                   1998         1997           1998         1997
                                                                -----------  -----------    -----------  -----------
<S>                                                             <C>          <C>            <C>          <C>    
UTILITY OPERATING REVENUES:
  Electric                                                      $  215,246   $  196,221     $  592,694   $  555,275
  Steam                                                              6,782        7,651         26,361       27,673
                                                                -----------  -----------    -----------  -----------
    Total operating revenues                                       222,028      203,872        619,055      582,948
                                                                -----------  -----------    -----------  -----------

UTILITY OPERATING EXPENSES:
  Operation:
    Fuel                                                            49,645       44,475        133,894      123,597
    Other                                                           38,801       36,269        112,147      104,524
  Power purchased                                                    2,899        1,365          6,748        6,655
  Purchased steam                                                    1,042        1,223          4,158        5,126
  Maintenance                                                       15,132       14,765         50,167       48,076
  Depreciation and amortization                                     26,696       25,733         77,359       77,977
  Taxes other than income taxes                                      9,429        8,194         26,887       25,194
  Income taxes - net                                                26,719       23,028         66,690       59,353
                                                                -----------  -----------    -----------  -----------
    Total operating expenses                                       170,363      155,052        478,050      450,502
                                                                -----------  -----------    -----------  -----------
UTILITY OPERATING INCOME                                            51,665       48,820        141,005      132,446
                                                                -----------  -----------    -----------  -----------

OTHER INCOME AND (DEDUCTIONS):
  Allowance for equity funds used during construction                  359          893            884        3,174
  Other - net                                                        2,134       (1,420)         2,856       (4,194)
  Gain on termination of agreement (Note 8)                         12,500            -         12,500            -
  Income taxes - net                                                (3,395)       3,434          1,275        7,353
                                                                -----------  -----------    -----------  -----------
    Total other income - net                                        11,598        2,907         17,515        6,333
                                                                -----------  -----------    -----------  -----------
INCOME BEFORE INTEREST AND OTHER CHARGES                            63,263       51,727        158,520      138,779
                                                                -----------  -----------    -----------  -----------

INTEREST AND OTHER CHARGES:
  Interest                                                          15,390       17,744         48,697       46,440
  Allowance for borrowed funds used during construction               (229)        (227)          (625)        (699)
  Preferred stock transactions                                         803          795          2,003        2,386
                                                                -----------  -----------    -----------  -----------
    Total interest and other charges - net                          15,964       18,312         50,075       48,127
                                                                -----------  -----------    -----------  -----------
INCOME BEFORE CUMULATIVE EFFECT
   OF ACCOUNTING CHANGE                                             47,299       33,415        108,445       90,652

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

NET INCOME                                                      $   47,299   $   33,415     $  108,445   $  108,999
                                                                ===========  ===========    ===========  ===========

BASIC EARNINGS PER SHARE (Note 2)

INCOME BEFORE CUMULATIVE EFFECT
   OF ACCOUNTING CHANGE                                         $     1.05   $     0.75     $     2.41   $     1.85
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (Note 4)                          -            -              -         0.37
                                                                -----------  -----------    -----------  -----------

NET INCOME                                                      $     1.05   $     0.75     $     2.41   $     2.22
                                                                ===========  ===========    ===========  ===========

DILUTED EARNINGS PER SHARE (Note 2)

INCOME BEFORE CUMULATIVE EFFECT
   OF ACCOUNTING CHANGE                                         $     1.04   $     0.74     $     2.38   $     1.84
CUMULATVE EFFECT OF ACCOUNTING CHANGE (Note 4)                           -            -              -         0.37
                                                                -----------  -----------    -----------  -----------

NET INCOME                                                      $     1.04   $     0.74     $     2.38   $     2.21
                                                                ===========  ===========    ===========  ===========

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

                               IPALCO ENTERPRISES, INC. and SUBSIDIARIES
                                      Consolidated Balance Sheets
                                             (In Thousands)
                                              (Unaudited)
<CAPTION>
                                                                      September 30         December 31
                            ASSETS                                        1998                1997
                            ------                                                            
                                                                      --------------      ---------------
<S>                                                                   <C>                 <C> 
UTILITY PLANT:
  Utility plant in service                                            $   2,836,355       $    2,800,446
  Less accumulated depreciation                                           1,182,314            1,121,317
                                                                      --------------      ---------------
      Utility plant in service - net                                      1,654,041            1,679,129
  Construction work in progress                                              84,724               77,030
  Property held for future use                                               10,224               10,224
                                                                      --------------      ---------------
      Utility plant - net                                                 1,748,989            1,766,383
                                                                      --------------      ---------------
OTHER ASSETS:
  Nonutility property - at cost, less accumulated depreciation               72,995               72,865
  Other investments                                                          12,425               13,023
                                                                      --------------      ---------------
      Other assets - net                                                     85,420               85,888
                                                                      --------------      ---------------
CURRENT ASSETS:
  Cash and cash equivalents                                                  18,013               17,293
  Accounts receivable and unbilled revenue
   (less allowance for doubtful accounts
   1998, $1,431 and 1997, $1,202)                                            45,647               47,033
  Fuel - at average cost                                                     29,852               35,257
  Materials and supplies - at average cost                                   49,215               48,416
  Prepayments and other current assets                                        7,297                9,100
                                                                      --------------      ---------------
      Total current assets                                                  150,024              157,099
                                                                      --------------      ---------------
DEFERRED DEBITS:
  Regulatory assets                                                         118,929              126,784
  Miscellaneous                                                              17,374               19,404
                                                                      --------------      ---------------
      Total deferred debits                                                 136,303              146,188
                                                                      --------------      ---------------
              TOTAL                                                   $   2,120,736       $    2,155,558
                                                                      ==============      ===============

                CAPITALIZATION AND LIABILITIES
                ------------------------------
CAPITALIZATION:
  Common shareholders' equity:
    Common stock                                                      $     416,547       $      395,851
    Unearned compensation - restricted stock awards                          (5,965)              (1,583)
    Premium on 4% cumulative preferred stock                                    649                  649
    Retained earnings                                                       603,613              532,730
    Treasury stock, at cost                                                (403,719)            (403,101)
                                                                      --------------      ---------------
      Total common shareholders' equity                                     611,125              524,546
  Cumulative preferred stock of subsidiary (Note 2)                          59,135                9,135
  Long-term debt (less current maturities and
   sinking fund requirements)                                               887,961            1,032,846
                                                                      --------------      ---------------
      Total capitalization                                                1,558,221            1,566,527
                                                                      --------------      ---------------
CURRENT LIABILITIES:
  Notes payable - banks and commercial paper                                 10,750               33,700
  Current maturities and sinking fund requirements                            1,425                3,094
  Accounts payable and accrued expenses                                      59,107               66,105
  Dividends payable                                                          13,418               11,523
  Taxes accrued                                                              34,045               22,126
  Interest accrued                                                           10,566               15,493
  Other current liabilities                                                  13,663               12,555
                                                                      --------------      ---------------
      Total current liabilities                                             142,974              164,596
                                                                      --------------      ---------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
  Accumulated deferred income taxes - net                                   317,047              314,869
  Unamortized investment tax credit                                          42,691               44,783
  Accrued postretirement benefits                                            12,363               17,144
  Accrued pension benefits                                                   41,342               39,821
  Miscellaneous                                                               6,098                7,818
                                                                      --------------      ---------------
      Total deferred credits and other long-term liabilities                419,541              424,435
                                                                      --------------      ---------------

COMMITMENTS AND CONTINGENCIES
              TOTAL                                                   $   2,120,736       $    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)

                                                                                Nine Months Ended
                                                                                   September 30
                                                                              1998               1997
                                                                         --------------     --------------
<S>                                                                      <C>                <C>  
CASH FLOWS FROM OPERATIONS:
  Net income                                                             $     108,445      $     108,999
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                                               77,907             77,640
    Amortization of regulatory assets                                            8,941             12,800
    Deferred income taxes and investment tax credit adjustments - net           (2,116)             8,685
    Allowance for funds used during construction                                (1,509)            (3,873)
    Cumulative effect of accounting change - before taxes                            -            (29,915)
  Change in certain assets and liabilities:
    Accounts receivable - excluding cumulative effect of accounting              1,386              9,250
change
    Fuel, materials and supplies                                                 4,606              4,908
    Accounts payable and accrued expenses                                       (6,998)            (9,155)
    Taxes accrued                                                               11,919             (2,588)
    Accrued pension benefits                                                     1,521              3,033
    Other - net                                                                 (7,390)            (2,457)
                                                                         --------------     --------------
Net cash provided by operating activities                                      196,712            177,327
                                                                         --------------     --------------

CASH FLOWS FROM INVESTING:
  Construction expenditures - utility                                          (55,642)           (47,801)
  Construction expenditures - nonutility                                        (1,947)            (1,260)
  Other                                                                          1,804            (12,139)
                                                                         --------------     --------------
Net cash used in investing activities                                          (55,785)           (61,200)
                                                                         --------------     --------------

CASH FLOWS FROM FINANCING:
  Issuance of long-term debt                                                         -            451,300
  Retirement of long-term debt                                                (146,594)           (79,250)
  Short-term debt - net                                                        (22,950)           (36,000)
  Common dividends paid                                                        (35,869)           (46,514)
  Issuance of preferred stock (Note 2)                                          50,000                  -
  Issuance of common stock related to incentive compensation plans              12,940              2,919
  Reacquired common stock                                                         (618)          (401,262)
  Other                                                                          2,884                576
                                                                         --------------     --------------
Net cash used in financing activities                                         (140,207)          (108,231)
                                                                         --------------     --------------
Net increase in cash and cash equivalents                                          720              7,896
Cash and cash equivalents at beginning of period                                17,293             19,317
                                                                         --------------     --------------
Cash and cash equivalents at end of period                               $      18,013      $      27,213
                                                                         ==============     ==============

----------------------------------------------------------------------------------------------------------
Supplemental  disclosures of cash flow information:  Cash paid
   during the period for:
    Interest (net of amount capitalized)                                 $      51,929      $      46,567
                                                                         ==============     ==============
    Income taxes                                                         $      48,159      $      49,353
                                                                         ==============     ==============


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                       173,629       7,946,020
            Exercise of stock options                385,753      12,940,315
            Restricted stock canceled                 (4,543)       (190,397)
       Balance at September 30, 1998                            $416,546,954
                                                                ============
              Less shares reacquired by Treasury     (14,284)
                                                  ----------
       Shares issued and outstanding at 
           September 30, 1998                     45,190,399
                                                  ==========
<PAGE>

       The following is a  reconciliation  of the weighted average common shares
        for the basic and diluted earnings per share computations:

<TABLE>
<CAPTION>

                                                         For the Period Ended September 30,
                                                         ----------------------------------
                                                  Three Months Ended             Nine Months Ended
                                                 1998            1997             1998        1997
                                              -------------------------------------------------------
                                                                       (In thousands)

       <S>                                       <C>           <C>              <C>           <C>   
       Weighted average common shares             44,954        44,582           44,906        49,042
       Dilutive effect of stock options              651           284              666           222
                                                 -------       -------          -------       -------
       Weighted average common
          and incremental shares                  45,605        44,866           45,572        49,264
                                                 =======       =======          =======       =======
</TABLE>

        Preferred Stock

        On January  13,  1998,  IPL 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 (RCF) was issued in April 1997 in the
        amount of $401 million.  The proceeds  were used to purchase,  through a
        self-tender offer, shares of IPALCO's  outstanding common stock.
        On July 15, 1998, IPALCO replaced the RCF with commercial paper by
        repaying the balance of $234 million on the RCF through the issuance of
        $230 million in commercial paper and a cash payment of $4 million.
        During the first nine months of 1998,  IPALCO reduced its debt amount by
        a net of $146 million resulting in a debt balance of $177 million as of
        September 30, 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 $18.3  million  ($.37) per share,
        which is reported as a separate  component of net income in the restated
        nine  months  ended  September  30,  1997.  The change had the effect of
        decreasing income before cumulative effect of accounting change in third
        quarter  and  nine  months  ended  September  30,  1997 by $4.1  million
        resulting  in a decrease to diluted  earnings per share of $.09 and $.08
        for the third quarter and nine months ended periods, respectively.
        The results of 1997 were restated for the accounting change.


5.      COMPREHENSIVE INCOME

        On January 1, 1998,  Enterprises  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  Enterprises has no amounts that require  classification
        under comprehensive income.

<PAGE>

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        Exercise Price per Share         Shares
                                               ---------------        ------------------------         ------
<S>                                                 <C>                 <C>                           <C>              
Outstanding, December 31, 1997................      $28.27              $16.8317 -  $31.37            52,045,338
   Issued.....................................       42.26               40.69   -   43.34               126,000
   Exercised..................................       27.32               16.8317 -   31.375             (385,753)
                                                                                                      ----------
Outstanding, September 30, 1998...............       29.46               16.8317 -   43.34             1,785,585
                                                                                                      ==========
</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 Enterprises.  No compensation cost
        has been  recognized  for the plans because the stock  options  exercise
        price is equal to fair value at the grant date.  Had  compensation  cost
        for the plans been determined based on the fair value at the grant dates
        for awards under the plans  consistent  with the method of SFAS No. 123,
        "Accounting for Stock-Based  Compensation,"  Enterprises' net income for
        the nine months ended  September  30, 1998,  would have  decreased  from
        $108.4  million  ($2.38  per  share) to the pro  forma  amount of $107.9
        million  ($2.37 per share).  Enterprises'  net income and  earnings  per
        share for the similar  period in 1997 would have  decreased  from $109.0
        million  ($2.21  per  share) to the pro forma  amount of $105.4  million
        ($2.14 per share).  Enterprises estimated the SFAS No. 123 fair value by
        utilizing  the  binomial   options  pricing  model  with  the  following
        assumptions: dividend yields of 2.54% to 6.88%, risk-free rates of 6.38%
        to  6.88%,  volatility  of 12% to 13% and  expected  lives  of 5  years.
        Earnings per share amounts presented in this paragraph are diluted.

        On January  27,  1998,  the Board of  Directors  amended  the  Long-Term
        Performance  and  Restricted  Stock  Incentive  Plan  as the  Long  Term
        Performance and Restricted Stock Incentive Plan (As Amended and Restated
        effective  January 1, 1998) also referred to as the 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>


7.      NEW ACCOUNTING STANDARD

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


8.      GAIN FROM TERMINATION OF AGREEMENT

        During the third  quarter of 1998, a gain of $12.5 million ($7.8 million
        after-tax)  or  $.17  per  share  resulted  from  the   liquidation  and
        termination  of an  agreement  to purchase up to 150  megawatts of power
        during the summer months  through the year 2000. IPL plans to ultimately
        replace this supply resource and is considering several alternatives.


9.       CLEVELAND ENERGY RESOURCES

        In  1997,  Enterprises  initiated  a  plan  to  sell  during  1998,  two
        subsidiaries of Mid-America,  Cleveland District Cooling Corporation and
        Cleveland  Thermal Energy Corporation (collectively referred  to as CER)
        and ceased recording depreciation.  During the third quarter of  1998,
        Enterprises  determined  that it was not probable that CER would be sold
        during  1998.  Enterprises continues  to have the  ability to remove the
        assets from operations.  Due to the delay in disposal, Enterprises
        resumed  depreciation  on the CER assets  during  September 1998.
        Enterprises' plan currently anticipates disposal of CER in 1999.

<PAGE>

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

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

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

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

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

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


LIQUIDITY AND CAPITAL RESOURCES

         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.

<PAGE>

Overview
--------

         The Board of Directors of  Enterprises  on August 25, 1998,  declared a
quarterly  dividend on common stock of 27.5 cents per share compared to 25 cents
per share  declared in the third quarter of 1997.  The dividend was paid October
15, 1998, to shareholders of record September 18, 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  $23.2  million  during the third quarter of
1998,  representing a $5.9 million increase from the comparable  period in 1997.
Internally  generated  cash  provided by  operations  was used for  construction
expenditures  during  the  third  quarter  of  1998.  Enterprises'  construction
expenditures  (excluding allowance for funds used during  construction)  totaled
$57.6  million   during  the  first  nine  months  ended   September  30,  1998,
representing  a $8.5  million  increase  from  the  comparable  period  in 1997.
Internally  generated  cash  provided by  operations  was used for  construction
expenditures during the first nine months of 1998.

         The  three-year   construction   program  has  not  changed  from  that
previously  reported  in  Enterprises'  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  Enterprises'  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. On July
15, 1998, IPALCO repaid the outstanding balance of $234 million on the Revolving
Credit Facility  through the issuance of $230 million in commercial  paper and a
cash payment of $4 million. During the first nine months of 1998, IPALCO reduced
its debt amount by a net of $146  million  resulting  in a debt  balance of $177
million as of September 30, 1998.

Year 2000
---------

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

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

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

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

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

State of Readiness

A. Identification and Assessment

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

         The Compliance  Testing Committee  continues to assess computer systems
and embedded chip devices related to Enterprises':

  - Electricity  generating stations and plants producing steam and/or chilled
      water;
  - Energy management systems;
  - Substation controls, system protection, and transmission and
      distribution systems;
  - Telecommunications systems; and
  - Business information systems.

         Enterprises  currently  expects  to  complete  the  identification  and
inventory  phase for critical  systems by the end of the fourth  quarter of 1998
and estimates the phase to be approximately 95% complete.

         Enterprises  currently  expects to complete  the  assessment  phase for
critical  systems by the end of the fourth  quarter  of 1998 and  estimates  the
phase to be approximately 75% complete.

B. Remediation and Testing

         The  Compliance  Testing  Committee  is  coordinating,   modifying,  or
replacing legacy systems which may not be Year 2000 compliant.  Enterprises will
be replacing  most of its key financial  software  applications  during 1998 and
1999.  Although  that  project  was not  specifically  initiated  as a Year 2000
effort, it will coincidentally result in replacement of non-compliant software.

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

         Enterprises  has  inquired of its  suppliers  and vendors of  software,
computer-related  equipment,  devices,  and services about Year 2000 compliance.
Some  provided  the required  information  and/or  assurances  and some did not.
Enterprises has elected to test not only existing systems but also new purchases
and upgrades in its efforts to minimize Year 2000 problems.

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

         Enterprises  currently  expects to complete the remediation and testing
phases for critical  systems by the end of the second quarter 1999 and estimates
that it is now approximately 50% complete.

Costs to Address Enterprises' Year 2000 Issues

         Not including the cost of replacing  Enterprises'  business software, a
project not initiated  specifically for Year 2000 reasons but which will provide
Year  2000  benefits  through  replacing  non-compliant  software,   Enterprises
currently estimates that its costs of the phases of identification,  assessment,
remediation  and  testing may be  approximately  $4,000,000,  which  Enterprises
believes is not material to its results of  operations,  liquidity and financial
condition.  Of that figure,  Enterprises  has currently  expended  approximately
$950,000.  A substantial  proportion of the costs of remediation  are associated
with  functional  areas  of  Enterprises   other  than   Information   Services.
Enterprises  currently  estimates that its cost of contingency  planning efforts
may be approximately $1,500,000.

Risks of Enterprises' Year 2000 Issues

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

         There are both external and internal  risks  associated  with Year 2000
that  could  affect  Enterprises' chilled water, steam and electricity
generation,   transmission  and distribution operations.  Potential internal
risk factors include increased risk of generator trips, inability to start or
restart generators,  increased risk of transmission  facility  trips,  loss  of
energy  management  systems,  loss  of Company-owned  voice/data communications,
system  protection  (relay) failures resulting  in cascading outages or facility
damage,  failure of  load-shedding controls  to operate  properly,  failure of
load  management  systems to operate properly, loss of or incorrect critical
operating data, failure of environmental control  systems,  loss of distribution
systems,  or failure of voltage control devices to operate properly. Occurrences
of those internal problems, alone or in combination, could result in varying
impacts on Enterprises' operations.

         External risk factors  include loss of customer load,  uncharacteristic
load  patterns,  loss of leased  communication  facilities,  failure of delivery
systems to maintain supplies of fuel, and severe or cold weather. Occurrences of
various  of those  events,  alone or in  combination,  could  result in  varying
impacts on Enterprises.

         Particularly  with respect to  responding to  contingencies  that might
occur,  unavailability of skilled labor could exacerbate Year 2000 problems. The
current  collective  bargaining  agreement  between  Indianapolis  Power & Light
Company (IPL) and the International Brotherhood of Electrical Workers, the union
representing  IPL's  production,  distribution,   construction  and  maintenance
employees, expires on December 13, 1999. That union recently rejected a proposed
one-year extension of the collective bargaining agreement which was proposed
by management so that negotiations would not be occurring near the end of 
calendar year 1999.

         Enterprises'  insurance policies,  including policies for liability and
property damage, currently expire or are up for renewal during 1999. Enterprises
currently expects that, in line with a general trend in the insurance  industry,
insurance  policies purchased by Enterprises during 1999 may exclude coverage of
Year 2000 events or certain elements of damage potentially flowing therefrom.

         In light of the many adverse conditions that could happen to
Enterprises associated with Year 2000,  along with the speculation that some or
many of them may not happen, it is extremely  difficult to  hypothesize a most
reasonably  likely worst case Year 2000 scenario with any degree of certainty.
With that in mind, Enterprises currently  believes the most reasonably  likely
worst case scenario would be the temporary  loss of one or more  generation
units resulting in interruptions of power to Enterprises'  customers.
Enterprises does not believe that the worst case scenario will occur and, should
it occur, Enterprises believes tht the consequences of that scenario, with
regard to either costs of repair or lost revenues,  are not likely to have a
material effect on Enterprises'  results of operations, liquidity, and financial
condition.

Enterprises' Contingency Plans

         The Contingency Planning Committee is engaged in reviewing hypothetical
scenarios  involving  various system or device  failures and preparing  plans by
which to operate  the Company in the event those  failures  occur.  Enterprises'
contingency  planning  efforts are not yet complete but are underway  within the
scope of an overall  outline.  Enterprises'  contingency  planning  involves the
phases of plan  development,  testing,  execution,  and recovery after Year 2000
events. As with compliance  testing,  contingency  planning touches  essentially
every  area  of  the  Company's   operations,   as  well  as  interactions  with
interconnected  utilities,  customers,  critical  vendors,  emergency  and other
governmental authorities.

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

         Contingency   planning   will   include   consideration   of  potential
interruptions  in the supply chain or  transportation  of critical fuel,  water,
chemicals,   material  supplies  etc.,  and  acquisition  of  appropriate  extra
supplies, as well as potential failures of or other problems associated with the
interconnected  electricity  grid.  Similarly,  consideration  will be  given to
cooperative  arrangements  with  other  utilities  in the  event  that Year 2000
problems impact the supply of skilled labor to effect remediation  actions.  The
Company's  existing  disaster  recovery  plans may form bases for some Year 2000
contingency plans.

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

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

<PAGE>

RESULTS OF OPERATIONS

      Comparison of Third Quarter and Nine Months Ended September 30, 1998
      --------------------------------------------------------------------
           with Third Quarter and Nine Months Ended September 30, 1997
           -----------------------------------------------------------

         Diluted earnings per share during the third quarter of 1998 were $1.04,
or $0.30  above  the $0.74  attained  in the  comparable  1997  period.  Diluted
earnings per share during the nine months ended  September 30, 1998, were $2.38,
or $0.17 above the $2.21 attained in the comparable 1997 period.  Net income for
the first nine months of 1997 included a one-time positive after-tax increase of
$18.3 million ($0.37 per share).  See "Cumulative  Effect of Accounting  Change"
below.  Also,  weighted  average,  diluted  shares  for the  nine  months  ended
September 30, 1998,  were 45.6 million  compared to 49.3 million for the similar
period in 1997 due to  Enterprises'  repurchase of 12.5 million common shares in
April 1997. The following discussion  highlights the factors contributing to the
third quarter and nine months ended results.

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

         Operating  revenues  during the third  quarter and nine months ended of
1998  increased  from the  comparable  1997  periods by $18.2  million and $36.1
million, respectively. The increases in revenues resulted from the following:
<TABLE>
<CAPTION>

                                                               Increase (Decrease) from Comparable Period
                                                               ------------------------------------------
                                                                            September 30, 1998
                                                                            ------------------
                                                              Three Months Ended         Nine Months Ended
                                                              ------------------         -----------------
                                                                          (Millions of Dollars)

         Electric:
              <S>                                                 <C>                       <C>    
              Change in retail KWH sales                          $  10.4                   $  14.9
              Fuel revenue                                            0.7                       0.9
              Wholesale revenue                                       7.5                      19.2
              DSM Tracker revenue                                     0.3                       1.1
         Steam revenue                                               (0.9)                     (1.3)
         Other revenue                                                0.2                       1.3
                                                                 --------                  --------
              Total change in operating revenues                 $   18.2                  $   36.1
                                                                 ========                  ========

</TABLE>

         The third  quarter  increase  in retail KWH sales  compared to the same
period in 1997 was due in part to warmer weather.  Cooling degree days increased
36% during  the third  quarter  compared  to the same  period in 1997.  The nine
months ended  increase was due in part to a 50% increase in cooling  degree days
partially  offset by a decrease of 24% in heating  degree  days  compared to the
same  period  last  year.  Economic  growth  in  IPL's  service  territory  also
contributed  to the increase in sales for both the third quarter and nine months
ended.  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 third quarter and nine months ended of 1998, as compared to the same periods
in 1997, reflect increased  wholesale  marketing efforts and energy requirements
of other utilities.

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

         Fuel  expenses  in the  third  quarter  and nine  months  ended of 1998
increased by $5.2 million and $10.3 million,  respectively  compared to the same
periods  during  1997.  The  primary  reason for both  variances  from the prior
periods was a result of increased total KWH sales.

         Other  expenses  in the third  quarter  and nine  months  ended of 1998
increased by $2.5 million and $7.6 million,  respectively. The third quarter and
nine month ended increases  resulted from increased  administrative  and general
expenses and  electric  distribution  expense.  The third  quarter  increase was
partially offset by decreased amortization of demand side management costs.

         Power purchased  expense increased in the third quarter by $1.5 million
while increasing only slightly during the nine months ended of 1998, as compared
to the similar periods last year. The increase during the third quarter resulted
from  increased  KWH  purchases.  The nine months ended  variance  resulted from
increased KWH purchases partially offset by decreased demand charges.

         Steam  purchased  expense  decreased  by $0.2  million and $1.0 million
during  the  third  quarter  and  nine  months  ended  periods  ended  of  1998,
respectively,  compared  to the similar  periods  last year.  The third  quarter
decrease was  primarily  due to decreased  unit prices of steam.  The nine month
ended decrease resulted from decreased steam purchases as well as decreased unit
prices of steam.

         Maintenance  expenses  increased  $0.4 million in the third quarter and
$2.1 million for the nine months ended of 1998  compared to the similar  periods
in 1997. The increase for the nine months ended period  resulted  primarily from
the overhaul of unit 6 at the  Pritchard  plant as well as increased  boiler and
electric plant maintenance at the Petersburg plant.

         Taxes other than income taxes  increased  $1.2 million and $1.7 million
in the third quarter and nine months ended  periods,  respectively,  compared to
the similar periods last year. These increases resulted primarily from increased
real estate and personal property taxes as well as increased gross receipts tax.

         Income  taxes - net,  increased  $3.7  million and $7.3  million in the
third quarter and nine months ended periods,  respectively due to an increase in
pretax operating income.

         As a result of the foregoing,  utility  operating income increased 5.8%
during  the third  quarter of 1998 from the  comparable  1997  period,  to $51.7
million. Utility operating income during the nine months ended of 1998 increased
6.5% from the comparable 1997 period, to $141.0 million.

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

         Allowance  for equity  funds used during  construction  decreased  $0.5
million and $2.3  million in the third  quarter and nine months  ended  periods,
respectively  compared  to the same  periods  last  year.  In August  1997,  the
amortization  of  deferred  equity  carrying  charges  on a  plant  asset  ended
resulting in these decreases.

         Other - net, which includes the pretax operating and investment  income
from  operations  other  than IPL,  as well as  non-operating  income  from IPL,
increased  $3.6  million and $7.1  million in the third  quarter and nine months
ended,  respectively.  The third quarter and nine months  increases  were due in
part to decreased  non-operating  expenses at IPL and decreased  pretax  losses,
excluding interest, at Mid-America.

         During the third  quarter of 1998,  a gain from the  termination  of an
agreement to purchase power was recognized by IPL in the amount of $12.5 million
(see note 8).

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

         Interest  expense  decreased  $2.4 million  during the third quarter of
1998 while increasing $2.3 million for the nine months ended of 1998 compared to
the same periods in 1997.  The decrease in the third  quarter is a result of the
decreased  debt  balance  in the  third  quarter  of  1998  compared  to 1997 on
Enterprises'  recapitalization debt facility. The nine months ended variance was
primarily  a  result  of  interest  on the  recapitalization  debt  facility  of
Enterprises that was issued in April 1997. There was no interest associated with
this debt during the first quarter of 1997. Also contributing to the nine months
ended  variance  was  increased   long-term  interest  expense  at  Mid-America,
partially offset by decreased interest expense at IPL.

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 (see note
4).


<PAGE>


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

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

         On August  15,  1997,  Region V of the U. S.  Environmental  Protection
Agency  issued to IPL a Notice of  Violation  (NOV) under the Clean Air Act. The
NOV alleged that particulate matter emissions from IPL's Perry K Units 11 and 12
exceeded  applicable  limits on three  dates in 1995,  that  particulate  matter
emissions  from Perry K Units 15 and 16 exceeded  applicable  limits on a single
date in each of 1994 and 1995,  and that sulfur dioxide  emissions  exceeded the
applicable  limit on four days in the first quarter of 1997.  IPL disagrees with
the Agency's interpretations of the applicable rules and believes that the Perry
K Plant has been in compliance with applicable limits. IPL has reached agreement
with the Agency and has executed a Consent  Order to resolve the matter  without
admission that violations occurred. No penalties or fines result from the Order.
IPL  is  required  to  conduct  additional   particulate  testing.   Failure  to
demonstrate compliance may result in additional expenditures for engineering and
corrective  measures.  IPL will submit additional opacity reports and additional
coal  analysis  results to EPA. The Order remains in effect until July 28, 2001.
Compliance with the Order resolves all alleged civil  violations  related to the
EPA's August 15, 1997 Notice of Violation.


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. (Exhibit 3.2 to the Form 10-Q
         dated 3-31-98).

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 4-29-98.)

10.1*    Form of Termination Benefits Agreement together with schedule of
         parties to, and dates of, the Termination Benefits Agreements.
         (Exhibit 10.1 to the Form 10-Q dated 6-30-98.) **

11.1     Computation of Per Share Earnings.


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:       November 13, 1998            /s/  John R. Brehm
     -------------------------            ----------------------------
                                              John R. Brehm
                                              Vice President and Treasurer



Date:       November 13, 1998            /s/  Stephen J. Plunkett
     --------------------------           ----------------------------
                                              Stephen J. Plunkett
                                              Controller