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, 1997                       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, 1997
    -----                                  ---------------------------------
Common (Without Par Value)                        44,605,417 Shares

<PAGE>1


                    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, 1997 and 1996                        2

  Consolidated Balance Sheets - September 30, 1997 and
     December 31, 1996                                                    3

  Statements of Consolidated Cash Flows -
     Nine Months Ended September 30, 1997 and 1996                        4

  Notes to Consolidated Financial Statements                             5-8

  Management's Discussion and Analysis of
     Financial Condition and Results of Operations                      9-13

PART II.  OTHER INFORMATION                                            14-16
--------  -----------------      

<PAGE>2


                         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
                                                                   1997             1996              1997              1996
                                                             ---------------  ----------------  ----------------  ---------------
<S>                                                          <C>              <C>               <C>               <C>
UTILITY OPERATING REVENUES:
  Electric                                                   $      202,916   $       198,579   $       561,528   $      551,680
  Steam                                                               7,639             7,093            28,029           28,059
                                                             ---------------  ----------------  ----------------  ---------------
    Total operating revenues                                        210,555           205,672           589,557          579,739
                                                             ---------------  ----------------  ----------------  ---------------

UTILITY OPERATING EXPENSES:
  Operation:
    Fuel                                                             44,475            40,962           123,597          125,745
    Other                                                            36,269            34,667           104,524          100,978
  Power purchased                                                     1,365             4,868             6,655           13,883
  Purchased steam                                                     1,223             1,497             5,126            5,148
  Maintenance                                                        14,765            15,743            48,076           45,669
  Depreciation and amortization                                      25,733            25,178            77,977           72,857
  Taxes other than income taxes                                       8,274             8,210            25,273           25,544
  Income taxes - net                                                 25,533            23,384            61,830           57,786
                                                             ---------------  ----------------  ----------------  ---------------
    Total operating expenses                                        157,637           154,509           453,058          447,610
                                                             ---------------  ----------------  ----------------  ---------------
UTILITY OPERATING INCOME                                             52,918            51,163           136,499          132,129
                                                             ---------------  ----------------  ----------------  ---------------

OTHER INCOME AND (DEDUCTIONS):
  Allowance for equity funds used during construction                   893               976             3,174            4,596
  Other - net                                                        (1,411)           (2,673)           (4,185)          (4,532)
  Income taxes - net                                                  3,434             1,167             7,353            2,039
                                                             ---------------  ----------------  ----------------  ---------------
    Total other income and (deductions) - net                         2,916              (530)            6,342            2,103
                                                             ---------------  ----------------  ----------------  ---------------
INCOME BEFORE INTEREST AND OTHER CHARGES                             55,834            50,633           142,841          134,232
                                                             ---------------  ----------------  ----------------  ---------------

INTEREST AND OTHER CHARGES:
  Interest                                                           17,753            12,685            46,449           37,996
  Allowance for borrowed funds used during construction                (227)              (15)             (699)          (3,325)
  Preferred dividend requirements of subsidiary                         795               795             2,386            2,386
                                                             ---------------  ----------------  ----------------  ---------------
    Total interest and other charges - net                           18,321            13,465            48,136           37,057
                                                             ---------------  ----------------  ----------------  ---------------
NET INCOME                                                   $       37,513   $        37,168   $        94,705   $       97,175
                                                             ===============  ================  ================  ===============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                           44,582            56,930            49,042           56,900
                                                             ===============  ================  ================  ===============
     (Note 2)
EARNINGS PER SHARE OF COMMON STOCK                           $         0.84   $          0.65   $          1.93   $         1.71
                                                             ===============  ================  ================  ===============
     (Note 2)
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK                 $         0.25   $          0.37   $          0.75   $         1.11
                                                             ===============  ================  ================  ===============
     (Note 2)


See notes to consolidated financial statements.  
</TABLE>
<PAGE>3
<TABLE>
                                   IPALCO ENTERPRISES, INC. and SUBSIDIARIES
                                          Consolidated Balance Sheets
                                                 (In Thousands)
                                                  (Unaudited)
<CAPTION>
                                                                           September 30            December 31
                             ASSETS                                            1997                    1996
                             ------
                                                                         -----------------       ----------------
<S>                                                                      <C>                     <C>    
UTILITY PLANT:
  Utility plant in service                                               $      2,800,741        $     2,763,305
  Less accumulated depreciation                                                 1,107,851              1,048,492
                                                                         -----------------       ----------------
      Utility plant in service - net                                            1,692,890              1,714,813
  Construction work in progress                                                    61,934                 63,243
  Property held for future use                                                     10,224                  9,913
                                                                         -----------------       ----------------
      Utility plant - net                                                       1,765,048              1,787,969
                                                                         -----------------       ----------------
OTHER ASSETS:
  Nonutility property - at cost, less accumulated depreciation                    105,982                108,290
  Other investments                                                                 6,762                  5,371
                                                                         -----------------       ----------------
      Other assets - net                                                          112,744                113,661
                                                                         -----------------       ----------------
CURRENT ASSETS:
  Cash and cash equivalents                                                        27,213                 19,317
  Accounts receivable (less allowance for doubtful
   accounts - 1997, $1,466 and 1996, $1,159)                                        8,459                 11,099
  Fuel - at average cost                                                           28,527                 30,625
  Materials and supplies - at average cost                                         49,917                 52,727
  Prepayments and other current assets                                              5,526                  9,931
                                                                         -----------------       ----------------
      Total current assets                                                        119,642                123,699
                                                                         -----------------       ----------------
DEFERRED DEBITS:
  Regulatory assets                                                               129,036                137,974
  Miscellaneous                                                                    28,815                 19,766
                                                                         -----------------       ----------------
      Total deferred debits                                                       157,851                157,740
                                                                         -----------------       ----------------
              TOTAL                                                      $      2,155,285        $     2,183,069
                                                                         =================       ================

                 CAPITALIZATION AND LIABILITIES
                 ------------------------------
CAPITALIZATION:
  Common shareholders' equity:
    Common stock                                                         $        393,604        $       389,966
    Premium on 4% cumulative preferred stock                                        1,363                  1,363
    Retained earnings                                                             524,552                466,397
    Treasury Stock                                                               (401,262)                     -
                                                                         -----------------       ----------------
      Total common shareholders' equity                                           518,257                857,726
  Cumulative preferred stock of subsidiary                                         51,898                 51,898
  Long-term debt (less current maturities and
   sinking fund requirements)                                                   1,033,134                662,591
                                                                         -----------------       ----------------
      Total capitalization                                                      1,603,289              1,572,215
                                                                         -----------------       ----------------
CURRENT LIABILITIES:
  Notes payable - banks and commercial paper                                       10,000                 46,000
  Current maturities and sinking fund requirements                                 12,794                 11,250
  Accounts payable and accrued expenses                                            53,067                 62,222
  Dividends payable                                                                12,250                 22,212
  Taxes accrued                                                                    20,507                 23,159
  Interest accrued                                                                 11,644                 13,354
  Other current liabilities                                                        13,968                 14,519
                                                                         -----------------       ----------------
      Total current liabilities                                                   134,230                192,716
                                                                         -----------------       ----------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
  Accumulated deferred income taxes - net                                         309,738                303,473
  Unamortized investment tax credit                                                45,513                 47,722
  Accrued postretirement benefits                                                  18,760                 23,635
  Accrued pension benefits                                                         40,316                 37,283
  Miscellaneous                                                                     3,439                  6,025
                                                                         -----------------       ----------------
      Total deferred credits and other long-term liabilities                      417,766                418,138
                                                                         -----------------       ----------------

COMMITMENTS AND CONTINGENCIES
              TOTAL                                                      $      2,155,285        $     2,183,069
                                                                         =================       ================

See notes to consolidated financial statements.
</TABLE>
<PAGE>4
<TABLE>

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

                                                                                 Nine Months Ended
                                                                                    September 30
                                                                               1997                1996
                                                                         ---------------     ---------------
<S>                                                                      <C>                 <C>
CASH FLOWS FROM OPERATIONS:
  Net income before preferred dividend requirements of subsidiary        $       97,091      $       99,561
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                                                77,640              72,526
    Amortization of regulatory assets                                            12,800              12,149
    Deferred income taxes and investment tax credit adjustments - net              (262)                245
    Allowance for funds used during construction                                 (3,873)             (7,921)
  Change in certain assets and liabilities:
    Accounts receivable                                                           2,640              (1,316)
    Fuel, materials and supplies                                                  4,908                (925)
    Accounts payable                                                             (9,155)            (24,629)
    Taxes accrued                                                                (2,652)              1,562
    Accrued pension benefits                                                      3,033               3,951
    Other - net                                                                  (2,457)             (6,371)
                                                                         ---------------     ---------------
Net cash provided by operating activities                                       179,713             148,832
                                                                         ---------------     ---------------

CASH FLOWS FROM INVESTING:
  Proceeds from maturities of marketable securities                                   -               3,810
  Construction expenditures - utility                                           (47,801)            (61,920)
  Construction expenditures - nonutility                                         (1,260)             (3,588)
  Other                                                                         (10,838)             (8,993)
                                                                         ---------------     ---------------
Net cash used in investing activities                                           (59,899)            (70,691)
                                                                         ---------------     ---------------

CASH FLOWS FROM FINANCING:
  Issuance of long-term debt                                                    451,300               1,600
  Retirement of long-term debt                                                  (79,250)            (18,700)
  Short-term debt - net                                                         (36,000)              8,611
  Dividends paid                                                                (48,900)            (64,945)
  Issuance of common stock related to incentive compensation plans                2,919               2,750
  Reacquired common stock                                                      (401,262)                  -
  Other                                                                            (725)                154
                                                                         ---------------     ---------------
Net cash used in financing activities                                          (111,918)            (70,530)
                                                                         ---------------     ---------------
Net increase in cash and cash equivalents                                         7,896               7,611
Cash and cash equivalents at beginning of period                                 19,317              11,554
                                                                         ---------------     ---------------
Cash and cash equivalents at end of period                               $       27,213      $       19,165
                                                                         ===============     ===============

------------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest (net of amount capitalized)                                 $       46,567      $       37,037
                                                                         ===============     ===============
    Income taxes                                                         $       49,353      $       49,898
                                                                         ===============     ===============


See notes to consolidated financial statements.
</TABLE>
<PAGE>5

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

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


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

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

        In the opinion of management these  statements  reflect all adjustments,
        consisting of only normal recurring accruals,  including  elimination of
        all  significant  intercompany  balances  and  transactions,  which  are
        necessary  to a fair  statement  of the results for the interim  periods
        covered by such  statements.  Due to the seasonal nature of the electric
        utility business, the annual results are not generated evenly by quarter
        during the year.  Certain  amounts from prior year financial  statements
        have been  reclassified  to conform to the  current  year  presentation.
        These financial  statements and notes should be read in conjunction with
        the audited  financial  statements  included in Enterprises' 1996 Annual
        Report on Form 10-K.

<TABLE>
2.      COMMON STOCK
<CAPTION>
                                                                           Shares           Amount
                                                                         ----------      ------------
       <S>                                                               <C>             <C>             
       Balance at December 31, 1996                                      57,034,912      $389,966,251
           Restricted stock issued (1st Quarter)                              1,628            44,363
            Exercise of stock options (1st Quarter)                           2,500            55,986
            Adjustment for restricted stock (1st Quarter)                        -            300,784
           Exercise of stock options (2nd Quarter)                           65,304         1,738,332
           Adjustment for restricted stock (2nd Quarter)                         -             84,220
           Exercise of stock options (3rd Quarter)                           40,501         1,125,323
           Adjustment for restricted stock (3rd Quarter)                         -            288,753
                                                                                         ------------
       Balance at September 30, 1997                                                     $393,604,012
                                                                                         ============
             Less shares reacquired by Treasury (2nd Quarter)           (12,539,428)
                                                                         ----------
       Shares issued and outstanding at September 30, 1997               44,605,417
                                                                         ==========
</TABLE>

        On February 25, 1997,  the Board of Directors  authorized the repurchase
        of up to 12 million  shares of IPALCO's  common  stock  through a "Dutch
        auction"  self-tender  offer.  On March 27, the Dutch Auction ended with
        12,539,428  shares of common stock  having been  tendered to the Company
        and not  withdrawn  at or below  $32  dollars  per  share.  The Board of
        Directors  subsequently  elected to purchase  all shares  tendered at or
        below $32 per share for $32 per share.  The  shares  were  purchased  on
        April 8, 1997,  through the  issuance of long term debt in the amount of
        $401 million (see Note 3, Long-term debt). All 12,539,428  shares remain
        in Treasury stock.

<PAGE>6


3.      LONG-TERM DEBT

        On April 4, 1997 IPALCO  Enterprises,  Inc.  entered into a $401 million
        Revolving  Credit  Facility  (the  "Revolver")  with Bank One,  Indiana,
        National  Association,  National  City  Bank of  Indiana,  and The First
        National Bank of Chicago with a maturity of March 31, 2002. The proceeds
        of this  Revolver were used to purchase,  through a  self-tender  offer,
        shares of IPALCO's outstanding common capital stock. Interest is payable
        monthly  and is based on a spread over LIBOR.  In  conjunction  with the
        issuance of the  Revolver,  IPALCO  entered  into an interest  rate swap
        agreement which fixed the interest rate on $300 million of the Revolver.
        Pursuant to the swap agreement which matures April 1, 2001,  IPALCO will
        pay interest at a fixed rate of 6.3575% to a swap counter party and will
        receive a variable  rate of interest in return based on one month LIBOR.
        The result is to effectively  establish a 6.6825% fixed rate of interest
        on $300 million of the Revolver.  The remaining  balance on the original
        $401 million Revolver was $333 million at September 30, 1997.

        On May 1, 1997, IPL retired First Mortgage Bonds, 5 5/8% Series, due May
        1, 1997, in the amount of $11,250,000.

        On  June  13,  1997,  Mid-America  Energy  Resources,  a  subsidiary  of
        Mid-America  Capital  Resources,  issued $50 million in long-term  notes
        payable at a fixed rate of 8.03% with the first  principal  payment  due
        September 1, 1998. The average life of the debt is 10 years with a final
        maturity on June 13, 2012, and with an initial  required  escrow balance
        of $6.95 million. A substantial portion of the proceeds from these notes
        was used to pay back intercompany debt and return capital to Mid-America
        Capital Resources.

4.      NEW ACCOUNTING STANDARDS

        Effective December,  1997,  Statement of Financial  Accounting Standards
        (SFAS) No. 128, relating to the computation and presentation of earnings
        per share,  becomes  effective.  SFAS 128 replaces the  presentation  of
        primary EPS with a presentation of basic EPS, requires dual presentation
        of  basic  and  diluted  EPS  for  all  entities  with  complex  capital
        structures   and  requires  a   reconciliation   of  the  numerator  and
        denominator   of  the  basic  EPS   computation  to  the  numerator  and
        denominator  of the diluted EPS  computation.  SFAS 128 is effective for
        financial  statements issued for periods ending after December 15, 1997;
        earlier  adoption is not permitted.  Management has determined  that the
        adoption of SFAS 128 will not have a material effect on the accompanying
        consolidated financial statements.

        In June,  1997,  SFAS No. 130,  "Comprehensive  Income,"  was issued and
        becomes  effective  in 1998 and  requires  reclassification  of  earlier
        financial  statements for  comparative  purposes.  SFAS No. 130 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.  SFAS No.  130 does not  require  a
        specific  format  for the  financial  statement  in which  comprehensive
        income is reported,  but does require that an amount  representing total
        comprehensive  income be reported in that statement.  Management has not
        yet  determined  the  effect,  if any,  of SFAS 130 on the  consolidated
        financial statements.

        Also in June,  1997,  SFAS No. 131,  "Disclosures  about  Segments of an
        Enterprise  and Related  Information,"  was issued.  The Statement  will
        change the way public  companies  report  information  about segments of
        their business in their annual financial statements and requires them to
        report selected segment information in their quarterly reports issued to
        shareholders.   It  also  requires  entity-wide  disclosures  about  the
        products and  services an entity  provides,  the  material  countries in
        which it holds  assets and reports  revenues,  and its major  customers.
        SFAS No. 131 is effective for fiscal years  beginning after December 15,
        1997.  Management has not yet determined the effect, if any, of SFAS No.
        131 on the consolidated financial statements.
<PAGE>7

5.      SALE OF ACCOUNTS RECEIVABLE

        In December, 1996, IPL entered into an agreement to sell, on a revolving
        basis,  undivided  percentage  interests  in  certain  of  its  accounts
        receivable,  including  accounts  receivable  for KWH  delivered but not
        billed,  up to an  aggregate  maximum  at any one  time of $50  million.
        Accounts  receivable on the  Consolidated  Balance Sheets are net of the
        $50 million  interest sold under the IPL agreement.  The gross amount of
        receivables  sold was $55.6 million,  of which $5.6 million was replaced
        with a receivable from the purchasing party.

6.      STOCK-BASED COMPENSATION

        On May 21, 1997, the IPALCO Enterprises, Inc. 1997 Stock Option Plan for
        officers and other key  employees  was approved by the  shareholders  of
        IPALCO.  Two million  shares of common stock were  reserved for issuance
        under the 1997 Plan.  As of  September  30,  1997,  grants  representing
        1,067,250  shares have been made from this plan.  The maximum period for
        exercising  an  option  may not  exceed  10 years  and one day after the
        grant,  provided  however,  that the incentive  stock options shall have
        terms not in excess of 10 years.

       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, 1996................       24.12               16.8317 -  25.3725         1,023,570
  Granted.....................................       31.38                          31.375          1,132,500
  Granted.....................................       30.50                          30.50              42,000
  Exercised...................................       24.52               16.8317 -  31.375           (108,305)
                                                                                                    ---------
Outstanding, September 30, 1997...............       28.16               16.8317 -  31.375          2,089,765
                                                                                                    =========
</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 nine months
        ended  September  30,  1997,  would have  decreased  from $ 94.7 million
        ($1.93 per share) to the pro forma  amount of $91.1  million  ($1.86 per
        share).  IPALCO's  net income  and  earnings  per share for the  similar
        period in 1996 would not change.  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.

<PAGE>8

7.      SUBSEQUENT EVENTS

        On October 9, 1997,  an amendment to the  Articles of  Incorporation  of
        Indianapolis  Power & Light Company was adopted at a special  meeting of
        shareholders.  The  amendment  removed a provision of the articles  that
        limited  IPL's ability to issue  unsecured  debt,  including  short-term
        debt.

        IPALCO  purchased  shares of IPL's  preferred stock on October 17, 1997,
        pursuant to the terms of a tender offer concluded  October 8, 1997. This
        purchase was accomplished  using proceeds obtained with the use of a $22
        million  increase  to  IPALCO's  Revolving  Credit  Facility  originally
        obtained in April,  1997. The following table shows the number of shares
        purchased for each class of preferred stock.

           Class                        Shares       Rate       Amount
           ------------------------------------------------------------
              4% Series.............    52,389     $71.38   $ 3,739,527
              4.2% Series...........    19,669      77.72     1,528,675
              4.6% Series...........    27,519      85.12     2,342,417
              4.8% Series...........    28,070      88.82     2,493,177
              6% Series.............    59,200     103.00     6,097,600
              8.2% Series...........    65,828     102.00     6,714,456
                                        ------              -----------
        Total shares purchased         252,675              $22,915,852
                                       =======              ===========

       After IPALCO's purchase, the stock was subsequently purchased from IPALCO
       by IPL at IPALCO's cost and  canceled.  As a result,  the stock is no 
       longer deemed issued and outstanding on the books of IPL. Following IPL's
       subsequent purchase, preferred stock consisted of the following:
<TABLE>
<CAPTION>
                                                                October 31, 1997
                                                           ---------------------------
                                                                                              Oct. 31      Dec. 31
                                                             Shares           Call           ----------------------
                                                           Outstanding        Price            1997          1996
                                                           -----------      --------         --------      --------
                                                                                             (Thousands of Dollars)
Cumulative $100 Par Value,
     authorized 2,000,000 shares
     <S>                                                   <C>              <C>              <C>           <C>    
     4% Series..........................................       47,611       $ 118.00         $  4,761      $ 10,000
     4.2% Series........................................       19,331         103.00            1,933         3,900
     4.6% Series........................................        2,481         103.00              248         3,000
     4.8% Series........................................       21,930         101.00            2,193         5,000
     6% Series..........................................       40,800         102.00            4,080        10,000
     8.2% Series........................................      134,157         101.00           13,416        19,998
                                                              -------                        --------      --------
       Total cumulative preferred stock                       266,310                         $26,631       $51,898
                                                              =======                        ========      ========
</TABLE>

        On October  28,  1997,  Indianapolis  Power & Light  Company's  Board of
        Directors  resolved to call for  redemption all shares of IPL's 6.0% and
        8.2%  Cumulative  Preferred Stock issued and outstanding on December 15,
        1997, at a price per share,  payable to  shareholders  of record of $102
        and $101, respectively, together with dividends accrued through the date
        of redemption.
<PAGE>9


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 August 26, 1997,  declared a
quarterly  dividend on common  stock of 25 cents per share  compared to 37 cents
per share  declared in the third quarter of 1996.  The dividend was paid October
15, 1997, to shareholders of record September 19, 1997.

         IPL's  capital  requirements  are  primarily  related  to  construction
expenditures  needed to meet customers' needs for electricity and steam, as well
as  expenditures  for  environmental   compliance.   Enterprises'   construction
expenditures  (excluding allowance for funds used during  construction)  totaled
$17.3 million during the third quarter ended September 30, 1997,  representing a
$0.8 million increase from the comparable period in 1996.  Internally  generated
cash provided by IPL's  operations  was used for IPL  construction  expenditures
during  the  third  quarter  of  1997.  Enterprises'  construction  expenditures
(excluding allowance for funds used during  construction)  totaled $49.1 million
during the nine months ended  September 30, 1997,  representing  a $16.4 million
decrease from the comparable  period in 1996.  This difference is mostly related
to reduced  construction  spending in 1997 compared to 1996 for the scrubbers at
IPL's  Petersburg  Generating  Station  that went  into  service  in June  1996.
Internally  generated  cash  provided  by  IPL's  operations  was  used  for IPL
construction  expenditures  during the first nine months of 1997. As a result of
IPL's new basic electric  rates and charges and reduced  capital  spending,  IPL
anticipates continued improving liquidity.

         The five-year construction program has not changed from that previously
reported in IPALCO's 1996 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 1996 Form 10-K report for further discussion).

         On April 4, 1997 IPALCO  Enterprises,  Inc. entered into a $401 million
Revolving  Credit Facility (the  "Revolver")  with Bank One,  Indiana,  National
Association,  National  City Bank of  Indiana,  and The First  National  Bank of
Chicago with a maturity of March 31, 2002.  The proceeds of this  Revolver  were
used to purchase,  through a self-tender offer,  shares of IPALCO's  outstanding
common capital stock.  Interest is payable monthly and is based on a spread over
LIBOR. In conjunction with the issuance of the Revolver,  IPALCO entered into an
interest  rate swap  agreement  which fixed the interest rate on $300 million of
the Revolver. Pursuant to the swap agreement which matures April 1, 2001, IPALCO
will pay  interest at a fixed rate of 6.3575% to a swap  counter  party and will
receive a variable  rate of interest  in return  based on one month  LIBOR.  The
result is to  effectively  establish  a 6.6825%  fixed rate of  interest on $300
million of the  Revolver.  The  remaining  balance on the original  $401 million
Revolver was $333 million at September 30, 1997.

         On May 1, 1997,  IPL retired First Mortgage  Bonds, 5 5/8% Series,  due
May 1, 1997, in the amount of $11,250,000.

        On June 13, 1997,  Mid-America  Energy  Resources  issued $50 million in
long-term  notes  payable  at a fixed  rate of 8.03%  with the  first  principal
payment due September 1, 1998. The average life of the debt is 10 years with the
final maturity on June 13, 2012, and with an initial  required escrow balance of
$6.95 million.  A substantial  portion of the proceeds from these notes was used
to pay  back  intercompany  debt  and  return  capital  to  Mid-America  Capital
Resources.
<PAGE>10
Rate Relief
-----------

         The Indiana  Utility  Regulatory  Commission  approved a two-step  rate
increase for IPL  electric  retail  customers  in August 1995.  The initial step
increase was effective  September 1, 1995,  and the second step increase  became
effective July 1, 1996.



<PAGE>11


RESULTS OF OPERATIONS

      Comparison of Third Quarter and Nine Months Ended September 30, 1997
      --------------------------------------------------------------------
           with Third Quarter and Nine Months Ended September 30, 1996
           -----------------------------------------------------------

         Net income during the third  quarter of 1997 was $37.5  million  ($0.84
per share), or $0.3 million above net income for the comparable 1996 period. Net
income during the nine months ended September 30, 1997, was $94.7 million ($1.93
per share), or $2.5 million below net income for the comparable 1996 period. 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 1997
increased  from the  comparable  1996 periods by $4.9 million and $9.8  million,
respectively. The increases in revenues resulted from the following:
<TABLE>
<CAPTION>
                                                               Increase (Decrease) from Comparable Period
                                                               ------------------------------------------
                                                              Three Months Ended         Nine Months Ended
                                                              ------------------         -----------------
                                                                          (Millions of Dollars)

       <S>                                                        <C>                       <C>    
       Increase in base electric rates                            $   -                     $  12.7
       Change in Kilowatt-hour (KWH) sales - net of fuel              0.9                      (7.1)
       Fuel revenues                                                  0.3                      (4.7)
       Steam revenues                                                 0.6                       -
       Sales for resale                                               2.8                       7.0
       Other revenues                                                 0.3                       1.9
                                                                  -------                   -------
       Total change in operating revenues                         $   4.9                   $   9.8
                                                                  =======                   =======
</TABLE>


         The  increase in base rate  electric  revenues for the nine month ended
period is the result of new tariffs, effective July 1, 1996, designed to produce
$25 million additional annual revenues. The decrease in retail KWH sales for the
nine months ended period was due to milder weather  partially offset by customer
growth.  Heating  degree days and cooling  degree days for the nine months ended
September  30, 1997,  decreased by 6.6% and 16.9%,  respectively,  from the same
period in 1996. The changes in fuel revenues in 1997 from the prior year reflect
changes in total fuel costs billed  customers.  The  increased  wholesale  sales
during the third  quarter and nine months ended of 1997, as compared to the same
periods in 1996,  reflect energy  requirements  of other utilities and increased
wholesale marketing efforts.

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

         Fuel expenses in the third quarter of 1997  increased $3.5 million from
the same period a year earlier while decreasing $2.1 million for the nine months
of 1997,  compared to the previous  year.  The increase in the third quarter was
due to increases in fuel consumption of $2.3 million, deferred fuel cost of $1.0
million as well as  increased  unit costs of coal and oil of $0.2  million.  The
nine-month  variance  from 1996 was due to decreases  in deferred  fuel costs of
$3.8 million and unit costs of coal and oil of $1.9 million  partially offset by
an increase in fuel consumption of $3.6 million.

         Power  purchased  decreased  by $3.5  million and $7.2 million from the
comparable  periods in 1996  during the third  quarter  and first nine months of
1997,  respectively.  The decrease in the third quarter was due to a decrease in
demand  charges of $3.3  million and to energy  purchases of $0.2  million.  The
nine-month  variance was due to decreased demand charges of $6.7 million as well
as decreased energy  purchases of $0.5 million.  The decreased demand charges in
both periods resulted from a new power purchase contract taking effect in May of
1997.
<PAGE>12

         Maintenance  expense  decreased by $1.0 million in the third quarter of
1997 while  increasing $2.4 million for the first nine months of 1997,  compared
to the same periods the previous year. The third quarter decrease was related to
the  overhaul  of a  production  unit at the  Pritchard  Plant  during the third
quarter of 1996. The nine-month  increase  resulted from a $2.0 million increase
for expenses at the Stout Plant primarily  related to the repair of a production
unit.  Increased  maintenance  expenses of $0.7 million for station equipment in
transmission also contributed to the nine-month variance.

         Depreciation  and  amortization  expense in the third  quarter and nine
months ended September 30, 1997,  increased from the same periods a year earlier
by $0.6  million  and $5.1  million,  respectively.  These  increases  primarily
resulted from increased depreciable plant balances.

         Income  taxes  - net  for the  third  quarter  and  nine  months  ended
September 30, 1997,  increased from the same periods in 1996 by $2.1 million and
$4.0 million,  respectively.  These  increases  were  primarily due to increased
pretax operating income.

         As a result of the foregoing, utility operating income during the third
quarter  of 1997  increased  3.4%  from the  comparable  1996  period,  to $52.9
million.  Utility  operating  income during the nine months ended  September 30,
1997, increased 3.3% from the comparable 1996 period, to $136.4 million.

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

         Allowance  for  equity  funds  used  during  construction  in the third
quarter  and nine months  ended  September  30,  1997,  decreased  from the same
periods  in 1996 by $0.1  million  and $1.4  million,  respectively.  The  third
quarter  decrease was due to  amortization  ending in August of 1997, of certain
deferred  Petersburg  Plant assets.  This  decrease was partially  offset in the
third quarter by an increased  equity rate.  The nine- month  variance  resulted
from a decreased  construction  base and the ending of  amortization  of certain
deferred assets.

         Other - net, which includes the pretax operating and investment  income
from  operations  other  than  IPL as  well as  non-operating  income  from  IPL
increased  by $1.3 and $0.3  million in the third  quarter and nine months ended
periods  of 1997,  respectively,  compared  to the  same  periods  in 1996.  The
increase  for the  third  quarter  of 1997  was due to  increased  revenues  and
decreased  operating  costs at  Mid-America of $1.0 million as well as increased
net revenues from contract work at IPL of $0.2 million.  The nine-month increase
was  primarily  due to  increased  miscellaneous  income at IPL of $0.8  million
resulting from contract work as well as decreased operating costs at Mid-America
partially offset by a gain on the sale of investment  securities realized during
1996.

         Income taxes - net, which includes taxes on operations  other than IPL,
in the third quarter and nine months ended  September 30, 1997,  decreased  from
the  same  periods  in 1996 by $2.3  million  and  $5.3  million,  respectively,
primarily due to increased interest expense at IPALCO.  The nine-month  decrease
also reflects the sale of investment securities in 1996.


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

         Interest  expense in the third quarter and nine months ended  September
30,  1997,  increased  from the same  periods in 1996 by $5.1  million  and $8.5
million,  respectively.  Interest  expense of $5.8 million and $11.7  million at
IPALCO for the Revolving  Credit Facility issued in April of 1997 contributed to
the  third  quarter  and  nine-month  variances,   respectively.  Other  factors
contributing to the third quarter  increase  include an increase of $1.2 million
at Mid-America  for long-term debt issued during 1997 and a decrease in interest
expense at IPL of $1.9 million due to the  retirement of long-term  debt in 1996
and 1997 as well as decreased short-term debt. Other factors contributing to the
September  30,  1997,   year-to-date   variance  include  increased  expense  at
Mid-America of $1.8 million and decreased expense at IPL of $5.0 million.  IPL's
decrease  was due to the  redemption  of $15 million and $50 million debt issues
during 1996 and $11.3 million in 1997 as well as decreased short-term debt.
<PAGE>13

         Allowance  for borrowed  funds used during  construction  for the third
quarter  increased  $0.2  million  while  decreasing  for the nine months  ended
September 30, 1997, by $2.6 million,  from the  comparable  periods in 1996. The
third quarter change resulted from an increase in the  construction  base and an
increase in the borrowed funds rate. A decreased  average  construction base for
the nine months ended September 30, 1997,  resulted in the $2.6 million decrease
compared to 1996.

<PAGE>14

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

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

         On August  18,  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.  Representatives  of IPL
met with the Agency on September  24, 1997,  in an attempt to resolve the matter
and have  subsequently  provided the Agency with  additional  information on the
operation  of the  Plant.  If IPL  were  adjudged  to have  violated  applicable
emission limits,  it could be subject to maximum penalties of $25,000 per day of
violation.

Item 5.  Other Information
-------  -----------------

         On July 16, 1997,  the United States  Environmental  Protection  Agency
promulgated  final  regulations  which amended the National  Ambient Air Quality
Standards by introducing  standards for fine particulate matter and creating new
ozone  standards.  Existing  sources that cause or contribute  to  nonattainment
regions will likely be subject to additional regulatory requirements,  including
possible  emission  reductions.  New  sources  wanting  to build  facilities  in
nonattainment  areas may also be subject to additional control  requirements and
may be required to offset their emissions. Because power plants emit certain air
pollutants  that could  contribute  to the  formation of ambient  ozone and fine
particulate matter, there is a possibility that existing Company sources will be
required to be retrofitted with additional air pollution controls in the future.
Congressional   intervention  and/or  litigation  regarding  the  standards  are
probable.  Due to these  uncertainties,  it is not presently possible to predict
the potential impacts  associated with  implementation of these standards on the
Company's facilities.

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

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

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

3.2*     Bylaws of IPALCO Enterprises, Inc., as amended. (Exhibit 3.2 to the
         Form 10-Q dated 3-31-97.)

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).(Exhibit 4.2 to the Form 10-K for the year
         ended 12-31-94.)

11.1     Computation of Per Share Earnings.

21.1*    Subsidiaries of the Registrant.  (Exhibit 21.1 to the Form 10-K 
         dated 12-31-96.)

27.1     Financial Data Schedule.
<PAGE>15

         (b)      Reports on Form 8-K.

                  None.


<PAGE>16


                                   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, 1997              /s/ John R. Brehm
     -----------------------------        ---------------------------
                                              John R. Brehm
                                              Vice President and Treasurer



Date:      November 13, 1997              /s/ Stephen J. Plunkett
     -----------------------------        ---------------------------
                                              Stephen J. Plunkett
                                              Controller