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

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**FORM 10-Q**

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

**For the quarterly period ended March 31, 2004**

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

**Commission file number 1-8644**



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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days.   YES [X]    NO [  ]

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

On May 10, 2004, 89,685,177 shares of IPALCO Enterprises, Inc. common stock were
outstanding. All of such shares were owned by The AES Corporation.

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









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



|**PART I - Financial Information**                                                                                           | **Page No.**
|---------------------------------------------------------------------------------------------------------------------------- | ------------
|                                                                                                                             |             
|Item 1:   Financial Statements:                                                                                              |             
|                                                                                                                             |             
|                                                                                                                             |             
|Unaudited Consolidated Statements of Income for the Three-month
        
          Periods Ended March 31, 2004 and 2003     | 3           
|                                                                                                                             |             
|Unaudited Consolidated Balance Sheets as of March 31, 2004 
        
           and December 31, 2003                        | 4           
|                                                                                                                             |             
|Unaudited Consolidated Statements of Cash Flows for the
        
          Three-month Periods Ended March 31, 2004 and 2003 | 5           
|                                                                                                                             |             
|Notes to Unaudited Consolidated Financial Statements                                                                         | 6           
|                                                                                                                             |             
|Item 2:   Management's Discussion and Analysis of Financial Condition 
          
and Results of Operations                  | 10          
|                                                                                                                             |             
|Item 3:   Quantitative and Qualitative Disclosure About Market Risk                                                          | 14          
|                                                                                                                             |             
|Item 4:  Controls and Procedures                                                                                             | 14          
|                                                                                                                             |             
|**PART II - Other Information**                                                                                              |             
|                                                                                                                             |             
|Item 1:  Legal Proceedings                                                                                                   | 15          
|                                                                                                                             |             
|Item 6:  Exhibits and Reports on Form 8-K                                                                                    | 15          
|                                                                                                                             |             
|Signature                                                                                                                    | 16          

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**PART I -- FINANCIAL INFORMATION**

Item 1.  Financial Statements

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**IPALCO ENTERPRISES, INC. and SUBSIDIARIES

Unaudited Consolidated Statements of Income

(In Thousands)**

`Three Months Ended
                                                                  March 31,
                                                           ---------------------
                                                              2004       2003
                                                           ---------- ----------
ELECTRIC UTILITY OPERATING REVENUES                        $ 214,628  $ 220,043

UTILITY OPERATING EXPENSES:
 Operation:
   Fuel                                                       45,855     45,042
   Other operating expenses                                   26,617     26,672
 Power purchased                                               2,683      5,143
 Maintenance                                                  19,691     19,295
 Depreciation and amortization                                29,496     29,618
 Taxes other than income taxes                                 8,929      8,909
 Income taxes-net                                             28,077     31,892
                                                           ---------- ----------
  Total operating expenses                                   161,348    166,571
                                                           ---------- ----------
UTILITY OPERATING INCOME                                      53,280     53,472
                                                           ---------- ----------
OTHER INCOME AND (DEDUCTIONS):
 Allowance for equity funds used during construction           1,039        930
 Gain (loss) on sales of assets, net                             854       (842)
 Other-net                                                     1,012       (266)
 Income tax benefit-net                                        6,214      6,521
                                                           ---------- ----------
  Total other income (deductions)-net                          9,119      6,343
                                                           ---------- ----------
INTEREST AND OTHER CHARGES:
 Interest on long-term debt                                   28,381     24,625
 Other interest                                                  125        123
 Allowance for borrowed funds used during construction          (720)      (445)
 Amortization of redemption premiums and expense on
  debt-net                                                       604        738
 Preferred dividends of subsidiary                               803        803
                                                           ---------- ----------
  Total interest and other charges-net                        29,193     25,844
                                                           ---------- ----------
NET INCOME                                                 $  33,206  $  33,971
                                                           ========== ==========`

See notes to unaudited consolidated financial statements.

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**IPALCO ENTERPRISES, INC. and SUBSIDIARIES

Unaudited Consolidated Balance Sheets

(In Thousands)**

`March 31,  December 31,
                                                                2004         2003
                                                            ------------ ------------
                           ASSETS
UTILITY PLANT:
 Utility plant in service                                   $ 3,216,531  $ 3,205,454
 Less accumulated depreciation                                1,295,403    1,277,373
                                                            ------------ ------------
     Utility plant in service - net                           1,921,128    1,928,081
 Construction work in progress                                  201,063      160,774
 Land held for sale                                               2,465        6,623
 Property held for future use                                     1,085        1,085
                                                            ------------ ------------
     Utility plant - net                                      2,125,741    2,096,563
                                                            ------------ ------------
OTHER ASSETS:
 Nonutility property - at cost, less
  accumulated depreciation                                        1,508        1,511
 Other investments                                                6,656        7,762
                                                            ------------ ------------
     Other assets - net                                           8,164        9,273
                                                            ------------ ------------
CURRENT ASSETS:
 Cash and cash equivalents                                       29,328       13,974
 Accounts receivable and unbilled revenue (less allowance
  for doubtful accounts of $1,922 and $1,653, respectively)      42,606       44,155
 Fuel - at average cost                                          27,245       29,803
 Materials and supplies - at average cost                        47,610       47,056
 Net income tax refunds receivable                                  222       11,397
 Prepayments and other current assets                             6,377        4,574
                                                            ------------ ------------
     Total current assets                                       153,388      150,959
                                                            ------------ ------------
DEFERRED DEBITS:
 Regulatory assets                                              191,464      200,743
 Miscellaneous                                                   33,800       30,954
                                                            ------------ ------------
     Total deferred debits                                      225,264      231,697
                                                            ------------ ------------
             TOTAL                                          $ 2,512,557  $$2,488,492
                                                            ============ ============
               CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
 Common shareholder's deficit:
   Premium on 4% cumulative preferred stock                 $       649  $      $649
   Paid in capital                                                  245          104
   Accumulated deficit                                          (75,305)     (64,111)
   Accumulated other comprehensive loss                         (58,047)     (58,420)
                                                            ------------ ------------
     Total common shareholder's deficit                        (132,458)    (121,778)
 Cumulative preferred stock of subsidiary                        59,135       59,135
 Long-term debt (less current maturities and sinking
  fund requirements)                                          1,502,008    1,482,011
                                                            ------------ ------------
     Total capitalization                                     1,428,685    1,419,368
                                                            ------------  -----------
CURRENT LIABILITIES:
  Current maturities and sinking fund requirements                  300          300
  Accounts payable                                               39,157       49,074
  Accrued expenses                                               16,064       20,221
  Dividends payable                                                 803          868
  Accrued real estate and personal property taxes                18,387       14,662
  Accrued income and other taxes                                 20,218        3,873
  Accrued interest                                               38,347       25,759
  Customer deposits                                              10,712       10,428
  Other current liabilities                                         879        1,746
                                                            ------------ ------------
     Total current liabilities                                  144,867      126,931
                                                            ------------ ------------
 LONG-TERM LIABILITIES:
 Accumulated deferred income taxes - net                        414,569      425,690
 Regulatory liabilities and other removal costs                 366,301      361,221
 Unamortized investment tax credit                               27,496       28,173
 Accrued postretirement benefits                                  6,274        6,059
 Accrued pension benefits                                       114,035      112,574
 Miscellaneous                                                   10,330        8,476
                                                            ------------ ------------
     Total deferred credits and other long-term liabilities     939,005      942,193
                                                            ------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 10)

             TOTAL                                          $ 2,512,557  $ 2,488,492
                                                            ============ ============`

See notes to unaudited consolidated financial statements.

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**IPALCO ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)**

`Three Months Ended
                                                              March 31,
                                                          ---------- ---------
                                                             2004       2003
                                                          ---------  ---------
Cash Flows from Operations:
 Net income                                              $  33,206  $  33,971
 Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation and amortization                           29,891     29,722
    Amortization of regulatory assets                          673        718
    Deferred income taxes and investment tax credit
      adjustments - net                                     (2,277)     3,911
    Gain on sale of land held for sale                      (4,127)        --
    (Gain) loss on sales of assets, net                       (854)       842
    Loss on investments                                        154        165
    Allowance for funds used during construction            (1,759)    (1,375)
  Change in certain assets and liabilities:
    Accounts receivable                                      1,549      2,101
    Fuel, materials and supplies                             2,004       (110)
    Net income taxes receivable or payable                  28,644     (2,802)
    Accounts payable and accrued expenses                  (13,496)    (3,208)
    Accrued other taxes                                      2,601      7,343
    Accrued pension benefits                                 1,461    (16,773)
    Accrued interest                                        12,588     11,649
    Other - net                                               (446)    (3,302)
                                                          ---------  ---------
Net cash provided by operating activities                   89,812     62,852
                                                          ---------  ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Construction expenditures - utility                      (55,269)   (26,704)
  Proceeds from sales of assets                              9,206         --
  Other                                                     (2,948)    (2,406)
                                                          ---------  ---------
Net cash used in investing activities                      (49,011)   (29,110)
                                                          ---------  ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Long-term borrowings                                      98,953         --
  Retirement of long-term debt                             (80,000)        --
  Dividends on common stock                                (44,400)        --
                                                          ---------  ---------
Net cash used in financing activities                      (25,447)        --
                                                          ---------  ---------
Net change in cash and cash equivalents                     15,354     33,742
Cash and cash equivalents at beginning of period            13,974     31,429
                                                          ---------  ---------
Cash and cash equivalents at end of period               $  29,328  $  65,171
                                                          =========  =========
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest (net of amount capitalized)                 $  15,199  $  12,657
                                                          =========  =========
    Income taxes                                         $      --  $  24,500
                                                          =========  =========`

See notes to unaudited consolidated financial statements.

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IPALCO ENTERPRISES, INC. and SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements



1.  ORGANIZATION

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

2.  BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts
of IPALCO, IPL and Mid-America. All significant intercompany amounts have been
eliminated. The accompanying financial statements are unaudited; however, they
have been prepared in accordance with accounting principles generally accepted
in the United States of America ("GAAP") for interim financial
information and in conjunction with the rules and regulations of the Securities
and Exchange Commission. Accordingly, they do not include all of the disclosures
required by GAAP for complete financial statements. In the opinion of
management, all adjustments necessary for fair presentation, consisting of only
normal recurring adjustments, have been included. The electric utility business
is affected by seasonal weather patterns throughout the year and, therefore, the
operating revenues and associated operating expenses are not generated evenly by
month during the year. Certain amounts from prior year financial statements have
been reclassified to conform to the current year presentation. These unaudited
financial statements have been prepared in accordance with the accounting
policies described in IPALCO's audited financial statements for the year ended
December 31, 2003, included in its annual report on Form 10-K and should be read
in conjunction therewith.

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

3.  NEW ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued Interpretation 46, "Consolidation of
Variable Interest Entities" ("FIN 46"). FIN 46 addresses consolidation
by business enterprises of variable interest entities ("VIE") and
significantly changes the consolidation requirements for those entities. FIN 46
is intended to achieve more consistent application of consolidation policies
related to VIE's and thus improve comparability between enterprises engaged in
similar activities when those activities are conducted through VIE's. In
December 2003, the FASB issued as a revision to the original Interpretation
("FIN 46-R") to codify both the proposed modifications and other
decisions previously issued through certain FASB Staff Positions into one
document. FIN 46-R currently applies to VIE's created after January 31, 2003,
and to VIE's in which an enterprise obtains an interest after that date. For
entities created prior to January 31, 2003, FIN 46 is to be adopted no later
than the end of the first interim or annual reporting period ending after March
15, 2004. The application of FIN 46 and FIN 46-R did not have any impact on
IPALCO's consolidated financial statements as neither IPALCO nor any of its
consolidated subsidiaries obtained any interest in a VIE since January 31, 2003
or is the primary beneficiary in any VIE.

4.  SEGMENT INFORMATION

IPALCO's operations are made up almost entirely of its ownership of IPL,
its consolidated electric utility, which is a reportable business segment. In
addition, IPALCO has outstanding $750 million of Senior Secured Notes (the
"IPALCO Notes"); approximately $1.6 million and $2.5 million of
nonutility cash and cash equivalents, as of March 31, 2004 and December 31,
2003, respectively; nonutility investments of $5.8 million and $6.1 million at
March 31, 2004 and December 31, 2003, respectively; and income taxes related to
those items. There was no operating income for any nonutility activities during
the periods covered by this report. Nonutility assets represented less than 1%
of IPALCO's total assets as of March 31, 2004 and December 31, 2003 and there
were no nonutility capital expenditures during the three month periods ended
March 31, 2004 and 2003.



5.  INDEBTEDNESS

On January 13, 2004, IPL issued $100 million of 6.60% first
mortgage bonds due January 1, 2034. The net proceeds of approximately $99
million were used to retire $80 million of 6.05% first mortgage bonds due
February 1, 2004 and to reimburse IPL's treasury for expenditures previously
incurred in connection with its capital expenditure program.

6.  PENSION BENEFITS

Employees' Retirement Plan: Most of IPL's employees are covered by
the Employees' Retirement Plan of Indianapolis Power & Light Company (the
"Defined Benefit Pension Plan.") The Defined Benefit Pension Plan is
noncontributory and is funded through a trust. Benefits are based on each
individual employee's pension band and years of service as opposed to their
compensation. Pension bands are based primarily on job duties and
responsibilities.

IPL's funding policy for the Defined Benefit Pension Plan is to contribute
annually not less than the minimum required by applicable law, nor more than the
maximum amount that can be deducted for federal income tax purposes.

Supplemental Retirement Plan: Additionally, a select group of former
management employees of IPALCO and IPL who have terminated vested benefits are
covered under a funded supplemental retirement plan.

The following table presents information relating to the Defined Benefit
Pension Plan and supplemental retirement plan:

`For the Three Months
                                                         Ended March 31,
                                                       --------------------
                                                          2004      2003
                                                       --------------------
Pension Benefits                                          (IN THOUSANDS)

Components of net periodic benefit cost
Service cost                                                $914      $926
Interest cost                                              6,426     6,743
Expected return on plan assets                            (6,717)   (5,674)
Amortization of prior service cost                            33        33
Recognized actuarial gain                                    953       670
                                                       --------------------
Net periodic benefit cost                                 $1,609    $2,698
                                                       ====================`

In April 2004, pension legislation was passed which decreased the present
value of IPALCO's current pension fund liabilities and lowered IPALCO's pension
funding requirements in the short-term. As a result, IPALCO can achieve the
minimum desired level of funding in 2004 (90%) with approximately $5.7 million
of contributions. Management is still evaluating whether it is economically
attractive to discretionally fund in excess of this amount. IPALCO did not make
any pension funding contributions during the three months ended March 31,
2004.

7.  OTHER POSTRETIREMENT BENEFITS

The Group Benefits Plan: IPL sponsors a group benefits plan which
provides certain health care and life insurance benefits to active employees.
Prior to October 20, 2000, the plan also provided certain health care and life
insurance benefits to employees who retired from active service on or after
attaining age 55 and had rendered at least 10 years of service. The
postretirement benefit costs of this plan were funded through an independent
voluntary employee beneficiary association ("VEBA") trust (the
"VEBA Trust"). On April 30, 2001, all assets of the VEBA Trust and its
obligations were formally spun-off to an independent trustee into a newly formed
plan, the VEBA Plan (the "VEBA Plan") that provides postretirement
medical and life benefits to retirees who retired from IPL or IPALCO before
October 20, 2000. In addition, people who were employed by IPL or IPALCO on
October 20, 2000, who subsequently retire from IPL or IPALCO and who meet the
retirement requirements of age 55 or older and 10 or more years service are
eligible for postretirement health care benefits under the VEBA Trust. The VEBA
Plan is sponsored and administered by an independent VEBA committee.

In November 2002, IPL and one bargaining unit of the International
Brotherhood of Electrical Workers union reached an agreement whereby IPL will
provide postretirement health care benefits through the end of their current
contract to unit members who were hired by IPL after October 20, 2000. The plan
was amended accordingly.

The following table presents the components of period benefit costs for other
postretirement benefits:

`For the Three Months
                                                          Ended March 31,
                                                       --------------------
                                                          2004      2003
                                                       --------------------
             Other Postretirement Benefits               (IN THOUSANDS)

Components of net periodic benefit cost
Service cost                                                $197       $47
Interest cost                                                207       196
Amortization of prior service cost                           235       214
                                                       --------------------
Total periodic benefit cost                                 $639      $457
                                                       ====================`

8.  LAND SALES

In December 2003, IPL reached agreements to sell approximately 4,000
acres of undeveloped property near Martinsville, Indiana divided between two
purchasers for an aggregate price of $13.2 million. This land is presented on
IPALCO's consolidated balance sheet as of March 31, 2004 and December 31, 2003
at $2.5 million and $6.6 million, respectively. The sale to one of the
purchasers was finalized in February 2004 for $7.4 million net proceeds with a
gain of $4.1 million and the other sale was closed in April 2004 with net
proceeds of $4.3 million and a gain of approximately $1.8 million. In accordance
with regulatory accounting, the $4.1 million gain from the February 2004 sale is
included as a reduction of other operating expenses on IPALCO's consolidated
income statement for the three months ended March 31, 2004.

9.  LONG TERM COMPENSATION PLAN

During 2004, all non-union employees of IPL began participating in the
AES Long Term Compensation Plan, a deferred compensation program. Participants
receive deferred compensation in the form of cash, restricted shares of AES
common stock and options to purchase shares of AES common stock. All three of
such components vest in thirds over a three-year period. Total deferred
compensation expense recorded during the first quarter of 2004, was $0.3 million
and was included in Other Operating Expenses on IPALCO's consolidated statement
of income.

10.  COMMITMENTS AND CONTINGENCIES

Legal

IPALCO and certain former officers and directors of IPALCO are named
as defendants in separate class action lawsuits under the Employment Retirement
Income Security Act ("ERISA") and the Federal securities laws (see
below), respectively, each filed in the U.S. District Court for the Southern
District of Indiana, and each making allegations regarding matters arising from
the acquisition of IPALCO by AES. The ERISA suit alleges breach of fiduciary
duties with respect to shares held in IPL's 401(k) thrift plan. While we cannot
predict the outcomes, we do not believe that the suits will have a material
adverse effect on IPALCO's consolidated financial statements.

Since May, 2003, IPALCO, IPL, AES and certain former directors and officers
of IPALCO and/or IPL received subpoenas from the Securities Division of the
Indiana Secretary of State seeking information focused largely on circumstances
surrounding the acquisition of IPALCO by AES. The Secretary of State's inquiry
is ongoing, as recently indicated in the Secretary of State's January 27, 2004
press release. IPALCO, IPL, AES and the individuals have produced various
materials in response to the subpoenas. While we can not predict the outcome, we
do not expect these matters will have a material adverse effect on IPALCO's
consolidated financial statements.

In November 2002, IPL was sued in a Fair Labor Standards Act ("FLSA")
collective action lawsuit filed in the U.S. District Court for the Southern
District of Indiana. The complaint alleges that certain of IPL's current and
former employees were not paid overtime pay at the rate required by the FLSA. We
believe that IPL did not violate the FLSA. While we cannot predict the outcome,
we do not believe the suit will have a material adverse effect on IPALCO's
consolidated financial statements.

In September 2002, IPALCO and certain of its former officers and directors
were sued in the U.S. District Court for the Southern District of Indiana in
connection with IPALCO's acquisition by AES. That suit has now been consolidated
with other actions in that court with the result that the only remaining IPALCO
defendants are three former officers who are insured under IPALCO's liability
insurance policies. The lawsuit purports to be filed on behalf of all persons
who exchanged their shares of IPALCO common stock for shares of AES common
stock. The complaint alleges violations of Section 11 of the Securities Act;
Sections 10(b), 14(a) and 20(a) of the Exchange Act and Rules 10b-5 and 14a-9.
We believe that the IPALCO defendants have meritorious defenses to the suit.
While we cannot predict the outcome, we do not believe that the suit will have a
material adverse effect on IPALCO's consolidated financial statements.

As of March 31, 2004, IPL has been named as a defendant in approximately 90
pending lawsuits alleging personal injury or wrongful death stemming from
exposure to asbestos and asbestos containing products formerly located in IPL
power plants. IPL has been named as a "premises defendant" in that IPL
did not mine, manufacture, distribute or install asbestos or asbestos containing
products. These suits have been brought on behalf of persons who worked for
contractors or subcontractors hired by IPL. Many of the original primary
defendants3⁄4
the asbestos manufacturers3⁄4
have filed for bankruptcy protection. IPL has insurance coverage for many of
these claims; currently, these cases are being defended by counsel retained by
various insurers who wrote policies applicable to the period of time during
which much of the exposure has been alleged. Although we do not believe that any
of the pending asbestos suits in which IPL is a named defendant will have a
material adverse effect on IPALCO's business or operations, we are unable to
predict the number or effect any additional suits may have. Accordingly, we
cannot assure that the pending or any additional suits will not have a material
effect on IPALCO's consolidated financial statements.

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

Environmental

With respect to environmental issues, IPL has ongoing discussions
with various regulatory authorities and we continue to believe that IPL is in
compliance with its various permits. On October 27, 1998, the U.S. Environmental
Protection Agency issued a final rule, referred to as the NOx SIP
call, which imposes more stringent limits on NOx emissions from
fossil fuel-fired steam electric generators. IPL's current estimates are the
NOx SIP call will necessitate additional capital expenditures of
approximately $109 million during 2004 and 2005 to achieve substantially all of
the required NOx emission reductions. The scope
of the construction program associated with NOx emission reductions
could be reduced by purchasing some of the required NOx emission
allowances in the market, subject to approval by the Indiana Utility Regulatory
Commission ("IURC").

On November 14, 2002, the IURC issued a Certificate of Public Convenience and
Necessity for the construction and use of clean coal technology
("CCT") to allow IPL to meet the NOx emission limits
imposed pursuant to the U.S. Environmental Protection Agency's NOx
SIP call. The CCT constitutes qualified pollution control property as defined in
Ind. Code section 8-1-2-6.6 and the IURC has approved ratemaking treatment
applicable to such property through an Environmental Compliance Cost Recovery
Adjustment ("ECCRA"). The ratemaking treatment provided for in the
IURC order includes a return on the investment in IPL's planned CCT projects
under construction. After the projects have been placed in service, the approved
ratemaking treatment provides for a return on the investment and recovery of the
depreciation expenses and operation and maintenance expenses associated with
these projects. Such costs are deferred as regulatory assets on IPALCO's balance
sheets. The ratemaking treatment also provides for recovery of expenditures
related to the purchase of NOx emission allowances, should such
expenditures be made to supplement IPL's CCT construction projects. IPL may add
the approved return on its CCT projects to its authorized annual net operating
income in subsequent fuel adjustment charge proceedings. The increase in the
amount of rate revenues and authorized net operating income resulting from IPL's
CCT plan will be determined in periodic filings to the IURC to be made at
intervals of no more often than every 6 months and will depend on the amount of
cumulative investment, depreciation expenses, operation and maintenance expenses
and actual NOx emission allowance purchases at the time of each of
the filings. Our first ECCRAs were approved on August 20, 2003, and February 18,
2004.

As of March 31, 2004 and December 31, 2003, Mid-America had a commitment to
invest additional capital of $3.8 million in EnerTech Capital Partners II L.P.
("EnerTech"), a venture capital fund. IPALCO has guaranteed the prompt
payment of this commitment when it may become due pursuant to the terms of the
partnership agreement between Mid-America and EnerTech. As required by GAAP,
there is no liability on the accompanying balance sheets for this guarantee.

In connection with the sale of the Cleveland Energy Resources assets,
Cleveland Thermal Energy Corporation and Cleveland District Cooling Corporation
have agreed to indemnify the buyer on an after-tax basis from and against all
losses arising out of: any liabilities excluded from the sale; and certain
litigation and environmental matters existing at the closing date, November 2,
2000. IPALCO has guaranteed this indemnification up to $14.6 million. Claims
regarding a breach of an environmental representation or regarding an excluded
liability must be brought on or before November 2, 2004. The indemnification
provided for under this agreement will in no event exceed the total aggregate
purchase price, or $14.6 million.

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

Some important factors that could cause our actual results or outcomes to
differ materially from those discussed in the forward-looking statements
include, but are not limited to: our ownership by AES, changes in our credit
ratings, performance of pension plan assets, fluctuations in customer growth and
demand, weather and weather-related damage, fuel costs, generating unit
availability and capacity, purchased power costs and availability, regulatory
action, environmental matters, federal and state legislation, interest rates,
availability and cost of capital, labor strikes, maintenance and capital
expenditures, local economic conditions, the ultimate disposition of litigation,
the specific needs of plants to perform unanticipated facility maintenance or
repairs or outages, the timing of deregulation and competition, product
development and technology changes. Most of these factors affect us through our
consolidated subsidiary, IPL. These factors are difficult to predict, contain
uncertainties that may materially affect actual results and are beyond our
control. We undertake no obligation to publicly update or review any forward-
looking information, future events or otherwise.

Overview

IPALCO Enterprises, Inc. is a holding company incorporated under the laws
of the state of Indiana. Our principal subsidiary is Indianapolis Power &
Light Company, a regulated utility operating in the state of Indiana.
Substantially all of our business consists of the generation, transmission,
distribution and sale of electric energy conducted through IPL. Our other direct
subsidiary, Mid-America Capital Resources, Inc., is the holding company for our
unregulated activities. Mid-America's only significant investment is a small
minority ownership interest in EnerTech Capital Partners II L.P., a venture
capital fund, valued at $3.5 million, as of March 31, 2004. Our business
segments are electric and "all other."

IPL is engaged primarily in generating, transmitting, distributing and
selling electric energy to more than 455,000 customers in the city of
Indianapolis and neighboring areas within the state of Indiana. IPL has an
exclusive right to provide retail electric service to those customers. IPL owns
and operates four generating stations, all within the state of Indiana.
Approximately 99% of the total electricity produced by IPL is generated from
coal. Natural gas and fuel oil combined to provide the remaining kWh generation
(primarily for peaking capacity). IPL's net electric generation capability for
winter and summer is 3,356 and 3,238 megawatts, respectively. Our overall
corporate mission is to serve our community's need for electric power in ways
that benefit all of our stakeholders, to build long-term value for our
shareholder, and to assure sustained excellence in performance for our owner,
our people, and other individuals and organizations which depend upon our
company.

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

RESULTS OF OPERATIONS

Comparison of Quarters Ended March 31, 2004 and March 31, 2003

The electric utility business is affected by seasonal weather
patterns throughout the year and, therefore, the operating revenues and
associated operating expenses are not generated evenly by month during the year.
Our first quarter 2004 net income of $33.2 million decreased $0.8 million from
net income of $34.0 million in the first quarter of 2003. The following
discussion highlights the significant factors contributing to this change.

Operating Revenues

Operating revenues decreased by $5.4 million during the three-month
period ended March 31, 2004 compared to the prior year as a result of the
following (dollars in thousands):

`March 31,  March 31,  Increase  Percentage
                              2004       2003    (Decrease)   Change
                           ----------  --------- ---------- -----------
Retail Revenues              $201,487   $202,721    ($1,234)      -0.6%
Wholesale Revenues              9,645     15,015     (5,370)     -35.8%
Miscellaneous Revenues          3,496      2,307      1,189       51.5%
                           ----------  --------- -----------
Total Operating Revenues     $214,628   $220,043    ($5,415)      -2.5%
                           ==========  ========= ===========

Heating Degree Days             2,780      3,106       (326)     -10.5%
Cooling Degree Days                 3          0          3        N/A`

The decrease in wholesale revenues was primarily due to a 33.3% decrease
in the quantity of wholesale kWh's sold and a 3.7% decrease in the average price
per kWh sold. The average market price per kWh decreased approximately 7.1%
during the comparative periods. In addition, during the first quarter of 2004,
we had less excess kWh output available for wholesale sales as a result of units
being offline for portions of 2004 for scheduled maintenance overhauls and
capital improvements to reduce NOx emissions. The $1.2 million
increase in miscellaneous revenues is primarily the result of $1.1 million of
revenues from the Midwest Independent Transmission System Operator, Inc.
("Midwest ISO"). The Midwest ISO was established as a non-profit
organization to maintain functional control over the combined transmission
systems of its members. As a transmission owner, IPL receives a portion of the
transmission service revenues from all wholesale kWh sales on the Midwest ISO
network based on its percentage of transmission system investment within the
Midwest ISO footprint. In addition, IPL pays the Midwest ISO an added
transmission cost on its retail load and a fee for each wholesale transaction. A
portion of the additional transmission cost paid to the Midwest ISO is deferred
as a regulatory asset and the remaining transmission costs, along with all
transaction fees, are expensed in other operating expenses. Our total revenues
from the Midwest ISO for 2004 are expected to be approximately $3 million to $4
million and the portion of Midwest ISO costs that are expensed are expected to
be approximately $2 million to $2.5 million in 2004.

Operating Expenses

Operating expenses decreased $5.2 million, or 3.1% during the three
months ended March 31, 2004, as compared to the same period in 2003. This
decrease is primarily the result of a $4.1 million gain in 2004 on the sale of
land held for sale; a $3.8 million decrease in income taxes; and a $2.5 million
decrease in power purchased; partially offset by a $3.8 million decrease in
gains on sales of sulfur dioxide ("SO2") allowances. In
accordance with regulatory accounting, both the gain on the sale of land held
for sale and the gain on sales of sulfur dioxide allowances are included as a
reduction of other operating expenses on IPALCO's consolidated income
statements. In April 2004, IPL finalized the sale of the remaining land held for
sale with net proceeds of $4.3 million and a gain of approximately $1.8 million.
The decrease in income taxes is primarily the result of the decrease in pre-tax
income and a decrease in the flow-through tax expense from depreciation of
$1.6M. The $2.5 million decrease in purchased power during the first quarter of
2004, as compared to the same period in 2003, was primarily due to higher than
normal power purchases in March of 2003 totaling $4.5 million, which was $3.4
million higher than in March 2004. The high cost of power purchases in March of
2003 was the result of a combination of (i) a scheduled maintenance outage
during March of 2003 on our largest base load coal fired unit (ii) colder than
normal temperatures (iii) higher than normal wholesale energy prices and (iv) an
unscheduled maintenance outage on another of our large coal fired units. The
combination of these factors resulted in us purchasing more energy and at higher
than normal prices.

We do not expect to sell SO2 allowances in the foreseeable future
and therefore we do not expect to have gains as we did in 2003. IPL projects to
exceed the SO2 Environmental Protection Agency ("EPA")
emissions allowance cap in 2004 and to purchase SO2 allowances as
necessary to remain in compliance with EPA regulations. Historically, the price
of such allowances has been volatile and therefore it is difficult to predict
what our cost may be in the future. Based on current prices, we anticipate
spending approximately $2 million per year beginning in 2004, increasing to
approximately $5 million in 2006 for SO2 allowances.

Primarily as a result of the foregoing, utility operating income decreased
$0.2 million or 0.4% during the first quarter of 2004 from the same period in
2003.

Other Income and Deductions

Other income and deductions increased from income of $6.3 million in 2003
to $9.1 million in 2004, primarily due to dividend income received in 2004 of
$1.4 million, a $0.9 million gain on the sale of noncore real estate assets in
2004 and a $0.8 million loss in 2003 on the sale of 1/3 of our ownership
interest in EnerTech.

Interest and Other Charges

Interest and other charges increased $3.3 million to $29.2 million in the
first quarter of 2004 as compared to the same period in 2003. This increase is
primarily the result of additional interest expense of $1.7 million, and $1.5
million on the issuances of $110 million and $100 million of first mortgage
bonds by IPL on August 6, 2003 and January 13, 2004, respectively, and a $0.9
million increase in interest expense on the IPALCO Notes due to a 50 basis point
increase, beginning May 15, 2003, in the interest charged as a result of ratings
downgrades, partially offset by a $0.8 million decrease from the retirement of
$80 million of first mortgage bonds at IPL on February 1, 2004.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2004, IPALCO had cash and cash equivalents of $29.3
million. In addition, IPL has available borrowing capacity of $74.3 million,
after existing letters of credit, under its $75.0 million committed credit
facilities. All long-term borrowings by IPL must first be approved by the IURC
and the aggregate amount of IPL's short-term borrowings must be approved by the
Federal Energy Regulatory Commission ("FERC"). IPL has obtained
approval from FERC to borrow the amounts available on its existing credit
facilities. Also, IPL and IPALCO have restrictions on the amount of new debt
that may be issued due to contractual obligations of AES and by financial
covenant restrictions under their existing debt obligations. Under such
restrictions, IPL is generally allowed to fully draw the amounts available on
its committed credit facilities, refinance existing debt, issue an additional
$30 million of long-term debt approved by the IURC and incur certain other
indebtedness. We believe that existing cash balances, cash generated from
operating activities and borrowing capacity on IPL's committed credit facilities
will be adequate on a short-term and long-term basis to meet anticipated
operating expenses, interest expense on outstanding indebtedness, recurring
capital expenditures and pay dividends to AES. Sources for principal payments on
outstanding indebtedness and nonrecurring capital expenditures are expected to
be obtained from: (i) existing cash balances; (ii) cash generated from
operating activities; (iii) borrowing capacity on IPL's committed credit
facilities and (iv) additional debt financing.

On January 13, 2004, IPL issued $100 million of 6.60% first
mortgage bonds due January 1, 2034. The net proceeds of approximately $99
million were used to retire $80 million of 6.05% first mortgage bonds due
February 2004 and to reimburse IPL's treasury for expenditures previously
incurred in connection with its capital expenditure program.

Capital Requirements.  Our capital requirements are primarily
related to IPL's construction expenditures needed to meet customers' needs for
electricity and for environmental compliance. IPL's construction expenditures
totaled $55.3 million during the three months ended March 31, 2004. This
represented an increase of $28.6 million from the comparable period in 2003,
primarily due to expenditures associated with new environmental standards
imposed by the EPA relating to NOx emission reductions. Construction
expenditures during the first three months of 2004 were financed with internally
generated cash provided by operations, borrowings on IPL's committed credit
facilities and a portion of the proceeds from the January 2004 issuance of $100
million of first mortgage bonds by IPL. We estimate total capital expenditures
of approximately $152 million in 2004, $111 million in 2005 and $140 million in
2006. These estimates include approximately $123 million for additions,
improvements and extensions to transmission and distribution lines, substations,
power factor and voltage regulating equipment, distribution transformers and
street lighting facilities; $98 million for power plant related projects; $12
million primarily for miscellaneous office equipment, furniture and leasehold
improvements; and $170 million for construction projects designed to reduce NOx
and sulfur dioxide emissions.

Pension Funding.  In April 2004, pension legislation was passed
which decreased the present value of our current pension fund liabilities and
lowered our pension funding requirements in the short-term. As a result, IPL can
achieve the minimum desired level of funding in 2004 (90%) with approximately
$5.7 million of contributions. Management is still evaluating whether it is
economically attractive to discretionally fund in excess of this amount. We did
not make any pension funding contributions during the three months ended March
31, 2004.

Dividends.  All of our outstanding common stock is held by AES.
During the first quarter of 2004, we paid $44.4 million in dividends to AES.
Future distributions will be determined at the discretion of our board of
directors and will depend primarily on dividends received from IPL, which are
affected by IPL's actual results of operations, cash flows, financial condition,
capital requirements, regulatory considerations, and such other factors as our
board of directors deems relevant.

Regulatory Matters

Midwest ISO Energy Markets Tariff Filing. The Midwest ISO filed
its Energy Markets Tariff with the FERC on March 31, 2004, as part of the
Midwest Market Initiative to standardize the structure and operation of
competitive wholesale power markets. The Midwest ISO currently plans to
implement the market restructuring, including day-ahead and real-time energy
markets, effective December 1, 2004. This restructuring could have an
impact on the costs associated with IPL's energy service to its utility
customers. FERC has not yet approved Midwest ISO's Energy Markets Tariff.
Pursuant to an order from the IURC, certain Midwest ISO administrative costs are
deferred for future recovery. At this time, we cannot predict the effect this
filing will have on our results of operations.

Final Report of the Joint U.S.-Canadian Blackout Task Force.
On April 5, 2004, the U.S.- Canadian Power System Outage Task
Force filed its Final Report on the August 14, 2003 electric power blackout that
occurred in large portions of the Midwest and Northeast United States and
Ontario, Canada. The blackout did not include IPL's service territory. The
Final Report contains findings and recommendations related to the blackout.
The adoption of federal legislation regarding mandatory and enforceable
reliability provisions is central to the recommendations of the task force.
The Final Report sets forth 46 recommendations grouped into the following four
general categories: institutional issues related to reliability; support of the
North American Electric Reliability Council's ("NERC") actions of
February 10, 2004 (in which NERC approved a series of actions and
strategic and technical initiatives intended to protect the reliability of the
North American bulk electric system); physical and cyber security of North
American bulk power systems; and the Canadian nuclear power sector. At this
time we cannot predict the effect any legislation
or other implementation of the recommendations of the Task Force will
have on IPL.

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Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Not applicable pursuant to General Instruction H of the Form 10-Q.

---

Item 4.	Controls and Procedures

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

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Please refer to Note 10 of the accompanying consolidated financial
statements for a summary of significant legal proceedings involving IPALCO
and/or IPL. We are also subject to routine litigation, claims and administrative
proceedings arising in the ordinary course of business, none of which is
expected to have a material adverse effect on our financial position or results
of operations.

Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits



|**Exhibit No.** | **Document**                                                                     
|--------------- | ---------------------------------------------------------------------------------
|                |                                                                                  
|31.1            | Certification by Chief Executive Officer required by Rule 13a-14(a) or 15d-14(a).
|                |                                                                                  
|31.2            | Certification by Chief Financial Officer required by Rule 13a-14(a) or 15d-14(a).
|                |                                                                                  
|32              | Certification required by Rule 13a-14(b) or 15d-14(b).                           

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

---

**SIGNATURE**



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



| |                         
| | ------------------------
| | IPALCO ENTERPRISES, INC.

| |             
| | ------------
| |             
| | (Registrant)

Date: May 11, 2004



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

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