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, 1999             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, 1999
                   -----                 ---------------------------------
        Common (Without Par Value)                85,727,614 Shares
<PAGE>


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

                                      INDEX
                                      -----



                                                                       Page No.
                                                                       --------

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

         Statements of Consolidated Income - Three Months Ended and
          Nine Months Ended September 30, 1999 and 1998                      2

         Consolidated Balance Sheets - September 30, 1999 and
            December 31, 1998                                                3

         Statements of Consolidated Cash Flows -
            Nine Months Ended September 30, 1999 and 1998                    4

         Notes to Consolidated Financial Statements                        5-8

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

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

<PAGE>



                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>

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

                                                               Three Months Ended                     Nine Months Ended
                                                                  September 30                           September 30
                                                             1999               1998                1999               1998
                                                        --------------     --------------      --------------     --------------
UTILITY OPERATING REVENUES:
<S>                                                     <C>                <C>                 <C>                <C>
  Electric                                              $     221,844      $     215,246       $     607,299      $     592,694
  Steam                                                         6,671              6,782              25,057             26,361
                                                        --------------     --------------      --------------     --------------
    Total operating revenues                                  228,515            222,028             632,356            619,055
                                                        --------------     --------------      --------------     --------------

UTILITY OPERATING EXPENSES:
  Operation:
    Fuel                                                       43,026             49,645             131,969            133,894
    Other                                                      33,728             38,801              97,248            112,147
  Power purchased                                              25,427              2,899              29,455              6,748
  Purchased steam                                               1,218              1,042               4,581              4,158
  Maintenance                                                  18,906             15,132              55,733             50,167
  Depreciation and amortization                                27,008             26,696              80,362             77,359
  Taxes other than income taxes                                 8,660              9,429              26,281             26,887
  Income taxes - net                                           22,128             26,719              65,628             66,690
                                                        --------------     --------------      --------------     --------------
    Total operating expenses                                  180,101            170,363             491,257            478,050
                                                        --------------     --------------      --------------     --------------
UTILITY OPERATING INCOME                                       48,414             51,665             141,099            141,005
                                                        --------------     --------------      --------------     --------------

OTHER INCOME AND (DEDUCTIONS):
  Allowance for equity funds used during construction             270                359                 940                884
  Other - net                                                   1,253              2,134                 589              2,856
  Gain on termination of agreement                                  -             12,500                   -             12,500
  Income taxes - net                                            1,405             (3,395)              6,053              1,275
                                                        --------------     --------------      --------------     --------------
    Total other income - net                                    2,928             11,598               7,582             17,515
                                                        --------------     --------------      --------------     --------------
INCOME BEFORE INTEREST AND OTHER CHARGES                       51,342             63,263             148,681            158,520
                                                        --------------     --------------      --------------     --------------

INTEREST AND OTHER CHARGES:
  Interest                                                     15,335             15,390              47,235             48,697
  Allowance for borrowed funds used during construction          (175)              (229)               (592)              (625)
  Preferred stock transactions                                    803                803               2,410              2,003
                                                        --------------     --------------      --------------     --------------
    Total interest and other charges - net                     15,963             15,964              49,053             50,075
                                                        --------------     --------------      --------------     --------------

NET INCOME                                              $      35,379      $      47,299       $      99,628      $     108,445
                                                        ==============     ==============      ==============     ==============


BASIC EARNINGS PER SHARE (Note 2)                       $        0.41      $        0.53       $        1.16      $        1.21
                                                        ==============     ==============      ==============     ==============

DILUTED EARNINGS PER SHARE (Note 2)                     $        0.41      $        0.52       $        1.15      $        1.19
                                                        ==============     ==============      ==============     ==============

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

                               IPALCO ENTERPRISES, INC. and SUBSIDIARIES
                                      Consolidated Balance Sheets
                                            (In Thousands)
                                              (Unaudited)
<CAPTION>
                                                                       September 30        December 31
                             ASSETS                                        1999                1998
                             ------
                                                                       --------------      -------------
UTILITY PLANT:
<S>                                                                    <C>                 <C>
  Utility plant in service                                             $   2,910,611       $  2,859,899
  Less accumulated depreciation                                            1,274,725          1,202,356
                                                                       --------------      -------------
      Utility plant in service - net                                       1,635,886          1,657,543
  Construction work in progress                                               78,419             80,198
  Property held for future use                                                10,719             10,719
                                                                       --------------      -------------
      Utility plant - net                                                  1,725,024          1,748,460
                                                                       --------------      -------------
OTHER ASSETS:
  Nonutility property - at cost, less accumulated depreciation                69,765             71,834
  Available-for-sale securities (Note 6)                                      45,058                  -
  Other investments                                                           12,341             12,234
                                                                       --------------      -------------
      Other assets - net                                                     127,164             84,068
                                                                       --------------      -------------
CURRENT ASSETS:
  Cash and cash equivalents                                                   13,402              9,075
  Special deposit (Note 3)                                                    23,500                  -
  Accounts receivable and unbilled revenue
   (less allowance for doubtful accounts
   1999, $1,553 and 1998, $1,212)                                             48,035             39,702
  Fuel - at average cost                                                      41,612             39,147
  Materials and supplies - at average cost                                    46,048             48,624
  Tax refund receivable                                                          650              9,647
  Prepayments and other current assets                                         9,448              4,863
                                                                       --------------      -------------
      Total current assets                                                   182,695            151,058
                                                                       --------------      -------------
DEFERRED DEBITS:
  Regulatory assets                                                          110,045            116,801
  Miscellaneous                                                               16,561             18,558
                                                                       --------------      -------------
      Total deferred debits                                                  126,606            135,359
                                                                       --------------      -------------
              TOTAL                                                    $   2,161,489       $  2,118,945
                                                                       ==============      =============

                 CAPITALIZATION AND LIABILITIES
                 ------------------------------
CAPITALIZATION:
  Common shareholders' equity:
    Common stock                                                       $     441,267       $    434,681
    Unearned compensation - restricted stock awards                           (3,369)            (5,384)
    Premium on 4% cumulative preferred stock                                     649                649
    Retained earnings                                                        673,994            612,941
    Accumulated other comprehensive income (Note 6)                           26,934                  -
    Treasury stock, at cost                                                 (557,178)          (468,696)
                                                                       --------------      -------------
      Total common shareholders' equity                                      582,297            574,191
  Cumulative preferred stock of subsidiary                                    59,135             59,135
  Long-term debt (less current maturities and
   sinking fund requirements)                                                870,036            907,974
                                                                       --------------      -------------
      Total capitalization                                                 1,511,468          1,541,300
                                                                       --------------      -------------
CURRENT LIABILITIES:
  Notes payable - banks and commercial paper                                   6,600             25,200
  Current maturities and sinking fund requirements                            84,822              1,425
  Accounts payable and accrued expenses                                       56,178             71,835
  Dividends payable                                                           13,870             13,392
  Taxes accrued                                                               36,771             20,723
  Interest accrued                                                            10,445             14,376
  Other current liabilities                                                   12,705             13,731
                                                                       --------------      -------------
      Total current liabilities                                              221,391            160,682
                                                                       --------------      -------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
  Accumulated deferred income taxes - net                                    339,072            318,327
  Unamortized investment tax credit                                           39,918             41,993
  Accrued postretirement benefits                                              5,842             10,768
  Accrued pension benefits                                                    38,153             39,953
  Miscellaneous                                                                5,645              5,922
                                                                       --------------      -------------
      Total deferred credits and other long-term liabilities                 428,630            416,963
                                                                       --------------      -------------

COMMITMENTS AND CONTINGENCIES

              TOTAL                                                    $   2,161,489       $  2,118,945
                                                                       ==============      =============

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

                                IPALCO ENTERPRISES, INC. and SUBSIDIARIES
                                  Statements of Consolidated Cash Flows
                                             (In Thousands)
                                               (Unaudited)
<CAPTION>
                                                                                Nine Months Ended
                                                                                   September 30
                                                                              1999               1998
                                                                         --------------     --------------
CASH FLOWS FROM OPERATIONS:
<S>                                                                      <C>                <C>
  Net income                                                             $      99,628      $     108,445
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                                               83,012             77,907
    Amortization of regulatory assets                                            7,633              8,941
    Deferred income taxes and investment tax credit adjustments - net             (351)            (2,116)
    Allowance for funds used during construction                                (1,532)            (1,509)
  Change in certain assets and liabilities:
    Accounts receivable                                                         (8,333)             1,386
    Fuel, materials and supplies                                                   111              4,606
    Accounts payable and accrued expenses                                      (15,657)            (6,998)
    Taxes accrued                                                               16,048             11,919
    Accrued pension benefits                                                    (1,800)             1,521
    Other - net                                                                 (5,403)            (4,598)
                                                                         --------------     --------------
Net cash provided by operating activities                                      173,356            199,504
                                                                         --------------     --------------

CASH FLOWS FROM INVESTING:
  Construction expenditures - utility                                          (52,888)           (55,642)
  Construction expenditures - nonutility                                          (306)            (1,947)
  Other                                                                           (936)             1,804
                                                                         --------------     --------------
Net cash used in investing activities                                          (54,130)           (55,785)
                                                                         --------------     --------------

CASH FLOWS FROM FINANCING:
  Issuance of long-term debt                                                   140,900            230,000
  Retirement of long-term debt                                                 (95,485)          (376,594)
  Special deposit                                                              (23,500)                 -
  Short-term debt - net                                                        (18,600)           (22,950)
  Common dividends paid                                                        (38,061)           (35,869)
  Issuance of preferred stock                                                        -             50,000
  Issuance of common stock related to incentive compensation plans               8,709             12,940
  Reacquired common stock                                                      (88,482)              (618)
  Other                                                                           (380)                92
                                                                         --------------     --------------
Net cash used in financing activities                                         (114,899)          (142,999)
                                                                         --------------     --------------
Net increase in cash and cash equivalents                                        4,327                720
Cash and cash equivalents at beginning of period                                 9,075             17,293
                                                                         --------------     --------------
Cash and cash equivalents at end of period                               $      13,402      $      18,013
                                                                         ==============     ==============

----------------------------------------------------------------------------------------------------------
Supplemental  disclosures of cash flow information:
  Cash paid during the period for:
    Interest (net of amount capitalized)                                 $      48,882      $      51,929
                                                                         ==============     ==============
    Income taxes                                                         $      36,878      $      48,159
                                                                         ==============     ==============
See notes to consolidated financial statements.
</TABLE>
<PAGE>


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

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


1.      GENERAL

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

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

        In the opinion of management these  statements  reflect all adjustments,
        consisting of only normal recurring accruals,  including  elimination of
        all  significant  intercompany  balances  and  transactions,  which  are
        necessary  to present 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 consolidated  financial statements included
        in Enterprises' 1998 Annual Report on Form 10-K.


2.      CAPITAL STOCK

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

       Balance at December 31, 1998                   88,863,026   $434,681,738
           Exercise of stock options                     455,318      8,709,019
           Decrease from compensation plans              (61,374)    (2,123,347)
                                                                   ------------
       Balance at September 30, 1999                               $441,267,410
                                                                   ============
           Less shares reacquired by Treasury         (3,529,356)
                                                      ----------
       Shares issued and outstanding at
           September 30, 1999                         85,727,614
                                                      ==========

        On  February 23,  1999,  the  IPALCO  Board of  Directors  authorized  a
        two-for-one   stock  split  of  IPALCO's   common   stock   issuable  to
        shareholders  at the close of business on March 5, 1999.  All references
        to share amounts of common stock and per share  information  reflect the
        stock split.

        On March 15, 1999,IPALCO completed its common stock repurchase plan that
        began in 1998. IPALCO  repurchased,  in the open market and in privately
        negotiated  transactions,  6 million  shares or 6.6% of its  outstanding
        stock for a total cost of $154 million.



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

                                                           For the Period Ended September 30,
                                                           ----------------------------------
                                                  Three Months Ended             Nine Months Ended
                                                   1999         1998              1999        1998
                                                 ---------------------          -------------------
                                                                     (In thousands)
<S>                                              <C>           <C>              <C>        <C>

       Weighted average common shares             85,720        89,908           86,219     89,812
       Dilutive effect of stock options              648         1,302              776      1,332
                                                 -------       -------          -------    -------
       Weighted average common
          and incremental shares                  86,368        91,210           86,995     91,144
                                                 =======       =======          =======    =======
</TABLE>



3.      LONG-TERM DEBT

        IPALCO's  Revolving  Credit  Facility  was  issued in April  1997 in the
        amount of $401 million.  The proceeds  were used to purchase,  through a
        self-tender offer,  shares of IPALCO's  outstanding common stock. During
        1998,  IPALCO repaid the Revolver with a commercial paper facility.  The
        Revolver  currently  has no  outstanding  balance but is  available  for
        future borrowings.  The balance outstanding was $197 million at December
        31, 1998, for the commercial paper facility.  Proceeds from the issue of
        debt  during  1999  were  used in  IPALCO's  most  recent  common  stock
        repurchase  program completed in March 1999. During the third quarter of
        1999, IPALCO decreased the outstanding  balance of commercial paper from
        $244.0  million at June 30, 1999,  to $220.0  million at  September  30,
        1999.

        On  May  27,  1999,  Energy  Resources,  a  subsidiary  of  Mid-America,
        refinanced  its $9.5 million  7.25% note due 2011,  and its $9.3 million
        variable  rate  note due 2030,  with the  proceeds  of an $18.8  million
        variable  rate  note.  The  interest  rate on the new debt was  3.95% at
        September  30,  1999.  The new  $18.8  million  note has a $9.5  million
        maturity on December 1, 2011,  and the  remainder is due on September 1,
        2030.

        On  September  14, 1999,  $23.5  million of  unsecured  long-term  notes
        payable were issued by IPL. The proceeds were placed in special  deposit
        to be used in October 1999 for the  refunding of its $23.5 million 7.45%
        Series  first  mortgage  bonds due 2019.  Interest  on the new debt will
        accrue  at  tax-exempt  auction  rates  of which  the rate was  3.75% at
        September 30, 1999, and its maturity date is August 1, 2030.

4.      STOCK-BASED COMPENSATION

       A summary of options  issued  under  IPALCO's  stock  option  plans is as
follows:
<TABLE>
<CAPTION>

                                              Weighted Average           Range of Option             Number of
                                               Price per Share           Price per Share               Shares
---------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                 <C>      <C>                  <C>
Outstanding, December 31, 1998................      $14.80              $8.416 - $21.67               2,618,298
   Issued.....................................       23.38                        23.38                  72,000
   Exercised..................................       14.69               8.416 -  20.345               (455,318)
                                                                                                      ---------
Outstanding, September 30, 1999...............       15.09               8.416 -  23.38               2,234,980
                                                                                                      =========
</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 stock option plans because the option price was
        equal to fair value at the grant dates.  Had  compensation  cost for the
        plans been  determined  based on the fair  value at the grant  dates for
        awards  under  the plans  consistent  with the  method of SFAS No.  123,
        "Accounting for Stock-Based  Compensation,"  Enterprises' net income for
        the nine months ended  September  30, 1999,  would have  decreased  from
        $99.6 million ($1.15 per share) to the pro forma amount of $99.4 million
        ($1.14 per share).  Enterprises'  net income and  earnings per share for
        the similar  period in 1998 would have  decreased  from  $108.4  million
        ($1.19 per share) to the pro forma amount of $107.9  million  ($1.18 per
        share).  Enterprises  estimated the SFAS No. 123 fair value by utilizing
        the  binomial  options  pricing  model with the  following  assumptions:
        dividend  yields  of 2.5% to  6.9%,  risk-free  rates  of 6.4% to  6.9%,
        volatility of 12% to 16% and expected lives of 5 years.

        IPALCO has a Long-Term  Performance and Restricted Stock Incentive Plan.
        On January 4, 1999, an  additional  15,572 shares were issued to reflect
        the  addition  of new  participants.  During the first  quarter of 1999,
        76,946 shares of restricted stock were canceled in order to pay taxes on
        behalf of  participants  or as a result  of a  participant  electing  to
        receive cash in lieu of stock.


5.     SEGMENT REPORTING

       Enterprises has two business segments  (electric and "all other").  Steam
       operations  of IPL and all  subsidiaries  other than IPL were combined in
       the "all  other"  category.  Pretax  operating  income  for the  electric
       segment  was $70.0  million  and $77.9  million  and for the "all  other"
       segment was $2.3  million,  and $3.1  million for the three  months ended
       September 30, 1999, and 1998,  respectively.  Pretax operating income for
       the  electric  segment was $203.1  million for both the nine months ended
       September 1999 and 1998. For the "all other"  segment,  pretax  operating
       income was $8.4  million,  and $8.7  million  for the nine  months  ended
       September 30, 1999, and 1998,  respectively.  Steam operations of IPL are
       included in the caption  UTILITY  OPERATING  INCOME.  All other operating
       components of all other  subsidiaries  other than IPL are included in the
       caption   "Other-net".   The  cost  of  property  and  plant,   excluding
       construction in progress and property held for future use, is as follows:

                                              September 30         December 31
                                                   1999               1998
--------------------------------------------------------------------------------
                                                       (In Thousands)

Electric ..................................     $ 2,800,300       $ 2,752,539
All other..................................         201,935           198,679
                                               ------------      ------------
       Subtotal............................     $ 3,002,235       $ 2,951,218
                                                ===========       ===========


6.      COMPREHENSIVE INCOME

       Enterprises   has  classified  its   investments  in  marketable   equity
       securities as available-for-sale,  and any unrealized gains or losses are
       recorded as a separate component of shareholders'  equity.  There were no
       unrealized gains on securities prior to the third quarter of 1999. During
       the third quarter of 1999, Enterprises recorded directly to shareholders'
       equity an unrealized  after-tax gain of $26.9 million  resulting from its
       investment in Internet  Capital Group,  Inc.  (Nasdaq:ICGE),  an internet
       holding  company,  which went public in August 1999. The gross unrealized
       gain on these  available-for-sale  securities  was $43.9  million and the
       related taxes would be $17.0 million. The cost basis and the market value
       for the investment were $1.2 million and $45.1 million,  respectively, at
       September  30,  1999.  There  have been no  proceeds  from sales of these
       securities  and no  realized  gains  during  1999.  The  balance of other
       comprehensive  income,  net of taxes,  at  September  30,  1999 was $26.9
       million.

7.      NEW ACCOUNTING STANDARD

        Statement  of  Financial   Accounting  Standards  No.  133  (SFAS  133),
        "Accounting  for Derivative  Instruments  and Hedging  Activities,"  was
        issued in June 1998 and was to be effective  for all fiscal  quarters of
        all fiscal years  beginning  after June 15, 1999. The effective date for
        this  standard  was  delayed one year by SFAS 137.  The  standard is now
        effective for all fiscal  quarters of all fiscal years  beginning  after
        June 15, 2000. SFAS 133 establishes  accounting and reporting  standards
        for derivative instruments and for hedging activities.  It requires that
        an entity  recognize all  derivatives as either assets or liabilities in
        the statement of financial  condition and measures those  instruments at
        fair  value.  If  certain  conditions  are  met,  a  derivative  may  be
        specifically  designated as a fair value hedge, a cash flow hedge,  or a
        hedge of a foreign currency exposure.  The accounting for changes in the
        fair value of a derivative  (that is,  gains and losses)  depends on the
        intended use of the derivative and the resulting designation. Management
        has  not  yet   quantified  the  effect  of  the  new  standard  on  the
        consolidated financial statements.

<PAGE>

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

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

         In connection with the safe harbor provisions of the Private Securities
Litigation  Reform  Act of 1995  (the  Reform  Act),  IPALCO  Enterprises,  Inc.
(Enterprises)  is hereby  filing  cautionary  statements  identifying  important
factors that could cause  Enterprises'  actual results to differ materially from
those projected in  forward-looking  statements of Enterprises.  This Form 10-Q,
and particularly  Management's Discussion and Analysis and our discussion of the
Year 2000 issues, contains  forward-looking  statements.  The Reform Act defines
forward-looking  statements as statements  that express an expectation or belief
and contain a projection, plan or assumption with regard to, among other things,
future  revenues,   income,  earnings  per  share  or  capital  structure.  Such
statements  of  future  events  or  performance  are not  guarantees  of  future
performance  and  involve  estimates,  assumptions,  and  uncertainties  and are
qualified  in their  entirety  by  reference  to,  and are  accompanied  by, the
following  important  factors that could cause  Enterprises'  actual  results to
differ materially from those contained in forward-looking  statements made by or
on  behalf  of  Enterprises.  The  words  "anticipate,"  "believe,"  "estimate,"
"expect,"  "forecast,"   "project,"  "objective"  and  similar  expressions  are
intended to identify forward-looking statements.

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

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

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


LIQUIDITY AND CAPITAL RESOURCES

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

Overview
--------

         The Board of Directors  of  Enterprises  on July 27,  1999,  declared a
quarterly dividend on common stock of 15 cents per share compared to 13.75 cents
per share  declared in the third quarter of 1998.  The dividend was paid October
15, 1999, to shareholders of record September 17, 1999.

         IPL's  capital  requirements  are  primarily  related  to  construction
expenditures  needed to meet customers'  needs for  electricity  and steam,  for
environmental compliance and for the implementation of an integrated information
system.  Enterprises'  construction  expenditures (excluding allowance for funds
used  during  construction)  totaled  $19.1  million  during the  quarter  ended
September 30, 1999,  representing  a $4.1 million  decrease from the  comparable
period in 1998.  Internally  generated  cash provided by operations was used for
construction  expenditures  during  the  third  quarter  of  1999.  Enterprises'
construction   expenditures   (excluding   allowance   for  funds  used   during
construction)  totaled $53.2 million during the nine months ended  September 30,
1999,  representing a $4.4 million decrease from the comparable  period in 1998.
Internally  generated  cash  provided by  operations  was used for  construction
expenditures during the first nine months of 1999.

         IPL's construction program includes $28.0 million for construction of a
100-megawatt  combustion  turbine  expected  to  be in  service  by  June  2000.
Additional  information  regarding IPL's three-year  construction program can be
found in IPALCO's 1998 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 1998 Form 10-K report for further discussion).

         IPALCO's  Revolving  Credit  Facility  was  issued in April 1997 in the
amount  of  $401  million.  The  proceeds  were  used  to  purchase,  through  a
self-tender offer,  shares of IPALCO's  outstanding  common stock.  During 1998,
IPALCO  repaid the  Revolver  with a  commercial  paper  facility.  The Revolver
currently has no outstanding balance but is available for future borrowings. The
balance  outstanding  was $197 million at December 31, 1998,  for the commercial
paper  facility.  Proceeds  from the  issue of debt  during  1999  were  used in
IPALCO's most recent common stock  repurchase  program  completed in March 1999.
During the third quarter of 1999,  IPALCO  decreased the outstanding  balance of
commercial  paper from $244.0  million at June 30,  1999,  to $220.0  million at
September 30, 1999.

         On May  27,  1999,  Energy  Resources,  a  subsidiary  of  Mid-America,
refinanced its $9.5 million 7.25% note due 2011,  and its $9.3 million  variable
rate note due 2030,  with the proceeds of an $18.8  million  variable rate note.
The interest rate on the new debt was 3.95% at September 30, 1999. The new $18.8
million note has a $9.5 million  maturity on December 1, 2011, and the remainder
is due on September 1, 2030.

         On September  14, 1999,  $23.5  million of  unsecured  long-term  notes
payable were issued by IPL. The  proceeds  were placed in special  deposit to be
used in October 1999 for the  refunding of its $23.5  million 7.45% Series first
mortgage  bonds due 2019.  Interest  on the new debt will  accrue at  tax-exempt
auction  rates of which  the rate was  3.75%  at  September  30,  1999,  and its
maturity date is August 1, 2030.


OTHER

Market Risk Sensitive Instruments and Positions
-----------------------------------------------

         The  primary  market risk to which  Enterprises  is exposed is interest
rate risk. Enterprises uses long-term debt as a primary source of capital in its
business.  A portion of this debt has an  interest  component  that  resets on a
periodic  basis to  reflect  current  market  conditions.  The  following  table
presents the principal cash  repayments and related  weighted  average  interest
rates by maturity date for Enterprises'  long-term fixed-rate debt and its other
types of long-term debt at September 30, 1999:
<TABLE>
<CAPTION>

                                             Maturity Schedule
                                         Period Ending September 30
                                                                                                       Fair
(Dollars in Millions)               2000    2001     2002     2003     2004  Thereafter   Total        Value
---------------------------------------------------------------------------------------------------------------
Long-term debt
<S>                                 <C>     <C>      <C>      <C>      <C>      <C>        <C>         <C>
Fixed rate                          $25.2   $3.3     $3.5     $3.8     $84.0    $423.6     $543.4      $540.7
  Average rate                      7.5%    7.9%     7.9%     7.9%     6.1%     7.0%       6.9%
Variable                            -       -        -        -        -        $192.3     $192.3      $192.3
  Average rate                      -       -        -        -        -        3.7%       3.7%
Recapitalization debt               $59.6   $80.2    $80.2    -        -        -          $220.0      $220.0
  Average rate                      6.7%    6.7%     6.7%     -        -        -          6.7%

</TABLE>


         To manage  Enterprises'  exposure to fluctuations in interest rates and
to lower funding  costs,  Enterprises  constantly  evaluates the use of, and has
entered  into,  interest  rate swaps.  Under  these  swaps,  Enterprises  or its
subsidiaries agree with counterparties to exchange, at specified intervals,  the
difference between  fixed-rate and floating-rate  interest amounts calculated on
an agreed  notional  amount.  This  interest  differential  paid or  received is
recognized in the  consolidated  statements of income as a component of interest
expense.

         At  September  30,  1999,  IPALCO had an interest  rate swap  agreement
outstanding with a notional amount of $175 million, of which the notional amount
decreases $25 million each quarter.  Enterprises  has agreed to pay a fixed rate
of 6.3575% and receive a floating rate based on applicable LIBOR.

         At September 30, 1999,  IPL had an interest rate swap  agreement with a
notional amount of $40 million, which expires in January 2023. IPL pays interest
at a fixed rate of 5.21% to a swap counter  party and  receives a variable  rate
based on the tax-exempt weekly rate.

New Environmental Standards
---------------------------

         On July 16, 1997,  the United States  Environmental  Protection  Agency
(EPA)  promulgated  final  regulations  which  amended the National  Ambient Air
Quality  Standards by  introducing  standards  for fine  particulate  matter and
creating new ozone standards.  On October 29, 1999, after conducting a rehearing
of its initial decision of May 14, 1999, the United States Court of Appeals for
the District of Columbia Circuit determined that the new ozone standards were
not issued lawfully, but left open the question of future remedy. The Court also
determined that the standards for fine particulate matter were legally deficient
in certain respects.

         Prior to the Court of Appeals'  decision,  on October 27, 1998, the EPA
issued a final rule calling for Indiana,  along, with 22 other  jurisdictions in
the  eastern  third of the United  States,  to impose more  stringent  limits on
emission of nitrogen oxides from  fossil-fuel  fired steam electric  generators,
such as those operated by  Enterprises.  This final rule was based,  in part, on
the new ozone standards that were the subject of the Court of Appeals' decisions
on May 14, 1999 and October 29, 1999. In a separate decision on May 25,1999, the
Court of Appeals issued a stay of a portion of EPA's 1998 final rule.

         Because  power plants emit  nitrogen  oxides,  as well as certain,  air
pollutants that could  contribute to the formation of fine  particulate  matter,
there is a possibility that existing  Enterprises sources will be required to be
retrofitted  with additional air pollution  controls in the future,  either as a
result of EPA's 1997 and 1998 regulations or due to future  regulatory  actions.
Litigation  concerning  EPA's 1997 and 1998 final  regulations is ongoing in the
United  States  Court of Appeals.  EPA  continues to seek rulings from the Court
that the 1997 and 1998 final  regulations are lawfully and fully effective.  Due
to these  uncertainties,  it is not presently possible to predict the effects of
these regulations on Enterprises.

Year 2000
---------

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

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

         The  Indiana  Utility  Regulatory  Commission  has  ordered all Indiana
public utilities,  including Enterprises, to "use their best efforts to identify
their mission  critical  operations  and conduct an inventory of all  electronic
devices  that may be affected  by date  processing  logic,  assess the status of
these  devices,  take  steps to correct  problems  in the  devices  and test the
devices to determine compliance" in order to be "Year 2000 ready."

         The  Compliance   Testing  Committee  has  essentially   completed  its
activities  of  inventorying,   reviewing,  analyzing,  correcting  and  testing
computer-related  systems and embedded chip devices.  The  Contingency  Planning
Committee has assessed  various  operating  scenarios  associated with potential
Year 2000 problems and formulated  plans by which to operate  Enterprises in the
event  of  such  problems.   Both  the  Compliance  Testing  Committee  and  the
Contingency  Planning  Committee  concentrated  first on systems critical to the
continuity of Enterprises' business and then on non-critical systems.

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

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

State of Readiness

         Enterprises' subsidiary, IPL, has reported to NERC that it believes its
mission-critical  systems used to produce and deliver  electricity are ready for
date changes  associated  with the Year 2000. The NERC definition of "Y2K Ready"
is that a system or application has been determined to be suitable for continued
use into the Year 2000.

A. Identification and Assessment

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

         The  Compliance  Testing  Committee has assessed  computer  systems and
embedded chip devices related to Enterprises':

      Electricity  generating stations and plants producing steam
         and/or chilled water;

      Energy management systems;

      Substation controls, system protection, and transmission
         and distribution systems;

      Telecommunications systems; and

      Business information systems.

         The  identification,  inventory  and  assessment  phases  for  critical
systems are now  complete.  The  Compliance  Testing  Committee  continues to be
vigilant for issues that may come to light and is also  working on  non-critical
systems.

B. Remediation and Testing

         The  Compliance  Testing  Committee  has  modified or  replaced  legacy
systems which may not be Year 2000  compliant.  Enterprises has replaced most of
its  key  financial  software  applications.   Although  that  project  was  not
specifically  initiated  as a  Year  2000  effort,  it  coincidentally  replaced
non-compliant software.

         The  Compliance   Testing   Committee  also  established  and  operated
appropriate testing environments to determine,  to the extent possible, the Year
2000  compliance  of  existing  systems  and/or  devices and the  compliance  of
replacement or upgraded systems and devices.  Enterprises  employed a variety of
the following techniques:  component tests, simulations, outside testing, vendor
verifications  or  upgrades or  change-outs.  Some  devices or systems,  such as
satellite  communication  links, are not susceptible to testing,  in which cases
Enterprises must rely on the service providers' verifications.

         Enterprises  has  inquired of its  suppliers  and vendors of  software,
computer-related  equipment,  devices and services  about Year 2000  compliance.
Some provided the requested information and/or assurances and some did not.

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

         With the  exception  of one  accounting  sub-system,  testing  of which
Enterprises expects to complete by mid-November 1999,  Enterprises has completed
the  remediation  and testing  phases for all critical  systems.  Enterprises is
operating its major  electricity  generating units with clocks set in year 2000.
Enterprises also  participated in two national NERC drills,  testing  utilities'
ability  to  operate  facilities  without  normal  communication   services  and
simulating  some events that could  occur upon the date  roll-over.  No problems
were encountered.

Costs to Address Enterprises' Year 2000 Issues

         Not including the cost of replacing  Enterprises'  business software, a
project not initiated specifically for Year 2000 reasons but which provided Year
2000 benefits through replacing  non-compliant  software,  Enterprises currently
estimates  that  its  costs  of  the  phases  of   identification,   assessment,
remediation  and testing may be  approximately  $4.7 million  which  Enterprises
believes is not material to its results of  operations,  liquidity and financial
condition. Of that figure, Enterprises has currently expended approximately $3.5
million.  A substantial  proportion of the costs of  remediation  are associated
with  functional  areas  of  Enterprises   other  than   Information   Services.
Enterprises  currently  estimates that its cost of contingency  planning efforts
may be approximately $2.1 million.

Risks of Enterprises' Year 2000 Issues

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

         There are both external and internal  risks  associated  with Year 2000
that could affect Enterprises' chilled water, steam and electricity  generation,
transmission  and  distribution  operations.  Potential  internal  risk  factors
include, but are not limited to, increased risk of generator trips, inability to
start or restart generators, increased risk of transmission facility trips, loss
of energy management systems, loss of Company-owned  voice/data  communications,
system  protection  (relay) failures  resulting in cascading outages or facility
damage, failure of load-shedding  controls to operate properly,  failure of load
management systems to operate properly,  loss of or incorrect critical operating
data, failure of environmental  control systems, loss of distribution systems or
failure of voltage  control  devices to operate  properly.  Occurrences of those
internal problems,  alone or in combination,  could result in varying effects on
Enterprises'  operations.  Concerns over these  occurrences are minimal based on
testing results that indicate no Year 2000-related  problems with key generation
and transmission control systems. Enterprises' generating units' control systems
have been tested for critical dates and are already operating in the year 2000.

         External risk factors include, but are not limited to, loss of customer
load,  uncharacteristic load patterns, loss of leased communication  facilities,
failure of  delivery  systems to  maintain  supplies  of fuel and severe or cold
weather.  Occurrences  of a variety of those  events,  alone or in  combination,
could result in varying effects on Enterprises.

         In view of the unprecedented nature of the Year 2000 phenomenon,  it is
not clear whether  insurance  policy language in policies  insuring  Enterprises
will be  interpreted  to cover or bar claims,  if any,  arising out of Year 2000
events.

        In light of the many adverse conditions that could conceivably happen to
Enterprises  associated with Year 2000,  along with the speculation that many of
them may not happen, it is extremely  difficult to hypothesize a most reasonably
likely worst case Year 2000 scenario with any degree of certainty.  With that in
mind,  Enterprises believes the most reasonably likely worst case scenario would
be an isolated  partial  reduction  in  generating  unit  capacity  due to minor
systems  failures  with no  interruption  of  power to  Enterprises'  customers.
Enterprises does not believe that the worst case scenario will occur and, should
it occur,  Enterprises  believes that the  consequences  of that scenario,  with
regard to either  costs of repair  or lost  revenues,  are not  likely to have a
material effect on Enterprises'  results of operations,  liquidity and financial
condition.

Enterprises' Contingency Plans

         The Contingency Planning Committee has reviewed hypothetical  scenarios
involving  various Year 2000 system or device  failures  and  prepared  plans by
which to operate  Enterprises  in the event those failures  occur.  Enterprises'
contingency planning involves the phases of plan development, testing, execution
and recovery after Year 2000 events.  As with  compliance  testing,  contingency
planning touches essentially every area of Enterprises'  operations,  as well as
interactions  with  interconnected  utilities,  customers,  critical vendors and
emergency and other governmental authorities.

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

         Contingency planning includes consideration of potential  interruptions
in the supply  chain or  transportation  of  critical  fuel,  water,  chemicals,
material supplies etc., and acquisition of appropriate  extra supplies,  as well
as potential  failures of or other problems  associated with the  interconnected
electricity  grid.  Enterprises'  existing  disaster  recovery plans have formed
bases for some Year 2000 contingency plans.

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

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

<PAGE>


RESULTS OF OPERATIONS

      Comparison of Third Quarter and Nine Months Ended September 30, 1999
      --------------------------------------------------------------------
           with Third Quarter and Nine Months Ended September 30, 1998
           -----------------------------------------------------------

         Diluted  earnings per share during the third  quarter of 1999 was $.41,
or $.11 below the $.52 attained in the comparable 1998 period. Weighted average,
diluted  shares for the 1999 third  quarter were 86.4  million  compared to 91.2
million  for the same  period in 1998 due to  IPALCO's  repurchase  of 6 million
common shares between  December 1998 and March 1999.  Diluted earnings per share
during the first nine months of 1999 was $1.15, or $.04 below the $1.19 attained
in the comparable  1998 period.  Weighted  average,  diluted shares for the nine
months ended September 30, 1999, were 87.0 million  compared to 91.1 million for
the same  period  in 1998.  The  following  discussion  highlights  the  factors
contributing to the third quarter and nine months ended results.

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

         Operating  revenues  increased  $6.5 million  during the third  quarter
ended  September  1999  compared  to the  similar  period  last year.  Operating
revenues for the nine months ended  September 1999 increased  $13.3 million from
the comparable 1998 period. These results were due to the following:

                                Increase (Decrease) from Comparable 1998 Period
                                -----------------------------------------------
                                               September 30, 1999
                                               ------------------
                                 Three Months Ended         Nine Months Ended
                                 ------------------         -----------------
                                             (Millions of Dollars)

 Electric:
      Change in retail KWH sales - net of fuel   $ 10.3          $ 18.7
      Fuel revenue                                  2.2             3.9
      Wholesale revenue                            (6.5)           (6.7)
      DSM Tracker revenue                           0.3             0.4
 Steam revenue                                     (0.1)           (1.3)
 Other revenue                                      0.3            (1.7)
                                                -------         -------
      Total change in operating revenues         $  6.5          $ 13.3
                                                =======         =======


         The third quarter and nine months increase in retail KWH sales compared
to the  similar  periods  in 1998  resulted  from a $9.9  million  change in the
estimate for unbilled  revenue as well as from economic growth in  Indianapolis.
The third  quarter of 1999 saw milder  temperatures  compared to last year. As a
result,  cooling  degree days  decreased  4%. The nine month  ended  increase in
retail KWH sales  compared to the same period in 1998  reflects  colder  weather
during the first quarter of 1999  partially  offset by milder weather during the
summer.  As a result,  heating degree days were up 16% while cooling degree days
were down 5% during the nine months ended  September  30, 1999,  compared to the
same period in 1998.  The  changes in fuel  revenues in 1999 from the prior year
reflect  changes in total  fuel costs  billed to  customers.  Wholesale  revenue
decreased  during  the third  quarter  and nine  months  ended of 1999 due to an
unusually high level of generating unit outages during peak demand conditions.

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

         Fuel costs  decreased  by $6.6  million  and $1.9  million in the third
quarter and nine months  ended  September  1999,  respectively,  compared to the
similar  periods last year.  The third quarter  decrease was primarily due to an
unusually  high level of  generating  unit outages  during the third  quarter of
1999. The nine months ended decrease was primarily due to decreased average fuel
costs partially offset by increased total KWH sales.

         Other  operating  expenses  decreased $5.1 million and $14.9 million in
the third quarter and nine months ended September 1999,  respectively,  compared
to the similar periods in 1998. The third quarter  decrease was primarily due to
decreased  administrative  and  general  expense  of $4.4  million  relating  to
decreased benefits expense, and decreased  distribution expense of $1.0 million.
The nine months ended decrease was due to decreased  administrative  and general
expense of $6.2 million,  increased sales of emission allowances of $4.7 million
(reduces operating expenses), decreased customer service and information expense
of $2.1 million and decreased distribution expense of $1.4 million.

         Power  purchased  increased  $22.5 million and $22.7 million during the
third quarter and nine months ended September 30, 1999,  compared to the similar
periods  last year.  These  increases  were due to the  unusually  high level of
generating unit outages during peak demand conditions ($13.4 million) and higher
market prices for scheduled summer peaking power ($9.1 million).

         Maintenance  expense increased $3.8 million and $5.6 million during the
third quarter and nine months ended September 30, 1999,  compared to the similar
periods last year. The increase in expense was due to unplanned  maintenance for
unit  outages.  Also  contributing  to the nine months  ended  increase  was the
overhaul of unit 1 at the Petersburg plant during early 1999.

         As a result of the foregoing,  utility  operating income decreased 6.3%
during  the third  quarter of 1999 from the  comparable  1998  period,  to $48.4
million.  Utility  operating  income during the nine months ended September 1999
increased .1% from the comparable 1998 period, to $141.1 million.

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

         Other - net, which includes the pretax operating and investment  income
from  operations  other  than IPL,  as well as  non-operating  income  from IPL,
decreased $.9 million and $2.3 million, during the third quarter and nine months
ended periods,  respectively. The third quarter decrease resulted from increased
net losses from  operations  other than IPL. The nine months ended  decrease was
due primarily to increased civic expenditures.

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

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

         Interest  expense  decreased  $1.5  million for the nine  months  ended
September  30,  1999,  compared to the similar  period last year  primarily as a
result of the reduction of the  principal  amount on the  recapitalization  debt
facility of IPALCO.

New Accounting Pronouncement
----------------------------

         The  Financial  Accounting  Standards  Board has  issued  Statement  of
Financial  Accounting  Standards No. 133, Accounting for Derivative  Instruments
and Hedging Activities," that Enterprises will be required to adopt in 2001 (see
Note  7  in  the  Notes  to  Consolidated   Financial   Statements  for  further
discussion).

<PAGE>


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

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

None

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.

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 3-31-99.)

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

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

11.1     Computation of Per Share Earnings.

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

27.1     Financial Data Schedule.

         (b)      Reports on Form 8-K.

                           None


<PAGE>


                                   Signatures
                                   ----------

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



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



Date:     November 12, 1999                       /s/  John R. Brehm
       ---------------------                  -----------------------------
                                                    John R. Brehm
                                                    Vice President and Treasurer



Date:     November 12, 1999                       /s/  Stephen J. Plunkett
       ---------------------                  -----------------------------
                                                    Stephen J. Plunkett
                                                    Controller