FORM 10-Q

                                  United States
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549


 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
                                     of 1934


                  For the quarterly period ended March 31, 2002



                            IPALCO ENTERPRISES, INC.
                            ------------------------
             (Exact name of Registrant as specified in its charter)


                          Commission File Number 1-8644
                                                 ------

         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         No   X
                                                  -------    -------



<PAGE>
                            IPALCO ENTERPRISES, INC
                                    FORM 10-Q
                                      INDEX


Part I - Financial Information

  Item 1:  Financial Statements:

           Unaudited Statements of Consolidated Operations for                3
             the three-month periods ended March 31, 2002 and 2001

           Consolidated Balance Sheets as of March 31, 2002                   4
             and December 31, 2001

           Unaudited Statements of Consolidated Cash Flows                    5
             for the three-month periods ended March 31, 2002 and 2001

           Notes to Unaudited Consolidated Financial Statements               6

  Item 2:  Management's Discussion and Analysis of Financial Condition        8
           and Results of Operations

Part II - Other Information

           Items 1 through 6                                                  12

Signatures                                                                    13



<PAGE>
<TABLE>
<CAPTION>
                                   IPALCO ENTERPRISES, INC. and SUBSIDIARIES
                                Unaudited Statements of Consolidated Operations
                                                (In Thousands)


                                                                                    Three Months Ended
                                                                                        March 31,
                                                                              -------------------------------
                                                                                   2002              2001
                                                                              -------------     -------------

<S>                                                                           <C>               <C>
ELECTRIC UTILITY OPERATING REVENUES                                           $    197,470      $    209,052

UTILITY OPERATING EXPENSES:
  Operation:
    Fuel                                                                            43,964            46,283
    Other                                                                           25,061            42,815
  Power purchased                                                                      900               574
  Maintenance                                                                       13,218            19,578
  Termination benefit agreement costs                                                    -            51,683
  Depreciation and amortization                                                     27,798            27,571
  Taxes other than income taxes                                                      9,159             9,583
  Income taxes - net                                                                26,396               646
                                                                              -------------     -------------
    Total operating expenses                                                       146,496           198,733
                                                                              -------------     -------------
UTILITY OPERATING INCOME                                                            50,974            10,319
                                                                              -------------     -------------

OTHER INCOME AND (DEDUCTIONS):
  Allowance for equity funds used during construction                                1,778               110
  Other - net                                                                          495               238
  Termination benefit agreement costs                                                    -            (4,747)
  Merger costs                                                                           -            (6,283)
  Income tax benefit - net                                                           5,348             2,293
                                                                              -------------     -------------
    Total other income (deductions) - net                                            7,621            (8,389)
                                                                              -------------     -------------
INCOME BEFORE INTEREST AND OTHER CHARGES                                            58,595             1,930
                                                                              -------------     -------------

INTEREST AND OTHER CHARGES:
  Interest on long-term debt                                                        24,146             9,343
  Other Interest                                                                       152               960
  Allowance for borrowed funds used during construction                               (834)              (55)
  Amortization of redemption premiums and expense on debt - net                        944               519
  Preferred stock transactions                                                         803               803
                                                                              -------------     -------------
    Total interest and other charges - net                                          25,211            11,570
                                                                              -------------     -------------

NET INCOME (LOSS)                                                             $     33,384      $     (9,640)
                                                                              =============     =============

</TABLE>

                                See notes to consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>
                                   IPALCO ENTERPRISES, INC. and SUBSIDIARIES
                                          Consolidated Balance Sheets
                                                (In Thousands)

                                                                           March 31,         December 31,
                                  ASSETS                                     2002                2001
                                  ------                                 --------------      --------------
UTILITY PLANT:                                                             (Unaudited)
<S>                                                                      <C>                 <C>
  Utility plant in service                                               $   2,948,092       $   2,942,190
  Less accumulated depreciation                                              1,468,850           1,443,736
                                                                         --------------      --------------
      Utility plant in service - net                                         1,479,242           1,498,454
  Construction work in progress                                                223,514             156,522
  Property held for future use                                                  10,768              10,741
                                                                         --------------      --------------
      Utility plant - net                                                    1,713,524           1,665,717
                                                                         --------------      --------------
OTHER ASSETS:
  Nonutility property - at cost, less accumulated depreciation                   1,836               1,742
  Other investments                                                             10,661              52,904
                                                                         --------------      --------------
      Other assets - net                                                        12,497              54,646
                                                                         --------------      --------------
CURRENT ASSETS:
  Cash and cash equivalents                                                     23,529              28,933
  Accounts receivable and unbilled revenue (less allowance
     for doubtful accounts of $1,347 and $1,095, respectively)                  44,375              48,001
  Fuel - at average cost                                                        38,552              28,970
  Materials and supplies - at average cost                                      48,921              48,376
  Prepayments and other current assets                                             744               1,283
                                                                         --------------      --------------
      Total current assets                                                     156,121             155,563
                                                                         --------------      --------------
DEFERRED DEBITS:
  Regulatory assets                                                             87,811              97,809
  Miscellaneous                                                                 23,994              22,195
                                                                         --------------      --------------
      Total deferred debits                                                    111,805             120,004
                                                                         --------------      --------------
              TOTAL                                                      $   1,993,947       $   1,995,930
                                                                         ==============      ==============

                  CAPITALIZATION AND LIABILITIES
                  ------------------------------
CAPITALIZATION:
  Common shareholder's equity:
    Premium on 4% cumulative preferred stock                             $         649       $         649
    Retained earnings (deficit)                                                 (2,567)             15,049
    Accumulated other comprehensive loss                                       (11,263)            (11,469)
                                                                           ------------        ------------
      Total common shareholder's equity (deficit)                              (13,181)              4,229
  Cumulative preferred stock of subsidiary                                      59,135              59,135
  Long-term debt (less current maturities and
   sinking fund requirements)                                                1,371,947           1,371,930
                                                                         --------------      --------------
      Total capitalization                                                   1,417,901           1,435,294
                                                                         --------------      --------------
CURRENT LIABILITIES:
  Current maturities and sinking fund requirements                                 300                 300
  Accounts payable                                                              40,463              47,798
  Accrued expenses                                                              14,814              16,285
  Dividends payable                                                                903                 910
  Accrued taxes                                                                 32,608               9,438
  Accrued interest                                                              33,059              21,892
  Other current liabilities                                                     22,272              19,897
                                                                         --------------      --------------
      Total current liabilities                                                144,419             116,520
                                                                         --------------      --------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
  Accumulated deferred income taxes - net                                      257,716             271,195
  Unamortized investment tax credit                                             33,460              33,690
  Accrued postretirement benefits                                                9,065               9,504
  Accrued pension benefits                                                     127,727             125,549
  Miscellaneous                                                                  3,659               4,178
                                                                         --------------      --------------
      Total deferred credits and other long-term liabilities                   431,627             444,116
                                                                         --------------      --------------

COMMITMENTS AND CONTINGENCIES (Note 5)
              TOTAL                                                      $   1,993,947       $   1,995,930
                                                                         ==============      ==============

</TABLE>

                             See notes to consolidated financial statements.

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

                                                                                  Three Months Ended
                                                                                       March 31,
                                                                           ----------------------------------
                                                                                2002                2001
                                                                           --------------      --------------
<S>                                                                        <C>                 <C>
CASH FLOWS FROM OPERATIONS:
  Net income (loss)                                                        $      33,384       $      (9,640)
  Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
    Depreciation and amortization                                                 28,030              27,501
    Amortization of regulatory assets                                                800                 736
    Deferred income taxes and investment tax credit adjustments - net             (4,439)              3,850
    Allowance for funds used during construction                                  (2,613)               (165)
  Change in certain assets and liabilities:
    Accounts receivable                                                            3,626              18,611
    Fuel, materials and supplies                                                 (10,127)              3,196
    Accounts payable and accrued expenses                                         (8,806)             (5,773)
    Accrued taxes                                                                 23,170             (28,047)
    Accrued pension benefits                                                       2,178              (2,534)
    Accrued interest                                                              11,167              (3,386)
    Other - net                                                                    2,158               2,841
                                                                             ------------        ------------
Net cash provided by operating activities                                         78,528               7,190
                                                                           --------------      --------------

CASH FLOWS FROM INVESTING:
  Construction expenditures - utility                                            (31,443)            (21,756)
  Other                                                                             (980)              2,053
                                                                             ------------        ------------
Net cash used in investing activities                                            (32,423)            (19,703)
                                                                           --------------      --------------

CASH FLOWS FROM FINANCING:
  Retirement of long-term debt                                                         -              (6,150)
  Common dividends paid                                                                -             (14,434)
  Dividends to AES                                                               (51,000)                  -
  Issuance of common stock related to incentive compensation plans                     -               1,764
  Reacquired common stock                                                              -               6,564
  Other                                                                             (509)              2,324
                                                                           --------------      --------------
Net cash used in financing activities                                            (51,509)             (9,932)
                                                                           --------------      --------------
Net decrease in cash and cash equivalents                                         (5,404)            (22,445)
Cash and cash equivalents at beginning of period                                  28,933              68,652
                                                                           --------------      --------------
Cash and cash equivalents at end of period                                 $      23,529       $      46,207
                                                                           ==============      ==============

-------------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest (net of amount capitalized)                                   $      12,300       $      13,639
                                                                           ==============      ==============
    Income taxes                                                           $       9,101       $      26,964
                                                                           ==============      ==============

</TABLE>

                                See notes to consolidated financial statements.



<PAGE>

                    IPALCO ENTERPRISES, INC. and SUBSIDIARIES
              Notes to Unaudited Consolidated Financial Statements
                              (Dollars in Millions)

1.  AES ACQUISITION

          On  March  27,  2001,  The  AES  Corporation   (AES)  acquired  IPALCO
Enterprises,  Inc.  (IPALCO) through a share exchange  transaction in accordance
with the Agreement and Plan of Share Exchange  dated as of July 15, 2000,  among
AES and IPALCO (the Share  Exchange  Agreement).  Pursuant to the Share Exchange
Agreement, IPALCO became a wholly-owned subsidiary of AES.

          During  the first  quarter  of 2001,  IPALCO  expensed  $6.3 of merger
related  costs which are  included  in OTHER  INCOME AND  (DEDUCTIONS)  - Merger
Costs. Total merger related costs were $12.1.

          As a result of the  acquisition  by AES,  in the first  quarter  2001,
IPALCO  recorded  $71.8  ($44.8  after  tax) of one time  costs  related  to the
termination of certain management employees.  The pretax expenses included $56.4
in costs associated with termination  benefit  agreements,  $9.2 in supplemental
retirement costs, and $6.2 in restricted stock expense. Substantially all of the
termination  benefit  agreement  costs,   supplemental   retirement  costs,  and
restricted stock costs were paid out by March 31, 2001.

2.  GENERAL

          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 accounting
principles  generally  accepted in the United  States of America  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 unaudited  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 unaudited financial statements and notes
should be read in conjunction with IPALCO's 2001 audited consolidated  financial
statements and notes included in its Form S-4 filed on April 3, 2002.

3. NEW ACCOUNTING PRONOUNCEMENTS

          In July 2001,  the  Financial  Accounting  Standards  Board issued new
pronouncements:  Statement of  Financial  Accounting  Standards  (SFAS) No. 141,
"Business Combinations" and SFAS No. 142, "Goodwill and Other Intangibles." SFAS
No. 141 requires  business  combinations  initiated  after June 30, 2001,  to be
accounted for using the purchase  method of accounting and broadens the criteria
for recording intangible assets separate from goodwill.

          SFAS  No.  142  requires  the use of a non  amortization  approach  to
account for purchased goodwill and certain intangibles. Under a non amortization
approach,  goodwill and certain  intangibles would not be amortized into results
of  operations,  but instead would be reviewed for  impairment at least annually
and written  down and charged to results of  operations  in the periods in which
the recorded  value of goodwill and certain  intangibles  are  determined  to be
greater  than  their fair  value.  SFAS No. 142 is  effective  for fiscal  years
beginning after December 15, 2001. The adoption of SFAS No. 142 did not have any
impact on Enterprises' financial position or results of operations.

<PAGE>

          In August 2001, the Financial  Accounting  Standards Board issued SFAS
144 "Accounting  for the Impairment or Disposal of Long-Lived  Assets." SFAS 144
addresses  accounting  for  and  reporting  of the  impairment  or  disposal  of
long-lived assets and is effective for fiscal years beginning after December 31,
2001.  The  adoption  of SFAS No.  144 did not have any  impact on  Enterprises'
financial position or results of operations.

4.  SEGMENT INFORMATION

          Operating  segments are components of an enterprise for which separate
financial  information  is  available  and is  evaluated  regularly by the chief
operating  decision maker in deciding how to allocate resources and in assessing
performance.  Enterprises'  reportable  business  segments are electric and "all
other."  All  subsidiaries  other  than  IPL are  combined  in the  "all  other"
category. The accounting policies of the identified segments are consistent with
those policies and procedures described in the summary of significant accounting
policies  footnote  in  Enterprises'  2001  consolidated  financials  statements
included  in its  Form  S-4  filed on April  3,  2002.  Intersegment  sales  are
generally  based on prices  that  reflect  the current  market  conditions.  The
following tables provide information about Enterprises' business segments:

<TABLE>
<CAPTION>
                                                                    For the Three Months Ended,
                                               ----------------------------------------------------------------------
                                                          March 2002                          March 2001
                                               ----------------------------------  ----------------------------------
                                                  Electric  All Other      Total      Electric  All Other      Total
                                                  --------  ---------      -----      --------  ---------      -----
<S>                                                   <C>           <C>     <C>           <C>          <C>      <C>
       Operating Revenues                             $197          -       $197          $209         $6       $215
       Depreciation and Amortization                    28          -         28            28          -         28
       Pre-tax Operating Income                         77          -         77            11          1         12
       Income Taxes                                     26        (5)         21             1        (2)        (1)
       Property - net of Depreciation                1,713          2      1,715         1,641         12      1,653
       Capital Expenditures                             31          -         31            22          -         22
</TABLE>

5. COMMITMENTS AND CONTINGENCIES

          In March 2002,  IPALCO and certain of its former officers were sued in
the U.S.  District  Court for the  Southern  District  of  Indiana  for  alleged
breaches  of  fiduciary  duty  stemming  from  declines in the prices of AES and
IPALCO  stock held by certain of IPALCO's  benefit  plans.  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 the consolidated financial statements.

          In  addition,  Enterprises  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 the
consolidated financial statements.

          With  respect  to  environmental   issues,   Enterprises  has  ongoing
discussions  with various  regulatory  authorities and continues to believe that
Enterprises is in compliance with its various permits.  On October 27, 1998, the
U.S.  Environmental  Protection  Agency issued a final rule,  which imposes more
stringent limits on nitrogen oxide (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  $120  during
2002-2005 to achieve the majority of IPL-required NOx emission  reductions.  The
intent is to purchase the remaining NOx emission allowances in the market.



<PAGE>




     Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS
                              (Dollars in millions)

FORWARD-LOOKING STATEMENTS

     This  Form  10-Q  includes   "forward-looking   statements"  including,  in
particular,  the statements about our plans,  strategies and prospects under the
headings  "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, 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.  The words
"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  acquisition  and  control  by  AES,
fluctuations in customer growth and demand, weather, fuel costs, generating unit
availability,  purchased  power  costs  and  availability,   regulatory  action,
environmental  matters,  federal and state  legislation,  interest rates,  labor
strikes,  maintenance and capital expenditures,  local economic conditions,  the
ultimate  disposition  of litigation and the specific needs of plants to perform
unanticipated  facility  maintenance  or repairs or outages.  In  addition,  our
ability to have  available an  appropriate  amount of  production  capacity in a
timely manner can significantly affect our financial performance.  The timing of
deregulation and  competition,  product  development and technology  changes are
also  important  potential  factors that may cause actual results or outcomes to
differ materially from those discussed in the forward-looking  statements.  Most
of these  factors  affect us through our wholly owned  subsidiary,  Indianapolis
Power & Light Company, or IPL.

     All such 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.

LIQUIDITY AND CAPITAL RESOURCES

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

Overview

          IPL  capital   requirements  are  primarily  related  to  construction
expenditures needed to meet customers' needs for electricity,  for environmental
compliance  and for energy  and  outage  management  systems.  Our  construction
expenditures totaled $31.4 during the quarter ended March 31, 2002, representing
a $9.7 increase from the comparable  period in 2001.  Construction  expenditures
during the first quarter of 2002 were financed using  internally  generated cash
provided by operations.

          IPL's  construction  program for the three-year  period 2002 - 2004 is
estimated to cost $387.0.  The estimated cost of the program by year is $93.3 in
2002,  $182.2 in 2003 and $111.5 in 2004.  It  includes  $250.0  for  additions,
improvements and extensions to transmission and distribution lines, substations,
power factor and voltage  regulating  equipment,  distribution  transformer  and
street  lighting  facilities.  The  construction  program also includes $7.6 for
energy and outage management systems.  These projected costs also include $124.0
of costs during the period associated with new  environmental  standards imposed
by the EPA.

          A combustion turbine valued at $42.6 was included in Other investments
at December 31, 2001 and is now included in Construction work in progress.

          On March 27, 2002,  the Board of Directors  declared a dividend to AES
of $51.0 payable on March 29, 2002. This created a deficit in retained earnings.

<PAGE>

OTHER

Market Risk Disclosure
----------------------

          The primary market risk to which we are exposed is interest rate risk.
IPL  uses  long-term  debt as a  primary  source  of  capital  in its  business.
Historically,  a portion of this debt had an interest  component that reset on a
periodic basis to reflect current market conditions.  At March 31, 2002, IPL had
$582.7 of fixed rate debt and a $40  notional  amount  variable  rate debt issue
which had been synthetically fixed through a  floating-to-fixed  rate swap. This
swap expires  January 2023.  IPL agrees to pay interest at a fixed rate of 5.21%
to a swap  counter  party and  receive a variable  rate based on the  tax-exempt
weekly  rate.  The fair  value of IPL's swap  agreement  was $(2.9) at March 31,
2002.

Remarketing Agreement and Liquidity Facility
--------------------------------------------

          IPL  has  entered  into  a  Remarketing  Agreement  with  J.P.  Morgan
Securities,  Inc. for the weekly  remarketing  of IPL's $40 City of  Petersburg,
Indiana,  Pollution  Control  Refunding  Revenue  Bonds  Adjustable  Rate Tender
Securities (ARTS) Series 1995B,  Indianapolis Power & Light Company Project (the
Bonds).  J.P. Morgan is obligated to use its best efforts to remarket the Bonds,
but is not obligated to buy or take any position in the Bonds. In addition,  one
of the  conditions  precedent to J.P.  Morgan's  obligations is that there shall
have been no adverse change in the properties, business, condition (financial or
otherwise) or results of  operations of IPL. In the event J.P.  Morgan is unable
to remarket the Bonds,  there is a liquidity  facility in place in the form of a
Credit  Agreement with ABN AMRO Bank, N.V. The Trustee for the Bonds is the only
one  authorized  to  request an advance  under this  facility,  and this is only
contemplated in the event of a failed  remarketing of the Bonds by J.P.  Morgan.
It is an event of default under this Credit Agreement if the S&P Rating shall be
BB+ or lower or the  long-term  debt  securities of IPL shall be unrated by S&P.
S&P Rating is defined as the rating assigned to the senior  unsecured  long-term
debt  securities  of IPL  without  third  party  credit  enhancement.  IPL is in
compliance with all covenants related to the Bonds.

RESULTS OF OPERATIONS

Comparison of Quarters Ended March 31, 2002 and March 31, 2001
--------------------------------------------------------------

          Our first  quarter 2002 net income of $33.4  increased  $43.0 from net
loss of $9.6 in the first quarter of 2001. The following  discussion  highlights
the factors contributing to these changes.

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

          Operating  revenues  decreased by $11.6 during the first quarter ended
March 31, 2002 compared to the similar period last year.  These results were due
to the following:

                                               Decrease From Comparable Period
                                                 Three Months Ended March 31
                                                 ---------------------------
Electric:
    Change in retail kWh sales                              $(2.9)
    Wholesale revenue                                        (8.7)
                                                           -------
      Total Change in Operating Revenues                   $(11.6)
                                                           =======

          The decrease in retail  kilowatt-hour (kWh) sales in the first quarter
2002 as  compared  to the  similar  period  in 2001  was the  result  of a 10.7%
decrease in heating  degree days and a 3% decrease in kWh sales as  temperatures
in the Indianapolis area were warmer than normal.  Wholesale  revenues decreased
during the first quarter of 2002 due to a decline in kWh sales of 80%, which was
primarily the result of a decrease in generation due to a soft wholesale  market
resulting from  unseasonably warm weather in the midwest in the first quarter of
2002.

<PAGE>

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

          Fuel costs decreased $2.3 in the first quarter of 2002 compared to the
same period last year, primarily due to decreased kWh sales, as described above.

          Other operating  expenses decreased $17.8 in the first quarter of 2002
compared  to the same  period  in  2001.  The  first  quarter  decrease  was due
primarily  to an  $8.8  decrease  in  supplemental  retirement  expense,  a $6.2
decrease in  restricted  stock  expense,  and a $4.2  decrease  in boiler  plant
maintenance  expense.  This was offset by an increase in the  disposition of SO2
allowances of $3.0.

          Maintenance  expenses  decreased  $6.4 in the  first  quarter  of 2002
compared  to the same  period  in  2001.  The  first  quarter  decrease  was due
primarily  to a $1.8  decrease  in the  expense  related to the  maintenance  of
overhead lines and a $4.1 decrease in plant maintenance expense. The decrease in
maintenance  expense during the first quarter was the result of cost containment
measures.

          Termination  benefit  agreement  costs decreased by $51.7 in the first
quarter of 2002 compared to the same period in 2001. The first quarter  decrease
was due to the 2001 recognition of officer  termination costs as a result of our
acquisition  by  AES  (see  Note  1).

          Income taxes-net increased $25.8 in the first quarter of 2002 compared
to the same period in 2001 due to an increase in pretax operating income.

          As a result of the foregoing,  utility operating income increased 394%
during the first quarter of 2002 from the comparable 2001 period, to $51.0.

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

          Allowance for equity funds used during construction  (AFUDC) increased
by $1.7 in the first  quarter of 2002 compared to the same period in 2001 due to
an increased construction base.

          Termination  benefit agreement costs associated with "Other Income and
Deductions"  decreased by $4.7 in the first quarter of 2002 compared to the same
period in 2001.  The first quarter  decrease was due to the 2001  recognition of
non-utility officer termination costs as a result of our acquisition by AES (see
Note 1).

          Merger cost decreased by $6.2 in the first quarter of 2002 compared to
the same period in 2001. The first quarter  decrease was due to the  recognition
of AES  transaction  costs due to our acquisition by AES in the first quarter of
2001 (see Note 1).

          Income tax  benefit - net  increased  by $3.1 in the first  quarter of
2002  compared  to the same  period in 2001,  primarily  due to an  increase  in
interest expense on the IPALCO Notes (see below).

Interest Charges
----------------

          Interest  expense  increased by $14.8 for the three months ended March
31,  2002,  as compared to the prior  period,  primarily as a result of $14.1 of
interest  associated  with  IPALCO's  issuance of $750 Senior  Secured  Notes in
November 2001 (the IPALCO Notes).

          Other interest decreased by $0.8 in the first quarter of 2002 compared
to the same  period in 2001 due in part to the pay off in  February  2001 of our
commercial paper program as well as the overall low interest rate environment in
2002.

          Allowance  for borrowed  funds used during  construction  increased by
$0.8 in the first  quarter of 2002 compared to the same period in 2001 due to an
increased construction base.

          Amortization of redemption  premiums and expenses increased by $0.4 in
the first quarter of 2002 compared to the same period in 2001. The first quarter
increase was due to amortizing issuance costs associated with the IPALCO Notes.



<PAGE>



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

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

     IPL has been named as a defendant  in  approximately  41 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 primary defendants--the  asbestos  manufacturers--have
filed for bankruptcy  protection,  and it is expected that many of the remaining
manufacturers  will also be forced into bankruptcy.  IPL has insurance  coverage
for many of these claims;  currently,  these cases are being defended by counsel
retained by various insurers who wrote "occurrence" coverage 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 our  business or
operations,  we are unable to predict the number or effect any additional  suits
may  have,  or  the  consequences  to  IPL of  the  bankruptcy  of the  asbestos
manufacturers;  accordingly,  we  cannot  assure  you  that the  pending  or any
additional  suits will not have a material effect on our business or operations.
Trial of one  asbestos  case is set for trial in July 2002 and one in  September
2002.

     On March 29, 2002, IPALCO and certain of its former officers were sued in a
purported class action in the U.S.  District Court for the Southern  District of
Indiana for alleged  breaches of fiduciary  duty  stemming  from declines in the
prices of AES and IPALCO stock held by certain of IPALCO's benefit plans seeking
compensation  for alleged  overpayment  for the purchase of IPALCO  stock,  plus
interest.  We believe that this suit is without  merit.  While we cannot predict
the outcome, we do not believe that the suit will have a material adverse effect
on our financial condition, results of operations or liquidity.

     In  addition  to the  foregoing,  we are a  defendant  in  various  actions
relating to various  aspects of our business.  While it is impossible to predict
the ultimate disposition of any litigation,  we do not believe that any of these
lawsuits,  either individually or in the aggregate, will have a material adverse
effect on our financial condition, results of operations or liquidity.

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

     (a)  Exhibits - No exhibits are being filed with this report.

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



<PAGE>



                                   Signatures
                                   ----------

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



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





Date:    May 31, 2002                  /s/ Hamsa Shadaksharappa
       ------------------              -----------------------------------------
                                           Hamsa Shadaksharappa
                                           Vice President - Financial Services
                                           (Principal Accounting Officer)