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
            June 30, 1997                       Commission File Number  1-8644


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

        Indiana                                              35-1575582
  (State or other jurisdiction                             (I.R.S. Employer
  of incorporation or organization)                       Identification No.)

           One Monument Circle
           Indianapolis, Indiana                               46204
  (Address of principal executive offices)                   (Zip Code)


  Registrant's telephone number, including area code:  317-261-8261



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

  Indicate  the  number of  shares  outstanding  of each of the  issuer's
  classes of common stock, as of the latest practicable date.


     Class                                     Outstanding At June 30, 1997
     -----                                     ----------------------------
     
Common (Without Par Value)                            44,564,916 Shares


<PAGE>1

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

                                      INDEX
                                      -----



                                                                       Page No.
                                                                       --------

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

         Statements of Consolidated Income - Three Months Ended and
            Six Months Ended June 30, 1997 and 1996                          2

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

         Statements of Consolidated Cash Flows -
            Six Months Ended June 30, 1997 and 1996                          4

         Notes to Consolidated Financial Statements                        5-7

         Management's Discussion and Analysis of
            Financial Condition and Results of Operations                 8-12

PART II.  OTHER INFORMATION                                              13-15
--------  -----------------                                              


<PAGE>2

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>

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


                                                                 Three Months Ended              Six Months Ended
                                                                      June 30                        June 30
                                                                 1997           1996            1997            1996
                                                            -------------  --------------  --------------  -------------
<S>                                                         <C>            <C>             <C>             <C>        
UTILITY OPERATING REVENUES:
  Electric                                                  $    170,096   $     169,163   $     358,612   $    353,101
  Steam                                                            8,620           8,458          20,390         20,966
                                                            -------------  --------------  --------------  -------------
    Total operating revenues                                     178,716         177,621         379,002        374,067
                                                            -------------  --------------  --------------  -------------

UTILITY OPERATING EXPENSES:
  Operation:
    Fuel                                                          37,506          40,360          79,122         84,783
    Other                                                         35,622          33,354          68,255         66,311
  Power purchased                                                  1,131           4,285           5,290          9,015
  Purchased steam                                                  1,684           1,499           3,903          3,651
  Maintenance                                                     17,613          16,112          33,311         29,926
  Depreciation and amortization                                   26,504          23,973          52,244         47,679
  Taxes other than income taxes                                    8,067           8,373          16,999         17,334
  Income taxes - net                                              14,601          13,543          36,297         34,402
                                                            -------------  --------------  --------------  -------------
    Total operating expenses                                     142,728         141,499         295,421        293,101
                                                            -------------  --------------  --------------  -------------
UTILITY OPERATING INCOME                                          35,988          36,122          83,581         80,966
                                                            -------------  --------------  --------------  -------------

OTHER INCOME AND (DEDUCTIONS):
  Allowance for equity funds used during construction              1,124           1,769           2,281          3,620
  Other - net                                                     (1,577)         (2,602)         (2,774)        (1,859)
  Income taxes - net                                               3,184           1,044           3,919            872
                                                            -------------  --------------  --------------  -------------
    Total other income - net                                       2,731             211           3,426          2,633
                                                            -------------  --------------  --------------  -------------
INCOME BEFORE INTEREST AND OTHER CHARGES                          38,719          36,333          87,007         83,599
                                                            -------------  --------------  --------------  -------------

INTEREST AND OTHER CHARGES:
  Interest                                                        17,064          12,663          28,696         25,311
  Allowance for borrowed funds used during construction             (226)         (1,585)           (472)        (3,310)
  Preferred dividend requirements of subsidiary                      796             796           1,591          1,591
                                                            -------------  --------------  --------------  -------------
    Total interest and other charges - net                        17,634          11,874          29,815         23,592
                                                            -------------  --------------  --------------  -------------
NET INCOME                                                  $     21,085   $      24,459   $      57,192   $     60,007
                                                            =============  ==============  ==============  =============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                        45,507          56,906          51,272         56,885
                                                            =============  ==============  ==============  =============
    (Note 2)
EARNINGS PER SHARE OF COMMON STOCK                          $       0.46   $        0.43   $        1.12   $       1.05
                                                            =============  ==============  ==============  =============
    (Note 2)
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK                $       0.25   $        0.37   $        0.50   $       0.74
                                                            =============  ==============  ==============  =============
    (Note 2)

See notes to consolidated financial statements.
</TABLE>





<PAGE>3

<TABLE>


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

                                                                       June 30                December 31
                                ASSETS                                  1997                     1996
                                ------                                                       
                                                                 -----------------       ------------------
<S>                                                              <C>                     <C>   
UTILITY PLANT:
  Utility plant in service                                       $      2,774,554        $       2,763,305
  Less accumulated depreciation                                         1,086,614                1,048,492
                                                                 -----------------       ------------------
      Utility plant in service - net                                    1,687,940                1,714,813
  Construction work in progress                                            73,461                   63,243
  Property held for future use                                             10,074                    9,913
                                                                 -----------------       ------------------
      Utility plant - net                                               1,771,475                1,787,969
                                                                 -----------------       ------------------
OTHER ASSETS:
  Nonutility property - at cost, less accumulated depreciation            107,263                  108,290
  Other investments                                                         5,524                    5,371
                                                                 -----------------       ------------------
      Other assets - net                                                  112,787                  113,661
                                                                 -----------------       ------------------
CURRENT ASSETS:
  Cash and cash equivalents                                                15,052                   19,317
  Accounts receivable (less allowance for doubtful
   accounts - 1997, $1,272 and 1996, $1,159)                                4,284                   11,099
  Fuel - at average cost                                                   27,085                   30,625
  Materials and supplies - at average cost                                 51,616                   52,727
  Prepayments and other current assets                                      5,746                    9,931
                                                                 -----------------       ------------------
      Total current assets                                                103,783                  123,699
                                                                 -----------------       ------------------
DEFERRED DEBITS:
  Regulatory assets                                                       132,462                  137,974
  Miscellaneous                                                            28,289                   19,766
                                                                 -----------------       ------------------
      Total deferred debits                                               160,751                  157,740
                                                                 -----------------       ------------------
              TOTAL                                              $      2,148,796        $       2,183,069
                                                                 =================       ==================

                    CAPITALIZATION AND LIABILITIES
                    ------------------------------
CAPITALIZATION:
  Common shareholders' equity:
    Common stock                                                 $        392,190        $         389,966
    Premium on 4% cumulative preferred stock                                1,363                    1,363
    Retained earnings                                                     498,192                  466,397
    Treasury Stock                                                       (401,262)                       -
                                                                 -----------------       ------------------
      Total common shareholders' equity                                   490,483                  857,726
  Cumulative preferred stock of subsidiary                                 51,898                   51,898
  Long-term debt (less current maturities and
   sinking fund requirements)                                           1,033,416                  662,591
                                                                 -----------------       ------------------
      Total capitalization                                              1,575,797                1,572,215
                                                                 -----------------       ------------------
CURRENT LIABILITIES:
  Notes payable - banks and commercial paper                                6,000                   46,000
  Current maturities and sinking fund requirements                         30,200                   11,250
  Accounts payable and accrued expenses                                    57,083                   62,222
  Dividends payable                                                        12,229                   22,212
  Taxes accrued                                                            22,937                   23,159
  Interest accrued                                                         15,399                   13,354
  Other current liabilities                                                11,601                   14,519
                                                                 -----------------       ------------------
      Total current liabilities                                           155,449                  192,716
                                                                 -----------------       ------------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
  Accumulated deferred income taxes - net                                 307,355                  303,473
  Unamortized investment tax credit                                        46,243                   47,722
  Accrued postretirement benefits                                          20,435                   23,635
  Accrued pension benefits                                                 39,448                   37,283
  Miscellaneous                                                             4,069                    6,025
                                                                 -----------------       ------------------
      Total deferred credits and other long-term liabilities              417,550                  418,138
                                                                 -----------------       ------------------

COMMITMENTS AND CONTINGENCIES
              TOTAL                                              $      2,148,796        $       2,183,069
                                                                 =================       ==================

                                                               

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

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

<CAPTION>
                                                                                   
                                                                                    Six Months Ended
                                                                                         June 30
                                                                                1997                  1996
                                                                          ----------------      ----------------
<S>                                                                       <C>                   <C> 
CASH FLOWS FROM OPERATIONS:
  Net income before preferred dividend requirements of subsidiary         $        58,783       $        61,598
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                                                  52,146                47,390
    Amortization of regulatory assets                                               7,825                 8,104
    Deferred income taxes and investment tax credit adjustments - net                (153)               (1,039)
    Allowance for funds used during construction                                   (2,753)               (6,930)
  Change in certain assets and liabilities:
    Accounts receivable                                                             6,815                 2,938
    Fuel, materials and supplies                                                    4,651                (2,925)
    Accounts payable                                                               (5,139)              (11,154)
    Taxes accrued                                                                    (222)                4,156
    Accrued pension benefits                                                        2,165                 2,634
    Other - net                                                                       213                 2,447
                                                                          ----------------      ----------------
Net cash provided by operating activities                                         124,331               107,219
                                                                          ----------------      ----------------

CASH FLOWS FROM INVESTING:
  Proceeds from maturities of marketable securities                                     -                 3,810
  Construction expenditures - utility                                             (30,569)              (45,441)
  Construction expenditures - nonutility                                           (1,187)               (3,547)
  Other                                                                            (9,241)               (8,676)
                                                                          ----------------      ----------------
Net cash used in investing activities                                             (40,997)              (53,854)
                                                                          ----------------      ----------------

CASH FLOWS FROM FINANCING:
  Issuance of long-term debt                                                      451,000                 1,600
  Retirement of long-term debt                                                    (61,250)              (17,900)
  Short-term debt - net                                                           (40,000)                9,278
  Dividends paid                                                                  (36,954)              (43,095)
  Issuance of common stock related to incentive compensation plans                  1,794                 1,909
  Reacquired common stock                                                        (401,262)                    -
  Other                                                                              (927)                  176
                                                                          ----------------      ----------------
Net cash used in financing activities                                             (87,599)              (48,032)
                                                                          ----------------      ----------------
Net increase (decrease) in cash and cash equivalents                               (4,265)                5,333
Cash and cash equivalents at beginning of period                                   19,317                11,554
                                                                          ----------------      ----------------
Cash and cash equivalents at end of period                                $        15,052       $        16,887
                                                                          ================      ================

----------------------------------------------------------------------------------------------------------------
Supplemental  disclosures of cash flow information:  Cash paid during the period
  for:
    Interest (net of amount capitalized)                                  $        25,622       $        22,431
                                                                          ================      ================
    Income taxes                                                          $        29,089       $        31,054
                                                                          ================      ================



See notes to consolidated financial statements.
</TABLE>




<PAGE>5


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

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


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

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

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

<TABLE>

2.      COMMON STOCK
<CAPTION>
                                                                  Shares              Amount
                                                                -----------         ------------
       <S>                                                      <C>                 <C>  
       Balance at December 31, 1996                              57,034,912         $389,966,251
           Restricted stock issued (1st Quarter)                      1,628               44,363
            Exercise of stock options (1st Quarter)                   2,500               55,986
            Adjustment for restricted stock (1st Quarter)                -               300,784
           Exercise of stock options (2nd Quarter)                   65,304            1,738,332
           Adjustment for restricted stock (2nd Quarter)                 -                84,220
                                                                                    ------------
       Balance at June 30, 1997                                                     $392,189,936
                                                                                    ============
             Less shares reacquired by Treasury (2nd Quarter)   (12,539,428)
                                                                -----------
       Shares issued and outstanding at June 30, 1997            44,564,916
                                                                ===========
</TABLE>


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


<PAGE>6


3.      LONG-TERM DEBT

        On April 4, 1997 IPALCO  Enterprises,  Inc.  entered into a $401 million
        Revolving  Credit  Facility  (the  "Revolver")  with Bank One,  Indiana,
        National  Association,  National  City  Bank of  Indiana,  and The First
        National Bank of Chicago with a maturity of March 31, 2002. The proceeds
        of this  Revolver were used to purchase,  through a  self-tender  offer,
        shares of IPALCO's outstanding common capital stock. Interest is payable
        monthly  and is based on a spread over LIBOR.  In  conjunction  with the
        issuance of the  Revolver,  IPALCO  entered  into an interest  rate swap
        agreement which fixed the interest rate on $300 million of the Revolver.
        Pursuant to the swap agreement which matures April 1, 2001,  IPALCO will
        pay interest at a fixed rate of 6.3575% to a swap counter party and will
        receive a variable  rate of interest in return based on one month LIBOR.
        The result is to effectively  establish a 6.6825% fixed rate of interest
        on $300 million of the  Revolver.  During  June,  1997,  IPALCO  retired
        $50,000,000 of the $401,000,000 debt issued in April, 1997.

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

        On June 13, 1997,  Mid-America  Energy  Resources  issued $50 million in
        long-term  notes  payable  at a  fixed  rate of  8.03%  with  the  first
        principal payment due September 1, 1998. The average life of the debt is
        10 years with a final  maturity  on June 13,  2012,  and with an initial
        required escrow balance of $6.95 million.

4.      NEW ACCOUNTING STANDARDS

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

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

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

<PAGE>7


5.      SALE OF ACCOUNTS RECEIVABLE

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

6.      STOCK-BASED COMPENSATION

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

       A summary of options  issued  under  IPALCO's  stock  option  plans is as
       follows:
<TABLE>
<CAPTION>
                                              Weighted Average    Range of Option     Number of
                                               Price per Share    Price per Share      Shares
                                              ----------------   -----------------    ---------
<S>                                                  <C>         <C>                  <C>    
Outstanding, December 31, 1996................       24.12       16.8317 - 25.3725    1,023,570
  Granted.....................................       31.38                 31.375     1,132,500
  Granted.....................................       30.50                 30.50         42,000
  Exercised...................................       24.33       16.8317 - 25.3308      (67,804)
                                                                                      ---------
Outstanding, June 30, 1997....................       28.09       16.8317 - 31.375     2,130,266
                                                                                      =========
</TABLE>

        Accounting  Principles Board (APB) Opinion No. 25, "Accounting for Stock
        Issued to Employees," and related  interpretations in accounting for the
        stock based plan have been applied by IPALCO.  No compensation  cost has
        been  recognized  for the plans because the stock options price is equal
        to fair value at the grant  date.  Had  compensation  cost for the plans
        been  determined  based on the fair value at the grant  dates for awards
        under the plans consistent with the method of SFAS No. 123,  "Accounting
        for  Stock-Based  Compensation,"  IPALCO's net income for the six months
        ended June 30, 1997,  would have decreased from $57.2 million ($1.12 per
        share)  to the pro forma  amount of $53.7  million  ($1.05  per  share).
        IPALCO's  net income and  earnings  per share for the similar  period in
        1996 would not change.  IPALCO  estimated the SFAS No. 123 fair value by
        utilizing  the  binomial   options  pricing  model  with  the  following
        assumptions: dividend yields of 3.19% to 6.88%, risk-free rates of 6.38%
        to 6.88%, volatility of 12% to 13% and expected lives of 5 years.

7.      SUBSEQUENT EVENT

        IPALCO filed  preliminary  documents  with the  Securities  and Exchange
        Commission  on  August  8,  1997,  describing  a  contemplated  offer to
        purchase  for  cash any and all  outstanding  shares  of the  cumulative
        preferred   stock  of  IPL.   The  offer  is   conditioned   upon  IPL's
        shareholders'  approval of an  amendment  to IPL's  Amended  Articles of
        Incorporation  (the  "Articles")  which would  remove a provision of the
        Articles  limiting IPL's ability to issue  unsecured  debt. In addition,
        preferred  shareholders  who wish to tender their shares pursuant to the
        offer must vote in favor of the Articles Amendment.  In conjunction with
        the filing, IPL filed a preliminary Proxy Statement for potential use in
        soliciting  proxies  for a special  meeting  of  shareholders  of IPL to
        consider the Articles Amendment.


<PAGE>8


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

         Material changes in the consolidated financial condition and results of
operations of IPALCO Enterprises,  Inc.  (Enterprises),  except where noted, are
attributed  to the  operations  of  Indianapolis  Power & Light  Company  (IPL).
Consequently, the following discussion is centered on IPL.


LIQUIDITY AND CAPITAL RESOURCES

Overview
--------

         The Board of  Directors  of  Enterprises  on May 27,  1997,  declared a
quarterly  dividend on common  stock of 25 cents per share  compared to 37 cents
per share declared in the second quarter of 1996. The dividend was paid July 15,
1997, to shareholders of record June 20, 1997.

         IPL's  capital  requirements  are  primarily  related  to  construction
expenditures  needed to meet customers' needs for electricity and steam, as well
as  expenditures  for  compliance  with the federal Clean Air Act.  Enterprises'
construction   expenditures   (excluding   allowance   for  funds  used   during
construction)  totaled  $18.2 million  during the second  quarter ended June 30,
1997,  representing a $5.2 million decrease from the comparable  period in 1996.
This decrease is mostly related to reduced  construction  spending in the second
quarter  of  1997  compared  to 1996  for  the  scrubbers  at  IPL's  Petersburg
Generating  Station as this  construction  project was  completed  in June 1996.
Internally generated cash provided by IPL's operations was used for construction
expenditures  during  the  second  quarter  of 1997.  Enterprises'  construction
expenditures  (excluding allowance for funds used during  construction)  totaled
$31.8 million  during the six months ended June 30, 1997,  representing  a $17.2
million  decrease from the comparable  period in 1996. This difference is mostly
related  to  reduced  construction  spending  in 1997  compared  to 1996 for the
scrubbers at IPL's Petersburg  Generating Station that went into service in June
1996.  This reduction also reflects  reduced  capital  spending on chilled water
systems  at two of  the  unregulated  subsidiaries.  Internally  generated  cash
provided by IPL's operations was used for construction  expenditures  during the
first six  months of 1997.  As a result  of IPL's new basic  electric  rates and
charges  and reduced  capital  spending,  IPL  anticipates  continued  improving
liquidity.

         The five-year construction program has not changed from that previously
reported in IPALCO's 1996 Form 10-K report. (See "Future  Performance" in Item 7
of  Management's  Discussion and Analysis of Financial  Condition and Results of
Operations in IPALCO's 1996 Form 10-K report for further discussion).

         On April 4, 1997 IPALCO  Enterprises,  Inc. entered into a $401 million
Revolving  Credit Facility (the  "Revolver")  with Bank One,  Indiana,  National
Association,  National  City Bank of  Indiana,  and The First  National  Bank of
Chicago with a maturity of March 31, 2002.  The proceeds of this  Revolver  were
used to purchase,  through a self-tender offer,  shares of IPALCO's  outstanding
common capital stock.  Interest is payable monthly and is based on a spread over
LIBOR. In conjunction with the issuance of the Revolver,  IPALCO entered into an
interest  rate swap  agreement  which fixed the interest rate on $300 million of
the Revolver. Pursuant to the swap agreement which matures April 1, 2001, IPALCO
will pay  interest at a fixed rate of 6.3575% to a swap  counter  party and will
receive a variable  rate of interest  in return  based on one month  LIBOR.  The
result is to  effectively  establish  a 6.6825%  fixed rate of  interest on $300
million of the Revolver.  During June, 1997,  IPALCO retired  $50,000,000 of the
$401,000,000 debt issued in April, 1997.

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

         On June 13, 1997,  Mid-America  Energy  Resources issued $50 million in
long-term  notes  payable  at a fixed  rate of 8.03%  with the  first  principal
payment due September 1, 1998. The average life of the debt is 10 years with the
final maturity on June 13, 2012, and with an initial  required escrow balance of
$6.95 million.


<PAGE>9

Rate Relief
-----------

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


<PAGE>10


RESULTS OF OPERATIONS

         Comparison of Second Quarter and Six Months Ended June 30, 1997
         ---------------------------------------------------------------
             with Second Quarter and Six Months Ended June 30, 1996
             ------------------------------------------------------

         Earnings  per share  during the second  quarter of 1997 were $0.46,  or
$0.03 above the $0.43 attained in the comparable 1996 period. Earnings per share
during the six months ended June 30, 1997,  were $1.12, or $0.07 above the $1.05
attained in the comparable 1996 period. The following discussion  highlights the
factors contributing to the second quarter and six months ended results.

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

       Operating revenues during the second quarter and six months ended of 1997
increased  from the  comparable  1996 periods by $1.1 million and $4.9  million,
respectively. The increases in revenues resulted from the following:
<TABLE>
<CAPTION>

                                                         Increase (Decrease) from Comparable Period
                                                         ------------------------------------------
                                                           Three Months Ended    Six Months Ended
                                                           ------------------    ----------------
                                                                    (Millions of Dollars)

       <S>                                                        <C>            <C>   
       Increase in base electric rates                            $   5.9        $  12.7
       Decreased Kilowatt-hour (KWH) sales - net of fuel             (5.5)          (8.0)
       Fuel revenues                                                 (2.2)          (5.0)
       Steam revenues                                                 0.1           (0.6)
       Sales for resale                                               2.1            4.2
       Other revenues                                                 0.7            1.6
                                                                  -------        -------
       Total change in operating revenues                         $   1.1        $   4.9
                                                                  =======        =======
</TABLE>

         The  increases  in base rate  electric  revenues  are the result of new
tariffs,  effective  July 1, 1996,  designed to produce  $25-million  additional
annual  revenues.  The  decrease in retail KWH sales was due to milder  weather.
During the second  quarter of 1997 cooling degree days decreased 38%, and in the
first quarter of 1997,  heating degree days decreased 12%,  compared to the same
periods  in 1996.  The  changes  in fuel  revenues  in 1997 from the prior  year
reflect changes in total fuel costs billed  customers.  The increased  wholesale
sales during the second quarter and six months ended of 1997, as compared to the
same  periods  in 1996,  reflect  energy  requirements  of other  utilities  and
increased wholesale marketing efforts.

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

         Fuel  expenses  in the  second  quarter  and six  months  ended of 1997
decreased  from the same  periods a year ago by $2.9  million and $5.7  million,
respectively.  The primary  reason for the decrease in the second  quarter was a
decrease in deferred fuel cost of $2.7 million. A deferred fuel cost decrease of
$4.8 million  contributed to the six months ended decrease.  Additional  factors
contributing  to the six month ended decrease were a decrease of $2.1 million in
unit costs of coal and oil and a $1.2 million increase in fuel consumption.

         Other operation  expenses in the second quarter and six months ended of
1997  increased  from  the same  periods  a year  ago by $2.3  million  and $1.9
million,  respectively.  The second  quarter  increase is comprised of increased
outside services of $1.1 million,  $0.7 million for increased  employee benefits
and $0.5 million for other administrative and general expenses.  The increase in
the second quarter was also due to increased  electric  distribution  expense of
$0.7 million and other increased  operating expenses which net to an increase of
$0.3 million.  Partially offsetting these increases to operating expenses in the
second  quarter  was the  gain  from  the sale of  emission  allowances  of $1.0
million.  The six months ended  variance is primarily  related to an increase in
outside  services of $1.9  million,  increases  to salaries of $0.9  million and
customer  accounts  expenses of $0.8 million offset by the gain from the sale of
emission allowances of $1.2 million.

<PAGE>11

         Power  purchased  decreased  by $3.2  million and $3.7 million from the
comparable  periods in 1996 during the second  quarter  and six months  ended of
1997, respectively.  The decrease in the second quarter was due to a decrease in
demand  charges  of $3.5  million  partially  offset  by an  increase  in energy
purchases of $0.3  million.  The six months  ended  variance was due also to the
decreased  demand charges of $3.5 million as well as decreased  energy purchases
of $0.2 million.  The decreased demand charges in both periods are a result of a
new power purchase contract taking effect in May of 1997.

         Maintenance  expense  increased by $1.5 million and $3.4 million during
the second  quarter and six months  ended of 1997  compared to the same  periods
last year.  The second  quarter  increase was  primarily  due to the repair of a
production unit at the Stout plant. The six month ended increase resulted from a
$1.6 million  increase for expenses at the Stout plant primarily  related to the
repair of a production unit. Increased  maintenance expenses of $0.8 million for
station  equipment in  transmission,  $0.6 million for the Petersburg  plant and
$0.4  million  for other  maintenance  also  contributed  to the six month ended
increase in expenses.

         Depreciation  and  amortization  expense in the second  quarter and six
months ended of 1997  increased from the same periods a year ago by $2.5 million
and  $4.6  million,  respectively.   These  increases  primarily  resulted  from
increased depreciable plant balances.

         Income taxes - net for the second  quarter and six months ended of 1997
increased  from the  same  periods  in 1996 by $1.1  million  and $1.9  million,
respectively.  These increases were primarily due to increased  pretax operating
income.

         As a result of the  foregoing,  utility  operating  income  during  the
second quarter of 1997 decreased 0.4% from the comparable 1996 period,  to $36.0
million.  Utility operating income during the six months ended of 1997 increased
3.2% from the comparable 1996 period, to $83.6 million.

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

         Allowance  for equity  funds  used  during  construction  in the second
quarter and six months ended of 1997  decreased from the same periods in 1996 by
$0.6  million  and $1.3  million,  respectively,  primarily  due to a  decreased
construction base partially offset by an increased equity rate which resulted in
a $0.1 million increase for both of the comparable periods.

         Other - net, which includes the pretax operating and investment  income
from  operations  other  than  IPL as  well as  non-operating  income  from  IPL
increased by $1.0 million in the second quarter of 1997 while decreasing by $0.9
million for the six months ended of 1997,  compared to the same periods in 1996.
The  increase for the second  quarter of 1997 was due to increased  net revenues
from contract work at IPL of $0.4 million,  increased  district cooling revenues
of $0.3 million and increases to other  subsidiaries  amounting to $0.3 million.
The six  months  ended  decrease  was  primarily  due to a gain  on the  sale of
investment  securities realized during 1996.  Partially offsetting this decrease
was an increase at IPL of $0.6 million resulting from contract work, an increase
at IPALCO of $0.3  million  due to  decreased  operating  costs as well as a net
increase to other subsidiaries of $0.2 million.

         Income taxes - net, which includes taxes on operations  other than IPL,
in the second  quarter  and six  months  ended of 1997  decreased  from the same
periods in 1996 by $2.1 million and $3.0 million, respectively, primarily due to
increased interest expense at IPALCO. The six month ended decrease also reflects
the sale of investment securities in 1996.

<PAGE>12

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

         Interest  expense in the second  quarter  and six months  ended of 1997
increased  from the  same  periods  in 1996 by $4.4  million  and $3.4  million,
respectively.  Interest  expense of $5.9  million at IPALCO for the $401 million
debt issued in April of 1997 contributed to both of the variances. Other factors
contributing to the second quarter  increase include an increase of $0.4 million
at Mid-America for increased  long-term debt and a decrease in interest  expense
at IPL of $1.9 million due to the  retirement of long-term debt in 1996 and 1997
as well as decreased  short-term  debt.  Other factors  contributing  to the six
month ended variance  include  increased  expense at Mid-America of $0.6 million
and  decreased  expense at IPL of $3.1  million.  IPL's  decrease was due to the
redemption  of $15  million and $50  million  debt issues  during 1996 and $11.3
million in 1997 as well as decreased short-term debt.

         Allowance for borrowed  funds used during  construction  for the second
quarter and six months ended of 1997 decreased  from the  comparable  periods in
1996  by  $1.4  million  and  $2.8  million,  respectively,  due to a  decreased
construction base.



<PAGE>13


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

Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

         The Annual Meeting of shareholders of IPALCO Enterprises, Inc. was held
on May 21,  1997.  At the  Annual  Meeting,  an  amendment  to the  Articles  of
Incorporation  was approved that  increased  the number of authorized  shares of
IPALCO's  common stock from 145 million to 290 million.  The vote was 32,428,359
in favor, and 4,081,008 against,  with 680,354 abstaining.  At the same meeting,
approval of the IPALCO  Enterprises,  Inc. 1997 Stock Option Plan occurred.  The
vote was 33,169,046 in favor and 2,974,503 against, with 1,046,172 abstaining.

         At the same  meeting  the  following  five  directors  in Class II were
elected to terms of three years each which expire in April,  2000. Each director
received the following numbers of votes as shown opposite his or her name:

         Director                       Votes For               Votes Withheld
         --------                       ---------               --------------

         Joseph D. Barnette, Jr.        36,377,536                    812,185
         Max L. Gibson.                 36,376,851                    812,870
         Ramon L. Humke                 36,287,580                    902,141
         Andrew J. Paine                35,954,076                  1,235,645
         Sallie W. Rowland              36,285,274                    904,447


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

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

3.1      Articles of Incorporation of IPALCO Enterprises, Inc., as amended.

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

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

4.2*     IPALCO Enterprises, Inc. and First Chicago Trust Company of New York 
         (Rights Agreement). (Exhibit 4.2 to the Form 10-K for the year ended 
         12-31-94.)

10.1     IPALCO Enterprises, Inc. 1997 Stock Option Plan. **

11.1     Computation of Per Share Earnings.

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

27.1     Financial Data Schedule.

<PAGE>14

99.1     First Amendment to Credit Agreement by and among IPALCO Enterprises, 
         Inc., Bank One,  Indiana,  National  Association,  National City Bank 
         of Indiana,  The First National Bank of Chicago,  The Bank of  Tokyo--
         Mitsubishi,  Ltd.,  Keybank National Association,  The Sanwa Bank, 
         Limited, Chicago Branch, Wachovia Bank of Georgia,  N. A. The Bank of
         Nova Scotia,  Dai-ichi  Kangyo Bank,  Ltd.,  Chicago Branch, The 
         Industrial Bank of Japan, Limited,  Morgan Guaranty Trust Company of
         New York,The Sumitomo Bank, Ltd.,and Suntrust Bank,Central Florida,N.A.

         (b)      Reports on Form 8-K.

                  None.




                                   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:            August 13, 1997               /s/ John R. Brehm
      ----------------------------------       -------------------------------
                                                   John R. Brehm
                                                   Vice President and Treasurer



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