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
         March 31, 1999                     Commission File Number  1-8644



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

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

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


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



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


                 Class                  Outstanding At March 31, 1999
                 -----                  -----------------------------
    Common (Without Par Value)               85,714,614 Shares





                    IPALCO ENTERPRISES, INC. AND SUBSIDIARIES

                                      INDEX



                                                                   Page No.
                                                                   -------
PART I.   FINANCIAL INFORMATION
-------   ---------------------

         Statements of Consolidated Income -
            Three Months Ended March 31, 1999 and 1998                  2

         Consolidated Balance Sheets - March 31, 1999 and
            December 31, 1998                                           3

         Statements of Consolidated Cash Flows -
            Three Months Ended March 31, 1999 and 1998                  4

         Notes to Consolidated Financial Statements                   5-7

         Management's Discussion and Analysis of
            Financial Condition and Results of Operations            8-16

PART II.  OTHER INFORMATION                                         17-18
--------  -----------------                                        

<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>

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

                                                                                  Three Months Ended
                                                                                       March 31
                                                                              1999                  1998
                                                                          -------------         -------------
UTILITY OPERATING REVENUES:
<S>                                                                       <C>                   <C>         
  Electric                                                                $    189,612          $    178,909
  Steam                                                                         11,219                11,412
                                                                          -------------         -------------
    Total operating revenues                                                   200,831               190,321
                                                                          -------------         -------------

UTILITY OPERATING EXPENSES:
  Operation:
    Fuel                                                                        45,914                41,040
    Other                                                                       30,758                34,921
  Power purchased                                                                  661                 1,007
  Purchased steam                                                                1,695                 1,890
  Maintenance                                                                   22,980                19,740
  Depreciation and amortization                                                 26,579                25,285
  Taxes other than income taxes                                                  8,936                 8,822
  Income taxes - net                                                            20,057                17,474
                                                                          -------------         -------------
    Total operating expenses                                                   157,580               150,179
                                                                          -------------         -------------
UTILITY OPERATING INCOME                                                        43,251                40,142
                                                                          -------------         -------------

OTHER INCOME AND (DEDUCTIONS):
  Allowance for equity funds used during construction                              351                   265
  Other - net                                                                     (128)                 (426)
  Income taxes - net                                                             2,056                 2,852
                                                                          -------------         -------------
    Total other income - net                                                     2,279                 2,691
                                                                          -------------         -------------
INCOME BEFORE INTEREST AND OTHER CHARGES                                        45,530                42,833
                                                                          -------------         -------------

INTEREST AND OTHER CHARGES:
  Interest                                                                      15,351                16,991
  Allowance for borrowed funds used during construction                           (221)                 (204)
  Preferred dividend requirements of subsidiary                                    803                   709
                                                                          -------------         -------------
    Total interest and other charges - net                                      15,933                17,496
                                                                          -------------         -------------

NET INCOME                                                                $     29,597          $     25,337
                                                                          =============         =============


BASIC EARNINGS PER SHARE (Note 2)                                         $       0.34          $       0.28
                                                                          =============         =============

DILUTED EARNINGS PER SHARE (Note 2)                                       $       0.34          $       0.28
                                                                          =============         =============


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

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

                                                                                        
                              ASSETS                                         March 31            December 31 
                              ------                                           1999                  1998
                                                                          --------------       --------------
UTILITY PLANT:
<S>                                                                       <C>                  <C>          
  Utility plant in service                                                $   2,863,579        $   2,859,899
  Less accumulated depreciation                                               1,227,301            1,202,356
                                                                          --------------       --------------
      Utility plant in service - net                                          1,636,278            1,657,543
  Construction work in progress                                                  91,884               80,198
  Property held for future use                                                   10,718               10,719
                                                                          --------------       --------------
      Utility plant - net                                                     1,738,880            1,748,460
                                                                          --------------       --------------
OTHER ASSETS:
  Nonutility property - at cost, less accumulated depreciation                   71,077               71,834
  Other investments                                                              13,197               12,234
                                                                          --------------       --------------
      Other assets - net                                                         84,274               84,068
                                                                          --------------       --------------
CURRENT ASSETS:
  Cash and cash equivalents                                                      12,311                9,075
  Accounts receivable and unbilled revenue
   (less allowance for doubtful accounts
   1999, $1,433 and 1998, $1,212)                                                38,671               39,702
  Fuel - at average cost                                                         38,857               39,147
  Materials and supplies - at average cost                                       47,457               48,624
  Tax refund receivable                                                           7,251                9,647
  Prepayments and other current assets                                            4,725                4,863
                                                                          --------------       --------------
      Total current assets                                                      149,272              151,058
                                                                          --------------       --------------
DEFERRED DEBITS:
  Regulatory assets                                                             115,514              116,801
  Miscellaneous                                                                  18,400               18,558
                                                                          --------------       --------------
      Total deferred debits                                                     133,914              135,359
                                                                          --------------       --------------
              TOTAL                                                       $   2,106,340        $   2,118,945
                                                                          ==============       ==============

                  CAPITALIZATION AND LIABILITIES
                  ------------------------------
CAPITALIZATION:
  Common shareholders' equity:
    Common stock                                                          $     441,089        $     434,681
    Unearned compensation - restricted stock awards                              (4,713)              (5,384)
    Premium on 4% cumulative preferred stock                                        649                  649
    Retained earnings                                                           629,681              612,941
    Treasury stock, at cost                                                    (557,178)            (468,696)
                                                                          --------------       --------------
      Total common shareholders' equity                                         509,528              574,191
  Cumulative preferred stock of subsidiary                                       59,135               59,135
  Long-term debt (less current maturities and
   sinking fund requirements)                                                   871,374              907,974
                                                                          --------------       --------------
      Total capitalization                                                    1,440,037            1,541,300
                                                                          --------------       --------------
CURRENT LIABILITIES:
  Notes payable - banks and commercial paper                                     11,684               25,200
  Current maturities and sinking fund requirements                               89,625                1,425
  Accounts payable and accrued expenses                                          64,452               71,835
  Dividends payable                                                              13,898               13,392
  Taxes accrued                                                                  46,615               20,723
  Interest accrued                                                               10,681               14,376
  Other current liabilities                                                      13,691               13,731
                                                                          --------------       --------------
      Total current liabilities                                                 250,646              160,682
                                                                          --------------       --------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
  Accumulated deferred income taxes - net                                       321,591              318,327
  Unamortized investment tax credit                                              41,301               41,993
  Accrued postretirement benefits                                                 9,024               10,768
  Accrued pension benefits                                                       39,267               39,953
  Miscellaneous                                                                   4,474                5,922
                                                                          --------------       --------------
      Total deferred credits and other long-term liabilities                    415,657              416,963
                                                                          --------------       --------------

COMMITMENTS AND CONTINGENCIES
              TOTAL                                                       $   2,106,340        $   2,118,945
                                                                          ==============       ==============

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

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

                                                                                 Three Months Ended
                                                                                      March 31
                                                                               1999               1998
                                                                          --------------     --------------
CASH FLOWS FROM OPERATIONS:
<S>                                                                       <C>                <C>          
  Net income                                                              $      29,597      $      25,337
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                                                27,189             25,856
    Amortization of regulatory assets                                             2,580              2,591
    Deferred income taxes and investment tax credit adjustments - net             1,070                465
    Allowance for funds used during construction                                   (572)              (469)
  Change in certain assets and liabilities:
    Accounts receivable                                                           1,031              8,976
    Fuel, materials and supplies                                                  1,457              1,465
    Accounts payable and accrued expenses                                        (7,383)           (10,785)
    Taxes accrued                                                                25,892             21,724
    Accrued pension benefits                                                       (686)               466
    Other - net                                                                  (4,270)            (4,810)
                                                                          --------------     --------------
Net cash provided by operating activities                                        75,905             70,816
                                                                          --------------     --------------

CASH FLOWS FROM INVESTING:
  Construction expenditures - utility                                           (15,319)           (13,297)
  Construction expenditures - nonutility                                            (32)              (210)
  Other                                                                          (1,656)            (5,426)
                                                                          --------------     --------------
Net cash used in investing activities                                           (17,007)           (18,933)
                                                                          --------------     --------------

CASH FLOWS FROM FINANCING:
  Issuance of long-term debt                                                     90,600                -
  Issuance of preferred stock                                                       -               50,000
  Retirement of long-term debt                                                  (39,000)           (41,000)
  Short-term debt - net                                                         (13,516)           (25,700)
  Common dividends paid                                                         (12,346)           (11,162)
  Issuance of common stock related to incentive compensation plans                8,531              3,180
  Reacquired common stock                                                       (88,482)               -
  Other                                                                          (1,449)             2,444
                                                                          --------------     --------------
Net cash used in financing activities                                           (55,662)           (22,238)
                                                                          --------------     --------------
Net increase in cash and cash equivalents                                         3,236             29,645
Cash and cash equivalents at beginning of period                                  9,075             17,293
                                                                          --------------     --------------
Cash and cash equivalents at end of period                                $      12,311      $      46,938
                                                                          ==============     ==============

-----------------------------------------------------------------------------------------------------------
Supplemental  disclosures of cash flow information: 
 Cash paid (received) during the period for:
    Interest (net of amount capitalized)                                  $      18,435      $      20,489
                                                                          ==============     ==============
    Income taxes                                                          $      (4,896)     $      (2,652)
                                                                          ==============     ==============

See notes to consolidated financial statements.

</TABLE>
<PAGE>

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

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


1.      GENERAL

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

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

        In the opinion of management these  statements  reflect all adjustments,
        consisting of only normal recurring accruals,  including  elimination of
        all  significant  intercompany  balances  and  transactions,  which  are
        necessary  to a fair  statement  of the results for the interim  periods
        covered by such  statements.  Due to the seasonal nature of the electric
        utility business, the annual results are not generated evenly by quarter
        during the year.  Certain  amounts from prior year financial  statements
        have been  reclassified  to conform to the  current  year  presentation.
        These financial  statements and notes should be read in conjunction with
        the audited  consolidated  financial statements included in Enterprises'
        1998 Annual Report on Form 10-K.


2.      CAPITAL STOCK

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

       Balance at December 31, 1998           88,863,026          $434,681,738
            Exercise of stock options            442,318             8,530,061
           Decrease from compensation plans      (61,374)           (2,123,347)
                                                                  ------------
       Balance at March 31, 1999                                  $441,088,452
                                                                  ============
          Less shares reacquired by Treasury  (3,529,356)
                                             ------------
       Shares issued and outstanding at
          March 31, 1999                      85,714,614
                                             ============

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

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


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


                                             For the Quarter Ended March 31,
                                             -------------------------------
                                                1999                 1998
                                                ----                 ----
                                                     (In thousands)

       Weighted average common shares           87,218              89,678
       Dilutive effect of stock options            897               1,344
                                                ------              ------
       Weighted average common
          and incremental shares                88,115              91,022
                                                ======              ======


3.      LONG-TERM DEBT

        IPALCO's  Revolving  Credit  Facility  was  issued in April  1997 in the
        amount of $401 million.  The proceeds  were used to purchase,  through a
        self-tender offer,  shares of IPALCO's  outstanding common stock. During
        1998,  IPALCO repaid the Revolver with a commercial paper facility.  The
        Revolver  currently  has no  outstanding  balance but is  available  for
        future  borrowings.  During the first quarter of 1999,  IPALCO increased
        the  outstanding  balance  of  commercial  paper  from $197  million  at
        December 31,  1998,  to $248.6  million at March 31, 1999.  The proceeds
        from the  increased  debt were used to  complete  IPALCO's  most  recent
        common stock repurchase program.  Current maturities of commercial paper
        was $88.2 million at March 31, 1999.


4.      STOCK-BASED COMPENSATION
<TABLE>

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

                                              Weighted Average       Range of Option        Number of
                                               Price per Share       Price per Share         Shares
------------------------------------------------------------------------------------------------------
<S>                                                  <C>             <C>      <C>           <C>      
Outstanding, December 31, 1998................       14.80           8.416 -  21.67         2,618,298
   Exercised..................................       14.85           9.374 -  20.345         (442,318)
                                                                                            ---------
Outstanding, March 31, 1999...................       14.78           8.416 -  21.67         2,175,980
                                                                                            =========
</TABLE>

        Accounting  Principles Board (APB) Opinion No. 25, "Accounting for Stock
        Issued to Employees," and related  interpretations in accounting for the
        stock based plan have been applied by IPALCO.  No compensation  cost has
        been recognized for the plans because the stock option 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 three  months
        ended March 31, 1999 and 1998 would not have changed.  IPALCO  estimated
        the SFAS No. 123 fair value by utilizing  the binomial  options  pricing
        model with the following  assumptions:  dividend yields of 2.5% to 6.9%,
        risk-free  rates of 6.4% to 6.9%,  volatility of 12% to 13% and expected
        lives of 5 years.

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


5.     SEGMENT REPORTING

       Enterprises has two business segments  (electric and "all other").  Steam
       operations  of IPL and all  subsidiaries  other than IPL were combined in
       the "all  other"  category.  Pretax  operating  income  for the  electric
       segment  was $60.8  million  and $54.6  million  and for the "all  other"
       segment was $3.2  million,  and $3.6 million for the first  quarter ended
       March 31,  1999,  and 1998,  respectively.  Steam  operations  of IPL are
       included in the caption  UTILITY  OPERATING  INCOME.  All other operating
       components of all other  subsidiaries  other than IPL are included in the
       caption   "Other-net".   The  cost  of  property  and  plant,   excluding
       construction in progress and property held for future use, is as follows:

                                                     March 31
                                          1999                   1998
-------------------------------------------------------------------------
                                                  (In Thousands)

Electric plant in service..........     $ 2,756,094           $ 2,707,869
All other..........................         196,831               192,308
                                        -----------           -----------
       Subtotal....................     $ 2,952,925           $ 2,900,177
                                        ===========           ===========


6.      NEW ACCOUNTING STANDARD

        Statement of Financial  Standards No. 133,  "Accounting  for  Derivative
        Instruments  and  Hedging  Activities,"  was  issued in June 1998 and is
        effective for all fiscal  quarters of all fiscal years  beginning  after
        June 15, 1999.  This  statement  establishes  accounting  and  reporting
        standards for  derivative  instruments  and for hedging  activities.  It
        requires that an entity  recognizes all  derivatives as either assets or
        liabilities  in the statement of financial  condition and measures those
        instruments at fair value.  If certain  conditions are met, a derivative
        may be specifically designated as a fair value hedge, a cash flow hedge,
        or a hedge of a foreign currency exposure. The accounting for changes in
        the fair value of a derivative  (that is,  gains and losses)  depends of
        the  intended  use of the  derivative  and  the  resulting  designation.
        Management  has not yet quantified the effect of the new standard on the
        consolidated financial statements.
<PAGE>
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

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

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

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

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

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


LIQUIDITY AND CAPITAL RESOURCES

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


Overview
--------

         The Board of Directors of Enterprises on February 23, 1999,  declared a
quarterly dividend on common stock of 15 cents per share compared to 13.75 cents
per share declared in the first quarter of 1998. The dividend was paid April 15,
1999, to shareholders of record March 30, 1999.

         IPL's  capital  requirements  are  primarily  related  to  construction
expenditures  needed to meet customers'  needs for  electricity  and steam,  for
environmental compliance and for the implementation of an integrated information
system.  Enterprises'  construction  expenditures (excluding allowance for funds
used during  construction)  totaled $15.4 million during the first quarter ended
March 31, 1999,  representing a $1.8 million increase from the comparable period
in  1998.  Internally  generated  cash  provided  by  operations  was  used  for
construction expenditures during the first quarter of 1999.

         The  three-year   construction   program  has  not  changed  from  that
previously reported in IPALCO's 1998 Form 10-K report. (See "Future Performance"
in Item 7 of  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations in IPALCO's 1998 Form 10-K report for further discussion).

         IPALCO's  Revolving  Credit  Facility  was  issued in April 1997 in the
amount  of  $401  million.  The  proceeds  were  used  to  purchase,  through  a
self-tender offer,  shares of IPALCO's  outstanding  common stock.  During 1998,
IPALCO  repaid the  Revolver  with a  commercial  paper  facility.  The Revolver
currently has no  outstanding  balance but is available  for future  borrowings.
During the first quarter of 1999,  IPALCO  increased the outstanding  balance of
commercial  paper from $197.0 million at December 31, 1998, to $248.6 million at
March 31,  1999.  The  proceeds  from the  increased  debt were used to complete
IPALCO's  most recent common stock  repurchase  program.  Current  maturities of
commercial paper was $88.2 million at March 31, 1999.


OTHER

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

       The primary market risk to which  Enterprises is exposed is interest rate
risk.  Enterprises  uses  long-term  debt as a primary  source of capital in its
business.  A portion of this debt has an  interest  component  that  resets on a
periodic  basis to  reflect  current  market  conditions.  The  following  table
presents the principal cash  repayments and related  weighted  average  interest
rates by maturity date for Enterprises'  long-term fixed-rate debt and its other
types of long-term debt at March 31, 1999:
<TABLE>
<CAPTION>

                                            Maturity Schedule
                                         Period Ending March 31
                                                                                                   Fair
(Dollars in Millions)           2000    2001     2002     2003     2004  Thereafter   Total        Value
-----------------------------------------------------------------------------------------------------------
Long-term debt
<S>                             <C>     <C>      <C>      <C>      <C>      <C>        <C>         <C>   
Fixed rate                      $1.4    $2.4     $3.3     $3.4     $83.8    $459.7     $554.0      $584.3
  Average rate                  7.9%    7.9%     7.9%     7.9%     6.1%     7.0%       6.9%
Variable                        -       -        -        -        -        $159.3     $159.3      $159.3
  Average rate                  -       -        -        -        -        4.0%       4.0%
Recapitalization debt           $88.2   $80.2    $80.2    -        -        -          $248.6      $248.6
  Average rate                  6.7%    6.7%     6.7%     -        -        -          6.7%
</TABLE>

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

       At March 31, 1999, IPALCO had an interest rate swap agreement outstanding
with a notional amount of $225 million,  of which the notional amount  decreases
$25 million each quarter.  Enterprises has agreed to pay a fixed rate of 6.3575%
and receive a floating rate based on applicable LIBOR.

       At March  31,  1999,  IPL had an  interest  rate  swap  agreement  with a
notional amount of $40 million, which expires in January 2023. IPL pays interest
at a fixed rate of 5.21% to a swap counter  party and  receives a variable  rate
based on the tax-exempt weekly rate.

Year 2000
---------

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

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

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

       The Compliance  Testing Committee is engaged in inventorying,  reviewing,
analyzing,  correcting  and testing  computer-related  systems and embedded chip
devices.  The  Contingency  Planning  Committee  is in the process of  assessing
various  operating  scenarios  associated  with potential Year 2000 problems and
formulating plans by which to operate Enterprises in the event of such problems.
Both the Compliance Testing Committee and the Contingency Planning Committee are
concentrating  first on  systems  critical  to the  continuity  of  Enterprises'
business.  Non-critical  systems  have lower  priorities  in terms of  committee
efforts.

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

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

State of Readiness

A. Identification and Assessment

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

       The Compliance Testing Committee continues to assess computer systems and
embedded chip devices related to Enterprises':

      Electricity  generating stations and plants producing steam and/or chilled
      water; Energy management systems;  Substation controls, system protection,
      and transmission and distribution systems; Telecommunications systems; and
      Business information systems.

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


B. Remediation and Testing

       The Compliance Testing Committee is coordinating,  modifying or replacing
legacy  systems  which may not be Year  2000  compliant.  Enterprises  is in the
process of replacing most of its key financial software  applications.  Although
that  project was not  specifically  initiated  as a Year 2000  effort,  it will
coincidentally result in replacement of non-compliant software.

       The  Compliance  Testing  Committee is also engaged in  establishing  and
operating appropriate testing environments to determine, to the extent possible,
the Year 2000  compliance of existing  systems and/or devices and the compliance
of replacement or upgraded  systems and devices.  Enterprises  may employ one or
more of the following techniques: component tests, simulations, outside testing,
vendor verifications or upgrades or change-outs.  Some devices or systems,  such
as satellite  communication  links, may not be susceptible to testing,  in which
cases Enterprises must rely on the service providers' verifications.

       Enterprises  has  inquired  of its  suppliers  and  vendors of  software,
computer-related  equipment,  devices and services  about Year 2000  compliance.
Some provided the requested information and/or assurances and some did not.
       Enterprises'  operations could be adversely affected by Year 2000-related
failures of other companies,  such as telecommunication  providers,  that supply
Enterprises with  mission-critical  services.  Similarly,  Year 2000 failures of
other utilities with which Enterprises is interconnected  could adversely affect
Enterprises' ability to deliver services to its customers.

       Enterprises  currently  expects to complete the  remediation  and testing
phases for critical  systems by the end of the second quarter 1999 and estimates
that it is now  approximately  80% complete.  Enterprises is operating its major
electricity  generating  units with  clocks set in year 2000.  Enterprises  also
participated  in a national NERC drill,  testing  utilities'  ability to operate
facilities  without  normal  communication  services.  No  major  problems  were
encountered.

Costs to Address Enterprises' Year 2000 Issues

       Not including the cost of replacing  Enterprises'  business  software,  a
project not initiated  specifically for Year 2000 reasons but which will provide
Year  2000  benefits  through  replacing  non-compliant  software,   Enterprises
currently estimates that its costs of the phases of identification,  assessment,
remediation  and  testing  may be  approximately  $4 million  which  Enterprises
believes is not material to its results of  operations,  liquidity and financial
condition.  Of that figure,  Enterprises has currently expended approximately $2
million.  A substantial  proportion of the costs of  remediation  are associated
with  functional  areas  of  Enterprises   other  than   Information   Services.
Enterprises  currently  estimates that its cost of contingency  planning efforts
may be approximately $1.5 million.

Risks of Enterprises' Year 2000 Issues

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

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

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

       Enterprises had previously  reported a risk of  unavailability of skilled
labor,  in  light  of the  December  13,  1999,  expiration  of  the  collective
bargaining agreement between IPL and the International Brotherhood of Electrical
Workers.  That risk has been ameliorated  through  negotiation of an arrangement
between IPL and the IBEW under which union  members will be available to work to
help respond to Year 2000 problems.

       Enterprises'  insurance  policies,  including  policies for liability and
property damage,  currently expire, are up for renewal or have anniversary dates
during 1999. Enterprises currently expects that, in line with a general trend in
the insurance industry, some insurance policies purchased or renewed during 1999
may  exclude  certain  elements  of damage  potentially  flowing  from Year 2000
events.  Similarly,  in  light of the  unprecedented  nature  of the  Year  2000
phenomenon,  it is not clear whether  policy  language  concerning  coverage and
policy defenses will be interpreted to cover or bar claims,  if any, arising out
of Year 2000 events.

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

Enterprises' Contingency Plans

         The Contingency Planning Committee is engaged in reviewing hypothetical
scenarios  involving  various Year 2000 system or device  failures and preparing
plans by  which to  operate  Enterprises  in the  event  those  failures  occur.
Enterprises' contingency planning efforts are not yet complete, but are underway
within  the  scope of an  overall  outline.  Enterprises'  contingency  planning
involves the phases of plan development,  testing,  execution and recovery after
Year 2000 events.  As with  compliance  testing,  contingency  planning  touches
essentially every area of Enterprises' operations,  as well as interactions with
interconnected  utilities,  customers,  critical vendors and emergency and other
governmental authorities.

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

       Contingency planning includes consideration of potential interruptions in
the supply chain or transportation of critical fuel, water, chemicals,  material
supplies  etc.,  and  acquisition  of  appropriate  extra  supplies,  as well as
potential  failures  of or other  problems  associated  with the  interconnected
electricity  grid.   Similarly,   consideration  may  be  given  to  cooperative
arrangements  with other  utilities in the event that Year 2000 problems  impact
the supply of skilled labor to effect remediation actions. Enterprises' existing
disaster recovery plans have formed bases for some Year 2000 contingency plans.

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

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



<PAGE>


RESULTS OF OPERATIONS

         Comparison of Quarters Ended March 31, 1999 and March 31, 1998
         --------------------------------------------------------------

         Diluted  earnings per share during the first  quarter of 1999 was $.34,
or $.06 above the $.28 attained in the comparable 1998 period. Weighted average,
diluted  shares for the 1999 first  quarter were 88.1  million  compared to 91.0
million  for the same  period in 1998 due to  IPALCO's  repurchase  of 6 million
common shares  between  December 1998 and March 1999.  The following  discussion
highlights the factors contributing to the first quarter results.

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

         Operating  revenues  during the first quarter of 1999  increased  $10.5
million from the comparable 1998 period.  The increase in revenues resulted from
the following:

                                                          Increase (Decrease)
                                                        from Comparable Period
                                                     Three Months Ended March 31
                                                     ---------------------------
                                                         (Millions of Dollars)

   Electric:
        Change in retail KWH sales - net of fuel               $    7.6
        Fuel revenue                                                0.7
        Wholesale revenue                                           2.7
        DSM tracker revenue                                         0.1
   Steam revenue                                                   (0.2)
   Other revenue                                                   (0.4)
                                                               --------
        Total change in operating revenues                     $   10.5
                                                               ========

         The first  quarter  increase  in retail KWH sales  compared to the same
period in 1998 was due to colder  weather.  Heating  degree days  increased  19%
during the first  quarter  compared to the same  period in 1998.  The changes in
fuel  revenues in 1999 from the prior year  reflect  changes in total fuel costs
billed to customers.  The increased  wholesale sales during the first quarter of
1999,  as  compared  to the same  period in 1998,  reflect  increased  wholesale
marketing efforts and energy requirements of other utilities.

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

         Fuel costs increased $4.9 million in the first quarter of 1999 compared
to the same period last year. This increase was primarily due to increased total
KWH sales.

         Other operating expenses decreased by $4.2 million in the first quarter
of 1999 compared to the same period in 1998.  This decrease was due primarily to
increased sales of emission  allowances of $3.4 million which reduces  operating
expenses.  Also  contributing to the variance was decreased  administrative  and
general expenses and other miscellaneous expenses.

         Maintenance  expenses  increased  $3.2 million in the first  quarter of
1999  compared  to the same  period in 1998.  The  increase  reflects  the costs
associated  with  the  overhaul  of unit 1 at the  Petersburg  plant  as well as
increased electric distribution expenses.

         Income taxes - net, increased $2.6 million in the first quarter of 1999
compared  to the same  period in 1998 due to an  increase  in  pretax  operating
income.

         As a result of the foregoing,  utility  operating income increased 7.7%
from the comparable 1998 period, to $43.3 million.

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

         Other - net, which includes the pretax operating and investment  income
from  operations  other  than IPL,  as well as  non-operating  income  from IPL,
increased   $0.3   million.   This  increase  was  primarily  due  to  increased
miscellaneous non-operating revenues at IPL.

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

         Interest  expense  decreased  $1.6 million in the first quarter of 1999
compared to the same period in 1998.  This decrease is a result of the reduction
of the principal amount on the  recapitalization  debt facility of IPALCO issued
in April 1997.


<PAGE>


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

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

None

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

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

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

3.2      Bylaws of IPALCO Enterprises, Inc, as amended.

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

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

11.1     Computation of Per Share Earnings.

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

27.1     Financial Data Schedule.

         (b)      Reports on Form 8-K.

                           A Form 8-K was filed on February 23, 1999,  reporting
                           Item 5, Other Events,  to report a two-for-one  stock
                           split.


<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 14, 1999                       /s/  John R. Brehm
       ---------------------                  -----------------------------  
                                                    John R. Brehm
                                                    Vice President and Treasurer



Date:       May 14, 1999                       /s/  Stephen J. Plunkett
       ---------------------                  -----------------------------
                                                    Stephen J. Plunkett
                                                    Controller