IPALCO Enterprises, Inc. (IPALCO) is a wholly-owned subsidiary of The AES Corporation (AES). IPALCO owns all of the outstanding common stock of its subsidiaries (collectively referred to as Enterprises). These include its regulated utility subsidiary, Indianapolis Power & Light Company (IPL) and its unregulated subsidiary, Mid-America Capital Resources, Inc. (Mid-America). IPL provides electric service to the Indianapolis metropolitan area and is the primary subsidiary of IPALCO. Mid-America is the parent company of nonutility businesses.

The accompanying consolidated financial statements include the accounts of IPALCO, IPL and Mid-America. All significant intercompany amounts have been eliminated. The accompanying financial statements are unaudited; however, they have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments necessary for fair presentation, consisting of only normal recurring adjustments, have been included. Due to the seasonal nature of the electric utility business, the annual results are not generated evenly by quarter during the year. Certain amounts from prior year financial statements have been reclassified to conform to the current year presentation. These unaudited financial statements have been prepared in accordance with the accounting policies described in IPALCO's audited financial statements for the year ended December 31, 2001 included in its registration statement on Form S-4 and should be read in conjunction therewith.

On March 27, 2001, AES acquired IPALCO through a share exchange transaction (the AES Acquisition) in accordance with the Agreement and Plan of Share Exchange dated as of July 15, 2000, among AES and IPALCO. During 2001, IPALCO expensed $6.3 million of AES Acquisition related costs, which are included in OTHER INCOME AND (DEDUCTIONS) - Merger Costs. Total AES Acquisition related costs, including costs recognized in 2000, were $12.1 million. Also in 2001, as a result of the AES Acquisition, IPALCO recorded $74.8 million ($46.4 million after tax) of one- time costs related to the termination of certain management employees. The pretax expenses included $59.4 million in costs associated with termination benefit agreements and severance, $9.2 million in supplemental retirement costs, and $6.2 million in restricted stock expense. Substantially all of the termination benefit agreement costs, supplemental retirement costs, and restricted stock costs were paid out by March 31, 2001.

In June 2001, the Financial Accounting Standards Board issued new pronouncements: Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangibles" and SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 142 requires the use of a non amortization approach to account for purchased goodwill and certain intangibles. Under a non amortization approach, goodwill and certain intangibles would not be amortized into results of operations, but instead would be reviewed for impairment at least annually and written down and charged to results of operations in the periods in which the recorded value of goodwill and certain intangibles are determined to be greater than their fair value. SFAS No. 142 was effective for IPALCO beginning January 1, 2002. The adoption of SFAS No. 142 did not have any impact on IPALCO's financial position or results of operations.

SFAS No. 143 addresses financial accounting and reporting for obligations associated with retirement of tangible long-lived assets and the associated asset retirement costs. It requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. This statement is effective for IPALCO beginning January 1, 2003. Management is currently evaluating the impact this statement will have on our consolidated financial position and results of operations.

In August 2001, the Financial Accounting Standards Board issued SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS 144 addresses accounting for and reporting of the impairment or disposal of long-lived assets and was effective for IPALCO beginning January 1, 2002. The adoption of SFAS No. 144 did not have any impact on IPALCO's financial position or results of operations.

IPALCO's operations are made up almost entirely of its ownership of IPL, its consolidated electric utility, which is a reportable business segment. IPALCO's nonutility activities include costs associated with the AES Acquisition, IPALCO's $750 million Senior Secured Notes issued November 2001 (the IPALCO Notes), approximately $3 million and $20 million of cash and cash equivalents as of September 30, 2002 and December 31, 2001, respectively, and income taxes related to those items. There was no operating income for any nonutility activities during the periods covered by this report and nonutility assets and capital expenditures represented less than 5% of IPALCO's ' total assets and capital expenditures as of September 30, 2002 and December 31, 2001.

During 2002, IPL terminated one unused line of credit and chose not to renew another unused line of credit, which expired, aggregating $55 million of borrowing capacity. These lines of credit were replaced with two new unsecured revolving credit facilities with an aggregate borrowing capacity of $75 million. The new facilities mature on May 23, 2003 and June 13, 2003 and are subject to certain financial covenants, with which IPL is in compliance as of the filing of this report. IPL has not drawn on either facility.

In June and October of 2002, Standard & Poor's Corporation lowered its credit ratings of IPALCO and IPL, as a result of similar reductions in its credit ratings of AES. As a result, the interest rate on the IPALCO Notes will increase by 100 basis points effective November 15, 2002. Any further reductions in the credit ratings of AES, IPALCO or IPL would not impact the interest rates on IPALCO or IPL's existing debt, but improvements in IPALCO's credit ratings would reduce the interest on the IPALCO Notes. The downgrades put IPL in default on an unused $40.6 million credit agreement, and a receivables sale agreement related to IPL's 1996 sale of $50 million of its accounts receivables. IPL obtained waivers on these defaults. Subsequently, the $40.6 million credit agreement expired and was replaced with a new agreement that does not include ratings triggers as an event of default. As of September 30, 2002 and as of the filing of this report, IPL and IPALCO were in compliance with all financial covenants and no event of default exists.

In March 2002, IPALCO and certain former officers and directors of IPALCO were named as defendants in a purported ERISA class action lawsuit filed in the U.S. District Court for the Southern District of Indiana. On May 28, 2002, an amended complaint was filed asserting that the former members of the pension committee for the thrift plan breached their fiduciary duties to the plaintiffs under the Employment Retirement Income Security Act by investing assets of the thrift plan in the common stock of IPALCO prior to the acquisition of IPALCO by AES. On July 22, 2002, the defendants filed a motion to dismiss the lawsuit, which motion remains pending.

In September 2002, IPALCO and certain of its former officers and directors were sued in the U.S. District Court for the Southern District of Indiana in connection with IPALCO's acquisition by AES. The lawsuit purports to be filed on behalf of all persons who exchanged their shares of IPALCO Common Stock for shares of AES common stock. The complaint alleges violations of Section 11 of the Securities Act; Sections 10(b), 14(a) and 20(a) of the Exchange Act and Rules 10b-5 and 14a-9. We believe that we have meritorious defenses to the suit. While we cannot predict the outcome, we do not believe that the suit will have a material adverse effect on IPALCO's financial condition, results of operations or liquidity.

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

At November 30 of each year, IPALCO reviews each pension plan to determine if the plans' accumulated benefit obligations exceed the fair value of the plan assets. If the accumulated benefit obligations exceed the fair value of the plan assets, an additional minimum pension liability is recorded on the balance sheet, with a corresponding charge to other comprehensive income. Based on preliminary projections of the plans' assets and accumulated benefit obligations, this additional minimum pension liability at December 31, 2002 may be a material amount.

IPL and The International Brotherhood of Electrical Workers Local 1395 (the IBEW) have agreed upon a new three-year collective bargaining agreement. The agreement covers more than 700 employees, approximately half of IPL's workforce, which includes production, distribution, construction, and maintenance personnel. The terms of the agreement include a competitive wage and benefits package consistent with other peer utilities. The agreement was ratified by the IBEW on November 8, 2002.

With respect to environmental issues, IPL has ongoing discussions with various regulatory authorities and we continue to believe that IPL is in compliance with its various permits. On October 27, 1998, the U.S. Environmental Protection Agency issued a final rule, which imposes more stringent limits on nitrogen oxide (NOx) emissions from fossil fuel-fired steam electric generators. IPL's current estimates are the NOx SIP call will necessitate additional capital expenditures of up to $260 million during 2002-2005 to achieve substantially all of the required NOx emission reductions. Alternatively, this amount could be reduced by purchasing some of the required NOx emission allowances in the market. IPL filed a petition with the Indiana Utility Regulatory Commission to recover a return on its capital investment, depreciation and incremental operating and maintenance, together with allowances purchased and consumed, in connection with the NOx emission reductions.

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

Some important factors that could cause our actual results or outcomes to differ materially from those discussed in the forward-looking statements include, but are not limited to; our control by AES, our credit ratings, fluctuations in customer growth and demand, weather, fuel costs, generating unit availability and capacity, purchased power costs and availability, regulatory action, environmental matters, federal and state legislation, interest rates, labor strikes, maintenance and capital expenditures, local economic conditions, the ultimate disposition of litigation and the specific needs of plants to perform unanticipated facility maintenance or repairs or outages. The timing of deregulation and competition, product development and technology changes are also important potential factors that may cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Most of these factors affect us through our consolidated subsidiary, IPL.

All such factors are difficult to predict, contain uncertainties that may materially affect actual results and are beyond our control. We undertake no obligation to publicly update or review any forward-looking information, future events or otherwise.

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

In June and October of 2002, Standard & Poor's Corporation lowered its credit ratings of IPALCO and IPL, as a result of similar reductions in its credit ratings of AES. As a result, the interest rate on the IPALCO Notes will increase by 100 basis points effective November 15, 2002. Any further reductions in the credit ratings of AES, IPALCO or IPL would not impact the interest rates on IPALCO or IPL's existing debt, but improvements in IPALCO's credit ratings would reduce the interest on the IPALCO Notes. The downgrades put IPL in default on an unused $40.6 million credit agreement, and a receivables sale agreement related to IPL's 1996 sale of $50 million of its accounts receivables. IPL obtained waivers on these defaults. Subsequently, the $40.6 million credit agreement expired and was replaced with a new agreement that does not include ratings triggers as an event of default. As of September 30, 2002 and as of the filing of this report, IPL and IPALCO were in compliance with all financial covenants and no event of default exists.

Our capital requirements are primarily related to IPL's construction expenditures needed to meet customers' needs for electricity, for environmental compliance and for energy and outage management systems. Excluding the $42.5 million combustion turbine, which IPALCO sold to IPL in 2002, IPL's construction expenditures totaled $74.6 million during the nine months ended September 30, 2002. This represented an increase of $3.7 million from the comparable period in 2001. Construction expenditures during the first nine months of 2002 were financed using internally generated cash provided by operations.

IPL's construction program for the three-year period 2002 - 2004 is estimated to cost $438 million. The estimated cost of the program by year is $101 million in 2002, $162 million in 2003 and $175 million in 2004. It includes $224 million for additions, improvements and extensions to transmission and distribution lines, substations, power factor and voltage regulating equipment, generating plants, distribution transformers and street lighting facilities. The construction program also includes $8 million for energy and outage management systems. These projected costs also include $206 million of costs during the period associated with new environmental standards imposed by the EPA and could be reduced by purchasing some of the required NOx emission allowances in the market. These costs could be as high as $260 million through 2005. IPL filed a petition with the Indiana Utility Regulatory Commission to recover a return on its capital investment, depreciation, and incremental operating and maintenance, together with allowances purchased and consumed in connection with the NOx emission reductions. Our capital expenditures may be financed through a combination of cash provided by operations, cash available on IPL's unused credit facilities or long-term indebtedness.

A combustion turbine valued at $42.5 million was included in Other investments at December 31, 2001 and is now included in Utility plant in service.

Total dividends paid to AES during the nine months ended September 30, 2002 were $111.3 million. Future dividends will be determined based on actual results of operations and cash available for distribution.

At November 30 of each year, IPALCO reviews each pension plan to determine if the plans' accumulated benefit obligations exceed the fair value of the plan assets. If the accumulated benefit obligations exceed the fair value of the plan assets, an additional minimum pension liability is recorded on the balance sheet, with a corresponding charge to other comprehensive income. Based on preliminary projections of the plans' assets and accumulated benefit obligations, this additional minimum pension liability at December 31, 2002 may be a material amount.

IPL and The International Brotherhood of Electrical Workers Local 1395 (the IBEW) have agreed upon a new three-year collective bargaining agreement. The agreement covers more than 700 employees, approximately half of IPL's workforce, which includes production, distribution, construction, and maintenance personnel. The terms of the agreement include a competitive wage and benefits package consistent with other peer utilities. The agreement was ratified by the IBEW on November 8, 2002.

Our third quarter 2002 net income of $40.8 million increased $16.1 million from net income of $24.7 million in the third quarter of 2001. The following discussion highlights the factors contributing to this change.

Operating revenues increased by $1.8 million during the three-month period ended September 30, 2002 compared to the prior year as a result of the following (Dollars in thousands):

The increase in retail revenues in the third quarter of 2002 as compared to the same period in 2001 was primarily due a 6.4% increase in retail kWh sales. This increase was due to an additional 298 cooling degree days, partially offset by 74 fewer heating degree days. The decrease in wholesale revenues was primarily due to a 43.1% decrease in wholesale kWh sales, partially offset by an 8.6% increase in the average price per kWh sold. IPL reduced its electricity generation due to the overall reductions in wholesale electricity prices caused by a sluggish economy and an increase in the supply of electricity, as many of the producers of electricity have increased their production capacity.

Operating expenses decreased $24.5 million, or 12.9% during the three months ended September 30, 2002, as compared to the same period in 2001. This is primarily the result of a charge of $23.8 million taken in the third quarter of 2001 relating to two additional Voluntary Early Retirement Programs (VERP's) offered as a result of the AES Acquisition; a $4.1 million decrease in other operating expenses; a $3.9 million decrease in power purchased; a $3.7 million decrease in fuel costs; and a $3.0 million decrease in maintenance expenses, partially offset by a $16.0 million increase in income taxes-net, which resulted from an increase in pretax operating income. The decrease in other operating expenses includes $4.0 million in 2001 for rents related to electricity generators, which were no longer needed after IPL placed a new gas turbine in service in 2002. The decrease in power purchased is due to a 29% decline in the average price per kWh purchased. The decrease in fuel cost is primarily due to a steadier demand for electricity in 2002, which resulted in better efficiency and stronger reliance on cheaper forms of energy production. In 2002, we produced a greater proportion of electricity from our low-cost, base-load, coal-fired units than from less efficient peaking unit resources. The maintenance expense decrease is primarily the result of the timing of major generating unit overhauls.

Primarily as a result of the foregoing, utility operating income increased $26.3 million or 75.7% during the third quarter of 2002 from the comparable 2001 period, to $61.1 million.

Other income and deductions increased from income of $1.5 million in 2001 to $5.6 million in 2002, primarily due to an additional $3.6 million of income tax benefit - net, which is primarily due to additional interest expense on the IPALCO Notes.

Interest and other charges increased $14.3 million or 122.7% in the first three months of 2002 as compared to the same period in 2001 primarily due to $14.1 million of interest and $0.4 million of amortization relating to the IPALCO Notes issued in November 2001.

Our first nine months 2002 net income of $103.3 million increased $53.9 million from net income of $49.4 million in the first nine months of 2001. The following discussion highlights the factors contributing to this change.

Operating revenues decreased by $18.1 million during the nine-month period ended September 30, 2002 as compared to the prior year, due to the following (Dollars in thousands):

The increase in retail revenues in 2002 was primarily due to a 1.1% increase in retail kWh sales. This increase was due to an additional 329 cooling degree days, partially offset by 187 fewer heating degree days. The decrease in wholesale revenues was primarily due to a 36.7% decrease in kWh sales and a 21.4% decrease in the average price per kWh sold. The decrease in the average wholesale price per kWh sold is due primarily to a sluggish economy, and an increase in the supply of electricity, as many of the producers of electricity have increased their production capacity. IPL reduced its electricity generation due to the reduction in wholesale electricity prices.

Operating expenses decreased $85.6 million, or 15.6% during the nine months ended September 30, 2002, as compared to the same period in 2001. This is primarily the result of $54.5 million of termination benefit agreement costs in 2001 resulting from the AES Acquisition; a charge of $23.8 million taken in the third quarter of 2001 relating to two additional VERP's offered as a result of the AES Acquisition; a $25.4 million decrease in other operating expenses; a $12.8 million decrease in fuel costs; and a $10.7 million decrease in maintenance expenses, partially offset by a $42.0 million increase in income taxes-net resulting from an increase in pretax operating income. The decrease in other operating expenses includes $11.2 million of supplemental retirement expense incurred in 2001, $6.2 million of restricted stock paid in 2001and an $8.9 million decrease in power generation operating expenses. The $8.9 million decrease in power generation operating expenses includes $4.0 million in 2001 for rents related to electricity generators, which were no longer needed after IPL placed a new gas turbine in service in 2002 and a $3.3 million decrease in expenses, primarily labor, related to the production of steam for electricity generation. The decrease in fuel cost is primarily due to a 5% decrease in kWh's generated, resulting from a decrease in fuel consumption, as described above. This decrease is partially offset by a $1.2 million increase in power purchased, resulting from an 82% increase in kWh's purchased, partially offset by a 41% decrease in the cost per kWh purchased . The maintenance expense decrease is primarily the result of the timing of major generating unit overhauls.

As a result of the foregoing, utility operating income increased $67.5 million or 73.5% during the first nine months of 2002 from the comparable 2001 period.

Other income and deductions changed from an expense of $8.1 million in 2001 to income of $20.5 million in 2002 primarily as a result of the following: income tax benefit - net increased by $11.0 million, primarily due to an increase in interest expense on the IPALCO Notes; we expensed $6.3 of merger costs in 2001 related to the AES Acquisition; termination benefit agreement costs of $4.7 million associated with "Other Income and Deductions" were recognized in 2001 due to the recognition of non-utility officer termination costs as a result of the AES Acquisition; and Allowance for funds used during construction increased by $2.4 million, due to the gas turbine placed in service in 2002.

Interest and other charges increased $42.3 million in the first nine months of 2002 as compared to the same period in 2001 primarily due to $42.2 million of interest and $1.1 million of amortization relating to the IPALCO Notes issued in November 2001.

(a) Evaluation Of Disclosure Controls and Procedures. Our chief executive officer and our chief financial officer, after evaluating the effectiveness of IPALCO's "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14c) as of a date (the Evaluation Date) within 90 days before the filing date of this quarterly report, have concluded that as of the Evaluation Date, our disclosure controls and procedures were effective and designed to ensure that material information relating to us and our consolidated subsidiaries is recorded, processed, summarized and reported in a timely manner.

IPL has been named as a defendant in approximately 50 pending lawsuits alleging personal injury or wrongful death stemming from exposure to asbestos and asbestos containing products formerly located in IPL power plants. IPL has been named as a "premises defendant" in that IPL did not mine, manufacture, distribute or install asbestos or asbestos containing products. These suits have been brought on behalf of persons who worked for contractors or subcontractors hired by IPL. Many of the original primary defendants¾ the asbestos manufacturers¾ have filed for bankruptcy protection. IPL has insurance coverage for many of these claims; currently, these cases are being defended by counsel retained by various insurers who wrote policies applicable to the period of time during which much of the exposure has been alleged. Although we do not believe that any of the pending asbestos suits in which IPL is a named defendant will have a material adverse effect on our business or operations, we are unable to predict the number or effect any additional suits may have. Accordingly, we cannot assure that the pending or any additional suits will not have a material effect on our business or operations.

In March 2002, IPALCO and certain former officers and directors of IPALCO were named as defendants in a purported ERISA class action lawsuit filed in the U.S. District Court for the Southern District of Indiana. On May 28, 2002, an amended complaint was filed asserting that the former members of the pension committee for the thrift plan breached their fiduciary duties to the plaintiffs under the Employment Retirement Income Security Act by investing assets of the thrift plan in the common stock of IPALCO prior to the acquisition of IPALCO by AES. On July 22, 2002, the defendants filed a motion to dismiss the lawsuit, which motion remains pending.

In September 2002, IPALCO and certain of its former officers and directors were sued in the U.S. District Court for the Southern District of Indiana in connection with IPALCO's acquisition by The AES Corporation. The lawsuit purports to be filed on behalf of all persons who exchanged their shares of IPALCO Common Stock for shares of AES common stock. The complaint alleges violations of Section 11 of the Securities Act; Sections 10(b), 14(a) and 20(a) of the Exchange Act and Rules 10b-5 and 14a-9. We believe that we have meritorious defenses to the suit. While we cannot predict the outcome, we do not believe that the suit will have a material adverse effect on IPALCO's financial condition, results of operations or liquidity.

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

On July 25, 2002, AES, as sole shareholder of IPALCO, executed a written consent electing the following individuals to serve as the IPALCO Board of Directors:

Steve Corwell      John Haarlow      Adrianne M. Horne

Ann Murtlow      J. Stuart Ryan      Hamsa Shadaksharappa

Exhibit No.	Document
10.1	Eighth amendment and waiver, dated as of October 30, 2002 to Receivables Sale Agreeent, dated as of December 20, 1996.
10.2	Tenth supplemental agreement to interconnection agreement between IPL and PSI Energy, Inc., dated as of June 26, 2002.
99.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

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

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

	IPALCO ENTERPRISES, INC.

	(Registrant)

Date: November 13, 2002

	By:	/s/ Hamsa Shadaksharappa

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

I, Ann Murtlow, certify that: