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, 2002 included in its annual report on Form 10-K and should be read in conjunction therewith.

The preparation of financial statements in conformity with GAAP 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 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 143 (SFAS 143), "Accounting for Asset Retirement Obligations." SFAS 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. IPALCO implemented this statement beginning January 1, 2003. The adoption of SFAS 143 did not impact our consolidated financial position or results of operations, but does require us to provide additional disclosure.

Included in IPL's retail electric rates are removal costs for certain assets that do not have legal obligations relating to the asset's retirement. As of June 30, 2003, IPL estimates that approximately $352 million related to removal costs is included in accumulated depreciation.

In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149 (SFAS 149), "Amendment of Statement 133 (SFAS 133) on Derivative Instruments and Hedging Activities." SFAS 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS 133. SFAS 149 is effective for contracts entered into or modified after June 30, 2003, with certain exceptions, and for hedging relationships designated after June 30, 2003. SFAS 149 does not impact the accounting for any of IPALCO nor its consolidated subsidiaries current contracts, but could impact the accounting of any contracts entered into or modified after June 30, 2003.

In May 2003, the FASB issued Statement of Financial Accounting Standards SFAS No. 150 (SFAS150), "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity." SFAS 150 requires certain financial instruments that have historically been classified as equity to be classified as debt (or as an asset in certain circumstances). SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities. Neither IPALCO nor any of its consolidated subsidiaries has any financial instruments that are within the scope of SFAS 150.

IPALCO's operations are made up almost entirely of its ownership of IPL, its consolidated electric utility, which is a reportable business segment. In addition, IPALCO has outstanding $750 million of Senior Secured Notes (the IPALCO Notes); approximately $5.3 million and $6.4 million of cash and cash equivalents, as of June 30, 2003 and December 31, 2002, respectively; nonutility investments at Mid America of $4.8 million and $6.4 million at June 30, 2003 and December 31, 2002, respectively; and income taxes related to those items. There was no operating income for any nonutility activities during the periods covered by this report. Nonutility assets represented less than 2% of IPALCO's total assets as of June 30, 2003 and December 31, 2002 and nonutility capital expenditures represented less than 1% of IPALCO's total capital expenditures for the six month periods ended June 30, 2003 and 2002.

In May, IPL increased the borrowing capacity of one of its two committed lines of credit from $45 million to $60 million and extended its maturity to May 21, 2004. In June, IPL executed an agreement which combined its existing $40.6 million liquidity facility (related to $40 million of IPL variable rate bonds, which are remarketed weekly) and its $30 million committed line of credit into one two-tranche agreement. The new agreement increased the capacity of the line of credit from $30 million to $50 million and extended its maturity to June 3, 2004. It also extended the maturity of the $40.6 million liquidity facility to June 3, 2004.

During the third quarter of 2003, IPL expects to issue $110 million in long term indebtedness primarily to finance a portion of IPL's 2003-2005 capital expenditure program, to reimburse its treasury for expenditures previously incurred in connection with the capital expenditure program and to repay amounts outstanding on its credit lines. Upon the closing of such issuance, the borrowing capacity of IPL's two committed lines of credit will be reduced back to $45 million and $30 million.

In March 2002, IPALCO and certain former officers and directors of IPALCO were named as defendants in a purported Employment Retirement Income Security Act (ERISA) class action lawsuit filed in the U.S. District Court for the Southern District of Indiana. Both lawsuits made allegations regarding matters arising from the acquisition of IPALCO by AES. On May 28, 2002, an amended complaint was filed asserting that the former members of the pension committee breached their fiduciary duties to the plaintiffs under ERISA by investing assets of the Thrift Plan in the common stock of IPALCO prior to the acquisition of IPALCO by AES. 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 July 2003, IPALCO and IPL each received subpoenas from the Indiana Secretary of State seeking information focused largely on circumstances surrounding the acquisition of IPALCO by AES.

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 November 2002, IPL, IPALCO, and AES were named as defendants in a purported Fair Labor Standards Act (FLSA) class action lawsuit filed in the U.S. District Court for the Southern District of Indiana. The complaint alleges that certain former IPL supervisors were not paid overtime pay at the rate required by the FLSA. IPALCO and AES have been dismissed from the suit. We believe that IPL did not violate the FLSA. While we cannot predict the outcome, we do not believe the suit will have a material adverse effect on IPALCO's financial condition, results of operations or liquidity.

IPL has been named as a defendant in approximately 62 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 IPALCO's 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 addition, IPALCO and its consolidated subsidiaries are 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.

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, referred to as the NO_x SIP call, which imposes more stringent limits on nitrogen oxide (NO_x) emissions from fossil fuel-fired steam electric generators. IPL's current estimates are that the NO_x SIP call will necessitate capital expenditures of approximately $227 million during 2003-2005 to achieve substantially all of the required NO_x emission reductions. The scope of the construction program associated with NO_x emission reductions could be reduced or delayed by purchasing some of the required NO_x emission allowances in the market, subject to approval by the Indiana Utility Regulatory Commission.

As of June 30, 2003, Mid-America had a commitment to invest additional capital of up to $5.4 million, upon the call of the general partner, in EnerTech Capital Partners II L.P., a venture capital fund.

In connection with the sale of certain thermal assets held by subsidiaries of IPALCO in November 2000, the IPALCO subsidiaries agreed to indemnify the buyer on an after-tax basis from and against all losses arising out of: any liabilities excluded from the sale; and certain litigation and environmental matters existing at the closing date, November 2, 2000. IPALCO has guaranteed this indemnification up to $14.6 million. Claims regarding a breach of an environmental representation or regarding an excluded liability must be brought on or before November 2, 2004.

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 ownership by AES, changes in our credit ratings, fluctuations in customer growth and demand, weather and weather- related damage, fuel costs, generating unit availability and capacity, purchased power costs and availability, regulatory action, environmental matters, federal and state legislation, interest rates, availability and cost of capital, capital market performance of pension plan assets, labor strikes, the timing of deregulation and competition, product development and technology changes, construction cost overruns, local economic conditions, the ultimate disposition of litigation and the specific needs of plants to perform unanticipated facility maintenance or repairs or outages. Most of these factors affect us through our consolidated subsidiary, IPL.

IPALCO Enterprises, Inc. (IPALCO) is a holding company incorporated under the laws of the state of Indiana. Our principal subsidiary, Indianapolis Power & Light Company (IPL), is engaged primarily in generating, transmitting, distributing and selling electric energy to approximately 450,000 customers in the City of Indianapolis and neighboring cities, towns and communities, and adjacent rural areas all within the state of Indiana, the most distant point being approximately forty miles from Indianapolis. IPL has an exclusive right to provide retail electric service to those customers. IPL owns and operates four generating stations. Two of the generating stations are primarily coal-fired stations. The third station has a combination of units that use coal (base load capacity) and natural gas and/or oil (peaking capacity) for fuel to produce electricity. The fourth station is a small peaking station that uses gas-fired combustion turbine technology for the production of electricity. IPL's net electric generation capability for winter is 3,342 megawatts and net summer capability is 3,224 megawatts.

Our second quarter 2003 net income of $15.2 million decreased $13.8 million from net income of $29.0 million in the second quarter of 2002. The following discussion highlights the factors contributing to this change.

Operating revenues decreased by $9.5 million during the three-month period ended June 30, 2003 compared to the prior year as a result of the following (dollars in thousands):

Operating expenses increased $3.2 million, or 2.1% during the three months ended June 30, 2003, as compared to the same period in 2002. This is primarily the result of a $6.3 million increase in other operating expenses, a $4.0 million increase in maintenance expenses and a $1.8 million increase in depreciation and amortization, partially offset by a $6.4 million decrease in income taxes - net and a $2.1 million decrease in real estate and personal property taxes resulting from recent real estate tax reassessments. The maintenance expense increase is primarily the result of increases associated with the plant maintenance schedule of the second quarter of 2003 compared to 2002. Maintenance expenses are expected to continue to be higher in 2003 as more scheduled plant maintenance outages are planned to coincide with our NOx compliance construction program. The increase in other operating expenses includes a $2.1 million increase in salaries and wages, a $1.5 million increase in property insurance and a $1.2 million increase in pension and other postretirement expenses. The increase in depreciation and amortization is primarily due to a $2.1 million increase in depreciation resulting primarily from a $207.3 million increase in the beginning utility plant in service balances between the two periods. The decrease in income taxes is primarily the result of a decrease in pretax income ($6.8 million) and deferred taxes related to deferred fuel ($1.2 million), partially offset by the effect ($2.6 million) of an increase in the state income tax rate from 4.5% to 8.5%.

Primarily as a result of the foregoing, utility operating income decreased $12.6 million or 26.7% during the second quarter of 2003 from the same period in 2002.

Other income and deductions increased slightly from income of $7.2 million in 2002 to $7.3 million in 2003. Included in this increase is a $1.3 million increase in the income tax benefit, which resulted primarily from the increase in the state income tax rate ($0.6 million) and a ($0.6 million) favorable variance in federal income taxes resulting from less federal taxable income. The second quarter of 2002 also included a $1.4 million gain on the sale of noncore real estate assets. The allowance for equity funds used during construction includes $0.5 million related to NOx expenditures in 2003 and $0.9 million in 2002 related to a gas combustion turbine placed in service during 2002.

Interest and other charges increased slightly to $26.7 million in the second quarter of 2003 from $25.5 million in the same period in 2002. The increase includes a $1.4 million increase in interest expense due to a 50 basis point increase, beginning November 15, 2002, and another 50 basis points increase beginning May 15, 2003 in the interest rate on the IPALCO Notes as a result of ratings downgrades. The allowance for borrowed funds used during construction includes $0.3 million related to NOx expenditures in 2003 and $0.4 million in 2002 related to a gas combustion turbine placed in service during 2002.

Net income for the six months ended June 30, 2003 was $49.2 million, as compared to $62.4 million for the same period in 2002. The following discussion highlights the factors contributing to the decrease.

Operating revenues increased by $13.1 million during the six-month period ended June 30, 2003 compared to the prior year as a result of the following (dollars in thousands):

The increase in operating revenues in the six months ended June 30, 2003 as compared to the same period in 2002 was primarily due to the $7.2 million increase in retail revenues and the $6.1 million increase in wholesale revenues. The increase in retail revenues was primarily due to a 2.7% increase in the number of retail kWh's sold and credits totaling $1.4 million issued in the six months ended June 30, 2002 to certain customers who experienced service interruptions as a result of severe storms in our service area in July 2001. The increase in kWh's sold was primarily due to an increase of 549, or 17.9%, in the number of heating degree days during the comparative periods, partially offset by a 182, or 48.5%, decrease in the number of cooling degree days. The increase in wholesale revenues was primarily due to a 49.0% increase in the average price per wholesale kWh sold.

Operating expenses increased $23.2 million, or 7.8% during the six months ended June 30, 2003, as compared to the same period in 2002. This is primarily the result of a $10.1 million increase in maintenance expenses, a $7.9 million increase in other operating expenses, a combined $4.7 million increase in fuel and power purchased and a $3.7 million increase in depreciation and amortization, partially offset by a $3.2 million decrease in real estate and personal property taxes resulting from recent real estate tax reassessments. The maintenance expense increase is primarily the result of increases associated with the plant maintenance schedule of 2003 compared to 2002. Maintenance expenses are expected to continue to be higher in 2003 as more scheduled plant maintenance outages are planned to coincide with our NOx compliance construction program. The increase in other operating expenses includes a $3.7 million increase in salaries and wages, a $2.8 million increase in pension and other postretirement expenses and a $1.9 million increase in property insurance. The increase in fuel and power purchased was primarily due to a combination of (i) a scheduled maintenance outage during March of our largest base load coal fired unit (ii) colder than normal temperatures during a period in March (iii) higher than normal wholesale energy prices in March and (iv) an unscheduled maintenance outage of another of our large coal fired units in March. The combination of these factors resulted in us purchasing more energy at higher than normal prices and an overall decrease in efficiency. The increase in depreciation and amortization is primarily due to a $4.1 million increase in depreciation resulting primarily from a $138.3 million increase in the beginning utility plant in service balances between the two periods.

In addition to those factors, total operating income taxes remained relatively constant, but was the result of a $6.7 million decrease in federal income tax expense and a $5.8 million increase in state income tax expense. The decrease in federal income tax expense was primarily due to a decrease in federal taxable income, while the increase in state income tax expense was primarily the effect ($5.4 million) of the increase in the state income tax rate from 4.5% to 8.5%.

Primarily as a result of the foregoing, utility operating income decreased $10.1 million or 10.3% during the six months ended June 30, 2003 from the same period in 2002.

Other income and deductions decreased slightly from income of $14.8 million in 2002 to $13.7 million in 2003. Contributing to this decrease is a $2.5 million gain in 2002 from the sales of noncore real estate assets and a $0.8 million loss in 2003 on the sale of 1/3 of our ownership interest in EnerTech Capital Partners II L.P. The allowance for equity funds used during construction includes $0.8 million related to NOx expenditures in 2003 and $2.2 million in 2002 related to a gas combustion turbine placed in service during 2002. The $2.5 million increase in the income tax benefit resulted primarily from the increase in the state income tax rate ($1.3 million) and a ($1.2 million) favorable variance in federal income taxes resulting from less federal taxable income.

Interest and other charges increased $1.9 million for the six months ended June 30, 2003 from the same period in 2002. The increase includes a $1.9 million increase in interest expense due to a 50 basis point increase, beginning November 15, 2002, and another 50 basis points increase beginning May 15, 2003 in the interest rate on the IPALCO Notes as a result of ratings downgrades. In addition, the allowance for equity funds used during construction includes $0.4 million related to NOx expenditures in 2003 and $1.0 million in 2002 related to a gas combustion turbine placed in service during 2002.

Overview. 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.

As of June 30, 2003, IPALCO had cash and cash equivalents of $9.8 million. In addition, IPL had $110 million of committed credit facilities (the IPL Credit Lines), of which $13.6 million was outstanding, and $96.4 million remained available. The total capacity on the IPL Credit Lines will be reduced from $110 million to $75 million and the amounts outstanding are expected to be repaid upon the closing of IPL's anticipated $110 million long term debt issuance (See below). All long- term borrowings by IPL must first be approved by the Indiana Utility Regulatory Commission (IURC) and the aggregate amount of IPL's short-term borrowings must be approved by the Federal Energy Regulatory Commission. Also, IPL and IPALCO have restrictions on the amount of new debt they may issue by contractual obligations of the parent company, AES, and by financial covenant restrictions under existing debt obligations at IPL and IPALCO. Under such restrictions, IPL is generally allowed to fully draw the amounts available on the IPL Credit Lines, refinance existing debt, issue up to $160 million of new long term debt approved by the IURC and incur certain other indebtedness. We believe that cash balances, cash flows from operations, the net proceeds from IPL bond issuances and available borrowing capacity on the IPL Credit Lines will be adequate to meet anticipated cash requirements in the near term.

In May, IPL increased the borrowing capacity of one of its two committed lines of credit from $45 million to $60 million and extended its maturity to May 21, 2004. In June, IPL executed an agreement which combined its existing $40.6 million liquidity facility (related to $40 million of IPL variable rate bonds, which are remarketed weekly) and $30 million committed line of credit into one two- tranche agreement. The new agreement increased the capacity of the line of credit from $30 million to $50 million and extended its maturity to June 3, 2004. It also extended the maturity of the $40.6 million liquidity facility to June 3, 2004.

During the third quarter of 2003, IPL expects to issue $110 million of long term indebtedness primarily to finance a portion of IPL's 2003-2005 capital expenditure program, to reimburse its treasury for expenditures previously incurred in connection with the capital expenditure program and to repay amounts outstanding on the IPL Credit Lines. Upon the closing of such issuance, the borrowing capacity of the IPL Credit Lines will be reduced back to $45 million and $30 million.

IURC Orders. On February 12, 2003, the IURC issued an order approving IPL's 2003- 2006 financing program (the IURC 2003 Financing Order), including, among other things, the issuance of up to $160 million of additional long-term debt to pay, in part, for IPL's construction program during 2003-2005, and the refinancing of $80 million of long-term debt, which matures in February 2004. In addition, the IURC 2003 Financing Order set forth a process whereby IPL must file a report with the IURC, prior to declaring or paying a dividend, that sets forth (1) the amount of any proposed dividend, (2) the amount of dividends distributed during the prior twelve months, (3) an income statement for the same twelve-month period, (4) the most recent balance sheet, and (5) IPL's capitalization as of the close of the preceding month, as well as a pro forma capitalization giving effect to the proposed dividend, with sufficient detail to indicate the amount of unappropriated retained earnings. If within twenty (20) calendar days the IURC does not initiate a proceeding to further explore the implications of the proposed dividend, the proposed dividend will be deemed approved. The IURC 2003 Financing Order stated that such process should continue in effect during the term of the financing authority, which expires December 31, 2006.

On February 28, 2003, IPL filed a petition for reconsideration, or in the alternative, for rehearing with the IURC. This petition sought clarification of certain provisions of the IURC 2003 Financing Order. In addition, the petition requested that the IURC establish objective criteria in connection with the reporting process related to IPL's long term debt capitalization ratio. On March 14, 2003, IPL filed a Notice of Appeal of the IURC 2003 Financing Order, as amended, in the Indiana Court of Appeals. We subsequently filed a motion to dismiss such appeal.

On April 16, 2003, the IURC issued its order in response to IPL's petition for reconsideration. The IURC declined to provide objective criteria relating to the dividend reporting process, and did not set a definitive time frame within which an investigation of a proposed dividend would be concluded. The IURC did make certain requested clarifications and corrections with regard to the IURC 2003 Financing Order, including the following: (1) the dividend reporting process applies only to dividends on IPL's common stock, not on its preferred stock; (2) a confidentiality process is established to maintain confidentiality of information filed under the dividend reporting process until such information has been publicly released and is no longer confidential; (3) dividends are not to be paid until after the twenty calendar days have passed, or the IURC approves the dividend after initiating a proceeding to explore the implications of a proposed dividend; and (4) certain technical corrections.

All of the reports IPL has filed with the IURC under the dividend reporting process were deemed approved after twenty days had elapsed and the IURC did not initiate any proceeding to explore the implications of the proposed dividends. We continue to believe that IPL will not be prevented from paying future dividends in the ordinary course of prudent business operations.

Capital Requirements. 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. IPL's construction expenditures totaled $62.3 million during the six months ended June 30, 2003. This represented an increase of $5.9 million from the comparable period in 2002. Construction expenditures during the first six months of 2003 were financed using internally generated cash provided by operations and borrowings on the IPL Credit Lines. We estimate total capital expenditures of approximately $160 million in 2003, $170 million in 2004 and $115 million in 2005. These amounts include approximately $227 million for construction associated with new environmental standards imposed by the EPA relating to NOx emission reductions.

Pension Plan. Pension plan assets consist of investments in equity and fixed income securities. Funding for the qualified defined benefit pension plan is based upon actuarially determined contributions that take into account the amount deductible for income tax purposes and the minimum contribution required under the Employee Retirement Income Security Act of 1974, as amended, as well as targeted funding levels necessary to qualify under standards of the Pension Benefit Guaranty Corporation for exemption from certain administrative requirements. Due to the decline in market value of the investment portfolio over the last few years, assets held in trust to satisfy plan obligations have decreased. Additionally, recent decreases in long-term interest rates have the effect of increasing the measured liability for funding purposes. As a result of these events, together with Voluntary Early Retirement Programs offered in recent years, our estimate of future funding obligations has increased substantially.

We funded $20 million to the pension plan in January of 2003 and $25.0 million in July of 2003. Depending on the timing of contributions and other factors, to meet our funding target, we anticipate additional program-related cash contributions for pension benefits of approximately $94.0 to $124.0 million through 2005, of which we may elect to make a contribution of approximately $51.0 million by September 2003. These estimates are based on actuarial assumptions using discount rates of 6.65% for 2003, 5.52% for 2004 and 5.32% for 2005. The discount rate assumption is based on our estimate of the four-year weighted average of 30-year treasury rates. Such estimates are also based on the market value of our pension plan assets at December 31, 2002, and an assumed rate of return on our pension plan assets of 9.0% during 2003 and 2004. If the rate of return on our pension plan assets for 2003 and 2004 were 0%, our anticipated pension contributions through 2005 that would be necessary for us to meet the same funding target would increase to a range of $128.0 million to $139.0 million.

Dividends. IPALCO did not pay any dividends during the first quarter of 2003, however we did pay total dividends of $63.3 million to AES in the second quarter of 2003. Future distributions will be determined at the discretion of the Board of Directors of IPALCO and will depend primarily on dividends received from IPL and such other factors as the Board of Directors of IPALCO deems relevant. Dividends from IPL are affected by IPL's results of operations, cash flows, financial condition, capital requirements, regulatory considerations (including compliance with the IURC 2003 Financing Order described above) and such other factors as the Board of Directors of IPL deems relevant.

Please refer to Note 6 of the attached financial statements for a summary of significant legal proceedings involving IPALCO and/or IPL. We are also subject to routine litigation, claims and administrative proceedings arising in the ordinary course of business, none of which is expected to have a material adverse effect on our financial position or results of operations.

(a) Exhibits

Exhibit No.	Document
10.1	Credit Agreement, Dated as of May 22, 2003, Among IPL, the Institutions from time to time Parties Thereto, as Lenders, and the Hungtington National Bank, as Agent
10.2	Credit Agreement Among IPL, the Institutions from time to time Parties Thereto, as Lenders, and LaSalle Bank National Association, as Agent, Dated as of June 4, 2003
99.1	Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
99.2	Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
99.3	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,18 U.S.C. Section 1350

(b) Reports on Form 8-K -On April 24, 2003, IPALCO filed a Form 8-K to report an Item 9. Regulation FD disclosure. The report disclosed certain details of an Order issued on April 16, 2003 by the Indiana Utility Regulatory Commission.

SIGNATURE