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
September 30, 1996 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 September 30, 1996
----- ---------------------------------
Common (Without Par Value) 56,947,412 Shares
<PAGE>1
IPALCO ENTERPRISES, INC. AND SUBSIDIARIES
-----------------------------------------
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
- -------------------------------
Statements of Consolidated Income - Three Months Ended and
Nine Months Ended September 30, 1996 and 1995 2
Consolidated Balance Sheets - September 30, 1996 and
December 31, 1995 3
Statements of Consolidated Cash Flows -
Nine Months Ended September 30, 1996 and 1995 4
Notes to Consolidated Financial Statements 5-6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-11
PART II. OTHER INFORMATION 12-13
- ---------------------------
<PAGE>2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Statements of Consolidated Income
(In Thousands Except Per Share Amounts)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1996 1995 1996 1995
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
UTILITY OPERATING REVENUES:
Electric $ 198,579 $ 192,718 $ 551,680 $ 508,879
Steam 7,093 7,155 28,059 26,164
-------------- ------------- ------------- -------------
Total operating revenues 205,672 199,873 579,739 535,043
-------------- ------------- ------------- -------------
UTILITY OPERATING EXPENSES:
Operation:
Fuel 40,962 45,396 125,745 128,237
Other 34,667 28,253 100,978 83,481
Power purchased 4,868 6,104 13,883 15,016
Purchased steam 1,497 1,307 5,148 4,725
Maintenance 15,743 14,736 45,669 45,684
Depreciation and amortization 25,178 22,238 72,857 65,129
Taxes other than income taxes 8,210 7,802 25,544 23,887
Income taxes - net 23,384 23,104 57,786 49,268
-------------- ------------- ------------- -------------
Total operating expenses 154,509 148,940 447,610 415,427
-------------- ------------- ------------- -------------
UTILITY OPERATING INCOME 51,163 50,933 132,129 119,616
-------------- ------------- ------------- -------------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used during construction 976 1,650 4,596 3,999
Other - net (2,673) (540) (4,532) (4,865)
Income taxes - net 1,167 48 2,039 1,754
-------------- ------------- ------------- -------------
Total other income and (deductions) - net (530) 1,158 2,103 888
-------------- ------------- ------------- -------------
INCOME BEFORE INTEREST AND OTHER CHARGES 50,633 52,091 134,232 120,504
-------------- ------------- ------------- -------------
INTEREST AND OTHER CHARGES:
Interest 12,685 13,169 37,996 38,886
Allowance for borrowed funds used during construction (15) (1,416) (3,325) (4,098)
Preferred dividend requirements of subsidiary 795 795 2,386 2,386
-------------- ------------- ------------- -------------
Total interest and other charges - net 13,465 12,548 37,057 37,174
-------------- ------------- ------------- -------------
NET INCOME 37,168 $ 39,543 $ 97,175 $ 83,330
============== ============= ============= =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 56,930 56,745 56,900 56,732
(Note 2) ============== ============= ============= =============
EARNINGS PER SHARE OF COMMON STOCK $ 0.65 $ 0.70 $ 1.71 $ 1.47
(Note 2) ============== ============= ============= =============
<PAGE>2 continued
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $ 0.37 $ 0.36 $ 1.11 $ 1.08
(Note 2) ============== ============= ============= =============
See notes to consolidated financial statements.
</TABLE>
<PAGE>3
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
<CAPTION>
September 30 December 31
ASSETS 1996 1995
------ --------------- ---------------
<S> <C> <C>
UTILITY PLANT:
Utility plant in service $ 2,718,656 $ 2,517,790
Less accumulated depreciation 1,028,761 984,910
--------------- ---------------
Utility plant in service - net 1,689,895 1,532,880
Construction work in progress 94,513 249,249
Property held for future use 9,878 9,878
--------------- ---------------
Utility plant - net 1,794,286 1,792,007
--------------- ---------------
OTHER ASSETS:
Nonutility property - at cost, less accumulated depreciation 108,793 108,331
Other investments 3,998 6,256
--------------- ---------------
Other assets - net 112,791 114,587
--------------- ---------------
CURRENT ASSETS:
Cash and cash equivalents 19,165 11,554
Accounts receivable (less allowance for doubtful
accounts - 1996, $718 and 1995, $851) 60,389 59,073
Fuel - at average cost 31,117 30,250
Materials and supplies - at average cost 57,663 57,605
Prepayments and other current assets 4,929 4,412
--------------- ---------------
Total current assets 173,263 162,894
--------------- ---------------
DEFERRED DEBITS:
Regulatory assets 140,998 142,711
Miscellaneous 18,379 18,998
--------------- ---------------
Total deferred debits 159,377 161,709
--------------- ---------------
TOTAL $ 2,239,717 $ 2,231,197
=============== ===============
<PAGE>3 continued
CAPITALIZATION AND LIABILITIES
------------------------------
CAPITALIZATION:
Common shareholders' equity:
Common stock $ 388,047 $ 385,032
Premium on 4% cumulative preferred stock 1,363 1,363
Retained earnings 470,398 436,408
--------------- ---------------
Total common shareholders' equity 859,808 822,803
Cumulative preferred stock of subsidiary 51,898 51,898
Long-term debt (less current maturities and
sinking fund requirements) 687,780 698,600
--------------- ---------------
Total capitalization 1,599,486 1,573,301
--------------- ---------------
CURRENT LIABILITIES:
Notes payable - banks and commercial paper 77,733 69,122
Current maturities and sinking fund requirements 11,250 17,500
Accounts payable and accrued expenses 57,355 81,984
Dividends payable 22,199 21,567
Taxes accrued 22,787 21,225
Interest accrued 11,730 14,719
Other current liabilities 17,242 16,092
--------------- ---------------
Total current liabilities 220,296 242,209
--------------- ---------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
Accumulated deferred income taxes - net 302,034 292,417
Unamortized investment tax credit 48,446 50,636
Accrued postretirement benefits 25,196 30,517
Accrued pension benefits 35,785 31,834
Miscellaneous 8,474 10,283
--------------- ---------------
Total deferred credits and other long-term liabilities 419,935 415,687
--------------- ---------------
COMMITMENTS AND CONTINGENCIES (NOTE 6)
TOTAL $ 2,239,717 $ 2,231,197
=============== ===============
See notes to consolidated financial statements.
</TABLE>
<PAGE>4
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Statements of Consolidated Cash Flows
(In Thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30
1996 1995
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net income before preferred dividend requirements of subsidiary $ 99,561 $ 85,716
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 72,526 67,547
Amortization of regulatory assets 12,149 2,490
Deferred income taxes and investment tax credit adjustments - net 245 3,245
Allowance for funds used during construction (7,921) (8,097)
Premiums on redemptions of debt - (800)
Change in certain assets and liabilities:
Accounts receivable (1,316) (9,762)
Fuel, materials and supplies (925) 3,872
Accounts payable (24,629) (2,567)
Taxes accrued 1,562 869
Accrued pension benefits 3,951 4,754
Other - net (6,371) 8,420
--------------- ---------------
Net cash provided by operating activities 148,832 155,687
--------------- ---------------
CASH FLOWS FROM INVESTING:
Proceeds from maturities of marketable securities 3,810 7,984
Construction expenditures - utility (61,920) (126,263)
Construction expenditures - nonutility (3,588) (31,536)
Other (8,993) (15,157)
--------------- ---------------
Net cash used in investing activities (70,691) (164,972)
--------------- ---------------
CASH FLOWS FROM FINANCING:
Issuance of long-term debt - 58,150
Retirement of long-term debt (17,100) (40,350)
Short-term debt - net 8,611 51,247
Dividends paid (64,945) (63,239)
Issuance of common stock related to incentive compensation plans 2,750 818
Other 154 1,296
--------------- ---------------
Net cash provided by (used in) financing activities (70,530) 7,922
--------------- ---------------
Net increase (decrease) in cash and cash equivalents 7,611 (1,363)
Cash and cash equivalents at beginning of period 11,554 8,148
--------------- ---------------
Cash and cash equivalents at end of period $ 19,165 $ 6,785
=============== ===============
<PAGE>4 continued
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 37,037 $ 37,804
=============== ===============
Income taxes $ 49,898 $ 35,081
=============== ===============
See notes to consolidated financial statements.
</TABLE>
<PAGE>5
IPALCO ENTERPRISES, INC. AND SUBSIDIARIES
-----------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. IPALCO Enterprises, Inc. (IPALCO) owns all of the outstanding common
stock of its subsidiaries (collectively referred to as Enterprises).
The consolidated financial statements include the accounts of IPALCO,
its utility subsidiary, Indianapolis Power & Light Company (IPL) and
its unregulated subsidiary, Mid-America Capital Resources, Inc. (Mid-
America). Mid-America is the parent company of nonutility energy-
related businesses.
The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make certain
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements. The reported amounts of revenues
and expenses during the reporting period may also be affected by the
estimates and assumptions management is required to make. Actual
results may differ from those estimates.
In the opinion of management these statements reflect all adjustments,
consisting of only normal recurring accruals, including elimination of
all significant intercompany balances and transactions, which are
necessary to a fair statement of the results for the interim periods
covered by such statements. Due to the seasonal nature of the electric
utility business, the annual results are not generated evenly by
quarter during the year. Certain amounts from prior year financial
statements have been reclassified to conform to the current year
presentation. These financial statements and notes should be read in
conjunction with the audited financial statements included in
Enterprises' 1995 Annual Report on Form 10-K.
2. COMMON STOCK
<TABLE>
<CAPTION>
Shares Amount
---------- ------------
<S> <C> <C>
Balance at December 31, 1995 56,802,256 $385,031,809
Restricted stock issued (January 1996) 7,320 186,050
Exercise of stock options (January 1996) 9,000 240,481
Exercise of stock options (February 1996) 88,680 1,704,046
Adjustment for post-split fractional shares (March 1996) (1,344) (35,683)
Adjustment for restricted stock (March 1996) - 126,170
Adjustment for restricted stock (June 1996) - (47,314)
Exercise of stock options (July 1996) 18,000 349,087
Exercise of stock options (August 1996) 23,500 492,684
---------- ------------
Balance at September 30, 1996 56,947,412 $388,047,330
========== ============
</TABLE>
On February 27, 1996, the IPALCO Board of Directors authorized a three-
for-two stock split of IPALCO's common stock issuable to shareholders
of record at the close of business on March 7, 1996. All references to
share amounts of common stock and per share information reflect the
stock split. The first quarter of 1996 reflects the payment of cash in
lieu of fractional shares.
3. LONG-TERM DEBT
On April 1, 1996, IPL retired First Mortgage Bonds, 5 1/8% Series, due
April 1, 1996, in the principal amount of $15.0 million.
<PAGE>6
On November 8, 1996, the City of Petersburg, Indiana issued, on behalf
of IPL, $20 million of Solid Waste Disposal Revenue Bonds, Adjustable
Rate Tender Securities (ARTS)SM Series 1996 (Indianapolis Power &
Light Company Project) due November 1, 2029 (1996 Bonds). The 1996
Bonds provide for an interest rate which varies with the tax-exempt
weekly rate. The proceeds from the issuance of the 1996 Bonds will be
used to provide funds to pay costs of certain facilities and equipment
to be used for solid waste disposal purposes owned by Indianapolis
Power & Light Company.
4. RATE MATTERS
The Indiana Utility Regulatory Commission approved a two-step rate
increase for IPL electric retail customers in August 1995. The step 1
increase was effective September 1, 1995, and the step 2 increase
became effective July 1, 1996.
5. STOCK-BASED COMPENSATION
During the first quarter 1996, IPALCO adopted Statement of Financial
Standards No. 123 "Accounting for Stock-Based Compensation" by
continuing to account for stock compensation in accordance with
Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued
to Employees." However, the fair value disclosures are not included
because they are not deemed to have a significant impact on the
financial position or results of operations of Enterprises.
6. COMMITMENTS AND CONTINGENCIES (See Item 1. Legal Proceedings of Part II
-- Other Information)
<PAGE>7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Material changes in the consolidated financial condition and results
of operations of IPALCO Enterprises, Inc. (Enterprises), except where
noted, are attributed to the operations of Indianapolis Power & Light
Company (IPL). Consequently, the following discussion is centered on IPL.
LIQUIDITY AND CAPITAL RESOURCES
Overview
- --------
The Board of Directors of Enterprises on August 27, 1996, declared a
quarterly dividend on common stock of 37 cents per share. The dividend was
paid October 15, 1996, to shareholders of record September 20, 1996.
IPL's capital requirements are primarily related to construction
expenditures needed to meet customers' needs for electricity and steam, as
well as expenditures for compliance with the federal Clean Air Act.
Enterprises' construction expenditures (excluding allowance for funds used
during construction) totaled $16.5 million during the third quarter ended
September 30, 1996, representing a $31.3 million decrease from the
comparable period in 1995. This decrease is mostly related to reduced
construction spending in the third quarter of 1996 compared to 1995 for the
scrubbers at IPL's Petersburg Generating Station as this construction
project was completed in June 1996. Such reduction also reflects reduced
capital spending on chilled water systems at two of the unregulated
subsidiaries. Internally generated cash provided by IPL's operations was
used for construction expenditures during the third quarter of 1996.
Enterprises' construction expenditures (excluding allowance for funds used
during construction) totaled $65.5 million during the nine months ended
September 30, 1996, representing a $92.3 million decrease from the
comparable period in 1995. This difference is mostly related to reduced
construction spending in 1996 compared to 1995 for the scrubbers at IPL's
Petersburg Generating Station. This reduction also reflects reduced
capital spending on chilled water systems at two of the unregulated
subsidiaries. Internally generated cash provided by IPL's operations was
used for construction expenditures during the first nine months of 1996.
As a result of IPL's new basic electric rates and charges and reduced
capital spending, IPL anticipates continued improving liquidity.
The five-year construction program has not changed from that
previously reported in IPALCO's 1995 Form 10-K report. (See "Cost of
Construction Program" in Item 7 of Management's Discussion and Analysis of
Financial Condition and Results of Operations in IPALCO's 1995 Form 10-K
report for further discussion).
On April 1, 1996, IPL retired First Mortgage Bonds, 5 1/8% Series, due
April 1, 1996, in the principal amount of $15.0 million.
On November 8, 1996, the City of Petersburg, Indiana issued, on behalf
of IPL, $20 million of Solid Waste Disposal Revenue Bonds, Adjustable Rate
Tender Securities (ARTS)SM Series 1996 (Indianapolis Power & Light Company
Project) due November 1, 2029 (1996 Bonds). The 1996 Bonds provide for an
interest rate which varies with the tax-exempt weekly rate. The proceeds
from the issuance of the 1996 Bonds will be used to provide funds to pay
costs of certain facilities and equipment to be used for solid waste
disposal purposes owned by Indianapolis Power & Light Company.
IPL is receiving 200 MW of firm capacity under an existing power
purchase agreement which expires March 31, 1997. Monthly capacity payments
required by this agreement are $1.2 million. During 1996, IPL entered into
a new power purchase agreement with LG&E Power Marketing Inc. for 150 MW of
firm capacity in each of the years 1997-2000.
<PAGE>8
Rate Relief
- -----------
The Indiana Utility Regulatory Commission approved a two-step rate
increase for IPL electric retail customers in August 1995. The step 1
increase was effective September 1, 1995, and the step 2 increase became
effective July 1, 1996.
<PAGE>9
RESULTS OF OPERATIONS
Comparison of Third Quarter and Nine Months Ended September 30, 1996
- --------------------------------------------------------------------
with Third Quarter and Nine Months Ended September 30, 1995
-----------------------------------------------------------
Earnings per share during the third quarter of 1996 were $0.65, or
$0.05 below the $0.70 attained in the comparable 1995 period. Earnings per
share during the nine months ended September 30, 1996, were $1.71, or $0.24
above the $1.47 attained in the comparable 1995 period. The following
discussion highlights the factors contributing to the third quarter and
nine months ended results.
Operating Revenues
- ------------------
Operating revenues during the third quarter and nine months ended
September 30, 1996, increased from the comparable 1995 periods by $5.8
million and $44.7 million, respectively. The increases in revenues
resulted from the following:
<TABLE>
<CAPTION>
Increase (Decrease) from Comparable Period
------------------------------------------
Three Months Ended Nine Months Ended
------------------ -----------------
(Millions of Dollars)
<S> <C> <C>
Increase in base electric rates $ 14.6 $ 34.0
Changes in Kilowatt-hour (KWH) sales - net of fuel (7.0) 10.9
Fuel revenues (2.7) (7.1)
Steam revenues - 1.9
Sales for resale 1.0 4.6
Other revenues (0.1) 0.4
-------- --------
Total change in operating revenues $ 5.8 $ 44.7
======== ========
</TABLE>
The increases in base rate electric revenues are the result of new
tariffs, effective September 1, 1995, and July 1, 1996, designed to produce
$35-million and $25-million additional annual revenues, respectively. The
third quarter decrease in retail KWH sales compared to the same period in
1995 was due to milder weather. Cooling degree days decreased 26% during
the third quarter. The increases in retail KWH sales during the nine
months ended of 1996, as compared with the same period in 1995, reflect
customer growth and increased sales resulting primarily from colder weather
in the first and second quarters of 1996. Heating degree days in the
Indianapolis area increased 15% for the nine months ended September 1996
over the same period in 1995. The changes in fuel revenues in 1996 from
the prior year reflect changes in total fuel costs billed customers. The
increased wholesale sales during the third quarter and nine months ended of
1996, as compared to the same periods in 1995, reflect energy requirements
of other utilities.
Operating Expenses
- ------------------
Fuel expenses in the third quarter of 1996 decreased $4.4 million due
to a $3.0 million decrease in unit prices, a $1.1 million decrease in
consumption and a $0.3 million decrease in deferred fuel compared to the
same period last year. For the nine months ended September 30, 1996, fuel
expenses decreased $2.5 million compared to last year. This difference
resulted from year-to-date decreases in unit prices and deferred fuel of
$7.6 million and $1.4 million, respectively, partially offset by an
increase in consumption of $6.5 million.
Other operation expenses in the third quarter and nine months ended
September 30, 1996, increased from the same periods a year ago by $6.4
million and $17.5 million, respectively. The primary cause of these
increases in both the third quarter and the nine-month period was the
expensing of accrual based electric postretirement costs as authorized by
IPL's 1995 rate case settlement. Such costs were deferred as regulatory
<PAGE>10
assets prior to September 1995. Increases in postretirement benefit
expenses were $2.6 million and $10.5 million in the third quarter and nine-
month periods, respectively. The increase in the third quarter was also
due to an increase in customer service and informational and sales expenses
of $1.0 million, an increase in miscellaneous steam power operating
expenses at the Petersburg plant of $0.8 million, an increase in regulatory
commission expense of $0.5 million, an increase in electric distribution
expenses of $0.5 million, an increase in miscellaneous office supplies and
expenses of $0.3 million, an increase in customer accounts expense of $0.3
million, an increase in transmission expense of $0.2 million and an
increase in other administrative and general expenses of $0.2 million.
Contributing to the nine month increase was an increase in customer
service and informational sales expense of $2.2 million, an increase in
miscellaneous steam power operating expenses at the Petersburg plant of
$1.9 million, an increase in regulatory commission expense of $1.6 million,
an increase in electric distribution of $0.9 million, an increase in
customer accounts expense of $0.6 million and increased operational expense
at the Pritchard plant of $0.3 million, partially offset by decreased
outside service expenses of $0.6 million.
Power purchased decreased by $1.2 million and $1.1 million from the
comparable periods in 1995 during the third quarter and nine months ended
of 1996, respectively. Both decreases are the result of decreases in
energy purchases.
Purchased steam during the third quarter and nine months ended of 1996
increased from the same periods in the prior year by $0.2 million and $0.4
million, respectively, due to an increase in therms purchased from an
independent resource recovery system located within the City of
Indianapolis.
Maintenance expenses increased $1.0 million in the third quarter of
1996 compared to the same period in 1995 primarily due to expenses relating
to the overhaul of unit 4 at the Pritchard plant during the third quarter
of 1996.
Depreciation and amortization expense in the third quarter and nine
months ended September 30, 1996, increased from the same periods a year ago
by $2.9 million and $7.7 million, respectively. These increases resulted
from the amortization of property-related regulatory deferrals effective
with the September 1, 1995 electric rate increase and increases in the
depreciable utility plant balances.
Taxes other than income taxes in the third quarter and nine months
ended of 1996 increased from the comparable periods in 1995 by $0.4 million
and $1.7 million, respectively. These increases are attributable primarily
to increases in property taxes due to an increase in tax rates and the
property tax base, state gross income taxes due to more revenue recorded in
1996, and FICA taxes.
Income taxes - net for the third quarter and nine months ended of 1996
increased from the same periods in 1995 by $0.3 million and $8.5 million,
respectively, primarily due to the increase in pretax utility operating
income.
As a result of the foregoing, utility operating income during the
third quarter of 1996 increased 0.5% from the comparable 1995 period, to
$51.2 million. Utility operating income during the nine months of
1996, increased 10.5% from the comparable 1995 period, to $132.1 million.
Other Income and Deductions
- ---------------------------
Allowance for equity funds used during construction in the third
quarter of 1996 decreased by $0.7 million and increased by $0.6 million for
the third quarter and nine months ended September 30, 1996, respectively,
compared to last year. The third quarter decrease was primarily due to
scrubbers at the Petersburg plant being placed in service in June 1996.
The increase for the nine-months ended period is attributable to carrying
charges on regulatory assets resulting from the electric rate case
settlement.
<PAGE>11
Other - net, which includes the pretax operating and investment income
from operations other than IPL, decreased by $2.1 million and increased by
$0.3 million from the comparable periods in 1995 during the third quarter
and nine months ended September 30, 1996, respectively. The decrease in
the third quarter was primarily due to the sale of investment securities at
Mid-America during the third quarter of 1995. The increase for the nine
months ended of 1996 is due to increased district cooling revenues
resulting from an increase in customers.
Income taxes - net, which includes taxes on operations other than IPL,
in the third quarter and nine months ended September 30, 1996, decreased
from the same periods in 1995 by $1.1 million and $0.3 million
respectively, primarily due to the decrease in nonutility operating income.
Interest and Other Charges
- --------------------------
Allowance for borrowed funds used during construction for the third
quarter and nine months ended September 30, 1996, decreased from the
comparable periods in 1995 by $1.4 million and $0.8 million, respectively,
due primarily to the scrubbers at the Petersburg plant being placed in
service in June 1996 and decreased carrying charges on regulatory assets.
<PAGE>12
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 asterick (*) are incorporated herein by reference and made a part
hereof.
3.1* Articles of Incorporation of IPALCO Enterprises, Inc., as amended.
(Form 10-K for year ended 12-31-90.)
3.2* Bylaws of IPALCO Enterprises, Inc. dated February 27, 1996. (Exhibit 3.2
to the form 10-Q for the quarter ended 3-31-96.)
4.1 IPALCO Enterprises, Inc. IPALCO PowerInvest Dividend Reinvestment and
Direct Stock Purchase Plan.
4.2* IPALCO Enterprises, Inc. and First Chicago Trust Company of New York
(Rights Agreement). (Exhibit 4.2 to the Form 10-K for the year ended
12-31-94.)
11.1 Computation of Per Share Earnings.
21.1 Subsidiaries of the Registrant.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K.
None.
<PAGE>13
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: November 13, 1996 /s/ John R. Brehm
----------------- --------------------------------
John R. Brehm
Vice President and Treasurer
Date: November 13, 1996 /s/ Stephen J. Plunkett
----------------- --------------------------------
Stephen J. Plunkett
Controller
PROSPECTUS
IPALCO ENTERPRISES, INC.
IPALCO PowerInvest
________________________
Common Stock, No Par Value
IPALCO PowerInvest, the dividend reinvestment and direct stock
purchase plan (the ``Plan'') of IPALCO Enterprises, Inc. (``IPALCO''),
provides a simple and convenient method for current and potential investors
to purchase shares of IPALCO Common Stock, no par value (``Common Stock'')
either in the form of new issue shares, open market shares, or in privately
negotiated transactions, as determined by IPALCO's Board of Directors.
Participants in the Plan may:
- through an initial cash investment of at least $250 become an
IPALCO shareholder;
- have dividends on all or a portion of the Common Stock, whether
held directly or in the Plan, automatically reinvested;
- receive cash dividends on all or a portion of the Common Stock,
whether held directly or in the Plan;
- invest by making optional cash payments of not less than $25 in
any calendar month or more than $100,000 in any calendar year;
- deposit their Common Stock certificates with the Plan for
safekeeping;
- direct IPALCO to transfer shares of Common Stock held in the Plan
to other persons and receive a gift certificate upon request; and
- sell shares of Common Stock held in their Plan accounts.
The purchase price of new issue shares of Common Stock will be the
average of the high and low sales prices on the New York Stock Exchange
Composite Tape on the Investment Date, as defined in the Plan. The purchase
price of shares purchased on the open market will be the weighted average of
the prices of the Common Stock purchased for the Plan for an Investment Date,
including brokerage commissions. The Common Stock is listed on the New York
Stock Exchange and the Chicago Stock Exchange. To the extent required by
applicable law in certain jurisdictions, shares of Common Stock offered under
the Plan to certain persons are offered only through a registered broker-
dealer in such jurisdictions.
________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_________________________
This Prospectus constitutes the Plan document and relates to
1,500,000 shares of Common Stock of IPALCO registered for
purchase under the Plan. This Prospectus should be retained
for future reference.
The date of this Prospectus is September 10, 1996.
IF YOU HAVE QUESTIONS CONCERNING THE PLAN
Please address all correspondence concerning the Plan to:
Indianapolis Power & Light Company Local Telephone 317-261-8394
Shareholder Services Toll Free 800-877-0153
P.O. Box 798 Facsimile 317-630-5780
Indianapolis, Indiana 46206-0798 Internet http://www.ipalco.com
E-Mail shareholderipalco.com
AVAILABLE INFORMATION
IPALCO is subject to the informational requirements of the Securities
Exchange Act of 1934 (the ``Exchange Act'') and in accordance therewith files
reports, proxy statements and other information with the Securities and
Exchange Commission (the ``Commission'') which may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following regional offices
of the Commission: Seven World Trade Center, New York, New York 10048, and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material also can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission maintains a Web site that contains reports, proxy
and information statements and other information regarding registrants that
file electronically with the Commission. The address of such site is
http://www.sec.gov. Reports, proxy material and other information concerning
IPALCO can also be inspected at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005 and the Chicago Stock Exchange,
440 South LaSalle Street, Chicago, Illinois 60603.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
IPALCO's Annual Report on Form 10-K for the latest fiscal year,
all Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed by
IPALCO pursuant to Section 13 or 15(d) of the Exchange Act since the end of
such fiscal year, and the description of Common Stock which is contained at
Item 4 in a Registration Statement on IPALCO's Form 8-B, as filed with the
Commission on December 21, 1983, including any amendment or report filed for
the purpose of updating such description, have been filed with the Commission
and are incorporated herein by reference.
All documents subsequently filed by IPALCO with the Commission
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, after
the date of this Prospectus and prior to the termination of the offering
made by this Prospectus, shall be deemed to be incorporated by reference in
this Prospectus and to be a part of this Prospectus from the date of the
filing of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by referenced herein modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
IPALCO hereby undertakes to provide without charge to each person to
whom this Prospectus has been provided, on the request of any such person, a
copy of any of the documents incorporated in this Prospectus by reference,
other than exhibits to such documents. Requests for such copies should be
directed to IPL Shareholder Services, P.O. Box 798, Indianapolis, IN 46206,
or by calling 317-261-8394 or 800-877-0153.
IPALCO ENTERPRISES, INC. AND ITS SUBSIDIARIES
IPALCO Enterprises, Inc. (``IPALCO'') is a holding company
incorporated under the laws of the State of Indiana on September 14, 1983.
Indianapolis Power & Light Company is a wholly-owned subsidiary of IPALCO and
is engaged primarily in generating, transmitting, distributing and selling
electric energy 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 about forty miles from Indianapolis. It also
produces, distributes and sells steam within a limited area in such city.
Mid-America Capital Resources, Inc. (``Mid-America'') is the holding company
for IPALCO's unregulated activities, and has as its subsidiaries:
Indianapolis Campus Energy, Inc., Store Heat and Produce Energy, Inc., which
conducts business as SHAPE Energy Resources, American Energy Service Corp.,
and Mid-America Energy Resources, Inc. (``Energy Resources''). Energy
Resources has operated a district cooling system in downtown Indianapolis
since 1991 and through other subsidiaries in downtown Cleveland, Ohio, since
1993. In 1995, Mid-America established Vital Resource Management as an
operating division within Mid-America. The principal executive offices of
IPALCO are located at One Monument Circle, Indianapolis, Indiana 46204, and
the telephone number is 317-261-8261.
IPALCO PowerInvest
Purpose
The purpose of the Plan is to provide existing and potential
investors with a simple, convenient and economical method to purchase shares
of IPALCO Common Stock.
Administration
Indianapolis Power & Light Company (``IPL'' or the ``Administrator'')
administers the Plan, maintains records, sends statements of account to
participants and performs such other duties as required by the Plan. The
Administrator also serves as transfer agent, registrar and dividend paying
agent for IPALCO Common Stock.
All correspondence regarding the Plan and completed Enrollment Forms
should be sent to the Administrator at the address which follows. Please
provide your Plan account number and/or Social Security Number on all
correspondence.
Indianapolis Power & Light Company Local Telephone 317-261-8394
Shareholder Services Toll Free 800-877-0153
P.O. Box 798 Facsimile 317-630-5780
Indianapolis, Indiana 46206-0798 Internet http://www.ipalco.com
E-mail shareholderipalco.com
The Administrator will appoint an independent agent (the ``Agent'')
for purchasing and selling shares for participants on the open market or
through negotiated transactions consistent with applicable securities laws
and regulations relating to volume, timing and price of such purchases during
any calendar month. The Agent will be an ``agent independent of the issuer''
as that term is defined in the rules and regulations under the Exchange Act.
All shares purchased by the Agent will be held by and registered in the
nominee name of the Administrator.
IPALCO reserves the right to make such additional or other
arrangements for the administration of the Plan as it deems appropriate.
IPALCO may replace the Administrator or the Agent at any time without prior
notice to the Plan participants. The Administrator and the Agent each
reserves the right to resign at any time upon advance written notice to
IPALCO. IPALCO, IPL and the Agent, in administering the Plan and in
performing their respective functions, shall not be liable for any act done
in good faith, or for any good faith omission to act, including, without
limitation, any claims of liability arising, or alleged to have arisen, out
of the failure to enroll an applicant, reinvest dividends, invest initial or
optional cash payments or terminate a participant's account under the Plan.
However, nothing contained herein shall affect a participant's right to bring
a cause of action based on alleged violations of federal securities laws.
Participants should recognize that IPALCO cannot assure them of a
profit or protect them against a loss on the value of shares of Common Stock
purchased or deposited by them under the Plan.
The officers of IPALCO may take such actions to carry out the Plan
as are not contrary to the terms and conditions of the Plan. IPALCO will
interpret and regulate the Plan and any agreement pertaining thereto, and
any such interpretation or regulation shall be conclusive.
Eligibility
Any person or entity, whether or not a record holder of Common Stock,
is eligible to participate in the Plan, provided that (i) such person or
entity fulfills the prerequisites for participation described herein; and
(ii) in the case of citizens or residents of a country other than the United
States, its territories and possessions, participation would not violate
local laws applicable to IPALCO, the Plan or the participant. To the extent
required by applicable law in certain jurisdictions, shares of Common Stock
offered under the Plan to certain persons are offered only through a
registered broker-dealer in such jurisdictions.
If a person owns shares which are registered in someone else's name,
such as in the name of a broker, nominee or trustee, and desires to
participate in the Plan, such person may request the broker, nominee or
trustee to participate in the Plan on his or her behalf. In the alternative,
such person may have those shares registered in his or her own name and
participate in the Plan individually.
Enrollment
Holders of Common Stock currently participating in IPALCO's Automatic
Dividend Reinvestment and Stock Purchase Plan, which is being replaced by
this Plan, will automatically be participants in the Plan without sending in
a new Enrollment Form. However, a participant who wishes to change his
participation in any way must submit a new Enrollment Form.
After being furnished with a copy of this Prospectus, enrollment in
the Plan may be accomplished at any time by completing and signing an
Enrollment Form and returning it to the Administrator at the applicable
address indicated in ``Administration'' above. Persons or entities that are
not registered holders of Common Stock, or employees of IPALCO or its
subsidiaries, must submit an initial cash investment, in an amount of at
least $250 and not more than $100,000 with their Enrollment Form. Checks or
money orders should be made payable to the order of ``IPALCO Enterprises,
Inc.'' DO NOT SEND CASH. An Enrollment Form and return envelope may be
obtained by written request to the Administrator, or by calling 317-261-8394
or 800-877-0153.
An Enrollment Form will be processed as promptly as practicable,
normally within two business days of receipt. Participation in the Plan will
commence after the properly completed Enrollment Form has been reviewed and
accepted by the Administrator.
If the Enrollment Form is received after a record date, reinvestment
of dividends will begin with the next dividend payment date. See
``Dividends'' for approximate record dates and cash dividend payment dates.
Employee Enrollment
After being furnished with a copy of this Prospectus, enrollment in
the Plan by employees who are not currently shareholders may be accomplished
at any time by completing and signing an Enrollment Form and returning it to
the Administrator together with an initial payment of at least $25. Checks or
money orders should be made payable to the order of ``IPALCO Enterprises,
Inc.'' Employees who are already registered shareholders may participate in
the Plan by completing an Enrollment Form.
To receive an Enrollment Form employees may contact:
IPL - Shareholder Services Division Telephone: 317-261-8394
Room 701 - IPALCO Corporate Center 800-877-0153
Dividend Reinvestment Options
Participants may choose to reinvest cash dividends paid on Common
Stock registered in their name or held in their account under the Plan as
follows:
Full Reinvestment -- Reinvest cash dividends payable on all Common
Stock registered in the participant's name and on all Common Stock
held in the Plan.
Partial Reinvestment -- Reinvest cash dividends payable on a
portion of the Common Stock registered in the participant's name
or held in the Plan and receive cash dividends on the remaining
shares.
No Reinvestment -- Receive cash dividends on all Common Stock
registered in the participant's name and on all Common Stock held
in the Plan.
Participants may make optional cash payments at any time under any
of the reinvestment options.
If a participant does not make an election, dividends payable on
Common Stock held in his or her account under the Plan will be
reinvested.
Changing Reinvestment Options
Participants may change their reinvestment option after enrollment
by selecting one of the other options on a new Enrollment Form and signing
and returning it to the Administrator. Changes will become effective as soon
as practicable after they are received by the Administrator.
Direct Deposit of Dividends
A participant may elect to have any cash dividends not being
reinvested under the Plan electronically deposited to the participant's
predesignated U.S. bank account. To receive such dividends by direct deposit,
contact the Administrator for a Direct Deposit Authorization Form. Direct
Deposit Authorization Forms should be completed, signed and returned to the
Administrator. Participants may change the designated account for direct
deposit or discontinue this feature by written instructions to the
Administrator.
Optional Cash Payments
After enrolling as a Plan participant, subsequent optional cash
payments of not less than $25 in any calendar month, or more than $100,000
per calendar year, may be made from time to time. Such investments may be
made by sending a check or money order, payable to the order of ``IPALCO
Enterprises, Inc.'' along with a completed cash payment form located at the
top of the account statement.
Once employees become Plan participants, they may elect to make
optional cash payments through payroll deduction of not less than $12.50
bi-weekly. The amount of payroll deduction can be changed or terminated by
contacting the Administrator. Employees may also send optional cash payments
directly to the Administrator under the same terms and conditions as other
Plan participants.
Optional cash payments will be acknowledged in the regular account
statement prepared by the Administrator. If the Administrator receives
payments totaling more than $100,000 per calendar year from a participant,
the amount by which those payments exceed $100,000, or if in one check, the
entire amount, will be returned to the participant. A participant may prevent
investment of an optional cash payment by notifying the Administrator at
least five full business days before the Investment Date. The same amount
of money need not be sent each time, and there is no obligation to make an
optional cash payment at any time. Participants who elect to make initial or
optional cash payments under the Plan must make such payments in lawful
money of the United States of America. The method of delivery of any initial
and optional cash investment is at the election and risk of the participant
or interested investor and will be deemed received when actually received by
the Administrator.
Electronic Stock Purchase
Participants may also take advantage of an automatic monthly
investment feature of the Plan. This feature allows a participant to specify
an amount (not less than $25 in any calendar month nor more than $100,000
per calendar year) to be electronically transferred from a pre-designated
U.S. bank checking account. To initiate automatic monthly deductions, the
participant must complete and sign an Electronic Stock Purchase Authorization
Form and return it to the Administrator together with a voided check for the
account from which such funds are to be drawn. Electronic Stock Purchase
Authorization Forms may be obtained from the Administrator at the address
indicated in ``Administration'' above. Once automatic monthly deduction is
initiated, funds will be drawn from the participant's designated checking
account on the 15th day of the month. If the 15th day of the month falls on
a day on which financial institutions are closed in Indianapolis, Indiana,
the automatic deduction will occur on the next business day. Participants may
change or terminate their automatic investments by notifying the Administrator
in writing.
Dividends
Dividend declarations will be determined by the Board of Directors
of IPALCO upon giving consideration to earnings, financial requirements and
other factors. The cash dividend payment dates for IPALCO are normally
January 15, April 15, July 15 and October 15 of each year. The dividend
record dates are normally three weeks prior to the dividend payment dates.
Cash dividends are payable on whole shares and any fractional interest
in a share of Common Stock.
Investment Dates
Initial or optional cash investments will be invested two times each
month, usually on the 1st and 15th of each month (the ``Investment Dates'').
Cash dividends will be reinvested on the Investment Date which falls on the
15th day of the month. If an Investment Date falls on a day on which the New
York Stock Exchange is closed, the Investment Date will be the next
following trading day. Optional cash payments received by check must be
received by the Administrator at least five full business days before an
Investment Date. Cash payments received less than five full business days
before an Investment Date will be invested on the following Investment Date.
Optional cash payments received by automatic withdrawal from a participant's
checking account will normally be invested on the 15th day of the month.
Purchase Procedures and Prices
The Agent may, at its discretion, purchase Common Stock prior to an
Investment Date and has absolute discretion, consistent with applicable
securities laws and regulations as to when, in what amounts and the price at
which Common Stock will be purchased during any calendar month. Funds not
invested in Common Stock within 30 days of receipt will be refunded without
interest to participants. No interest will be earned by or paid to
participants on funds held by the Administrator. Participants are urged to
time their initial or optional cash investments so that such funds are
received by the Administrator shortly (but not less than five business days)
before an Investment Date.
The number of shares purchased for each participant will depend on
the total amount of the participant's dividends to be reinvested, any initial
or optional cash payments to be invested, the price per share of Common
Stock, and the brokerage commissions incurred when making open market
purchases of Common Stock. A participant's account will be credited on the
Investment Date with the number of shares purchased, including fractions of
shares computed to four decimal places. There is no provision in the Plan for
participants, IPALCO or the Administrator to order the purchase of a specific
number of shares, a specified price, the markets on which shares are
purchased or the selection of the broker or dealer (other than the Agent)
through or from whom purchases may be made. Since purchases under the Plan
will not necessarily occur on a particular date, a participant does not
have the freedom to select more precise timing for purchases.
The price per share of Common Stock purchased on the open market for
any Investment Date will be the weighted average of the prices paid by the
Agent for the Common Stock purchased for the applicable investment period,
plus brokerage commissions. The price per share of new issue shares of Common
Stock purchased from IPALCO on any Investment Date will be the average of the
high and low sales prices of the Common Stock on the New York Stock Exchange
Composite Tape on the Investment Date. In determining the purchase price,
fractional cents will be rounded to the next whole one-tenth of a cent. The
high and low sale prices on the Composite Tape normally will be published in
The Wall Street Journal on the first business day following an Investment
Date.
Partial Withdrawal of Shares from Plan
Any number of whole shares held in a participant's account may be
withdrawn by the participant, upon written request to the Administrator,
without complete withdrawal from the Plan. A form on the reverse side of the
account statement may be used for that purpose. Any such request will be
processed weekly, and a certificate for the whole number of shares withdrawn
will be sent to the participant. Any withdrawal request received by the
Administrator on or after an ex-dividend date (two business days before
record date) will not be processed until after the dividend relating to that
record date has been reinvested.
The certificates for shares withdrawn will be registered in the
participant's name as shown on the account registration. The certificates may
be registered in another name subject to compliance with the Administrator's
transfer requirements as discussed under ``Gifts or Transfer of Common
Stock.''
Dividends on any shares withdrawn from the Plan in certificate form
will continue to be reinvested in the Plan if the participant has elected
the Full Reinvestment option. For participants who have elected other
investment options, dividends on any shares withdrawn from the Plan in
certificate form will be reinvested or paid in cash, consistent with the
participant's current election.
Complete Withdrawal from Plan
A participant may completely withdraw from the Plan by giving written
notice of withdrawal to the Administrator. A notice of complete withdrawal
from the Plan will be processed weekly, and a certificate for all whole
shares in the participant's account and a check for the proceeds from the
sale of any fractional share will be sent to the participant. Any withdrawal
request received by the Administrator on or after an ex-dividend date (two
business days before record date) will not be processed until after the
dividend relating to that record date has been reinvested.
The certificates for shares withdrawn will be registered in the
participant's name as shown on the account registration. The certificates
may be registered in another name subject to compliance with the
Administrator's transfer requirements as discussed under ``Gifts or Transfer
of Common Stock.''
Gifts or Transfer of Common Stock
If a participant wishes to change the ownership of all or part of his
Common Stock held in the Plan, a gift or transfer may be made subject to
compliance with the Administrator's transfer requirements and the rules of
the Securities Transfer Association, Inc. Any such request must be in
writing, bear the signature of the participant and such signature must be
accompanied by a Medallion Guarantee from a commercial bank, member of the
New York Stock Exchange or other participant in the Medallion Program.
A new Plan account will be opened in the name of the person to whom
the shares are transferred, but no stock certificate will be issued. A Plan
Prospectus will be mailed to such person as a new shareholder and any
dividends paid on the new account will be reinvested unless the Administrator
receives a completed Enrollment Form from the new shareholder indicating a
different reinvestment option.
IPALCO will provide the participant who requested the transfer and
the new shareholder with an account statement to confirm establishment of the
new account and reflect current transactions. In addition, gift certificates
reflecting the gift or transfer are available upon request.
Sale of Common Stock
A participant may request in writing that the Administrator sell all
or any portion of the shares held in the Plan account. Requests for sales
may be made at any time and the Administrator will forward the sale
instructions to the Agent weekly. The Agent will sell such shares as soon as
practicable after processing the request. A check made payable to the
shareholder of record for the sale proceeds, less any brokerage commission,
will be sent within three business days after the date of sale. Any sale
request received by the Administrator on or after an ex-dividend date (two
business days before record date) will not be processed until after the
dividend relating to that record date has been reinvested. There is no
provision in the Plan for participants, IPALCO or the Administrator to order
a specified price, the markets on which shares are sold or the selection of
the broker or dealer (other than the Agent) through or from whom sales may
be made. For participants selling whole shares and fractional shares, the
price of the fractional share will be based upon the same price received for
the whole shares.
Costs
Brokerage commissions resulting from open market purchases of Common
Stock made by the Agent for an Investment Date will be added to the price
per share of Common Stock. Brokerage commissions will be a negotiated rate
established under the terms of IPALCO's agreement with the Agent, which is
$0.06 per share as of the date of this Prospectus. However, there are
no brokerage commissions charged to participants when new issue shares
of Common Stock are being purchased under the Plan. If a participant sells
shares held in the Plan, the Agent will deduct the brokerage commission and
other charges related to such sale. All other costs associated with the
administration of the Plan are paid by IPALCO.
Reports to Participants
Each participant in the Plan will receive an account statement after
completion of each transaction affecting such account, including each
dividend payment date, after each optional cash purchase, deposit, sale,
withdrawal or transfer. The statement will show, as applicable, the date of
the transaction, the amount invested, the purchase price of the Common Stock,
the number of shares purchased, deposited, sold, transferred, or withdrawn,
total shares held in the Plan, and other relevant information. Participants
should retain these statements of account in order to establish the cost
basis, for tax purposes, for shares of Common Stock acquired under the Plan.
In addition, participants will receive copies of the same communications sent
to all holders of Common Stock, including IPALCO's annual report to
shareholders, annual meeting materials, and certain income tax information
for reporting dividends paid or reinvested.
Certificates for Shares
Certificates for all or a portion of whole shares of Common Stock
purchased under the Plan will be issued out of a participant's account only
upon written request. A form on the reverse side of the account statement
may be used for that purpose. Certificates for fractional interest in shares
will not be issued under any circumstances. Upon withdrawal or termination
from the Plan, fractional shares will be aggregated with other fractional
shares and sold through the Plan and a check for the proceeds will be mailed
directly to the participant.
Shares credited to the account of a participant under the Plan may
not be pledged. Participants who wish to pledge their Common Stock must
request that such shares be withdrawn from the Plan and that certificates be
issued in the participant's name.
Safekeeping Services for Certificates
The Plan's Safekeeping Service allows Plan participants to deposit
certificated shares of Common Stock for safekeeping. Shares deposited for
safekeeping will be held in the name of the nominee of the Administrator and
credited to the participant's account under the Plan. Plan participants may
instruct the Administrator to reinvest all or a portion of the dividends or
pay dividends in cash.
The Plan's Safekeeping Service offers two significant advantages to
participants. First, the risk associated with loss, theft or destruction of a
participant's certificated shares is eliminated. Second, because certificated
shares deposited with the Plan for safekeeping are treated the same way as
other shares held in the Plan, they may be sold through the Plan in a
convenient and economical manner.
Participants who wish to deposit certificated shares of Common Stock
with the Plan should send them to the Administrator with written instructions
to place them in safekeeping. The certificates should not be endorsed and the
assignment section should not be completed. Participants are urged to send
stock certificates by certified mail, return receipt requested.
Amendment or Termination of the Plan
IPALCO reserves the right to amend, suspend, modify or terminate the
Plan at any time, in whole, in part, or with respect to participants in one
or more jurisdictions, without the approval of participants. All participants
will receive notice of any such amendment, suspension, modification or
termination. Upon termination of the Plan, certificates for whole shares
credited to a participant's account under the Plan will be issued and a cash
payment will be made for any fractional interest in shares as provided herein.
Federal Income Tax Consequences
Cash dividends paid to participants or reinvested under the Plan will
be taxable as having been received by a participant, even though the
participant has not actually received them in cash. A participant will
receive an annual statement from the Administrator indicating the amount of
cash dividends or reinvested dividends reported to the U.S. Internal Revenue
Service (``Service'') as dividend income.
A participant will not realize gain or loss for U.S. Federal income
tax purposes upon the transfer of shares to the Plan or the withdrawal of
whole shares from the Plan. Participants will, however, generally realize
gain or loss upon the sale of shares (including the receipt of cash for
fractional shares) held in the Plan.
As a general matter, the tax basis of shares purchased with
reinvested dividends or cash payments will equal the cost of such shares,
including any brokerage fees and related charges paid out of the reinvested
dividends or optional cash. An exception applies to shares purchased with
reinvested dividends excluded from gross income under a limited election
available during the period 1982 through 1985, as to which shares the tax
basis is generally zero.
Plan participants who are non-resident aliens or non-U.S.
corporations, partnerships or other entities generally are subject to a
withholding tax on dividends paid on shares held in the Plan. The
Administrator is required to withhold from dividends paid the appropriate
amount determined in accordance with Service regulations. Where applicable,
this withholding tax is determined by treaty between the U.S. and the
country in which such participant resides. Accordingly, the amount of any
dividends, net of the applicable withholding tax, will be credited to
participant Plan accounts for investment in additional shares of Common
Stock or paid to the participant in cash.
The foregoing does not purport to be a comprehensive summary of all
of the tax considerations that may be relevant to a participant in the Plan.
In addition, special tax considerations may apply to certain participants;
therefore, participants are urged to consult their tax advisors regarding
the consequences of participation in the Plan.
Other Information
Stock dividend, stock split, or other distribution. Any shares of
Common Stock distributable by IPALCO as a stock dividend, a stock split, or a
similar transaction on shares of Common Stock credited to a participant's
account under the Plan as of the record date for such stock dividend, stock
split or other distribution will be credited to that account under the Plan.
Rights offering. In the event that IPALCO makes a Common Stock rights
offering, the subscription rights pertaining to any shares registered in the
names of participants in the Plan would be mailed directly to them, in the
same manner as to shareholders not participating in the Plan. The rights
pertaining to shares held in Plan accounts would be sold by the Agent and
the proceeds used to purchase additional shares of Common Stock to be
allocated to such accounts. Participants wishing to exercise, transfer or
sell rights belonging to shares held in their Plan accounts must request
that the Administrator withdraw such shares from their accounts before the
record date for the rights offering.
Voting of Shares. A participant will have the exclusive right to
exercise all voting rights respecting shares of Common Stock credited to his
account. IPALCO will forward all shareholder materials relating to shares of
Common Stock credited to a participant's account to the participant. A
participant may vote all shares of Common Stock, including fractional shares,
credited to his account in person or by proxy. A participant's proxy card
will include shares of Common Stock credited to his account and shares of
Common Stock registered in his name. Shares of Common Stock credited to a
participant's account will not be voted unless the participant or his proxy
votes them.
PLAN OF DISTRIBUTION
The Common Stock offered hereby is offered pursuant to the Plan which
provides for the purchase of shares of Common Stock, either from IPALCO's
authorized but unissued shares, by an Agent on the open market, or in
privately negotiated transactions. As of the date of this Prospectus, shares
of Common Stock purchased for participants under the Plan are being purchased
on the open market by an Agent, as defined herein. IPALCO may not change its
determination regarding the source of purchases of shares under the Plan more
than once in any three month period. The primary consideration in determining
the source of shares of Common Stock to be used for purchases under the Plan
is expected to be IPALCO's need to increase equity capital. The determination
whether to purchase Common Stock in the form of new issue shares or on the
open market shall be made by IPALCO's Board of Directors, at its sole
discretion, without notice to participants. Participants pay a brokerage
commission to the Agent on each purchase and sale of Common Stock on the open
market, and all other costs and expenses associated with the Plan are paid by
IPALCO.
USE OF PROCEEDS
As of the date of this Prospectus, shares of Common Stock purchased
for participants under the Plan are being purchased on the open market and
IPALCO will not receive any proceeds. The proceeds to be received by IPALCO
from the sale of new issue shares of Common Stock offered hereby, after
payment of the expenses incurred in the administration of the Plan, will be
placed in IPALCO's treasury and used to meet current expenditures and for
general corporate purposes. IPALCO has no basis for estimating either the
number of new issue shares of Common Stock, if any, that may be purchased
under the Plan or the prices at which such shares will be purchased.
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedules incorporated by reference in this Prospectus
have been audited by Deloitte & Touche LLP, independent auditors, as stated
in their reports, which are incorporated herein by reference, and have been
so incorporated in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
LEGAL OPINIONS
Certain legal matters in connection with the Common Stock offered
hereby have been passed upon for IPALCO by Bryan G. Tabler, Vice President,
Secretary and General Counsel of IPALCO, One Monument Circle, Indianapolis,
Indiana 46204. As of June 15, 1996, Mr. Tabler owned 9,332 shares of IPALCO's
Common Stock. Mr. Tabler is acquiring additional shares of IPALCO Common
Stock at regular intervals through the Indianapolis Power & Light Company
Employees' Thrift Plan and through this Plan.
TABLE OF CONTENTS Page
Questions Concerning the Plan 2
Available Information 2
Incorporation of Certain Documents by
Reference 2
IPALCO Enterprises, Inc. and
Its Subsidiaries 3
IPALCO PowerInvest 3
Purpose 3
Administration 3
Eligibility 4
Enrollment 4
Employee Enrollment 5
Dividend Reinvestment Options 5
Changing Reinvestment Options 5
Direct Deposit of Dividends 5
Optional Cash Payments 5
Electronic Stock Purchase 6
Dividends 6
Investment Dates 6
Purchase Procedures and Prices 7
Partial Withdrawal of Shares from Plan 7
Complete Withdrawal from Plan 8
Gifts or Transfer of Common Stock 8
Sale of Common Stock 8
Costs 8
Reports to Participants 9
Certificates for Shares 9
Safekeeping Services for Certificates 9
Amendment or Termination of the Plan 9
Federal Income Tax Consequences 10
Other Information 10
Plan of Distribution 11
Use of Proceeds 11
Experts 11
Legal Opinions 11
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, and, if given
or made, such information or representations must not be relied upon as
having been authorized by IPALCO Enterprises, Inc. This Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy any of the
securities offered hereby in any jurisdiction to or from any persons to whom
it is unlawful to make or solicit such offer in such jurisdiction. Neither
the delivery of this Prospectus nor any sales made hereunder shall under any
circumstances create any implication that there has been no change in the
affairs of IPALCO since the date hereof or that the information herein is
correct as of any time subsequent to its date.
IPALCO ENTERPRISES, INC.
Common Stock, No Par Value
IPALCO PowerInvest
P R O S P E C T U S
September 10, 1996
<TABLE>
IPALCO ENTERPRISES, INC. EXHIBIT 11.1
Exhibit 11.1 - Computation of Per Share Earnings
<CAPTION>
For the Quarter Ended September 30, 1996
QUARTER ENDED SEPTEMBER 30, 1996: Earnings Per Fully
Common Share Primary Diluted
------------ ---------- ----------
<S> <C> <C> <C>
Weighted Average Number of Shares
Average Common Shares Outstanding at 9/30/96 56,929,848 56,929,848 56,929,848
Dilutive Effect for Stock Options at 9/30/96 - 123,876 123,876
----------- ---------- ----------
Weighted Average Shares at 9/30/96 56,929,848 57,053,724 57,053,724
=========== ========== ==========
Net Income To Be Used To Compute Fully
Diluted Earnings Per Average Common Share (Dollars in thousands)
Net Income $37,168 $37,168 $37,168
=========== ========== ==========
Earnings Per Average Common Share $0.65 $0.65 (a) $0.65 (a)
=========== ========== ==========
For the Nine Months Ended September 30, 1996
NINE MONTHS ENDED SEPTEMBER 30, 1996: Earnings Per Fully
Common Share Primary Diluted
------------ ---------- ----------
Weighted Average Number of Shares
Average Common Shares Outstanding at 9/30/96 56,899,634 56,899,634 56,899,634
Dilutive Effect for Stock Options at 9/30/96 - 109,147 113,346
----------- ---------- ----------
Weighted Average Shares at 9/30/96 56,899,634 57,008,781 57,012,980
=========== ========== ==========
Net Income To Be Used To Compute Fully
Diluted Earnings Per Average Common Share (Dollars in thousands)
Net Income $97,175 $97,175 $97,175
=========== ========== ==========
Earnings Per Average Common Share $1.71 $1.70 (a) $1.70 (a)
=========== ========== ==========
Note:
(a) This calculation is submitted in accordance with Regulation S-K item 601(b)(11) although not required
by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%.
</TABLE>
Exhibit 21.1 List of Subsidiaries
--------------------
State in
Which
Organized
---------
Subsidiary of IPALCO Enterprises, Inc.
Indianapolis Power & Light Company (IPL) Indiana
Subsidiary of IPL
Property and Land Company, Inc. Indiana
Fort Ben Energy Management Corp. Indiana
Mid-America Capital Resources, Inc. Indiana
(Mid-America)
Subsidiaries of Mid-America
Indianaplis Campus Energy, Inc. (ICE) Indiana
Store Heat and Produce Energy, Inc. (SHAPE) Indiana
Mid-America Energy Resources, Inc.
(Energy Resources) Indiana
Subsidiaries of Energy Resources
Cleveland Thermal Energy Corporation Ohio
Cleveland District Cooling Corporation Ohio
American Energy Service Corp. Indiana
Both IPL and Mid-America are wholly owned by IPALCO
Enterprises, Inc. Each of the subsidiaries listed for
IPL, Mid-America and Energy Resources is wholly owned
except for SHAPE, which is 80% owned by Mid-America.
Both Cleveland Thermal Energy Corporation and Cleveland
District Cooling Corporation conduct business under the
name Cleveland Energy Resources.
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000728391
<NAME> IPALCO ENTERPRISES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,794,286
<OTHER-PROPERTY-AND-INVEST> 112,791
<TOTAL-CURRENT-ASSETS> 173,263
<TOTAL-DEFERRED-CHARGES> 159,377
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,239,717
<COMMON> 388,047
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 470,398
<TOTAL-COMMON-STOCKHOLDERS-EQ> 859,808
0
51,898
<LONG-TERM-DEBT-NET> 687,780
<SHORT-TERM-NOTES> 77,733
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 11,250
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 551,248
<TOT-CAPITALIZATION-AND-LIAB> 2,239,717
<GROSS-OPERATING-REVENUE> 579,739
<INCOME-TAX-EXPENSE> 57,786
<OTHER-OPERATING-EXPENSES> 389,824
<TOTAL-OPERATING-EXPENSES> 447,610
<OPERATING-INCOME-LOSS> 132,129
<OTHER-INCOME-NET> 2,103
<INCOME-BEFORE-INTEREST-EXPEN> 134,232
<TOTAL-INTEREST-EXPENSE> 37,057
<NET-INCOME> 97,175
2,386
<EARNINGS-AVAILABLE-FOR-COMM> 97,175
<COMMON-STOCK-DIVIDENDS> 62,559
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 148,832
<EPS-PRIMARY> 1.70
<EPS-DILUTED> 1.70
</TABLE>
