UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549____________FORM 10-Q____________



X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended September 30, 2005

or

____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number 1-3196

CONSOLIDATED NATURAL GAS COMPANY





|DELAWARE(State or other jurisdiction of incorporation or organization)         | 54-1966737(I.R.S. Employer Identification No.)
|------------------------------------------------------------------------------ | ----------------------------------------------
|                                                                               |                                               
|120 TREDEGAR STREET
RICHMOND, VIRGINIA(Address of principal executive offices) | 23219(Zip Code)                               
|                                                                               |                                               
|(804) 819-2000(Registrant's telephone number)                                 

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 such filing requirements for the past 90 days. Yes XNo

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Exchange Act). Yes No X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X

At September 30, 2005, the latest practicable date for determination, 100 shares of common stock, without par value, of the registrant were outstanding.

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS FILING THIS FORM 10-Q UNDER THE REDUCED DISCLOSURE FORMAT.

PAGE 2

CONSOLIDATED NATURAL GAS COMPANY
INDEX

|                              |                                                                                             | Page  Number
|----------------------------- | ------------------------------------------------------------------------------------------- | ------------
|PART I. Financial Information
|Item 1.                       | Consolidated Financial Statements                                                           |             
|                              | Consolidated Statements of Income - Three and Nine Months Ended September 30, 2005 and 2004 | 3           
|                              | Consolidated Balance Sheets - September 30, 2005 and December 31, 2004                      | 4           
|                              | Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2005 and 2004       | 6           
|                              | Notes to Consolidated Financial Statements                                                  | 7           
|Item 2.                       | Management's Discussion and Analysis of Results of Operations                               | 21          
|Item 4.                       | Controls and Procedures                                                                     | 36          
|                              | PART II. Other Information                                                                  |             
|Item 1.                       | Legal Proceedings                                                                           | 37          
|Item 6.                       | Exhibits                                                                                    | 37          

PAGE 3

CONSOLIDATED NATURAL GAS COMPANY

PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

|                                                                                   | Three Months EndedSeptember 30, | Nine Months EndedSeptember 30,
|---------------------------------------------------------------------------------- | ------------------------------- | ------------------------------
|                                                                                   | 2005                            | 2004                          
|                                                                                   | (millions)                     
|                                                                                   |                                 |                               
|Operating Revenue                                                                  |                                 |                               
|External customers                                                                 | $1,153                          | $1,031                        
|Affiliated customers                                                               | 324                             | 217                           
|Total operating revenue                                                            | 1,477                           | 1,248                         
|                                                                                   |                                 |                               
|Operating Expenses                                                                 |                                 |                               
|Purchased gas, net                                                                 |                                 |                               
|External suppliers                                                                 | 477                             | 280                           
|Affiliated suppliers                                                               | 124                             | 107                           
|Electric fuel and energy purchases                                                 |                                 |                               
|External suppliers                                                                 | 48                              | 46                            
|Affiliated suppliers                                                               | 67                              | 55                            
|Liquids, pipeline capacity and other purchases                                     | 127                             | 98                            
|Other operations and maintenance                                                   |                                 |                               
|External                                                                           | 774                             | 219                           
|Affiliated                                                                         | 41                              | 43                            
|Depreciation, depletion and amortization                                           | 163                             | 156                           
|Other taxes                                                                        | 60                              | 55                            
|Total operating expenses                                                           | 1,881                           | 1,059                         
|                                                                                   |                                 |                               
|Income (loss) from operations                                                      | (404)                           | 189                           
|                                                                                   |                                 |                               
|Other income                                                                       | 8                               | 3                             
|Interest and related charges:                                                      |                                 |                               
|Interest expense                                                                   | 58                              | 38                            
|Interest expense - junior subordinated notes payable to           affiliated trust | 4                               | 4                             
|Total interest and related charges                                                 | 62                              | 42                            
|                                                                                   |                                 |                               
|Income (loss) before income taxes                                                  | (458)                           | 150                           
|Income tax expense (benefit)                                                       | (160)                           | 50                            
|                                                                                   |                                 |                               
|Net Income (Loss)                                                                  | $  (298)                        | $  100                        

________________
The accompanying notes are an integral part of the Consolidated Financial Statements.

PAGE 4

CONSOLIDATED NATURAL GAS COMPANYCONSOLIDATED BALANCE SHEETS
(Unaudited)

|                                                                               | September 30,2005 | December 31, 2004(1)
|------------------------------------------------------------------------------ | ----------------- | --------------------
|                                                                               | (millions)       
|ASSETS                                                                         |                   |                     
|                                                                               |                   |                     
|Current Assets                                                                 |                   |                     
|Cash and cash equivalents                                                      | $      30         | $      19           
|Customer accounts receivable (net of allowance of $22 in 2005 and $28 in 2004) | 818               | 1,044               
|Other accounts receivable                                                      | 46                | 61                  
|Receivables due from affiliates                                                | 157               | 125                 
|Inventories                                                                    | 379               | 222                 
|Derivative assets                                                              | 2,573             | 504                 
|Deferred income taxes                                                          | 617               | 280                 
|Other                                                                          | 480               | 374                 
|Total current assets                                                           | 5,100             | 2,629               
|                                                                               |                   |                     
|Investments                                                                    | 306               | 291                 
|                                                                               |                   |                     
|Property, Plant and Equipment                                                  |                   |                     
|Property, plant and equipment                                                  | 18,644            | 17,220              
|Accumulated depreciation, depletion and amortization                           | (6,609)           | (6,170)             
|Total property, plant and equipment, net                                       | 12,035            | 11,050              
|                                                                               |                   |                     
|Deferred Charges and Other Assets                                              |                   |                     
|Goodwill, net                                                                  | 623               | 623                 
|Regulatory assets                                                              | 395               | 369                 
|Prepaid pension cost                                                           | 1,060             | 984                 
|Derivative assets                                                              | 1,720             | 541                 
|Other                                                                          | 262               | 235                 
|Total deferred charges and other assets                                        | 4,060             | 2,752               
|                                                                               |                   |                     
|Total assets                                                                   | $21,501           | $16,722             

________________(1)The Consolidated Balance Sheet at December 31, 2004 has been derived from the audited Consolidated 
     Financial Statements at that date.

The accompanying notes are an integral part of the Consolidated Financial Statements.

PAGE 5

CONSOLIDATED NATURAL GAS COMPANY
CONSOLIDATED BALANCE SHEETS-(Continued)

(Unaudited)

|                                                           | September 30,2005 | December 31, 2004(1)
|---------------------------------------------------------- | ----------------- | --------------------
|                                                           | (millions)       
|LIABILITIES AND SHAREHOLDER'S EQUITY                       |                  
|                                                           |                   |                     
|Current Liabilities                                        |                   |                     
|Securities due within one year                             | $     -           | $     150           
|Short-term debt                                            | 190               | -                   
|Accounts payable, trade                                    | 1,052             | 949                 
|Payables to affiliates                                     | 118               | 111                 
|Affiliated current borrowings                              | 884               | 1,195               
|Accrued interest, payroll and taxes                        | 250               | 229                 
|Derivative liabilities                                     | 4,896             | 1,237               
|Other                                                      | 515               | 341                 
|Total current liabilities                                  | 7,905             | 4,212               
|                                                           |                   |                     
|Long-Term Debt                                             |                   |                     
|Long-term debt                                             | 3,444             | 3,454               
|Junior subordinated notes payable to affiliated trust      | 206               | 206                 
|Total long-term debt                                       | 3,650             | 3,660               
|                                                           |                   |                     
|                                                           |                   |                     
|Deferred Credits and Other Liabilities                     |                   |                     
|Deferred income taxes and investment tax credits           | 1,963             | 2,321               
|Asset retirement obligations                               | 250               | 251                 
|Derivative liabilities                                     | 3,404             | 1,234               
|Regulatory liabilities                                     | 241               | 223                 
|Other                                                      | 294               | 341                 
|Total deferred credits and other liabilities               | 6,152             | 4,370               
|                                                           |                   |                     
|Total liabilities                                          | 17,707            | 12,242              
|                                                           |                   |                     
|Commitments and Contingencies(see Note 11)                 |                   |                     
|                                                           |                   |                     
|Common Shareholder's Equity                                |                   |                     
|Common stock-no par, 100 shares authorized and outstanding | 1,816             | 1,816               
|Other paid-in capital                                      | 3,273             | 2,520               
|Retained earnings                                          | 817               | 993                 
|Accumulated other comprehensive loss                       | (2,112)           | (849)               
|Total common shareholder's equity                          | 3,794             | 4,480               
|                                                           |                   |                     
|Total liabilities and shareholder's equity                 | $21,501           | $16,722             

________________

(1)

PAGE 6

CONSOLIDATED NATURAL GAS COMPANYCONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                                           | Nine Months EndedSeptember 30,
|-------------------------------------------------------------------------- | ------------------------------
|                                                                           | 2005                          
|                                                                           | (millions)                    
|                                                                           |                               
|Operating Activities                                                       |                               
|Net income                                                                 | $  240                        
|Adjustments to reconcile net income to net cash from operating activities: |                               
|Depreciation, depletion and amortization                                   | 498                           
|Deferred income taxes and investment tax credits, net                      | 34                            
|Net unrealized (gain) loss on energy-related derivatives                   | 650                           
|Valuation adjustment on CNG International assets                           | -                             
|Changes in:                                                                |                               
|Accounts receivable                                                        | 244                           
|Affiliated receivables and payables                                        | (25)                          
|Inventories                                                                | (157)                         
|Margin deposit assets and liabilities                                      | 164                           
|Accounts payable, trade                                                    | 81                            
|Accrued interest, payroll and taxes                                        | 23                            
|Prepaid pension costs                                                      | (76)                          
|Deferred revenue                                                           | (178)                         
|Other operating assets and liabilities                                     | (198)                         
|Net cash provided by operating activities                                  | 1,300                         
|                                                                           |                               
|Investing Activities                                                       |                               
|Additions to gas and oil properties, including acquisitions                | (1,114)                       
|Proceeds from sales of gas and oil properties                              | 86                            
|Plant construction and other property additions                            | (260)                         
|Acquisition of business                                                    | (43)                          
|Other                                                                      | (25)                          
|Net cash used in investing activities                                      | (1,356)                       
|                                                                           |                               
|Financing Activities                                                       |                               
|Issuance (repayment) of short-term debt, net                               | 190                           
|Issuance (repayment) of affiliated current borrowings, net                 | 439                           
|Repayment of long-term debt                                                | (150)                         
|Common stock dividend payments                                             | (416)                         
|Other                                                                      | 4                             
|Net cash provided by (used in) financing activities                        | 67                            
|                                                                           |                               
|Increase (decrease) in cash and cash equivalents                           | 11                            
|Cash and cash equivalents at beginning of period                           | 19                            
|Cash and cash equivalents at end of period                                 | $   30                        
|                                                                           |                               
|Supplemental Cash Flow Information                                         |                               
|Noncash transaction from financing activities:                             |                               
|Conversion of short-term borrowings to contributed capital                 | $750                          

The accompanying notes are an integral part of the Consolidated Financial Statements.







PAGE 7

CONSOLIDATED NATURAL GAS COMPANYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Nature of OperationsConsolidated Natural Gas Company (the Company), a public utility holding company registered under the Public Utility Holding Company Act of 1935 (1935 Act), is a wholly-owned subsidiary of Dominion Resources, Inc. (Dominion). In August 2005, the President of the United States signed the Energy Policy Act of 2005, which provides for the repeal of the 1935 Act in February 2006.

The Company, through its subsidiaries, operates in all phases of the natural gas business, explores for and produces gas and oil and provides a variety of energy marketing services. Its regulated gas distribution subsidiaries serve approximately 1.7 million residential, commercial and industrial gas sales and transportation customer accounts in Ohio, Pennsylvania and West Virginia and its nonregulated retail energy marketing businesses serve 1.2 million residential and commercial gas and electric customer accounts in the Northeast, Mid-Atlantic and Midwest. The Company operates an interstate gas transmission pipeline and underground natural gas storage system in the Northeast, Midwest, and the Mid-Atlantic states and a liquefied natural gas (LNG) import and storage facility in Maryland. The Company's producer services operation involves the aggregation of natural gas supply and related wholesale activities. The Company's exploration and production operations are located in several major gas and oil producing basins in the United States, both onshore and offshore.

The Company manages its daily operations through three primary operating segments: Delivery, Energy and Exploration & Production. In addition, the Company reports its corporate functions as a segment. Assets remain wholly-owned by the Company's legal subsidiaries.

The "Company" is used throughout this report and, depending on the context of its use, may represent any of the following: the legal entity, Consolidated Natural Gas Company, one of Consolidated Natural Gas Company's consolidated subsidiaries or the entirety of Consolidated Natural Gas Company and its consolidated subsidiaries.

Note 2.  Significant Accounting PoliciesAs permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the accompanying unaudited Consolidated Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2004 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2005 and June 30, 2005.

In the opinion of the Company's management, the accompanying unaudited Consolidated Financial Statements contain all adjustments, including normal recurring accruals necessary to present fairly the Company's financial position as of September 30, 2005, its results of operations for the three and nine months ended September 30, 2005 and 2004, and its cash flows for the nine months ended September 30, 2005 and 2004.

The Company makes certain estimates and assumptions in preparing its Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses for the periods presented. Actual results may differ from those estimates.

The accompanying unaudited Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of the Company and all majority-owned subsidiaries and those variable interest entities (VIEs) where the Company has been determined to be the primary beneficiary.

The Company reports certain contracts and instruments at fair value in accordance with GAAP. Market pricing and indicative price information from external sources are used to measure fair value when available. In the absence of this information, the Company estimates fair value based on near-term and historical price information and statistical methods. For individual contracts, the use of differing assumptions could have a material effect on the contract's estimated fair value. See Note 2 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2004 for a more detailed discussion of the Company's estimation techniques.

PAGE 8

CONSOLIDATED NATURAL GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

The results of operations for the interim periods are not necessarily indicative of the results expected for the full year. Information for quarterly periods is affected by seasonal variations in sales, rate changes, timing of purchased gas expense recovery and other factors.

Certain amounts in the 2004 Consolidated Financial Statements have been reclassified to conform to the 2005 presentation. These reclassifications had no effect on net income.

Note 3.     Recently Issued Accounting StandardsFIN 47In March 2005, the Financial Accounting Standards Board (FASB) issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (FIN 47), which clarifies that an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation when the obligation is incurred - generally upon acquisition, construction, or development and/or through the normal operation of the asset, if the fair value of the liability can be reasonably estimated. A conditional asset retirement obligation is a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. Uncertainty about the timing and/or method of settlement is required to be factored into the measurement of the liability when sufficient information exists. The Company will adopt FIN 47 on December 31, 2005 and is currently evaluating its impact, which could be material to the Company's results of operations and financial condition.

SFAS No. 154In May 2005, the FASB issued Statement of Financial Accounting Standard (SFAS) No. 154, Accounting Changes and Error Corrections. SFAS No. 154 applies to all voluntary changes in accounting principle and requires retrospective application to prior periods' financial statements of a voluntary change in accounting principle unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. The Company will apply the provisions of SFAS No. 154 beginning January 1, 2006.

EITF 04-5In June 2005, the FASB ratified the consensus reached by the Emerging Issues Task Force (EITF) on Issue No. 04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights.EITF 04-5 provides guidance in assessing when a general partner should consolidate its investment in a limited partnership or similar entity. The provisions of EITF 04-5 were required to be applied beginning June 30, 2005 by general partners of all newly formed limited partnerships and for existing limited partnerships for which the partnership agreements are modified and is effective for general partners in all other limited partnerships beginning January 1, 2006. The Company is currently evaluating existing relationships to determine the impact that EITF 04-5 may have on its results of operations and financial condition.

PAGE 9

CONSOLIDATED NATURAL GAS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

EITF 04-13The Company enters into buy/sell and related agreements as a means to reposition its offshore Gulf of Mexico crude oil production to more liquid marketing locations onshore. The Company typically enters into either a single or a series of buy/sell transactions in which it sells its crude oil production at the offshore field delivery point and buys similar quantities at Cushing, Oklahoma for sale to third parties. The Company is able to enhance profitability by selling to a wide array of refiners and/or trading companies at Cushing, one of the largest crude oil markets in the world, versus restricting sales to a limited number of refinery purchasers in the Gulf of Mexico.

Under the primary guidance of EITF Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent,the Company presents the sales and purchases related to its crude oil buy/sell arrangements on a gross basis in its Consolidated Statements of Income. These transactions require physical delivery of the crude oil and the risks and rewards of ownership are evidenced by title transfer, assumption of environmental risk, transportation scheduling and counterparty nonperformance risk. Amounts currently shown on a gross basis in the Company's Consolidated Statements of Income are summarized below.

|                                                    | Three MonthsEnded September 30, | Nine MonthsEnded September30,
|--------------------------------------------------- | ------------------------------- | -----------------------------
|                                                    | 2005                            | 2004                         
|                                                    | (millions)                     
|Sale activity included in operating revenue         | $126                            | $105                         
|                                                    |                                 |                              
|Purchase activity included in operating expenses(1) | 121                             | 98                           

_________________________

In September 2005, the FASB ratified the EITF's consensus on Issue No. 04-13, Accounting for Purchases and Sales of Inventory with the Same Counterparty, that will require buy/sell and related agreements to be presented on a net basis in the Consolidated Statements of Income if they are entered into in contemplation of one another. This new guidance is required to be applied to all new arrangements entered into, and modifications or renewals of existing arrangements, for reporting periods beginning after March 16, 2006. The Company is currently assessing the impact that this new guidance may have on its income statement presentation of these transactions; however, there will be no impact on the Company's results of operations or cash flows.

Note 4.  AcquisitionIn July 2005, the Company completed the acquisition of Craton Energy Corp. (Craton) for approximately $45 million in cash. Craton's operations are focused on oil and gas property acquisition and development in the eastern Texas region. The operations of Craton are included in the Exploration & Production operating segment.

Note 5.  Operating RevenueThe Company's operating revenue consists of the following:

|                               | Three Months Ended September 30, | Nine Months Ended September 30,
|------------------------------ | -------------------------------- | -------------------------------
|                               | 2005                             | 2004                           
|                               | (millions)                      
|Operating Revenue              |                                  |                                
|Regulated gas sales            | $122                             | $110                           
|Nonregulated electric sales    | 123                              | 115                            
|Nonregulated gas sales         |                                  |                                
|External customers             | 256                              | 146                            
|Affiliated customers           | 293                              | 206                            
|Gas transportation and storage | 184                              | 155                            
|Gas and oil production         | 296                              | 350                            
|Other                          | 203                              | 166                            
|Total operating revenue        | $1,477                           | $1,248                         



PAGE 10

CONSOLIDATED NATURAL GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Note 6.  Comprehensive IncomeThe following table presents total comprehensive income (loss):

|                                                                                                                                                                                                 | Three Months Ended September 30, | Nine Months Ended September 30,
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------- | -------------------------------
|                                                                                                                                                                                                 | 2005                             | 2004                           
|                                                                                                                                                                                                 | (millions)                      
|                                                                                                                                                                                                 |                                  |                                
|Net income (loss)                                                                                                                                                                                | $(298)                           | $100                           
|Other comprehensive loss:                                                                                                                                                                        |                                  |                                
|Net other comprehensive loss associated with effective portion of the changes in fair value of derivatives designated as cash flows hedges, net of taxes and amounts reclassified to earnings(1) | (588)                            | (230)                          
|Other(2)                                                                                                                                                                                         | -                                | (1)                            
|Other comprehensive loss                                                                                                                                                                         | (588)                            | (231)                          
|Total comprehensive income (loss)                                                                                                                                                                | $(886)                           | $  (131)                       

________________

Note 7.  Hedge Accounting ActivitiesThe Company is exposed to the impact of market fluctuations in the price of natural gas and oil and to the interest rate risks of its business operations. The Company uses derivative instruments to mitigate its exposure to these risks and designates certain derivative instruments as fair value or cash flow hedges for accounting purposes as allowed by SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. Selected information about the Company's hedge accounting activities follows:

|                                                                                                                        | Three Months Ended September 30, | Nine Months Ended September 30,
|----------------------------------------------------------------------------------------------------------------------- | -------------------------------- | -------------------------------
|                                                                                                                        | (millions)                      
|                                                                                                                        | 2005                             | 2004                           
|Portion of gains (losses) on hedging instruments determined to be ineffective and included in net income:               |                                  |                                
|Fair value hedges                                                                                                       | $ 3                              | $ (1)                          
|Cash flow hedges(1)                                                                                                     | (29)                             | (1)                            
|Net ineffectiveness                                                                                                     | $ (26)                           | $ (2)                          
|                                                                                                                        |                                  |                                
|Portion of gains (losses) on hedging instruments excluded from measurement of effectiveness and included in net income: |                                  |                                
|Fair value hedges(2)                                                                                                    | $ (1)                            | $  -                           
|Cash flow hedges(2)                                                                                                     | 1                                | 30                             
|Total                                                                                                                   | $  -                             | $  30                          

(1)

PAGE 11

CONSOLIDATED NATURAL GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

The following table presents selected information related to cash flow hedges included in accumulated other comprehensive income (loss) (AOCI) in the Consolidated Balance Sheet at September 30, 2005:

|              | AOCIAfter-Tax | Portion Expected to be
Reclassified
to Earnings
during the
Next 12 MonthsAfter-Tax | Maximum Term
|------------- | ------------- | ---------------------------------------------------------------------------------- | ------------
|              | (millions)    |                                                                                   
|Commodities:  |               |                                                                                    |             
|Gas           | $   (1,503)   | $ (802)                                                                            | 60 months   
|Oil           | (609)         | (277)                                                                              | 39 months   
|Interest Rate | (1)           | -                                                                                  | 110 months  
|Total         | $(2,113)      | $(1,079)                                                                           |             

The amounts that will be reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., anticipated sales) in earnings, thereby achieving the realization of prices contemplated by the underlying risk management strategies and will vary from the anticipated amounts presented above as a result of changes in market prices and interest rates.

As a result of a delay in reaching anticipated production levels in the Gulf of Mexico, the Company discontinued hedge accounting for certain cash flow hedges in March 2005 since it became probable that the forecasted sales of oil would not occur. In connection with the discontinuance of hedge accounting for these contracts, the Company reclassified $30 million ($19 million after-tax) of losses from AOCI to earnings in March 2005. Through September 30, 2005, the Company has recognized additional losses of $29 million ($19 million after-tax) due to subsequent changes in the fair value of these contracts.

Additionally, due to interruptions in Gulf of Mexico and South Louisiana gas and oil production caused by Hurricanes Katrina and Rita, the Company discontinued hedge accounting for certain cash flow hedges in August and September 2005 since it became probable that the forecasted sales of gas and oil would not occur. The discontinuance of hedge accounting for these contracts resulted in the following losses:

- $37 million ($24 million after-tax) reclassified from AOCI to earnings for contracts that settled in the three months ended September 30, 2005 for which delivery did not occur;
- $386 million ($248 million after-tax) reclassified from AOCI to earnings for contracts that will settle in future periods; and
- $133 million ($85 million after-tax) due to subsequent changes in the fair value of these contracts.

Losses related to the discontinuance of hedge accounting were reported in other operations and maintenance expense in the Consolidated Statements of Income.

While the Company's facilities were not significantly damaged by the hurricanes, certain production capability remains off-line primarily due to damage to downstream infrastructure owned by third parties. At this time, the Company is not able to predict with certainty when off-line production will resume. If, in the future, it becomes probable that additional forecasted sales of gas and oil will not occur, it may be necessary to discontinue hedge accounting for cash flow hedges related to those forecasted sales.

PAGE 12

CONSOLIDATED NATURAL GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Note 8.  Ceiling Test The Company follows the full cost method of accounting for gas and oil exploration and production activities as prescribed by the SEC. Under the full cost method, capitalized costs are subject to a quarterly ceiling test. Under the ceiling test, amounts capitalized are limited to the present value of estimated future net revenues to be derived from the anticipated production of proved gas and oil reserves, assuming period-end hedge-adjusted prices. Approximately 12% of the Company's anticipated production is hedged by qualifying cash flow hedges, for which hedge-adjusted prices were used to calculate estimated future net revenue. Whether period-end market prices or hedge-adjusted prices were used for the portion of production that is hedged, there was no ceiling test impairment as of September 30, 2005.

Note 9.  Variable Interest EntitiesIn accordance with FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, (FIN 46R), the Company consolidates a variable interest lessor entity through which the Company has financed and leased a power generation project. The Consolidated Balance Sheets as of September 30, 2005 and December 31, 2004 reflect net property, plant and equipment of $209 million and $214 million, respectively, and $234 million of debt related to this entity. The debt is nonrecourse to the Company and is secured by the entity's property, plant and equipment.

Note 10.  Significant Financing TransactionsJoint Credit FacilitiesIn May 2005, Dominion, Virginia Electric and Power Company (Virginia Power), a wholly-owned subsidiary of Dominion, and the Company entered into a $2.5 billion, five-year joint revolving credit facility that replaced their $1.5 billion three-year facility dated May 2004 and their $750 million three-year facility dated May 2002. This credit facility is being used for working capital, as support for the combined commercial paper programs of Dominion, Virginia Power and the Company and other general corporate purposes. This credit facility can also be used to support up to $1.25 billion of letters of credit. At September 30, 2005, total outstanding commercial paper supported by the joint credit facility was $1.1 billion, $190 million of which were the Company's borrowings. At September 30, 2005, total outstanding letters of credit supported by the joint credit facility were $1.2 billion, none of which were issued on behalf of the Company. At September 30, 2005, capacity available under this credit facility was $158 million.

Other Credit Facilities The Company utilizes cash and letters of credit to fund collateral requirements under its commodities hedging program. Collateral requirements are impacted by commodity prices, hedging levels and the credit quality of the Company and its counterparties. Collateral requirements have increased significantly in 2005 as a result of escalating commodity prices. At September 30, 2005, the Company had the following letter of credit facilities:

|Facility Limit | Outstanding Letters ofCredit | Facility Capacity Remaining | Date of Facility | Facility Maturity Date
|-------------- | ---------------------------- | --------------------------- | ---------------- | ----------------------
|(millions)     |                              |                            
|$1,750(1)      | $1,547                       | $ 203                       | August 2005      | August 2010           
|100            | 100                          | -                           | June 2004        | June 2007             
|100            | 100                          | -                           | August 2004      | August 2009           
|290(2)         | 290                          | -                           | October 2004     | October 2005          
|550(2)         | 550                          | -                           | October 2004     | April 2006            
|1,900          | 1,242                        | 658                         | August 2005      | February 2006         
|$4,690         | $3,829                       | $ 861                       |                  |                       

(1)

PAGE 13

CONSOLIDATED NATURAL GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)



Long-Term DebtIn April 2005, the Company repaid $150 million of its 7.375% debentures.

Shelf RegistrationAt September 30, 2005, the Company had $900 million of available capacity under a shelf registration with the SEC that would permit the Company to issue debt and trust preferred securities to meet future capital requirements.

Note 11.  Commitments and Contingencies Other than the matters discussed below, there have been no significant developments regarding commitments and contingencies disclosed in Note 19 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2004, Note 11 to the Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, or Note 10 to the Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 nor have any significant new matters arisen during the three months ended September 30, 2005.

Lease CommitmentIn September 2005, the Company and two other gas and oil exploration and production companies signed a four-year drilling contract related to a new ultra-deepwater drilling rig, to be named Ensco 8500, that is expected to be delivered in mid-2008. The contract has a four-year primary term, plus four one-year extension options. The Company's minimum commitment under the agreement is for approximately $96 million over the four-year term.

Guarantees, Letters of Credit and Surety BondsAs of September 30, 2005, the Company had issued $2.1 billion of guarantees, including: $1.7 billion to support commodity transactions of subsidiaries; $200 million for subsidiary debt and $151 million for guarantees supporting other agreements of subsidiaries. The Company had also purchased $44 million of surety bonds and authorized the issuance of standby letters of credit by financial institutions of $3.8 billion. The Company enters into these arrangements to facilitate commercial transactions by its subsidiaries with third parties. While the majority of these guarantees do not have a termination date, the Company may choose at any time to limit the applicability of such guarantees to future transactions.

Note 12.  Credit Risk As a result of its large and diverse customer base, the Company is not exposed to a significant concentration of credit risk for receivables arising from gas utility operations and retail energy sales. The Company's exposure to credit risk is concentrated primarily within its sales of gas and oil production and energy marketing, including its hedging activities, as the Company transacts with a smaller, less diverse group of counterparties and transactions may involve large notional volumes and potentially volatile commodity prices. At September 30, 2005, gross credit exposure related to these transactions totaled $874 million, reflecting the unrealized gains for contracts carried at fair value plus any outstanding receivables (net of payables, where netting agreements exist), prior to the application of collateral. After the

PAGE 14

CONSOLIDATED NATURAL GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

application of collateral, the Company's credit exposure is reduced to $719 million. Of this amount, investment grade counterparties represent 53% and no single counterparty exceeded 6%.

As of September 30, 2005 and December 31, 2004, the Company had margin deposit assets (reported in other current assets) of $74 million and $88 million, respectively. The Company had margin deposit liabilities (reported in other current liabilities) of $150 million as of September 30, 2005. The Company had no margin deposit liabilities at December 31, 2004.

Note 13.    Related Party TransactionsThe Company engages in related party transactions primarily with Dominion subsidiaries (affiliates). The Company's accounts receivable and payable balances with affiliates are settled based on contractual terms or on a monthly basis, depending on the nature of the underlying transactions. The Company is included in Dominion's consolidated federal income tax return and participates in certain Dominion benefit plans. The significant related party transactions are disclosed below.

Transactions with AffiliatesThe Company transacts with affiliates for certain quantities of natural gas and other commodities at market prices in the ordinary course of business. The Company also enters into certain derivative commodity contracts with affiliates. These contracts, which are principally comprised of commodity swaps and options, are used by the Company to manage commodity price risks associated with the purchases and sales of natural gas. The Company designates the majority of these contracts as cash flow hedges for accounting purposes.

Presented below are affiliated transactions recorded in operating revenue and operating expenses:

|                                                               | Three Months Ended September 30, | Nine Months Ended September 30,
|-------------------------------------------------------------- | -------------------------------- | -------------------------------
|                                                               | 2005                             | 2004                           
|                                                               | (millions)                      
|Purchases of natural gas from affiliates                       | $124                             | $107                           
|Purchases of electric fuel and energy from affiliates          | 67                               | 55                             
|Sales of natural gas to affiliates                             | 293                              | 206                            
|Sales of gas transportation and storage services to affiliates | 15                               | 4                              
|Sales of electricity to affiliates                             | 16                               | 6                              

The commodity transactions reported above include net realized gains and (losses) on affiliated commodity transactions of $31 million and $4 million in the third quarters of 2005 and 2004, respectively, and $18 million and $14 million in the first nine months of 2005 and 2004, respectively. At September 30, 2005 and December 31, 2004, the Company's Consolidated Balance Sheets include derivative assets of $712 million and $249 million, respectively, and derivative liabilities of $291 million and $49 million, respectively, with affiliates. Unrealized gains or losses, representing the effective portion of the changes in fair value of those derivative contracts that are designated as hedges, are included in AOCI on the Consolidated Balance Sheets.

Dominion Resources Services, Inc. provides certain administrative and technical services to the Company, which totaled $45 million and $44 million in the third quarters of 2005 and 2004, respectively, and $136 million and $127 million for the nine months ended September 30, 2005 and 2004, respectively. The Company provides certain services to affiliates, including technical services, which totaled $2 million in both the third quarters of 2005 and 2004, and $8 million and $5 million for the nine months ended September 30, 2005 and 2004, respectively.

PAGE 15

CONSOLIDATED NATURAL GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Transactions with Dominion The Company and its subsidiaries have borrowed funds from Dominion under short-term borrowing arrangements. The short-term demand note borrowings were $163 million at December 31, 2004. In February 2005, borrowings by certain Company subsidiaries from Dominion under short-term demand notes were converted to borrowings from the Dominion money pool. In September 2005, $750 million of the outstanding Dominion money pool borrowings were converted to contributed capital. At September 30, 2005 and December 31, 2004, the Company's subsidiaries had $1.0 billion of outstanding borrowings for each period under the Dominion money pool. Interest charges incurred by the Company related to these borrowings were $19 million and $3 million in the third quarters of 2005 and 2004, respectively, and $39 million and $8 million for the nine months ended September 30, 2005 and 2004, respectively.

Note 14.  Employee Benefit Plans The following table illustrates the components of the provision for net periodic benefit cost for the Company's pension and other postretirement benefit plans for employees represented by collective bargaining units:

|                                                | PensionBenefits | Other 
PostretirementBenefits
|----------------------------------------------- | --------------- | -----------------------------
|                                                | 2005            | 2004                         
|Three Months Ended September 30,                | (millions)     
|Service cost                                    | $ 3             | $ 3                          
|Interest cost                                   | 8               | 8                            
|Expected return on plan assets                  | (26)            | (25)                         
|Amortization of prior service cost              | -               | 1                            
|Amortization of transition obligation (asset)   | -               | (1)                          
|Amortization of net (gain) loss                 | -               | (1)                          
|Net periodic benefit cost (credit)              | $(15)           | $(15)                        
|                                                |                 |                              
|Company's net periodic benefit cost (credit)(1) | $(25)           | $(28)                        
|                                                |                 |                              
|Nine Months Ended September 30,                 |                 |                              
|Service cost                                    | $ 9             | $  8                         
|Interest cost                                   | 23              | 23                           
|Expected return on plan assets                  | (77)            | (75)                         
|Amortization of prior service cost              | 1               | 1                            
|Amortization of transition obligation (asset)   | -               | (2)                          
|Amortization of net (gain) loss                 | -               | (1)                          
|Net periodic benefit cost (credit)              | $(44)           | $(46)                        
|                                                |                 |                              
|Company's net periodic benefit cost (credit)(1) | $(76)           | $(84)                        
|                                                |                 |                              

(1)

Employer Contributions

PAGE 16

CONSOLIDATED NATURAL GAS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15.  Condensed Consolidating Financial Information The Company has fully and unconditionally guaranteed $200 million of senior notes issued by its wholly-owned subsidiary, Dominion Oklahoma Texas Exploration and Production, Inc. (DOTEPI). In the event of a default by this subsidiary, the Company would be obligated to repay such amounts. Condensed consolidating financial information for the Company, DOTEPI and the Company's other subsidiaries are presented below:

Condensed Consolidating Statement of Income Information

|Three Months Ended September 30, 2005 | CNG (Parent Company) | DOTEPI | Other Subsidiaries | Adjustments & Eliminations | Consolidated
|------------------------------------- | -------------------- | ------ | ------------------ | -------------------------- | ------------
|                                      | (millions)          
|                                      |                      |        |                    |                            |             
|Operating revenue                     | $  -                 | $198   | $1,421             | $(142)                     | $1,477      
|Operating expense                     | 1                    | 119    | 1,898              | (137)                      | 1,881       
|Income (loss) from operations         | (1)                  | 79     | (477)              | (5)                        | (404)       
|Other income                          | 55                   | -      | 8                  | (55)                       | 8           
|Interest and related charges          | 51                   | 16     | 48                 | (53)                       | 62          
|Income (loss) before income taxes     | 3                    | 63     | (517)              | (7)                        | (458)       
|Income tax expense (benefit)          | -                    | 31     | (188)              | (3)                        | (160)       
|Equity in earnings of subsidiaries    | (301)                | -      | -                  | 301                        | -           
|Net income (loss)                     | $(298)               | $  32  | $(329)             | $297                       | $  (298)    



|Nine Months Ended September 30, 2005 | CNG (Parent Company) | DOTEPI | Other Subsidiaries | Adjustments & Eliminations | Consolidated
|------------------------------------ | -------------------- | ------ | ------------------ | -------------------------- | ------------
|                                     | (millions)          
|                                     |                      |        |                    |                            |             
|Operating revenue                    | $  -                 | $551   | $5,263             | $(395)                     | $5,419      
|Operating expense                    | 2                    | 313    | 4,953              | (382)                      | 4,886       
|Income (loss) from operations        | (2)                  | 238    | 310                | (13)                       | 533         
|Other income                         | 154                  | -      | 22                 | (156)                      | 20          
|Interest and related charges         | 151                  | 47     | 123                | (154)                      | 167         
|Income before income taxes           | 1                    | 191    | 209                | (15)                       | 386         
|Income tax expense (benefit)         | (2)                  | 74     | 80                 | (6)                        | 146         
|Equity in earnings of subsidiaries   | 237                  | -      | -                  | (237)                      | -           
|Net income                           | $240                 | $  117 | $  129             | $(246)                     | $  240      



PAGE 17

CONSOLIDATED NATURAL GAS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

|Three Months Ended September 30, 2004 | CNG (Parent Company) | DOTEPI | Other Subsidiaries | Adjustments & Eliminations | Consolidated
|------------------------------------- | -------------------- | ------ | ------------------ | -------------------------- | ------------
|                                      | (millions)          
|                                      |                      |        |                    |                            |             
|Operating revenue                     | $  -                 | $174   | $1,174             | $(100)                     | $1,248      
|Operating expense                     | -                    | 95     | 1,063              | (99)                       | 1,059       
|Income from operations                | -                    | 79     | 111                | (1)                        | 189         
|Other income                          | 48                   | -      | 5                  | (50)                       | 3           
|Interest and related charges          | 50                   | 10     | 31                 | (49)                       | 42          
|Income (loss) before income taxes     | (2)                  | 69     | 85                 | (2)                        | 150         
|Income tax expense (benefit)          | (1)                  | 24     | 29                 | (2)                        | 50          
|Equity in earnings of subsidiaries    | 101                  | -      | -                  | (101)                      | -           
|Net income                            | $100                 | $  45  | $  56              | $(101)                     | $  100      



|Nine Months Ended September 30, 2004 | CNG (Parent Company) | DOTEPI | Other Subsidiaries | Adjustments & Eliminations | Consolidated
|------------------------------------ | -------------------- | ------ | ------------------ | -------------------------- | ------------
|                                     | (millions)          
|                                     |                      |        |                    |                            |             
|Operating revenue                    | $     -              | $465   | $4,524             | $(362)                     | $4,627      
|Operating expense                    | 1                    | 246    | 3,731              | (361)                      | 3,617       
|Income (loss) from operations        | (1)                  | 219    | 793                | (1)                        | 1,010       
|Other income                         | 140                  | -      | 42                 | (139)                      | 43          
|Interest and related charges         | 148                  | 30     | 86                 | (139)                      | 125         
|Income (loss) before income taxes    | (9)                  | 189    | 749                | (1)                        | 928         
|Income tax expense (benefit)         | (4)                  | 54     | 286                | (1)                        | 335         
|Equity in earnings of subsidiaries   | 598                  | -      | -                  | (598)                      | -           
|Net income                           | $593                 | $ 135  | $  463             | $(598)                     | $  593      

PAGE 18

CONSOLIDATED NATURAL GAS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Condensed Consolidating Balance Sheet Information

|At September 30, 2005                                 | CNG (Parent Company) | DOTEPI  | Other Subsidiaries | Adjustments & Eliminations | Consolidated
|----------------------------------------------------- | -------------------- | ------- | ------------------ | -------------------------- | ------------
|                                                      | (millions)          
|Assets                                                |                      |         |                    |                            |             
|Current assets                                        | $2,149               | $   612 | $5,810             | $(3,471)                   | $5,100      
|Investment in affiliates                              | 3,201                | -       | 151                | (3,138)                    | 214         
|Other investments                                     | 92                   | -       | -                  | -                          | 92          
|Loan to affiliates                                    | 2,202                | -       | -                  | (2,202)                    | -           
|Property, plant and equipment, net                    | -                    | 3,976   | 8,152              | (93)                       | 12,035      
|Deferred charges and other assets                     | 399                  | 532     | 3,896              | (767)                      | 4,060       
|Total assets                                          | $8,043               | $5,120  | $18,009            | $(9,671)                   | $21,501     
|                                                      |                      |         |                    |                            |             
|Liabilities & Shareholder's Equity                    |                      |         |                    |                            |             
|Current liabilities                                   | $  737               | $1,543  | $9,092             | $(3,467)                   | $7,905      
|Long-term debt                                        | 3,009                | 201     | 234                | -                          | 3,444       
|Notes payable to affiliates                           | 206                  | 1,089   | 1,114              | (2,203)                    | 206         
|Deferred credits and other liabilities                | 297                  | 1,279   | 5,393              | (817)                      | 6,152       
|Common shareholder's equity                           | 3,794                | 1,008   | 2,176              | (3,184)                    | 3,794       
|Total liabilities and shareholder's
           equity | $8,043               | $5,120  | $18,009            | $(9,671)                   | $21,501     



|At December 31, 2004                                  | CNG (Parent Company) | DOTEPI  | Other Subsidiaries | Adjustments & Eliminations | Consolidated
|----------------------------------------------------- | -------------------- | ------- | ------------------ | -------------------------- | ------------
|                                                      | (millions)          
|Assets                                                |                      |         |                    |                            |             
|Current assets                                        | $1,866               | $   341 | $3,047             | $(2,625)                   | $2,629      
|Investment in affiliates                              | 3,891                | -       | 141                | (3,828)                    | 204         
|Other investments                                     | 87                   | -       | -                  | -                          | 87          
|Loan to affiliates                                    | 2,202                | -       | -                  | (2,202)                    | -           
|Property, plant and equipment, net                    | -                    | 3,619   | 7,506              | (75)                       | 11,050      
|Deferred charges and other assets                     | 138                  | 532     | 2,450              | (368)                      | 2,752       
|Total assets                                          | $8,184               | $4,492  | $13,144            | $(9,098)                   | $16,722     
|                                                      |                      |         |                    |                            |             
|Liabilities & Shareholder's Equity                    |                      |         |                    |                            |             
|Current liabilities                                   | $  379               | $1,047  | $5,408             | $(2,622)                   | $4,212      
|Long-term debt                                        | 3,014                | 206     | 234                | -                          | 3,454       
|Notes payable to affiliates                           | 206                  | 1,089   | 1,113              | (2,202)                    | 206         
|Deferred credits and other liabilities                | 105                  | 1,093   | 3,582              | (410)                      | 4,370       
|Common shareholder's equity                           | 4,480                | 1,057   | 2,807              | (3,864)                    | 4,480       
|Total liabilities and shareholder's
           equity | $8,184               | $4,492  | $13,144            | $(9,098)                   | $16,722     



PAGE 19

CONSOLIDATED NATURAL GAS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Condensed Consolidating Statement of Cash Flow Information

|Nine Months Ended September 30, 2005                     | CNG (Parent Company) | DOTEPI | Other Subsidiaries | Adjustments & Eliminations | Consolidated
|-------------------------------------------------------- | -------------------- | ------ | ------------------ | -------------------------- | ------------
|                                                         | (millions)          
|Net cash provided by operating      activities           | $444                 | $271   | $995               | $(410)                     | $1,300      
|Net cash provided by (used in)      investing activities | 72                   | (483)  | (817)              | (128)                      | (1,356)     
|Net cash provided by (used in)      financing activities | (373)                | 212    | (168)              | 396                        | 67          



|Nine Months Ended September 30, 2004                     | CNG (Parent Company) | DOTEPI | Other Subsidiaries | Adjustments & Eliminations | Consolidated
|-------------------------------------------------------- | -------------------- | ------ | ------------------ | -------------------------- | ------------
|                                                         | (millions)          
|Net cash provided by (used in)      operating activities | $538                 | $(328) | $1,498             | $(176)                     | $1,532      
|Net cash provided by (used in)      investing activities | (45)                 | (309)  | (513)              | 235                        | (632)       
|Net cash provided by (used in)      financing activities | (493)                | 272    | (988)              | 298                        | (911)       



Note 16.  Operating SegmentsThe Company is organized primarily on the basis of products and services sold in the United States. The Company manages its operations based on three primary operating segments:

Delivery includes the Company's regulated gas distribution systems and customer service operations which are subject to cost-of-service rate regulation and accordingly, applies SFAS No. 71, Accounting for the Effects of Certain Types of Regulation.It also includes the Company's nonregulated retail energy marketing activities.

Energy includes the Company's tariff-based natural gas transmission pipeline and storage businesses and an LNG facility which are subject to cost-of-service rate regulation and accordingly, applies SFAS No. 71. It also includes certain natural gas production and producer services, which consist of aggregation of gas supply and related wholesale activities.

Exploration & Production includes the Company's gas and oil exploration, development and production operations. These operations are located in several major producing basins in the lower 48 states, including the outer continental shelf and deepwater areas of the Gulf of Mexico.

PAGE 20

CONSOLIDATED NATURAL GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Corporate and Otherincludes the Company's corporate and other functions, including the activities of CNG International (CNGI), the Company's power generating facility and other minor subsidiaries. In addition, the contribution to net income by the Company's primary operating segments is determined based on a measure of profit that executive management believes represents the segments' core earnings. As a result, certain specific items attributable to those segments are not included in profit measures evaluated by executive management in assessing the segment's performance or allocating resources among the segments. These specific items are instead reported in the Corporate and Other segment and include:

Nine Months Ended September 30, 2005 
A loss related to the discontinuance of hedge accounting in August and September 2005 for certain gas and oil hedges resulting from an interruption of gas and oil production in the Gulf of Mexico caused by Hurricanes Katrina and Rita, and subsequent changes in the fair value of those hedges.

Nine Months Ended September 30, 2004A loss related to the discontinuance of hedge accounting in September 2004 for certain oil hedges resulting from an interruption of oil production in the Gulf of Mexico caused by Hurricane Ivan and subsequent changes in the fair value of those hedges during the third quarter.

Intersegment sales and transfers are based on underlying contractual arrangements and agreements and may result in intersegment profit or loss.

|                                      | Delivery   | Energy | Exploration &Production | Corporateand Other | Eliminations | Consolidated Total
|------------------------------------- | ---------- | ------ | ----------------------- | ------------------ | ------------ | ------------------
|                                      |           
|                                      | (millions)
|Three Months ended September 30, 2005 |            |        |                         |                    |              |                   
|Operating revenue:                    |            |        |                         |                    |              |                   
|External customers                    | $330       | $312   | $512                    | $(1)               | $  -         | $1,153            
|Affiliated customers                  | -          | 303    | 3                       | 18                 | -            | 324               
|Intersegment                          | 1          | 71     | 51                      | -                  | (123)        | -                 
|Net income (loss)                     | (6)        | 44     | 20                      | (356)              | -            | (298)             
|                                      |            |        |                         |                    |              |                   
|Three Months ended September 30, 2004 |            |        |                         |                    |              |                   
|Operating revenue:                    |            |        |                         |                    |              |                   
|External customers                    | $304       | $205   | $522                    | $ -                | $  -         | $1,031            
|Affiliated customers                  | -          | 210    | -                       | 7                  | -            | 217               
|Intersegment                          | 12         | 44     | 28                      | -                  | (84)         | -                 
|Net income (loss)                     | 2          | 38     | 121                     | (61)               | -            | 100               
|                                      |            |        |                         |                    |              |                   
|Nine Months Ended September 30, 2005  |            |        |                         |                    |              |                   
|Operating revenue:                    |            |        |                         |                    |              |                   
|External customers                    | $2,000     | $894   | $1,724                  | $ -                | $  -         | $4,618            
|Affiliated customers                  | 1          | 759    | 14                      | 27                 | -            | 801               
|Intersegment                          | 24         | 186    | 123                     | -                  | (333)        | -                 
|Net income (loss)                     | 114        | 173    | 309                     | (356)              | -            | 240               
|                                      |            |        |                         |                    |              |                   
|Nine Months Ended September 30, 2004  |            |        |                         |                    |              |                   
|Operating revenue:                    |            |        |                         |                    |              |                   
|External customers                    | $1,824     | $663   | $1,325                  | $ -                | $  -         | $3,812            
|Affiliated customers                  | 1          | 780    | -                       | 34                 | -            | 815               
|Intersegment                          | 47         | 154    | 95                      | -                  | (296)        | -                 
|Net income (loss)                     | 130        | 159    | 374                     | (70)               | -            | 593               

PAGE 21

CONSOLIDATED NATURAL GAS COMPANYITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS

Management's Discussion and Analysis of Results of Operations (MD&A) discusses the results of operations and general financial condition of Consolidated Natural Gas Company. MD&A should be read in conjunction with the Consolidated Financial Statements. The "Company" is used throughout MD&A and, depending on the context of its use, may represent any of the following: the legal entity, Consolidated Natural Gas Company, one of Consolidated Natural Gas Company's consolidated subsidiaries or the entirety of Consolidated Natural Gas Company and its consolidated subsidiaries. The Company is a wholly-owned subsidiary of Dominion.



The reader will find the following information in this MD&A:

- Forward-Looking Statements
- Accounting Matters
- Results of Operations
- Segment Results of Operations
- Credit Risk
- Other Matters
- Risk Factors and Cautionary Statements That May Affect Future Results

Forward-Looking Statements

This report contains statements concerning the Company's expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify these forward-looking statements by words such as "anticipate," "estimate," "forecast," "expect," "believe," "should," "could," "plan," "may" or other similar words.

The Company makes forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to be materially different from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other risks that may cause actual results to differ from predicted results are set forth in Risk Factors and Cautionary Statements That May Affect Future Results.

The Company bases its forward-looking statements on management's beliefs and assumptions using information available at the time the statements are made. The Company cautions the reader not to place undue reliance on its forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, materially differ from actual results. The Company undertakes no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

Accounting Matters

Critical Accounting Policies and Estimates

PAGE 22

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS

OtherAs discussed in Note 3 to the Consolidated Financial Statements, the Company enters into buy/sell and related agreements as a means to reposition its offshore Gulf of Mexico crude oil production to more liquid marketing locations onshore. Under the primary guidance of EITF Issue No. 99-19, the Company presents the sales and purchases related to its crude oil buy/sell arrangements on a gross basis in its Consolidated Statements of Income. In September 2005, the FASB ratified the EITF's consensus on Issue No. 04-13that will require buy/sell and related agreements to be presented on a net basis in the Consolidated Statements of Income if they are entered into in contemplation of one another. This new guidance is required to be applied to all new arrangements entered into, and modifications or renewals of existing arrangements, for reporting periods beginning after March 16, 2006. The Company is currently assessing the impact that this new guidance may have on its income statement presentation of these transactions; however, there will be no impact on the Company's results of operations or cash flows.

Results of OperationsSegment results include the impact of intersegment revenues and expenses, which may result in an intersegment profit or loss. Following is a summary of contributions by the Company's operating segments to net income (loss) for the third quarter and year-to-date periods ended September 30, 2005 and 2004:

|                               | Third Quarter | Year-To-Date
|------------------------------ | ------------- | ------------
|                               | 2005          | 2004        
|                               | (millions)   
|Delivery                       | $  (6)        | $    2      
|Energy                         | 44            | 38          
|Exploration & Production       | 20            | 121         
|Primary operating segments     | 58            | 161         
|                               |               |             
|Corporate and Other            | (356)         | (61)        
|Consolidated net income (loss) | $ (298)       | $ 100       

Gulf of Mexico Hurricanes

The hurricanes have negatively impacted the Company's earnings in 2005 due to:

- A reduction in expected gas and oil production;
- Losses resulting from the discontinuance of hedge accounting for certain cash flow hedges related to forecasted gas and oil production; and
- Expenses incurred to temporarily relocate the Company's employees that were based in New Orleans.

PAGE 23

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

OverviewThird Quarter 2005 vs. 2004The Company incurred a net loss of $298 million in the third quarter of 2005, versus net income of $100 million in the third quarter of 2004. The combined net income contribution of the Company's primary operating segments decreased $103 million primarily reflecting a lower contribution from exploration and production operations due to:

- A decrease in gas and oil production resulting from interruptions caused by Hurricanes Katrina and Rita;
- An increase in hedge ineffectiveness expense primarily due to an increase in the fair value differential between the delivery location and commodity specifications of derivative contracts held by exploration and production operations and the delivery location and commodity specifications of the Company's forecasted gas and oil sales; and
- The impact in the prior year of favorable changes in the fair value of certain oil options.

The consolidated results also include the impact of significant specific items reported in the Corporate and Other segment:

- A $357 million after-tax loss in 2005 related to the discontinuance of hedge accounting for certain gas and oil hedges resulting from an interruption of gas and oil production in the Gulf of Mexico caused by Hurricanes Katrina and Rita, and subsequent changes in the fair value of those hedges; and
- A $61 million after-tax loss in 2004 related to the discontinuance of hedge accounting for certain oil hedges resulting from a mid-September interruption of oil production in the Gulf of Mexico caused by Hurricane Ivan, and subsequent changes in the fair value of those hedges.

Year-To-Date 2005 vs. 2004Net income for the nine months ended September 30, 2005 decreased 60% to $240 million, as compared to the first nine months of 2004. The combined net income contribution of the Company's primary operating segments decreased $67 million primarily resulting from:

- A lower contribution from delivery operations reflecting higher bad debt and interest expenses for the regulated operations partially offset by higher gas margins for the nonregulated retail energy marketing operations;
- A higher contribution from energy operations primarily reflecting higher gas prices at producer services; and
- A lower contribution from exploration and production operations resulting from:
- Lower gas production primarily due to interruptions caused by Hurricanes Katrina and Rita;
- Losses related to the discontinuance of hedge accounting in March 2005 for certain oil hedges primarily resulting from a delay in reaching anticipated production levels in the Gulf of Mexico, and subsequent changes in the fair value of those hedges;
- An increase in hedge ineffectiveness expense primarily due to an increase in the fair value differential between the delivery location and commodity specifications of derivative contracts held by exploration and production operations and the delivery location and commodity specifications of the Company's forecasted gas and oil sales; and
- The impact in the prior year of favorable changes in the fair value of certain oil options; partially offset by
- The recognition of business interruption insurance revenue associated with Hurricane Ivan, higher average realized prices for gas and higher oil production as compared to 2004, reflecting production from the deepwater Gulf of Mexico Devils Tower and Front Runner projects.



The consolidated results also include the impact of significant specific items reported in the Corporate and Other segment, which are described above.

PAGE 24

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

Analysis of Consolidated Operations Presented below are selected amounts related to the Company's results of operations:

|                                                        | Third Quarter | Year-To-Date
|------------------------------------------------------- | ------------- | ------------
|                                                        | 2005          | 2004        
|                                                        | (millions)   
|                                                        |               |             
|Operating Revenue(1)                                    | $1,477        | $1,248      
|                                                        |               |             
|Operating Expenses                                      |               |             
|Purchased gas, net(1)                                   | 601           | 387         
|Electric fuel and energy purchases(1)                   | 115           | 101         
|Liquids, pipeline capacity and other 
        purchases | 127           | 98          
|Other operations and maintenance(1)                     | 815           | 262         
|Depreciation, depletion and amortization                | 163           | 156         
|Other taxes                                             | 60            | 55          
|                                                        |               |             
|Other income                                            | 8             | 3           
|Interest and related charges(1)                         | 62            | 42          
|Income tax expense (benefit)                            | (160)         | 50          

(1)

An analysis of the Company's results of operations for the third quarter and the year-to-date period of 2005 compared to the third quarter and the year-to-date period of 2004 follows:

Third Quarter 2005 vs. 2004Operating Revenue increased 18% to $1.5 billion, primarily reflecting:

- A $197 million increase in nonregulated gas sales revenue largely reflecting a $192 million increase from gas aggregation activities primarily due to higher prices. This increase was largely offset by a corresponding increase in Purchased gas, net expense;
- A $29 million increase ingas transportation and storage revenue primarily reflecting an increase from gas transmission operations largely due to additions of pipeline and storage capacity; and
- A $37 million increase in other revenue, primarily reflecting a $14 million increase in sales of extracted products principally due to increased volumes and a $21 million increase in sales of purchased oil by exploration and production operations. The increase in sales of purchased oil was offset by a corresponding increase in Liquids, pipeline capacity and other purchases expense; partially offset by
- A $54 million decrease in gas and oil production revenueprimarilydue to a decrease in production volumes resulting from interruptions caused by Hurricanes Katrina and Rita.

Operating Expenses and Other Items Purchased gas, net expenseincreased 55% to $601 million, principally resulting from a $187 million increase associated with gas aggregation activities primarily reflecting higher prices discussed in Operating Revenue.

PAGE 25

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

Liquids, pipeline capacity and other purchases expense increased 30% to $127 million, primarily reflecting a $23 million increase in purchases of oil by exploration and production operations, as discussed in Operating Revenue.

Other operations and maintenance expense increased 211% to $815 million, primarily reflecting the following:

- A $556 million loss related to the discontinuance of hedge accounting for certain gas and oil hedges resulting from an interruption of gas and oil production in the Gulf of Mexico caused by Hurricanes Katrina and Rita, and subsequent changes in the fair value of those hedges;
- A $29 million increase in hedge ineffectiveness expense associated with exploration and production operations, primarily due to an increase in the fair value differential between the delivery location and commodity specifications of derivative contracts held by the Company and the delivery location and commodity specifications of the Company's forecasted gas and oil sales; and
- The net impact in 2004 of the following:
- A $96 million loss related to the discontinuance of hedge accounting for certain oil hedges, resulting from an interruption of oil production in the Gulf of Mexico caused by Hurricane Ivan, and subsequent changes in the fair value of those hedges; and
- A $45 million benefit due to favorable changes in the fair value of certain oil options related to exploration and production operations.

Other taxes increased 9% to $60 million, primarily due to higher severance taxes associated with higher commodity prices.

Interest and related charges increased 48% to $62 million, primarily reflecting a $17 million increase related to Dominion money pool borrowings due to higher outstanding balances and higher interest rates.

Year-To-Date 2005 vs. 2004

Operating Revenue increased 17% to $5.4 billion, primarily reflecting:

- A $315 million increase in other revenue reflecting a $179 million increase due to the recognition of business interruption insurance revenue associated with Hurricane Ivan, a $44 million increase in sales of extracted products principally due to increased prices and volumes and a $90 million increase in sales of purchased oil by exploration and production operations. The increase in revenue from sales of purchased oil was offset by a corresponding increase in Liquids, pipeline capacity and other purchases expense;
- A $235 million increase in nonregulated gas sales revenue largely reflecting a $177 million increase from gas aggregation activities primarily due to higher prices ($257 million), partially offset by lower volumes ($80 million), and a $73 million increase from sales of gas purchased by exploration and production operations to facilitate gas transportation and satisfy other agreements. The increases in revenue from gas aggregation activities and exploration and production operations were largely offset by corresponding increases in Purchased gas, net expense;
- A $164 million increase in regulated gas sales revenue primarily related to the recovery of higher gas prices. The effect of this increase was offset by a comparable increase in Purchased gas, net expense;
- A $60 million increase in gas transportation and storage revenuefrom gas transmission operations largely due to additions of pipeline and storage capacity; and
- A $44 million increase in gas and oil production revenue reflecting a $58 million increase from oil production due to higher volumes, partially offset by a $21 million decrease from gas production. The decrease in gas production was due to lower volumes largely resulting from interruptions in Gulf of Mexico production caused by Hurricanes Katrina and Rita, partially offset by higher average realized prices.

PAGE 26

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

Operating Expenses and Other Items

Purchased gas, net expense increased 19% to $2.3 billion, principally resulting from:

- A $165 million increase associated with regulated gas distribution operations discussed in Operating Revenue;
- A $160 million increase associated with gas aggregation activities reflecting higher prices ($241 million), partially offset by lower volumes ($81 million) discussed in Operating Revenue; and
- A $77 million increase related to exploration and production operations discussed in Operating Revenue.

Liquids, pipeline capacity and other purchases expense increased 52% to $315 million, reflecting a $94 million increase related to purchases of oil by exploration and production operations, as discussed above in Operating Revenue,and an $11 million increase related to pipeline and storage capacity for gas transmission operations.

Other operations and maintenance expense increased 140% to $1.3 billion, primarily resulting from:

- A $556 million loss related to the discontinuance of hedge accounting for certain gas and oil hedges resulting from an interruption of gas and oil production in the Gulf of Mexico caused by Hurricanes Katrina and Rita, and subsequent changes in the fair value of those hedges;
- A $59 million loss related to the discontinuance of hedge accounting in March 2005 for certain oil hedges resulting from a delay in reaching anticipated production levels in the Gulf of Mexico, and subsequent changes in the fair value of those hedges;
- A $41 million increase in hedge ineffectiveness expense associated with exploration and production operations, primarily due to an increase in the fair value differential between the delivery location and commodity specifications of derivative contracts held by the Company and the delivery location and commodity specifications of the Company's forecasted gas and oil sales;
- A $61 million increase in costs related to gas and oil production activities related to higher production costs, administrative costs and financing fees; and
- The net impact of the following items recognized in 2004:
- A $120 million benefit due to favorable changes in the fair value of certain oil options related to exploration and production operations; and
- A $96 million loss related to the discontinuance of hedge accounting for certain oil hedges resulting from an interruption of oil production in the Gulf of Mexico caused by Hurricane Ivan, and subsequent changes in the fair value of those hedges.



Other income decreased 53% to $20 million, primarily reflecting an $8 million gain on the sale of a portion of CNGI's equity investment in an Australian pipeline business and an $18 million benefit resulting from a favorable adjustment to the carrying amount of this investment in 2004. No comparable benefit was recognized during 2005.

Interest and related charges increased 34% to $167 million, primarily reflecting:

- A $32 million increase related to Dominion money pool borrowings due to higher outstanding balances and higher interest rates; and
- A $10 million increase due to the effect of higher interest rates in 2005 on variable rate debt.

PAGE 27

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

Segment Results of Operations

Delivery Segment

Delivery includes the Company's regulated gas distribution and customer service business, as well as nonregulated retail energy marketing operations and related products and services.



|                             | Third Quarter | Year-To-Date
|---------------------------- | ------------- | ------------
|                             | 2005          | 2004        
|                             | (millions)   
|Net income contribution      | $(6)          | $2          
|                             |               |             
|Throughput (bcf):            |               |             
|Gas sales-regulated          | 8             | 9           
|Gas transportation-regulated | 35            | 34          
|Total throughput             | 43            | 43          
|                             |               |             
|Bcf = billion cubic feet     |               |             

Presented below, on an after-tax basis, are the key factors impacting Delivery's net income contribution:

|                                                | Third Quarter
2005 vs. 2004
Increase(Decrease) | Year-To-Date 
2005 vs. 2004Increase(Decrease)
|----------------------------------------------- | ---------------------------------------------- | ---------------------------------------------
|                                                | (millions)                                    
|Nonregulated retail energy marketing operations | $ (4)                                          | $ 6                                          
|Regulated operations:                           |                                                |                                              
|Weather                                         | -                                              | 3                                            
|Bad debt reserve                                | -                                              | (6)                                          
|Interest expense                                | (3)                                            | (10)                                         
|Other gas margins                               | -                                              | (6)                                          
|Other                                           | (1)                                            | (3)                                          
|Change in net income contribution               | $(8)                                           | $(16)                                        

Delivery's third quarter and year-to-date net income contribution decreased $8 million and $16 million, respectively, primarily reflecting:

- A lower contribution from nonregulated retail energy marketing operations in the third quarter, largely resulting from a decrease in average customer accounts. In the year-to-date period, the contribution from nonregulated retail energy marketing operations increased, largely resulting from higher gas margins;
- Favorable weather in the regulated gas service territories in the year-to-date period;
- Higher bad debt expense, primarily reflecting the favorable impact in the prior year of a reduction in reserves;
- Increased interest expense primarily due to the impact of higher interest rates on Dominion money pool borrowings and additional long-term debt borrowings from the parent company;
- A lower contribution from regulated gas operations, reflecting changes in customer usage and other factors in the year-to-date period; and
- Other factors including an increase in incentive based compensation and medical benefits expense.

PAGE 28

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

Energy Segment

Energy includes the Company's tariff-based natural gas transmission pipeline and storage businesses and an LNG facility. It also includes certain natural gas production operations and producer services, which consist of aggregation of gas supply and related wholesale activities.



|                                  | Third Quarter | Year-To-Date
|--------------------------------- | ------------- | ------------
|                                  | 2005          | 2004        
|                                  | (millions)   
|Net income contribution           | $44           | $38         
|                                  |               |             
|Gas sales (bcf)                   | 54            | 50          
|Gas transmission throughput (bcf) | 131           | 112         

Presented below, on an after-tax basis, are the key factors impacting Energy's net income contribution:

|                                  | Third Quarter
2005 vs. 2004
Increase(Decrease) | Year-To-Date 
2005 vs. 2004Increase(Decrease)
|--------------------------------- | ---------------------------------------------- | ---------------------------------------------
|                                  | (millions)                                    
|Producer services                 | $6                                             | $ 12                                         
|Cove Point                        | 4                                              | 8                                            
|Gas transmission operations       | (1)                                            | (1)                                          
|Other                             | (3)                                            | (5)                                          
|Change in net income contribution | $6                                             | $ 14                                         

Energy's third quarter and year-to-date net income contribution increased $6 million and $14 million, respectively, primarily reflecting:

- Higher gas prices realized by the producer services operation; and
- Higher contribution from the Cove Point LNG facility resulting from the addition of a fifth storage tank in December 2004 and increased pipeline capacity; partially offset by
- Higher system gas and leased pipeline capacity expense and the effects of a rate settlement, partially offset by higher gas transportation and storage revenue, primarily from additional pipeline capacity and higher extracted products sales due to increased volume and prices; and
- Other factors including an increase in incentive based compensation.

PAGE 29

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

Exploration & Production Segment

Exploration & Production includes the Company's gas and oil exploration, development and production business.

|                                                 | Third Quarter | Year-To-Date
|------------------------------------------------ | ------------- | ------------
|                                                 | 2005          | 2004        
|                                                 | (millions)    |             
|Net income contribution                          | $20           | $121        
|                                                 |               |             
|Gas production (bcf)                             | 59.5          | 64.7        
|Oil production (million bbls)                    | 2.5           | 2.5         
|                                                 |               |             
|Average realized prices with hedging results:    |               |             
|Gas (per mcf)(1)                                 | $4.65         | $4.12       
|Oil (per bbl)                                    | $20.38        | $26.23      
|                                                 |               |             
|Average realized prices without hedging results: |               |             
|Gas (per mcf)(1)                                 | $8.00         | $5.67       
|Oil (per bbl)                                    | $59.81        | $42.65      
|                                                 |               |             
|Other information:                               |               |             
|DD&A (unit of production rate per mcfe)          | $1.53         | $1.39       



(1)

PAGE 30

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

Presented below, on an after-tax basis, are the key factors impacting Exploration & Production's net income contribution:

|                                                 | Third Quarter
2005 vs. 2004
Increase(Decrease) | Year-To-Date 
2005 vs. 2004Increase(Decrease)
|------------------------------------------------ | ---------------------------------------------- | ---------------------------------------------
|                                                 | (millions)                                    
|Operations and maintenance expense               | $(63)                                          | $(178)                                       
|Gas and oil-production                           | (34)                                           | (3)                                          
|Interest expense                                 | (10)                                           | (19)                                         
|Depreciation, depletion and amortization expense | (1)                                            | (12)                                         
|Business interruption insurance                  | -                                              | 114                                          
|Gas and oil-prices                               | 10                                             | 45                                           
|Other                                            | (3)                                            | (12)                                         
|Change in net income contribution                | $ (101)                                        | $ (65)                                       



- Higher operations and maintenance expenses, primarily due to the impact in 2004 of favorable changes in the fair value of certain oil options, an increase in hedge ineffectiveness expense in 2005 and an increase in production costs. Higher year-to-date operations and maintenance expenses also reflect the discontinuance of hedge accounting in March 2005 for certain oil hedges largely resulting from delays in reaching anticipated production levels in the Gulf of Mexico, and subsequent changes in the fair value of those hedges;
- Lower gas production primarily reflecting interruptions in Gulf of Mexico production caused by Hurricanes Katrina and Rita, partially offset in the year-to-date period by higher oil production as compared to 2004, reflecting production from the deepwater Gulf of Mexico Devils Tower and Front Runner projects;
- Increased interest expense primarily due to the combined impact of additional borrowings and higher interest rates on Dominion money pool borrowings; and
- Higher depreciation, depletion and amortization expense, primarily reflecting higher industry finding and development costs and the impact of increased oil production; partially offset by
- The recognition of business interruption insurance revenue associated with Hurricane Ivan in the year-to-date period; and
- Higher average realized prices for gas.

PAGE 31

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

Corporate and Other Corporate and Other includes the Company's corporate and other functions, including the activities of CNGI, the Company's power generating facility and other minor subsidiaries. Presented below are Corporate and Other's operating results for the third quarter and year-to-date periods ended September 30, 2005 and 2004:

|                                                  | Third Quarter | Year-To-Date
|------------------------------------------------- | ------------- | ------------
|                                                  | 2005          | 2004        
|                                                  | (millions)   
|Specific items attributable to operating segments | $ (359)       | $  (61)     
|Corporate operations                              | 3             | -           
|Net expenses                                      | $ (356)       | $  (61)     

Corporate and Other reported net expenses of $356 million for the third quarter and year-to date period of 2005 and net expenses of $61 million for the third quarter of 2004 and $70 million for the year-to-date period of 2004, primarily reflecting:

- A $556 million loss ($357 million after-tax) recorded in the third quarter of 2005 related to the discontinuance of hedge accounting for certain gas and oil hedges, resulting from an interruption in gas and oil production caused by Hurricanes Katrina and Rita, and subsequent changes in the fair value of those hedges, attributable to the Exploration & Production segment; and
- A $96 million loss ($61 million after-tax) recorded in the third quarter of 2004 related to the discontinuance of hedge accounting for certain oil hedges, resulting from an interruption of oil production in the Gulf of Mexico caused by Hurricane Ivan, and subsequent changes in the fair value of those hedges, attributable to the Exploration & Production segment.

Also impacting the year-to-date period were the following:

- A $33 million tax valuation allowance recorded in the second quarter of 2004 related to certain CNGI investments that were held for sale; partially offset by
- A $26 million benefit in 2004 related to the sale of CNGI's equity investment in an Australian pipeline business.

Credit RiskThe Company's exposure to potential credit risk results primarily from its marketing of natural gas and sales of gas and oil production. Presented below is a summary of the Company's gross credit exposure as of September 30, 2005. The Company calculates its gross credit exposure for each counterparty as the unrealized fair value of derivative contracts plus any outstanding receivables (net of payables, where netting agreements exist), prior to the application of collateral.

|                                           |  | Gross CreditExposure |  | Credit Collateral |  | Net CreditExposure
|------------------------------------------ |  | -------------------- |  | ----------------- |  | ------------------
|                                           |  | (millions)          
|Investment grade(1)                        |  | $  374               |  | $ 150             |  | $  224            
|Non-investment grade(2)                    |  | 14                   |  | -                 |  | 14                
|No external ratings:                       |  |                      |  |                   |  |                   
|Internally rated - investment grade(3)     |  | 158                  |  | -                 |  | 158               
|Internally rated - non-investment grade(4) |  | 328                  |  | 5                 |  | 323               
|Total                                      |  | $  874               |  | $ 155             |  | $  719            

(

PAGE 32

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

Other Matters

West Virginia Rates

Energy Policy Act of 2005 (the Act)In August 2005, the President signed the Act. Key provisions of the Act include the following:

- Repeal of the Public Utility Holding Company Act of 1935 in February 2006;
- Provision for greater regulatory oversight by other federal and state authorities;
- Grant of enhanced merger approval authority to the Federal Energy Regulatory Commission (FERC);
- Grant of exclusive authority to FERC to approve applications for construction of LNG facilities; and
- Improvement of the processes for approval and permitting of interstate pipelines.

The Company is currently evaluating the impact that the Act may have on its results of operations and financial condition.

PAGE 33

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

Risk Factors and Cautionary Statements That May Affect Future Results

Factors that may cause actual results to differ materially from those indicated in any forward-looking statement or projection include weather conditions; governmental regulations; cost of environmental compliance; fluctuations in energy-related commodities prices and the effect these could have on the Company's earnings, liquidity position and the underlying value of its assets; trading counterparty credit risk; capital market conditions, including price risk due to marketable securities held as investments in trusts and benefit plans; fluctuations in interest rates; changes in rating agency requirements or ratings; changes in accounting standards; collective bargaining agreements and labor negotiations; the risks of operating businesses in regulated industries that are subject to changing regulatory structures; changes to regulated gas rates recoverable by the Company; realization of expected business interruption insurance proceeds; political and economic conditions (including inflation and deflation). Other more specific risk factors are as follows:

The Company's operations are weather sensitive. The Company's results of operations can be affected by changes in the weather. Weather conditions directly influence the demand for natural gas and affect the price of energy commodities. In addition, severe weather, including hurricanes, can be destructive, causing production delays and property damage that require the Company to incur additional expenses.

The Company is subject to complex government regulation that could adversely affect its operations. The Company's operations are subject to extensive federal, state and local regulation and may require numerous permits, approvals and certificates from various governmental agencies. The Company must also comply with environmental legislation and associated regulations. Management believes the necessary approvals have been obtained for the Company's existing operations and that its business is conducted in accordance with applicable laws. However, new laws or regulations, or the revision or reinterpretation of existing laws or regulations, may require the Company to incur additional expenses.

Costs of environmental compliance, liabilities and litigation could exceed the Company's estimates which could adversely affect its results of operations. Compliance with federal, state and local environmental laws and regulations may result in increased capital, operating and other costs, including remediation and containment expenses and monitoring obligations. In addition, the Company may be a responsible party for environmental clean-up at a site identified by a regulatory body. Management cannot predict with certainty the amount and timing of all future expenditures related to environmental matters because of the difficulty of estimating clean-up and compliance costs, and the possibility that changes will be made to the current environmental laws and regulations. There is also uncertainty in quantifying liabilities under environmental laws that impose joint and several liability on all potentially responsible parties.

The use of derivative instruments could result in financial losses and liquidity constraints. The Company uses derivative instruments, including futures, forwards, options and swaps, to manage its commodity and financial market risks. The Company could recognize financial losses on these contracts as a result of volatility in the market values of the underlying commodities or if a counterparty fails to perform under a contract. In the absence of actively quoted market prices and pricing information from external sources, the valuation of these contracts involves management's judgment or use of estimates. As a result, changes in the underlying assumptions or use of alternative valuation methods could affect the reported fair value of these contracts.

In addition, the Company uses financial derivatives to hedge future sales of its gas and oil production, which may limit the benefit the Company would otherwise receive from increases in commodity prices.



PAGE 34

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

For additional information concerning derivatives and commodity-based trading contracts, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk, Market Rate Sensitive Instruments and Risk Management and Notes 2 and 9 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2004.

The Company's exploration and production business is dependent on factors that cannot be predicted or controlled and that could damage facilities, disrupt production or reduce the book value of its assets. Factors that may affect the Company's financial results include damages to or suspension of operations caused by weather, fire, explosion or other events to the Company or third-party gas and oil facilities, fluctuations in natural gas and crude oil prices, results of future drilling and well completion activities and the Company's ability to acquire additional land positions in competitive lease areas, as well as inherent operational risks that could disrupt production.

Short-term market declines in the prices of natural gas and oil could adversely affect the Company's financial results by causing a permanent write-down of its natural gas and oil properties as required by the full cost method of accounting. Under the full cost method, all direct costs of property acquisition, exploration and development activities are capitalized. If net capitalized costs exceed the present value of estimated future net revenues based on hedge-adjusted period-end prices from the production of proved gas and oil reserves (the ceiling test) at the end of any quarterly period, then a permanent write-down of the assets must be recognized in that period.

The Company maintains business interruption insurance for offshore operations associated with its exploration and production business. The Company expects to file substantial insurance claims related to Hurricanes Katrina and Rita. Failure by the Company to realize the full value of its claims or to fully insure business interruption losses could adversely affect results of operations. Additionally, the increased level of hurricane activity in the Gulf of Mexico is likely to significantly increase the cost of business interruption insurance and could make it unavailable on commercially reasonable terms. Inability to insure its offshore Gulf of Mexico operations could adversely affect the Company's results of operations.

An inability to access financial markets could affect the execution of the Company's business plan. The Company relies on access to short-term money markets, longer-term capital markets and banks as significant sources of liquidity for capital requirements not satisfied by the cash flows from its operations, including margin requirements related to hedges of future gas and oil production. Management believes that the Company will maintain sufficient access to these financial markets based upon current credit ratings. However, certain disruptions outside of the Company's control may increase its cost of borrowing or restrict its ability to access one or more financial markets. Such disruptions could include an economic downturn, the bankruptcy of an unrelated energy company or changes to the Company's credit ratings. Restrictions on the Company's ability to access financial markets may affect its ability to execute its business plan as scheduled.

Changing rating agency requirements could negatively affect the Company's growth and business strategy. As of September 30, 2005, the Company's senior unsecured debt is rated BBB+, negative outlook, by Standard & Poor's, A3, stable outlook, by Moody's and BBB+, stable outlook by Fitch Ratings Ltd. (Fitch). These agencies have implemented more stringent applications of the financial requirements for various ratings levels. In order to maintain its current credit ratings in light of these or future new requirements, the Company may find it necessary to take steps or change its business plans in ways that may adversely affect its growth and earnings. A reduction in the Company's credit ratings by Standard & Poor's, Moody's or Fitch could increase its borrowing costs and adversely affect operating results and could require it to post additional margin in connection with some of its marketing activities.

PAGE 35

CONSOLIDATED NATURAL GAS COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
RESULTS OF OPERATIONS
(Continued)

Potential changes in accounting practices may adversely affect the Company's financial results. The Company cannot predict the impact that future changes in accounting standards or practices may have on public companies in general, the energy industry or its operations specifically. New accounting standards could be issued that could change the way the Company records revenues, expenses, assets and liabilities. These changes in accounting standards could adversely affect the Company's reported earnings or could increase reported liabilities.

Failure to retain and attract key executive officers and other skilled professional and technical employees could have an adverse effect on the operations of the Company. Implementation of the Company's growth strategy is dependent on its ability to recruit, retain and motivate employees. Competition for skilled employees in some areas is high and the inability to retain and attract these employees could adversely affect the Company's business and future financial condition.

PAGE 36

CONSOLIDATED NATURAL GAS COMPANY

ITEM 4. CONTROLS AND PROCEDURES

Senior management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures are effective. There were no changes in the Company's internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

On December 31, 2003, the Company adopted FIN 46R for its interests in special purpose entities referred to as SPEs and, as a result, has included in its consolidated financial statements those SPEs described in Note 3 to the Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2004. The Consolidated Balance Sheet as of September 30, 2005 reflects $210 million of net property, plant and equipment and deferred charges and $234 million of related debt attributable to the SPE. As this SPE is owned by unrelated parties, the Company does not have the authority to dictate or modify, and therefore cannot assess, the disclosure controls and procedures or internal control over financial reporting in place at this entity.

In August and September 2005, Hurricanes Katrina and Rita made landfall along the Gulf Coast. The storms and subsequent flooding disrupted communications and facilities and displaced staff of Exploration & Production, the Company's gas and oil exploration, development and production operation, which had business offices located in New Orleans, Louisiana. In the aftermath of the storms, the Company implemented its disaster recovery plan thereby maintaining business continuity. As such, certain transaction processing, financial closing and information technology controls were temporarily modified during the period. Apart from this, there have been no significant changes in the Company's internal control over financial reporting (as defined in Rule 13a - 15(f) and Rule 15d - 15(f) under the Securities Exchange Act of 1934, as amended) during the quarter that ended September 30, 2005, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PAGE 37

CONSOLIDATED NATURAL GAS COMPANY
PART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS

From time to time, the Company is alleged to be in violation or in default under orders, statutes, rules or regulations relating to the environment, compliance plans imposed upon or agreed to by the Company and its subsidiaries, or permits issued by various local, state and federal agencies for the construction or operation of facilities. Administrative proceedings may also be pending on these matters. In addition, in the ordinary course of business, the Company is involved in various legal proceedings. Management believes that the ultimate resolution of these proceedings will not have a material adverse effect on the Company's financial position, liquidity or results of operations. See Other Matters in Management's Discussion and Analysis of Results of Operations for discussion on various regulatory proceedings to which the Company is a party.

In September 2005, Dominion Transmission, Inc. (DTI) reached an agreement in principle on a proposed Consent Order and Agreement (COA) with the Pennsylvania Department of Environmental Protection (PADEP) which would supersede a 1990 COA between the parties. The agreement in principle resolves longstanding groundwater contamination issues at several DTI compressor stations in Pennsylvania and includes a penalty and environmental projects of $850,000 to be paid to PADEP and the Pennsylvania Department of Conservation and Natural Resources to resolve alleged violations. Negotiations are ongoing with both agencies to finalize language and payment mechanisms. As of September 30, 2005, DTI has accrued $850,000 for the penalty and environmental projects.

ITEM 6. EXHIBITS

|(a) Exhibits:
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PAGE 38

CONSOLIDATED NATURAL GAS COMPANY
PART II. OTHER INFORMATIONITEM 6. EXHIBITS

|(a) Exhibits (continued):
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SIGNATURE

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.

|                 | CONSOLIDATED NATURAL GAS COMPANYRegistrant                                                       
|---------------- | -------------------------------------------------------------------------------------------------
|                 |                                                                                                  
|November 3, 2005 | /s/ Steven A. RogersSteven A. Rogers
Vice President and Controller
(Principal Accounting Officer)
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