<PAGE>   1

================================================================================



                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                ---------------

                                   FORM 10-Q

(MARK ONE)


[X]                QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934


FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997, 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 1-7310

                       MICHIGAN CONSOLIDATED GAS COMPANY
             (Exact name of registrant as specified in its charter)

                MICHIGAN                                 38-0478040
     (State or other jurisdiction of                  (I.R.S. Employer
     incorporation or organization)                 Identification No.)

 500 GRISWOLD STREET, DETROIT, MICHIGAN                  48226
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code 313-965-2430

                                   NO CHANGES
(Former name, former address and former fiscal year, if changed since last
report.)


     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   X                   No
                               ---                     ---

     Number of shares outstanding of each of the registrant's classes of common
stock, as of October 31, 1997:

               Common Stock, par value $.01 per share: 10,300,000




================================================================================
<PAGE>   2
                               INDEX TO FORM 10-Q

                      FOR QUARTER ENDED SEPTEMBER 30, 1997

<TABLE>
<CAPTION>

                                                                               PAGE
                                                                              NUMBER
                                                                              ------
<S>                                                                             <C>
COVER ....................................................................       i
                                                                               
INDEX ....................................................................       ii
                                                                               
PART I  - FINANCIAL  INFORMATION                                               
Item 1.  Financial Statements.............................................        6
Item 2.  Management's Discussion and Analysis of Financial                     
         Condition and Results of Operations..............................        1
                                                                               
PART II - OTHER  INFORMATION                                                   
Item 6.  Exhibits and Reports on Form 8-K.................................       11
                                                                               
SIGNATURE ................................................................       12
</TABLE>
                                                                               
                                                                               
                                                                               






                                      ii


























<PAGE>   3
               MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES
                MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS

     The company reported a net loss of $16.0 million for the 1997 third
quarter, improving $2.4 million over the comparable 1996 quarter. Given the
seasonal nature of the gas distribution business, MichCon generally experiences
a loss during the third quarter when the weather is warm and less gas is
delivered to customers.  Items favorably impacting the quarter comparison were
improved gross margins and lower operation and maintenance expenses, partially
offset by higher depreciation and financing costs. Earnings decreased $5.3
million and $10.8 million for the 1997 nine- and twelve-month periods,
respectively, reflecting higher depreciation and financing costs, as well as
reduced gross margins due to warmer weather.




<TABLE>
<CAPTION>
                                             EARNINGS COMPONENTS (IN MILLIONS)
                                             ---------------------------------
                                                  COMPARING 1997 TO 1996
                                                  ----------------------

                                                      Quarter                  Nine Months              Twelve Months
                                                      -------                  ------------             -------------      
                                               $ Change     % Change      $ Change     % Change     $ Change     % Change
                                               --------     --------      --------     --------     --------     --------   
<S>                                          <C>           <C>          <C>           <C>          <C>          <C>
Operating Revenue .......................      $ 1.9            1.6%       $(14.6)       (1.7)%       $ 6.7          0.5%        
Cost of Gas .............................       (1.3)          (4.5)        (13.4)       (3.1)         14.8          2.4         
Gross Margin ............................        3.2            3.6          (1.2)       (0.3)         (8.1)        (1.3)        
Operation and Maintenance ...............       (4.9)          (7.2)         (1.4)       (0.7)          0.5          0.2         
Depreciation and Depletion ..............        1.3            5.4           4.1         5.6           6.2          6.4         
Property and Other Taxes ................       (0.5)          (3.8)         (0.2)       (0.4)          1.3          2.1         
Other Income and Deductions .............        0.8            7.7           3.0         8.8           2.7          5.7         
Income Tax Provision ....................        4.1           38.7          (1.2)       (4.3)         (7.8)       (16.3)        
Net Income...............................        2.4           13.0          (5.3)      (10.2)        (10.8)       (12.7)        
</TABLE> 

GROSS MARGIN

     Gross margin (operating revenues less cost of gas) increased for the 1997
quarter and decreased for the nine- and twelve-month periods, respectively.
Gross margin for all 1997 periods was affected by increased other operating
revenues reflecting initiatives to grow revenues by providing gas-related
services.  The favorable quarter results also reflect higher intermediate
transportation services, partially offset by lower gas sales.  The decrease in
gross margin for the 1997 nine- and twelve-month periods was primarily due to
lower gas sales and end user transportation deliveries caused by warmer
weather, partially offset by the continued growth in intermediate
transportation services.

                 EFFECT OF WEATHER ON GAS MARKETS AND EARNINGS


<TABLE>
<CAPTION>
                                                 Quarter                  Nine Months               Twelve Months
                                         -----------------         ------------------         -------------------      
                                         1997         1996         1997          1996         1997          1996
                                         ----         ----         ----          ----         ----          ----   
<S>                                   <C>          <C>          <C>          <C>           <C>          <C>
Percentage Colder
 than Normal .................           N/M          N/M          1.7%          6.2%         2.5%          6.8%
Increase (Decrease) from                                         
 Normal in:                                                       
  Gas Markets (Bcf) ..........         (0.3)        (0.2)          1.2           8.4          3.7          14.2
  Net Income (Millions) ......        $(0.2)       $(0.2)         $1.1          $7.6         $3.3         $12.7
</TABLE>                                                         
                                                                   

                                       1



<PAGE>   4

               MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES
                MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (CONTINUED)




     Gas sales and end user transportation revenues in total decreased $3.1
million, $26.3 million and $5.9 million in the 1997 quarter, nine- and
twelve-month periods, respectively.  The decrease in revenues for the quarter
is due to lower gas costs which are recovered in gas sales rates as
subsequently discussed in the "Cost of Gas" section.  The quarter was further
impacted by a slight decrease in gas sales volumes.  The decrease in revenues
for the 1997 nine-month period is due to reduced gas sales and end user
transportation deliveries as a result of warmer weather and lower gas costs.
The twelve-month period decrease in revenues was also affected by reduced gas
sales and end user transportation deliveries as a result of warmer weather,
partially offset by higher gas costs.


<TABLE>
<CAPTION>
                                                         Quarter                 Nine Months                 Twelve Months
                                                         -------                 -----------                 -------------
                                                     1997        1996        1997           1996         1997             1996      
                                                     ----        ----        ----           ----         ----             ----      
<S>                                               <C>         <C>          <C>            <C>          <C>              <C>     
GAS MARKETS ($ MILLIONS)                                                                                                            
Gas Sales................................         $ 77.7       $ 80.9       $717.7        $744.4         $1,059.2       $1,064.0    
End User Transportation..................           16.2         16.1         61.5          61.1             82.6           83.7    
Intermediate Transportation..............           12.9         12.4         41.0          35.2             54.4           44.4    
Other....................................           12.3          7.9         36.2          30.3             48.0           45.4    
                                                  ------       ------       ------        ------         --------       --------    
                                                  $119.1       $117.3       $856.4        $871.0         $1,244.2       $1,237.5    
                                                  ======       ======       ======        ======         ========       ========    
GAS MARKETS (IN BCF)                                                                                                                
Gas Sales................................           13.8         14.2        141.7         150.4            209.0          222.4    
End User Transportation..................           28.6         28.6        105.7         107.9            144.4          149.9    
Intermediate Transportation..............          164.9        148.7        447.1         407.1            567.5          510.8    
                                                  ------       ------       ------        ------         --------       --------    
                                                   207.3        191.5        694.5         665.4            920.9          883.1    
                                                  ======       ======       ======        ======         ========       ========    
</TABLE>  
          
     Intermediate transportation revenues increased for the 1997 quarter, nine-
and twelve-month periods by $0.5 million, $5.8 million and $10.0 million,
respectively, due to increased deliveries.  The increase in intermediate
transportation deliveries for all periods reflects additional volumes
transported in connection with the recent expansion of the northern Michigan
gathering system. The northern Michigan gathering system enabled MichCon to
transport an additional 22.7 Bcf, 55.6 Bcf and 81.2 Bcf for the 1997 quarter,
nine- and twelve-month periods, respectively.  Intermediate transportation 
volumes for all 1997 periods were impacted by lower deliveries to major 
customers.  Although volumes for these fixed-fee customers have varied, the
related revenues were not significantly affected.

     Other operating revenues increased in all periods due in part to increased
merchandise sales and gas related services.  Also affecting the quarter
comparison is an unfavorable adjustment for energy conservation revenues in the
1996 quarter resulting from the discontinuance of MichCon's energy conservation
programs. Other operating revenue for the 1997 twelve-month period also
reflects an increase in gas processing revenues from the northern Michigan
gathering system, partially offset by a decrease in energy conservation
revenue.

COST OF GAS

     Cost of gas is affected by variations in sales volumes and cost of gas
rates.  Through the Gas Cost Recovery mechanism, MichCon is allowed timely
recovery of 100% of its prudently and reasonably incurred cost of gas sold.
Therefore, fluctuations in total gas costs have little or no effect on gross
margins.

                                       2









<PAGE>   5

               MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES
                MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (CONTINUED)




     Cost of gas sold decreased in the 1997 quarter and nine-month period and
increased slightly for the 1997 twelve-month period.  Cost of gas for all 1997
periods was affected by lower sales volumes, primarily due to warmer weather,
as well as supplier refunds.  The 1997 quarter also reflects a reduction in the
market prices paid of $.03 (1%) per thousand cubic feet of gas sold,
substantially offset by increased lost gas costs.  Partially offsetting the
decrease in the 1997 nine-month period was higher market prices resulting in a
$.12 (4%) increase in the average unit cost of gas sold.  The increase in cost
of gas in the 1997 twelve-month period reflects a $.24 (9%) increase in the
average unit cost of gas sold.

OPERATION AND MAINTENANCE

     Operation and maintenance expenses decreased for the 1997 quarter and
nine-month period and increased slightly for the 1997 twelve-month period.
Operation and maintenance expenses were affected in all periods by lower
benefit costs, primarily pension and retiree healthcare costs.  The 1997
quarter and nine-month period further benefited from a decrease in
uncollectibles expense.  Partially offsetting the decrease in the 1997
nine-month period were higher engergy conservation program expenses and
operating expenses related to increased intermediate transportation volumes as
previously discussed.  The increase in the 1997 twelve-month period is due 
primarily to higher uncollectibles expense and the additional operating 
expenses related to the increase in intermediate transportation volumes, that 
were mitigated by reduced expenses from the discontinuance of the energy 
conservation programs.


DEPRECIATION AND DEPLETION

     The increase in depreciation and depletion for the 1997 quarter, nine- and
twelve-month periods is due to higher plant balances reflecting capital
expenditures of $212.7 million in the 1996 calendar year.  Depreciation and
depletion expenses are expected to increase in future years due to additional
capital investments.  MichCon filed an application with the Michigan Public
Service Commission in October 1996 to lower its depreciation rates which could
partially offset the anticipated increase in depreciation expense in future
years.

PROPERTY AND OTHER TAXES

     Property and other taxes decreased in the 1997 quarter and nine-month
period and increased in the 1997 twelve-month period.  The Company reduced its
property taxes for all 1997 periods based on pending appeals of its personal
property tax assessments.  A favorable resolution of the appeals is expected in
1999.  All 1997 periods were also impacted by an increase in Michigan single
business taxes relating to prior years.

OTHER INCOME AND DEDUCTIONS

     Other income and deductions increased in all the 1997 periods primarily
due to additional interest expense resulting from increased long-term debt
required to finance capital investments, partially offset by reduced interest
on lower outstanding commercial paper.

                                       3



<PAGE>   6

               MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES
                MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (CONTINUED)




INCOME TAX PROVISION

     Income taxes changed primarily as a result of variations in earnings.  The
increase in income taxes for the 1997 quarter was additionally impacted by the
amounts recorded in the 1996 quarter for the favorable resolution of prior
years' tax issues.  The decreases in income taxes for the 1997 nine- and
twelve-month periods were also positively impacted by tax credits, partially
offset by the favorable resolution of prior years' tax issues recorded in the
1996 periods.
     
CAPITAL RESOURCES AND LIQUIDITY

OPERATING ACTIVITIES

     MichCon's cash flow from operating activities totaled $209.9 million for
the 1997 nine-month period, increasing $98.7 million from the comparable 1996
period.  The increase was due primarily to lower working capital requirements
reflecting a reduction in the gas cost recovery undercollection, partially 
offset by lower net income after adjusting for depreciation and deferred taxes.
Operating cash flows were sufficient for the payment of cash dividends on
common stock and all capital investments.

FINANCING ACTIVITIES

     During the latter part of the year, cash and cash equivalents normally
decrease as funds are used to finance increases in gas inventories and customer
accounts receivable.  Short-term debt is normally reduced in the first part of
each year as gas inventories are depleted and funds are received from winter
heating sales.  To meet its seasonal short-term borrowing needs, MichCon
normally issues commercial paper which is backed by credit lines with several
banks.  MichCon has established credit lines to allow for borrowings of up to
$150 million under a 364-day revolving credit facility and up to $150 million
under a three-year revolving credit facility both of which expire July 1998.
During the first nine months of 1997, MichCon repaid $176.7 million of
commercial paper.  Commercial paper of $61.6 million was outstanding as of
September 30, 1997.

     During May 1997, MichCon issued $85 million of first mortgage bonds under
its existing shelf registrations.   The funds from this issuance were used to
retire first mortgage bonds, fund capital expenditures and for general
corporate purposes.  MichCon's capital requirements and general market
conditions will affect the timing and amount of future issuances.

     During April 1997, subsidiaries of MichCon borrowed $40 million under a
nonrecourse credit agreement that matures in 2005.  Proceeds were used to
finance the expansion of its northern Michigan gathering system.

     During the 1997 second quarter, MichCon redeemed early $17 million of
long-term debt.  MichCon also repaid $50 million of first mortgage bonds on its
stated maturity date in May 1997.

     MichCon's capitalization objective is to maintain a ratio of approximately
50% debt and 50% equity. At September 30, 1997, common equity was 50.2% of
total capitalization excluding nonrecourse debt.

INVESTING ACTIVITIES

     MichCon's capital expenditures totaled $97 million during the 1997
nine-month period and are anticipated to be approximately $150 million by the
end of the year.  These investments will be made to

                                       4



<PAGE>   7

               MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES
                MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS (CONCLUDED)



add new customers, develop new gas transportation markets, make improvements to
existing storage, distribution and transmission systems and to improve its
information systems.

     It is management's opinion that MichCon will have sufficient capital
resources, both internal and external, to meet anticipated capital
requirements.


OUTLOOK

     MichCon's strategy is to grow revenues and reduce its costs in order to
maintain strong returns and provide customers with quality service at
competitive prices.  Revenue growth will be achieved through the expansion of
MichCon's 1.2 million residential, commercial and industrial customer base.
MichCon is concentrating on adding new customers in current service areas
including increased penetration of previous expansion areas.  MichCon will
continue initiatives to increase productivity and improve customer services in
order to strengthen its competitive position in the gas industry.  Management
is continually assessing ways to improve cost competitiveness.  Among the cost
savings initiatives, MichCon and other Michigan utilities are exploring
opportunities to share the cost of similar functions in order to obtain greater
efficiencies and increase customer value.

NEW ACCOUNTING PRONOUNCEMENTS

     In 1996 the Emerging Issues Task Force of the Financial Accounting
Standards Board reached a consensus that the costs associated with modifying
internal use software for the year 2000 should be expensed as incurred.
MichCon has established processes for evaluating and managing the risks and
costs associated with this issue.  MichCon is assessing the extent of necessary
modifications to its computer software and the impact on the financial position
and results of operations.

FORWARD-LOOKING STATEMENTS

     The Quarterly Report on Form 10-Q includes forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve certain risks and uncertainties that may
cause actual future results to differ materially from those contemplated,
projected, estimated or budgeted in such forward-looking statements.  Factors
that may impact forward-looking statements include, but are not limited to, the
following:  (i) the effects of weather and other natural phenomenon;  (ii)
increased competition from other energy suppliers as well as alternative forms
of energy;  (iii) the capital intensive nature of MichCon's business;  (iv)
economic climate and growth in the geographic areas in which MichCon does
business;  (v) the uncertainty of gas reserve estimates;  (vi) the timing and
extent of changes in commodity prices for natural gas, electricity  and crude
oil; (vii) conditions of capital markets and equity markets and (viii) the
effects of changes in governmental policies and regulatory actions, including
income taxes, environmental compliance and authorized rates.


                                       5

<PAGE>   8

               MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES
                  CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
                             (THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED          NINE MONTHS ENDED         TWELVE MONTHS ENDED
                                                       SEPTEMBER 30,               SEPTEMBER 30,               SEPTEMBER 30,
                                                  -----------------------     -----------------------    ------------------------
                                                     1997         1996           1997         1996         1997           1996
                                                  ----------    ----------    ----------   ----------    ----------    ----------
                               
<S>                                              <C>           <C>           <C>          <C>          <C>            <C>
OPERATING REVENUES.............................   $  119,114    $  117,251    $  856,359   $  870,970    $1,244,174    $1,237,481
                                                  ----------    ----------    ----------   ----------    ----------    ----------
OPERATING EXPENSES             
  Cost of gas..................................       27,848        29,163       414,152      427,560       623,186       608,392 
  Operation and maintenance....................       63,809        68,727       207,308      208,710       292,879       292,381
  Depreciation and depletion...................       26,159        24,830        78,084       73,963       102,268        96,103
  Property and other taxes.....................       12,667        13,161        46,602       46,773        61,591        60,298
                                                  ----------    ----------    ----------   ----------    ----------    ----------
    Total operating expenses...................      130,483       135,881       746,146      757,006     1,079,924     1,057,174
                                                  ----------    ----------    ----------   ----------    ----------    ----------
OPERATING INCOME (LOSS)........................      (11,369)      (18,630)      110,213      113,964       164,250       180,307
                                                  ----------    ----------    ----------   ----------    ----------    ----------
EQUITY IN EARNINGS OF JOINT VENTURES...........          212           203           853          698         1,041           938
                                                  ----------    ----------    ----------   ----------    ----------    ----------
OTHER INCOME AND (DEDUCTIONS)  
  Interest income..............................        1,144         1,401         3,630        2,620         4,910         3,839
  Interest on long-term debt...................      (11,659)      (10,313)      (33,973)     (30,238)      (44,438)      (39,921)
  Other interest expense.......................       (1,033)       (1,217)       (5,782)      (4,992)       (8,802)       (7,620)
  Minority interest............................         (523)         (332)       (1,456)      (1,034)       (1,410)       (1,034)
  Other........................................          766           (36)          663         (285)         (808)       (3,084)
                                                  ----------    ----------    ----------   ----------    ----------    ----------
    Total other income and (deductions)........      (11,305)      (10,497)      (36,918)     (33,929)      (50,548)      (47,820)
                                                  ----------    ----------    ----------   ----------    ----------    ----------
INCOME (LOSS) BEFORE INCOME TAXES..............      (22,462)      (28,924)       74,148       80,733       114,743       133,425
INCOME TAX PROVISION...........................       (6,426)      (10,487)       27,060       28,279        40,267        48,082
                                                  ----------    ----------    ----------   ----------    ----------    ----------
NET INCOME (LOSS)..............................      (16,036)      (18,437)       47,088       52,454        74,476        85,343
        
DIVIDENDS ON PREFERRED STOCK...................            -             -             -           18             -            71
                                                  ----------    ----------    ----------   ----------    ----------    ----------
NET INCOME (LOSS) AVAILABLE FOR COMMON STOCK...   $  (16,036)   $  (18,437)   $   47,088   $   52,436    $   74,476    $   85,272
                                                  ==========    ==========    ==========   ==========    ==========    ==========
</TABLE>

            CONSOLIDATED STATEMENT OF RETAINED EARNINGS (UNAUDITED)
                             (THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED          NINE MONTHS ENDED         TWELVE MONTHS ENDED
                                                       SEPTEMBER 30,               SEPTEMBER 30,               SEPTEMBER 30,
                                                  -----------------------     -----------------------    ------------------------

                                                     1997         1996           1997         1996          1997          1996
                                                  ----------    ----------    ----------   ----------    ----------    ----------
<S>                                              <C>           <C>         <C>              <C>             <C>            <C>
BALANCE - BEGINNING OF PERIOD..................   $  359,429    $  331,617    $  336,305   $  267,744    $  313,180    $  234,908
  Add - Net income (Loss)......................      (16,036)      (18,437)       47,088       52,454        74,476        85,343
                                                  ----------    ----------    ----------   ----------    ----------    ----------
                                                     343,393       313,180       383,393      320,198       387,656       320,251
  Deduct - Cash dividends declared:
    Preferred stock............................            -             -             -           18             -            71
    Common stock...............................            -             -        40,000        7,000        44,263         7,000
                                                  ----------    ----------    ----------   ----------    ----------    ----------
BALANCE - END OF PERIOD........................   $  343,393    $  313,180    $  343,393   $  313,180    $  343,393    $  313,180
                                                  ==========    ==========    ==========   ==========    ==========    ==========
</TABLE>

The notes to the consolidated financial statements are an integral part of these
                                  statements.


                                      6


<PAGE>   9
               MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
                             (THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
                                                                                               SEPTEMBER 30,         DECEMBER 31,
                                                                                          -----------------------    ------------
                                                                                             1997         1996           1996
                                                                                          ----------   ----------    ------------
<S>                                                                                    <C>            <C>          <C>
ASSETS
  CURRENT ASSETS                                                      
    CASH AND CASH EQUIVALENTS........................................................     $   12,148   $   18,282    $   10,010
    Accounts receivable, less allowance for doubtful accounts of     
     $16,104, $14,112 and $17,707, respectively......................................        104,218      119,787       169,436
    Accrued unbilled revenues........................................................         21,972       22,197       107,377
    Gas in inventory.................................................................         96,533      101,742        67,910
    Property taxes assessed applicable to future periods.............................         26,870       23,456        60,592
    Accrued gas cost recovery revenues...............................................              -       33,585        27,672
    Other............................................................................         32,375       22,602        23,025
                                                                                          ----------   ----------    ----------
                                                                                             294,116      341,651       466,022
                                                                                          ----------   ----------    ----------
  DEFERRED CHARGES AND OTHER ASSETS       
    Investment in and advances to joint ventures.....................................         19,229       20,357        19,479
    Deferred postretirement benefit costs............................................              -        7,103         4,863
    Deferred environmental costs.....................................................         27,600       28,016        28,233
    Prepaid benefit costs............................................................         71,345       54,103        64,307
    Other............................................................................         55,209       48,660        50,206
                                                                                          ----------   ----------    ----------
                                                                                             173,383      158,239       167,088
                                                                                          ----------   ----------    ----------
  Property, Plant and Equipment......................................................      2,741,653    2,609,095     2,668,294
    Less - Accumulated depreciation and depletion ...................................      1,303,841    1,221,009     1,243,060
                                                                                          ----------   ----------    ----------
                                          
                                                                                           1,437,812    1,388,086     1,425,234
                                                                                          ----------   ----------    ----------
                                          
                                                                                          $1,905,311   $1,887,976    $2,058,344
                                                                                          ==========   ==========    ==========
LIABILITIES AND SHAREHOLDER'S EQUITY      
  CURRENT LIABILITIES                     
    Accounts payable.................................................................     $   92,051   $   99,223    $  130,725
    Notes payable....................................................................        140,022      194,013       265,126
    Current portion of long-term debt and capital lease obligations..................         28,099       53,213        53,232
    Federal income, property and other taxes payable.................................         40,602       33,241        84,788
    Customer deposits................................................................         14,026       10,787        12,860
    Other............................................................................         56,921       50,885        63,309
                                                                                          ----------   ----------    ----------
                                                                                             371,721      441,362       610,040
                                                                                          ----------   ----------    ----------
  DEFERRED CREDITS AND OTHER LIABILITIES  
    Accumulated deferred income taxes................................................         79,273       83,160        76,523
    Unamortized investment tax credit................................................         33,206       35,050        34,588
    Tax benefits amortizable to customers............................................        123,540      112,930       116,313
    Accrued environmental costs......................................................         32,000       32,000        32,000
    Minority interest................................................................         16,927       18,503        17,604
    Other............................................................................         38,553       59,838        43,954
                                                                                          ----------   ----------    ----------
                                                                                             323,499      341,481       320,982
                                                                                          ----------   ----------    ----------

  LONG-TERM DEBT, INCLUDING CAPITAL LEASE OBLIGATIONS (NOTE 2) ......................        625,999      551,254       550,318
                                                                                          ----------   ----------    ----------
  COMMITMENTS AND CONTINGENCIES (NOTE 4)                                              

  COMMON SHAREHOLDER'S EQUITY                                                         
    Common stock.....................................................................         10,300       10,300        10,300
    Additional paid-in capital.......................................................        230,399      230,399       230,399
    Retained earnings................................................................        343,393      313,180       336,305
                                                                                          ----------   ----------    ----------
                                                                                             584,092      553,879       577,004
                                                                                          ----------   ----------    ----------
                                                                                          $1,905,311   $1,887,976    $2,058,344
                                                                                          ==========   ==========    ==========
</TABLE> 
The notes to the consolidated financial statements are an integral part of this
                                  statement.

                                          7





<PAGE>   10
              MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES
               CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
                            (THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
                                                                                     NINE  MONTHS ENDED
                                                                                        SEPTEMBER 30
                                                                                 ------------------------ 
                                                                                    1997          1996   
                                                                                 ----------    ----------
<S>                                                                              <C>           <C>
CASH FLOW FROM OPERATING ACTIVITIES
  Net income.................................................................... $   47,088    $  52,454
  Adjustments to reconcile net income to net cash flow provided
    from operating activities:
      Depreciation and depletion
        Per statement of income.................................................     78,084       73,963
        Charged to other accounts...............................................      5,660        5,667
      Deferred income taxes - current...........................................    (25,229)      (5,372)
      Deferred income taxes and investment tax credit - net............               8,595       10,715
      Other.....................................................................     (1,159)      (1,946)
      Changes in assets and liabilities, exclusive of changes
        shown separately........................................................     96,908      (24,184)
                                                                                 ----------    ---------
          Net cash provided from operating activities.........................      209,947      111,297
                                                                                 ----------    --------- 

CASH FLOW FROM FINANCING ACTIVITIES
  Notes payable - net...........................................................   (125,104)      (2,622)
  Issuance of long-term debt (Note 2)...........................................    124,051       69,645
  Additional paid-in-capital....................................................          -        1,614
  Cash dividend paid:
    Common stock................................................................    (40,000)      (7,000)
    Preferred stock.............................................................          -          (54)
  Retirement of long-term debt and preferred stock.........................         (74,792)      (5,435)
                                                                                 ----------    ---------
          Net cash (used for) provided from financing activities..........         (115,845)      56,148
                                                                                 ----------    --------- 

CASH FLOW FROM INVESTING ACTIVITIES
  Capital expenditures..........................................................    (97,042)    (146,277)
  Other - net...................................................................      5,078      (11,355)
                                                                                 ----------    ---------
          Net cash used for investing activities................................    (91,964)    (157,632)
                                                                                 ----------    --------- 

Net Increase in Cash and Cash Equivalents...................................          2,138        9,813
Cash and Cash Equivalents, January 1..........................................       10,010        8,469
                                                                                 ----------    ---------
Cash and Cash Equivalents, September 30....................................      $   12,148    $  18,282
                                                                                 ==========    ========= 

CHANGES IN ASSETS AND LIABILITIES, EXCLUSIVE OF CHANGES SHOWN SEPARATELY
    Accounts receivable - net................................................... $   61,679    $  58,180
    Accrued gas cost recovery revenues..........................................     28,318      (34,163)
    Accrued unbilled revenues...................................................     85,405       68,937
    Gas in inventory............................................................    (28,623)     (61,551)
    Property taxes assessed applicable to future periods...............              33,722       34,703
    Accounts payable............................................................    (38,674)     (10,101)
    Federal income, property and other taxes payable....................            (44,186)     (53,971)
    Other current assets and liabilities........................................      8,953        1,363
    Deferred and prepaid benefit costs..........................................     (2,175)     (23,396)
    Deferred assets and liabilities.............................................     (7,511)      (4,185)
                                                                                 ----------    ---------
                                                                                 $   96,908    $ (24,184)
                                                                                 ==========    ========= 
SUPPLEMENTAL DISCLOSURES
  Cash paid for:
    Interest, net of amounts capitalized........................................ $   37,073    $  28,501
                                                                                 ==========    ========= 
    Federal income taxes........................................................ $   39,530    $  28,792
                                                                                 ==========    ========= 
  Noncash financing activities:
    Transfer of pipeline net assets from MCN...................................  $        -    $  17,008
                                                                                 ==========    ========= 
</TABLE>



The notes to the consolidated financial statements are an integral part of this
                                  statement.

                                       8



<PAGE>   11
               MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1.   GENERAL

     There have been no changes in MichCon's principal accounting policies from
those set forth in MichCon's 1996 Annual Report on Form 10-K.  Certain
reclassifications have been made to the prior year's financial statements to
conform with the 1997 presentation.

     The unaudited information furnished herein, in the opinion of management,
reflects all adjustments (consisting of only recurring adjustments or accruals)
necessary for a fair presentation of the results of operations during the
periods.

     Because of seasonal and other factors, revenues, expenses and net income
for the interim periods should not be construed as representative of revenues,
expenses and net income for all or any part of the balance of the current year
or succeeding periods.

2.   CAPITALIZATION

     A.  LONG-TERM DEBT ISSUANCE

          The following long-term debt totaling $85,000,000 was issued in 
     May 1997:


               First Mortgage Bonds         Amount Issued
               --------------------         -------------
               7.21%, due May 2007            $30,000,000
               7.06%, due May 2012            $40,000,000
               7.60%, due May 2017            $15,000,000
                      

          These funds were used to repay short-term debt used to retire first   
     mortgage bonds on May 1, 1997, fund capital expenditures and for general
     corporate purposes.

          MichCon has entered into variable interest rate swap agreements with
     notional principal amounts aggregating $80,000,000 in connection with the
     first mortgage bonds issued May 1997. Swap agreements of $40,000,000
     through May 2002 have reduced the average cost of debt from 7.31% to 6.32%
     for the five months ended September 30, 1997.  Swap agreements of
     $40,000,000 through May 2005 have reduced the average cost of debt from
     7.06% to 5.91% for the five months ended September 30, 1997.

          During April 1997, MichCon subsidiaries borrowed $40,000,000 under a
     nonrecourse credit agreement.  Under terms of the agreement, certain
     alternative variable interest rates are available at the borrowers' option
     during the life of the agreement.  Quarterly principal payments commenced
     in June 1997 with a final installment due November 2005. The loan is
     secured by a pledge of stock of the borrowers and a security interest in
     certain of their assets. MichCon may be required to support the credit
     agreement through limited capital contributions to the subsidiaries if
     certain cash flow and operating targets are not met.  At September 30,
     1997, $37,600,000 was outstanding at a weighted average interest rate
     6.34%.




                                       9


<PAGE>   12

               MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONCLUDED)




2.   CAPITALIZATION - (CONTINUED)

     B.  LONG-TERM DEBT REDEMPTION

          In the second quarter of 1997, MichCon  redeemed early $5,000,000 of
     9.50% first mortgage bonds and $12,000,000 of 9.75% unsecured notes.  As
     noted in MichCon's 1996 Form 10-K, the company had a variable interest
     rate swap agreement through April 2000 on the $12,000,000 unsecured notes. 
     This agreement reduced the cost of debt of the fixed-rate unsecured notes
     from 9.75% to 5.77% for the six months ended June 30, 1997.  This swap has
     been redesignated as a hedge of other outstanding first mortgage bonds.

3.   LINES OF CREDIT

     MichCon has established credit lines that allow for borrowings of up to 
$150,000,000 under a 364-day revolving credit facility and up to        
$150,000,000 under a three-year revolving credit facility.  These credit        
lines totaling $300,000,000 support its commercial paper program. Commercial
paper of $61,571,000 was outstanding as of September 30,1997 under these lines.
The 364-day revolving credit facility was renewed in July 1997. Both revolving
credit facilities expire in July 1998.

4.   COMMITMENTS AND CONTINGENCIES

     MichCon is involved in certain legal and administrative proceedings before
various courts and governmental agencies concerning claims arising in the
ordinary course of business.  Management cannot predict the final disposition 
of such proceedings, but believes that adequate provision has been made for 
probable losses.  It is management's belief, after discussion with legal 
counsel, that the ultimate resolution of those proceedings still pending will 
not have a material adverse effect on MichCon's financial statements.



                                       10
<PAGE>   13
                               OTHER INFORMATION



EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits


          EXHIBIT
          NUMBER                   DESCRIPTION
          -------  --------------------------------------------------

          12-1     Computation of Ratio of Earnings to Fixed Charges.

          27-1     Financial Data Schedule.



     (b)  Reports on Form 8-K

          None
   



                                       11

<PAGE>   14
                                   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.


                                        MICHIGAN CONSOLIDATED GAS COMPANY



Date: November 7, 1997                      By:   /s/  Howard L. Dow III
                                               -------------------------
                                                       Howard L. Dow III
                                                       Vice President and
                                                     Chief Financial Officer




                                       12


<PAGE>   15
                              INDEX TO EXHIBITS


EXHIBIT NO.             DESCRIPTION
-----------             -----------

12-1                    Computation of Ratio Earning to Fixed Charges.

27-1                    Financial Data Schedule