CONSOL Energy Reports Strong Fourth Quarter; Record Earnings for 2005

PITTSBURGH, Jan. 26  /PRNewswire-FirstCall/ -- CONSOL Energy Inc. (NYSE:CNX), a high-Btu bituminous coal and coalbed methane company, reported earnings of $87.6 million, or $0.94 per diluted share, for its fourth quarter ended December 31, 2005, compared with $67.7 million, or $0.74 per diluted share for the same period a year earlier.  The company reported record annual earnings of $580.9 million, or $6.26 per diluted share, for 2005 compared with $198.6 million, or $2.18 per diluted share, for 2004.  Net cash from operating activities was $218.7 million for the quarter just ended, compared with $162.8 million for the December 2004 quarter.

  FINANCIAL RESULTS - Period-To-Period Comparison
                                                      Twelve       Twelve
                           Quarter      Quarter       Months       Months
                            Ended        Ended        Ended        Ended
                         December 31, December 31, December 31, December 31,
                             2005         2004         2005         2004
  Total Revenue and
   Other Income             $969.1       $791.4     $3,810.4     $2,776.7
  Earnings Before Effect
   of Accounting Change      $87.6        $67.7       $580.9       $115.2
  Net Income                 $87.6        $67.7       $580.9       $198.6
  Earnings Per Share
   (Diluted)                 $0.94        $0.74        $6.26        $2.18
  Net Cash from Operating
   Activities               $218.7       $162.8       $409.1       $358.1
  EBITDA                    $190.6       $140.2       $926.3       $389.0*
  EBIT                      $123.0        $44.0       $664.5       $108.6*
  Capital Expenditures      $236.2       $111.5       $523.5       $410.6
  Other Investing Cash Flows ($2.6)        $5.7      ($449.1)      ($10.1)

   In millions of dollars except per share. Amounts for capital expenditures
   do not include amounts for equity affiliates.  Other investing cash flows
   represents net cash used in or (provided by) investing activities less
   capital expenditures and includes:  Additions to mineral leases;
   Investment in Equity Affiliates; Proceeds from Sales of Assets and
   Proceeds of $420.2 million from sale of 18.5% of CNX Gas. *Before
   cumulative effect of accounting change.




"The fourth quarter was a strong quarter and 2005 was a watershed year for us in many respects," said J. Brett Harvey, president and chief executive officer.  "During the year, our mines performed well, energy prices continued to rise, and we executed our plan to establish the value of our gas business. In addition, the long term market for Northern Appalachian coal began to evolve as we had forecasted allowing us to secure, in January of this year, a major multi-year contract for high sulfur coal going to scrubbed power plants."

Harvey noted that several mines or complexes set production records for the year. "Bailey Mine set a new record of 11.1 million tons," Harvey said, "and the Bailey/Enlow Complex set a new record of 20.9 million tons." In addition, Harvey said that records were set at the McElroy Mine (10.4 million tons), the Loveridge Mine (6.4 million tons) and the Emery Mine (1.2 million tons). He said performance at these mines helped offset the estimated loss of approximately 2.5 million tons from the Buchanan Mine due to problems that occurred there during the year.

"McElroy, Loveridge and the Bailey/Enlow complex are all facilities in which we have made significant capital investments in the past three years," Harvey explained.  "Our record of capital investment is one of putting our dollars to work in the right places at the right time."

Energy prices, in particular, were a strong driver in CONSOL Energy's fourth quarter and full year results. "Coal prices period-to-period were up more than $4.50 for the quarter just ended and more than $5.50 for the full year," Harvey noted "This is a very robust pricing environment," he said. "It has enabled us to price our short-term and long-term coal sales at levels that will continue to provide top line growth."

Harvey also explained that long-term coal markets are beginning to recognize the substantial value of Northern Appalachian coals.  "This January, we executed a major, long-term contract with American Electric Power (AEP) for Northern Appalachian coal with a high sulfur content.  We were able to do this deal because AEP, as it completes its scrubber projects, was looking for long- term, reliable supplies of coal close to their plants."

Harvey said he believes that other similar transactions are in the offing. "As scrubbers are added to existing plants, more power plant operators in the east will seek the advantage of fueling with high-Btu coal that is close to their plants."

Period-To-Period Analysis of Financial Results for the Quarter

Total revenue and other income improved 22.5 percent, primarily reflecting higher prices for produced coal and gas and increased revenue from the purchase of gas (offset by a commensurate increase in cost of goods sold for purchased gas).

Total costs increased 11.7 percent.

Cost of goods sold (including Purchased Gas Costs) increased 20.5 percent, primarily reflecting higher costs related to Purchased Gas (offset by a commensurate increase in Purchased Gas Revenue), higher costs for produced coal (reflecting increased supply and labor costs) and higher taxes and royalties that increased as prices rose.

Depreciation, depletion and amortization decreased 29.7 percent, primarily attributable to the acceleration of depreciation for equipment and facilities at Rend Lake and other idled mine locations in the 2004 period.

Interest expense decreased $1.4 million, or 17.5 percent, reflecting lower amounts of borrowing throughout the 2005 period.

Taxes other than income increased 6.2 percent, reflecting higher coal and gas production taxes related to increases in coal and gas sales prices.

As of December 31, 2005, CONSOL Energy had no short-term debt and had $855.9 million in total liquidity, which is comprised of $340.6 million of cash, an available accounts receivable securitization facility of $102.7 million and $412.6 million available to be borrowed under its $750 million bank facility.

  Coal Operations
                                                      Twelve       Twelve
                           Quarter      Quarter       Months       Months
                            Ended        Ended        Ended        Ended
                         December 31, December 31, December 31, December 31,
                             2005         2004         2005         2004
  Total Coal Sales
   (millions of tons)        18.0         19.1         70.5         69.5
  Sales - Company-Produced
   (millions of tons)        17.5         18.7         68.9         67.4
  Coal Production
   (millions of tons)        17.7*        19.2         69.1         67.7
  Average Realized Price
   Per Ton - Company-
   Produced                $36.28       $31.70       $35.61       $30.06
  Operating Costs Per Ton  $21.90       $19.36       $22.28       $20.40
  Non-operating Charges
   Per Ton                  $5.12        $4.11        $4.93        $4.57
  DD&A Per Ton              $2.94        $2.49        $2.86        $2.57
  Total Cost Per Ton -
   Company-Produced **     $29.95       $25.96       $30.06       $27.54

   Sales and production includes CONSOL Energy's portion from equity
   affiliates.  Operating costs include items such as labor, supplies,
   power, preparation costs, project accruals, subsidence costs, gas well
   plugging costs, charges for employee benefits (including Combined Fund
   premium), royalties, production and property taxes.  Non-operating
   charges include items such as charges for long-term liabilities, direct
   administration, selling and general administration.
   *Includes .48 million tons of metallurgical grade coal.
   **Amounts may not add due to rounding.




Coal segment performance improved in the quarter-to-quarter comparison, reflecting higher realized prices for company-produced coal, offset by lower coal sales, lower coal production and higher unit costs of production.

Sales of company-produced coal declined 1.2 million tons, period-to- period, reflecting, in part, a decline of approximately 1.0 million tons in production from the Buchanan Mine related to a skip hoist problem that occurred in September and caused production to be suspended for most of the quarter.

Average realized prices increased $4.58, or 14.4 percent, reflecting improved contract and spot pricing.

Total costs for company-produced coal increased $3.98 per ton, or 15.3 percent, primarily reflecting a 7.8 percent decrease in production volumes (which tends to increase the unit cost impact of fixed costs), as well as higher supply costs, reflecting additional maintenance work done and higher prices for supplies, higher labor costs related to increased man-counts, as well as higher production and other taxes that rise as prices for coal rise.

Operating margins (average realized price less operating costs) were $14.38 per ton, an improvement of 16.5 percent period-to-period, while financial margins (average realized price less total costs) were $6.33 per ton, an increase of 10.5 percent. "Margin expansion in coal production is a goal we have pursued with great urgency because it is a key driver in the overall profitability of the company," Harvey explained.

Gas Operations

CNX Gas Corporation (NYSE:CXG), 81.5 percent of which is owned by CONSOL Energy, reported net income to CONSOL Energy of $26.5 million for the quarter ended December 31, 2005, and $92.7 million for the calendar year 2005.  CNX Gas Corporation issued its earnings release on January 25, 2006.  Additional information regarding CNX Gas Corporation financial and operating results for the quarter and year just ended are available in that release.

"CNX Gas Corporation is off to a strong start as an independent company," Harvey said. "Our expectations for this investment remain very high."

Developments During the Quarter

In September, the Buchanan Mine, near Mavisdale, Virginia, suspended production following a problem with the mine's skip hoist mechanism.  The hoist was repaired and production resumed on December 13, 2005.  It is estimated that the mine lost approximately 1.0 million tons of production during the period that production was suspended.  During that period, the company invoked the force majeure provision on all sales contracts for Buchanan Mine coal.

In October, David C. Hardesty, president - West Virginia University, was elected to the CONSOL Energy Board of Directors.

In December, the company's Board of Directors authorized a common share repurchase program of up to $300 million during the 24-month period beginning January 1, 2006 and ending December 31, 2007.

Subsequent Events

In January, CONSOL Energy announced that it had entered into a coal sales agreement with American Electric Power (AEP) for the sale of up to 82.5 million tons of high-Btu bituminous coal to various AEP coal-fired power stations over a 15-year period beginning in 2007 and running through 2021. The coal will come from the Shoemaker and McElroy mines and will be shipped to AEP power plants that have or will be equipped to have scrubbers.

As a result of the new contract, the company announced that it will begin a major capital improvement project for the Shoemaker Mine, replacing the mine's older, rail haulage system with a new, more efficient conveyor belt haulage system.

Also in January, CONSOL Energy announced that it had agreed to purchase Mon River Towing and J.A.R. Barge Lines, LP from the Guttman Group, a private concern.  The acquisition will increase the size of CONSOL Energy's towboat fleet from 5 to 18 and increase the number of barges from about 300 to more than 650, increasing coal transportation capacity from 11 million tons to about 24 million tons.  The transaction closed on January 20, 2006.

Outlook

In the tables below, the company provides certain financial and production guidance measures.  These measures are based on the company's current estimates and are subject to change based on changing circumstances and on risks associated with the business that are described at the end of this news release.

                                 GUIDANCE

                                         2006      2007      2008     2009
                                      Estimate  Estimate  Estimate  Estimate
  FINANCIAL FORECAST (millions)
     CAPEX (Total)                       $740      N.A.      N.A.      N.A.
        - Coal                           $490*     N.A.      N.A.      N.A.
        - Gas                            $165*     N.A.      N.A.      N.A.
        - Land                            $65**    N.A.      N.A.      N.A.
        - Other                           $20      N.A.      N.A.      N.A.
     DD&A                                $285      N.A.      N.A.      N.A.

  COAL
     Tons Produced (millions of tons)   70 -74   67 - 71   68 - 72   74 - 78
     Tons Committed (millions of
      tons at Jan. 17, 2006)             66.0      46.3      34.9      26.4
     Tons Committed and Priced (millions
      of tons at Jan. 17, 2006)          65.0      40.7      21.9       7.5
     Av. Realized Price/Ton
      Committed & Priced               $37.34    $37.99    $40.35    $40.93

   *Does not include investments in equity affiliates.
   **Includes approximately $12 million in land acquisitions for gas
   operations.
   N.A. = Not Available



  2006 COAL CAPEX (forecast)

  CATEGORY                       2006
  Maintenance of Production      $300
  Expansion                      $120
  Efficiency                      $45
  Environmental and Safety        $25
     TOTAL                       $490


  2006 Quarterly Production Guidance

                          1Q Estimate  2Q Estimate  3Q Estimate  4Q Estimate

  Coal (millions of tons) 17.2 - 18.2  18.2 - 19.2  16.3 - 17.3  18.3 - 19.3





Over the next two years, electricity generation in the United States is forecast to grow approximately 2.0% per annum, absent any adverse weather impacts.  According to industry reports, coal inventories are significantly below normal in the United States and could add 10-20 million tons of demand in 2006.  Furthermore, natural gas prices remain high and make gas powered generation more expensive than that of coal.  These factors should contribute to an already tight supply/demand balance for U.S. thermal (steam) coal.

The United States Energy Information Administration (EIA) has forecasted that over the next four years there are more than 12 gigawatts of planned capacity additions from new generators that will use coal as an energy source -- requiring an estimated 30 million tons of high-Btu coal per year.  In addition, there are nearly 50 gigawatts of existing coal-fired power scheduled to be retrofitted with scrubbers over the same time frame.  CONSOL Energy expects to benefit from:  the long-term demand for high-Btu Northern Appalachia coal due to new and retrofitted scrubbers on power plants geographically located near CONSOL's mines; the growing demand for electricity generation as consumers use more electricity-dependent devices; the geological limitations of Central Appalachian coal; and the potential transportation issues associated with lower Btu coal.

"While the overall market for coal remains positive, we believe the growth in demand for Northern Appalachian coal will exceed the industry's organic growth by a wide-margin," Harvey said.  "The transaction with AEP that we announced earlier this month is indicative of the way we see this market evolving.  Major coal-burning power generators are beginning to move to the high-Btu products available close to their plants as their scrubber construction projects are completed."  On January 11, 2005, CONSOL Energy announced that it had entered into a 15-year sales contract with American Electric Power (AEP) for up to 82.5 million tons of Northern Appalachian coal from CONSOL Energy's Shoemaker and McElroy mines.

Harvey said the company's ten-year plan for Northern Appalachia is synchronized with the addition of scrubbed power plant capacity being added. "While we are already seeing some near-term market growth, by 2008, additional scrubbed capacity will have grown significantly," he explained, "and will continue to grow from there."

The company has a significant amount of its 2006 coal production already sold.  "This year is a bridge year for the higher sulfur Northern Appalachian coals," Harvey said. "Sulfur dioxide allowance prices are high, which restricts the market for the highest sulfur products such as those from Shoemaker."  He noted that scrubber capacity begins to come on line by the end of this year. "Because of our sales position in 2006, we are largely insulated from the effects of the current price of allowances."

Harvey also noted that Northern Appalachian coals have a logistical advantage in many markets because the mines are located close to customers and, in many instances, have access to economical water transportation.  "Our recent acquisition of Mon River Towing more than doubles our capacity to move coal on the rivers," he explained. "This gives us significant value in the market.  In addition, we see our river operations as a core competency that will contribute to the bottom line."

Looking at forecasted capital spending, Harvey said that spending on coal projects is similar to the cycle of spending made earlier. "The production volumes and the earnings generation in coal this past year were a result not only of our sustained investment in the business," he said, "but also our investment in key expansion projects that began in mid-2002."  He noted that during this multi-year period the company expanded the McElroy Mine and the Bailey Central Processing plant as well as re-activating the previously idled Loveridge Mine.

Capital projects approved this year are expected to result in the addition of nearly 15 million tons of gross annual production over the next four years. "These projects, many of which take several years to complete, allow us to increase production at a measured, disciplined rate as well as replace about 9 million tons of natural depletions or declines in production from existing mines," Harvey said.

Planned capital spending for 2006 also is expected to have a positive impact on coal unit costs.  "We are forecasting an increase in cash costs per ton of only 2.5 percent compared with 2005," Harvey said, "and an increase in total costs of only 1.5 percent."  He noted, however, that achieving forecasted unit costs are dependent on achieving or exceeding forecasted production volumes.

Harvey said the forecast for strong cash generation allows the company to fund its capital spending entirely from internally generated funds. "In addition, we will have free cash beyond our capital program to continue to reward shareholders with the highest dividend among our coal peers, as well as executing about half of our authorized share repurchase program."  Late last year, the company announced that the Board of Directors had authorized the repurchase of up to $300 million of the company's outstanding common shares during the two-year period from January 1, 2006 through December 31, 2007. "We expect to use the full authorization during that period," he concluded.

CONSOL Energy Inc. has annual revenues of $2.8 billion. The company was named one of America's most admired companies in 2005 by Fortune magazine. It received the U.S. Department of the Interior's Office of Surface Mining National Award for Excellence in Surface Mining for the company's innovative reclamation practices in 2002 and 2003. Also in 2003, the company was listed in Information Week magazine's "Information Week 500" list for its information technology operations. In 2002, the company received a U.S. Environmental Protection Agency Climate Protection Award. Additional information about the company can be found at its web site: http://www.consolenergy.com/.

Definition: EBIT is defined as earnings (excluding cumulative effect of accounting change) before deducting net interest expense (interest expense less interest income) and income taxes. EBITDA is defined as earnings (excluding cumulative effect of accounting change) before deducting net interest expense (interest expense less interest income), income taxes and depreciation, depletion and amortization. Although EBIT and EBITDA are not measures of performance calculated in accordance with generally accepted accounting principles, management believes that it is useful to an investor in evaluating CONSOL Energy because it is widely used to evaluate a company's operating performance before debt expense and its cash flow. EBIT and EBITDA do not purport to represent cash generated by operating activities and should not be considered in isolation or as a substitute for measures of performance in accordance with generally accepted accounting principles. In addition, because all companies do not calculate EBIT or EBITDA identically, the presentation here may not be comparable to similarly titled measures of other companies. Reconciliation of EBITDA and EBIT to the income statement is as follows:

                              CONSOL Energy
                              EBIT & EBITDA
                              (000) Omitted
                                                        Twelve    Twelve
                                    Quarter   Quarter   Months    Months
                                     Ended     Ended     Ended     Ended
                                   12/31/05  12/31/04  12/31/05  12/31/04

  Net Income/(Loss)                 $87,593   $67,668  $580,861  $198,582
  Less: Cumulative Effect of
         Accounting Change                -         -         -  ($83,373)
  Adjusted Net Income                87,593    67,668   580,861   115,209

  Add:  Interest Expense              6,413     7,776    27,317    31,429
  Less: Interest Income              (4,045)     (767)   (8,066)   (5,376)
  Add:  Income Taxes                 33,078   (30,682)   64,339   (32,646)

  Earnings Before Interest
   & Taxes (EBIT)                   123,039    43,995   664,451   108,616

  Add:  Depreciation, Depletion
         & Amortization              67,592    96,187   261,851   280,397

  Earnings Before Interest, Taxes
   and DD&A (EBITDA)               $190,631  $140,182  $926,302  $389,013



  Forward-Looking Statements


CONSOL Energy is including the following cautionary statement to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, CONSOL Energy. With the exception of historical matters, any matters discussed are forward-looking statements (as defined in Section 21E of the Exchange Act) that involve risks and uncertainties that could cause actual results to differ materially from projected results. You can identify these statements by forward-looking words such as "may," "will," "expect," "anticipate," "believe," "guidance," "forecast," "estimate," "intend," "predict," and "continue" or similar words.  These risks, uncertainties and contingencies include, but are not limited to, the following:

   * the disruption of rail, barge and other systems which deliver our coal,
     or pipeline systems which deliver our gas;
   * our inability to hire qualified people to meet replacement or expansion
     needs;
   * the risks inherent in coal mining being subject to unexpected
     disruptions, including geological conditions, equipment failure, fires,
     accidents and weather conditions which could cause our results to
     deteriorate;
   * uncertainties in estimating our economically recoverable coal and gas
     reserves;
   * risks in exploring for and producing gas;
   * obtaining governmental permits and approvals for our operations;
   * a loss of our competitive position because of the competitive nature of
     the coal industry and the gas industry, or a loss of our competitive
     position because of overcapacity in these industries impairing our
     profitability;
   * a decline in prices we receive for our coal and gas affecting our
     operating results and cash flows;
   * the inability to produce a sufficient amount of coal to fulfill our
     customers' requirements which could result in our customers initiating
     claims against us;
   * reliance on customers extending existing contracts or entering into new
     long-term contracts for coal;
   * reliance on major customers;
   * our inability to collect payments from customers if their
     creditworthiness declines;
   * coal users switching to other fuels in order to comply with various
     environmental standards related to coal combustion;
   * the effects of government regulation;
   * our inability to obtain additional financing necessary in order to fund
     our operations, capital expenditures, potential acquisitions and to
     meet our other obligations;
   * the incurrence of losses in future periods;
   * the effects of mine closing, reclamation and certain other liabilities;
   * our ability to comply with restrictions imposed by our senior credit
     facility;
   * increased exposure to employee related long-term liabilities;
   * lump sum payments made to retiring salaried employees pursuant to our
     defined benefit pension plan;
   * the outcome of various asbestos litigation cases;
   * our ability to comply with laws or regulations requiring that we obtain
     surety bonds for workers' compensation and other statutory
     requirements;
   * results of class action lawsuits against us and certain of our officers
     alleging that the defendants issued false and misleading statements to
     the public and seeking damages and costs;
   * our ability to service debt and pay dividends is dependent upon us
     receiving distributions from our subsidiaries; and
   * the anti-takeover effects of our rights plan could prevent a change of
     control.



                     CONSOL ENERGY INC. AND SUBSIDIARIES
                                 (Unaudited)
                      CONSOLIDATED STATEMENTS of INCOME
                (Dollars in thousands - except per share data)

                               Three Months Ended     Twelve Months Ended
                                  December 31,            December 31,
                                2005        2004        2005        2004

  Sales - Outside              $782,764    $701,466  $2,977,833  $2,468,248
  Sales - Purchased Gas         117,603      46,586     275,148     112,005
  Sales - Related Party             -           -         4,749         -
  Freight - Outside              26,836      27,736     119,343     110,175
  Freight - Related Party           -           -           468         -
  Other Income                   41,856      15,646     105,582      86,321
  Gain on Sale of 18.5% of
   CNX Gas                          -           -       327,326         -
       Total Revenue and
        Other Income            969,059     791,434   3,810,449   2,776,749
  Cost of Goods Sold and Other
       Operating Charges
        (exclusive of
        depreciation,
        depletion and
        amortization shown
        below)                  542,576     501,824   2,158,760   1,887,947
  Purchased Gas Costs           118,981      47,094     278,720     113,063
  Freight Expense                26,836      27,736     119,811     110,175
  Selling, General and
   Administrative Expense        21,537      18,819      80,700      72,870
  Depreciation, Depletion
   and Amortization              67,592      96,187     261,851     280,397
  Interest Expense                6,413       7,776      27,317      31,429
  Taxes Other Than Income        58,428      55,012     228,606     198,305
       Total Costs              842,363     754,448   3,155,765   2,694,186
  Earnings Before Income
   Taxes, Minority
       Interest and
        Cumulative Effect of
        Change in Accounting
        Principle               126,696      36,986     654,684      82,563
  Income Taxes (Benefit)         33,078     (30,682)     64,339     (32,646)
  Earnings Before Minority
   Interest and Cumulative
   Effect of Change in
   Accounting Principle          93,618      67,668     590,345     115,209
  Minority Interest              (6,025)        -        (9,484)        -
  Cumulative Effect of
   Change in Accounting for
   Workers' Compensation
   Liability, net of
   Income Taxes of $53,080          -           -           -        83,373
       Net Income               $87,593     $67,668    $580,861    $198,582
       Basic Earnings Per
        Share                     $0.95       $0.75       $6.33       $2.20
       Dilutive Earnings Per
        Share                     $0.94       $0.74       $6.26       $2.18
  Weighted Average Number of
   Common Shares Outstanding:
       Basic                 92,466,044  90,551,567  91,744,954  90,230,693
       Dilutive              93,631,913  91,868,095  92,767,490  91,199,945
  Dividends Paid Per Share        $0.14       $0.14       $0.56       $0.56



                     CONSOL ENERGY INC. AND SUBSIDIARIES
                                 (Unaudited)
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Dollars in thousands)

                                     Three Months Ended Twelve Months Ended
                                        December 31,        December 31,
                                       2005      2004      2005      2004
  Operating Activities:
    Net Income                        $87,593   $67,668  $580,861  $198,582
    Adjustments to Reconcile Net
     Income to Net Cash Provided by
     Operating Activities:
      Cumulative Effect of Change in
       Accounting Principle, net of tax   -         -         -     (83,373)
      Depreciation, Depletion and
       Amortization                    67,592    96,187   261,851   280,397
      Compensation from Restricted
       Stock Unit Grants                  942       438     3,596     1,153
      (Gain) on the Sale of Assets     (2,241)   (2,063)  (15,095)  (40,841)
      (Gain) on Sale of 18.5%
       Interest in Gas Segment            -         -    (327,326)      -
      Change in Minority Interest       6,025       -       9,484       -
      Amortization of Mineral Leases      509       613     4,483     4,907
      Deferred Income Taxes             5,931   (28,936)   (4,644)  (26,914)
      Equity in (Earnings) Losses of
       Affiliates                        (898)      366    (2,850)    4,317
      Changes in Operating Assets:
              Accounts Receivable
               Securitization             -      22,700  (125,000)   17,000
              Accounts and Notes
               Receivable              15,908   (20,774)  (31,900)   (7,959)
              Inventories              (3,041)  (11,493)  (13,361)  (18,544)
              Prepaid Expenses        (10,743)    1,086   (28,148)   (2,734)
      Changes in Other Assets         (12,310)    7,902    (6,525)   16,968
      Changes in Operating
       Liabilities:
              Accounts Payable         17,418    26,443    22,725    54,459
              Other Operating
               Liabilities             23,383     6,034    61,094   (24,936)
      Changes in Other Liabilities     20,274    (5,584)   15,317   (15,764)
      Other                             2,375     2,171     4,524     1,373
      Net Cash Provided by Operating
       Activities                     218,717   162,758   409,086   358,091
  Investing Activities:
    Capital Expenditures             (236,205) (111,517) (523,467) (410,611)
    Additions to Mineral Leases        (1,503)   (6,087)   (9,329)  (10,354)
    Net Investment in Equity
     Affiliates                         2,095    (1,511)    3,996    (4,303)
    Proceeds from Sale of 18.5%
     Interest in Gas Segment              -         -     420,167       -
    Proceeds from Sales of Assets       1,984     1,897    34,220    24,726
      Net Cash Used in Investing
       Activities                    (233,629) (117,218)  (74,413) (400,542)
  Financing Activities:
    Payments on Miscellaneous
     Borrowings                          (300)     (116)     (584)   (4,651)
    Payments on Short Term
     Borrowings                        (2,200)      -         -         -
    Payments on Revolver                  -     (43,300)   (1,700)  (63,300)
    Proceeds from (Payments on) Long
     Term Notes                        14,000       -      14,000   (45,000)
    Dividends Paid                    (12,944)  (12,660)  (51,321)  (50,471)
    Withdrawal from Restricted Cash       -         -         -     190,918
    Stock Options Exercised             3,781     4,329    39,150    14,864
      Net Cash Provided by (Used in)
       Financing Activities             2,337   (51,747)     (455)   42,360
  Net (Decrease) Increase in Cash
   and Cash Equivalents               (12,575)   (6,207)  334,218       (91)
  Cash and Cash Equivalents at
   Beginning of Period                353,215    12,629     6,422     6,513
  Cash and Cash Equivalents at End
   of Period                         $340,640    $6,422  $340,640    $6,422



                     CONSOL ENERGY INC. AND SUBSIDIARIES

                         CONSOLIDATED BALANCE SHEETS

               (Dollars in thousands - except per share data)

                                            (Unaudited)
                                            DECEMBER 31,      DECEMBER 31,
                                                2005              2004

  ASSETS

  Current Assets:
    Cash and Cash Equivalents                   $340,640            $6,422
    Accounts and Notes Receivable:
      Trade                                      276,277           111,580
      Other Receivables                           23,340            30,251
    Inventories                                  140,976           121,902
    Deferred Income Taxes                        143,481           145,890
    Recoverable Income Taxes                         -              14,614
    Prepaid Expenses                              64,537            39,510

        Total Current Assets                     989,251           470,169

  Property, Plant and Equipment:
    Property, Plant and Equipment              7,096,660         6,514,016
      Less - Accumulated Depreciation,
       Depletion and Amortization              3,561,897         3,331,436

        Total Property, Plant and
         Equipment - Net                       3,534,763         3,182,580

  Other Assets:
    Deferred Income Taxes                        376,477           355,008
    Investment in Affiliates                      52,261            47,684
    Other                                        134,900           140,170

       Total Other Assets                        563,638           542,862

        TOTAL ASSETS                          $5,087,652        $4,195,611



                     CONSOL ENERGY INC. AND SUBSIDIARIES

                         CONSOLIDATED BALANCE SHEETS

               (Dollars in thousands - except per share data)

                                            (Unaudited)
                                            DECEMBER 31,      DECEMBER 31,
                                                2005              2004
  LIABILITIES AND STOCKHOLDERS' EQUITY

  Current Liabilities:
    Accounts Payable                            $197,375          $166,068
    Short-Term Notes Payable                         -               5,060
    Current Portion of Long-Term Debt              4,629             3,885
    Accrued Income Taxes                          17,557               -
    Other Accrued Liabilities                    560,584           530,472

        Total Current Liabilities                780,145           705,485

        Total Long-Term Debt                     438,367           425,760

  Deferred Credits and Other
   Liabilities:
    Postretirement Benefits Other Than
     Pensions                                  1,592,907         1,531,250
    Pneumoconiosis Benefits                      411,022           427,264
    Mine Closing                                 356,776           305,152
    Workers' Compensation                        134,759           140,318
    Deferred Revenue                              27,343            50,208
    Salary Retirement                             33,703            51,957
    Reclamation                                   32,183             5,745
    Other                                        161,647            83,451

        Total Deferred Credits and
         Other Liabilities                     2,750,340         2,595,345

  Minority Interest                               93,444               -

        Total Liabilities and Minority
         Interest                              4,062,296         3,726,590

  Stockholders' Equity:
    Common Stock, $.01 par value;
     500,000,000 Shares Authorized,
     92,525,412 Issued and
     Outstanding at December 31, 2005;
     91,267,558 Issued and
     90,642,939 Outstanding at
     December 31, 2004                               925               913
    Preferred Stock, 15,000,000 Shares
     Authorized; None Issued
     and Outstanding                                 -                 -
    Capital in Excess of Par Value               884,241           846,644
    Retained Earnings (Deficit)                  252,109          (277,406)
    Other Comprehensive Loss                    (105,162)          (89,193)
    Unearned Compensation on Restricted
     Stock Units                                  (6,757)           (4,883)
    Common Stock in Treasury, at Cost -
     0 Shares at December 31, 2005,
     624,619 Shares at December 31, 2004             -              (7,054)

        Total Stockholders' Equity             1,025,356           469,021

        TOTAL LIABILITIES AND
         STOCKHOLDERS' EQUITY                 $5,087,652        $4,195,611



                     CONSOL ENERGY INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                (Dollars in Thousands - except per share data)

                                       Other   Unearned
                                       Compre- Compen-              Total
                  Capital in Retained  hensive sation on            Stock-
           Common Excess of  Earnings  Income  Restricted  Treasury holders'
           Stock  Par Value (Deficit) (Loss)   Stock Units Stock    Equity

  Balance -
     December 31,
     2004   $913 $846,644 $(277,406) $(89,193)  $(4,883) $(7,054)  $469,021

  (Unaudited)

    Net
     Income    -        -   580,861         -         -        -    580,861
    Treasury
     Rate Lock
     (Net of
     $53 tax)  -        -         -       (80)        -        -        (80)
    Minimum
     Pension
     Liability
     (Net of
     ($4,301)
     tax)      -        -         -     6,754         -        -      6,754
    Minority
     Interest in
     OCI of
     Gas       -        -         -     6,432         -        -      6,432
    Gas Cash
     Flow Hedge
     (Net of
     $18,664
     tax)      -        -         -   (29,075)        -        -    (29,075)
    Comprehensive
     Income
     (Loss)    -        -   580,861   (15,969)        -        -    564,892

    Dividend
     Equivalents
     on Restricted
     Stock Units
     (1,814
     units)    -      276         -         -      (276)       -          -
    Issuance of
     Restricted
     Stock
     Units under
     the Equity
     Incentive
     Plan
     (94,691
     shares)   -    4,270         -         -    (4,270)       -          -
    Stock Options
     Exercised
     (1,883,673
     shares)  12   32,084         -         -         -    7,054     39,150
    Stock-Based
     Compensation
     from
     Accelerated
     Vesting   -      735         -         -         -        -        735
    Common Stock
     Issued
     (4,946
     shares)   -      225         -         -         -        -        225
    Amortization of
     Restricted
     Stock Unit
     Grants    -      (18)        -         -     2,672        -      2,654
    Dividends
     ($.56 per
     share)    -       25   (51,346)        -         -        -    (51,321)

  Balance -
     December 31,
      2005  $925 $884,241  $252,109 $(105,162)  $(6,757)     $ - $1,025,356



                              PRODUCTION REPORT

  COAL                                 4th Quarter       4th Quarter
  (Millions of Tons)                   2005 Actual       2004 Actual

  Northern Appalachia                     14.9              15.4
  Central Appalachia                       2.5               3.6
  Other Areas                              0.3               0.2
  Total                                   17.7              19.2



  SPECIAL INCOME STATEMENT
  December QTR
  In Millions

                                        Three Months Ended December 31, 2005
                                               COAL
                                                           Total Total
                                     Produced  Other Total  Gas  Other TOTAL

  Sales                                  $629   $20  $649  $217   $34  $900
  Freight Revenue                          27   -      27   -     -      27
  Other Income                            -      40    40     2   -      42
  Gain (Loss) on Sale of 18.5% of CNX Gas -     -     -     -     -     -
     Total Revenue and Other Income       656    60   716   219    34   969

  Cost of Goods Sold                      400    64   464   150    47   661
  Freight Expense                          27   -      27   -     -      27
  Selling, General & Admin.                15   -      15     3     4    22
  DD&A                                     51     5    56     9     3    68
  Interest Expense                        -     -     -     -       6     6
  Taxes Other Than Income                  40    12    52     4     2    58
     Total Cost                           533    81   614   166    62   842

  Earnings (Loss) Before Income Taxes    $123  $(21) $102   $53  $(28) $127

  Income Tax                                                            (33)

  Earnings Before Minority Interest                                      94

  Minority Interest                                                      (6)

  Net Income                                                            $88



  SPECIAL INCOME STATEMENT
  December YTD
  In Millions

                                       Year to Date December 31, 2005
                                          COAL
                                                        Total Total
                                 Produced Other  Total   Gas  Other  TOTAL

  Sales                           $2,448    $79  $2,527  $602  $129  $3,258
  Freight Revenue                    120    -       120   -     -       120
  Other Income                       -       86      86    15     4     105
  Gain (Loss) on Sale of 18.5% of
   CNX Gas                           -      -       -     -     327     327
     Total Revenue and Other
      Income                       2,568    165   2,733   617   460   3,810

  Cost of Goods Sold               1,613    265   1,878   395   164   2,437
  Freight Expense                    120    -       120   -     -       120
  Selling, General & Admin.           60      1      61     8    12      81
  DD&A                               194     20     214    35    13     262
  Interest Expense                   -      -       -     -      27      27
  Taxes Other Than Income            145     62     207    14     8     229
     Total Cost                    2,132    348   2,480   452   224   3,156

  Earnings (Loss) Before Income
   Taxes                            $436  $(183)   $253  $165  $236    $654

  Income Tax                                                            (64)

  Earnings Before Minority
   Interest                                                             590

  Minority Interest                                                      (9)

  Net Income                                                           $581



    CONSOL Energy Inc.
    Financial and Operating Statistics
                                                  Quarter Ended Dec 31
                                                    2005        2004
    AS REPORTED FINANCIALS:

    Revenue ($ MM)                                $969.059    $791.434
    EBIT ($MM)  *                                 $123.039     $43.995
    EBITDA ($ MM)  *                              $190.631    $140.182
    Net Income ($ MM)                              $87.593     $67.668
    EPS(diluted)                                     $0.94       $0.74
    Average shares outstanding - Dilutive       93,631,913  91,868,095

    CAPEX, excl. acquisitions ($ MM)              $236.205    $111.517

    COAL OPERATIONAL:
    # Mining Complexes (end of period)                  22          20
    # Complexes Producing (end of period)               17          16
    Sales (MM tons)-Produced only                   17.541      18.672
    Average sales price ** ($/ton)                  $36.28      $31.70
    Production income ($/ton)                        $6.33       $5.74
    Production (MM tons)- Produced only             17.657      19.161
    Produced Tons Ending inventory (MM tons)***      1.650       1.502

    *  Year to date total may not add due to rounding
    ** note: average sales price of tons produced
    ***note: includes equity companies


First Call Analyst: 

FCMN Contact: 

DATASOURCE: CONSOL Energy Inc.



CONTACT:  Thomas F. Hoffman of CONSOL Energy Inc., [phone]



Web site:  http://www.consolenergy.com/

Copyright