<PAGE>

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

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

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

                                   FORM 10-Q

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

(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
              OF 1934

    for the quarterly period ended September 30, 2001.

                                      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 No. 000-22697

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

                              AT HOME CORPORATION
          (Exact name of the Registrant as specified in its charter)

        Delaware
     (State or other
     jurisdiction of             77-0408542
    incorporation or          (I.R.S. Employer
      organization)        Identification Number)

   450 Broadway Street              94063
Redwood City, California         (Zip Code)
  (Address of principal
   executive offices)

                                (650) 556-5000
           (The Registrant's telephone number, including area code)

  Former name, former address, and former year, if changed since last report:

                                Not applicable.

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

   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 [_]

<TABLE>
<CAPTION>
                                                      As of October 31,
                                                            2001
                                                      -----------------
<S>                                                   <C>
Number of shares of Series A Common Stock outstanding    324,097,192
Number of shares of Series B Common Stock outstanding     86,595,578
</TABLE>

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

<PAGE>

                         CHAPTER 11 BANKRUPTCY FILINGS

   On September 28, 2001, At Home Corporation, or Excite@Home, and all of our
wholly-owned subsidiaries, excluding Excite Europe Ltd., Excite Espana SL and
certain other foreign subsidiaries, filed voluntary petitions for
reorganization relief under Chapter 11 of the United States Bankruptcy Code
with the United States Bankruptcy Court for the Northern District of
California, jointly administered under Case No. 01-32495-TC. Also on September
28, 2001, we entered into an asset purchase agreement with AT&T Corp., our
controlling shareholder, providing for the purchase by AT&T of substantially
all of the assets and services associated with our broadband Internet access
business for $307 million and the assumption of certain liabilities. We have
filed a motion with the bankruptcy court to approve this asset sale to AT&T
pursuant to Section 363 of Chapter 11 of the United States Bankruptcy Code.
This asset purchase agreement is subject to several closing conditions,
including approval by the bankruptcy court and competing offers or overbids
during the Section 363 sale process. The sale hearing is currently scheduled
for December 5, 2001. There can be no assurance that the hearing will take
place on this date or at all. We are currently overseeing our operations as a
debtor in possession, subject to court approval of matters outside the ordinary
course of business, and pending resolution of our motion to reject certain
master distribution agreements, as described below, we intend to continue to
operate our Internet access business until the proposed sale of this business
is completed. Under Chapter 11, claims against us in existence prior to the
filing of the petitions for reorganization relief under the federal bankruptcy
laws are stayed while we are in bankruptcy.

   Our bankruptcy filing may have constituted an event of default according to
the terms of the agreements covering our $100 million of convertible notes
issued in June 2001, the $500 million principal amount of 4 3/4% convertible
notes issued in December 1999, the $437 million principal amount ($249.1
million accreted principal value as of September 30, 2001) of convertible
debentures issued in December 1998, as well as certain real estate leases,
capital leases and other obligations. However, we do not believe that any
default provisions that were triggered by the bankruptcy filing constitute an
event of default, or are enforceable, under the United States Bankruptcy Code.
Any actions on these obligations have been stayed and repayment is subject to
the claim and distribution process under the jurisdiction of the bankruptcy
court.

   On September 30, 2001, we had $157 million in cash, cash equivalents and
short-term investments, of which $16.9 million was held in connection with
stand-by letters of credit that secured several facility leases and several
employment agreements. In October 2001, we entered into interim agreements that
revise certain terms under which we provide the @Home residential broadband
Internet service to substantially all of our North American cable partners
through November 30, 2001 in consideration for these cable partners' continued
ability to add subscribers to our broadband Internet service. Under these
interim agreements, payments for past services were brought current and we will
receive periodic up-front payments for subscriber revenues through November 30,
2001 based on a fixed amount of revenue per @Home subscriber that represents an
increase in per-subscriber revenues compared to the revenue share amounts we
have historically received under our distribution agreements. These interim
agreements expire on November 30, 2001, and there can be no assurance that they
will be extended or renewed. On October 10, 2001, we received a notice from
AT&T that our failure to add new subscribers was a breach of certain sections
of the asset purchase agreement and that AT&T reserved all its contractual,
legal and equitable rights with respect to the alleged breaches.

   On October 3, 2001, the United States Trustee for the Northern District of
California appointed an official committee of creditors including both
bondholders and general unsecured creditors. On October 9, 2001, the United
States Trustee replaced the bondholder committee members with additional
unsecured creditors and formed a second official committee to represent
bondholders.

   On October 9, 2001, the bankruptcy court entered an interim order directing
that we temporarily set aside $100 million in cash otherwise available to
support operations as adequate protection for the use of the cash collateral of
affiliates of Promethean Asset Management, L.L.C. and Leonardo, L.P., holders
of the $100 million convertible notes issued in June 2001. In addition, we have
filed a preference complaint against Leonardo, L.P. asserting that it perfected
its security interest within 90 days of the bankruptcy filing, and therefore we
believe

                                      2

<PAGE>

that $50 million of the claim associated with these convertible notes is
subject to compromise. As of the filing date of this quarterly report, the
bankruptcy court has not ruled on this motion and there can be no assurance
that the $100 million will be made available for operating purposes.

   On or about October 22, 2001, the bondholders' committee filed a motion in
the bankruptcy court to obtain an order compelling us to reject master
distribution agreements that we have with certain cable companies, asserting
that the terms of those contracts are unfavorable to Excite@Home. On or about
November 2, 2001, we filed a motion seeking authority to reject the same master
distribution agreements on the basis that (i) if we complete the sale of our
access assets to AT&T the agreements must be rejected and (ii) we believe the
terms of the agreements are unfavorable and we do not believe that the cable
companies will renegotiate the agreements without the threat of a shutdown. The
hearing on both motions is set for November 30, 2001. If the contracts are not
renegotiated and are rejected, such a shutdown would cause a cessation of
service for our subscribers.

   We filed our schedules of assets and liabilities with the bankruptcy court
on November 5, 2001. The date for filing proofs of claim under the United
States Bankruptcy Code has been scheduled for the first quarter of 2002. There
may be differences between what we believe to be the amount of claims and the
amounts claimed by our creditors. Litigation, including significant litigation,
may be required to resolve such disputes. Due to the large number of creditor
claims, the value of our common stock is highly speculative.

   On November 8, 2001, we entered into an asset sale and transition services
agreement with InfoSpace, Inc., for the sale to InfoSpace of certain narrowband
Excite.com assets, which include certain domain names, trademarks and user
data, for $10 million. The agreement also provides for certain transition
services to be provided by Excite@Home to InfoSpace until no later than
December 31, 2001. The sale of these Excite.com assets is also subject to
bankruptcy court approval and the overbidding process pursuant to Section 363.
A motion has been filed with the bankruptcy court to approve the sale of these
assets to InfoSpace.

   If the broadband access assets are sold to AT&T or an overbidder, we would
contemplate filing a Chapter 11 plan to provide for the continued disposition
of remaining assets and the distribution of proceeds to creditors and interest
holders in accordance with the statutory priorities set forth in the United
States Bankruptcy Code and would cease to operate as a going concern.

   Certain creditor groups have indicated that they will object to the proposed
asset sale of our broadband access business to AT&T and there can be no
assurance that the sale will be approved by the bankruptcy court. There can
also be no assurance that the bankruptcy court will review the proposed sale or
other offers on a timely basis, that additional objections to the sale will not
be raised if other offers are made by other parties in interest, including the
creditor committees or other claimants, that the bankruptcy court will approve
such sale or other offers, or that other conditions or events will not prevent
the timely execution of the proposed sale, or a plan of reorganization.
Although we believe that we have sufficient cash on hand to finance operations
during the period of time contemplated for the completion of the proposed sale
of our broadband business, including supporting our post-petition trade and
employee obligations, a prolonged bankruptcy court process, the failure to
close the asset sales or the unsuccessful renegotiation of agreements,
especially those with our cable partners, could ultimately result in the
operational and/or administrative insolvency of Excite@Home. These and other
uncertainties inherent in the bankruptcy proceedings and related restructuring
process could have a material adverse affect on our operations and liquidity,
as further discussed under "Management's Discussion and Analysis of Financial
Condition and Results of Operations".

   Our Series A Common Stock is now quoted on the Over-the-Counter Bulletin
Board after being delisted from the NASDAQ National Market on October 22, 2001.
In addition, with respect to bondholders and stockholders who hold Excite@Home
securities which were previously traded under Form S-3 registration statements
filed with the Securities and Exchange Commission, due to the bankruptcy filing
and related events, these Form S-3 registration statements are no longer
available for the purposes of trading in these securities. Certain of the
convertible bonds remain eligible for trading on the PORTAL market. Any other
trades in the

                                      3

<PAGE>

securities covered by these Form S-3 registration statements, or other shares
subject to trading restrictions, will need to be made in compliance with
applicable federal and state securities laws.

   In addition to the above, management has taken and is attempting to take
several additional strategic and cost-cutting actions aimed at protecting the
value of our business for the benefit of our financial stakeholders while
maintaining service to customers during the bankruptcy process, including
seeking to sell non-core assets such as narrowband media assets, other assets
and interests in international joint ventures and reducing capital
expenditures, normal business expenses and staffing levels.

                                      4

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

    QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2001

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                Page
                                                                                                ----
<C>     <S>                                                                                     <C>
                                   PART I--FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements--Unaudited:

        Condensed Consolidated Balance Sheets as of September 30, 2001 and December 31, 2000...   6

        Condensed Consolidated Statements of Operations for the Three and Nine Months Ended
        September 30, 2001 and 2000............................................................   7

        Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30,
        2001 and 2000..........................................................................   8

        Notes to Condensed Consolidated Financial Statements...................................   9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..  21

Item 3. Quantitative and Qualitative Disclosures About Market Risk.............................  43

                                     PART II--OTHER INFORMATION

Item 1. Legal Proceedings......................................................................  45

Item 2. Changes in Securities and Use of Proceeds..............................................  46

Item 3. Default Upon Senior Securities.........................................................  46

Item 4. Submission of Matters to a Vote of Security Holders....................................  46

Item 5. Other Information......................................................................  46

Item 6. Exhibits and Reports on Form 8-K.......................................................  47

Signatures.....................................................................................  48
</TABLE>

                                      5

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                (In thousands, except share and per share data)
<TABLE>
<CAPTION>
                                                                                 September 30, December 31,
                                                                                     2001          2000
                                                                                 ------------- ------------
                                                                                  (Unaudited)      (*)
<S>                                                                              <C>           <C>
                                    ASSETS
Current assets:
  Cash and cash equivalents..................................................... $    122,142  $    64,508
  Restricted cash...............................................................       16,903       34,139
  Short-term investments........................................................       18,000      102,115
                                                                                 ------------  -----------
   Total cash and cash equivalents, restricted cash and short-term investments..      157,045      200,762
  Accounts receivable, net......................................................       15,097       65,899
  Accounts receivable--related parties..........................................       63,446       54,126
  Other current assets..........................................................       25,369       42,626
                                                                                 ------------  -----------
   Total current assets.........................................................      260,957      363,413
Property, equipment and improvements, net.......................................      332,531      366,127
Investments in affiliated companies.............................................       13,929       35,032
Other investments...............................................................        9,358       73,628
Distribution agreements, net....................................................      117,838      239,357
Goodwill and other acquired intangible assets, net..............................           --      908,788
Other assets....................................................................      124,408      120,355
                                                                                 ------------  -----------
   Total assets................................................................. $    859,021  $ 2,106,700
                                                                                 ============  ===========
                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  Current liabilities:
  Accounts payable.............................................................. $         --  $    65,060
  Accounts payable--related parties.............................................           --       10,892
  Accrued compensation and related expenses.....................................           --       21,940
  Deferred revenue..............................................................           --       40,381
  Other accrued liabilities.....................................................           --      101,826
  Current portion of capital lease and other obligations........................           --       70,258
  Convertible note..............................................................       50,000           --
                                                                                 ------------  -----------
   Total current liabilities....................................................       50,000      310,357
                                                                                 ------------  -----------
Convertible notes and debentures................................................           --      743,525
Capital lease and other obligations, less current portion.......................           --       85,904
Other liabilities...............................................................           --       10,397
Liabilities subject to compromise (Note 2)......................................    1,270,523           --
Commitments and contingencies
Stockholders' equity (deficit):
  Convertible preferred stock, $0.01 par value, Authorized shares--9,650,000:
   Issued and outstanding shares--6,050 in 2001 and 7,621 in 2000...............      240,868      286,208
  Common stock, $0.01 par value, Authorized shares--1,110,000,000:
   Issued and outstanding shares--410,677,844 in 2001 and 405,362,314 in 2000...    9,875,082    9,809,893
  Deferred compensation.........................................................       (1,459)     (34,070)
  Accumulated other comprehensive income (loss).................................       (1,232)      19,085
  Accumulated deficit...........................................................  (10,574,761)  (9,124,599)
                                                                                 ------------  -----------
    Total stockholders' equity (deficit)........................................     (461,502)     956,517
                                                                                 ------------  -----------
    Total liabilities and stockholders' equity (deficit)........................ $    859,021  $ 2,106,700
                                                                                 ============  ===========
</TABLE>
--------
(*) The condensed consolidated balance sheet as of December 31, 2000 has been
    derived from financial statements audited by prior independent auditors as
    of that date (which includes an explanatory paragraph expressing
    substantial doubt about our ability to continue as a going concern) but
    does not include the information and footnotes required by generally
    accepted accounting principles for complete financial statements.

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements

                                      6

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                     (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                            Three Months Ended       Nine Months Ended
                                                               September 30,           September 30,
                                                           --------------------  ------------------------
                                                             2001       2000        2001         2000
                                                           ---------  ---------  -----------  -----------
<S>                                                        <C>        <C>        <C>          <C>
Revenues(1):
   Consumer access........................................ $ 104,488  $  56,788  $   269,519  $   151,246
   Commercial services....................................    14,207     17,796       44,004       45,030
   Media/advertising......................................    14,357     77,731       87,990      228,691
   International..........................................     5,333      8,218       18,306       22,350
                                                           ---------  ---------  -----------  -----------
       Total revenues.....................................   138,385    160,533      419,819      447,317
Operating costs(2):
   Cost of services and products..........................    94,617     80,365      285,726      206,967
   Product development and engineering....................    26,328     23,818       85,365       71,606
   Sales and marketing....................................    37,891     79,244      144,232      210,424
   General and administrative.............................    16,879     19,535       52,773       48,057
   Restructuring costs....................................    34,631         --      210,440           --
   Cost and amortization of distribution agreements.......    23,583     24,350       99,022      146,481
   Costs and amortization of goodwill, intangible assets,
     deferred compensation and other acquisition-
     related amounts......................................    26,262    591,042      160,721    1,753,492
   Write-down of goodwill, other intangible assets and
     other assets.........................................   218,592         --      842,069           --
                                                           ---------  ---------  -----------  -----------
       Total operating costs..............................   478,783    818,354    1,880,348    2,437,027
                                                           ---------  ---------  -----------  -----------
Loss from operations......................................  (340,398)  (657,821)  (1,460,529)  (1,989,710)
Reorganization items, net.................................   104,838         --      104,838           --
Interest and other income (expense), net..................   (13,899)     5,700      (29,742)       9,751
Write-down of other investments...........................    (8,394)        --      (32,326)          --
Equity share of losses of affiliated companies............   (13,431)   (16,589)     (32,403)     (33,535)
                                                           ---------  ---------  -----------  -----------
Net loss.................................................. $(271,284) $(668,710) $(1,450,162) $(2,013,494)
                                                           =========  =========  ===========  ===========
Net loss per share--basic and diluted..................... $   (0.66) $   (1.67) $     (3.55) $     (5.10)
                                                           =========  =========  ===========  ===========
Shares used in per share calculation--basic and diluted...   410,097    401,191      408,122      394,976
                                                           =========  =========  ===========  ===========
----------------------------------------------------------
(1) Revenue from related parties.......................... $  10,801  $  12,256  $    34,951  $    36,494
                                                           =========  =========  ===========  ===========
(2) Depreciation and amortization included in operating
  costs, excluding amortization of distribution agreements
  and acquisition-related amounts......................... $  42,261  $  31,921  $   117,888  $    75,148
                                                           =========  =========  ===========  ===========
</TABLE>

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements

                                      7

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                (In thousands)

<TABLE>
<CAPTION>
                                                                                                 Nine Months Ended
                                                                                                   September 30,
                                                                                             ------------------------
                                                                                                2001         2000
                                                                                             -----------  -----------
<S>                                                                                          <C>          <C>
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net loss.................................................................................... $(1,450,162) $(2,013,494)
Adjustments to reconcile net loss to cash used in operating activities:
  Depreciation and amortization.............................................................     116,123       74,383
  Amortization of distribution agreements...................................................      72,915       70,931
  Cost of distribution agreements...........................................................      26,107       75,550
  Amortization of deferred and other stock-based compensation...............................      17,515       16,252
  Amortization of goodwill and other intangible assets......................................     144,811    1,729,237
  Write-down of goodwill, other intangible assets and other assets..........................     842,069           --
  Write-down of other investments...........................................................      32,326           --
  Accretion of discount on convertible debentures...........................................       7,592        7,251
  Equity share of losses of affiliated companies............................................      32,403       33,535
  Changes in assets and liabilities:
   Accounts receivable......................................................................      41,482      (30,994)
   Other assets.............................................................................      31,933      (22,434)
   Accounts payable.........................................................................     (37,204)      27,859
   Accrued liabilities......................................................................      48,945       33,246
   Deferred revenues........................................................................     (14,039)     (18,609)
   Other long-term liabilities..............................................................         588        2,317
                                                                                             -----------  -----------
Cash used in operating activities...........................................................     (86,596)     (14,970)
                                                                                             -----------  -----------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
Purchases of short-term investments.........................................................     (18,000)    (110,786)
Sales and maturities of short-term investments..............................................     102,115      231,092
Purchases of other investments..............................................................      (1,250)     (28,420)
Sales of other investments..................................................................      13,973       34,420
Proceeds from sale of business interests....................................................      34,133           --
Purchases of property, equipment and improvements...........................................    (108,683)    (110,477)
Payments under backbone agreement...........................................................      (8,268)     (45,965)
Investment in joint ventures................................................................     (11,099)     (53,934)
Business combinations, net of cash received.................................................          --       (6,397)
                                                                                             -----------  -----------
Cash provided by (used in) investing activities.............................................       2,921      (90,467)
                                                                                             -----------  -----------
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
Proceeds from issuance of common stock, net of repurchases..................................       6,652       76,555
Proceeds from issuance of debt..............................................................     183,200           --
Payments on capital lease and other obligations.............................................     (65,779)     (43,154)
                                                                                             -----------  -----------
Cash provided by financing activities.......................................................     124,073       33,401
                                                                                             -----------  -----------
Net increase (decrease) in cash and cash equivalents........................................      40,398      (72,036)
Cash and cash equivalents, beginning of period (including restricted cash of $34,139 in 2001
 and $988 in 2000)..........................................................................      98,647      224,548
                                                                                             -----------  -----------
Cash and cash equivalents, end of period (including restricted cash of $16,903 in 2001
 and $11,239 in 2000)....................................................................... $   139,045  $   152,512
                                                                                             ===========  ===========
SUPPLEMENTAL DISCLOSURES
  Interest paid............................................................................. $    26,114  $    19,802
                                                                                             ===========  ===========
  Acquisition of equipment under capital leases............................................. $    49,368  $    89,200
                                                                                             ===========  ===========
  Vested warrants to purchase Series A common stock capitalized as distribution agreements.. $       365  $   434,129
                                                                                             ===========  ===========
  Conversion of preferred stock to common stock............................................. $    45,340  $   161,867
                                                                                             ===========  ===========
  Mergers and acquisitions:.................................................................
   Common and preferred stock issued and options and warrants exercisable for
    common stock assumed.................................................................... $        --  $   213,889
                                                                                             ===========  ===========
   Liabilities assumed...................................................................... $        --  $     6,969
                                                                                             ===========  ===========
</TABLE>

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements

                                      8

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Summary of Significant Accounting Policies

  Basis of Presentation

   The unaudited condensed consolidated financial statements include the
accounts of At Home Corporation and its consolidated subsidiaries, all of which
are wholly owned. All significant intercompany transactions and balances have
been eliminated in consolidation. Investments in entities owned 20% or more
that are not controlled by us are accounted for under the equity method and
presented in the consolidated balance sheets as investments in affiliated
companies. The unaudited condensed consolidated financial statements reflect
all adjustments consisting of normal recurring accruals, which are, in the
opinion of management, necessary for a fair presentation of the interim periods
presented. The results of operations for the three months (third quarter) and
nine months (first three quarters) ended September 30, 2001 are not necessarily
indicative of the results to be expected for any subsequent period. Certain
information and disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been condensed
or omitted pursuant to the Securities and Exchange Commission's rules and
regulations. The unaudited condensed consolidated financial statements and
notes included herein should be read in conjunction with our audited
consolidated financial statements and notes included in our annual report on
Form 10-K for the year ended December 31, 2000 as filed with the Securities and
Exchange Commission on April 2, 2001, as amended on April 30, 2001 to include
information in Part III, and as amended on August 20, 2001 to include an
explanatory paragraph in the report of independent auditors expressing
substantial doubt about our ability to continue as a going concern.

   We have had operating losses and negative cash flow since our inception. In
2001, the expansion and enhancement of our broadband network has required
significant ongoing capital outlay, and the weakened demand for Internet
advertising has resulted in decreasing revenue and negative cash flow for our
media operations. On September 28, 2001, we filed a voluntary petition to
reorganize under Chapter 11 of the U.S. Bankruptcy Code, which is discussed in
more detail below. These factors raise substantial doubt about our ability to
continue as a going concern. The condensed consolidated financial statements do
not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification
of liabilities that might result from the outcome of this uncertainty, except
for those adjustments required by the American Institute of Certified Public
Accountants' Statement of Position 90-7 (SOP 90-7), "Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code", as described below. The
unaudited condensed consolidated financial statements have been prepared
assuming we will continue as a going concern. The continuation of this basis of
accounting may no longer be appropriate if the bankruptcy court approves a
Section 363 asset sale and subsequent plan of liquidation.

  Reclassifications

   Certain reclassifications have been made to previously reported amounts in
the consolidated financial statements in order to conform to the current
presentation.

  Recently Issued Accounting Pronouncements

   In June 2001, the Financial Standards Accounting Board (FASB) issued
Statement of Financial Accounting Standards No. 143 (FAS 143), "Accounting for
Asset Retirement Obligations," which addresses financial accounting and
reporting for obligations related to the retirement of tangible long-lived
assets and associated asset retirement costs. FAS 143 is effective for fiscal
years beginning after June 15, 2002. We do not expect the impact of adoption of
FAS 143 to have a material effect on our financial position or results of
operations.

                                      9

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)


   In October 2001, the FASB issued Statement of Financial Accounting Standards
No. 144 (FAS 144), "Accounting for the Impairment or Disposal of Long-Lived
Assets". FAS 144 supercedes FAS 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." FAS 144 applies
to all long-lived assets including discontinued operations and consequently
amends Accounting Principles Board Opinion No. 30. FAS 144 develops one
accounting model for long-lived assets that are to be disposed of by sale. FAS
144 requires that long-lived assets that are to be disposed of by sale be
measured at the lower of book value or fair value less cost to sell.
Additionally, FAS 144 expands the scope of discontinued operations to include
all components of an entity with operations that can be distinguished from the
rest of the entity and will be eliminated from the ongoing operations of the
entity in a disposal transaction. FAS 144 is effective for fiscal years
beginning after December 15, 2001. We have not assessed the impact of adoption
of FAS 144 on our financial position or results of operations due to
significant uncertainty in light of our bankruptcy filing.

2. Chapter 11 Bankruptcy Filings

   On September 28, 2001, At Home Corporation, or Excite@Home, and all of our
wholly-owned subsidiaries, excluding Excite Europe Ltd., Excite Espana SL and
certain other foreign subsidiaries, filed voluntary petitions for
reorganization relief under Chapter 11 of the United States Bankruptcy Code
with the United States Bankruptcy Court for the Northern District of
California, jointly administered under Case No. 01-32495-TC. Also on September
28, 2001, we entered into an asset purchase agreement with AT&T Corp., our
controlling shareholder, providing for the purchase by AT&T of substantially
all of the assets and services associated with our broadband Internet access
business for $307 million and the assumption of certain liabilities. We have
filed a motion with the bankruptcy court to approve this asset sale to AT&T
pursuant to Section 363 of Chapter 11 of the United States Bankruptcy Code.
This asset purchase agreement is subject to several closing conditions,
including approval by the bankruptcy court and competing offers or overbids
during the Section 363 sale process. The sale hearing is currently scheduled
for December 5, 2001. There can be no assurance that the hearing will take
place on this date or at all. We are currently overseeing our operations as a
debtor in possession, subject to court approval of matters outside the ordinary
course of business, and pending resolution of our motion to reject certain
master distribution agreements, as described below, we intend to continue to
operate our Internet access business until the proposed sale of this business
is completed. Under Chapter 11, claims against us in existence prior to the
filing of the petitions for reorganization relief under the federal bankruptcy
laws are stayed while we are in bankruptcy.

   Our bankruptcy filing may have constituted an event of default according to
the terms of the agreements covering our $100 million of convertible notes
issued in June 2001, the $500 million principal amount of 4 3/4% convertible
notes issued in December 1999, the $437 million principal amount ($249.1
million accreted principal value as of September 30, 2001) of convertible
debentures issued in December 1998, as well as certain real estate leases,
capital leases and other obligations. However, we do not believe that any
default provisions that were triggered by the bankruptcy filing constitute an
event of default, or are enforceable under the United States Bankruptcy Code.
Any actions on these obligations have been stayed and repayment is subject to
the claim and distribution process under the jurisdiction of the bankruptcy
court.

   On September 30, 2001, we had $157 million in cash, cash equivalents and
short-term investments, of which $16.9 million was held in connection with
stand-by letters of credit that secured several facility leases and several
employment agreements. In October 2001, we entered into interim agreements that
revise certain terms under which we provide the @Home residential broadband
Internet service to substantially all of our North American cable partners
through November 30, 2001 in consideration for these cable partners' continued
ability to add subscribers to our broadband Internet service. Under these
interim agreements, payments for past services were brought current and we will
receive periodic up-front payments for subscriber revenues through November 30,
2001 based on a fixed amount of revenue per @Home subscriber that represents an
increase in

                                      10

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)

per-subscriber revenues compared to the revenue share amounts we have
historically received under our distribution agreements. These interim
agreements expire on November 30, 2001, and there can be no assurance that they
will be extended or renewed. On October 10, 2001, we received a notice from
AT&T that our failure to add new subscribers was a breach of certain sections
of the asset purchase agreement and that AT&T reserved all its contractual,
legal and equitable rights with respect to the alleged breaches.

   On October 9, 2001, the bankruptcy court entered an interim order directing
that we temporarily set aside $100 million in cash otherwise available to
support operations as adequate protection for the use of the cash collateral of
affiliates of Promethean Asset Management, L.L.C. and Leonardo, L.P., holders
of the $100 million convertible notes issued in June 2001. In addition, we have
filed a preference complaint against Leonardo, L.P. asserting that it perfected
its security interest within 90 days of the bankruptcy filing, and therefore we
believe that $50 million of the claim associated with these convertible notes
is subject to compromise. As of the filing date of this quarterly report, the
bankruptcy court has not ruled on this motion and there can be no assurance
that the $100 million will be made available for operating purposes.

   On or about October 22, 2001, the bondholders' committee filed a motion in
the bankruptcy court to obtain an order compelling us to reject master
distribution agreements that we have with certain cable companies, asserting
that the terms of those contracts are unfavorable to Excite@Home. On or about
November 2, 2001, we filed a motion seeking authority to reject the same master
distribution agreements on the basis that (i) if we complete the sale of our
access assets to AT&T the agreements must be rejected and (ii) we believe the
terms of the agreements are unfavorable and we do not believe that the cable
companies will renegotiate the agreements without the threat of a shutdown. The
hearing on both motions is set for November 30, 2001. If the contracts are not
renegotiated and are rejected, such a shutdown would cause a cessation of
service for our subscribers.

   On November 8, 2001, we entered into an asset sale and transition services
agreement with InfoSpace, Inc., for the sale to InfoSpace of certain narrowband
Excite.com assets, which include certain domain names, trademarks and user
data, for $10 million. The sale of these Excite.com assets is also subject to
bankruptcy court approval and the overbidding process pursuant to Section 363.
A motion has been filed with the bankruptcy court to approve the sale of these
assets to InfoSpace.

   Certain creditor groups have indicated that they will object to the proposed
asset sale of our broadband access business to AT&T and there can be no
assurance that the sale will be approved by the bankruptcy court. There can
also be no assurance that the bankruptcy court will review the proposed sale or
other offers on a timely basis, that additional objections to the sale will not
be raised if other offers are made by other parties in interest, including the
creditor committees or other claimants, that the bankruptcy court will approve
such sale or other offers, or that other conditions or events will not prevent
the timely execution of the proposed sale, or a plan of reorganization.
Although we believe that we have sufficient cash on hand to finance operations
during the period of time contemplated for the completion of the proposed sale
of our broadband business, including supporting our post-petition trade and
employee obligations, a prolonged bankruptcy court process, the failure to
close the asset sales or the unsuccessful renegotiation of agreements,
especially those with our cable partners, could ultimately result in the
operational and/or administrative insolvency of Excite@Home. These and other
uncertainties inherent in the bankruptcy proceedings and related restructuring
process could have a material adverse affect on our operations and liquidity.

  Liabilities Subject to Compromise

   Claims against us in existence prior to the filing of the petitions for
Chapter 11 reorganization relief are reflected in the September 30, 2001
balance sheet as "liabilities subject to compromise," except those claims that
are expected not to be subject to compromise. We have received approval from
the bankruptcy court to pay or otherwise honor certain of our pre-petition
obligations, including employee wages for continuing employees. Additional
claims may arise subsequent to the filing date resulting from rejection of
executory contracts, including leases, and from the determination by the court,
or agreement by parties-in-interest, of allowed claims

                                      11

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)

for contingencies and other disputed amounts. There may be differences between
what we believe to be the amount of claims as reflected in liabilities subject
to compromise and the amounts claimed by our creditors. Litigation, including
significant litigation, may be required to resolve such disputes.

   Claims secured by our assets are stayed, although the holders of such claims
have the right to move the court for relief from the stay. Secured claims
include the $100 million convertible notes issued in June 2001, a financing
arrangement with AT&T for backbone capacity, and obligations under capital
lease arrangements for network equipment. The $100 million convertible notes
are purportedly secured by a general lien on our assets, our financing
arrangement with AT&T is secured by our backbone capacity agreement, and
capital lease obligations are secured by specific network equipment. As of
September 30, 2001, we expect that all pre-petition secured and unsecured
claims are subject to compromise (with the exception of $50 million related to
the $100 million convertible notes that were issued in June 2001), as such
claims may be undersecured or impaired.

   On September 28, 2001, we were subject to a number of legal proceedings and
claims in the ordinary course of business, including those described in "Part
II, Item I. Legal Proceedings" below. The commencement of our bankruptcy
proceedings triggered an automatic stay of these legal proceedings and claims.
The automatic stay bars the commencement or continuation of any proceeding,
action or effort to collect upon any pre-petition claim against us.

   The following represents the components of liabilities subject to compromise
as of September 30, 2001:

<TABLE>
<S>                                         <C>
Accounts payable........................... $   36,344
Related party liabilities..................      2,404
Accrued compensation and related expenses..     11,814
Other accrued liabilities..................    110,763
Accrued restructuring costs (Note 3).......     50,134
Deferred revenue...........................     26,342
Convertible debt...........................    799,126
Lease and other financing obligations......    222,611
Other liabilities..........................     10,985
                                            ----------
   Total liabilities subject to compromise. $1,270,523
                                            ==========
</TABLE>

  Reorganization Items, Net

   Income, expenses, gains and losses resulting from the reorganization and
restructuring of the business while in bankruptcy are reported separately from
operations as reorganization items in accordance with SOP 90-7. In the third
quarter of 2001, the reorganization items of $104.8 million included $1.1
million in professional fees incurred in connection with the filing of the
bankruptcy petition and a gain of $105.9 million. This gain resulted from the
difference between amounts previously accrued in accordance with the FASB's
Emerging Issues Task Force (EITF) Issue No. 94-3 on the recognition of
liabilities for exit costs and the expected amount of the allowed claims for
leases of real property pursuant to Section 502 of the United States Bankruptcy
Code and accrued in accordance with FASB Statement No. 5, Accounting for
Contingencies.

3. Restructuring Costs

   On September 25, 2001, we announced a workforce reduction of over 500
employees in connection with the shutting down of the MatchLogic business unit
and the substantial streamlining of our media business through the shutting
down or sale of narrowband operations. The workforce reduction was approved by
our board of

                                      12

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)

directors on September 21, 2001. Earlier in the third quarter, we eliminated
approximately 300 redundant positions as a result of several internal
organizational realignments. Management approved plans to vacate several
additional facilities in connection with these workforce reductions and we also
surrendered possession of a number of vacant facilities in the third quarter of
2001.

   On April 30, 2001, we announced a workforce reduction of approximately 380
employees and the expansion of our operational restructuring announced on
January 23, 2001. The workforce reduction was approved by our board of
directors on April 16, 2001 and impacted all divisions throughout the company,
but was more heavily weighted towards our media operations. We also completed
the shutdown of consolidated European narrowband operations by July 15, 2001 as
contemplated in the April 30, 2001 announcement. Additionally, management
determined that several facilities, including recently constructed buildings
near our corporate headquarters, would not be occupied as a result of the
workforce reductions and the general reduction in our planned employee levels.
We have significant lease obligations in connection with these recently
constructed buildings representing the substantial portion of our restructuring
costs in the second quarter of 2001. All of our facilities leases, and the
underlying obligations and contingent liabilities, are subject to compromise in
our Chapter 11 case.

   On January 23, 2001, we announced a workforce reduction of approximately 250
employees and a related operational restructuring, which was approved by our
board of directors on January 19, 2001. The majority of reductions and
restructuring affected the narrowband media operations and the iMALL e-commerce
application operations. We substantially completed the winding down of iMALL
activities in the second quarter of 2001. We also discontinued our DSL offering
to @Work customers in the first quarter of 2001 due to the dissolution of
Northpoint, a wholesale provider of DSL connectivity.

   As of September 30, 2001, approximately 1,500 positions were eliminated as a
result of workforce reductions initiated during 2001, of which approximately
180 employees remained on staff primarily for the purpose of shutting down
MatchLogic operations and substantially streamlining our media business through
the shutting down or sale of narrowband operations. With the sale of the
narrowband Excite.com assets to InfoSpace, Inc. and the completion of the
related transition services by the end of the year, we plan to substantially
complete the exit activities associated with our workforce reductions by the
end of 2001.

   We incurred restructuring costs of $34.6 million in the third quarter of
2001 and $210.4 million in the first nine months of 2001. We did not incur
restructuring costs in 2000. The following represents the accrual for
restructuring costs as of and for each of the periods indicated (in thousands):

<TABLE>
<CAPTION>
                                    Severance Facilities  Other      Total
                                    --------- ---------- --------  ---------
   <S>                              <C>       <C>        <C>       <C>
   Balance as of December 31, 2000.  $    --  $      --  $     --  $      --
      Additions....................    5,526      5,789     5,748     17,063
      Deductions...................   (4,921)      (508)       --     (5,429)
                                     -------  ---------  --------  ---------
   Balance as of March 31, 2001....      605      5,281     5,748     11,634
      Additions....................    7,592    150,939       215    158,746
      Deductions...................   (5,008)      (188)     (246)    (5,442)
                                     -------  ---------  --------  ---------
   Balance as of June 30, 2001.....    3,189    156,032     5,717    164,938
      Additions....................    5,740     15,435    13,456     34,631
      Deductions...................   (4,189)  (133,254)  (11,992)  (149,435)
                                     -------  ---------  --------  ---------
   Balance as of September 30, 2001  $ 4,740  $  38,213  $  7,181  $  50,134
                                     =======  =========  ========  =========
</TABLE>

                                      13

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)


   Additions represent the restructuring costs incurred in each period and
include: severance and related employee benefit obligations; losses on
non-cancellable leases related to facilities exited as a result of
consolidating personnel, net of expected sublease income and including
unrecoverable leasehold improvements; accruals for losses associated with
assets as a result of the activities exited; and other costs such as amounts
payable under terminated contracts. Deductions represent cash payments and
asset disposals in each period related to restructuring costs, and the
deduction for facilities in the third quarter of 2001 represents a
reorganization gain of $105.9 million associated with the limiting of real
property lease claims under the bankruptcy code and the write-offs of leasehold
improvements related to facilities for which possession has been surrendered.
Accrued restructuring costs as of September 30, 2001 primarily included accrued
future severance payments, estimated lease losses for exited facilities, and
amounts expected to be payable under terminated contracts and other related
costs, and such accrued costs are included in pre-petition liabilities.

   Costs incurred during bankruptcy or as a result of the restructuring process
while in bankruptcy are recorded as reorganization items in accordance with SOP
90-7.

4. Other Significant Transactions

  Backbone Capacity Financing Transaction with AT&T

   On June 19, 2001, we terminated our backbone capacity agreement with AT&T
and simultaneously entered into a revised agreement. We received $85.2 million
in cash in exchange for granting AT&T a security interest in the capacity
rights under the agreement and we recorded this amount in capital lease and
other obligations. The $85.2 million principal amount, plus interest at a rate
of 8%, is required to be repaid to AT&T in monthly installments of
approximately $0.7 million through April 2020, the term of the revised backbone
capacity agreement. Other assets include $100.9 million related to the backbone
capacity agreement and this amount is being amortized over the term of the
agreement. We have not made payments under this agreement since the bankruptcy
filing. While we have not received a notice of default from AT&T for our
failure to pay, there can be no assurances that such notice will not be
delivered during the bankruptcy process or that AT&T will not seek relief from
the automatic stay to exercise its remedies resulting from the non-payment.
Pursuant to the asset purchase agreement with AT&T, we are required to assume
this agreement, cure defaults thereunder and assign it to AT&T.

  Equity investment in International Joint Ventures

   In the third quarter of 2001, we initiated efforts to sell or liquidate our
financial interests in international joint ventures, including @Home Benelux,
@Home Japan, Excite@Home Australia, Excite Japan, Excite UK and Excite Italy.
During the quarter, our interest in @Home Benelux was acquired by the other
joint venture partners in exchange for approximately 4 million Euros
(approximately $3.9 million at the transaction date) representing the repayment
of outstanding accounts and notes receivable and prepayment for a brand
license. We also sold our interest in Excite@Home Australia to the other joint
venture partner in exchange for approximately 5 million Australian dollars
(approximately $2.5 million at the transaction date) representing a liquidation
payment for our equity interest in the joint venture. The carrying value of the
Excite@Home Australia joint venture in excess of the liquidation proceeds was
recorded as a non-operating cost in the third quarter of 2001. In conjunction
with the termination of our equity interest in these joint ventures, we entered
into long-term technology licensing and support agreements with the former
joint venture partners under which we will continue to provide services and
receive revenues in the future. We are continuing to seek the sale or
liquidation of our financial interests in our remaining international joint
ventures while in bankruptcy.

                                      14

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)


5. Selected Statement of Operations Components

  Segment Reporting

   Our key operating segments are organized around our customers and services
and aggregated into the reported business segments based on how our management
organizes, manages and internally reports our revenues. Our key operating
segments for the periods presented and the reported business segments that they
were aggregated into as of September 30, 2001 were as follows: (1) Consumer
Access, which included the @Home service, premium broadband services, customers
care and set-top development; (2) Commercial Services, which included the @Work
service and e-commerce applications; (3) Media/Advertising, which included the
Excite, Bluemountain.com and Webshots narrowband content services, broadband
content services, and targeted and other advertising services provided by
MatchLogic; and (4) International, which included our broadband and narrowband
services in Europe, Australia and Japan. Information used by our key operating
decision makers (consisting of our executive management team) in reviewing
operations and in allocating resources includes revenue for each key operating
segment. Information such as assets and liabilities are not produced internally
for each key operating segment. Although we allocate some specific operating
costs to each key operating segment, which results in a partial measure of loss
from operations and net loss, a significant portion of operating costs such as
network operations and engineering are not allocated to some of the segments,
and therefore our key operating decision makers have not utilized this partial
financial information in segment format for the purpose of reviewing operations
and allocating resources. In addition, we have corporate marketing, corporate
development, general and administrative, and other operations that generate no
revenues and are not part of a key operating segment.

   Our reportable segments have changed from prior years, and the 2000
information has been restated accordingly. The following represents information
for our reported business segments for the periods indicated (in thousands):

<TABLE>
<CAPTION>
                                        Three Months Ended Nine Months Ended
                                          September 30,      September 30,
                                        ------------------ -----------------
                                          2001      2000     2001     2000
                                        --------  -------- -------- --------
<S>                                     <C>       <C>      <C>      <C>
Revenues:
   Consumer Access..................... $104,488  $ 56,788 $269,519 $151,246
   Commercial Services.................   14,207    17,796   44,004   45,030
   Media/Advertising...................   14,357    77,731   87,990  228,691
   International.......................    5,333     8,218   18,306   22,350
                                        --------  -------- -------- --------
       Total consolidated revenues..... $138,385  $160,533 $419,819 $447,317
                                        ========  ======== ======== ========
</TABLE>

   Media/Advertising and Commercial Services revenues were derived
predominantly from customers located in the United States in each of the third
quarter and first nine months of 2001 and 2000.

   Consumer Access revenue derived from customers located outside the United
States, and excluded from International, consisted primarily of revenue from
our cable partners and their cable customers located in Canada, and accounted
for approximately 15% of total Consumer Access revenue in each of the third
quarter and first nine months of 2001 and 2000.

   International revenue earned from services provided to our unconsolidated
international joint ventures was $5.2 million and $5.6 million in the third
quarter of 2001 and 2000, respectively, and was $15.4 million and $14.7 million
in the first nine months of 2001 and 2000, respectively. International revenue
earned by our consolidated operations outside of North America was $0.1 million
and $2.6 million in the third quarter of 2001

                                      15

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)

and 2000, respectively, and was $2.9 million and $7.7 million in the first nine
months of 2001 and 2000, respectively.

   No single customer accounted for more than 10% of total consolidated
revenues in each of the third quarter or the first nine months of 2001 and
2000. However, together with their cable customers, AT&T, Comcast and Cox, who
are significant investors in our common stock, accounted for approximately 60%
and 25% of total consolidated revenues in the third quarter of 2001 and 2000,
respectively, and approximately 50% and 25% in the first nine months of 2001
and 2000, respectively.

  Revenue from Related Parties

   Revenue from related parties was $10.8 million and $12.3 million in the
third quarter of 2001 and 2000, respectively, and was $34.9 million and $36.5
million in the first nine months of 2001 and 2000, respectively. Related party
revenue from services such as advertising arrangements, customer service
support, local area content development, development of set-top devices and
pre-commercial deployment consulting provided to our cable partners with
significant investments in our common stock was $5.9 million and $5.6 million
in the third quarter of 2001 and 2000, respectively, and $19.3 million and
$19.4 million in the first nine months of 2001 and 2000, respectively. Related
party revenue from consulting and other services rendered to our international
and other joint ventures, including arrangements on a cost-plus basis, was $4.9
million and $6.7 million in the third quarter of 2001 and 2000, and was $15.6
million and $17.1 million in the first nine months of 2001 and 2000,
respectively.

  Revenue Related to Our Strategic Investments

   In conjunction with many of our investments, we have strategic arrangements
to provide services to our investees consisting of the delivery of advertising
impressions, e-commerce sponsorships and revenue share arrangements on our web
sites. Revenue under these arrangements is recognized based on the fair value
of the services provided if sufficient objective evidence of fair value exists
for the investment. This revenue was $2.1 million and $18.8 million in the
third quarter of 2001 and 2000, respectively, and $19.2 million and $47.3
million in the first nine months of 2001 and 2000, respectively. Investments
under these arrangements are recorded at their fair values on the date of the
investment. The fair values of such investments in privately held companies are
generally determined based on the price per share paid by a third party in the
same round of financing in which we participate.

  Barter Revenue

   There was no revenue from barter transactions involving the exchange of
advertising in our media properties for advertising in third-party Internet,
print and television media in the third quarter of 2001. Revenue from barter
transactions involving the exchange of advertising in our media properties for
advertising in third party Internet, print and television media was $2.8
million in the third quarter of 2000, and was $3.7 million and $31.3 million in
the first nine months of 2001 and 2000, respectively. Revenue from these
exchanges is recorded at the lower of the fair value of the advertising
delivered or the advertising received. In accordance with Emerging Issues Task
Force (EITF) Issue No. 99-17, "Accounting for Advertising Barter Transactions",
effective January 20, 2000, the fair value of advertising delivered is based on
similar advertising transactions for which we received cash during the six
months prior to the advertising barter transactions. Advertising barter
transactions generally result in the recognition of equivalent amounts of
revenue and expense.

   Revenue recognized from other barter transactions, involving primarily the
exchange of our advertising and data-marketing services for third party
software and property and equipment for internal use, was $2.2 million in

                                      16

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)

the third quarter of 2000 and was $0.8 million and $8.6 million in the first
nine months of 2001 and 2000, respectively. There was no revenue from other
barter transactions in the third quarter of 2001. Revenue from these exchanges
is generally recorded at the fair value of the services provided unless the
fair value of the services or products received is more readily determinable.

  Write-down of Goodwill, Other Intangible Assets and Other Assets

   Write-down of goodwill, other intangible assets and other assets consisted
of $218.6 million in the third quarter of 2001, including $153.6 million of
goodwill and other intangible assets associated with the media business, $41.4
million of property and equipment including software without alternate future
use other than as currently used by the MatchLogic and the Excite Narrowband
businesses, $37.4 million related to the Cablevision warrants, and $5.2 million
of other assets such as prepaid contract fees in the media business. These
write-downs were offset by $19 million in recoveries of prior write-downs of
goodwill associated with Bluemountain.com resulting from its sale during the
third quarter of 2001 for approximately $32 million. In the first nine months
of 2001, asset write-downs totaled $842.1 million, including $600.1 million of
impairment write-downs to goodwill and other intangible assets in the first
quarter of 2001 and a $12.6 million write-off of the Cablevision distribution
agreement and $10.8 million write-off of impaired software in the second
quarter of 2001. There were no write-downs in the comparable periods in 2000.

   Goodwill and other intangible assets--third quarter of 2001. In the third
quarter of 2001, management established and the board of directors approved a
formal plan to shut down MatchLogic and pursue an immediate substantial
streamlining of our media business through the shutting down or sale of
narrowband operations, due to the sustained negative cash flows generated by
these business units. We identified these circumstances as impairment
indicators as of September 30, 2001 of the remaining carrying values of
goodwill, other acquired intangible assets and property and equipment without
alternate use other than as currently used by these business units. Based on an
analysis indicating that the carrying values of tangible and intangible assets
in these business units exceeded the expected undiscounted future cash flows,
we determined that the remaining carrying values of all business-unit goodwill
and other intangible assets were impaired and that the carrying values of
property, equipment and other assets of MatchLogic and other narrowband Media
business units were also impaired (see below). The impairment of tangible
assets for these business units resulted in the write-off of the $153.6 million
remaining carrying value of goodwill and other intangible assets as of
September 30, 2001.

   Goodwill and other intangible assets--first quarter of 2001. In the first
quarter of 2001, we identified indicators of possible impairment of our
long-lived assets (principally, goodwill and other acquired intangible assets)
on a basis similar to the impairment indicators identified as of December 31,
2000. The impairment indicators included continued deterioration in the
business climate of, and reduced levels of venture capital funding activity
for, Internet advertising and other Internet-based companies, continued
significant declines in the market values of our competitors in the Internet
advertising industry, and changes made and announced in April 2001 in our
operating and cash flow forecasts for the remainder of 2001.

   We performed asset impairment tests with the assistance of independent
valuation experts at the business unit level, the lowest level for which we
have identifiable cash flows. The tests were performed by comparing the
expected undiscounted cash flows for a five-year period, plus a terminal value
for future cash flows, to each business unit's carrying amount of the goodwill
and other intangible assets resulting from purchase business combinations in
which the acquired operations have continued to be managed as separate business
units. We determined that the potential impairment to carrying amounts of
property and equipment and other tangible assets without alternate use other
than as currently used by these business units were not significant as of the
date of the impairment test. Based on the results of these tests, we determined
that the carrying values of business-unit

                                      17

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)

goodwill and other intangible assets related to Excite, Kendara, DataInsight,
Rucker, iMALL, Bluemountain.com, Webshots, and Worldprints were impaired in the
first quarter of 2001.

   We determined, with the assistance of independent valuation experts, the
fair value of the impaired long-lived assets for the respective business units.
Fair value was determined using the discounted cash flow method and the market
comparison method. An impairment write-down of goodwill and other intangible
assets totaling $600.1 million was recorded in the first quarter of 2001,
reflecting the amount by which the carrying amounts of the assets exceeded
their respective fair values. The write-down consisted of $569.1 million for
goodwill and $31 million for other acquired intangible assets.

   Property and equipment, including software. As a result of the decision to
substantially streamline our media business through the shutting down or sale
of narrowband operations, we determined that the carrying value of property and
equipment and other assets without alternate use other than as currently used
by these business units was impaired as of September 30, 2001. The $41.4
million write-down of these assets during the third quarter of 2001 reduced the
carrying value of these assets to fair value.

   In the second quarter of 2001, several in-progress projects in the media
business were discontinued. This resulted in the impairment of capitalized
costs related to these projects, consisting of third-party software recorded in
property and equipment. The software has no alternate use and cannot be sold,
and therefore, the $10.8 million carrying amount of this software was written
off in the second quarter of 2001.

   Cablevision distribution agreement and warrants. In the second quarter of
2001, we informed Cablevision that we were seeking the termination of our
relationship and the recovery of warrants to purchase up to 21.9 million shares
of our Series A common stock granted to Cablevision in 1997 and 1998 pursuant
to a distribution agreement for the deployment of the @Home service on an
exclusive basis to customers located in Cablevision's cable markets. We
capitalized the cost of these distribution agreements in 1997 and 1998 based on
the fair values of the warrants at that time, and we have been amortizing these
balances on a straight-line basis through June 4, 2002, the term of
exclusivity. However, based on our intention to terminate the agreement and the
probability that we would recover the warrants, we recorded a $12.6 million
charge to operations which represented the difference between the unamortized
balance of the Cablevision distribution agreement and the $37.4 million fair
value of the warrants included in other assets. The $37.4 million carrying
value of the warrants was recorded as a loss in the third quarter of 2001 based
on the decline in the fair value of the warrants as of September 30, 2001. We
also filed a lawsuit against Cablevision on April 23, 2001, seeking the return
of the warrants or money damages. Please see "Part II. Item I. Legal
Proceedings--Other Litigation Matters" for further detail regarding this
lawsuit.

   Bluemountain.com sale. On September 12, 2001, we completed the sale of
Bluemountain.com, an online greeting card provider, for net proceeds of
approximately $32 million in cash. The sale proceeds in excess of the
approximately $13 million in carrying value of assets sold (approximately $3
million of tangible assets and $10 million of intangible assets), net of
transaction fees, was recorded as a $19 million recovery against the prior
write-down in Bluemountain.com goodwill and other intangible assets.

  Write-down of Other Investments

   We recorded impairment write-downs of other investments of $32.3 million in
the first nine months of 2001, respectively. These write-downs included $9
million in the first nine months of 2001 on publicly traded equity securities
representing other-than-temporary unrealized losses included in accumulated
other comprehensive income (loss) and $23.3 million in the first nine months of
2001 on privately held investments representing a

                                      18

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)

reduction in the investment balance recorded in other investments. The
write-down of $8.4 million in the third quarter of 2001 was related to
privately held investments. There were no impairment write-downs of other
investments recorded in the comparable periods in 2000. The impairment
write-downs related to publicly traded equity securities resulted from our
conclusion that declines in the fair market values of such investments below
their carrying values were not temporary (generally, the fair market values
were below the carrying values for a continuous period of six months or more).
The impairment write-downs related to privately held investments resulted from
our conclusion that the carrying values of these investments were not
recoverable, based on indicators such as bankruptcy, limited liquidity and low
probability of closing required near-term financing.

  Business Combinations and Acquisition-Related Costs

   Acquisition-related costs were as follows for the periods indicated (in
thousands):

<TABLE>
<CAPTION>
                                                          Three Months Ended  Nine Months Ended
                                                            September 30,       September 30,
                                                          ------------------ -------------------
                                                            2001     2000      2001      2000
                                                          -------  --------  -------- ----------
<S>                                                       <C>      <C>       <C>      <C>
Amortization of goodwill and other intangible assets..... $21,005  $580,815  $144,811 $1,729,237
Amortization of acquisition-related deferred compensation   5,257     5,252    15,750     15,487
Other acquisition-related costs..........................      --     4,975       160      8,768
                                                          -------  --------  -------- ----------
   Total acquisition-related costs....................... $26,262  $591,042  $160,721 $1,753,492
                                                          =======  ========  ======== ==========
</TABLE>

   Amortization of goodwill and other intangible assets was $21 million and
$580.8 million in the third quarter of 2001 and 2000, respectively, and was
$144.8 million and $1,729.2 million in the first nine months of 2001 and 2000,
respectively. The reduction in amortization and accumulated amortization in
2001 from the comparable periods in 2000 resulted from the impairment
write-downs of goodwill and other intangible assets amounting to $4,609.1
million in the fourth quarter of 2000 and $600.1 million in the first quarter
of 2001.

   Amortization of deferred compensation related to acquisitions was $5.3
million in both the third quarter of 2001 and 2000, respectively and was $15.8
million and $15.5 million in the first nine months of 2001 and 2000,
respectively. Acquisition-related deferred compensation resulted from certain
outstanding employee stock options and restricted stock that we assumed in the
acquisitions of Webshots and Bluemountain.com in 1999 and DataInsight in 2000.
Deferred compensation is measured as the difference between the exercise price
of an unvested award and the fair market value of our Series A common stock at
the date of the acquisition and is amortized over the vesting term of the award.

   Other acquisition-related costs in the prior year periods were incurred
predominantly as a result of personnel, systems and technology integration
efforts related primarily to our acquisitions of Excite, iMALL,
Bluemountain.com, Kendara and Worldprints.

  Comprehensive Loss

   The components of our comprehensive loss for each period presented are as
follows (in thousands):

<TABLE>
<CAPTION>
                                                          Three Months Ended       Nine Months Ended
                                                             September 30,           September 30,
                                                         --------------------  ------------------------
                                                           2001       2000        2001         2000
                                                         ---------  ---------  -----------  -----------
<S>                                                      <C>        <C>        <C>          <C>
Net loss................................................ $(271,284) $(668,710) $(1,450,162) $(2,013,494)
Unrealized gain (loss) on available-for-sale investments    (1,425)    25,774      (20,448)     (83,573)
Foreign currency translation gain (loss)................        36         48          132          190
                                                         ---------  ---------  -----------  -----------
   Comprehensive loss................................... $(272,673) $(642,888) $(1,470,478) $(2,096,877)
                                                         =========  =========  ===========  ===========
</TABLE>

                                      19

<PAGE>

                  AT HOME CORPORATION (DEBTOR-IN-POSSESSION)

 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)


6. Calculation of Net Loss Per Share

   Basic and diluted net loss per share is computed using the weighted average
number of common shares outstanding during the period. Since we have a net loss
for all periods presented, net loss per share on a diluted basis is equivalent
to basic net loss per share because the effect of converting outstanding stock
options, warrants, common stock subject to repurchase, convertible debt,
preferred stock and other common stock equivalents would be anti-dilutive.

   The computation of basic and diluted net loss per share is as follows for
the periods indicated (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                          Three Months Ended       Nine Months Ended
                                                             September 30,           September 30,
                                                         --------------------  ------------------------
                                                           2001       2000        2001         2000
                                                         ---------  ---------  -----------  -----------
<S>                                                      <C>        <C>        <C>          <C>
Net loss................................................ $(271,284) $(668,710) $(1,450,162) $(2,013,494)
                                                         =========  =========  ===========  ===========
Weighted average shares of common stock outstanding.....   410,216    402,408      408,476      396,824
Less: weighted average shares of common stock subject to
  repurchase............................................      (119)    (1,217)        (354)      (1,848)
                                                         ---------  ---------  -----------  -----------
Shares used in per share calculations...................   410,097    401,191      408,122      394,976
                                                         =========  =========  ===========  ===========
Net loss per share--basic and diluted................... $   (0.66) $   (1.67) $     (3.55) $     (5.10)
                                                         =========  =========  ===========  ===========
</TABLE>

                                      20

<PAGE>

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

   The following discussion of our financial condition and results of
operations should be read in conjunction with the condensed consolidated
financial statements and related notes contained in this report and the
information contained in our annual report for the year ended December 31,
2000. This discussion contains "forward-looking" statements within the meaning
of the Securities Act of 1933 and the Securities Exchange Act of 1934. In some
cases, you can identify these statements by words such as "may," "might,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue," and other similar terms. These
forward-looking statements include, among other things, statements about our
pending bankruptcy proceedings, future financial outlook, cash position,
revenues, broadband subscriber base and more generally other projections of our
future financial performance, our potential growth and anticipated trends in
our businesses. These statements are only predictions, based on our current
expectations about future events, and we cannot guarantee that they will be
accurate. These forward-looking statements involve risks and uncertainties, and
our actual results, performance or achievements could differ materially from
those expressed or implied by the forward-looking statements on the basis of
several factors, including those that we discuss under the section entitled
"Risk Factors". We encourage you to read that section carefully. These
forward-looking statements speak only as of the date of this report, and we
will not necessarily update information in this report if any forward-looking
statement later turns out to be inaccurate, unless we are required to do so by
law.

Overview

   On September 28, 2001, At Home Corporation, or Excite@Home, and all of our
wholly-owned subsidiaries, excluding Excite Europe Ltd., Excite Espana SL and
certain other foreign subsidiaries, filed voluntary petitions for
reorganization relief under Chapter 11 of the United States Bankruptcy Code
with the United States Bankruptcy Court for the Northern District of
California, jointly administered under Case No. 01-32495-TC. Also on September
28, 2001, we entered into an asset purchase agreement with AT&T Corp., our
controlling shareholder, providing for the purchase by AT&T of substantially
all of the assets and services associated with our broadband Internet access
business for $307 million and the assumption of certain liabilities. We have
filed a motion with the bankruptcy court to approve this asset sale to AT&T
pursuant to Section 363 of Chapter 11 of the United States Bankruptcy Code.
This asset purchase agreement is subject to several closing conditions,
including approval by the bankruptcy court and competing offers or overbids
during the Section 363 sale process. The sale hearing is currently scheduled
for December 5, 2001. There can be no assurance that the hearing will take
place on this date or at all. We are currently overseeing our operations as a
debtor in possession, subject to court approval of matters outside the ordinary
course of business, and pending resolution of our motion to reject certain
master distribution agreements, as described below, we intend to continue to
operate our Internet access business until the proposed sale of this business
is completed. Under Chapter 11, claims against us in existence prior to the
filing of the petitions for reorganization relief under the federal bankruptcy
laws are stayed while we are in bankruptcy. Please see "Chapter 11 Bankruptcy
Filings" and "Risk Factors" for further detail about our bankruptcy filing. As
a result of the uncertainties inherent in the bankruptcy process, historical
trends, growth rates and other factors that are derived from comparisons of
operating results of prior and current periods are not indicative of future
results.

   We are a leading provider of residential broadband network services through
our @Home service, which had approximately 3,690,000 subscribers in North
America and 470,000 International subscribers as of September 30, 2001, and we
provide commercial broadband services to thousands of small and medium-sized
enterprises and several content delivery networks. The @Home service is
delivered in partnership with our cable partners, which include AT&T, Comcast,
Cox, Shaw, Rogers and many others, over the upgraded local cable
infrastructure. As of September 30, 2001, approximately 36 million homes were
upgraded for two-way data traffic and therefore capable of receiving the @Home
service.

   We are in the process of shutting down our MatchLogic operations and
substantially streamlining our international operations and media business,
through the shutting down or sale of narrowband operations. As a

                                      21

<PAGE>

result of these decisions, we announced a workforce reduction of approximately
500 employees on September 25, 2001 and began to negotiate the termination of
contracts, to exit several facilities and to surrender possession of those
facilities already vacated. Earlier in the third quarter, we eliminated
approximately 300 redundant positions as a result of several internal
organizational realignments. The restructuring costs associated with these
actions in the third quarter totaled $34.6 million and the substantial portion
of the third quarter asset write-downs of $218.6 million consisted of
impairment charges for goodwill, other intangible assets and tangible assets
associated with media operations and MatchLogic. We expect to complete the shut
down of MatchLogic and the sale or shutting down of narrowband media operations
by December 31, 2001. The sale of non-core assets, including the
recently-announced agreement for the sale for $10 million of certain domain
names, trademarks and narrowband user traffic associated with Excite.com, are
subject to approval by the bankruptcy court and parties-in-interest.

   In September 2001, we sold our Bluemountain.com web site, an online greeting
card business, for net proceeds of approximately $32 million in cash. Also in
the third quarter of 2001, we also initiated efforts to sell or liquidate our
financial interests in international joint ventures, including @Home Benelux,
@Home Japan, Excite@Home Australia, Excite Japan, Excite UK and Excite Italy.
During the quarter, our interests in @Home Benelux and Excite@Home Australia
were acquired by the respective joint venture partners. These transactions
resulted in the recovery of the accounts and note receivable balances from
these joint ventures and a partial recovery of our investment in Excite@Home
Australia. In conjunction with the termination of our equity interest in these
joint ventures, we entered into long-term technology licensing and support
agreements with the former joint venture partners under which we will continue
to provide services and receive revenues in the future. We are continuing to
seek the sale or liquidation of our financial interests in our remaining
international joint ventures while in bankruptcy.

   Currently, our services are organized into four business segments. Consumer
Access includes the @Home service, Commercial Services includes the @Work
service, Media/Advertising includes Excite and MatchLogic advertising and media
services, and International includes our international operations. We expect
that revenues in our Media/Advertising and International segments will
substantially decline and our consolidated operating costs will be reduced as
narrowband operations in these segments are sold or shut down.

                                      22

<PAGE>

Results of Operations

  Three Months (Third Quarter) and Nine Months Ended September 30, 2001
  Compared to Three Months and Nine Months Ended September 30, 2000

Note: As a result of the uncertainties inherent in the restructuring process
while in bankruptcy, historical trends, growth rates and other factors that are
derived from comparisons of operating results of prior and current periods are
not indicative of future results.

Revenues

   Our reportable segments have changed from prior years, and the 2000
information has been restated accordingly. The following represents our
revenues by business segment for the periods indicated (dollars in thousands):

<TABLE>
<CAPTION>
                                Three Months Ended September 30,
                           -----------------------------------------
                                      % of                     % of
                                     Total   Period           Total
                             2001   Revenues Change   2000   Revenues
                           -------- -------- ------ -------- --------
<S>                        <C>      <C>      <C>    <C>      <C>
Revenues:.................
   Consumer access........ $104,488    76%     84%  $ 56,788    35%
   Commercial services....   14,207    10%    (20)%   17,796    11%
   Media/advertising......   14,357    10%    (82)%   77,731    49%
   International..........    5,333     4%    (35)%    8,218     5%
                           --------   ---           --------   ---
       Total revenues..... $138,385   100%    (14)% $160,533   100%
                           ========   ===           ========   ===
<CAPTION>

                                Nine Months Ended September 30,
                           -----------------------------------------
                                      % of                     % of
                                     Total   Period           Total
                             2001   Revenues Change   2000   Revenues
                           -------- -------- ------ -------- --------
<S>                        <C>      <C>      <C>    <C>      <C>
Revenues:.................
   Consumer access........ $269,519    64%     78%  $151,246    34%
   Commercial services....   44,004    11%     (2)%   45,030    10%
   Media/advertising......   87,990    21%    (62)%  228,691    51%
   International..........   18,306     4%    (18)%   22,350     5%
                           --------   ---           --------   ---
       Total revenues..... $419,819   100%     (6)% $447,317   100%
                           ========   ===           ========   ===
</TABLE>

  Consumer Access

   Consumer Access revenues for the periods presented consisted primarily of
the percentage of @Home service subscription fees from North American
subscribers that we received under our revenue sharing agreements with our
cable partners. Revenue from the @Home service varies by cable partner and
market and typically represented 35% of the monthly fee collected from each
subscriber by the cable partner. We generally receive a lower fee if
subscribers purchase their own cable modems, if cable partners offer incentives
to new subscribers such as reduced fees or free service, or if cable partners
provide a portion of the service themselves such as those in Canada. Revenue
from @Home subscribers outside of North America is recorded in the
International segment and not in Consumer Access. Due to the above factors,
revenue from the @Home service may significantly lag subscriber growth rates
and may not result in consistent measurements such as average revenue per unit
(ARPU) over any period.

   In June 2001, we announced that our mutual exclusivity obligations with
Comcast and Cox would end on December 4, 2001, and in August 2001, we announced
that Comcast and Cox would formally terminate their distribution agreements
with us on June 4, 2002. Currently, Comcast and Cox together account for
approximately 30% of our consolidated revenues.

                                      23

<PAGE>

   In October 2001, we entered into interim agreements with substantially all
of our North American cable partners that revise the terms under which we
provide the @Home service in consideration for these cable partners' continued
ability to add subscribers to our broadband Internet service. Under these
interim agreements, payments for past services were brought current and we will
receive periodic up-front payments for subscriber revenues through November 30,
2001 based on a fixed amount of revenue per @Home subscriber that represents an
increase in per-subscriber revenues compared to the revenue share amounts we
have historically received under our distribution agreements. These interim
agreements expire on November 30, 2001, and there can be no assurance that they
will be extended or renewed for any period. On October 10, 2001, we received a
notice from AT&T that our failure to add new subscribers was a breach of
certain sections of the asset purchase agreement and that AT&T reserved all its
contractual, legal and equitable rights with respect to the alleged breaches.
On or about October 22, 2001, the bondholders' committee filed a motion in the
bankruptcy court to obtain an order compelling us to reject master distribution
agreements that we have with certain cable companies, asserting that the terms
of those contracts are unfavorable to Excite@Home. On or about November 2,
2001, we filed a motion seeking authority to reject the same master
distribution agreements on the basis that (i) if we complete the sale of our
access assets to AT&T the agreements must be rejected and (ii) we believe the
terms of the agreements are unfavorable and we do not believe that the cable
companies will renegotiate the agreements without the threat of a shutdown. The
hearing on both motions is set for November 30, 2001.

   Consumer Access revenues increased in the third quarter and first nine
months of 2001 by 84% and 78%, respectively, as compared to the same periods in
2000, due primarily to the approximately 85% growth in the number of North
American @Home subscribers from approximately 2.0 million as of September 30,
2000 to approximately 3.7 million as of September 30, 2001. Consumer Access
revenues did not increase at the same rate as the increase in the number of
@Home subscribers due to a combination of the factors affecting @Home revenue
discussed above, the most significant of which was free service incentives
offered by our cable partners to attract new subscribers. In addition, the
number of @Home subscribers at the end of a particular period is not
representative of the average number of paying subscribers during that period.

   Our bankruptcy filing and the proposed sale of our broadband business to
AT&T or other bidders and the pending motions for us to reject the master
distribution agreements, as well as the weakening economy and increased
unemployment rate, may result in losses of existing and potential subscribers,
and may have secondary effects which may adversely affect our subscriber
growth. In addition, the decision by Comcast and Cox to terminate their
distribution agreements with us and the uncertainty regarding whether, and
under what terms, our distribution arrangements with our cable partners will be
extended, create uncertainty regarding the number of subscribers that we will
provide the @Home service to in the future and the revenues we would receive
from those subscribers. Due to these factors, historical subscriber and revenue
growth trends are not necessarily indicative of future results. Moreover, if we
are successful in closing the sale of our broadband business to AT&T or another
bidder, we will have no subscribers. Please see "Risk Factors" for further
factors that may affect our Consumer Access revenues in the future.

  Commercial Services

   Commercial Services includes revenues from the @Work service, small business
hosting services and content delivery network arrangements. Revenues from the
@Work service and content delivery networks are based on the number of
customers and the type of data connections used by those customers. The @Work
service is included as part of the assets to be sold to AT&T or other bidders.

   Commercial Services revenues decreased in the third quarter and first nine
months of 2001 by 20% and 2%, respectively, as compared to the same periods in
2000, due primarily to the decrease in e-commerce revenue generated in the 2000
periods by our iMALL e-commerce business application operations, which were
discontinued in the first quarter of 2001, partially offset by increases in
revenues from the @Work service due to moderate growth in the number of
customers.

                                      24

<PAGE>

   The iMALL operations discontinued in the first quarter of 2001 may result in
lower total Commercial Services revenues for the remainder of 2001 as compared
to 2000. Additionally, our joint offer agreement with AT&T is being terminated
effective March 31, 2002, which may result in lower Commercial Services
revenues in future periods. Our bankruptcy filing and the proposed sale of our
broadband business to AT&T or other bidders, as well as the weakening economy,
has resulted in significant uncertainties about future results in the
Commercial Services segment and therefore historical customer and revenue
growth trends are not necessarily indicative of future results. Please see
"Risk Factors" for further factors that may affect our Commercial Services
revenues in the future.

  Media/Advertising

   Media/Advertising includes revenues generated by our narrowband and
broadband Excite portals and the Bluemountain.com and Webshots web sites
(together, the Excite Network), as well as targeted advertising, online
database marketing and e-commerce relationship management services provided by
MatchLogic. In September 2001, we announced that we would shut down the
MatchLogic operations by year-end and substantially streamline our media
business through the shut down or sale of narrowband operations. We also sold
the Bluemountain.com web site in September 2001. The sale of non-core assets
while in bankruptcy, including a recently-announced agreement for the sale for
$10 million of certain narrowband assets associated with Excite.com, including
certain domain names, trademarks, and user data, are subject to approval by the
bankruptcy court and parties-in-interest. As a result of these actions, our
Media/Advertising revenues in future periods will decrease substantially and
will represent an insignificant portion of consolidated revenues going forward.

   Media/Advertising revenues decreased in the third quarter and first nine
months of 2001 by 82% and 62%, respectively, as compared to the same periods in
2000, due to the decline in our advertising rates and the number of advertisers
in response to softness in the Internet advertising market, deterioration in
the Internet business climate, and reluctance by advertisers to remain in, or
enter into, partnership arrangements with us given our planned closure or sale
of narrowband media operations.

  International

   International includes revenues earned from services provided to our joint
ventures outside of North America, including revenue sharing for online
advertising and consulting and other services provided under arrangements on a
cost plus basis, and revenue earned by our consolidated operations outside of
North America, consisting primarily of advertising revenue. In July 2001, we
substantially completed the shut down of our consolidated European narrowband
media operations. Also in the third quarter of 2001, we initiated efforts to
sell or liquidate our financial interests in international joint ventures.
During the quarter, our interests in @Home Benelux and Excite@Home Australia
were acquired by the respective joint venture partners. In conjunction with the
termination of our equity interest in these joint ventures, we entered into
long-term technology licensing and support agreements with the former joint
venture partners under which we will continue to provide services and receive
revenues in the future. We are continuing to seek the sale or liquidation of
our financial interests in our remaining international joint ventures while in
bankruptcy. In future periods, we expect International revenues to consist
primarily of technology licensing and support arrangements for the @Home
service previously provided under joint venture agreements. Our bankruptcy
filing and the proposed sale of our broadband business to AT&T or other bidders
has resulted in significant uncertainties about future results in the
International segment and therefore historical trends are not necessarily
indicative of future results.

   Revenues from International decreased in the third quarter and first nine
months of 2001 by 35% and 18%, respectively, as compared to the same periods in
2000, due to the decline in revenues earned by our consolidated European
narrowband operations due to weakening demand for Internet advertising and the
shut down of these operations in the third quarter of 2001, partially offset by
the increase in subscriber revenue from international @Home broadband
operations. International revenue earned from our unconsolidated international
joint ventures

                                      25

<PAGE>

was $5.2 million and $5.6 million in the third quarter of 2001 and 2000,
respectively, and $15.4 million and $14.7 million in the first nine months of
2001 and 2000, respectively. International revenue earned by our consolidated
operations outside of North America was $0.1 million and $2.6 million in the
third quarter of 2001 and 2000, respectively, and $2.9 million and $7.7 million
in the first nine months of 2001 and 2000, respectively.

  Revenue from related parties

   Revenue from related parties decreased by 12% to $10.8 million, or 8% of
total revenues, in the third quarter of 2001 from $12.3 million, or 8% of total
revenues, in the third quarter of 2000 and decreased by 4% to $34.9 million, or
8% of total revenues, in the first nine months of 2001 from $36.5 million, or
8% of total revenues, in the first nine months of 2000. Related party revenue
from services such as advertising arrangements, customer service support, local
area content development, development of set-top devices and pre-commercial
deployment consulting provided to our cable partners with significant
investments in our common stock increased by 5% to $5.9 million in the third
quarter of 2001 from $5.6 million in the third quarter of 2000 and decreased by
1% to $19.3 million in the first nine months of 2001 from $19.4 million in the
first nine months of 2000. Related party revenue from consulting and other
services rendered to our international and other joint ventures, including
arrangements on a cost plus basis, decreased by 27% to $4.9 million in the
third quarter of 2001 from $6.7 million in the third quarter of 2000 and
decreased by 9% to $15.6 million in the first nine months of 2001 from $17.1
million in the first nine months of 2000.

  Revenue related to our strategic investments

   In conjunction with many of our investments, we have strategic arrangements
to provide services to our investees consisting of the delivery of advertising
impressions, e-commerce sponsorships and revenue share arrangements on our web
sites. Revenue under these arrangements is recognized based on the fair value
of the services provided if sufficient objective evidence of fair value exists
for the investment. Revenue from strategic investments decreased by 89% to $2.1
million, or 2% of total revenues, in the third quarter of 2001 from $18.8
million, or 12% of total revenues, in the third quarter of 2000, and decreased
by 59% to $19.2 million, or 5% of total revenues, in the first nine months of
2001 from $47.3 million, or 11% of total revenues, in the first nine months of
2000. Investments under these arrangements are recorded at their fair values on
the date of the investment. The fair values of such investments in privately
held companies are generally determined based on the price per share paid by a
third party in the same round of financing in which we participate.

  Barter revenue

   Revenue from barter transactions involving the exchange of advertising in
our media properties for third party advertising in Internet, print and
television media decreased by 100% in the third quarter of 2001 from $2.8
million, or 2% of total revenues, in the third quarter of 2000, and decreased
by 89% to $3.7 million, or 1% of total revenues, in the first nine months of
2001 from $31.3 million, or 7% of total revenues, in the first nine months of
2000. Revenue from these exchanges is recorded at the lower of the fair value
of the advertising delivered or the advertising received. In accordance with
Emerging Issues Task Force (EITF) Issue No. 99-17, "Accounting for Advertising
Barter Transactions", effective January 20, 2000, the fair value of advertising
delivered is based on similar advertising transactions for which we received
cash during the six months prior to the advertising barter transactions.
Advertising barter transactions generally result in the recognition of
equivalent amounts of revenue and expense.

   Revenue recognized from other barter transactions, involving primarily the
exchange of our advertising and data-marketing services for third party
software and property and equipment for internal use, decreased by 100% in the
third quarter of 2001 from $2.2 million, or 1% of total revenues, in the third
quarter of 2000, and decreased by 91% to $0.8 million, or less than 1% of total
revenues, in the first nine months of 2001 from $8.6 million, or 2% of total
revenues, in the first nine months of 2000. Revenue from these exchanges is
generally recorded at the fair value of the services provided unless the fair
value of the services or products received is more readily determinable.

                                      26

<PAGE>

Operating Costs

   Our operating costs were as follows for the periods indicated (dollars in
thousands):

<TABLE>
<CAPTION>
                                                                   Three Months Ended
                                                                     September 30,
                                                              ----------------------------
                                                                 2001    Change    2000
                                                              ---------- ------ ----------
<S>                                                           <C>        <C>    <C>
Operating costs:
   Cost of services and products............................. $   94,617   18%  $   80,365
   Product development and engineering.......................     26,328   11%      23,818
   Sales and marketing.......................................     37,891  (52%)     79,244
   General and administrative................................     16,879  (14%)     19,535
   Restructuring charge......................................     34,631  n/a           --
   Costs and amortization of distribution agreements.........     23,583   (3%)     24,350
   Costs and amortization of goodwill, intangible assets,
     deferred compensation and other acquisition-related
     amounts.................................................     26,262  (96%)    591,042
   Write-down of goodwill, other intangible assets and other
     assets..................................................    218,592  n/a           --
                                                              ----------  ---   ----------
       Total operating costs................................. $  478,783  (41%) $  818,354
                                                              ==========        ==========
<CAPTION>

                                                                   Nine Months Ended
                                                                     September 30,
                                                              ----------------------------
                                                                 2001    Change    2000
                                                              ---------- ------ ----------
<S>                                                           <C>        <C>    <C>
Operating costs:
   Cost of services and products............................. $  285,726   38%  $  206,967
   Product development and engineering.......................     85,365   19%      71,606
   Sales and marketing.......................................    144,232  (31%)    210,424
   General and administrative................................     52,773   10%      48,057
   Restructuring charge......................................    210,440  n/a           --
   Costs and amortization of distribution agreements.........     99,022  (32%)    146,481
   Costs and amortization of goodwill, intangible assets,
     deferred compensation and other acquisition-related
     amounts.................................................    160,721  (91%)  1,753,492
   Write-down of goodwill, other intangible assets and other
     assets..................................................    842,069  n/a           --
                                                              ----------        ----------
       Total operating costs................................. $1,880,348  (23%) $2,437,027
                                                              ==========        ==========
</TABLE>

  Cost of services and products

   Cost of services and products is primarily related to our broadband network
for delivering the @Home and @Work services and our Internet web sites, and
includes costs related to telecommunications and connectivity, web hosting,
technical and customer support, operational personnel, equipment depreciation,
and royalties, license arrangements and revenue sharing arrangements for
content and other services. Cost of services and products increased in the
third quarter and first nine months of 2001 by 18% and 38%, respectively, as
compared to the same periods in 2000, due primarily to network maintenance,
depreciation of network equipment, connectivity costs and customer service
operations related to the growth in @Home and @Work customers and higher
network expenses due to our efforts to stabilize, scale and improve the
reliability of our broadband network. These increases were partially offset by
reduced levels of revenue sharing payments related to media and advertising
services. There is significant uncertainty regarding the future level of our
cost of services and products as a result of our bankruptcy filing and the
related restructuring process, but we anticipate that any future increases in
the @Home and/or @Work customer base, were they to occur, would generally
result in increases in cost of services and products.

                                      27

<PAGE>

  Product development and engineering

   Product development and engineering costs consist primarily of salaries and
related costs for hardware and software development and engineering personnel,
consulting fees, equipment depreciation, supplies, and allocated overhead costs
such as computer systems and facilities. Product development and engineering
costs increased in the third quarter and first nine months of 2001 by 11% and
19%, respectively, as compared to the same periods in 2000, due to higher
network development costs related to our efforts to stabilize, scale and
improve the reliability of our broadband network as well as costs for the
development of advanced broadband services, such as premium subscription-based
services, billing and back-office systems, auto-provisioning and
self-installation initiatives. These increases were partially offset by
moderate operational cost savings from the decrease in product development
related to media and advertising and from lower levels of engineering
recruiting and consulting fees. While in bankruptcy and the related
restructuring process, we cannot anticipate what type of product development
and engineering projects will be continued and therefore, future decisions
about the level of product development and engineering efforts will be the
primary factor in the level of future product development and engineering costs.

  Sales and marketing

   Sales and marketing costs consist primarily of promotional and advertising
costs, personnel costs for our direct sales force, commissions, agency and
consulting fees, and allocated overhead costs such as computer systems and
facilities. We currently rely on our cable partners to market the @Home service
in local markets although we have historically made additional marketing funds
available to our cable partners for this purpose. In addition, we have engaged
in nationwide marketing of the @Home service through promotional activities and
retail initiatives. Sales and marketing costs decreased in the third quarter
and first nine months of 2001 by 52% and 31%, respectively, as compared to the
same periods in 2000, due to the curtailment in spending for marketing and
promotion of our narrowband web sites and the discontinuation of our free ISP
product during the first quarter of 2001 which has resulted in the elimination
of related marketing costs. The decrease in the first nine months of 2001 as
compared to 2000 was partially offset by efforts in the first quarter of 2001
to support our strategic alliances and data marketing activities. In addition,
the decreases in the 2001 periods as compared to 2000 were partially offset by
provisions for bad debt resulting from our restructuring plans. While in
bankruptcy and the related restructuring process, we do not anticipate that
sales and marketing efforts will be maintained at the levels experienced in
recent periods and therefore we expect sales and marketing costs to continue at
substantially reduced levels in the future as compared to historical periods.

  General and administrative

   General and administrative costs consist primarily of administrative, legal,
finance and executive personnel costs, fees for professional services and the
related costs of facilities and computer systems to support our operations.
General and administrative costs decreased in the third quarter of 2001 by 14%
as compared to the third quarter of 2000 due to the implementation of
cost-saving measures during 2001 including workforce reductions and the closure
of real estate facilities. General and administrative costs increased in the
first nine months of 2001 by 10% as compared to the first nine months of 2000
due to the pre-restructuring expansion of facilities and computer systems,
including related increases in costs for telecommunications, utilities and
taxes, as well as higher legal and professional fees during the significant
growth phase of our operations and infrastructure between the beginning of 2000
and early 2001. Due to uncertainties inherent in the bankruptcy and related
restructuring process, we cannot predict the future trend in general and
administrative costs.

  Restructuring charges

   On September 25, 2001, we announced a workforce reduction of over 500
employees in connection with the shutting down of the MatchLogic business unit
and the substantial streamlining of our media business through the shut down or
sale of narrowband operations. The workforce reduction was approved by our
board of directors on September 21, 2001. Earlier in the third quarter, we
eliminated approximately 300 redundant positions as a

                                      28

<PAGE>

result of several internal organizational realignments. Management approved
plans to vacate several additional facilities in connection with these
workforce reductions and we also surrendered possession of a number of vacant
facilities in the third quarter of 2001.

   On April 30, 2001, we announced a workforce reduction of approximately 380
employees and the expansion of our operational restructuring announced on
January 23, 2001. The workforce reduction was approved by our board of
directors on April 16, 2001 and impacted all divisions throughout the company,
but was more heavily weighted towards our media operations. We also completed
the shutdown of consolidated European narrowband operations by July 15, 2001 as
contemplated in the April 30, 2001 announcement. Additionally, management
determined that several facilities, including recently constructed buildings
near our corporate headquarters, would not be occupied as a result of the
workforce reductions and the general reduction in our planned employee levels.
We have significant lease obligations in connection with these recently
constructed buildings representing the substantial portion of our restructuring
costs in the second quarter of 2001.

   On January 23, 2001, we announced a workforce reduction of approximately 250
employees and a related operational restructuring, which was approved by our
board of directors on January 19, 2001. The majority of reductions and
restructuring affected the narrowband media operations and the iMALL e-commerce
application operations. We substantially completed the winding down of iMALL
activities in the second quarter of 2001. We also discontinued our DSL offering
to @Work customers in the first quarter of 2001 due to the dissolution of
Northpoint, a wholesale provider of DSL connectivity.

   As of September 30, 2001, approximately 1,500 positions were eliminated as a
result of workforce reductions initiated during 2001, of which approximately
180 employees remained on staff primarily for the purpose of shutting down
MatchLogic operations and shutting down or selling narrowband media operations.
We plan to substantially complete the exit activities associated with our
workforce reductions prior to the end of 2001.

   We incurred restructuring costs of $34.6 million in the third quarter of
2001 and $210.4 million in the first nine months of 2001. We did not incur
restructuring costs in the comparable periods in 2000. Restructuring costs
included the following amounts in the third quarter, second quarter and first
quarter of 2001, respectively: $5.7 million, $7.6 million and $5.5 million for
severance and related employee benefit obligations; $15.4 million, $150.9
million and $5.8 million in estimated losses on noncancellable leases related
to facilities exited as a result of consolidating personnel, net of expected
sublease income and including unrecoverable leasehold improvements; and $13.5
million, $0.2 million and $5.8 million of other costs such as penalties
incurred for terminated contracts and reserves for losses upon disposal of
assets as a result of the activities exited. The facilities charges are
comprised primarily of estimated losses on recently completed facilities near
our corporate headquarters. We surrendered possession of these and several
other facilities during the third quarter of 2001 and the bankruptcy court
approved our motion to reject these leases in October 2001. We recorded as a
reduction in the restructuring accrual and corresponding reorganization gain
the difference between the estimated lease losses immediately prior to the
bankruptcy filing and the expected amount of the allowed claims for these
leases pursuant to Section 502 of the United States Bankruptcy Code.

   Incremental cash payments related to our restructuring plans consisted of
severance payments and payments for terminated contracts totaling approximately
$5 million in each of the three quarters of 2001. As a result of our bankruptcy
filing, the restructuring accrual as of September 30, 2001 predominantly
represents pre-petition obligations and therefore we expect to pay these
amounts in accordance with the bankruptcy process. Although we expect to
realize cash and operational savings in future periods from these workforce
reductions and restructuring plans, the business activities associated with
these actions generated significant revenues on a historical basis and
therefore we do not believe that these actions will result in cash and
operational savings that are relevant for the purposes of projecting future
cash flows or operating results in comparison with our historical results.

                                      29

<PAGE>

   Costs incurred during bankruptcy or as a result of the restructuring process
while in bankruptcy are recorded as reorganization items.

  Cost and amortization of distribution agreements

   Cost and amortization of distribution agreements decreased in the third
quarter of 2001 by 3% and decreased in the first nine months of 2001 by 32% as
compared to the respective periods in 2000. The decrease in 2001 over the prior
year periods was due to the lower cost of distribution agreements charged
immediately to operations and the decrease in amortization of distribution
agreements due to the write-off of the Cablevision distribution agreement in
the second quarter of 2001. Cost and amortization of distribution agreements
represent charges to operations based on the fair value of warrants granted to
cable partners as incentives for distributing the @Home service. The fair
values of warrants not related to any future agreements or subject to
forfeiture are charged to operations immediately at the time that the warrants
are earned and represent cost of distribution agreements. There were no such
charges in either the third quarter of 2001 or 2000. Cost of distribution
agreements was $26.1 million and $75.6 million in the first nine months of 2001
and 2000, respectively. The fair values of warrants earned by cable partners in
connection with exclusive distribution of the @Home service are capitalized and
amortized over the term of the respective distribution agreement. Amortization
of distribution agreements was $23.6 million and $24.4 million in the third
quarter of 2001 and 2000, respectively, and was $72.9 million and $70.9 million
in the first nine months of 2001 and 2000, respectively. We expect that the
future amortization rate of distribution agreements will be at comparable
levels to prior periods, but the early termination of distribution agreements
with our cable partners would likely result in an increased rate of
amortization.

  Costs and amortization of goodwill, intangible assets, deferred compensation
  and other acquisition-related amounts

   Acquisition-related costs were as follows for the periods indicated (in
thousands):

<TABLE>
<CAPTION>
                                       Three Months Ended
                                         September 30,       Nine Months Ended September 30,
                                    ------------------------ -------------------------------
                                     2001   Change    2000      2001      Change    2000
                                    ------- ------  --------  --------    ------ ----------
<S>                                 <C>     <C>     <C>      <C>          <C>    <C>
Amortization of goodwill and other
  intangible assets................ $21,005   (96%) $580,815 $144,811      (92%) $1,729,237
Amortization of acquisition-related
  deferred compensation............   5,257     0%     5,252   15,750        2%      15,487
Other acquisition-related costs....      --  (100%)    4,975      160      (98%)      8,768
                                    -------         --------  --------           ----------
Total acquisition-related costs and
  expenses......................... $26,262   (96%) $591,042 $160,721      (91%) $1,753,492
                                    =======         ========  ========           ==========
</TABLE>

   Amortization of goodwill and other intangible assets. Amortization of
goodwill and other intangible assets decreased in the third quarter and first
nine months of 2001 by 96% and 91%, respectively, as compared to the same
periods in 2000, due to the impairment write-downs of these intangible assets
amounting to $4,609.1 million in the fourth quarter of 2000 and an additional
$600.1 million in the first quarter of 2001. Because goodwill and other
intangible assets were fully written off in the third quarter of 2001, we do
not expect future amortization related to these intangible assets.

   Amortization of acquisition-related deferred compensation. Amortization of
deferred compensation related to acquisitions remained substantially the same
in the third quarter and first nine months of 2001 as compared to the same
periods in 2000. We expect that future amortization of deferred compensation
will be reduced substantially due to the sale of Bluemountain.com in the third
quarter of 2001 and the full amortization of deferred compensation balances
associated with Webshots, which accounted for the substantial portion of
deferred compensation amortization in prior periods.

                                      30

<PAGE>

   Other acquisition-related costs. There were no other acquisition-related
costs in the third quarter of 2001, as compared to costs of $5 million in the
third quarter of 2000. Other acquisition-related costs decreased by 98% in the
first nine months of 2001 compared to the first nine months of 2000. These
decreases in 2001 were due to higher costs incurred in 2000 as a result of
personnel, systems and technology integration efforts related primarily to our
acquisitions of Excite, iMALL, Bluemountain.com, Kendara and Worldprints. We do
not expect to incur these costs in the foreseeable future.

  Impairment write-down of goodwill, other intangible assets and other assets

   Write-down of goodwill, other intangible assets and other assets consisted
of $218.6 million in the third quarter of 2001, including $153.6 million of
goodwill and other intangible assets associated with the media business, $41.4
million of property and equipment including software without alternate future
use other than as currently used by the MatchLogic and the Excite Narrowband
businesses, $37.4 million related to the Cablevision warrants, and $5.2 million
of other assets such as prepaid contract fees in the media business. These
write-downs were offset by $19 million in recoveries of prior write-downs of
goodwill associated with Bluemountain.com resulting from its sale during the
third quarter of 2001 for approximately $32 million. In the first nine months
of 2001, asset write-downs totaled $842.1 million, including $600.1 million of
impairment write-downs to goodwill and other intangible assets in the first
quarter of 2001 and a $12.6 million write-off of the Cablevision distribution
agreement and $10.8 million write-off of impaired software in the second
quarter of 2001. There were no write-downs in the comparable periods in 2000.

   Goodwill and other intangible assets--third quarter of 2001. In the third
quarter of 2001, management established and the board of directors approved a
formal plan to shut down MatchLogic and pursue a substantial streamlining of
our media business through the shut down or sale of narrowband operations, due
to the sustained negative cash flows generated by these business units. We
identified these circumstances as impairment indicators as of September 30,
2001 of the remaining carrying values of goodwill, other acquired intangible
assets and property and equipment without alternate use other than as currently
used by these business units. Based on an analysis indicating that the carrying
values of tangible and intangible assets in these business units exceeded the
expected undiscounted future cash flows, we determined that the remaining
carrying values of all business-unit goodwill and other intangible assets were
impaired and that the carrying values of property, equipment and other assets
of MatchLogic and other narrowband Media business units were also impaired (see
below). The impairment of tangible assets for these business units resulted in
the write-off of the $153.6 million remaining carrying value of goodwill and
other intangible assets as of September 30, 2001.

   Goodwill and other intangible assets--first quarter of 2001. In the first
quarter of 2001, we identified additional indicators of possible impairment of
our long-lived assets, principally goodwill and other intangible assets, on a
basis similar to the impairment indicators identified as of December 31, 2000.
These impairment indicators included continued deterioration in the business
climate of, and reduced levels of venture capital funding activity for,
Internet advertising and other Internet-related companies, continued
significant declines in the market values of our competitors in the Internet
advertising industry, and changes made and announced in April 2001 in our
operating and cash flow forecasts for the remainder of 2001. As a result, we
recorded an impairment write-down totaling $600.1 million in the first quarter
of 2001. Please refer to this section in our Form 10-Q for the quarter ended
March 31, 2001 for further details related to this write-down including
information on the impairment testing methodology.

   Property and equipment, including software. As a result of the decision to
sell or shut down narrowband operations, we determined that the carrying value
of property and equipment and other assets without alternate use other than as
currently used by these business units was impaired as of September 30, 2001.
The $41.4 million write-down of these assets during the third quarter of 2001
reduced the carrying value of these assets to fair value.

                                      31

<PAGE>

   In the second quarter of 2001, several in-progress projects in the media
business were discontinued. This resulted in the impairment of capitalized
costs related to these projects, consisting of third-party software recorded in
property and equipment. The software has no alternate use and cannot be sold,
and therefore, the $10.8 million carrying amount of this software was written
off in the second quarter of 2001.

   Cablevision distribution agreement and warrants. In the second quarter of
2001, we informed Cablevision that we were seeking the termination of our
relationship and the recovery of warrants to purchase up to 21.9 million shares
of our Series A common stock granted to Cablevision in 1997 and 1998 pursuant
to a distribution agreement for the deployment of the @Home service on an
exclusive basis to customers located in Cablevision's cable markets. We
capitalized the cost of these distribution agreements in 1997 and 1998 based on
the fair values of the warrants at that time, and we have been amortizing these
balances on a straight-line basis through June 4, 2002, the term of
exclusivity. However, based on our intention to terminate the agreement and the
probability that we would recover the warrants, we recorded a $12.6 million
charge to operations which represented the difference between the unamortized
balance of the Cablevision distribution agreement and the $37.4 million fair
value of the warrants. The $37.4 million carrying value of the warrants was
recorded as a loss in the third quarter of 2001 based on the decline in the
fair value of the warrants as of September 30, 2001.

   Bluemountain.com sale. On September 12, 2001, we completed the sale of
Bluemountain.com, an online greeting card provider, for net proceeds of
approximately $32 million in cash. The sale proceeds in excess of the
approximately $13 million in carrying value of assets sold (approximately $3
million of tangible and $10 million of intangible assets), net of transaction
fees, was recorded as a $19 million recovery against the prior write-down in
Bluemountain.com goodwill and other intangible assets.

Reorganization Items, Net

   Income, expenses, gains and losses resulting from the reorganization and
restructuring of the business while in bankruptcy are reported separately from
operations as reorganization items in accordance with SOP 90-7. In the third
quarter of 2001, the reorganization items of $104.8 million included $1.1
million in professional fees incurred in connection with the filing of the
bankruptcy petition and a gain of $105.9 million. This gain resulted from the
difference between amounts previously accrued in accordance with EITF Issue No.
94-3 on recognition of liabilities for exit costs and the expected amount of
the allowed claims for leases of real property pursuant to Section 502 of the
United States Bankruptcy Code and accrued in accordance with Financial
Standards Accounting Board Statement No. 5, Accounting for Contingencies.

Interest and Other Income (Expense), Net

   Our net interest and other income consisted of the following for the periods
indicated (dollars in thousands):

<TABLE>
<CAPTION>
                               Three Months Ended September 30, Nine Months Ended September 30,
                               -------------------------------  ------------------------------
                                  2001        Change    2000       2001        Change   2000
                                --------      ------  --------   --------      ------ --------
<S>                            <C>            <C>    <C>        <C>            <C>    <C>
Interest and other income..... $  1,022        (94%) $ 17,482   $ 11,678        (73%) $ 43,695
Interest and other expense....  (14,921)        27%   (11,782)   (41,420)        22%   (33,944)
                                --------              --------   --------             --------
   Interest and other income
     (expense), net........... $(13,899)       n/a   $  5,700   $(29,742)       n/a   $  9,751
                                ========              ========   ========             ========
</TABLE>

   Interest and other income decreased in the third quarter and first nine
months of 2001 by 94% and 73%, respectively, as compared to the same periods in
2000, due to the decline in interest-bearing short-term investment balances and
lower realized gains from sales of strategic investments in publicly traded
companies. Interest and other expense increased in the third quarter and first
nine months of 2001 by 27% and 22%, respectively, as compared to the same
periods in 2000, due to higher capital lease balances. As a result of the
above, we had net interest and other expense in the third quarter and first
nine months of 2001 while we had net interest and other income in the same
periods in 2000. We do not expect that there will be sufficient collateral to

                                      32

<PAGE>

cover our interest-bearing pre-petition liabilities, including our convertible
debt and capital lease obligations, and therefore going forward we will
discontinue accruing interest on our pre-petition obligations while in
bankruptcy. We anticipate that this will result in a significant decrease in
interest and other expense in future periods.

Write-Down of Other Investments

   We recorded impairment write-downs of other investments of $32.3 million in
the first nine months of 2001. These write-downs included $9 million in the
first nine months of 2001 on publicly traded equity securities representing
other-than-temporary unrealized losses included in accumulated other
comprehensive income (loss) and $23.3 million in the first nine months of 2001
on privately held investments representing a reduction in the investment
balance recorded in other investments. The write-down of $8.4 million in the
third quarter of 2001 was related to privately held investments. There were no
impairment write-downs of other investments recorded in the comparable periods
in 2000. The impairment write-downs related to publicly traded equity
securities resulted from our conclusion that declines in the fair market values
of such investments below their carrying values were not temporary (generally,
the fair market values were below the carrying values for a continuous period
of six months or more). The impairment write-downs related to privately held
investments resulted from our conclusion that the carrying values of these
investments were not recoverable, based on indicators such as bankruptcy,
limited liquidity and low probability of closing required near-term financing.

Equity Share of Losses of Affiliated Companies

   Affiliated companies, which we consider to be related parties, include our
joint ventures that distribute the @Home and Excite services internationally.
Our ownership interests in these joint ventures generally range from 15% to
50%, with the exception of Excite Japan and Excite UK. Although our ownership
interests in the Excite Japan and Excite UK joint ventures exceed 50%, because
our majority voting rights are restricted in certain respects by approval,
veto, or participatory rights granted to the minority shareholders, these joint
ventures have not been consolidated in our financial statements.

   In the third quarter of 2001, we initiated efforts to sell or liquidate our
financial interests in international joint ventures, including @Home Benelux,
@Home Japan, Excite@Home Australia, Excite Japan, Excite UK and Excite Italy.
During the quarter, our interest in @Home Benelux was acquired by the other
joint venture partners in exchange for approximately 4 million Euros
(approximately $3.9 million at the transaction date) representing the repayment
of outstanding accounts and notes receivable and prepayment for a brand
license. We also sold our interest in Excite@Home Australia to the other joint
venture partner in exchange for approximately 5 million Australian dollars
(approximately $2.5 million at the transaction date) representing a liquidation
payment for our equity interest in the joint venture. The carrying value of the
Excite@Home Australia joint venture in excess of the liquidation proceeds was
recorded as a non-operating cost in the third quarter of 2001. In conjunction
with the termination of our equity interest in these joint ventures, we entered
into long-term technology licensing and support arrangements with the former
joint venture partners under which we will continue to provide services and
receive revenues in the future. We are continuing to seek the sale or
liquidation of our financial interests in our remaining international joint
ventures while in bankruptcy. In addition, our Work.com joint venture
discontinued operations on March 31, 2001 as a result of the current decline in
online advertising spending. We invested $15 million in this joint venture in
April 2000 and we have fully reduced this investment by our equity share of the
joint venture's losses through March 31, 2001, the date of its closure.

   Equity share of losses of affiliated companies decreased by 19% to $13.4
million in the third quarter of 2001 from $16.6 million in the third quarter of
2000 and decreased by 3% to $32.4 million in the first nine months of 2001 from
$33.5 million in the first nine months of 2000 due to higher prior year losses
experienced by joint ventures in earlier stages of development, partially
offset by losses experienced by the Work.com joint venture during its shut down
in the first quarter of 2001, recent losses experienced by the Excite UK joint
venture and the net charge related to the liquidation of the Excite@Home
Australia joint venture in the third quarter of 2001. We expect that future
equity share of losses will be limited to the remaining carrying value of
affiliated companies of $13.9 million as of September 30, 2001.

                                      33

<PAGE>

Income Taxes

   Due to operating losses incurred since inception, we did not record a
provision for income taxes in the third quarter and first nine months of 2001
or 2000. A valuation allowance has been recorded for the net deferred tax
assets as of September 30, 2001 and 2000, since we lack an earnings history.
Accordingly, we have not recorded any income tax benefit for net losses
incurred for any period from inception through September 30, 2001.

Net Loss

   Our net losses were $271.3 million and $668.7 million in the third quarter
of 2001 and 2000, respectively, and were $1,450.2 million and $2,013.5 million
in the first nine months of 2001 and 2000, respectively. The decrease in our
net loss for the 2001 periods as compared to 2000 was due to lower levels of
goodwill and intangible asset amortization offset partially by restructuring
costs and asset write-downs. Our future operating results are subject to
significant uncertainty as a result of our bankruptcy filing.

Liquidity and Capital Resources

   Our bankruptcy filing on September 28, 2001 has resulted in significant
uncertainty about our liquidity and capital resources, including those
discussed below and under "Risk Factors". Prior to our bankruptcy filing, our
former independent auditors modified their report of independent auditors to
include an explanatory paragraph expressing substantial doubt about our ability
to continue as a going concern. If the Internet access business is sold to AT&T
or another bidder, we will likely cease operating as a going concern and will
proceed with the disposition of our remaining assets. There can be no
assurances that we will have sufficient liquidity to maintain operations at
current levels during the bankruptcy and related restructuring process. A
significant portion of this uncertainty relates to the following:

  .  In October 2001, we entered into interim agreements that revise certain
     terms under which we provide the @Home residential broadband Internet
     service to substantially all of our North American cable partners through
     November 30, 2001 in consideration for these cable partners' continued
     ability to add subscribers to our broadband Internet service. Under these
     interim agreements, payments for past services were brought current and we
     will receive periodic up-front payments for subscriber revenues through
     November 30, 2001 based on a fixed amount of revenue per @Home subscriber
     that represents an increase in per-subscriber revenues compared to the
     revenue share amounts we have historically received under our distribution
     agreements. These interim agreements expire on November 30, 2001, and
     there can be no assurance that they will be extended or renewed for any
     period. As a result, the amount of cash currently required to support our
     operations may not be indicative of the amount of cash required beginning
     in December 2001.

  .  The bankruptcy court entered an interim order on October 9, 2001 directing
     that we temporarily set aside $100 million in cash otherwise available to
     support operations as adequate protection for the use of the cash
     collateral of affiliates of Promethean Asset Management, L.L.C. and
     Leonardo, L.P., holders of the $100 million convertible notes issued in
     June 2001.

  .  Immediately prior to our Chapter 11 bankruptcy filing, we entered into an
     asset purchase agreement with AT&T to sell essentially all of the assets
     related to our broadband internet access business, and in particular
     assets related to our @Home and @Work operations in the United States and
     Canada, to AT&T for $307 million and the assumption of certain
     liabilities. Under this agreement, we are obligated to make specified
     capital expenditures and to meet specified network performance levels with
     respect to each of our cable partners. Therefore, we may not have the
     flexibility to rapidly decrease our cash outlays.

  .  We may not be successful in selling our Internet broadband business to
     AT&T or other bidders. Completion of this transaction is subject to higher
     and better offers for our broadband business, approval by the bankruptcy
     court, and the satisfaction of several other conditions set forth in the
     asset purchase agreement. On October 10, 2001, we received a notice from
     AT&T that our failure to add new subscribers was a breach of certain
     sections of the asset purchase agreement and that AT&T reserved all

                                      34

<PAGE>

     its contractual, legal and equitable rights with respect to the alleged
     breaches. There can be no assurance that we will close the sale of the
     broadband access business to AT&T or any other bidder. Please see "Risk
     Factors" under the heading "We may not be successful in selling our
     broadband business for sufficient value, or at all."

  .  Our Chapter 11 filing and the associated uncertainty surrounding whether
     our agreement with AT&T to sell our broadband business will be approved by
     the bankruptcy court, as well as our financial position, has and will
     continue to impair our ability to operate our business. Please see "Risk
     Factors" under the heading "Our recent Chapter 11 filing has and will
     continue to impair our business operations."

  .  Reduction in capital expenditures for our broadband network and losses of
     employees may result in degradation of network performance. Our failure to
     meet network performance standards may constitute a default under our
     service level agreements with certain cable companies, potentially
     resulting in liability for liquidated damages. Moreover, our failure to
     meet performance standards for broadband service would be a default under
     the asset purchase agreement with AT&T.

   Please see "Chapter 11 Bankruptcy Filings" for further detail about our
bankruptcy proceedings.

   We continue to seek additional liquidity through the sales of our remaining
assets, including the sale of narrowband media operations and interests in
international joint ventures. These sales are subject to approval by the
bankruptcy court and parties-in-interest, and there can be no assurance that we
will be able to close these sales.

   Although we believe that we will have sufficient cash on hand to finance
operations during the period of time contemplated for the completion of the
proposed sale of our broadband business, including supporting our post-petition
trade and employee obligations, an adverse outcome with regard to any of the
above or other uncertainties inherent in the bankruptcy and related
restructuring, such as a prolonged court process, could ultimately result in
the operational and/or administrative insolvency of Excite@Home. As a company
in bankruptcy, we do not, from a practical standpoint, have access to the
capital markets to obtain financing. Debtor-in-possession financing, should it
be needed, may not be available on terms acceptable to us or at all. Please
also see "Risk Factors" for further discussion of factors that may adversely
affect our liquidity.

   Since our inception, we have financed our operations primarily through
private and public sales of equity securities and convertible debt securities
and capital lease and other financing arrangements. As of September 30, 2001,
our principal source of liquidity was $157 million of cash, cash equivalents
and short-term investments compared to $200.8 million as of December 31, 2000.
Of the $157 million as of September 30, 2001, $16.9 million was held primarily
in connection with stand-by letters of credit that secured several facility
leases and several employment agreements. Our short-term investments consist
predominantly of debt instruments that mature in less than one year, are highly
liquid and have a high-quality investment rating. We intend to make our
short-term investments available, if and when needed, for operating purposes.

   The following represents the summary of our cash flows as of the end of and
for the first nine months of each year indicated (dollars in thousands):

<TABLE>
<CAPTION>
                                                                   2001    Change  2000
                                                                 --------  ------ -------
<S>                                                              <C>       <C>    <C>
Cash and cash equivalents (including restricted cash) at the end
  of the period................................................. $139,045    (9%) 152,512
Cash used in operating activities...............................  (86,596)  478%  (14,970)
Cash provided by (used in) investing activities.................    2,921   n/a   (90,467)
Cash provided by financing activities...........................  124,073   271%   33,401
</TABLE>

                                      35

<PAGE>

  Operating Activities

   Cash used in operating activities in the first nine months of 2001 increased
by 478% over 2000 due to a $151.9 million increase in net loss excluding
non-cash charges, partially offset by a $80.3 million decrease in cash used for
accounts payable and other operating assets and liabilities.

  Investing Activities

   Cash provided by investing activities in the first nine months of 2001 was
$2.9 million compared to cash used in investing activities in the first nine
months of 2000 of $90.5 million. The increase was primarily due to a $42.8
million decrease in investments in joint ventures resulting from our efforts to
minimize further capital contributions earlier in 2001 and the decision to sell
our financial interest in these joint ventures in the third quarter of 2001; a
$37.7 million decrease in payments under our backbone agreement due to the
large up-front funding of network build-out costs in the prior year; a $34.1
million increase from proceeds of sales of business interests primarily due to
the Bluemountain.com sale; a $6.7 million increase in net proceeds from other
investments; a $1.8 million decrease in net purchases of property, equipment
and improvements; and a partial offset of the above activities by a $36.2
million decrease in net sales of short-term investments. We anticipate that we
will use cash in investing activities in the future primarily for capital
expenditures related to equipment to support our broadband network operations,
which we are required to undertake pursuant to our asset purchase agreement
with AT&T (see "Commitments" below).

  Financing Activities

   Cash provided by financing activities in the first nine months of 2001
increased by 271% over 2000 due to the net proceeds of $183.2 million related
to the issuance of $100 million in convertible notes and the amendment of our
backbone capacity agreement with AT&T, partially offset by a decrease in
proceeds from issuance of common stock of $69.9 million as a result of fewer
stock option exercises and the decline in our stock price and an increase in
payments on capital leases of $22.6 million resulting from an increase in
capital lease obligations related to network equipment supporting our broadband
network. With respect to capital lease obligations that we assert are disguised
financings, we will not make any lease payments thereunder unless required by
the bankruptcy court to do so. With respect to our backbone capacity agreement
with AT&T, we have not made any payments thereunder since the bankruptcy
filing. Pursuant to the asset purchase agreement with AT&T, we are required to
assume this agreement, cure defaults thereunder and assign it to AT&T.

  Commitments

   In general, our commitments in existence prior to the filing of bankruptcy
are stayed while we continue business operations as a debtor-in-possession. As
a result of our bankruptcy filing, our convertible debt securities and some
real estate leases, capital leases and other obligations are in default.
However, we do not believe that any default provisions that were triggered by
the bankruptcy filing are enforceable under the United States Bankruptcy Code
and any actions on these obligations have been stayed. These commitments,
including any amounts immediately due as a result of an acceleration clause,
are subject to a distribution process to be approved by the bankruptcy court.
In general, we will not continue to accrue interest on debt obligations because
these commitments are either unsecured or, with respect to secured obligations,
we do not expect that there will be sufficient collateral to cover interest
payments. We will continue to make lease payments for facilities that we occupy
and that we have not filed a motion to reject in court, including our corporate
headquarters.

   Our asset purchase agreement with AT&T obligates us to make capital
expenditures at a level consistent with the level prior to the bankruptcy
filing, and as necessary to achieve network performance specifications with
respect to services provided to subscribers of each of our cable partners.

   Management has implemented, and the bankruptcy court has approved, a key
employee retention and severance plan under which retention and severance
payments are triggered upon the occurrence of certain

                                      36

<PAGE>

milestones or other events during the bankruptcy process, including the
completion of the sale of the broadband business, approval of a plan of
reorganization or liquidation, and termination of employment.

   Prior to the bankruptcy filing, we entered into various severance and
retention arrangements with our senior executives. These agreements are subject
to assumption or rejection by us in the bankruptcy proceedings. The creditor
committees have disapproved the terms of these agreements and we are working
with the creditor committees to modify these agreements and obtain their
approval. These agreements, as modified, are also subject to approval by the
bankruptcy court.

Impact of Adoption of New Accounting Standards

   In June 2001, the Financial Standards Accounting Board (FASB) issued
Statement of Financial Accounting Standards No. 143 (FAS 143), "Accounting for
Asset Retirement Obligations," which addresses financial accounting and
reporting for obligations related to the retirement of tangible long-lived
assets and associated asset retirement costs. FAS 143 is effective for fiscal
years beginning after June 15, 2002. We do not expect the impact of adoption of
FAS 143 to have a material effect on our financial position or results of
operations.

   In October 2001, the FASB issued FAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets". FAS 144 supercedes FAS 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
FAS 144 applies to all long-lived assets including discontinued operations and
consequently amends Accounting Principles Board Opinion No. 30. FAS 144
develops one accounting model for long-lived assets that are to be disposed of
by sale. FAS 144 requires that long-lived assets that are to be disposed of by
sale be measured at the lower of book value or fair value less cost to sell.
Additionally, FAS 144 expands the scope of discontinued operations to include
all components of an entity with operations that can be distinguished from the
rest of the entity and will be eliminated from the ongoing operations of the
entity in a disposal transaction. FAS 144 is effective for fiscal years
beginning after December 15, 2001. We have not assessed the impact of adoption
of FAS 144 on our financial position or results of operations due to
significant uncertainty in light of our bankruptcy filing.

Risk Factors

   The forward-looking statements throughout this quarterly report involve
risks and uncertainties, and our actual results, performance or achievements
could differ materially from those expressed or implied by the forward-looking
statements on the basis of several factors, including the risks described
below. These risks are not the only ones facing our company. Additional risks
not presently known to us, or that we currently deem immaterial, may also
impair our business operations. Our business, financial condition or results of
operations could be seriously harmed by any of these risks.

  We may not be successful in selling our broadband business for sufficient
  value, or at all.

   Immediately prior to our Chapter 11 bankruptcy filing, we entered into an
asset purchase agreement with AT&T to sell essentially all of the assets
related to our broadband internet access business, and in particular assets
related to our @Home and @Work operations in the United States and Canada, to
AT&T for $307 million and the assumption of certain liabilities. Completion of
this transaction is subject to whether higher and better offers for our
broadband business emerge, approval by the bankruptcy court, and the
satisfaction of several other conditions set forth in the asset purchase
agreement. In addition, we have made several representations, warranties and
covenants to AT&T and have agreed to continue to operate our broadband business
in accordance with criteria set forth in the agreement, including agreements
regarding capital expenditures to support our broadband network and agreements
to operate our broadband network in accordance with specified network
performance levels. On October 10, 2001, we received a notice from AT&T that
our failure to add new subscribers was a breach of certain sections of the
asset purchase agreement and that AT&T reserved all its contractual, legal and
equitable rights with respect to the alleged breaches. Operating our business
to meet these

                                      37

<PAGE>

criteria will require us to incur significant operating expenses. If we fail to
satisfy these criteria, AT&T could elect to terminate this agreement, or could
seek indemnification for damages. Our indemnification obligations for certain
matters is capped at the purchase price, and for others it is uncapped.
Therefore, as a result, the overall net proceeds from this transaction could be
substantially less than $307 million.

   Unless the purchase prices offered by AT&T, or potentially other bidders,
for our Internet broadband access business and by potential bidders for our
other assets are increased significantly, our bondholders and other creditors
would recover only a portion of the amounts owed to them. Due to the complex
nature of our business and the fact that AT&T is a party to our most
significant contracts, which comprise many of our most valuable assets, we may
not receive higher and better offers from other parties. Even so, the
bankruptcy court may not approve our current asset purchase agreement with
AT&T. As a result of these factors, it is possible that we will only receive
the purchase price offered by AT&T, or potentially less if AT&T terminates the
agreement or it is not approved by the bankruptcy court, and that our
stockholders will not receive any value for their stock.

  Our ability to finance our operations through the course of our bankruptcy
  proceedings is uncertain.

   As of September 30, 2001, we had $157 million in cash, cash equivalents and
short-term investments. We have taken several actions to reduce spending,
including substantially streamlining our media business through the shut down
or sale of narrowband operations and the shutting down of our MatchLogic
division, as well as reductions in capital expenditures, significant staff
reductions, and restrictions on departmental budgets and normal business
expenses. In addition, due to our recent filing under Chapter 11 of the United
States Bankruptcy Code, we will be able to reject many significant contractual
obligations, such as real estate leases, which will enable us to decrease our
cash burn rate.

   During the three months ended September 30, 2001, we had negative cash flows
from our operating, investing and financing activities, even though such cash
flows included the sale of Bluemountain.com for net proceeds of approximately
$32 million. We are seeking to sell non-core businesses and assets, including
many of our media assets and our interests in international joint ventures, in
an effort to eliminate cash-flow negative operations and to raise additional
cash to support our operations. The sale of non-core assets while in
bankruptcy, including a recently-announced agreement for the sale for $10
million of narrowband assets, including certain domain names, trademarks, and
user data, associated with Excite.com, are subject to approval by the
bankruptcy court and parties-in-interest. In addition, we entered into interim
revenue agreements with our cable partners, which increase the broadband
revenues we receive from substantially all of our cable partners in North
America until their expiration on November 30, 2001. We may seek to extend or
renew these interim revenue agreements with our cable partners if appropriate,
although it is uncertain whether our cable partners would be willing to do so.
We cannot assure you that our operations will have positive cash flows for any
future period or that we will be able to continue to finance our operations
during bankruptcy, especially if the time period contemplated for the
completion of the proposed sale of our broadband business is prolonged and we
are not able to negotiate revised agreements with our cable partners.

   Although we have entered into an agreement with AT&T to sell substantially
all of our broadband business, this agreement is subject to the approval of the
bankruptcy court, and AT&T's bid has received opposition from bondholders.
Therefore, our bankruptcy case will extend into 2002 or longer. During this
time, we will need to continue making capital expenditures and incurring normal
operating expenses to support the addition of new subscribers to our @Home
service and to maintain network stability, particularly because our asset
purchase agreement with AT&T obligates us to make specified capital
expenditures and to meet specified network performance levels with respect to
each of our cable partners. Therefore, we may not have the flexibility to
rapidly decrease our cash outlays. We may not have sufficient cash to support
our business operations if the bankruptcy case proceeds for an extended period
of time and a sale of our broadband business is not finalized. Should we need
it, debtor-in-possession financing may not be available to us on acceptable
terms or at all, especially in light of the downturn in the economy and the
capital markets. If we are unable to make capital expenditures or other
payments to support our operations, we could lose existing and potential
subscribers, and this could decrease the value of our broadband business.

                                      38

<PAGE>

  Our recent Chapter 11 bankruptcy filing has and will continue to impair our
  business operations.

   Our bankruptcy filing and the associated uncertainty surrounding whether our
agreement with AT&T to sell our broadband business will be approved by the
bankruptcy court, as well as our financial position, has and will continue to
impair our ability to operate our business. For example:

  .  The uncertainty surrounding the future of our broadband operations may
     result in losses of new and existing subscribers. Prospective subscribers
     may also be less willing to sign up for the @Home service, especially
     since many subscribers are required, or elect, to purchase cable modems
     which entail an upfront cost. Likewise, existing clients may fear that our
     @Home service may be discontinued as a result of the bankruptcy
     proceedings, and may seek alternative high-speed Internet services.

  .  We have agreements and relationships with many third parties, including
     equipment suppliers, network engineering, management and maintenance
     consultants, providers of telecommunications circuits and other service
     providers that are integral to conducting our day-to-day operations,
     particularly with respect to maintaining the performance of our network
     and offering the @Home service. Although the United States Bankruptcy Code
     places restrictions on the abilities of our business partners to terminate
     their contracts with us, they may still attempt to do so, or may attempt
     to reduce or tighten our commercial relationship with them. We may not be
     able to finance new equipment purchases and expand our relationships as
     needed to support our broadband operations.

  .  Prospective business partners may refuse to do business with us or may
     require prepayments by us on terms that are not acceptable.

  .  Retention of our senior management and key employees is critical to
     maintaining and expanding our broadband operations, and many of these
     employees would be difficult to replace, especially in light of our recent
     Chapter 11 bankruptcy filing. Bankruptcy creates uncertainty with
     employees about job security and generally has a negative impact on
     employee morale. These factors, together with the drop in our stock price
     which has effectively eliminated the retention and incentive effect of our
     stock options, has led to an increase in departures of employees at all
     levels, and increases the risk that we will lose additional employees in
     the future. We have entered into agreements and instituted plans in an
     attempt to retain employees that are critical to our business operations,
     but we cannot guarantee that these measures will be effective.

  .  Our senior management may not be able to devote as much time to the
     operation of our business as necessary due to the time and attention
     required to be dedicated to the bankruptcy proceedings and other legal
     proceedings.

  .  With the resignation of William R. Hearst, III from our board of directors
     effective October 31, 2001, we no longer have a sufficient number of board
     members to constitute a quorum. Either an amendment of our charter by our
     controlling shareholder or the appointment of an additional director is
     required for our board to take action. There can be no assurance that we
     can attract new board members, retain our existing board members or amend
     our charter.

  .  Our reductions in capital expenditures and losses of employees may result
     in degradation of network performance, potentially resulting in defaults
     under the service level agreements with certain cable companies and
     liability for liquidated damages thereunder.

  We may not be able to continue as a going concern and you should consider
  this when reviewing our financial statements.

   Our financial statements have been prepared on the assumption that we will
continue as a going concern. We are in the process of selling our broadband
access business to AT&T or other bidders. Although it is possible that we may
attempt to reorganize and continue to operate our broadband business as an
alternative to an unsuccessful sale to AT&T or other bidders, the completion of
such a sale would likely result in the subsequent liquidation of our assets and
a distribution to claimants. Under such circumstances, the going concern basis
of

                                      39

<PAGE>

accounting may no longer be appropriate. In addition, prior to our bankruptcy
filing, our former independent auditors included an explanatory paragraph in
their report of independent auditors stating that our need to raise financing
to support our operations and the occurrence of certain events which could
require our debt to become due raised a substantial doubt about our ability to
continue as a going concern. If we are unable to continue as a going concern, a
liquidation basis of accounting may be required resulting in substantial
changes in the presentation of our financial statements. In such case, the
value of our tangible and intangible assets as currently recorded in our
balance sheet may be substantially higher than the proceeds we would recover in
a liquidation of our business.

  Our Chapter 11 bankruptcy filing may subject us to additional litigation risk
  and may impair our ability to reorganize should we attempt to do so.

   Our bankruptcy filing may have constituted an event of default according to
the terms of the agreements covering our outstanding convertible debt and
several of our equipment lease financing agreements, real estate leases and
other contractual arrangements, and several of these obligations may have
become immediately due and payable in full. However, we do not believe that any
default provisions that were triggered by the bankruptcy filing constitute an
event of default, or are enforceable, under the United States Bankruptcy Code.
In addition, we have outstanding obligations with trade and other creditors.
Under the United States Bankruptcy Code, as a result of the bankruptcy filing,
all pending claims and litigation against us are stayed and no party may take
any action to recover pre-filing claims except with the approval of the
bankruptcy court. In addition, the United States Bankruptcy Code provides us
with the ability to reject some of our agreements, in which case the parties
affected by these rejections may file claims with the bankruptcy court.
Additional liabilities may arise in the future as a result of the rejection of
agreements and from the determination of the bankruptcy court (or agreement by
parties-in-interest) of allowed claims for contingencies and other disputes.
Due to the uncertain nature of many of these potential claims, we are unable to
project the magnitude of these claims with any degree of certainty.

   In addition, we granted AT&T a security interest in our backbone capacity
agreement with AT&T as part of our financing arrangement with AT&T in June
2001. We have also granted security interests in other of our assets under
equipment lease financing arrangements and to secure our obligations under our
$100 million principal amount convertible notes. AT&T and other secured parties
may attempt to foreclose on these assets during the bankruptcy proceedings. If
the bankruptcy court were to approve foreclosure on key assets, this would
impair our ability to sell our broadband business to a third party, or
alternatively our ability to continue to operate our business and reorganize
should we attempt to do so.

  The economic downturn may prevent us from meeting increases in subscribers
  previously forecasted by us, may result in lost business opportunities for us
  and is making it more expensive for us to operate our business.

   Decisions by consumers and business customers to subscribe to our broadband
services are discretionary. The slowdown in the U.S. economy, and the recent
increase in unemployment generally and among workers in the high technology
sector in particular, may cause consumers and business customers to cancel
existing subscriptions or defer decisions to open new subscriptions to our
broadband services. Additionally, the weakened economy, combined with the
uncertainty of our future commercial relationships, could lead our cable
partners to reduce their investments in upgrading their cable infrastructure to
support our broadband services and in marketing to attract new subscribers. As
a result, there is continued uncertainty with respect to revenue growth and
increases in subscribers previously forecasted by us for the remainder of 2001,
and any unexpected decrease in demand for our broadband services could have a
material adverse effect on our revenues and operating results. If our revenues
were to decrease significantly and we were unable to adjust our level of
operations or reduce our spending in a timely manner, our operating results
would be materially harmed.

                                      40

<PAGE>

  Our operating results may fluctuate due to our Chapter 11 bankruptcy filing
  and other business factors.

   Our operating results may fluctuate significantly in the near term, and in
the long term if we do not sell our broadband business, as a result of a
variety of factors, many of which are outside of our control. These factors
include, but are not limited to, the following:

   . subscriber growth rates, especially in light of our recent Chapter 11
     bankruptcy filing;

   . whether our relationships with our cable partners continue, and whether
     our interim revenue arrangements with our cable partners are extended or
     renewed;

   . changes in the technological, competitive and legal landscape of the
     broadband industry;

   . our ability to shut down or sell non-core, money-losing operations and to
     reduce expenses in a timely manner;

   . whether we are able to sustain network performance at or above levels
     required by our agreements with our cable partners and demanded by
     subscribers to the @Home service;

   . general economic conditions;

   . the introduction of new products or services by us or our competitors, and
     the integration of new services and features with existing services, such
     as self-installation kits for the @Home service;

   . the amount and timing of capital expenditures and other costs relating to
     our operations; and

   . charges to earnings for workforce reductions, and potential additional
     write-downs related to impairment of assets.

   Our expense levels are based in part on expectations of future revenue.
Although we have decreased our operating plan to account for our current cash
position, we may be unable to identify and react in a timely manner to rapidly
changing business conditions and therefore may not adjust our operating plan or
spending quickly enough to compensate for an unexpected revenue or cash
shortfall.

   Overall, the effect of our bankruptcy filing on our business creates
uncertainty regarding our operating results in the short and long term. Due to
this and all of the foregoing factors and the other risks described in this
section, you should not rely on period-to-period comparisons of our results of
operations as an indication of future performance.

  We have incurred and expect to continue to incur substantial losses.

   We have incurred net losses in every fiscal period since our formation in
1995. In addition, we intend to continue to incur significant operating
expenses and capital expenditures in order to support our network to the extent
that a sale of our broadband access business to AT&T or another bidder remains
a viable option. In recent quarters, we have recorded significant write downs
of tangible and intangible assets, and we may have to record additional
write-downs in the future if we determine that our assets have suffered
additional impairment. Although we will receive higher fixed fees for the @Home
service under our interim revenue agreements than the revenue share payments we
historically received under our distribution agreements, such interim
agreements expire on November 30, 2001 and there is significant uncertainty
about our ability to renew or extend such agreements for any period. Therefore,
although we are taking strategic and cost-cutting actions that we anticipate
will result in improvements in our operating results, we may continue to incur
net losses and negative cash flows in the future.

                                      41

<PAGE>

  It may be more expensive and more difficult to execute trades in shares of
  our Series A common stock due to the delisting of our stock from the Nasdaq
  National Market and our bankruptcy filing.

   On October 22, 2001, our Series A common stock was delisted from the Nasdaq
National Market, and quotation of our stock on the Over-the-Counter Bulletin
Board commenced the next day. The delisting of our stock could reduce the
ability of holders of our Series A common stock to purchase or sell shares as
quickly and as inexpensively as they have done historically. Fewer
broker-dealers are now willing or able to sell or make a market in our Series A
common stock. Not maintaining a listing on a major stock market may result in a
decrease in the trading price of our Series A common stock due to a decrease in
liquidity, reduced analyst coverage and less interest by institutions and
individuals in investing in our Series A common stock. Moreover, there is no
assurance that we will maintain compliance with the requirements for our common
stock to be quoted on the Over-the-Counter Bulletin Board, in which case our
common stock would be quoted on the Pink Sheets.

   In addition, with respect to bondholders and stockholders who hold
Excite@Home securities which were previously traded under Form S-3 registration
statements filed with the Securities and Exchange Commission, due to the
bankruptcy filing and related events, these Form S-3 registration statements
are no longer available for the purposes of trading in these securities.
Certain of the convertible bonds remain eligible for trading on the PORTAL
market. Any other trades in the securities covered by these Form S-3
registration statements, or other shares subject to trading restrictions, will
need to be made in compliance with applicable federal and state securities
laws, which may prevent the public resale of some securities until required
holding periods are met or may increase the expense of trading in these
securities.

  We need to maintain performance of our broadband business, but we may not
  achieve our performance standards, including subscriber growth.

   Reduction in capital expenditures for our broadband network and losses of
employees may result in degradation of network performance and our ability to
maintain subscriber growth. Our failure to meet these standards may constitute
a default under our service level agreements with certain cable companies,
potentially resulting in liability for liquidated damages. In addition, our
failure to add subscribers may constitute a default under our distribution
agreements. Moreover, our failure to meet performance standards for broadband
service and subscriber growth metrics may constitute defaults under the asset
purchase agreement with AT&T.

  Our relationships with our cable partners are critical to our broadband
  business.

   We currently are dependent on cable companies to provide the @Home service
since the cable companies' local networks are required to deliver the service
to residential homes. The cable infrastructure was originally designed to
handle one-way data transmission, and we are not able to offer the @Home
service until cable companies upgrade their networks to handle two-way
high-speed data transmission. In addition, we rely on our cable partners to
market our services and to provide customer installation and customer support
services. We entered into distribution agreements with AT&T, Comcast, Cox and
other cable companies to offer a co-branded version of the @Home service to
their customers. We recently entered into interim agreements under which we
will receive higher revenues from substantially all of our cable partners in
North America until November 30, 2001. These agreements expire on November 30,
2001, and it is unclear whether we will be able to extend or renew these
arrangements for any period. Prior to our Chapter 11 bankruptcy filing, we
announced that our mutual exclusivity obligations with Comcast and Cox will end
on December 4, 2001, although our distribution agreements with these cable
companies currently remain in place through June 4, 2002. Both we and the
bondholders' committee have filed motions with the bankruptcy court for
Excite@Home to reject master distribution agreements with certain cable
partners which are scheduled to be heard on November 30, 2001. If our
relationships with one or more of these cable partners or AT&T were to
terminate or diminish, we may not be able to offer the @Home service to the
customers served by those cable companies on a cost-effective basis, or at all,
or the revenues we receive from these customers may decrease. Any of these
results could materially harm our business.

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<PAGE>

  We face many additional risks related to the operation of our broadband
  business.

   In addition to the risks described above, we face the following general
risks associated with the operation of our broadband business.

   . Our broadband business does not currently have positive cash- flows, and
     the long-term sustainability of this business is unproven.

   . We could face significant competition in the event that our cable partners
     offer competing Internet access services or other companies offer Internet
     access services over our cable partners' cable systems.

   . If we cannot maintain the reliability, scalability and speed of our
     broadband network, customer demand for our broadband services and our
     relationships with our cable partners will suffer.

   . We face litigation risks due to our relationships with our cable partners,
     as described under "Legal Proceedings" in this and prior periodic reports.

   . Our dependence on our network to provide our broadband services exposes us
     to a significant risk of system failure.

   . New technology could make it more difficult for us to deliver online
     advertising.

   . We must develop and maintain the awareness of our brands to attract
     consumers and advertisers.

   . If we do not develop new and enhanced features, products and services for
     our broadband services, we may not be able to attract and retain a
     sufficient number of users.

   . If we do not maintain the security of our networks, we could lose
     customers and may be subject to litigation.

   These and other risks are described in greater detail in our most recent
annual report on Form 10-K and quarterly reports on Form 10-Q filed prior to
this report but subsequent to the annual report, and we suggest that you review
these reports.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

   The following discusses our exposure to market risk related to changes in
interest rates, equity prices and foreign currency exchange rates.

Interest Rate Sensitivity

   As of September 30, 2001, we had two issuances of long-term convertible debt
outstanding and $100 million of zero-coupon convertible notes issued in June
2001 and classified as current liabilities. The carrying amount of our
convertible debentures issued in December 1998, net of unamortized original
issue discount, was $249.1 million as of September 30, 2001 and the debentures
bear an effective interest rate of approximately 4%. Our convertible notes
issued in December 1999 had an outstanding balance of $500 million as of June
30, 2001 and bear a fixed rate of interest of 4 3/4%. Because the interest
rates on these debt instruments are fixed, a hypothetical 10 percent increase
or decrease in market interest rates would not have a material impact on us.
Increases in market interest rates could, however, increase the interest
expense associated with future borrowings by us, if any. We do not hedge
against interest rate increases. While we are in bankruptcy proceedings, we
generally will not record interest expense on our interest-bearing obligations
as long as there is uncertain about whether or not our interest-bearing
obligations may be subject to compromise. We included all interest-bearing
obligations as subject to compromise in our balance sheet as of September 30,
2001.

Equity Price Risk

   We own shares of privately held and publicly traded companies that we
classify as other investments in our consolidated balance sheets. We generally
value our investments in privately held companies at cost. Because

                                      43

<PAGE>

many of these companies are technology startups in an early stage of
development and may never develop into commercially viable businesses, these
investments are inherently risky and we may incur losses related to our
investments in these companies. We value our investments in the equity
securities of publicly traded companies using the quoted closing sale price for
the last day of each month. We write down our investments in privately held
investments and publicly traded equity securities when there is a permanent
decline in value. We wrote down $129.5 million and $32.3 million of such
investments in the fourth quarter of 2000 and in the first nine months of 2001,
respectively. The carrying value of our privately held and publicly traded
investments was $9.4 million as of September 30, 2001, and these investments
are at risk of further declines in the future. We do not hedge against equity
price changes.

Foreign Currency Exchange Rate Risk

   Substantially all of our revenues are realized in U.S. dollars and most of
our revenues are from customers located in the United States. Therefore, our
foreign currency exchange rate risk is substantially limited to funding
commitments to our international joint ventures. Because the timing and amount
of the required contributions is not predictable, we do not typically hedge
against foreign currency exchange rate changes and we did not hold any such
hedges as of September 30, 2001.

                                      44

<PAGE>

                          PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

  Bankruptcy Proceedings

   On September 28, 2001, At Home Corporation, or Excite@Home, and all of our
wholly-owned subsidiaries, excluding Excite Europe Ltd., Excite Espana SL and
certain other foreign subsidiaries, filed voluntary petitions for
reorganization relief under Chapter 11 of the United States Bankruptcy Code
with the United States Bankruptcy Court for the Northern District of
California, jointly administered under Case No. 01-32495-TC. Also on September
28, 2001, we entered into an asset purchase agreement with AT&T Corp., our
controlling shareholder, providing for the purchase by AT&T of substantially
all of the assets and services associated with our broadband Internet access
business for $307 million and the assumption of certain liabilities. We have
filed a motion with the bankruptcy court to approve this asset sale to AT&T
pursuant to Section 363 of Chapter 11 of the United States Bankruptcy Code.
This asset purchase agreement is subject to several closing conditions,
including approval by the bankruptcy court and competing offers or overbids
during the Section 363 sale process. On October 10, 2001, we received a notice
from AT&T that our failure to add new subscribers was a breach of certain
sections of the asset purchase agreement and that AT&T reserved all its
contractual, legal and equitable rights with respect to the alleged breaches.
The sale hearing is currently scheduled for December 5, 2001. There can be no
assurance that such hearing will take place on such date or at all. We are
currently overseeing our operations as a debtor in possession, subject to court
approval of matters outside the ordinary course of business, and pending
resolution of our motion to reject certain master distribution agreements, we
intend to continue to operate our Internet access business until the proposed
sale of this business is completed. Under Chapter 11, claims against us in
existence prior to the filing of the petitions for reorganization relief under
the federal bankruptcy laws are stayed while we are in bankruptcy.

   On October 9, 2001, the bankruptcy court entered an interim order directing
that we temporarily set aside $100 million in cash otherwise available to
support operations as adequate protection for the use of the cash collateral of
affiliates of Promethean Asset Management, L.L.C. and Leonardo, L.P., holders
of the $100 million convertible notes issued in June 2001. In addition, we have
filed a preference complaint against Leonardo, L.P. asserting that it perfected
its security interest within 90 days of the bankruptcy filing, and therefore we
believe that $50 million of the claim associated with these convertible notes
is subject to compromise. As of the filing date of this quarterly report, the
bankruptcy court has not ruled on this motion and there can be no assurance
that the $100 million will be made available for operating purposes.

   Please see "Chapter 11 Bankruptcy Filings" for further detail about our
bankruptcy proceedings.

  Other Litigation Matters

Note: The commencement of our bankruptcy proceedings under Chapter 11 of the
United States Bankruptcy Code triggered an automatic stay of the claims in
which we are a defendant, including those described below. The automatic stay
bars the commencement or continuation of any proceeding, action or effort to
collect upon any of the following pre-petition claim against us.

   On September 6, 2001, Linda Ward, Brian Lewis and Donnie Doby, Jr. filed a
purported shareholder class action suit in California State Superior Court in
San Mateo County against us, AT&T Corporation, Comcast Corporation, Cox
Communications, Inc. and others for an alleged breach of fiduciary duties and
injunctive relief. As a result of the automatic stay pursuant to the bankruptcy
filing, we have not filed any responsive pleadings in this action.

   Fred and Roberta Lipschutz, Arthur Simon and John Galley, III, as named
plaintiffs, filed a purported class action suit against us, AT&T, Service Co
L.L.C. and entities affiliated with eight other cable companies in the United
States District Court for the Central District of California on November 10,
1999. The complaint alleged violations of the federal antitrust laws. The
plaintiffs sought an injunction prohibiting the alleged acts, damages
(including treble damages), costs and attorneys' fees. At trial, the court
denied the plaintiffs' motion for class certification. The plaintiffs appealed
this decision to the 9th Circuit Court of Appeals, which affirmed the lower
court's ruling but remanded on other grounds. The Central District Court of
California dismissed this case with prejudice on November 5, 2001.

                                      45

<PAGE>

   Please also refer to Item 3 of our annual report on Form 10-K for the year
ended December 31, 2000 and Item 1 of our quarterly reports on Form 10-Q for
the quarters ended March 31, 2001 and June 30, 2000 for a description of other
ongoing material legal proceedings which neither first became a reportable
event, nor included any material development, during the third quarter of 2001.

   We cannot assure you that we will prevail in any litigation. Regardless of
the outcome, any litigation may require us to incur significant litigation
expenses and may result in significant diversion of management.

ITEM 2. Changes in Securities and Use of Proceeds

   Not applicable.

ITEM 3. Default Upon Senior Securities

   Our voluntary petition for reorganization relief under Chapter 11 of the
United States Bankruptcy Code may have constituted an event of default
according to the terms of the agreements covering the following outstanding
debt securities:

<TABLE>
<CAPTION>
                                               Principal
Security                                        Balance       Maturity Date
--------                                      ------------  -----------------
<S>                                           <C>           <C>
Convertible Secured Notes due 2006........... $100,000,000    June 8, 2006
43/4% Convertible Subordinated Notes due 2006 $500,000,000  December 13, 2006
Convertible Subordinated Debentures due 2018. $249,126,000* December 28, 2018
</TABLE>
--------
* Reflects original issue discount accrued as of September 30, 2001.

   The principal balances reflected above may have become immediately due and
payable at the time of our bankruptcy filing. In addition, our bankruptcy
filing constituted an event of default according to the terms of several real
estate leases, capital leases and other obligations as of September 30, 2001.
However, we do not believe that any default provisions that were triggered by
the bankruptcy filing constitute an event of default, or are enforceable, under
the United States Bankruptcy Code. Any actions by the holders of these
securities have been stayed and the claims are subject to the jurisdiction of
the bankruptcy court.

ITEM 4. Submission of Matters to a Vote of Security Holders

   On July 24, 2001, we held our annual meeting of stockholders. The matters
voted upon and approved by the stockholders at the meeting, and the number of
votes cast with respect to each such matter are incorporated herein by
reference from the Form 10-Q for the quarterly period ended June 30, 2001 filed
on August 14, 2001.

ITEM 5. Other Information

  Departures of Executive Officers and Directors

   In the third quarter of 2001, James Brelsford, Senior Vice President of
Business Development, Leilani Gayles, Senior Vice President of Human Resources,
Mark McEachen, Executive Vice President and Chief Financial Officer, Mark
O'Leary, Executive Vice President of Commercial Broadband Services, Megan
Pierson, Senior Vice President and General Counsel, Byron Smith, Executive Vice
President of Consumer Broadband Services and Chief Marketing Officer, and Mark
Stevens, Executive Vice President of Corporate and Business Development, left
Excite@Home.

   On October 23, 2001, AT&T Broadband notified us that it had removed C.
Michael Armstrong, Frank Ianna, Charles H. Noski and Daniel E. Somers from the
board of directors of Excite@Home effective as of October 1, 2001. AT&T
Broadband also irrevocably relinquished its rights to replace these directors,
and to otherwise appoint or designate additional directors that would
constitute a majority of Excite@Home's board of directors. The two remaining
directors elected by AT&T Broadband, Mufit Cinali and John C. Petrillo,
continue to serve on the board of directors.

                                      46

<PAGE>

   Effective October 31, 2001, William R. Hearst, III resigned as a director of
Excite@Home, and as a result, we no longer have a sufficient number of board
members to constitute a quorum. Either an amendment of our charter by our
controlling shareholder or the appointment of an additional director is
required for our board to take action. There can be no assurance that we can
attract new board members, retain our existing board members or amend our
charter.

  Halt of Public Trading in and Delisting of Series A Common Stock

   On October 1, 2001, Nasdaq halted trading in our Series A common stock on
the Nasdaq National Market due to our bankruptcy filing on September 28, 2001.
The suspension in trading continued until our Series A Common Stock was
delisted from the Nasdaq National Market effective following the close of the
trading markets on October 22, 2001. Quotation of our stock on the
Over-the-Counter Bulletin Board under the ticker symbol "ATHMQ" began on
October 23, 2001. There is no assurance that we will maintain compliance with
the requirements of our common stock to be quoted on the Over-the-Counter
Bulletin Board, in which case our common stock would be quoted on the Pink
Sheets.

  Executive Retention and Severance Program

   Prior to the bankruptcy filing, we entered into various severance and
retention arrangements with our senior executives. These agreements are subject
to assumption or rejection by us in the bankruptcy proceedings. The creditor
committees have disapproved the terms of these agreements and we are working
with the creditor committees to modify these agreements and obtain their
approval. These agreements, as modified, are also subject to approval by the
bankruptcy court.

ITEM 6. Exhibits and Reports on Form 8-K

   (a) Exhibits. The exhibits listed in the accompanying exhibit index are
filed as part of this report.

   (b) Current Reports on Form 8-K.

   On August 22, 2001, we filed a current report on Form 8-K announcing that we
had dismissed Ernst & Young LLP effective as of August 15, 2001, and had
engaged PricewaterhouseCoopers LLP as our new independent accountants effective
August 16, 2001.

   On August 28, 2001, we filed a current report on Form 8-K announcing that we
had received written notice from two of the holders of our Convertible Notes
demanding payment of $50 million of those notes on or before August 31, 2001.

   On September 6, 2001, we filed a current report on Form 8-K announcing that
(1) we had received formal notification from Comcast and Cox that they will
exercise their rights under their existing distribution agreements with us to
terminate those agreements effective June 4, 2002, and (2) our board of
directors had authorized us to retain an investment banking firm as a financial
and restructuring advisor.

   On September 11, 2001, we filed a current report on Form 8-K announcing that
Mark McEachen had resigned his position as Chief Financial Officer of the
company effective September 9, 2001.

   On September 18, 2001, we filed a current report on Form 8-K announcing that
we had sold our BlueMountain.com online greeting cards division to
AmericanGreetings.com for an aggregate purchase price of $35 million, from
which we received net cash proceeds of approximately $32 million.

                                      47

<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                          AT HOME CORPORATION
                                          (Registrant)

                                                     /s/ PATTI S. HART
                                          By: _________________________________
Dated: November 19, 2001
                                                       Patti S. Hart
                                                  Chief Executive Officer

                                                      /s/ TERRI CURTIS
                                          By: _________________________________
Dated: November 19, 2001
                                                        Terri Curtis
                                                     Vice President and
                                                    Corporate Controller
                                                  (Principal Financial and
                                                    Accounting Officer)

                                      48

<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>

                                                         Incorporated by Reference
                                                      -------------------------------
Exhibit                                                                       Filing   Filed
Number               Exhibit Description              Form  File No. Exhibit   Date   Herewith
------  --------------------------------------------- ----- -------- ------- -------- --------
<C>     <S>                                           <C>   <C>      <C>     <C>      <C>
  2.1.. Agreement and Plan of Merger, dated            8-K            2.01   09/18/01
        September 12, 2001, between Excite@Home and
        AG.com.

  2.2.. Asset Purchase Agreement, dated September 28, AT&T   005-      1     10/04/01
        2001, by and among Excite@Home, certain       13D/A  51925
        subsidiaries of Excite@Home and AT&T Corp.
</TABLE>
--------


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