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                                    FORM 10-K
                         ------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

              (Mark One)

          [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934
               FOR THE FISCAL YEAR ENDED

                                DECEMBER 31, 2000

                                       OR
          [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934
               FOR THE TRANSITION PERIOD FROM  ___________ TO ____________

                          Commission file number 0-6983

                            [GRAPHIC OMITTED - LOGO]

                               COMCAST CORPORATION
             (Exact name of registrant as specified in its charter)

        PENNSYLVANIA                                      23-1709202
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

    1500 Market Street, Philadelphia, PA                    19102-2148
  (Address of principal executive offices)                  (Zip Code)

       Registrant's telephone number, including area code: (215) 665-1700
                        --------------------------------
           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      NONE
                        ---------------------------------
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                  Class A Special Common Stock, $1.00 par value
                  Class A Common Stock, $1.00 par value
                          ----------------------------
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 [  ]

                           --------------------------
Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by  reference in Part III of this Form 10-K or any  amendments  to
this Form 10-K.                                                             [ ]

                           --------------------------
As of December  31,  2000,  the  aggregate  market  value of the Class A Special
Common Stock and Class A Common Stock held by  non-affiliates  of the Registrant
was $37.421 billion and $862.3 million, respectively.

                           --------------------------
As of December 31, 2000, there were 908,015,192 shares of Class A Special Common
Stock, 21,832,250 shares of Class A Common Stock and 9,444,375 shares of Class B
Common Stock outstanding.

                           --------------------------
                       DOCUMENTS INCORPORATED BY REFERENCE
Part III - The Registrant's definitive Proxy Statement for its Annual Meeting of
Shareholders presently scheduled to be held in June 2001.

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<PAGE>
                               COMCAST CORPORATION
                          2000 FORM 10-K ANNUAL REPORT
                                TABLE OF CONTENTS
                                     PART I
Item 1  Business............................................................. 1
Item 2  Properties...........................................................16
Item 3  Legal Proceedings....................................................16
Item 4  Submission of Matters to a Vote of Security Holders..................16
Item 4A Executive Officers of the Registrant.................................17

                                     PART II
Item 5  Market for the Registrant's Common Equity and
         Related Stockholder Matters.........................................18
Item 6  Selected Financial Data..............................................19
Item 7  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.................................21
Item 8  Financial Statements and Supplementary Data..........................31
Item 9  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure.................................64

                                    PART III
Item 10 Directors and Executive Officers of the Registrant...................64
Item 11 Executive Compensation...............................................64
Item 12 Security Ownership of Certain Beneficial Owners and Management.......64
Item 13 Certain Relationships and Related Transactions.......................64

                                     PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K......65
SIGNATURES...................................................................69


     This Annual  Report on Form 10-K is for the year ended  December  31, 2000.
This Annual Report modifies and supersedes  documents filed prior to this Annual
Report. The SEC allows us to "incorporate by reference" information that we file
with them,  which means that we can  disclose  important  information  to you by
referring you directly to those documents. Information incorporated by reference
is considered to be part of this Annual Report. In addition, information that we
file  with  the  SEC in the  future  will  automatically  update  and  supersede
information  contained in this Annual Report. In this Annual Report,  "Comcast,"
"we," "us" and "our" refer to Comcast Corporation and its subsidiaries.

     You  should  carefully  review the  information  contained  in this  Annual
Report, but should  particularly  consider any risk factors that we set forth in
this Annual Report and in other  reports or documents  that we file from time to
time with the SEC. In this Annual Report,  we state our beliefs of future events
and of our future financial  performance.  In some cases, you can identify those
so-called "forward-looking statements" by words such as "may," "will," "should,"
"expects,"  "plans,"   "anticipates,"   "believes,"   "estimates,"   "predicts,"
"potential,"  or "continue" or the negative of those words and other  comparable
words.  You  should be aware  that those  statements  are only our  predictions.
Actual events or results may differ materially.  In evaluating those statements,
you should specifically  consider various factors,  including the risks outlined
below.  Those factors may cause our actual results to differ materially from any
of our forward-looking statements.

Factors Affecting Future Operations

     We have acquired and we anticipate acquiring cable  communications  systems
in new communities in which we do not have  established  relationships  with the
franchising  authority,  community  leaders and cable  subscribers.  Further,  a
substantial number of new employees are being and must continue to be integrated
into our business  practices and  operations.  Our results of operations  may be
significantly  affected by our ability to  efficiently  and  effectively  manage
these changes.

     In addition, our businesses may be affected by, among other things:

          o    changes in laws and regulations,
          o    changes in the competitive environment,
          o    changes in technology,
          o    industry consolidation and mergers,
          o    franchise related matters,
          o    market  conditions that may adversely  affect the availability of
               debt  and  equity   financing   for  working   capital,   capital
               expenditures or other purposes,
          o    demand  for  the   programming   content  we  distribute  or  the
               willingness  of other  video  program  distributors  to carry our
               content, and
          o    general economic conditions.


<PAGE>

                                     PART I

ITEM 1 BUSINESS

     We are principally involved in three lines of business:

          o    Cable-through  the  development,   management  and  operation  of
               broadband communications networks,
          o    Commerce-through QVC, our electronic retail- ing subsidiary, and
          o    Content-through our consolidated  subsidiaries Comcast Spectacor,
               Comcast SportsNet and E!  Entertainment  Television,  and through
               our other  programming  investments,  including The Golf Channel,
               Speedvision and Outdoor Life.

     We are currently the third largest cable  operator in the United States and
are in the process of deploying digital cable  applications and high-speed cable
modem  service  to expand the  products  available  on our cable  communications
networks.

     Our  consolidated   cable  operations  served   approximately  7.7  million
subscribers and passed  approximately 12.9 million homes in the United States as
of December 31, 2000.  We have entered into an agreement to acquire,  subject to
receipt  of  necessary  regulatory  and other  approvals,  up to  700,000  cable
subscribers from AT&T Corp. Upon completion of this pending  transaction,  which
is  expected  to close by the end of the second  quarter of 2001,  we will serve
approximately 8.4 million subscribers.

     Through  QVC, we market a wide  variety of products  directly to  consumers
primarily on  merchandise-focused  television programs. As of December 31, 2000,
QVC was available,  on a full and part-time basis, to over 77.9 million homes in
the United  States,  over 8.9 million homes in the United  Kingdom and over 22.6
million homes in Germany.

     We are a Pennsylvania  corporation  that was organized in 1969. We have our
principal executive offices at 1500 Market Street, Philadelphia,  PA 19102-2148.
Our telephone  number is (215)  665-1700.  We also have a world wide web site at
http://www.comcast.com.   The  information   posted  on  our  web  site  is  not
incorporated into this Annual Report.

                  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

     You should see Note 10 to our consolidated  financial  statements in Item 8
of this Annual Report for information about our operations by industry segment.

                      GENERAL DEVELOPMENTS OF OUR BUSINESS

     We entered  into a number of  significant  transactions  in 2000 which have
closed or are expected to close in 2001. We have summarized  these  transactions
below and have more fully described them in Note 3 to our consolidated financial
statements in Item 8 of this Annual Report.

Pending Transactions as of December 31, 2000

     Adelphia Cable Systems Exchange

     On January 1, 2001, we completed  our  previously  announced  cable systems
exchange  with  Adelphia  Communications  pursuant  to which we  received  cable
communications  systems serving approximately 460,000 subscribers from Adelphia.
In  exchange,  Adelphia  received  certain of our cable  communications  systems
serving approximately 440,000 subscribers.

     AT&T Cable Systems Acquisition

     In August 2000,  we entered into an  agreement  with AT&T to acquire  cable
communications  systems serving up to 700,000  subscribers from AT&T in exchange
for AT&T common stock that we currently  own or may  acquire,  in a  transaction
intended  to qualify as  tax-free  to both us and to AT&T.  The  transaction  is
subject to customary closing conditions and regulatory approvals and is expected
to close by the end of the second quarter 2001.

Completed Transactions During 2000

     Acquisition of Lenfest Communications, Inc.

     In  January  2000,  we  acquired  Lenfest  Communications,  Inc.,  a  cable
communications company serving approximately 1.1 million subscribers primarily


<PAGE>



in the  Philadelphia  area  from  AT&T and the other  Lenfest  stockholders  for
approximately  120.1 million  shares of our Class A Special  Common Stock with a
value of  $6.014  billion.  In  connection  with  the  acquisition,  we  assumed
approximately $1.326 billion of debt.

     Consolidation of Comcast Cablevision of Garden State, L.P.

     Comcast   Cablevision  of  Garden  State,  L.P.  ,  formerly  Garden  State
Cablevision L.P., a cable communications  company serving  approximately 216,000
subscribers in New Jersey,  is a partnership  which was owned 50% by Lenfest and
50% by us. We had  accounted  for our  interest in Garden  State Cable under the
equity method. As a result of the acquisition of Lenfest  Communications,  Inc.,
we now own 100% of Garden State Cable. As such, the operating  results of Garden
State Cable have been included in our consolidated  statement of operations from
the date of our acquisition of Lenfest.

     Acquisition of CalPERS' Interest in Jointly Owned Cable Properties

     In February 2000, we acquired the California  Public  Employees  Retirement
System's  45% interest in Comcast MHCP  Holdings,  L.L.C.,  formerly a 55% owned
consolidated  subsidiary  of ours,  which serves  subscribers  in Michigan,  New
Jersey  and  Florida.  As a  result,  we now  own  100%  of  Comcast  MHCP.  The
consideration was $750.0 million in cash.

     Acquisition of Remaining Interest in Jones Intercable, Inc.

     In March 2000, we acquired from the public shareholders the approximate 60%
interest in Jones  Intercable,  Inc. not previously held by us for approximately
35.6 million  shares of our Class A Special  Common Stock with a value of $1.727
billion.  Jones Intercable was formerly a 40% owned  consolidated  subsidiary of
ours.

     Acquisition of Prime Communications LLC

     In  August   2000,   we  acquired   Prime   Communications   LLC,  a  cable
communications  company serving approximately 406,000 subscribers,  for cash and
through  our  conversion  to  equity of  previously  made  loans to Prime.  Upon
closing,  we assumed and immediately  repaid $532.0 million of Prime's debt with
proceeds from borrowings under existing credit facilities.

     AT&T Cable Systems Exchange

     On December 31, 2000, we completed our previously  announced  cable systems
exchange  with AT&T Corp.  pursuant  to which we received  cable  communications
systems serving  approximately 770,000 subscribers.  In exchange,  AT&T received
certain  of our  cable  communications  systems  serving  approximately  700,000
subscribers.

                          DESCRIPTION OF OUR BUSINESSES

Cable Communications

     Technology and Capital Improvements

     Our cable communications networks receive signals by means of:

          o    special antennae,
          o    microwave relay systems,
          o    earth stations, and
          o    coaxial and fiber optic cables.

     Products and Services

     We offer a variety  of  services  over our cable  communications  networks,
including  traditional  analog video and new services  such as digital cable and
high- speed cable  modem  service.  Available  service  offerings  depend on the
bandwidth capacity of the cable communications system.  Bandwidth,  expressed in
megahertz (MHz), is a measure of information-carrying  capacity. It is the range
of usable frequencies that can be carried by a cable communications  system. The
greater the bandwidth, the greater the capacity of the system. As of January 31,
2001,  approximately 84% of our cable subscribers were served by a system with a
capacity of at least 550-MHz and approximately 70% of our cable subscribers were
served by a system with a capacity of at least 750-MHz.

     Digital  compression  technology  enables us to substantially  increase the
number  of  channels  our  cable  communications   systems  can  carry.  Digital
compression  technology  converts  up to twelve  analog  signals  into a digital
format and compresses such signals into the bandwidth  normally  occupied by one
analog signal. At the home, a set-top video terminal converts the digital signal
into  analog  signals  that can be viewed on a normal  television  set.  Digital
compression  technology enables us to provide a significant number of additional
programming choices to our subscribers.

     We are deploying  fiber optic cable and upgrading the technical  quality of
our cable communications networks.

                                      - 2 -

<PAGE>

As a result, the reliability and capacity of our systems have increased,  aiding
in the delivery of  additional  video  programming  and other  services  such as
enhanced  digital  video,  high-speed  cable modem  service  and, in some areas,
telephony.

     We will  incur  significant  capital  expenditures  in the  future  for the
upgrading and rebuilding of the cable  communications  systems acquired or to be
acquired by us as a result of our  acquisitions of Lenfest  Communi- cations and
Jones Intercable,  the systems exchanges with AT&T and Adelphia,  as well as the
pending systems acquisition from AT&T.

     Franchises

     Cable   communications   systems  are   constructed   and  operated   under
non-exclusive  franchises granted by state or local governmental authorities for
varying lengths of time and are subject to federal,  state and local legislation
and regulation. Our franchises typically provide for periodic payment of fees to
franchising  authorities of up to 5% of "revenues" (as defined by each franchise
agreement).  We normally pass those fees on to  subscribers.  In many cases,  we
need the consent of the franchising authority to transfer our franchises.

     Although  franchises  historically have been renewed,  renewals may include
less  favorable  terms and  conditions.  Under existing law,  franchises  should
continue to be renewed for  companies  that have provided  adequate  service and
have complied  generally with franchise  terms.  The  franchising  authority may
choose to award additional  franchises to competing companies at any time. As of
January 31, 2001, we served  approximately  1,776  franchise areas in the United
States.

     Traditional Analog Video Services

     We  receive  the  majority  of our  revenues  from  subscription  services.
Subscribers  typically pay us on a monthly  basis and generally may  discontinue
services  at any time.  Monthly  subscription  rates and  related  charges  vary
according  to the type of service  selected  and the type of  equipment  used by
subscribers.

     We offer a full range of traditional analog video services.  We tailor both
our basic channel  line-up and our additional  channel  offerings to each system
according  to  demographics,   programming   preferences,   competition,   price
sensitivity and local  regulation.  Our service  offerings include the following
programming packages:

          o    basic programming,
          o    expanded basic programming,
          o    premium services, and
          o    pay-per-view programming.

     All of our video subscribers receive our basic cable service.  This service
generally consists of national television networks,  local broadcast television,
locally- originated  programming,  including governmental and public access, and
limited satellite-delivered programming.

     Our expanded basic cable service includes a group of satellite-delivered or
non-broadcast  channels such as  Entertainment  and Sports  Programming  Network
(ESPN),  Cable News  Network  (CNN) and MTV Networks  (MTV),  in addition to the
basic channel line-up.

     For an  additional  monthly  fee,  subscribers  can also  subscribe  to our
premium  services either  individually or in packages of several  channels.  Our
premium  services  generally offer,  without  commercial  interruption,  feature
motion  pictures,  live and taped  sporting  events,  concerts and other special
features.  The charge for premium  services  depends  upon the type and level of
service selected by the subscriber.  Our premium services may include  offerings
such as:

          o    Home Box Office(R),
          o    Cinemax(R),
          o    Showtime(R),
          o    The Movie Channel(TM),
          o    Encore(R), and
          o    Starz(R).

     Our  pay-per-view  service permits our subscribers to order, for a separate
fee,  individual  feature motion  pictures and special event  programs,  such as
professional  boxing,  professional  wrestling  and  concerts  on  an  unedited,
commercial-free basis.

     New Service Offerings

     The high bandwidth capacity of our cable communications networks enables us
to deliver  substantially  more  channels  and/or new and advanced  products and
services to our  subscribers.  A variety of emerging  technologies and the rapid
growth of the Internet  have  presented  us with  substantial  opportunities  to
provide new or expanded  products and services to our  subscribers and to expand
our  sources of revenue.  As a result,  we have  introduced  the  following  new
services for the benefit of both our residential and commercial subscribers:

          o    digital cable television service, and

                                      - 3 -

<PAGE>

          o    high-speed cable modem service installed in personal computers.

     We have and will  continue to upgrade our cable  communications  systems so
that we can  provide  these  and  other new  services  such as video on  demand,
commonly known as VOD,  interactive  television and cable telephony more rapidly
to our subscribers.

     Digital Cable Service

     We offer digital cable television  services to subscribers in substantially
all of our cable communications systems.

     Subscribers  to our digital  cable  service may receive a mix of additional
television  programming,  an interactive  program guide and multiple channels of
digital music. The additional programming falls into four categories:

          o    additional expanded basic channels,

          o    additional premium channels,

          o    "multiplexes"   of  premium   channels  to  which  a   subscriber
               previously  subscribed,  such as  multiple  channels  of Home Box
               Office or  Showtime,  which are varied as to time of broadcast or
               programming content theme, and

          o    additional  pay-per-view  programming,  such as more pay-per-view
               options  and/or  frequent  showings of the most popular  films to
               provide near video-on-demand.

     Subscribers  typically pay us on a monthly basis for digital cable services
and generally may discontinue  services at any time. Monthly  subscription rates
vary  generally  according  to the level of  service  and the  number of digital
converters  selected  by the  subscriber.  We  expect  that  purchases  of these
services by our subscribers will increase in the future.

     High-Speed Cable Modem Service

     We market Excite@Home's  high-speed cable modem services as Comcast@Home in
areas  served  by  certain  of our  cable  communications  systems.  Residential
subscribers  can  connect  their  personal  computers  via  cable  modems  to  a
high-speed  national network  developed and managed by Excite@Home.  Subscribers
can then access online  information,  including  the Internet,  at faster speeds
than that of  conventional  modems.  We also provide  businesses  with  Internet
connectivity solutions and networked business applications.  We provide national
and local content and sell advertising to businesses.

     Other Revenue Sources

     We also generate revenues from advertising  sales,  installation  services,
commissions from electronic  retailing and other services.  We generate revenues
from the sale of advertising time to local, regional and national advertisers on
non-broadcast channels.

     Sales and Marketing

     Our sales  efforts are primarily  directed  toward  generating  incremental
revenues in our franchise  areas and  increasing  the number of  subscribers  we
serve. We sell our products and services through:

          o    telemarketing,
          o    direct mail advertising,
          o    door-to-door selling,
          o    cable television advertising,
          o    local media advertising, and
          o    retail outlets.

     Programming

     We generally pay a monthly fee per subscriber per channel.  Our programming
costs are increased by:

          o    increases in the number of subscribers,
          o    expansion of the number of channels provided to customers, and
          o    increases in contract rates from programming suppliers.

     We attempt to secure long-term  programming contracts with volume discounts
and/or  marketing  support  and  incentives  from  programming  suppliers.   Our
programming  contracts  are generally for a fixed period of time and are subject
to negotiated renewal. We have experienced  increases in our cost of programming
and we anticipate that future contract renewals will result in programming costs
that are higher than our costs today, particularly for sports programming.

     We utilize  interactive  programming guides to provide our subscribers with
current  programming  information,  as well as advertising and other content. We
recently formed a joint venture with other  companies,  including  various cable
companies, to develop additional sources for the interactive guide.


                                      - 4 -

<PAGE>

     Customer Service

     We manage most of our cable communications  systems in geographic clusters.
Clustering  improves  our ability to sell  advertising,  enhances our ability to
efficiently introduce and market new products, and allows us to more efficiently
and effectively  provide customer service and support. As part of our clustering
strategy,  we have consolidated our local customer service operations into large
regional call centers. These regional call centers have technologically advanced
telephone  systems that provide  24-hour per day,  7-day per week call answering
capability, telemarketing and other services.

     Our Cable Communications Systems

     The table below  summarizes  certain  subscriber  information for our cable
communications  systems as of December 31 (homes,  subscribers and subscriptions
in thousands):


<TABLE>
<CAPTION>
                                           2000(9)      1999(9)        1998          1997          1996
                                          ----------  ----------   -----------    ---------    ----------
Cable
<S>                                     <C>            <C>           <C>           <C>           <C>
    Homes Passed (1)                      12,679         9,522         7,382         7,138         6,975
    Subscribers (2)                        7,607         5,720         4,511         4,366         4,280
    Penetration (3)                         60.0%         60.1%         61.1%         61.2%         61.4%
Digital Cable
    "Digital Ready" Subscribers (4)        7,258         4,637         1,570
    Subscriptions (5)                      1,354           515            78
    Penetration (6)                         18.7%         11.1%          5.0%
Comcast@Home
    "Modem Ready" Homes Passed (7)         6,360         3,259         1,804           866
    Subscribers                              400           142            51            10
    "Modem Ready" Penetration (8)            6.3%          4.4%          2.8%          1.2%
-------------
<FN>
(1)  A home is "passed" if we can connect it to our distribution  system without
     further extending the transmission lines.
(2)  A dwelling with one or more television sets connected to a system counts as
     one cable subscriber.
(3)  Cable  penetration means the number of cable subscribers as a percentage of
     cable homes passed.
(4)  A subscriber is "digital  ready" if the  subscriber is in a market where we
     have launched our digital cable service.
(5)  Each digital converter box counts as one digital cable subscription.
(6)  Digital cable penetration  means the number of digital cable  subscriptions
     as a percentage of "digital  ready"  subscribers.  Certain  subscribers may
     have multiple digital cable subscriptions.
(7)  A home passed is "modem ready" if we can connect it to our Internet service
     connection system without further upgrading the transmission lines.
(8)  "Modem ready" penetration means the number of Comcast@Home subscribers as a
     percentage of "modem ready" homes passed.
(9)  In April 1999, we acquired a controlling interest in Jones Intercable, Inc.
     In  January  2000,  we  acquired  Lenfest  Communications,  Inc.  and began
     consolidating  the results of Comcast  Cablevision of Garden State, L.P. In
     August 2000, we acquired Prime  Communications  LLC. On January 1, 2001 and
     December 31, 2000, we completed our cable systems  exchanges  with Adelphia
     Communications and AT&T Corp., respectively.  The subscriber information as
     of December 31, 2000  excludes the effects of our  exchanges  with Adelphia
     and AT&T.
</FN>
</TABLE>

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


     Competition

     Our cable communications systems compete with a number of different sources
which provide news,  information  and  entertainment  programming  to consumers,
including:

          o    local   television   broadcast   stations  that  provide  off-air
               programming  which can be received  using a roof-top  antenna and
               television set,

          o    program  distributors that transmit  satellite signals containing
               video programming, data and other information to receiving dishes
               of varying sizes located on the subscriber's premises,

          o    satellite master antenna  television  systems,  commonly known as
               SMATV, which generally serve  condominiums,  apartment and office
               complexes and residential developments,

          o    other operators who build and operate  communications  systems in
               the same communities that we serve,


                                      - 5 -

<PAGE>

          o    interactive online computer services,

          o    newspapers, magazines and book stores,

          o    movie theaters,

          o    live concerts and sporting events, and

          o    home video products.

     In order to compete  effectively,  we strive to  provide,  at a  reasonable
price to subscribers:

          o    superior technical performance,

          o    superior customer service,

          o    a greater variety of video programming, and

          o    new products and services.

     Federal  law allows  local  telephone  companies  to  provide,  directly to
subscribers,  a wide  variety of services  that are  competitive  with our cable
communications  services.  Some  local  telephone  companies  provide or plan to
provide video services within and outside their telephone  service areas through
a variety of methods,  including cable networks,  satellite program distribution
and wireless transmission facilities.

     A local telephone company, Ameritech, and facilities-based competitors such
as RCN Corporation and Knology  Holdings,  Inc., among others,  are now offering
cable  and  other  communications  services  in  various  areas  where  we  hold
franchises.  We anticipate that  facilities-  based  competitors will develop in
other franchise areas that we serve.

     Local  telephone  companies  and other  businesses  construct  and  operate
communications  facilities  that provide  access to the Internet and  distribute
interactive  computer-based services, data and other non-video services to homes
and businesses. These competitors are not required, in certain circumstances, to
comply  with  some  of  the   material   obligations   imposed  upon  our  cable
communications  systems  under our  franchises.  We are  unable to  predict  the
likelihood  of success of  competing  video or cable  service  ventures by local
telephone  companies  or other  businesses.  Nor can we predict the impact these
competitive ventures might have on our business and operations.

     We  operate  each  of  our  cable  communications  systems  pursuant  to  a
non-exclusive franchise that is issued by the community's governing body such as
a city council,  a county board of  supervisors  or a state  regulatory  agency.
Federal law prohibits franchising authorities from unreasonably denying requests
for additional  franchises,  and it permits  franchising  authorities to operate
cable systems. Companies that traditionally have not provided cable services and
that have  substantial  financial  resources (such as public  utilities that own
certain of the poles to which our cables are  attached)  may also  obtain  cable
franchises and may provide competing communications services.

     In the past few years,  Congress  has enacted  legislation  and the Federal
Communications  Commission,  commonly  known as the FCC, has adopted  regulatory
policies intended to provide a more favorable operating environment for existing
and new technologies that provide, or have the potential to provide, substantial
competition to our cable  communications  systems.  These  technologies  include
direct  broadcast  satellite  service,  commonly  known  as DBS,  among  others.
According to recent  government and industry reports,  conventional,  medium and
high-power  satellites  currently provide video programming to over 14.5 million
individual  households,  condominiums,  apartment  and office  complexes  in the
United States. DBS providers with high-power satellites typically offer to their
subscribers  more  than  300  channels  of  programming,  including  programming
services  substantially  similar  to  those  provided  by  cable  communications
systems.

     DBS service can be received  virtually  anywhere in the continental  United
States through the installation of a small roof top or side-mounted antenna. DBS
systems use video  compression  technology  to  increase  channel  capacity  and
digital  technology to improve the quality of the signals  transmitted  to their
subscribers.  Our digital cable  service is  competitive  with the  programming,
channel capacity and the digital quality of signals  delivered to subscribers by
DBS systems.  We are and will  continue to deploy  digital  cable service in the
communities that we serve.

     Two  major  companies,   DirecTV  and  Echostar,   are  currently  offering
nationwide high-power DBS services. Federal legislation establishes, among other
things, a permanent compulsory copyright license that permits satellite carriers
to retransmit  local  broadcast  television  signals to  subscribers  who reside
inside the local television  station's market.  These companies are transmitting
local broadcast  signals in many markets which we serve. As a result,  satellite
carriers are more competitive to cable  communications  system operators like us
because they offer programming which more closely resembles what we offer. These
companies and others are also developing  ways to bring advanced  communications
services to their  customers.  They are currently  offering  satellite-delivered
high-speed  Internet  access  services  with a  telephone  return  path  and are
beginning to provide true  two-way  interactivity.  We are unable to predict the
effects  these  competitive   developments   might  have  on  our  business  and
operations.

                                      - 6 -
<PAGE>

     Our cable  communications  systems also compete for subscribers  with SMATV
systems.  SMATV system  operators  typically are not subject to regulation  like
local  franchised cable  communications  system  operators.  SMATV systems offer
subscribers both improved reception of local television stations and many of the
same  satellite-delivered  programming  services  offered  by  franchised  cable
communications  systems. In addition, some SMATV operators are developing and/or
offering packages of telephony,  data and video services to private  residential
and commercial  developments.  SMATV system operators often enter into exclusive
service  agreements with building owners or homeowners'  associations,  although
some states have enacted laws to provide cable communications  systems access to
these complexes.  Courts have reviewed challenges to these laws and have reached
varying results.

     Many of our cable communications  systems are currently offering high-speed
cable modem  services to  subscribers.  These  systems  compete with a number of
other companies, many of whom have substantial resources, such as:

          o    existing Internet service providers, commonly known as ISPs,

          o    local telephone companies, and

          o    long distance telephone companies.

     A number of companies,  including telephone companies and ISP's, have asked
local,  state and  federal  governments  to mandate  that  cable  communications
systems  operators  provide capacity on their broadband  infrastructure  so that
these  companies  and  others  may  deliver   high-speed   Internet  access  and
interactive television services directly to customers over cable facilities.

     The deployment of Digital Subscriber Line technology,  known as DSL, allows
Internet access to subscribers at data  transmission  speeds equal to or greater
than that of modems  over  conventional  telephone  lines.  Numerous  companies,
including telephone companies, have introduced DSL service and certain telephone
companies are seeking to provide high-speed broadband services without regard to
present service boundaries and other regulatory  restrictions.  We are unable to
predict the likelihood of success of competing  online  services  offered by our
competitors or what impact these  competitive  ventures may have on our business
and operations.

     We expect advances in communications  technology, as well as changes in the
marketplace  and the  regulatory  and  legislative  environment  to occur in the
future.  We refer you to page 10 for a detailed  discussion of  legislative  and
regulatory  factors.  Other new  technologies  and  services may develop and may
compete with services that our cable communications systems offer. Consequently,
we are unable to predict the effect that  ongoing or future  developments  might
have on our business and operations.

Commerce

     QVC is a domestic and  international  electronic media general  merchandise
retailer which produces and distributes merchandise-focused television programs,
via satellite,  to affiliated video program  distributors for  retransmission to
subscribers.  At QVC,  program hosts describe and  demonstrate  the products and
viewers place orders directly with QVC. We own 57% of QVC.

     Revenue Sources

     QVC sells a variety of consumer products and accessories including jewelry,
housewares,  electronics,  apparel  and  accessories,   collectibles,  toys  and
cosmetics. QVC purchases, or obtains on consignment,  products from domestic and
foreign  manufacturers  and  wholesalers,  often on favorable terms based on the
volume of the transactions. QVC intends to continue introducing new products and
product  lines.  QVC does not depend upon any one  particular  supplier  for any
significant portion of its inventory.

     Viewers  place  orders to purchase QVC  merchandise  by calling a toll-free
telephone number.  QVC uses automatic call distributing  equipment to distribute
calls to its operators. The majority of all payments for purchases are made with
a major credit card or QVC's  private  label credit card.  QVC's  private  label
credit  card  program  is  serviced  by an  unrelated  third  party.  QVC  ships
merchandise  promptly from its distribution  centers,  typically within 24 hours
after  receipt of an order.  QVC's return  policy  permits  customers to return,
within 30 days,  any  merchandise  purchased  for a full refund of the  purchase
price and original shipping charges.

     Distribution Channels

     In the  United  States,  QVC is  transmitted  live 24 hours a day, 7 days a
week, to 62.7 million cable  television  homes.  An additional 0.7 million cable
television  homes  receive  QVC on a less than full time basis and 14.5  million
home  satellite  dish users receive QVC  programming.  The QVC program  schedule
consists of one-hour and  multi-hour  program  segments.  Each program  theme is
devoted to a  particular  category of product or  lifestyle.  From time to time,
special program segments are devoted to merchandise associated with a particular
celebrity, event, geographical region or seasonal interest.

                                      - 7 -
<PAGE>

     QVC sells  products by means of electronic  media in Germany and the United
Kingdom.  In the UK, this  service  currently  reaches  over 8.9  million  cable
television  and home  satellite  dish-served  homes.  In Germany,  this  service
currently is available to over 22.6 million cable  television and home satellite
dish-served homes.  However,  we estimate that only 9.5 million homes in Germany
have programmed their television sets to receive this service.

     QVC also offers an interactive shopping service, iQVC, on the Internet. The
iQVC service offers a diverse array of merchandise,  on-line,  24 hours a day, 7
days a week.  iQVC also  maintains a mailing list which e-mails  product news to
subscribers.

     QVC Transmission

     A  transponder  on a  communications  satellite  transmits the QVC domestic
signal. QVC subleases transponders for the transmission of its signals to the UK
and Germany and has made  arrangements  for  redundant  coverage  through  other
satellites  in  case  of a  failure.  QVC  has  never  had  an  interruption  in
programming due to transponder  failure.  We cannot offer  assurances that there
will not be an  interruption  or  termination of satellite  transmission  due to
transponder  failure.  Interruption or termination could have a material adverse
effect on QVC's future results of operations.

     Program Distributors

     QVC has entered into affiliation agreements with video program distributors
in the US to carry  QVC  programming.  Generally,  there are no  charges  to the
programming  distributors  for the  distribution  of QVC. In return for carrying
QVC, each  programming  distributor  receives an allocated  portion,  based upon
market  share,  of up to five  percent of the net sales of  merchandise  sold to
customers located in the programming distributor's service area. QVC has entered
into multi-year  affiliation  agreements with various cable and satellite system
operators  for  carriage  of QVC  programming.  The  terms  of most  affiliation
agreements are  automatically  renewable for one-year terms unless terminated by
either  party on at least 90 days notice  prior to the end of the term.  Most of
the affiliation agreements provide for the programming  distributor to broadcast
commercials  regarding QVC on other channels and to distribute QVC's advertising
material  to  subscribers.  As of  December  31,  2000,  9.5% of the total homes
reached by QVC were  attributable  to QVC's  affiliation  agreements with us and
20.0% with AT&T's  Liberty Media Group,  the owner of a 43% interest in QVC, and
their respective affiliated companies.

     QVC's business depends on its affiliation with programming distributors for
the  transmission of QVC  programming.  If a significant  number of homes are no
longer served because of  termination or non-renewal of affiliation  agreements,
our financial results could be adversely affected. QVC has incentive programs to
induce programming  distributors to enter into or extend affiliation  agreements
or to increase the number of homes under existing affiliation agreements.  These
incentives include various forms of marketing,  carriage and launch support. QVC
will continue to recruit additional programming distributors and seek to enlarge
its audience.

     Competition

     QVC operates in a highly competitive environment.  As a general merchandise
retailer,  QVC  competes  for  consumer  expenditures  with  the  entire  retail
industry,  including department,  discount, warehouse and specialty stores, mail
order  and  other  direct   sellers,   shopping  center  and  mall  tenants  and
conventional retail stores. On television,  QVC competes with other programs for
channel  space  and  viewer  loyalty   against  similar   electronic   retailing
programming,  as well as  against  alternative  programming  supplied  by  other
sources,  including news, public affairs,  entertainment and sports programmers.
The use of digital compression  provides  programming  distributors with greater
channel capacity.  While greater channel capacity  increases the opportunity for
QVC to be distributed,  it also may adversely impact on QVC's ability to compete
for television  viewers to the extent it results in higher channel position,  in
placement  of  QVC  in  separate  programming  tiers,  or  in  the  addition  of
competitive channels.

                                      - 8 -

<PAGE>

Content

     We  have  made   investments  in  cable   television   networks  and  other
programming-related enterprises as a means of generating additional revenues and
subscriber  interest.  Our  programming  investments  as of  December  31,  2000
include:

<TABLE>
<CAPTION>
                                                                                             Ownership
Investment                                           Description                            Percentage
------------------------      ----------------------------------------------------------    -----------
<S>                          <C>                                                             <C>
Comcast Spectacor             Live sporting events, concerts and other events                   66.0%
Comcast SportsNet             Regional sports programming and events                            53.1%
E! Entertainment              Entertainment-related news and original programming               39.7%
Style                         Fashion-related programming                                       39.7%
CN8-The Comcast Network       Regional and local programming                                   100.0%
Comcast Sports Southeast      Regional sports programming and events                            72.4%
The Golf Channel              Golf-related programming                                          60.3%
Outdoor Life                  Outdoor activities                                                16.8%
Speedvision                   Automotive, marine and aviation                                   14.5%
The Sunshine Network          Regional sports and public affairs                                15.6%
In Demand                     Pay-per-view programming                                          11.1%
Home Team Sports              Regional sports programming and events                              (a)
<FN>
(a)  The Company  acquired 100% of Home Team Sports in February 2001.  Home Team
     Sports is a regional  sports  programming  network  which  provides  sports
     related programming, including the Baltimore Orioles MLB baseball team, the
     Washington Wizards NBA basketball team, the Washington  Capitals NHL hockey
     team and the Carolina  Hurricanes NHL hockey team.  Home Team Sports serves
     approximately 4.8 million subscribers in the Mid-Atlantic region.
</FN>
</TABLE>

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


Consolidated Programming Investments

     Comcast Spectacor

     Comcast Spectacor is our family of businesses that perform and/or host live
sporting events,  concerts and other special events.  Comcast Spectacor consists
principally of the Philadelphia  Flyers NHL Hockey Team, the Philadelphia  76ers
NBA Basketball Team, two large multi-purpose  arenas in Philadelphia and Comcast
SportsNet, our regional sports programming network.

     Comcast SportsNet

     Comcast  SportsNet is a 24-hour regional sports  programming  network which
provides  sports-related  programming,  including  the  Philadelphia  Flyers NHL
hockey team, the  Philadelphia  76ers NBA basketball  team and the  Philadelphia
Phillies MLB  baseball  team to  approximately  2.7 million  subscribers  in the
Philadelphia region. Comcast SportsNet is delivered to affiliates terrestrially.

     E! Entertainment

     E!  Entertainment  is a 24-hour network with  programming  dedicated to the
world of entertainment.  Programming formats include behind-the-scenes specials,
original  movies and  series,  news,  talk shows and  comprehensive  coverage of
entertainment  industry awards shows and film festivals  worldwide.  The network
has approximately 67 million subscribers.

     Style

     Style,  an  affiliate of E!  Entertainment,  is our 24-hour  cable  network
dedicated  to fashion,  home  design,  beauty,  health,  fitness and more,  with
distribution  to  approximately  10 million  subscribers.  We launched  Style in
October 1998.

     CN8-The Comcast Network

     CN8-The Comcast Network,  our regional  programming service is delivered to
approximately  3.9  million  cable  subscribers  in  Pennsylvania,  New  Jersey,
Delaware and Maryland.  CN8 provides original  programming,  including local and
regional news and public affairs,  regional sports,  health, cooking and family-
oriented programming.  We intend to continue to introduce similar programming in
other areas we serve.

     Comcast Sports Southeast

     Comcast  Sports  Southeast  ("CSS") was created in September  1999.  CSS is
delivered to approximately 2.0 million cable  subscribers  primarily in Alabama,
Arkansas, Florida, Georgia, Kentucky,  Louisiana,  Mississippi,  North Carolina,
South Carolina and Tennessee. CSS is a satellite-delivered service that provides
original sports programming and sports news geared toward the Southeast.

                                      - 9 -
<PAGE>

Other Programming Investments

     The Golf Channel

     The  Golf  Channel  is  a  24-hour  network  devoted  exclusively  to  golf
programming  with  distribution to  approximately  37 million  subscribers.  The
programming  schedule includes live tournaments,  golf instruction  programs and
golf news.

     Outdoor Life

     Outdoor Life is a 24-hour network devoted  exclusively to adventure and the
outdoor lifestyle. Its programming focuses on a wide range of outdoor activities
including expeditions, skiing, cycling, surfing and camping.

     Speedvision

     Speedvision is a 24-hour network devoted to automotive, aviation and marine
enthusiasts.  Its  programming  includes  original  consumer  news,  motorsports
coverage, lifestyle and instructional programs and historical documentaries.

     The Sunshine Network

     The Sunshine Network is a regional sports and public affairs network, which
focuses its programming specifically on teams, events and programs from Florida.
Programming  rights  include over 20 local teams and  properties,  including the
Orlando  Magic and Miami Heat NBA  basketball  teams and the Tampa Bay Lightning
NHL hockey team.

     In Demand

     In  Demand  is  the  brand-name  of  a  cable  operator-controlled   buying
cooperative for pay-per-view programming.

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

                           LEGISLATION AND REGULATION

Cable

     The Communications  Act of 1934, as amended,  establishes a national policy
to regulate the development and operation of cable  communications  systems. The
Communications Act allocates responsibility for enforcing federal policies among
the FCC, state and local governmental  authorities.  The courts,  especially the
federal  courts,  play an  important  oversight  role  as  these  statutory  and
regulatory provisions are interpreted and enforced by the various federal, state
and local governmental units.

     We expect that court actions and  regulatory  proceedings  will continue to
refine the rights and obligations of various parties,  including the government,
under the  Communications  Act. The results of these judicial and administrative
proceedings  may  materially  affect our business  operations.  In the following
paragraphs,  we summarize the principal federal laws and regulations  materially
affecting the growth and operation of the cable communications industry. We also
provide a brief  description  of certain state and local laws  applicable to our
businesses.

     The Communications Act and FCC Regulations

     The  Communications  Act and the regulations and policies of the FCC affect
significant aspects of our cable system operations, including:

          o    subscriber rates,

          o    the content of programming we offer our  subscribers,  as well as
               the way we sell our  program  packages to  subscribers  and other
               video program distributors,

          o    the use of our cable  systems by local  franchising  authorities,
               the public and other unrelated third parties,

          o    our franchise agreements with governmental authorities,

          o    cable system ownership limitations and prohibitions, and

          o    our use of utility poles and conduit.

     Subscriber Rates

     The  Communications  Act and the FCC's  regulations  and policies limit the
ability of cable  systems to raise rates for basic  services  and  equipment  in
communities that are not subject to effective competition, as defined by federal
law.  Where there is no  effective  competition,  federal law gives  franchising
authorities the power to regulate the monthly rates charged by the operator for:

          o    the lowest level of programming  service,  typically called basic
               service,  which generally  includes local broadcast  channels and
               public access or governmental channels required by the operator's
               franchise, and

                                     - 10 -
<PAGE>
          o    the installation, sale and lease of equipment used by subscribers
               to receive  basic  service,  such as  converter  boxes and remote
               control units.

     The FCC has adopted  detailed rate  regulations,  guidelines and rate forms
that we and the franchising authority must use in connection with the regulation
of our basic service and equipment rates. If the franchising authority concludes
that our rates are not in  accordance  with the FCC's rate  regulations,  it may
require us to reduce our rates and to refund  overcharges to  subscribers,  with
interest. We may appeal adverse rate decisions to the FCC.

     The Communications Act and the FCC's regulations also:

          o    prohibit  regulation  of rates  charged  by cable  operators  for
               programming  offered on a per channel or per program  basis,  and
               for multi- channel groups of non-basic programming,

          o    require   operators  to  charge  uniform  rates  throughout  each
               franchise area that is not subject to effective competition,

          o    prohibit  regulation of non-predatory bulk discount rates offered
               by  operators  to  subscribers  in  commercial  and   residential
               developments, and

          o    permit  regulated  equipment  rates to be computed by aggregating
               costs of broad categories of equipment at the franchise,  system,
               regional or company level.

     Content Requirements

     The Communications  Act and the FCC's regulations  contain broadcast signal
carriage  requirements that allow certain local commercial  television broadcast
stations:

          o    to elect once every three years to require a cable communications
               system to carry the station, subject to certain exceptions, or

          o    to  negotiate  with us on the terms by which we carry the station
               on   our   cable   communications    system,    commonly   called
               retransmission consent.

     The Communications  Act and the FCC's regulations  require a cable operator
to devote up to one-third of its  activated  channel  capacity for the mandatory
carriage of local commercial television stations.  The Communi- cations Act also
gives  local  non-commercial  television  stations  mandatory  carriage  rights;
however,  such  stations  are not given the option to  negotiate  retransmission
consent for the carriage of their signals by cable systems. Additionally,  cable
systems must obtain retransmission consent for:

          o    all  "distant"   commercial   television   stations  (except  for
               commercial  satellite-delivered  independent "superstations" such
               as WGN),

          o    commercial radio stations, and

          o    certain low-power television stations.

     The FCC recently adopted  regulations which require us to carry the signals
of local digital-only  broadcast  stations (both commercial and  non-commercial)
and the digital  signals of those local  broadcast  stations  that return  their
analog spectrum to the government and convert to a digital broadcast format. The
FCC's rules give the digital- only  broadcast  stations the  discretion to elect
whether the operator will carry the  station's  signal in a digital or converted
analog format and to tie the carriage of their digital signals with the carriage
of their analog signals as a retransmission consent condition.  We are unable to
predict the ultimate  outcome of this  proceeding or the impact any new carriage
requirements might have on the operations of our cable systems.

     The  Communications Act requires our cable systems to permit subscribers to
purchase  video  programming on a per channel or a per program basis without the
necessity  of  subscribing  to any tier of  service,  other than the basic cable
service tier. However, we are not required to comply with this requirement until
2002 for any of our cable systems that do not have  addressable  converter boxes
or that have other substantial  technological  limitations.  A limited number of
our systems do not have the technological capability to offer programming in the
manner required by the statute and thus currently are exempt from complying with
this requirement.

     To increase  competition  between  cable  operators and other video program
distributors, the Communications Act:

          o    precludes any satellite video programmer  affiliated with a cable
               company,  or with a common carrier  providing  video  programming
               directly to its subscribers,  from favoring an affiliated company
               over competitors,

          o    requires  such  programmers  to sell their  satellite-  delivered
               programming to other video program distributors, and

          o    limits  the  ability  of  such  programmers  to  offer  exclusive
               programming arrangements to their affiliates.

     The FCC has concluded that the program access rules do not apply to certain
terrestrially-delivered

                                     - 11 -
<PAGE>
programming,  such as Comcast  SportsNet.  The FCC decision is  currently  under
appeal.

     The Communications  Act contains  restrictions on the transmission by cable
operators of obscene or indecent  programming.  The  Communications Act requires
the cable operator, upon the request of the subscriber, to scramble or otherwise
fully block any channel the subscriber  does not wish to receive.  A three-judge
federal  district  court  determined  that  certain   restrictions  on  channels
primarily dedicated to sexually oriented programming were unconstitutional.  The
United States Supreme Court recently affirmed the lower court's ruling.

     The FCC actively regulates other aspects of our programming, involving such
areas as:

          o    our use of  syndicated  and  network  programs  and local  sports
               broadcast programming,

          o    advertising in children's programming,

          o    political advertising,

          o    origination cablecasting,

          o    sponsorship identification, and

          o    closed captioning of video programming.

     Use of Our Cable Systems by The Government and Unrelated Third Parties

     The Communications  Act allows franchising  authorities and unrelated third
parties to have access to our cable systems' channel capacity. For example, it:

          o    permits franchising authorities to require cable operators to set
               aside channels for public,  educational and  governmental  access
               programming, and

          o    requires a cable  system  with 36 or more  activated  channels to
               designate  a  significant  portion of its  channel  capacity  for
               commercial leased access by third parties to provide  programming
               that may compete with services offered by the cable operator.

The FCC  regulates  various  aspects of third  party  commercial  use of channel
capacity  on our  cable  systems,  including  the rates  and  certain  terms and
conditions of the commercial use.

     Recently,  a number of companies,  including  telephone  companies and ISPs
have  asked  local,  state  and  federal   governments  to  mandate  that  cable
communications   systems   operators   provide   capacity  on  their   broadband
infrastructure  so that  these  companies  and  others  may  deliver  high-speed
Internet access and interactive  television  services directly to customers over
cable facilities. Some cable operators,  including us, have initiated litigation
challenging  municipal  efforts to unilaterally  impose  so-called "open access"
requirements.  The few  court  decisions  dealing  with  this  issue  have  been
inconsistent.  The FCC recently  initiated a regulatory  proceeding  to consider
"open access" and related  regulatory  issues and, in connection with its review
of the recent AOL-Time Warner merger,  imposed,  together with the Federal Trade
Commission,  "open access," technical performance and other requirements related
to the merged company's  Internet and Instant Messaging  platforms.  Whether the
policy framework  reflected in these agencies' merger reviews will be imposed on
an industry- wide basis is uncertain.  We cannot predict the ultimate outcome of
this  administrative  proceeding or the impact of any new access requirements on
the operation of our cable systems.

     Franchise Matters

     Although  franchising  matters are  normally  regulated  at the local level
through a franchise  agreement and/or a local ordinance,  the Communications Act
provides  oversight  and  guidelines  to  govern  our  relationship  with  local
franchising authorities. For example, the Communications Act:

          o    affirms  the right of  franchising  authorities  (state or local,
               depending on the practice in  individual  states) to award one or
               more franchises within their jurisdictions,

          o    generally  prohibits us from operating in  communities  without a
               franchise,

          o    encourages competition with our existing cable systems by:

               o    allowing  municipalities  to operate cable  systems  without
                    franchises, and

               o    preventing  franchising  authorities from granting exclusive
                    franchises or from unreasonably refusing to award additional
                    franchises covering an existing cable system's service area,

          o    permits  local   authorities,   when  granting  or  renewing  our
               franchises,  to establish  requirements for certain cable-related
               facilities and equipment,  but prohibits franchising  authorities
               from establishing  requirements for specific video programming or
               information services other than in broad categories,

          o    permits us to obtain  modification of our franchise  requirements
               from the franchise  authority or by judicial  action if warranted
               by changed circumstances,

                                     - 12 -
<PAGE>



          o    generally prohibits franchising authorities from:

               o    imposing  requirements  during the initial cable franchising
                    process or during franchise  renewal that require,  prohibit
                    or restrict us from providing telecom- munications services,

               o    imposing franchise fees on revenues we derive from providing
                    telecommunications services over our cable systems, or

               o    restricting  our use of any type of subscriber  equipment or
                    transmission technology, and

          o    limits our  payment of  franchise  fees to the local  franchising
               authority  to 5% of our gross  revenues  derived  from  providing
               cable services over our cable system.

     The Communications Act contains  procedures  designed to protect us against
arbitrary  denials of the  renewal  of our  franchises,  although a  franchising
authority under various  conditions can deny us a franchise  renewal.  Moreover,
even if our franchise is renewed,  the franchising  authority may seek to impose
upon us new and  more  onerous  requirements  such as  significant  upgrades  in
facilities  and services or increased  franchise fees as a condition of renewal.
Similarly,  if a franchising authority's consent is required for the purchase or
sale of our cable system or franchise,  the franchising authority may attempt to
impose more  burdensome or onerous  franchise  requirements  on us in connection
with a  request  for  such  consent.  Historically,  cable  operators  providing
satisfactory services to their subscribers and complying with the terms of their
franchises have typically obtained franchise  renewals.  We believe that we have
generally met the terms of our franchise  agreements  and have provided  quality
levels of service.  We anticipate that our future  franchise  renewal  prospects
generally will be favorable.

     Various courts have considered  whether  franchising  authorities  have the
legal right to limit the number of franchises  awarded within a community and to
impose  certain  substantive  franchise   requirements  (e.g.  access  channels,
universal service and other technical  requirements).  These decisions have been
inconsistent  and, until the United States Supreme Court rules  definitively  on
the scope of cable operators'  constitu- tional and statutory  protections,  the
legality of the franchising  process generally and of various specific franchise
requirements is likely to be in a state of flux.

     Ownership Limitations

     The  Communications  Act generally  prohibits us from owning or operating a
SMATV or wireless  cable  system in any area where we provide  franchised  cable
service.  We may,  however,  acquire and operate SMATV systems in our franchised
service  areas  if  the  programming  and  other  services   provided  to  SMATV
subscribers  are offered  according to the terms and conditions of our franchise
agreement.

     The  Communications Act also authorizes the FCC to impose nationwide limits
on the number of  subscribers  under the control of a cable  operator and on the
number of channels  that can be occupied on a cable system by video  programmers
in which the cable operator has an attributable  ownership interest. The FCC has
adopted cable ownership regulations and established:

          o    a 30% nationwide subscriber ownership limit,

          o    subscriber ownership information reporting requirements, and

          o    attribution  rules that identify when the ownership or management
               by  us or  third  parties  of  other  communications  businesses,
               including cable systems,  television broadcast stations and local
               telephone  companies,  may  be  imputed  to us  for  purposes  of
               determining our compliance with the FCC's ownership restrictions.

Although a federal  appellate  court rejected  constitutional  challenges to the
statutory  ownership  limitations  and the United States  Supreme Court recently
declined to review that case, an appeal  challenging  the FCC's  adoption of its
cable ownership regulations is currently pending in federal court. We are unable
to predict the outcome of this  judicial  proceeding or the impact any ownership
restrictions might have on our business and operations.

     The Communications  Act eliminated the statutory  prohibition on the common
ownership,  operation or control of a cable  system and a  television  broadcast
station in the same market.  While the FCC has eliminated its regulations  which
precluded the  cross-ownership  of a national  broadcasting  network and a cable
system, it has retained other regulations which prohibit the common ownership of
other broadcasting interests and cable systems in the same geographical areas.

     The 1996 amendments to the Communications Act made far-reaching  changes in
the relationship  between local telephone companies and cable service providers.
These amendments:

          o    eliminated  federal legal  barriers to  competition  in the local
               telephone and cable communications businesses, including allowing
               local telephone  companies to offer video services in their local
               telephone service areas,

                                     - 13 -
<PAGE>

          o    preempted  state  and local  laws and  regulations  which  impose
               barriers to telecommunications competition,

          o    set basic standards for relationships between  telecommunications
               providers, and

          o    generally  limited  acquisitions  and  prohibited  certain  joint
               ventures between local telephone companies and cable operators in
               the same market.

     Local  telephone   companies  may  provide  service  as  traditional  cable
operators  with local  franchises or they may opt to provide  their  programming
over  unfranchised   "open  video  systems,"  subject  to  certain   conditions,
including, but not limited to, setting aside a portion of their channel capacity
for use by unaffiliated program  distributors on a  non-discriminatory  basis. A
federal appellate court overturned  various parts of the FCC's open video rules,
including the FCC's preemption of local franchising  requirements for open video
operators.  The FCC has modified its open video rules to comply with the federal
court's decision.  We are unable to predict the impact these rule  modifications
may have on our business and operations.

     Pole Attachment Regulation

     The  Communications  Act requires the FCC to regulate the rates,  terms and
conditions  imposed by public  utilities for cable  systems' use of utility pole
and conduit  space unless  state  authorities  demonstrate  to the FCC that they
adequately  regulate pole attachment  rates, as is the case in certain states in
which we operate.  In the absence of state regulation,  the FCC administers pole
attachment rates on a formula basis. The FCC's original rate formula governs the
maximum rate certain  utilities  may charge for  attachments  to their poles and
conduit by cable operators providing only cable services. The FCC also adopted a
second rate  formula  that  became  effective  in February  2001 and governs the
maximum rate certain  utilities  may charge for  attachments  to their poles and
conduit by companies  providing  telecommunications  services,  including  cable
operators.

     Any  resulting  increase  in  attachment  rates  due to the  FCC's new rate
formula will be phased in over a five-year  period in equal  annual  increments,
beginning in February 2001. Several parties have requested the FCC to reconsider
its new  regulations  and several  parties  challenged the new rules in court. A
federal  appellate  court  upheld  the  constitutionality  of the new  statutory
provision   which   requires   that   utilities   provide   cable   systems  and
telecommunications  carriers with nondiscriminatory  access to any pole, conduit
or right-of-way controlled by the utility. However, the same court determined in
a separate case that the FCC did not have authority to regulate the rates, terms
and conditions of cable operators' pole attachments that are simultaneously used
to  provide  high-speed  Internet  access  and cable  services.  Based upon this
decision, a number of companies that control utility poles in areas served by us
have already  announced  and  unilaterally  implemented  significant  changes in
contract terms and increases in the rates charged for cable pole attachments. We
have  joined in  several  complaints  filed at the FCC by  various  state  cable
associations  challenging  certain  utilities' rate increases and the unilateral
imposition of new contract terms.  Although the adverse appellate court decision
has been  stayed  pending  review by the United  States  Supreme  Court,  if the
decision is not  reversed,  the  contract  terms  imposed by  utilities on cable
operators for pole  attachments  will likely be more  onerous.  We are unable to
predict the outcome of the legal  challenge to the FCC's new  regulations or the
ultimate  impact any  revised FCC rate  formula,  any new pole  attachment  rate
regulations or any elimination or modification of the FCC's regulatory authority
might have on our business and operations.

     Other Regulatory Requirements of the Communications Act and the FCC

     The Communications Act also includes provisions, among others, regulating:

          o    customer service,

          o    subscriber privacy,

          o    marketing practices,

          o    equal employment opportunity, and

          o    technical standards and equipment compatibility.

     The FCC  actively  regulates  other parts of our cable  operations  and has
adopted regulations implementing its authority under the Communications Act.

     The FCC may enforce its  regulations  through the imposition of substantial
fines,  the issuance of cease and desist orders  and/or the  imposition of other
administrative  sanctions,  such as the  revocation  of FCC  licenses  needed to
operate  certain  transmission  facilities  often used in connection  with cable
operations.  The FCC has  ongoing  rulemaking  proceedings  that may  change its
existing rules or lead to new  regulations.  We are unable to predict the impact
that any further FCC rule changes may have on our business and operations.

     Other bills and administrative proposals pertaining to cable communications
have  previously  been  introduced in Congress or have been  considered by other
governmental  bodies over the past several  years.  It is probable  that further
attempts will be made by Congress and other governmental  bodies relating to the
regulation of cable

                                     - 14 -
<PAGE>

communications services.

Copyright

     Our cable  communications  systems provide our  subscribers  with local and
distant  television  and radio  broadcast  signals  which are  protected  by the
copyright  laws.  We generally  do not obtain a license to use this  programming
directly  from  the  owners  of the  programming;  instead  we  comply  with  an
alternative  federal copyright licensing process. In exchange for filing certain
reports and  contributing  a percentage  of our revenues to a federal  copyright
royalty pool, we obtain blanket permission to retransmit copyrighted material.

     In a  report  to  Congress,  the U.S.  Copyright  Office  recommended  that
Congress  make  major  revisions  to both the  cable  television  and  satellite
compulsory licenses. Congress recently modified the satellite compulsory license
in a manner that  permits DBS  providers to become more  competitive  with cable
operators like us. The possible  simplification,  modification or elimination of
the  cable  communications  compulsory  copyright  license  is  the  subject  of
continuing  legislative  review. The elimination or substantial  modification of
the cable  compulsory  license  could  adversely  affect  our  ability to obtain
suitable  programming and could  substantially  increase the cost of programming
that remains  available for  distribution to our  subscribers.  We are unable to
predict the outcome of this legislative activity.

     Our cable  communications  systems  often  utilize music in the programs we
provide  to  subscribers   including  local   advertising,   local   origination
programming and pay-per-view  events.  The right to use this music is controlled
by music  performing  rights  organizations  who  negotiate  on  behalf of their
members for license fees covering each  performance.  The cable industry and one
of these  organizations have agreed upon a standard licensing agreement covering
the performance of music contained in programs originated by cable operators and
in pay-per-view  events.  Negotiations on a similar  licensing  agreement are in
process  with  another  music  performing  rights   organization.   Rate  courts
established by a federal court exist to determine appropriate copyright coverage
and payments in the event the parties fail to reach a negotiated settlement.  We
are unable to predict  the  outcome  of these  proceedings  or the amount of any
license  fees we may be required to pay for the use of music.  We do not believe
that the  amount of such fees will be  significant  to our  financial  position,
results of operations or liquidity.

State and Local Regulation

     Our cable systems use local  streets and  rights-of-way.  Consequently,  we
must comply with state and local regulation  which is typically  imposed through
the  franchising  process.  The  terms and  conditions  of our  franchises  vary
materially from jurisdiction to jurisdiction.  Each franchise generally contains
provisions governing:

          o    cable service rates,

          o    franchise fees,

          o    franchise term,

          o    system construction and maintenance obligations,

          o    system channel capacity,

          o    design and technical performance,

          o    customer service standards,

          o    franchise renewal,

          o    sale or transfer of the franchise,

          o    service territory of the franchisee,

          o    indemnification of the franchising authority,

          o    use and occupancy of public streets, and

          o    types of cable services provided.

     A number of states  subject  cable  systems  to the  jurisdiction  of state
governmental  agencies.  Those states in which we operate that have enacted such
state level regulation are Connecticut, New Jersey and Delaware. State and local
franchising  jurisdiction  is not  unlimited,  however;  it  must  be  exercised
consistently  with federal law. The  Communications  Act  immunizes  franchising
authorities  from monetary  damage awards  arising from the  regulation of cable
systems  or  decisions  made  on  franchise  grants,  renewals,   transfers  and
amendments.

     The summary of certain  federal and state  regulatory  requirements  in the
preceding  pages does not describe all present and proposed  federal,  state and
local regulations and legislation  affecting the cable industry.  Other existing
federal regulations,  copyright licensing, and, in many jurisdictions, state and
local franchise requirements, are currently the subject of judicial proceedings,
legislative hearings and administrative proposals which could change, in varying
degrees, the manner in which cable systems operate. We are unable to predict the
outcome of these  proceedings or their impact upon our cable  operations at this
time.

                                     - 15 -
<PAGE>

Commerce and Content

     The  FCC  does  not  directly  regulate  the  content  or  transmission  of
programming  services  like those offered by QVC and E!  Entertainment.  The FCC
does,  however,  exercise  regulatory  authority  over the satellites and uplink
facilities which transmit programming services such as those provided by QVC and
E! Entertainment.  The FCC has granted,  subject to periodic reviews,  permanent
licenses to QVC for its uplink  facilities (and for backup  equipment of certain
of these  facilities)  at sufficient  power levels for  transmission  of the QVC
service.  The FCC has licensing  authority over satellites from which QVC and E!
Entertainment  obtain transponder  capacity,  but does not regulate their rates,
terms or conditions of service.  The FCC could,  however,  alter the  regulatory
obligations  applicable  to satellite  service  providers.  The QVC  programming
services offered in the UK and Germany are regulated by the media authorities in
those countries.

                                    EMPLOYEES

     As of December 31, 2000, we had approximately  35,000  employees.  Of these
employees,  approximately  18,000  were  associated  with cable  communications,
approximately  11,000 were associated with commerce and approximately 6,000 were
associated  with other  divisions.  We believe that our  relationships  with our
employees are good.

ITEM 2 PROPERTIES

     Cable

     A central receiving  apparatus,  distribution cables,  servers,  analog and
digital  converters,  cable  modems,  customer  service  call  centers and local
business  offices are the principal  physical  assets of a cable  communications
system. We own or lease the receiving and distribution  equipment of each system
and own or lease  parcels of real  property for the  receiving  sites,  customer
service  call  centers and local  business  offices.  In order to keep pace with
technological   advances,  we  are  maintaining,   periodically   upgrading  and
rebuilding the physical components of our cable communications systems.

     Commerce

     Television  studios,  customer  service  call  centers,  business  offices,
product warehouses and distribution centers are the principal physical assets of
our commerce operations.  These assets include QVC's studios and offices, Studio
Park,  located in West  Chester,  Pennsylvania.  QVC owns the  majority of these
assets. In order to keep pace with technological  advances,  QVC is maintaining,
periodically  upgrading and rebuilding  the physical  components of our commerce
operations.  QVC's  warehousing and distribution  facilities will continue to be
upgraded over the next several years.

     Content

     Two large multi-purpose arenas, television studios and business offices are
the principal physical assets of our content  operations.  We own the arenas and
own or  lease  the  television  studios  and  business  offices  of our  content
operations.

     We  believe  that  substantially  all of our  physical  assets  are in good
operating condition.

ITEM 3 LEGAL PROCEEDINGS

     We are subject to legal  proceedings and claims which arise in the ordinary
course of our business. In the opinion of our management, the amount of ultimate
liability with respect to these actions will not materially affect our financial
position, results of operations or liquidity.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable.



                                     - 16 -

<PAGE>

ITEM 4A EXECUTIVE OFFICERS OF THE REGISTRANT

     The  current  term of office of each of our  officers  expires at the first
meeting  of our  Board  of  Directors  following  the  next  Annual  Meeting  of
Shareholders, presently scheduled to be held in June 2001, or as soon thereafter
as each of their  successors is elected and qualified.  The following table sets
forth certain  information  concerning our executive  officers,  including their
ages, positions and tenure as of December 31, 2000:

<TABLE>
<CAPTION>
<S>                   <C>     <C>       <C>
                             Officer
Name                  Age     Since         Position with Comcast
------------------   -----   ------     --------------------------------------------------
Ralph J. Roberts      80      1969      Chairman of the Board of Directors; Director
Julian A. Brodsky     67      1969      Vice Chairman of the Board of Directors; Director
Brian L. Roberts      41      1986      President; Director
Lawrence S. Smith     53      1988      Executive Vice President
John R. Alchin        52      1990      Executive Vice President; Treasurer
Stanley L. Wang       60      1981      Executive Vice President - Law and Administration
Lawrence J. Salva     44      2000      Senior Vice President
</TABLE>
                              --------------------

     Ralph J.  Roberts has served as a Director and as our Chairman of the Board
of Directors for more than five years.  Mr.  Roberts  devotes a major portion of
his time to our business and affairs.  Mr.  Roberts has been the President and a
Director of Sural Corporation ("Sural"), a privately-held investment company and
our  controlling  shareholder,  for more  than  five  years.  Mr.  Roberts  also
presently serves as a Director of Comcast Cable Communications, Inc. Mr. Roberts
is the father of Brian L. Roberts.

     Julian A. Brodsky has served as a Director and as our Vice  Chairman of the
Board of Directors for more than five years. Mr. Brodsky devotes a major portion
of his time to our business and affairs.  Mr.  Brodsky  presently  serves as the
Treasurer  and as a Director  of Sural.  Mr.  Brodsky is also a Director  of RBB
Fund, Inc. and NDS Group plc.

     Brian L.  Roberts has served as our  President  and as a Director  for more
than five years. Mr. Roberts devotes a major portion of his time to our business
and affairs. Mr. Roberts presently serves as Vice President and as a Director of
Sural.  As  of  December  31,  2000,  our  shares  owned  by  Sural  constituted
approximately  87% of the voting  power of the two classes of our voting  common
stock  combined.  Mr.  Roberts has sole voting power over stock  representing  a
majority of voting power of all Sural stock and,  therefore,  has voting control
over Comcast.  Mr. Roberts is our Principal Executive Officer.  Mr. Roberts also
presently  serves as a Director of Comcast  Cable  Communications,  Inc. and The
Bank of New York. Mr. Roberts is a son of Ralph J. Roberts.

     Lawrence S. Smith has served as an Executive  Vice  President for more than
five years.  For more than five years prior to January 2000, Mr. Smith served as
our Principal  Accounting Officer. Mr. Smith also presently serves as a Director
of Comcast Cable Communications, Inc.

     John R. Alchin was named an  Executive  Vice  President  in February  2000.
Prior to that time,  Mr.  Alchin  served as our  Treasurer  and as a Senior Vice
President  for more than five  years.  Mr.  Alchin  is our  Principal  Financial
Officer.

     Stanley L. Wang was named Executive Vice President - Law and Administration
in February 2000. Prior to that time, Mr. Wang served as a Senior Vice President
and as our Secretary and General Counsel for more than five years. Mr. Wang also
presently serves as a Director of Comcast Cable Communications, Inc.

     Lawrence  J. Salva  joined  the  Company  in  January  2000 as Senior  Vice
President  and Chief  Accounting  Officer.  Prior to that time,  Mr. Salva was a
national  accounting  consulting  partner  in  the  public  accounting  firm  of
PricewaterhouseCoopers  for more than five  years.  Mr.  Salva has served as our
Principal Accounting Officer since January 2000.

                                     - 17 -
<PAGE>

                                     PART II

ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
       MATTERS

     Our Class A Special  Common  Stock is included  on Nasdaq  under the symbol
CMCSK and our Class A Common Stock is included on Nasdaq under the symbol CMCSA.
There is no established  public trading market for our Class B Common Stock. Our
Class B Common Stock can be converted,  on a share for share basis, into Class A
Special  or Class A Common  Stock.  The  following  table  sets  forth,  for the
indicated  periods,  the closing  price range of our Class A Special and Class A
Common Stock as furnished by Nasdaq (as adjusted for our two-for-one stock split
in the form of a 100% stock dividend in May 1999).

<TABLE>
<CAPTION>
<S>                                                    <C>          <C>               <C>            <C>
                                                             Class A
                                                             Special                          Class A
                                                   -------------------------------------------------------------
                                                       High            Low              High            Low
                                                   -------------   -----------      -------------   ------------
2000
First Quarter......................................    $54  9/16     $38  5/16         $51   7/16      $36   1/4
Second Quarter.....................................     44  3/16      29   3/4          41    3/4       29   3/4
Third Quarter......................................     41  1/16      31  1/16          40  11/16       30   3/4
Fourth Quarter.....................................     43 15/16      34                43  15/16       33   7/8

1999
First Quarter......................................    $38  9/16     $29   5/8         $37  11/32      $28 15/16
Second Quarter.....................................     42            29  7/16          39  11/16       28   3/8
Third Quarter......................................     41  9/16      32   5/8          38   9/16       29  7/16
Fourth Quarter.....................................     56   1/2      35 11/16          53    1/8       32  1/16
</TABLE>

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

     We began  paying  quarterly  cash  dividends on our Class A Common Stock in
1977.  From 1978,  we paid equal  dividends on shares of both our Class A Common
Stock and our Class B Common Stock. From December 1986, when the Class A Special
Common Stock was issued, through March 1999 we paid equal dividends on shares of
our Class A Special,  Class A and Class B Common Stock. We declared dividends of
$.0467 for the year ended  December  31,  1998 on shares of our Class A Special,
Class A and Class B Common Stock (as adjusted for our two-for-one stock split in
the  form  of a 100%  stock  dividend  in May  1999).  Our  Board  of  Directors
eliminated  the  quarterly  cash  dividend on all classes of our common stock in
March 1999. We do not intend to pay dividends on our Class A Special, Class A or
Class B Common Stock for the foreseeable future.

     If you hold shares of our Class A Special Common Stock,  you cannot vote in
the election of directors or otherwise, except where class voting is required by
law. In that case, if you hold Class A Special  Common Stock,  you have one vote
per share.  Generally,  if you hold Class A Common Stock,  you have one vote per
share. If you hold Class B Common Stock, you have 15 votes per share. Generally,
including the election of directors, holders of Class A Common Stock and Class B
Common  Stock vote as one class except where class voting is required by law. If
you hold  Class A Common  Stock or  Class B Common  Stock,  you have  cumulative
voting rights.

     As of December  31, 2000,  there were 4,066  record  holders of our Class A
Special  Common Stock,  1,597 record holders of our Class A Common Stock and one
record holder of our Class B Common Stock.

                                     - 18 -
<PAGE>

ITEM 6 SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
<S>                                                  <C>           <C>          <C>         <C>        <C>
                                                                     Year Ended December 31,
                                                       2000(1)      1999(1)      1998(1)       1997       1996
                                                   -------------------------------------------------------------
                                                              (Dollars in millions, except per share data)
                                                            -------------------------------------------------
Statement of Operations Data:
Revenues (2).......................................   $8,218.6     $6,529.2     $5,419.0    $4,700.4   $3,813.8
Operating (loss) income............................     (161.0)       664.0        557.1       466.6      465.9
Income (loss) from continuing operations before
     extraordinary items...........................    2,045.1        780.9      1,007.7      (182.9)      (6.4)
Discontinued operations (3)........................                   335.8        (31.4)      (25.6)     (46.1)
Extraordinary items................................      (23.6)       (51.0)        (4.2)      (30.2)      (1.0)
Net income (loss)..................................    2,021.5      1,065.7        972.1      (238.7)     (53.5)
Basic earnings (loss) for common stockholders
  per common share (4)
     Income (loss) from continuing operations
        before extraordinary items.................      $2.27        $1.00        $1.34       ($.29)     ($.01)
     Discontinued operations (3)...................                     .45         (.04)       (.04)      (.10)
     Extraordinary items...........................       (.03)        (.07)        (.01)       (.04)
                                                   -----------   ----------   ----------  ---------- ----------
     Net income (loss).............................      $2.24        $1.38        $1.29       ($.37)     ($.11)
                                                   ===========   ==========   ==========  ========== ==========
Diluted earnings (loss) for common
  stockholders per common share (4)
     Income (loss) from continuing operations
        before extraordinary items.................      $2.16         $.95        $1.25       ($.29)     ($.01)
     Discontinued operations (3)...................                     .41         (.03)       (.04)      (.10)
     Extraordinary items...........................       (.03)        (.06)        (.01)       (.04)
                                                   -----------   ----------   ----------  ---------- ----------
     Net income (loss).............................      $2.13        $1.30        $1.21       ($.37)     ($.11)
                                                   ===========   ==========   ==========  ========== ==========
Cash dividends declared per common share (4).......                               $.0467      $.0467     $.0467
Balance Sheet Data (at year end):
Total assets.......................................  $35,744.5    $28,685.6    $14,710.5   $11,234.3  $10,660.4
Working capital (deficit)..........................    1,102.2      4,226.3      2,497.0        13.6      (12.6)
Long-term debt (5).................................   10,517.4      8,707.2      5,464.2     5,334.1    5,998.3
Stockholders' equity...............................   14,086.4     10,341.3      3,815.3     1,646.5      551.6
Supplementary Financial Data:
Operating income before depreciation and
     amortization (6)..............................   $2,470.3     $1,880.0     $1,496.7    $1,293.1   $1,047.0
Net cash provided by (used in) (7).................
     Operating activities..........................    1,219.3      1,249.4      1,067.7       844.6      644.5
     Financing activities..........................     (271.4)     1,341.4        809.2       283.9      (88.0)
     Investing activities..........................   (1,218.6)    (2,539.3)    (1,415.3)   (1,045.8)    (749.5)
----------
<FN>
(1)  You should see "Management's Discussion and Analysis of Financial Condition
     and Results of Operations" in Item 7 of this Annual Report for a discussion
     of events which affect the  comparability  of the information  reflected in
     this financial data.
(2)  We have  adjusted  these amounts in  accordance  with Emerging  Issues Task
     Force No. 00-10, "Accounting for Shipping and Handling Fees and Costs" (see
     Note 2 to our  consolidated  financial  statements in Item 8 of this Annual
     Report).
(3)  In July 1999, we sold Comcast Cellular  Corporation to SBC  Communications,
     Inc.  Comcast  Cellular is presented as a  discontinued  operation  for all
     periods presented (see Note 3 to our consolidated  financial  statements in
     Item 8 of this Annual Report).
(4)  We have  adjusted  these for our  two-for-one  stock split in the form of a
     100% stock dividend in May 1999 (see Note 6 to our  consolidated  financial
     statements in Item 8 of this Annual Report).
(5)  Includes a $666.0 million adjustment to carrying value at December 31, 1999
     (see  Note 5 to our  consolidated  financial  statements  in Item 8 of this
     Annual Report).

                                     - 19 -
<PAGE>

(6)  Operating income before  depreciation and amortization is commonly referred
     to in our  businesses as "operating  cash flow."  Operating  cash flow is a
     measure of a company's ability to generate cash to service its obligations,
     including  debt  service  obligations,  and to  finance  capital  and other
     expenditures. In part due to the capital intensive nature of our businesses
     and  the  resulting   significant   level  of  non-cash   depreciation  and
     amortization expense,  operating cash flow is frequently used as one of the
     bases for comparing  businesses in our industries,  although our measure of
     operating cash flow may not be comparable to similarly  titled  measures of
     other  companies.  Operating  cash flow is the  primary  basis  used by our
     management  to  measure  the  operating   performance  of  our  businesses.
     Operating  cash flow does not purport to  represent  net income or net cash
     provided  by  operating  activities,  as  those  terms  are  defined  under
     generally accepted accounting  principles,  and should not be considered as
     an alternative to those measurements as an indicator of our performance.
(7)  This  represents  net cash  provided  by (used  in)  operating  activities,
     financing   activities  and  investing   activities  as  presented  in  our
     consolidated  statement  of cash flows  which is included in Item 8 of this
     Annual Report.
</FN>
</TABLE>





                                     - 20 -
<PAGE>

ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
       RESULTS OF OPERATIONS

Overview

     We have  experienced  significant  growth  in  recent  years  through  both
strategic   acquisitions  and  growth  in  our  existing  businesses.   We  have
historically  met our cash  needs for  operations  through  our cash  flows from
operating   activities.   Cash   requirements   for   acquisitions  and  capital
expenditures  have been provided  through our financing  activities and sales of
investments,  as well as our existing  cash,  cash  equivalents  and  short-term
investments.

     We have acquired and we anticipate acquiring cable  communications  systems
in new communities in which we do not have  established  relationships  with the
franchising  authority,  community  leaders and cable  subscribers.  Further,  a
substantial number of new employees are being and must continue to be integrated
into our business  practices and  operations.  Our  previously  announced  cable
systems  exchanges  with  AT&T  Corp.   ("AT&T")  and  Adelphia   Communications
("Adelphia") closed on December 31, 2000 and January 1, 2001, respectively.  Our
previously  announced cable systems  acquisition  from AT&T, which is subject to
customary closing conditions and regulatory  approvals,  is expected to close by
the end of the  second  quarter  of  2001.  Our  results  of  operations  may be
significantly  affected by our ability to  efficiently  and  effectively  manage
these changes.

General Developments of Business

     See  "General  Developments  of  Business"  in  Part  I and  Note  3 to our
consolidated financial statements in Item 8.

Liquidity and Capital Resources

     The  cable  communications  and the  electronic  retailing  industries  are
experiencing  increasing competition and rapid technological changes. Our future
results of operations will be affected by our ability to react to changes in the
competitive  environment  and by our  ability  to  implement  new  technologies.
However,  we  believe  that  competition  and  technological  changes  will  not
significantly affect our ability to obtain financing.

     We believe that we will be able to meet our current and long-term liquidity
and capital requirements,  including fixed charges,  through our cash flows from
operating  activities,  existing cash,  cash  equivalents and  investments,  and
through available borrowings under our existing credit facilities.

     Cash, Cash Equivalents and Short-term Investments

     We  have  traditionally   maintained   significant  levels  of  cash,  cash
equivalents  and  short-term   investments  to  meet  our  short-term  liquidity
requirements.  Our cash  equivalents and short-term  investments are recorded at
fair value. Cash, cash equivalents and short-term investments as of December 31,
2000 were $3.711 billion, substantially all of which is unrestricted. See Note 4
to our consolidated financial statements included in Item 8.

     Capital Expenditures

     During  2001,  we expect to incur  approximately  $1.65  billion of capital
expenditures  in  our  cable,   commerce  and  content   businesses,   including
approximately $1.45 billion for our cable operations.

     Cable

     We expect our 2001 cable capital  expenditures  will include  approximately
$550  million  for  the  upgrading  and  rebuilding  of  certain  of  our  cable
communications  systems,  approximately $550 million for the deployment of cable
modems,  digital  converters  and new service  offerings,  and the remainder for
recurring capital projects.

     The amount of such capital  expenditures  for years subsequent to 2001 will
depend on numerous factors, some of which are beyond our control including:

          o    competition,

          o    cable system capacity of newly acquired systems, and

          o    the timing and rate of deployment of new services.

     National  manufacturers  are the primary source of supplies,  equipment and
materials  utilized  in the  construction,  rebuild  and  upgrade  of our  cable
communications  systems.  Costs  have  increased  during  recent  years  and are
expected  to  continue  to  increase  as a  result  of  the  need  to  construct
increasingly complex systems, overall demand for labor and other factors. Future
increases in such costs may be significant to our financial position, results of
operations and liquidity.

     Commerce

     During  2001,  we  expect  to  incur  approximately  $150  million  for our
majority-owned electronic retailing subsidiary, QVC, Inc. ("QVC"), primarily for
the

                                     - 21 -

<PAGE>

upgrading  of  QVC's  warehousing   facilities,   distribution   facilities  and
information systems.

     New Business Initiatives

     During  2001,  we expect to incur $275  million to $325  million of capital
expenditures in our new business  initiatives  primarily for the construction of
our  domestic  wireline  business  and  the  construction  of our  international
wireless  operations.  The  amount of such  capital  expenditures  for 2001 will
depend  on the  timing  and rate at which we elect to  deploy  resources  in the
targeted service areas.

     We  anticipate  capital  expenditures  for  years  subsequent  to 2001 will
continue  to be  significant.  As of  December  31,  2000,  we do not  have  any
significant contractual obligations for capital expenditures.

     Financing

     See Notes 5 and 6 to our consolidated financial statements included in Item
8.

     The $1.587  billion  increase  in our  long-term  debt,  including  current
portion,  results  principally from the $2.146 billion of aggregate debt that we
assumed in connection  with our  acquisitions  of Lenfest  Communications,  Inc.
("Lenfest")  in January 2000 and Prime  Communications  LLC  ("Prime") in August
2000 (see Notes 3 and 5 to our  consolidated  financial  statements  included in
Item 8), $107.0 million of borrowings,  net of retirements and  repayments,  and
the $666.0  million  reduction  to the carrying  value of our 2.0%  Exchangeable
Subordinated  Debentures  due 2029 (the "ZONES")  during the year ended December
31, 2000 (see Note 5 to our consolidated  financial  statements included in Item
8).

     As of December 31, 2000 and 1999,  our long-term  debt,  including  current
portion,  was $10.811  billion and $9.225 billion,  respectively.  Excluding the
effects of interest  rate risk  management  instruments,  28.5% and 25.4% of our
long-term debt as of December 31, 2000 and 1999,  respectively,  was at variable
rates.

     In January  2001,  our indirect  wholly  owned  subsidiary,  Comcast  Cable
Communications,  Inc.  ("Comcast  Cable")  sold an  aggregate of $1.5 billion of
public debt  consisting  of $500.0  million of 6.375%  Senior Notes due 2006 and
$1.0  billion of 6.75%  Senior  Notes due 2011.  In January  2001,  we issued an
additional  $192.8  million  principal  amount at  maturity  of our Zero  Coupon
Convertible  Debentures  due 2020 (the "Zero Coupon  Debentures" - see Note 5 to
our consolidated financial statements included in Item 8). We used substantially
all of the net  proceeds  from the  offerings  to repay a portion of the amounts
outstanding  under  Comcast  Cable's  commercial  paper  program and bank credit
facility.  After giving effect to these subsequent  transactions,  and excluding
the effects of interest rate risk management instruments, 13.5% of our long-term
debt was at variable rates.

     We have,  and may from time to time in the  future,  depending  on  certain
factors  including  market  conditions,  make  optional  repayments  on our debt
obligations, which may include open market repurchases of our outstanding public
notes and debentures.

     Interest Rate Risk Management

     We are exposed to the market risk of adverse  changes in interest rates. To
manage the volatility  relating to these  exposures,  we maintain a mix of fixed
and variable rate debt and enter into various derivative  transactions  pursuant
to our policies. Positions are monitored using techniques including market value
and  sensitivity  analyses.  We do not hold or issue  any  derivative  financial
instruments for trading  purposes and are not a party to leveraged  instruments.
The credit  risks  associated  with our  derivative  financial  instruments  are
controlled through the evaluation and monitoring of the  creditworthiness of the
counterparties.   Although  we  may  be  exposed  to  losses  in  the  event  of
nonperformance by the  counterparties,  we do not expect such losses, if any, to
be significant.

     Using interest rate exchange agreements ("Swaps"), we agree to exchange, at
specified intervals,  the difference between fixed and variable interest amounts
calculated by reference to an agreed-upon  notional  principal amount.  Interest
rate cap agreements  ("Caps") are used to lock in a maximum interest rate should
variable rates rise, but enable us to otherwise pay lower market rates. Interest
rate collar  agreements  ("Collars")  limit our  exposure to and  benefits  from
interest  rate  fluctuations  on variable rate debt to within a certain range of
rates.

                                     - 22 -
<PAGE>

     The table set forth below  summarizes the fair values and contract terms of
financial  instruments  subject to  interest  rate risk  maintained  by us as of
December 31, 2000 (dollars in millions):

<TABLE>
<CAPTION>
<S>                                        <C>       <C>         <C>    <C>       <C>         <C>       <C>     <C>
                                                                                                                  Fair
                                                                 Expected Maturity Date                         Value at
                                          2001      2002      2003     2004      2005     Thereafter    Total   12/31/00
                                          ----      ----      ----     ----      ----     ----------    -----   --------
Debt
Fixed Rate..........................    $107.9    $208.6      $7.9   $308.6    $705.9      $6,386.2  $7,725.1   $7,165.3
   Average Interest Rate............     10.2%      9.6%      8.0%     8.1%      8.3%          5.3%      5.9%

Variable Rate.......................    $186.0    $239.4     $61.3     $0.1  $2,597.6          $1.8  $3,086.2   $3,086.2
   Average Interest Rate............      6.8%      6.4%      6.4%     7.9%      6.8%          7.9%      6.8%

Interest Rate Instruments
Variable to Fixed Swaps.............    $197.5    $143.5     $36.7                                     $377.7       $3.7
   Average Pay Rate.................      5.5%      4.9%      4.9%                                       5.2%
   Average Receive Rate.............      6.4%      6.0%      6.0%                                       6.2%
Fixed to Variable Swaps.............                                 $300.0                  $150.0    $450.0       $3.2
   Average Pay Rate.................                                   7.5%                    7.9%      7.7%
   Average Receive Rate.............                                   8.1%                    8.3%      8.2%
</TABLE>

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

     The  notional  amounts of interest  rate  instruments,  as presented in the
table  above,  are used to measure  interest to be paid or  received  and do not
represent  the amount of  exposure  to credit  loss.  The  estimated  fair value
approximates the proceeds (costs) to settle the outstanding contracts.  Interest
rates on variable  debt are  estimated by us using the average  implied  forward
London  Interbank  Offer Rate ("LIBOR")  rates for the year of maturity based on
the yield curve in effect at December 31,  2000,  plus the  borrowing  margin in
effect for each credit  facility at December 31, 2000.  Average receive rates on
the  Variable  to Fixed  Swaps are  estimated  by us using the  average  implied
forward LIBOR rates for the year of maturity  based on the yield curve in effect
at December 31, 2000. While Swaps,  Caps and Collars  represent an integral part
of our  interest  rate risk  management  program,  their  incremental  effect on
interest  expense for the years ended  December 31, 2000,  1999 and 1998 was not
significant.

     Equity Price Risk Management

     During the year ended  December 31, 1999, we entered into  cashless  collar
agreements (the "Equity  Collars")  covering  $1.365 billion  notional amount of
investment securities which were accounted for at fair value. The Equity Collars
limit our exposure to and benefits  from price  fluctuations  in the  underlying
equity  securities.  The Equity Collars mature between 2001 and 2003. As we have
accounted for the Equity Collars as a hedge,  changes in the value of the Equity
Collars  were  substantially  offset by changes  in the value of the  underlying
investment  securities  which were also marked-  to-market  through  accumulated
other comprehensive income in our consolidated balance sheet.
     We adopted Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative  Instruments and Hedging  Activities",  as amended, on January 1,
2001, as required by the new statement. We refer you to page 29 for a discussion
of the  expected  impact  the  adoption  of the new  statement  will have on our
consolidated financial position and results of operations.

Statement of Cash Flows

     Cash and cash equivalents  decreased $270.7 million as of December 31, 2000
from December 31, 1999. The decrease in cash and cash equivalents  resulted from
cash flows from  operating,  financing  and  investing  activities  as explained
below.

     Net cash  provided  by  operating  activities  from  continuing  operations
amounted to $1.219 billion for the year ended December 31, 2000 due  principally
to our operating income before  depreciation  and amortization  (see "Results of
Operations"),  offset by changes in working capital as a result of the timing of
receipts and  disbursements  and the effects of net interest and current  income
tax expense.

     Net cash used in financing  activities  from continuing  operations,  which
includes  borrowings  and  repayments  of  debt,  as well as the  issuances  and
repurchases  of our equity  securities,  was $271.4  million  for the year ended
December 31, 2000.  During the year ended December 31, 2000, we borrowed  $5.435
billion,  consisting  of $2.150  billion of  borrowings  under  Comcast  Cable's
commercial  paper  program,   $2.283  billion  of  borrowings  under  subsidiary
revolving  lines of credit and $1.002 billion through the issuance of our $1.285
billion principal

                                     - 23 -
<PAGE>

amount at maturity of Zero Coupon Debentures. During the year ended December 31,
2000, we repaid $5.357 billion of our long-term  debt,  consisting  primarily of
$3.861  billion of  repayments on certain of our  revolving  credit  facilities,
$826.7 million of repayments under Comcast Cable's  commercial paper program and
$615.7  million of aggregate  repurchases  of various of our senior notes and of
our senior subordinated debentures.  In addition, during the year ended December
31,  2000,  we received  proceeds of $30.5  million  related to issuances of our
common  stock and the sale of put options on our common  stock,  we  repurchased
$324.9  million of our common stock,  and we incurred  $55.8 million of deferred
financing costs.

     Net cash used in investing activities from continuing operations was $1.219
billion  for the year  ended  December  31,  2000.  Net cash  used in  investing
activities includes the effects of acquisitions, net of cash acquired, of $187.3
million,  consisting of our acquisition of certain cable communications systems,
investments  of $1.011  billion,  capital  expenditures  of $1.637  billion  and
additions to deferred  charges of $409.2  million,  offset by net proceeds  from
sales of  short-term  investments  of $1.028  billion and proceeds from sales of
investments of $997.3 million.

Results of Operations

     The effects of our recent  acquisitions  were to increase  our revenues and
expenses, resulting in increases in our operating income before depreciation and
amortization.  The increases in our property and equipment, deferred charges and
long-term  debt  (see  Notes 5 and 8 to our  consolidated  financial  statements
included in Item 8) and the  corresponding  increases in  depreciation  expense,
amortization  expense and  interest  expense  from 1999 to 2000 and from 1998 to
1999 are primarily due to the effects of our  acquisitions of Jones  Intercable,
Inc.  ("Jones  Intercable"),  Lenfest and Prime in April 1999,  January 2000 and
August  2000,  respectively,   as  well  as  our  increased  levels  of  capital
expenditures.

     During  2001,  we expect to incur $110 million to $150 million of operating
losses before  depreciation and  amortization,  primarily in connection with the
expansion  of our new  domestic  wireline and  international  wireless  business
initiatives.  The amount of such operating  losses will depend on the timing and
rate at which we elect to deploy resources in the targeted service areas.

     Our depreciation  expense and amortization  expense for years subsequent to
2000 will increase significantly as a result of our cable systems exchanges with
AT&T and  Adelphia  which  closed on  December  31,  2000 and  January  1, 2001,
respectively.

                                     - 24 -
<PAGE>

     Our summarized consolidated financial information for the three years ended
December 31, 2000 is as follows (dollars in millions, "NM" denotes percentage is
not meaningful):

<TABLE>
<CAPTION>
<S>                                                                <C>         <C>         <C>         <C>
                                                                       Year Ended
                                                                      December 31,        Increase/(Decrease)
                                                                    2000        1999          $          %
                                                                 ----------   ---------   ---------   --------
Revenues........................................................   $8,218.6    $6,529.2    $1,689.4       25.9%
Cost of goods sold from electronic retailing....................    2,284.9     2,060.0       224.9       10.9
Operating, selling, general and administrative expenses.........    3,463.4     2,589.2       874.2       33.8
                                                                 ----------   ---------
Operating income before depreciation and amortization (1) ......    2,470.3     1,880.0       590.3       31.4
Depreciation....................................................      837.3       572.0       265.3       46.4
Amortization....................................................    1,794.0       644.0     1,150.0         NM
                                                                 ----------   ---------
Operating (loss) income.........................................     (161.0)      664.0      (825.0)        NM
                                                                 ----------   ---------
Interest expense................................................      691.4       538.3       153.1       28.4
Investment income...............................................     (983.9)     (629.5)      354.4       56.3
(Income) expense related to indexed debt........................     (666.0)      666.0     1,332.0         NM
Equity in net losses (income) of affiliates.....................       21.3        (1.4)      (22.7)        NM
Other income....................................................   (2,825.5)   (1,409.4)    1,416.1         NM
Income tax expense..............................................    1,441.3       723.7       717.6       99.2
Minority interest...............................................     (115.3)        4.6      (119.9)        NM
                                                                 ----------   ---------
Income from continuing operations before
   extraordinary items..........................................   $2,045.1      $780.9    $1,264.2         NM
                                                                 ==========   =========

                                                                       Year Ended
                                                                      December 31,        Increase/(Decrease)
                                                                    1999        1998          $          %
                                                                 ----------   ---------   ---------   --------
Revenues........................................................   $6,529.2    $5,419.0    $1,110.2       20.5%
Cost of goods sold from electronic retailing....................    2,060.0     1,735.7       324.3       18.7
Operating, selling, general and administrative expenses.........    2,589.2     2,186.6       402.6       18.4
                                                                 ----------   ---------
Operating income before depreciation and amortization (1) ......    1,880.0     1,496.7       383.3       25.6
Depreciation....................................................      572.0       463.9       108.1       23.3
Amortization....................................................      644.0       475.7       168.3       35.4
                                                                 ----------   ---------
Operating income................................................      664.0       557.1       106.9       19.2
                                                                 ----------   ---------
Interest expense................................................      538.3       466.7        71.6       15.3
Investment (income) expense.....................................     (629.5)      187.8      (817.3)        NM
Expense related to indexed debt.................................      666.0                   666.0         NM
Equity in net (income) losses of affiliates.....................       (1.4)      515.9       517.3         NM
Gain from equity offering of affiliate..........................                 (157.8)     (157.8)        NM
Other income....................................................   (1,409.4)   (2,012.9)     (603.5)     (30.0)
Income tax expense..............................................      723.7       594.0       129.7       21.8
Minority interest...............................................        4.6        44.3       (39.7)     (89.6)
                                                                 ----------   ---------
Income from continuing operations before
   extraordinary items..........................................     $780.9    $1,007.7     ($226.8)     (22.5%)
                                                                 ==========   =========
------------
<FN>
(1)  Operating income before  depreciation and amortization is commonly referred
     to in our  businesses as "operating  cash flow."  Operating  cash flow is a
     measure of a company's ability to generate cash to service its obligations,
     including  debt  service  obligations,  and to  finance  capital  and other
     expenditures. In part due to the capital intensive nature of our businesses
     and  the  resulting   significant   level  of  non-cash   depreciation  and
     amortization expense,  operating cash flow is frequently used as one of the
     bases for comparing  businesses in our industries,  although our measure of
     operating cash flow may not be comparable to similarly  titled  measures of
     other  companies.  Operating  cash flow is the  primary  basis  used by our
     management  to  measure  the  operating   performance  of  our  businesses.
     Operating  cash flow does not purport to  represent  net income or net cash
     provided  by  operating  activities,  as  those  terms  are  defined  under
     generally accepted accounting  principles,  and should not be considered as
     an alternative to such measurements as an indicator of our performance. See
     "Statement  of Cash Flows" above for a discussion  of net cash  provided by
     operating activities.
</FN>
</TABLE>

                                     - 25 -
<PAGE>

Operating Results by Business Segment

     The following  represent the operating results of our significant  business
segments,  including:  "Cable" and "Commerce."  The remaining  components of our
operations  are not  independently  significant  to our  consolidated  financial
position or results of  operations  (see Note 10 to our  consolidated  financial
statements included in Item 8).

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

     Cable
     The following  table  presents  financial  information  for the years ended
December 31, 2000, 1999 and 1998 for our cable segment (dollars in millions):

<TABLE>
<CAPTION>
<S>                                                              <C>           <C>            <C>         <C>
                                                                      Year Ended
                                                                     December 31,                Increase
                                                                  2000          1999           $           %
                                                               ----------    ----------     --------     -----
Analog video..................................................   $3,536.8      $2,558.0       $978.8      38.3%
Digital video.................................................      114.5          30.9         83.6        NM
Cable modem...................................................      114.4          44.5         69.9        NM
Advertising sales.............................................      290.2         190.3         99.9      52.5
Other.........................................................      129.1         105.6         23.5      22.3
                                                               ----------    ----------     --------
     Service income...........................................    4,185.0       2,929.3      1,255.7      42.9

Operating, selling, general and administrative expenses.......    2,285.4       1,576.3        709.1      45.0
                                                               ----------    ----------     --------

Operating income before depreciation and amortization (a).....   $1,899.6      $1,353.0       $546.6      40.4%
                                                               ==========    ==========     ========

                                                                      Year Ended
                                                                     December 31,                Increase
                                                                  1999          1998           $           %
                                                               ----------    ----------     --------     -----
Analog video..................................................   $2,558.0      $2,036.6       $521.4      25.6%
Digital video.................................................       30.9           2.2         28.7        NM
Cable modem...................................................       44.5          14.3         30.2        NM
Advertising sales.............................................      190.3         138.7         51.6      37.2
Other.........................................................      105.6          85.6         20.0      23.4
                                                               ----------    ----------     --------
     Service income...........................................    2,929.3       2,277.4        651.9      28.6

Operating, selling, general and administrative expenses.......    1,576.3       1,180.8        395.5      33.5
                                                               ----------    ----------     --------

Operating income before depreciation and amortization (a).....   $1,353.0      $1,096.6       $256.4      23.4%
                                                               ==========    ==========     ========
---------------
<FN>
(a) See footnote (1) on page 25.
</FN>
</TABLE>

     Of the $978.8  million  increase  from 1999 to 2000 in analog video service
income,  which consists of our basic,  expanded basic,  premium and pay-per-view
services,  $885.9 million is attributable to the effects of our  acquisitions of
Jones Intercable, Lenfest and Prime in April 1999, January 2000 and August 2000,
respectively,  and $92.9  million  relates  principally  to changes in rates and
subscriber  growth  in our  historical  operations,  offset  by  slightly  lower
pay-per-view  revenue.  The increase  from 1999 to 2000 in digital video service
income  is due  primarily  to the  addition  of  approximately  839,000  digital
subscriptions  during the year ended  December 31, 2000 and, to a lesser extent,
to the effects of a new,  higher-  priced digital  service  offering made in the
second  half of 2000.  The  increase  from 1999 to 2000 in cable  modem  service
income is primarily  due to the addition of  approximately  258,000  cable modem
subscribers during the year ended December 31, 2000.  Approximately one- half of
the increase from 1999 to 2000 in advertising  sales revenue is  attributable to
the  effects  of  our  acquisition  of  Lenfest,  with  the  remaining  increase
attributable to the effects of the 2000 political  campaigns and increased cable
viewership.  The  increase  from  1999 to 2000 in other  service  income,  which
includes  installation  revenues,  guide revenues,  commissions  from electronic
retailing  and  other  product  offerings,  is  primarily  attributable  to  our
acquisitions of Lenfest and Jones Intercable.

                                     - 26 -
<PAGE>

     Of the $521.4  million  increase  from 1998 to 1999 in analog video service
income,  $378.5 million is  attributable  to the effects of our  acquisitions of
Jones Intercable and Greater  Philadelphia  Cablevision,  Inc. in April 1999 and
June 1999,  respectively,  and $142.9 million relates  principally to changes in
rates and subscriber growth in our historical operations and higher pay-per-view
revenue.  The increase from 1998 to 1999 in digital video service  income is due
primarily to the addition of approximately  437,000 digital subscriptions during
the year ended  December 31, 1999. The increase from 1998 to 1999 in cable modem
service  income is primarily due to the addition of  approximately  91,000 cable
modem  subscribers  during the year ended  December 31, 1999.  The increase from
1998 to 1999 in  advertising  sales  revenue is  primarily  attributable  to our
acquisition of Jones Intercable,  strong economic conditions and increased cable
viewership.  The increase from 1998 to 1999 in other service income is primarily
attributable to our acquisition of Jones Intercable.

     The increases in operating,  selling,  general, and administrative expenses
from 1999 to 2000 and from 1998 to 1999 are  primarily due to the effects of our
acquisitions of Jones Intercable,  Lenfest and Prime,  increases in the costs of
cable  programming  as a result of  changes  in  rates,  subscriber  growth  and
additional channel offerings, the effects of cable modem subscriber growth, and,
to a lesser  extent,  to  increases  in labor  costs  and other  volume  related
expenses  in  our  historical  operations.  We  anticipate  the  cost  of  cable
programming will increase in the future as cable  programming rates increase and
additional sources of cable programming become available.

     Commerce

     The  following  table sets forth the  operating  results  for our  commerce
segment, which consists of QVC, Inc. and subsidiaries (dollars in millions):

<TABLE>
<CAPTION>
<S>                                                               <C>           <C>           <C>          <C>
                                                                       Year Ended
                                                                      December 31,                Increase
                                                                    2000          1999          $          %
                                                                 ---------      --------     -------     ------
Net sales from electronic retailing...........................    $3,535.9      $3,167.4      $368.5       11.6%
Cost of goods sold from electronic retailing..................     2,284.9       2,060.0       224.9       10.9
Operating, selling, general and administrative expenses.......       631.8         568.6        63.2       11.1
                                                                 ---------      --------     -------
Operating income before depreciation and amortization (a).....      $619.2        $538.8       $80.4       14.9%
                                                                 =========      ========     =======
Gross margin..................................................        35.4%         35.0%
                                                                 =========      ========

                                                                       Year Ended
                                                                      December 31,                Increase
                                                                    1999          1998          $          %
                                                                 ---------      --------     -------     ------
Net sales from electronic retailing...........................    $3,167.4      $2,676.4      $491.0       18.3%
Cost of goods sold from electronic retailing..................     2,060.0       1,735.7       324.3       18.7
Operating, selling, general and administrative expenses.......       568.6         506.5        62.1       12.3
                                                                 ---------      --------     -------
Operating income before depreciation and amortization (a).....      $538.8        $434.2      $104.6       24.1%
                                                                 =========      ========     =======
Gross margin..................................................        35.0%         35.1%
                                                                 =========      ========
---------------
<FN>
(a) See footnote (1) on page 25.
</FN>
</TABLE>

     The increase in net sales from  electronic  retailing  from 1999 to 2000 is
primarily  attributable to the effects of 4.7%, 10.0% and 41.0% increases in the
average  number of homes  receiving  QVC services in the United  States  ("US"),
United Kingdom ("UK") and Germany,  respectively;  increases of 5.5% and 9.4% in
net sales per home in the US and Germany (in Deutschemarks), respectively, and a
10.6%  decrease  in net sales per home in the UK (in  British  pounds);  and the
negative effects of fluctuations in foreign  currency  exchange rates during the
year.

     The increase in net sales from  electronic  retailing  from 1998 to 1999 is
primarily  attributable to the effects of 4.1%, 11.4% and 35.2% increases in the
average  number of homes  receiving  QVC  services  in the US,  UK and  Germany,
respectively; increases of 8.5%, 8.4% and 90.9% in net sales per home in the US,
UK (in British  pounds) and Germany (in  Deutschemarks),  respectively;  and the
negative  effect of fluctuations  in the  Deutschemark  exchange rate during the
year.

                                     - 27 -
<PAGE>

     The increases in cost of goods sold from electronic retailing are primarily
related to the growth in net sales.  The changes in gross margin are a result of
shifts in sales mix.

     In connection  with new  accounting  guidance  issued during the year ended
December 31, 2000 (see  discussion  of EITF 00-10 in Note 2 to our  consolidated
financial statements included in Item 8), QVC reclassified shipping and handling
revenue  from cost of goods  sold from  electronic  retailing  to net sales from
electronic  retailing for all periods presented.  This  reclassification  had no
effect on QVC's reported  operating income before  depreciation and amortization
and no significant effect on growth in net sales from electronic retailing.  The
effect of the  reclassification  was to increase QVC's net sales from electronic
retailing by  approximately  11% and to decrease  gross margin by  approximately
four percentage points, respectively,  for the years ended December 31, 1999 and
1998 as compared to the amounts previously reported.

     The increases in operating,  selling,  general and administrative  expenses
from 1999 to 2000 and from  1998 to 1999 are  primarily  attributable  to higher
variable  costs and  personnel  costs  associated  with the  increases  in sales
volume.
                           ---------------------------

     Consolidated Analysis

     Interest Expense

     The  increases in interest  expense from 1999 to 2000 and from 1998 to 1999
are primarily due to the effects of our  acquisitions of Lenfest in January 2000
and Jones  Intercable in April 1999 and the issuance of the ZONES in October and
November  1999,  offset,  in part,  by the net  effects  of our  borrowings  and
repayments  and  retirements of debt. We anticipate  that,  for the  foreseeable
future, interest expense will be a significant cost to us.

     Investment (Income) Expense

     During the years ended  December 31,  2000,  1999 and 1998,  we  recognized
pre-tax gains of $824.6 million, $323.0 million and $0.7 million,  respectively,
on sales of certain of our investments.

     During the years ended  December  31,  2000 and 1999,  in  connection  with
certain  mergers of publicly  traded  companies  held by us and accounted for as
investments available for sale, we recognized pre-tax gains of $62.1 million and
$187.6 million, respectively, representing the difference between the fair value
of the securities received by us and our basis in the securities exchanged. Such
gains were recorded as  reclassifications  from accumulated other  comprehensive
income to investment income.

     During the years ended  December 31, 1999 and 1998, we recorded  investment
expense of $18.1 million and $105.5 million, respectively, related to changes in
the value of and the  settlement of call options on certain of our  unrestricted
equity investments, all of which expired by November 1999.

     During the years  ended  December  31,  2000,  1999 and 1998,  we  recorded
pre-tax losses of $74.4 million, $35.5 million and $152.8 million, respectively,
on certain of our  investments  based on a decline in value that was  considered
other than temporary.

     (Income) Expense Related to Indexed Debt

     The ZONES have been accounted for as an indexed debt  instrument  since the
maturity value is dependent upon the fair value of Sprint PCS Stock.  During the
years ended December 31, 2000 and 1999, we recorded  (income) expense related to
indexed debt of ($666.0)  million and $666.0 million,  respectively,  to reflect
the (decrease)  increase in fair value of the underlying Sprint PCS Stock during
the respective periods.

     Equity in Net Losses (Income) of Affiliates

     Equity in net losses of  affiliates  for the year ended  December  31, 1998
consists  primarily of our proportionate  share of the net losses of Sprint PCS,
Comcast  UK  Cable   Partners   Limited   ("Comcast   UK  Cable")  and  Teleport
Communications,  Inc.  ("Teleport").  As a result of the restructuring of Sprint
PCS,  the sale of our  interest  in Comcast UK Cable and the merger of  Teleport
into AT&T during the year ended December 31, 1998 (see "Other Income" below), we
no longer accounted for these investments under the equity method.

     Gain From Equity Offering of Affiliate

     During the year ended  December 31, 1998,  in  connection  with  Teleport's
issuance of shares of its Class A Common Stock,  we recognized a $157.8  million
increase  in our  proportionate  share of  Teleport's  net assets as a gain from
equity offering of affiliate.

     Other Income

     In December 2000, in connection  with our cable systems  exchange with AT&T
pursuant to which we received cable communications systems serving approximately
770,000 subscribers in exchange for

                                     - 28 -
<PAGE>

certain  of our  cable  communications  systems  serving  approximately  700,000
subscribers,  we recorded a pre-tax  gain of $1.711  billion,  representing  the
difference  between  the  estimated  fair  value as of the  closing  date of the
transaction and our cost basis in the systems exchanged.

     In August 2000, we obtained the right to exchange our Excite@Home  Series A
Common Stock with AT&T and we waived certain of our Excite@Home  Board level and
shareholder   rights  under  a  stockholders   agreement  (see  Note  4  to  our
consolidated  financial  statements  included in Item 8). In connection with the
transaction,  we recorded a pre-tax  gain of $1.045  billion,  representing  the
estimated fair value of the investment as of the closing date.

     In August  2000,  we exchanged  all of the capital  stock in a wholly owned
subsidiary which held certain wireless  licenses for  approximately  3.2 million
shares of AT&T common stock.  In connection  with the exchange,  we recognized a
pre-tax gain of $98.1  million,  representing  the  difference  between the fair
value of the AT&T common stock  received of $100.0 million and our cost basis in
the subsidiary.

     Other income for the year ended December 31, 1999 is primarily attributable
to the receipt of a $1.5  billion  termination  fee as  liquidated  damages from
MediaOne Group, Inc.  ("MediaOne"),  net of transaction  costs, in May 1999 as a
result of  MediaOne's  termination  of its  Agreement and Plan of Merger with us
dated March 1999.

     In November  1998,  we  recognized a pre-tax gain of $758.5  million on the
restructuring   of  the  ownership  and   management   control  of  Sprint  PCS,
representing  the difference  between the aggregate fair value of the Sprint PCS
common stock,  convertible  preferred  stock and warrant  received by us and our
cost basis in our partnership interest in Sprint PCS.

     In October  1998,  we  recognized a pre-tax  gain of $148.3  million on the
exchange  of our  interest  in Comcast UK Cable for  approximately  4.8  million
shares of NTL  Incorporated  ("NTL") common stock,  representing  the difference
between the fair value of the NTL common stock received by us and our cost basis
in Comcast UK Cable.

     In July 1998, AT&T completed its merger with Teleport.  Upon closing of the
merger,  we received 36.3 million  shares (as adjusted for AT&T's  3-for-2 stock
split in April  1999) of AT&T  common  stock in  exchange  for the 25.6  million
shares of Teleport Class B Common Stock held by us. As a result of the exchange,
we  recognized a pre-tax gain of $1.092  billion,  representing  the  difference
between  the fair value of the AT&T  common  stock  received  by us and our cost
basis in Teleport.

     Income Tax Expense

     The increases in income tax expense from 1999 to 2000 and from 1998 to 1999
are  primarily  the result of the effects of changes in our income  before taxes
and minority interest, and non-deductible goodwill amortization.

     Minority Interest

     The  changes in minority  interest  from 1999 to 2000 and from 1998 to 1999
are attributable to the effects of our acquisition of a controlling  interest in
Jones  Intercable  in April  1999,  our  acquisition  of the  California  Public
Employees  Retirement  System's 45% interest in Comcast MHCP Holdings  L.L.C. in
February  2000 and to  changes  in the net income or loss of our other less than
100% owned consolidated subsidiaries.

     Extraordinary Items

     Extraordinary  items for the years ended  December 31, 2000,  1999 and 1998
consist of unamortized debt issue costs and debt extinguishment
costs,  net of related tax benefits,  expensed in connection with the redemption
and refinancing of certain indebtedness.

     We believe that our operations are not materially affected by inflation.

     Expected Impact of Adoption of SFAS No. 133

     We adopted Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative  Instruments and Hedging  Activities," as amended,  on January 1,
2001, as required by the new statement.  This statement  establishes  accounting
and reporting  standards for derivatives  and hedging  activities (see Note 2 to
our consolidated  financial  statements included in Item 8). Adoption of the new
statement will affect our accounting  for our indexed debt  instruments,  equity
option agreements,  cashless collar agreements on investment securities,  equity
warrant agreements, and interest rate exchange agreements.

     Under the new statement,  our derivative  instruments,  which are comprised
solely of derivative  financial  instruments,  must be recorded at fair value on
our consolidated balance sheet with changes in fair value recorded, except under
specific circumstances,  to our consolidated statement of operations.  Recording
changes in the fair value of our derivative instruments to our

                                     - 29 -
<PAGE>

consolidated  statement  of  operations  represents  a change  from our  current
accounting  whereby  generally  these  changes are  recorded  as a component  of
stockholders'  equity.  When specific  circumstances  exist, hedge accounting is
permitted  when the  derivative  instrument  is  designated  as a  hedge.  Hedge
accounting permits changes in the fair value of our derivative instruments to be
either  substantially  offset in our  consolidated  statement of  operations  by
changes in the fair value of the  hedged  item or  deferred  as a  component  of
stockholders'  equity until the hedged item is  recognized  in our  consolidated
statement of operations.

     On January 1, 2001, in connection  with our adoption of the new  statement,
we reclassified our investment in Sprint PCS from an available for sale security
to a trading security.  In connection with this  reclassification,  we expect to
record pre-tax investment income of approximately $1.1 billion, representing the
accumulated  unrealized gain on our investment in Sprint PCS previously recorded
as a component of stockholders' equity. Further,  beginning in the first quarter
of 2001,  we will record  changes in the fair value of our  investment in Sprint
PCS to investment income or expense in our consolidated statement of operations.
These adjustments will be substantially offset by the changes in the fair values
of the Equity Collars  described on page 23 and the derivative  component of our
indexed debt instruments described below.

     Upon  adoption  of the new  statement,  the  balance  of our  indexed  debt
instruments,  included in long-term debt, will be reduced by approximately  $400
million.  The new statement  requires that we split our indexed debt instruments
into their derivative and debt components.  We will record the debt component at
a  discount  from its  value at  maturity.  Over  the term of the  indexed  debt
instruments,  increases in the value of the debt  component  will be recorded to
interest  expense in our  consolidated  statement of operations.  Changes in the
fair value of the derivative  component will be recorded to investment income or
expense in our consolidated statement of operations.

     Our right to exchange our Excite@Home  common stock with AT&T is a hedge of
our investment in Excite@Home.  Therefore,  although we have exercised our right
to exchange our investment with AT&T,  beginning in the first quarter of 2001 we
will record  changes in the fair value of this  investment and of our investment
in Excite@Home  common stock to investment income or expense in our consolidated
statement of operations until the transaction closes.

     In  connection  with  the  adoption  of the new  statement,  we  expect  to
recognize as income a cumulative effect of change in accounting  principle,  net
of tax, of  approximately  $400 million in the first quarter of 2001.  This gain
will  consist  of the  $400  million  adjustment  related  to our  indexed  debt
instruments  previously  described and  approximately  $200 million  principally
related to the reclassification of gains previously recognized as a component of
other comprehensive income on our equity derivative instruments,  net of related
deferred income taxes.

     The adoption of the new  statement  will also result in a decrease in other
comprehensive  income as a result of the  reclassification  to our  consolidated
statement  of  operations  of  pre-tax  gains  of  approximately  $1.3  billion,
primarily  related to our  investment  in Sprint  PCS as  discussed  above.  The
decrease will be recorded in the first quarter of 2001, net of related  deferred
income taxes, of approximately $450 million.

     Adoption of the new statement will likely result in volatility  from period
to period  in  investment  (income)  expense  as  reported  on our  consolidated
statement of  operations.  We are unable to predict the effects this  volatility
may have on our future earnings.

                                     - 30 -
<PAGE>

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Comcast Corporation
Philadelphia, Pennsylvania

We  have  audited  the  accompanying   consolidated  balance  sheet  of  Comcast
Corporation  and its  subsidiaries  as of December  31,  2000 and 1999,  and the
related  consolidated  statements of  operations,  cash flows and  stockholders'
equity for each of the three years in the period ended December 31, 2000.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits. We did not audit the consolidated  financial statements of QVC, Inc.
("QVC") (a  consolidated  subsidiary)  as of December  31, 1998 and for the year
then ended,  which  statements  reflect total revenues  constituting  49% of the
Company's  consolidated  revenues for the year ended  December  31, 1998.  Those
statements were audited by other auditors whose report has been furnished to us,
and our opinion,  insofar as it relates to the amounts included in the Company's
consolidated  financial  statements  for QVC, is based solely upon the report of
such other auditors.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial statement  presentation.  We believe that our audits and the report of
other auditors provide a reasonable basis for our opinion.

In our  opinion,  based on our  audits and the  report of other  auditors,  such
consolidated  financial statements present fairly, in all material respects, the
financial  position of Comcast  Corporation and its  subsidiaries as of December
31, 2000 and 1999, and the results of their  operations and their cash flows for
each of the three years in the period ended December 31, 2000 in conformity with
accounting principles generally accepted in the United States of America.



Deloitte & Touche LLP

Philadelphia, Pennsylvania
February 23, 2001


                                     - 31 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
(Dollars in millions, except share data)

<TABLE>
<CAPTION>
<S>                                                                                  <C>               <C>
                                                                                          December 31,
                                                                                     2000              1999
                                                                                   ---------         ---------
ASSETS
CURRENT ASSETS
   Cash and cash equivalents.................................................         $651.5            $922.2
   Investments...............................................................        3,059.7           7,606.0
   Accounts receivable, less allowance for doubtful
     accounts of $141.7 and $136.6...........................................          891.9             673.3
   Inventories, net..........................................................          438.5             402.8
   Other current assets......................................................          102.8             100.1
                                                                                   ---------         ---------
       Total current assets..................................................        5,144.4           9,704.4
                                                                                   ---------         ---------
INVESTMENTS..................................................................        2,661.9           5,548.8
                                                                                   ---------         ---------
PROPERTY AND EQUIPMENT.......................................................        6,799.2           5,153.2
   Accumulated depreciation..................................................       (1,596.5)         (1,700.9)
                                                                                   ---------         ---------
   Property and equipment, net...............................................        5,202.7           3,452.3
                                                                                   ---------         ---------
DEFERRED CHARGES
   Franchise and license acquisition costs...................................       16,594.4           5,155.7
   Excess of cost over net assets acquired and other.........................       10,271.5           7,566.4
                                                                                   ---------         ---------
                                                                                    26,865.9          12,722.1
   Accumulated amortization..................................................       (4,130.4)         (2,742.0)
                                                                                   ---------         ---------
   Deferred charges, net.....................................................       22,735.5           9,980.1
                                                                                   ---------         ---------
                                                                                   $35,744.5         $28,685.6
                                                                                   =========         =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable and accrued expenses.....................................       $2,852.9          $2,737.5
   Accrued interest..........................................................          105.5             104.5
   Deferred income taxes.....................................................          789.9           2,118.6
   Current portion of long-term debt.........................................          293.9             517.5
                                                                                   ---------         ---------
       Total current liabilities.............................................        4,042.2           5,478.1
                                                                                   ---------         ---------
LONG-TERM DEBT, less current portion (including adjustment to
   carrying value of zero and $666.0 million)................................       10,517.4           8,707.2
                                                                                   ---------         ---------
DEFERRED INCOME TAXES........................................................        5,786.7           3,150.5
                                                                                   ---------         ---------
MINORITY INTEREST AND OTHER..................................................        1,257.2           1,008.5
                                                                                   ---------         ---------
COMMITMENTS AND CONTINGENCIES (NOTE 9).......................................
COMMON EQUITY PUT OPTIONS....................................................           54.6
                                                                                   ---------         ---------
STOCKHOLDERS' EQUITY
   Preferred stock - authorized, 20,000,000 shares...........................
     5.25% series B mandatorily redeemable convertible, $1,000 par value;
     issued, 59,450 and 569,640 at redemption value..........................           59.5             569.6
   Class A special common stock, $1 par value - authorized,
     2,500,000,000 shares; issued, 931,340,103 and 716,442,482; outstanding,
     908,015,192 and 716,442,482 ............................................          908.0             716.4
   Class A common stock, $1 par value - authorized,
     200,000,000 shares; issued, 21,832,250 and 25,993,380...................           21.8              26.0
   Class B common stock, $1 par value - authorized,
     50,000,000 shares; issued, 9,444,375....................................            9.4               9.4
   Additional capital........................................................       11,598.8           3,527.0
   Retained earnings (accumulated deficit)...................................        1,056.5            (619.8)
   Accumulated other comprehensive income....................................          432.4           6,112.7
                                                                                   ---------         ---------
       Total stockholders' equity............................................       14,086.4          10,341.3
                                                                                   ---------         ---------
                                                                                   $35,744.5         $28,685.6
                                                                                   =========         =========

</TABLE>

See notes to consolidated financial statements.

                                                     - 32 -

<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in millions, except per share data)
<TABLE>
<CAPTION>
<S>                                                                           <C>           <C>          <C>
                                                                                   Year Ended December 31,
                                                                                2000         1999         1998
                                                                              --------      -------      -------
REVENUES
   Service income...........................................................  $4,682.7     $3,361.8     $2,742.6
   Net sales from electronic retailing......................................   3,535.9      3,167.4      2,676.4
                                                                              --------      -------      -------
                                                                               8,218.6      6,529.2      5,419.0
                                                                              --------      -------      -------
COSTS AND EXPENSES
   Operating................................................................   2,212.5      1,663.1      1,410.3
   Cost of goods sold from electronic retailing.............................   2,284.9      2,060.0      1,735.7
   Selling, general and administrative......................................   1,250.9        926.1        776.3
   Depreciation.............................................................     837.3        572.0        463.9
   Amortization.............................................................   1,794.0        644.0        475.7
                                                                              --------      -------      -------
                                                                               8,379.6      5,865.2      4,861.9
                                                                              --------      -------      -------
OPERATING (LOSS) INCOME.....................................................    (161.0)       664.0        557.1
OTHER (INCOME) EXPENSE
   Interest expense.........................................................     691.4        538.3        466.7
   Investment (income) expense..............................................    (983.9)      (629.5)       187.8
   (Income) expense related to indexed debt.................................    (666.0)       666.0
   Equity in net losses (income) of affiliates..............................      21.3         (1.4)       515.9
   Gain from equity offering of affiliate...................................                              (157.8)
   Other income.............................................................  (2,825.5)    (1,409.4)    (2,012.9)
                                                                              --------      -------      -------
                                                                              (3,762.7)      (836.0)    (1,000.3)
                                                                              --------      -------      -------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX
   EXPENSE, MINORITY INTEREST AND EXTRAORDINARY ITEMS.......................   3,601.7      1,500.0      1,557.4
INCOME TAX EXPENSE..........................................................   1,441.3        723.7        594.0
                                                                              --------      -------      -------
INCOME FROM CONTINUING OPERATIONS BEFORE
   MINORITY INTEREST AND EXTRAORDINARY ITEMS................................   2,160.4        776.3        963.4
MINORITY INTEREST...........................................................    (115.3)         4.6         44.3
                                                                              --------      -------      -------
INCOME FROM CONTINUING OPERATIONS BEFORE
   EXTRAORDINARY ITEMS......................................................   2,045.1        780.9      1,007.7
GAIN (LOSS) FROM DISCONTINUED OPERATIONS, net of income tax expense
   (benefit) of $166.1 million in 1999 and  ($19.1) million in 1998.........                  335.8        (31.4)
                                                                              --------      -------      -------
INCOME BEFORE EXTRAORDINARY ITEMS...........................................   2,045.1      1,116.7        976.3
EXTRAORDINARY ITEMS ........................................................     (23.6)       (51.0)        (4.2)
                                                                              --------      -------      -------
NET INCOME..................................................................   2,021.5      1,065.7        972.1
PREFERRED DIVIDENDS.........................................................     (23.5)       (29.7)       (29.1)
                                                                              --------      -------      -------
NET INCOME FOR COMMON STOCKHOLDERS..........................................  $1,998.0      $1,036.0      $943.0
                                                                              ========      =======      =======
BASIC EARNINGS (LOSS) FOR COMMON STOCKHOLDERS PER COMMON SHARE
   Income from continuing operations before extraordinary items.............     $2.27        $1.00        $1.34
   Discontinued operations..................................................                    .45         (.04)
   Extraordinary items......................................................      (.03)        (.07)        (.01)
                                                                              --------      -------      -------
   Net income...............................................................     $2.24        $1.38        $1.29
                                                                              ========      =======      =======
BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES  OUTSTANDING.................     890.7        749.1        733.0
                                                                              ========      =======      =======
DILUTED EARNINGS (LOSS) FOR COMMON STOCKHOLDERS PER COMMON SHARE
   Income from continuing operations before extraordinary items.............     $2.16         $.95        $1.25
   Discontinued operations..................................................                    .41         (.03)
   Extraordinary items......................................................      (.03)        (.06)        (.01)
                                                                              --------      -------      -------
   Net income...............................................................     $2.13        $1.30        $1.21
                                                                              ========      =======      =======
DILUTED WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING................................................     948.7        819.9        806.0
                                                                              ========      =======      =======
</TABLE>

See notes to consolidated financial statements.

                                                      - 33 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)


<TABLE>
<CAPTION>
<S>                                                                                        <C>          <C>            <C>
                                                                                                 Year Ended December 31,
                                                                                             2000         1999         1998
                                                                                          ---------    ---------    ---------
OPERATING ACTIVITIES
   Net income............................................................................. $2,021.5     $1,065.7       $972.1
   Adjustments to reconcile net income to net cash provided
     by operating activities from continuing operations:
     Depreciation.........................................................................    837.3        572.0        463.9
     Amortization.........................................................................  1,794.0        644.0        475.7
     Non-cash interest (income) expense, net..............................................    (22.6)       (27.8)        29.2
     Non-cash (income) expense related to indexed debt....................................   (666.0)       666.0
     Equity in net losses (income) of affiliates..........................................     21.3         (1.4)       515.9
     Gain from equity offering of affiliate...............................................                             (157.8)
     Gains on investments and other income, net........................................... (3,679.3)    (1,917.0)    (1,758.5)
     Minority interest....................................................................    115.3         (4.6)       (44.3)
     Discontinued operations..............................................................                (335.8)        31.4
     Extraordinary items..................................................................     23.6         51.0          4.2
     Deferred income taxes and other......................................................  1,102.3        (31.9)       418.2
                                                                                          ---------    ---------    ---------
                                                                                            1,547.4        680.2        950.0
     Changes in working capital...........................................................   (328.1)       569.2        117.7
                                                                                          ---------    ---------    ---------

       Net cash provided by operating activities from continuing operations ..............  1,219.3      1,249.4      1,067.7
                                                                                          ---------    ---------    ---------

FINANCING ACTIVITIES
   Proceeds from borrowings...............................................................  5,435.3      2,786.6      1,938.0
   Retirements and repayments of debt..................................................... (5,356.5)    (1,368.2)    (1,113.4)
   Issuances of common stock and sales of put options on common stock.....................     30.5         17.1         41.8
   Repurchases of common stock............................................................   (324.9)       (30.7)       (12.9)
   Dividends..............................................................................                  (9.4)       (36.0)
   Deferred financing costs...............................................................    (55.8)       (51.0)       (16.3)
   Other..................................................................................                  (3.0)         8.0
                                                                                          ---------    ---------    ---------

       Net cash (used in) provided by financing activities from continuing operations .....  (271.4)    1,341.4        809.2
                                                                                          ---------    ---------    ---------

INVESTING ACTIVITIES
   Acquisitions, net of cash acquired.....................................................   (187.3)      (755.2)      (309.7)
   Proceeds from termination fee, net.....................................................               1,460.0
   Proceeds from sales of (purchases of) short-term investments, net......................  1,028.1     (1,035.5)       145.9
   Capital contributions to and purchases of investments.................................. (1,010.7)    (2,012.2)      (202.1)
   Proceeds from sales of investments.....................................................    997.3        599.8         23.6
   Proceeds from investees' repayments of loans...........................................                               74.7
   Capital expenditures................................................................... (1,636.8)      (893.8)      (898.9)
   Sale of subsidiaries, net of cash sold.................................................                 361.1       (140.4)
   Additions to deferred charges..........................................................   (409.2)      (263.5)      (108.4)
                                                                                          ---------    ---------    ---------

       Net cash used in investing activities from continuing operations................... (1,218.6)    (2,539.3)    (1,415.3)
                                                                                          ---------    ---------    ---------


(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    - CONTINUING OPERATIONS...............................................................   (270.7)        51.5        461.6

CASH AND CASH EQUIVALENTS, beginning of year..............................................    922.2        870.7        409.1
                                                                                          ---------    ---------    ---------

CASH AND CASH EQUIVALENTS, end of year....................................................   $651.5       $922.2       $870.7
                                                                                          =========    =========    =========
</TABLE>


See notes to consolidated financial statements.

                                                         - 34 -

<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Dollars in millions, except per share data)

<TABLE>
<CAPTION>
<S>                                       <C>   <C>     <C>      <C>     <C>   <C>        <C>          <C>        <C>     <C>
                                                                                                     Accumulated Other
                                                                                                       Comprehensive
                                                                                                       Income (Loss)
                                                                                                    --------------------
                                                                                         Retained   Unrealized
                                         Preferred Stock    Common Stock                 Earnings   Gains on
                                         ------------- ----------------------            (Accum-     Market-  Cumulative
                                         Series Series Class A                Additional  ulated      able    Translation
                                           A      B    Special Class A Class B Capital   Deficit)  Securities Adjustments   Total
                                         ------ ------ ------- ------- ------ --------- ----------- --------- ----------- ---------

BALANCE, JANUARY 1, 1998...............   $31.9 $513.2  $674.6   $31.8   $8.8  $2,673.0   ($2,415.9)   $140.7     ($11.6)  $1,646.5
Comprehensive income:
   Net income..........................                                                       972.1
   Unrealized gains on marketable
     securities, net of deferred
     taxes of $489.4...................                                                 908.8
   Cumulative translation adjustments..                                                                             11.8
Total comprehensive income.............                                                                                     1,892.7
   Conversion of convertible
     subordinated debt to common
     stock.............................                   20.8                    336.8                                       357.6
   Exercise of options.................                    3.4            0.6      31.8                                        35.8
   Retirement of common stock..........                   (0.4)   (0.1)            (2.4)      (10.0)                          (12.9)
   Cash dividends, common, $.0467
     per share.........................                                                       (34.4)                          (34.4)
   Cash dividends, Series A preferred..                                            (1.6)                                       (1.6)
   Series B preferred dividends........           27.5                            (27.5)
   Temporary equity related to
     put options.......................                                           (79.8)                                      (79.8)
   Proceeds from sales of put options..                                            11.4                                        11.4
                                         ------ ------ ------- ------- ------ --------- ----------- --------- ----------  ---------

BALANCE, DECEMBER 31, 1998.............    31.9  540.7   698.4    31.7    9.4   2,941.7    (1,488.2)  1,049.5        0.2    3,815.3
Comprehensive income:
   Net income..........................                                                     1,065.7
   Unrealized gains on marketable
     securities, net of deferred
     taxes of $2,730.2.................                                                               5,070.3
   Cumulative translation adjustments..                                                                            (7.3)
Total comprehensive income.............                                                                                     6,128.7
   Acquisition.........................                    8.5                    283.2                                       291.7
   Exercise of options.................                    2.2                     23.7                                        25.9
   Conversion of Series A preferred....   (31.9)           2.7                     29.2
   Retirement of common stock..........                           (0.8)            (4.6)      (25.3)                          (30.7)
   Cash dividends, Series A preferred..                                            (0.8)                                       (0.8)
   Series B preferred dividends........           28.9                            (28.9)
   Share exchange......................                    4.6    (4.9)           172.3      (172.0)
   Temporary equity related to
     put options.......................                                           111.2                                       111.2
                                         ------ ------ ------- ------- ------ --------- ----------- --------- ----------  ---------

BALANCE, DECEMBER 31, 1999 ............          569.6   716.4    26.0    9.4   3,527.0      (619.8)  6,119.8       (7.1)  10,341.3
Comprehensive income:
   Net income..........................                                                     2,021.5
   Unrealized losses on marketable
     securities, net of deferred
     taxes of $3,055.3.................                                                              (5,674.1)
   Cumulative translation adjustments..                                                                             (6.2)
Total comprehensive loss...............                                                                                    (3,658.8)
   Acquisitions........................                  155.7                  7,585.2                                     7,740.9
   Exercise of options.................                    2.6                     53.9       (27.7)                           28.8
   Retirement of common stock..........                   (6.0)   (3.1)           (42.3)     (273.5)                         (324.9)
   Conversion of Series B preferred....         (533.6)   38.3                    495.3
   Series B preferred dividends........           23.5                            (23.5)
   Share exchange......................                    1.0    (1.1)            44.1       (44.0)
   Temporary equity related to
     put options.......................                                           (40.9)                                      (40.9)
                                         ------ ------ ------- ------- ------ --------- ----------- --------- ----------  ---------

BALANCE, DECEMBER 31, 2000.............   $      $59.5  $908.0   $21.8   $9.4 $11,598.8    $1,056.5    $445.7     ($13.3) $14,086.4
                                         ====== ====== ======= ======= ====== ========= =========== ========= ==========  =========
</TABLE>



See notes to consolidated financial statements.

                                                                          - 35 -

<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


1.   BUSINESS

     Comcast  Corporation  and its  subsidiaries  (the "Company") is principally
     involved in three lines of business: cable, commerce and content.

     The Company's  cable business is principally  involved in the  development,
     management and operation of broadband communications networks in the United
     States  ("US").   The  Company's   consolidated   cable  operations  served
     approximately 7.7 million subscribers and passed approximately 12.9 million
     homes as of December 31, 2000.

     Commerce is provided through the Company's  consolidated  subsidiary,  QVC,
     Inc. ("QVC").  Through QVC, an electronic  retailer,  the Company markets a
     wide variety of products  directly to consumers  primarily on  merchandise-
     focused  television  programs.  QVC was available,  on a full and part-time
     basis,  to over 77.9 million homes in the US, over 8.9 million homes in the
     United Kingdom ("UK") and over 22.6 million homes in Germany as of December
     31, 2000.

     Content  is  provided  through  the  Company's  consolidated   subsidiaries
     including  Comcast  Spectacor,   Comcast  SportsNet  and  E!  Entertainment
     Television,  Inc.  ("E!  Entertainment"),  and  through  other  programming
     investments including The Golf Channel, Speedvision and Outdoor Life.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER ITEMS

     Basis of Consolidation
     The consolidated  financial  statements include the accounts of the Company
     and  all  wholly  owned  or  controlled   subsidiaries.   All   significant
     intercompany  accounts and transactions  among  consolidated  entities have
     been eliminated.

     Management's Use of Estimates
     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     Fair Values
     The estimated fair value amounts presented in these consolidated  financial
     statements  have been  determined  by the Company  using  available  market
     information and appropriate methodologies.  However,  considerable judgment
     is required in  interpreting  market data to develop the  estimates of fair
     value. The estimates presented herein are not necessarily indicative of the
     amounts that the Company could realize in a current  market  exchange.  The
     use of different market  assumptions  and/or  estimation  methodologies may
     have a material effect on the estimated fair value amounts. Such fair value
     estimates are based on pertinent  information available to management as of
     December 31, 2000 and 1999, and have not been comprehensively  revalued for
     purposes of these consolidated financial statements since such dates.

     Cash Equivalents
     Cash  equivalents  consist   principally  of  US  Government   obligations,
     commercial  paper,  repurchase  agreements and certificates of deposit with
     maturities of three months or less when purchased.  The carrying amounts of
     the Company's cash equivalents approximate their fair values.

     Inventories - Electronic Retailing
     Inventories  are stated at the lower of cost or market.  Cost is determined
     by the average cost method,  which  approximates  the  first-in,  first-out
     method.

                                     - 36 -

<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Investments
     Investments  consist  principally  of equity  securities  and US Government
     obligations,  commercial paper,  repurchase  agreements and certificates of
     deposit with maturities of greater than three months when purchased.

     Investments  in  entities  in which the Company has the ability to exercise
     significant  influence  over the operating  and  financial  policies of the
     investee  are  accounted  for  under  the  equity  method.   Equity  method
     investments  are  recorded at original  cost and adjusted  periodically  to
     recognize the Company's proportionate share of the investees' net income or
     losses  after the date of  investment,  additional  contributions  made and
     dividends   received.   The  differences  between  the  Company's  recorded
     investments  and its  proportionate  interests  in the  book  value  of the
     investees' net assets are being  amortized to equity in net income or loss,
     primarily over a period of 20 years, which is consistent with the estimated
     lives of the underlying assets.

     Unrestricted  publicly  traded  investments are classified as available for
     sale and  recorded at their fair  value,  with  unrealized  gains or losses
     resulting from changes in fair value between  measurement dates recorded as
     a component of other comprehensive income.

     Restricted  publicly  traded  investments and investments in privately held
     companies  are stated at cost,  adjusted for any known  diminution in value
     (see Note 4).

     Property and Equipment
     Property and equipment are stated at cost.  Depreciation is provided by the
     straight-line method over estimated useful lives as follows:

                  Buildings and improvements.................8-40 years
                  Operating facilities.......................5-20 years
                  Other equipment............................2-10 years

     Improvements  that extend asset lives are  capitalized;  other  repairs and
     maintenance  charges  are  expensed  as  incurred.  The  cost  and  related
     accumulated  depreciation  applicable to assets sold or retired are removed
     from the accounts and the gain or loss on  disposition  is  recognized as a
     component of depreciation expense.

     Capitalized Costs
     The  costs  associated  with the  construction  of cable  transmission  and
     distribution   facilities   and  new  cable   service   installations   are
     capitalized.  Costs  include  all  direct  labor and  materials  as well as
     certain indirect costs.

     Deferred Charges
     Franchise and license  acquisition  costs are amortized on a  straight-line
     basis over their legal or estimated useful lives ranging principally from 3
     to 20 years.  The excess of cost over the fair value of net assets acquired
     is being  amortized on a  straight-line  basis over estimated  useful lives
     ranging  principally  from 20 to 30 years. QVC and certain of the Company's
     content  subsidiaries have entered into multi-year  affiliation  agreements
     with various  cable and  satellite  system  operators for carriage of their
     respective  programming.  In connection with these affiliation  agreements,
     the  Company's  subsidiaries  generally pay a fee to the cable or satellite
     operator   based  on  the  number  of   subscribers.   Cable  or  satellite
     distribution  rights are capitalized and amortized on a straight-line basis
     over the term of the related  distribution  agreements ranging  principally
     from 6 to 12 years.

     Valuation of Long-Lived Assets
     The Company  periodically  evaluates the  recoverability  of its long-lived
     assets,  including  property  and  equipment  and deferred  charges,  using
     objective   methodologies  whenever  events  or  changes  in  circumstances
     indicate   that  the  carrying   amount  may  not  be   recoverable.   Such
     methodologies  include evaluations based on the cash flows generated by the
     underlying assets,  profitability  information,  including estimated future
     operating results, trends or other determinants of fair value. If the total
     of the expected future undiscounted cash flows is less than the

                                     - 37 -
<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     carrying  amount of the  asset,  a loss is  recognized  for the  difference
     between the fair value and the carrying value of the asset.

     Foreign Currency Translation
     Assets and  liabilities of the Company's  foreign  subsidiaries,  where the
     functional  currency is the local currency,  are translated into US dollars
     at the December 31 exchange rate. The related  translation  adjustments are
     recorded  as a  component  of  other  comprehensive  income.  Revenues  and
     expenses are translated using average exchange rates prevailing  during the
     year.  Foreign currency  transaction gains and losses are included in other
     (income) expense.

     Revenue Recognition
     Service income is recognized as service is provided. Credit risk is managed
     by disconnecting services to cable customers who are delinquent.  Net sales
     from  electronic  retailing  are  recognized  at the  time of  shipment  to
     customers. The Company's policy is to allow customers to return merchandise
     for up to thirty days after date of  shipment.  An  allowance  for returned
     merchandise  is  provided  as a  percentage  of sales  based on  historical
     experience. Advertising sales revenue is recognized at estimated realizable
     values when the advertising is aired.

     Stock-Based Compensation
     The Company  accounts for  stock-based  compensation in accordance with APB
     Opinion No. 25,  "Accounting  for Stock Issued to  Employees,"  and related
     interpretations,   as  permitted  by  Statement  of  Financial   Accounting
     Standards  ("SFAS") No. 123,  "Accounting  for  Stock-Based  Compensation."
     Compensation  expense for stock options is measured as the excess,  if any,
     of the quoted market price of the Company's  stock at the date of the grant
     over the amount an  employee  must pay to acquire  the stock.  Compensation
     expense  for  restricted  stock  awards is recorded  annually  based on the
     quoted market price of the Company's stock at the date of the grant and the
     vesting  period.  Compensation  expense  for stock  appreciation  rights is
     recorded  annually  based on the  changes  in quoted  market  prices of the
     Company's stock or other  determinants of fair value at the end of the year
     (see Note 6).

     Postretirement and Postemployment Benefits
     The estimated costs of retiree benefits and benefits for former or inactive
     employees, after employment but before retirement, are accrued and recorded
     as a charge to operations during the years the employees provide services.

     Investment Income
     Investment income includes interest income,  dividend income and gains, net
     of losses, on the sales of marketable securities and long-term investments.
     Gross  realized  gains  and  losses  are  recognized   using  the  specific
     identification  method  (see  Note  4).  Investment  income  also  includes
     impairment losses resulting from adjustments to the net realizable value of
     certain of the Company's investments.

     Income Taxes
     The Company  recognizes  deferred tax assets and  liabilities for temporary
     differences  between the financial reporting basis and the tax basis of the
     Company's  assets and  liabilities  and expected  benefits of utilizing net
     operating  loss  carryforwards.  The impact on deferred taxes of changes in
     tax rates and laws,  if any,  applied to the years during  which  temporary
     differences are expected to be settled,  are reflected in the  consolidated
     financial statements in the period of enactment.

     Derivative Financial Instruments
     The  Company  employs  derivative  financial  instruments  for a number  of
     purposes.  The Company  manages its  exposure to  fluctuations  in interest
     rates  by  entering  into  interest  rate  exchange  agreements  ("Swaps"),
     interest rate cap agreements  ("Caps") and interest rate collar  agreements
     ("Collars"). The Company manages the cost of its share repurchases the sale
     of equity put option contracts ("Comcast Put Options"). The Company manages
     its exposure to  fluctuations in the value of certain of its investments by
     entering into equity collar  agreements  ("Equity  Collars") and equity put
     option agreements ("Equity Put Options").  The Company makes investments in
     businesses,  to some degree,  through the purchase of equity call option or
     call warrant agreements ("Equity Warrants"). The

                                     - 38 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Company has issued  indexed  debt  instruments  whose  value,  in part,  is
     derived from the market value of Sprint PCS common  stock.  The Company has
     also sold call options on certain of its  investments in equity  securities
     ("Covered Call Options").

     Swaps, Caps and Collars are matched with either fixed or variable rate debt
     and  periodic  cash  payments  are  accrued  on a  settlement  basis  as an
     adjustment  to  interest  expense.   Any  premiums  associated  with  these
     instruments are amortized over their term and realized gains or losses as a
     result of the  termination  of the  instruments  are deferred and amortized
     over the remaining term of the underlying debt. Unrealized gains and losses
     as a result of these  instruments are recognized when the underlying hedged
     item is extinguished or otherwise terminated.

     Proceeds  from sales of Comcast Put Options are  recorded in  stockholders'
     equity and an amount equal to the  redemption  price of the common stock is
     reclassified from permanent equity to temporary equity.  Subsequent changes
     in the  market  value of  Comcast  Put  Options  are not  recorded.  Equity
     Collars,  Equity Put Options and Equity  Warrants are marked to market on a
     current basis with the result included in accumulated  other  comprehensive
     income in the Company's  consolidated  balance sheet.  Covered Call Options
     are  marked to  market  on a current  basis  with the  result  included  in
     investment  (income)  expense in the  Company's  consolidated  statement of
     operations.

     Those  instruments  that have been  entered  into by the  Company  to hedge
     exposure to interest rate risks are periodically examined by the Company to
     ensure that the instruments are matched with underlying liabilities, reduce
     the Company's  risks relating to interest  rates and,  through market value
     and  sensitivity  analysis,  maintain a high  correlation  to the  interest
     expense  of the hedged  item.  For those  instruments  that do not meet the
     above criteria,  variations in their fair value are  marked-to-market  on a
     current basis in the Company's consolidated statement of operations.

     The Company does not hold or issue any derivative financial instruments for
     trading purposes and is not a party to leveraged  instruments (see Note 5).
     The  credit  risks  associated  with  the  Company's  derivative  financial
     instruments  are  controlled  through the  evaluation and monitoring of the
     creditworthiness of the counterparties. Although the Company may be exposed
     to losses in the event of nonperformance by the counterparties, the Company
     does not expect such losses, if any, to be significant.

     Sale of Stock by a Subsidiary or Equity Method Investee
     Changes in the Company's  proportionate share of the underlying equity of a
     consolidated  subsidiary  or equity method  investee  which result from the
     issuance of  additional  securities  by such  subsidiary  or  investee  are
     recognized  as gains or losses in the Company's  consolidated  statement of
     operations  unless gain  realization  is not assured in the  circumstances.
     Gains for  which  realization  is not  assured  are  credited  directly  to
     additional capital.

     SFAS No. 133, as Amended
     In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
     No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities."
     This  statement   establishes   accounting  and  reporting   standards  for
     derivatives  and hedging  activities.  The new standard  requires  that all
     derivative  instruments  be  reported  on the  balance  sheet at their fair
     values. For derivative  instruments  designated and effective as fair value
     hedges,  changes in the fair  value of the  derivative  instrument  will be
     substantially  offset in the statement of operations by changes in the fair
     value of the hedged item.  For  derivative  instruments  designated as cash
     flow  hedges,  the  effective  portion  of any hedge is  reported  in other
     comprehensive  income until it is  recognized  in earnings  during the same
     period in which the hedged item affects earnings.  The ineffective  portion
     of all hedges will be recognized in current  earnings each period.  Changes
     in the fair value of derivative  instruments  that are not  designated as a
     hedge will be recorded each period in current earnings.

     In July 1999,  the FASB issued SFAS No. 137 which  deferred  the  effective
     date for  implementation  of SFAS No. 133 to fiscal years  beginning  after
     June 15, 2000. In June 2000, the FASB issued SFAS No. 138 which addressed

                                     - 39 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     certain issues causing implementation  difficulties for entities that apply
     SFAS No. 133. The Company  adopted SFAS No. 133, as amended,  on January 1,
     2001.  Instruments that the Company has entered into that will be accounted
     for under SFAS No. 133,  as  amended,  include  indexed  debt  instruments,
     Swaps,  Equity  Warrants,  Equity  Put  Options,  and Equity  Collars.  See
     Management's  Discussion and Analysis of Financial Condition and Results of
     Operations  included in Item 7 of the Company's  Annual Report on Form 10-K
     for a discussion  of the expected  impact the adoption of SFAS No. 133 will
     have on the  Company's  consolidated  financial  position  and  results  of
     operations.

     SFAS No. 140
     In September 2000, the FASB issued SFAS No. 140,  "Accounting for Transfers
     and Servicing of Financial Assets and Extinguishments of Liabilities." SFAS
     No. 140 replaces SFAS No. 125 and addresses  certain  issues not previously
     addressed  in SFAS  No.  125.  SFAS  140 is  effective  for  transfers  and
     servicing  occurring  after March 31, 2001.  SFAS No. 140 is effective  for
     disclosures  about  securitizations  and collateral and for the recognition
     and  reclassification  of collateral for fiscal years ending after December
     15, 2000.  The  adoption of SFAS No. 140 did not have a material  impact on
     the Company's financial position or results of operations.

     SAB No. 101, as Amended
     In December  1999,  the staff of the  Securities  and  Exchange  Commission
     ("SEC")  issued  Staff  Accounting   Bulletin  ("SAB")  No.  101,  "Revenue
     Recognition in Financial  Statements,"  which provides guidance in applying
     generally accepted  accounting  principles to selected revenue  recognition
     issues.  In March 2000 and June 2000,  the staff of the SEC amended SAB No.
     101 to delay the required  implementation date of SAB No. 101 to the fourth
     quarter of fiscal years  beginning  after  December  15, 1999.  The Company
     adopted SAB No. 101, as amended,  on October 1, 2000.  The  adoption of SAB
     No.  101,  as  amended,  did not have a  material  impact on the  Company's
     results of operations.

     EITF 00-10
     In May,  July and  September  2000,  the  Emerging  Issues  Task Force (the
     "EITF")  reached a  consensus  on EITF  Issue No.  00-10,  "Accounting  for
     Shipping and Handling  Fees and Costs."  EITF No. 00-10  requires  that all
     amounts  billed  to a  customer  in a sale  transaction  for  shipping  and
     handling be classified as revenue.  QVC previously  classified shipping and
     handling  revenue  as an  offset  to cost of  goods  sold  from  electronic
     retailing.  The Company has reclassified shipping and handling revenue from
     cost of goods sold from  electronic  retailing to net sales from electronic
     retailing  for  all  periods  presented  in the  accompanying  consolidated
     statement of operations.

     Securities Lending Transactions
     The  Company may enter into  securities  lending  transactions  pursuant to
     which the Company requires the borrower to provide cash collateral equal to
     the value of the loaned  securities,  as  adjusted  for any  changes in the
     value of the underlying loaned securities.  Loaned securities for which the
     Company  maintains  effective  control are included in  investments  in the
     Company's consolidated balance sheet.


                                     - 40 -
<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Earnings for Common Stockholders Per Common Share
     Earnings for common  stockholders  per common share is computed by dividing
     net income, after deduction of preferred stock dividends,  when applicable,
     by the weighted  average  number of common  shares  outstanding  during the
     period on a basic and diluted  basis.  The following  table  reconciles the
     numerator  and  denominator  of the  computations  of diluted  earnings for
     common  stockholders  per common share  ("Diluted EPS") for the years ended
     December 31, 2000, 1999 and 1998, respectively.

<TABLE>
<CAPTION>
<S>                                                                      <C>           <C>            <C>
                                                                   (Amounts in millions, except per share data)
                                                                                     Year Ended
                                                                                    December 31,
                                                                          2000          1999         1998
                                                                     ------------  ------------  -----------
   Net income for common stockholders...........................         $1,998.0      $1,036.0       $943.0
   Dilutive securities effect on net income for common
      stockholders..............................................                                         1.0
   Preferred dividends..........................................             23.5          29.7         29.1
                                                                     ------------  ------------  -----------
   Net income for common stockholders used for
      Diluted EPS...............................................         $2,021.5      $1,065.7       $973.1
                                                                     ============  ============  ===========
   Basic weighted average number of common shares
      outstanding...............................................            890.7         749.1        733.0
   Dilutive securities:
        1 1/8% discount convertible subordinated debentures,
          redeemed March 1998...................................                                         5.0
        Series A and B convertible preferred stock..............             42.5          44.0         45.2
        Stock option and restricted stock plans.................             15.4          26.8         22.8
        Put options on Class A Special Common Stock.............              0.1
                                                                     ------------  ------------  -----------
   Diluted weighted average number of common shares
      outstanding...............................................            948.7         819.9        806.0
                                                                     ============  ============  ===========
   Diluted earnings for common stockholders per
      common share..............................................            $2.13         $1.30        $1.21
                                                                     ============  ============  ===========
</TABLE>

     Comcast Put Options on a weighted  average 1.5 million shares,  2.7 million
     shares and 2.9 million shares of its Class A Special Common Stock (see Note
     6) were  outstanding  during the years ended  December 31,  2000,  1999 and
     1998, respectively.  Comcast Put Options outstanding during the years ended
     December 31, 1999 and 1998 were not included in the  computation of Diluted
     EPS as the Comcast Put  Options'  exercise  price was less than the average
     market  price of the  Company's  Class A Special  Common  Stock  during the
     periods.

     In December 2000, the Company  issued $1.285  billion  principal  amount at
     maturity of Zero Coupon  Convertible  Debentures due 2020 (the "Zero Coupon
     Debentures") (see Note 5). Holders may surrender the Zero Coupon Debentures
     for conversion at any time prior to maturity,  unless previously  redeemed,
     but only if the closing sale price of the Company's  Class A Special Common
     Stock is greater than 110% of the accreted conversion price for at least 20
     trading  days of the 30 trading days prior to  conversion.  As the weighted
     average  closing sale price of the Company's  Class A Special  Common Stock
     was not  greater  than 110% of the  accreted  conversion  price  during the
     period  from the date of issuance  of the Zero  Coupon  Debentures  through
     December 31,  2000,  the Zero Coupon  Debentures  have been  excluded  from
     Diluted EPS.

                                     - 41 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Reclassifications
     Certain  reclassifications  have been made to the prior years' consolidated
     financial statements to conform to those classifications used in 2000.

3.   ACQUISITIONS AND OTHER SIGNIFICANT EVENTS

     AT&T Cable Systems Exchange
     On December 31, 2000, the Company completed its previously  announced cable
     systems  exchange  with AT&T Corp.  ("AT&T")  pursuant to which the Company
     received  cable  communications   systems  serving   approximately  770,000
     subscribers.  In exchange,  AT&T received  certain of the  Company's  cable
     communications  systems  serving  approximately  700,000  subscribers.   In
     connection with the exchange,  the Company  recorded to other income a pre-
     tax  gain of  $1.711  billion,  representing  the  difference  between  the
     estimated  fair value as of the  closing  date of the  transaction  and the
     Company's cost basis in the systems exchanged.

     Acquisition of Prime Communications LLC
     In December 1998, the Company agreed to invest in Prime  Communications LLC
     ("Prime"),  a cable communications  company serving  approximately  406,000
     subscribers.  Pursuant to the terms of this agreement, in December 1998 the
     Company  acquired from Prime a $50.0 million 12.75%  subordinated  note due
     2008 issued by Prime. In July 1999, the Company made a loan to Prime in the
     form of a $733.5  million  6% ten year  note,  convertible  into 90% of the
     equity of Prime.  Since that time,  the Company  made an  additional  $70.0
     million  in loans to Prime (on the same  terms as the  original  loan).  In
     August 2000, the note,  plus accrued  interest of $51.7 million on the note
     and the loans,  was converted and the owners of Prime sold their  remaining
     10% equity interest in Prime to the Company for $87.7 million. As a result,
     the Company now owns 100% of Prime and has  assumed  management  control of
     Prime's  operations (the "Prime  Acquisition").  Upon closing,  the Company
     assumed and immediately repaid $532.0 million of Prime's debt with proceeds
     from borrowings under existing credit facilities.

     Acquisition of Jones Intercable, Inc.
     In April  1999,  the  Company  acquired  a  controlling  interest  in Jones
     Intercable,  Inc.  ("Jones  Intercable"),  a cable  communications  company
     serving approximately 1.1 million subscribers,  for aggregate consideration
     of  $706.3  million  in  cash.  In June  1999,  the  Company  purchased  an
     additional 1.0 million shares of Jones  Intercable Class A Common Stock for
     $50.0 million in cash in a private transaction. The Company contributed its
     interest  in  Jones  Intercable  to  Comcast  Cable  Communications,   Inc.
     ("Comcast Cable"), an indirect wholly owned subsidiary of the Company.

     In  March  2000,  the  Jones  Intercable  shareholders  approved  a  merger
     agreement  pursuant to which the Jones Intercable  shareholders,  including
     Comcast Cable,  received 1.4 shares of the Company's Class A Special Common
     Stock in exchange for each share of Jones  Intercable  Class A Common Stock
     and Common Stock (the "Jones Merger") and Jones  Intercable was merged with
     and into a wholly owned  subsidiary of the Company.  In connection with the
     closing of the Jones Merger, the Company issued  approximately 58.9 million
     shares  of its  Class  A  Special  Common  Stock  to the  Jones  Intercable
     shareholders,  including  approximately 23.3 million shares to a subsidiary
     of the Company and 35.6  million  shares with a value of $1.727  billion to
     the public  shareholders.  As required under generally accepted  accounting
     principles,  the shares held by the subsidiary of the Company are presented
     as issued but not outstanding (held in treasury) in the Company's  December
     31, 2000 consolidated balance sheet.

     Acquisition of CalPERS' Interest in Jointly Owned Cable Properties
     In February 2000,  the Company  acquired the  California  Public  Employees
     Retirement  System's  ("CalPERS")  45% interest in Comcast  MHCP  Holdings,
     L.L.C.  ("Comcast MHCP"),  formerly a 55% owned consolidated  subsidiary of
     the Company which serves  subscribers in Michigan,  New Jersey and Florida.
     As a result,  the Company now owns 100% of Comcast MHCP. The  consideration
     was $750.0 million in cash.

                                     - 42 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Acquisition of Lenfest Communications, Inc.
     In  January  2000,  the  Company  acquired  Lenfest  Communications,   Inc.
     ("Lenfest"),  a cable  communications  company  serving  approximately  1.1
     million  subscribers  primarily in the Philadelphia  area from AT&T and the
     other Lenfest  stockholders for  approximately  120.1 million shares of the
     Company's  Class A Special Common Stock with a value of $6.014 billion (the
     "Lenfest  Acquisition").  In connection with the Lenfest  Acquisition,  the
     Company assumed approximately $1.326 billion of debt (see Note 5).

     Consolidation of Comcast Cablevision of Garden State, L.P.
     Comcast  Cablevision of Garden State, L.P. ("Garden State Cable") (formerly
     Garden State  Cablevision  L.P.), a cable  communications  company  serving
     approximately 216,000 subscribers in New Jersey, is a partnership which was
     owned 50% by Lenfest and 50% by the Company.  The Company had accounted for
     its interest in Garden State Cable under the equity method.  As a result of
     the Lenfest  Acquisition,  the Company now owns 100% of Garden State Cable.
     As such, the operating  results of Garden State Cable have been included in
     the Company's  consolidated  statement of  operations  from the date of the
     Lenfest Acquisition.

     Acquisition of Greater Philadelphia Cablevision, Inc.
     In June 1999, the Company acquired Greater Philadelphia  Cablevision,  Inc.
     ("Greater   Philadelphia"),   a  cable   communications   company   serving
     approximately  79,000  subscribers in Philadelphia from Greater Media, Inc.
     for  approximately  8.5  million  shares of the  Company's  Class A Special
     Common Stock with a value of $291.7 million.

     The  acquisitions  completed by the Company during the years ended December
     31,  2000  and 1999  were  accounted  for  under  the  purchase  method  of
     accounting.  As such,  the operating  results of the acquired  systems have
     been included in the Company's  consolidated  statement of operations  from
     the  acquisition  date.  The  Company  recorded  the final  purchase  price
     allocation related to the Company's  acquisitions of Lenfest,  Garden State
     Cable,  CalPERS'  interest in Comcast MHCP and of the public  shareholders'
     interest  in Jones  Intercable  during  the  fourth  quarter  of 2000.  The
     allocation of the purchase price for the  acquisition of Prime and the AT&T
     cable  systems  exchange,   is  preliminary  pending  completion  of  final
     appraisals.  As the  consideration  given in exchange for Jones Intercable,
     Greater  Philadelphia,  Lenfest and the  additional  50% interest in Garden
     State Cable was shares of the Company's  Class A Special Common Stock,  and
     in the case of Prime was primarily the conversion of convertible notes, the
     acquisitions  of such interests had no significant  impact on the Company's
     consolidated  statement of cash flows  during the years ended  December 31,
     2000 and 1999, respectively (see Note 8).

     Unaudited Pro Forma Information
     The following  unaudited pro forma information for the years ended December
     31, 2000,  1999 and 1998 has been  presented as if the Jones Merger and the
     acquisitions of Lenfest,  CalPERS'  interest in Comcast MHCP and Prime, the
     consolidation  of Garden State Cable and the cable systems acquired through
     the  exchange  with  AT&T  each  occurred  on  January  1,  1999,  and  the
     acquisition  of  a  controlling   interest  in  Jones  Intercable  and  the
     acquisition  of Greater  Philadelphia  occurred  on  January 1, 1998.  This
     information  is based on  historical  results of  operations,  adjusted for
     acquisition  costs,  and, in the opinion of management,  is not necessarily
     indicative  of what the results  would have been had the  Company  operated
     Jones  Intercable,  Greater  Philadelphia,  Lenfest,  Garden  State  Cable,
     Comcast  MHCP,  Prime and the AT&T cable  systems  received in the exchange
     since such dates.

<TABLE>
<CAPTION>
<S>                                                       <C>         <C>          <C>
                                                               (Amounts in millions,
                                                               except per share data)
                                                              Year Ended December 31,
                                                           2000        1999         1998
                                                         ----------  ----------  -----------

     Revenues .........................................   $8,397.3    $7,566.5    $5,922.7
     Income before extraordinary items ................   $1,938.3      $252.2      $925.3
     Net income .......................................   $1,914.7      $201.2      $921.1
     Diluted EPS .....................................,      $1.98       $0.21       $1.13
</TABLE>



                                     - 43 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)

     Sale of Comcast Cellular Corporation
     In July 1999,  the Company  sold  Comcast  Cellular  Corporation  ("Comcast
     Cellular") to SBC  Communications,  Inc. for $361.1 million in cash and the
     assumption of $1.315  billion of Comcast  Cellular  debt,  and recognized a
     gain on the sale of $355.9 million,  net of income tax expense. The results
     of operations of Comcast  Cellular  have been  presented as a  discontinued
     operation in accordance  with Accounting  Principles  Board ("APB") Opinion
     30,  "Reporting  the  Results of  Operations  -  Reporting  the  Effects of
     Disposal  of a  Segment  of a  Business,  and  Extraordinary,  Unusual  and
     Infrequently  Occurring  Events  and  Transactions."  During the year ended
     December  31,  1999,  the  Company   recognized  losses  from  discontinued
     operations of $20.1 million.

     Other Income
     In August 2000, the Company  obtained the right to exchange its Excite@Home
     Corporation ("Excite@Home") Series A Common Stock (the "Excite@Home Stock")
     with AT&T and waived certain of its Excite@Home Board level and shareholder
     rights under a stockholders agreement. The Company also agreed to cause its
     existing  appointee  to the  Excite@Home  Board of Directors to resign (see
     Note 4). In connection with the transaction,  the Company recorded to other
     income a pre-tax gain of $1.045  billion,  representing  the estimated fair
     value of the investment as of the closing date.

     In August 2000, the Company  exchanged all of the capital stock of a wholly
     owned subsidiary which held certain wireless licenses for approximately 3.2
     million shares of AT&T common stock. In connection  with the exchange,  the
     Company  recorded  to  other  income  a  pre-tax  gain  of  $98.1  million,
     representing  the  difference  between  the fair  value of the AT&T  shares
     received of $100.0 million and the Company's cost basis in the subsidiary.

     During  the year ended  December  31,  1999,  the  Company  received a $1.5
     billion  termination fee as liquidated  damages from MediaOne  Group,  Inc.
     ("MediaOne")  as a result of  MediaOne's  termination  of its Agreement and
     Plan of Merger with the Company dated March 1999. The termination  fee, net
     of  transaction  costs,  was  recorded  to other  income  in the  Company's
     consolidated statement of operations.

     Adelphia Cable Systems Exchange
     On January 1, 2001, the Company  completed its previously  announced  cable
     systems  exchange with  Adelphia  Communications  ("Adelphia")  pursuant to
     which  the  Company   received   cable   communications   systems   serving
     approximately  460,000  subscribers  from Adelphia.  In exchange,  Adelphia
     received  certain of the Company's  cable  communications  systems  serving
     approximately  440,000  subscribers.  In connection with the exchange,  the
     Company expects to record a gain and the acquisition  will be accounted for
     as a purchase.

     AT&T Cable Systems Acquisition
     In August 2000, the Company  entered into an agreement with AT&T to acquire
     cable communications systems serving up to 700,000 subscribers from AT&T in
     exchange  for AT&T  common  stock that the  Company  currently  owns or may
     acquire,  in a  transaction  intended  to qualify as  tax-free  to both the
     Company and to AT&T.  Pursuant to the  agreement,  the agreed upon value of
     the cable communications systems to be acquired by the Company from AT&T is
     up to $3.2 billion  (subject to  adjustment  based on the actual  number of
     subscribers acquired).  Also pursuant to the agreement,  approximately 39.6
     million shares of the AT&T common stock currently owned by the Company will
     be valued at $54.41  per share.  The  transaction  is subject to  customary
     closing  conditions  and regulatory  approvals,  will be accounted for as a
     purchase, and is expected to close by the end of the second quarter of 2001
     (see Note 4).

                                     - 44 -
<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


4.   INVESTMENTS

                                                           December 31,
                                                       2000            1999
                                                    -----------     -----------
                                                        (Dollars in millions)

     Fair value method
          AT&T Corp..............................      $1,174.3        $2,025.5
          Excite@Home Corporation................       1,479.1           918.0
          Internet Capital Group, Inc............          71.5         4,127.2
          Sprint Corp. PCS Group.................       2,149.8         4,234.0
          Other..................................         322.4           667.4
                                                    -----------     -----------
                                                        5,197.1        11,972.1
     Cost method.................................         128.4         1,134.6
     Equity method...............................         396.1            48.1
                                                    -----------     -----------
              Total investments..................       5,721.6        13,154.8
     Less, current investments...................       3,059.7         7,606.0
                                                    -----------     -----------
     Non-current investments.....................      $2,661.9        $5,548.8
                                                    ===========     ===========

     Fair Value Method
     The Company  holds  unrestricted  equity  investments  in certain  publicly
     traded  companies,  with an  historical  cost of $4.490  billion and $2.558
     billion as of December  31,  2000 and 1999,  respectively.  The  unrealized
     pre-tax  gains on these  investments  as of  December  31, 2000 and 1999 of
     $707.1 million and $9.414 billion, respectively,  have been reported in the
     Company's  consolidated  balance sheet  principally as a component of other
     comprehensive  income, net of related deferred income tax expense of $240.0
     million and $3.294 billion, respectively.

     AT&T.  In July 1998,  AT&T merged with Teleport  Communications  Group Inc.
     ("Teleport")  with AT&T as the surviving  corporation.  Upon closing of the
     transaction,  the Company  received  approximately  36.3 million  shares of
     unregistered  AT&T common stock (as adjusted for AT&T's 3-for-2 stock split
     in April 1999) in exchange for the  approximately  25.6  million  shares of
     Teleport  Class B Common  Stock  held by the  Company.  As a result  of the
     exchange,  the Company  recorded to other  income a pre-tax  gain of $1.092
     billion  during  the  year  ended  December  31,  1998,   representing  the
     difference  between  the  fair  value of the AT&T  stock  received  and the
     Company's basis in Teleport.

     In March 1999, AT&T merged with  Tele-Communications,  Inc.  ("TCI"),  with
     AT&T as the surviving corporation (the "AT&T/TCI Merger").  Upon closing of
     the AT&T/TCI Merger, the Company received  approximately 3.6 million shares
     (as adjusted for AT&T's  3-for-2  stock split in April 1999) of AT&T common
     stock in exchange for the  approximately  3.1 million shares of TCI Class A
     Common Stock held by the Company and the Company received approximately 3.6
     million  shares of Class A Liberty  Media  Group  Tracking  Shares  for the
     approximately  2.3  million  shares  of  TCI  Ventures  Group,  Inc.  ("TCI
     Ventures") common stock and the approximately 2.4 million shares of Liberty
     Media Group Class A Common  Stock held by the  Company.  As a result of the
     exchange,  the Company  recorded to other  income a pre-tax  gain of $187.6
     million  during  the  year  ended  December  31,  1999,   representing  the
     difference  between the fair value of the stock  received and the Company's
     basis in TCI and TCI Ventures.

     As of December  31, 2000 and 1999,  the Company  holds  approximately  68.0
     million and 39.9 million  shares of AT&T common  stock.  As of December 31,
     2000 and 1999,  the  Company has  recorded  its  investment  in AT&T at its
     estimated  fair value of $1.174  billion and $2.026  billion,  respectively
     (see Note 3).

     Excite@Home.  Excite@Home  provides  Internet  services to subscribers  and
     businesses over the cable communications infrastructure in a limited number
     of cities in the United States. The Company holds approximately

                                     - 45 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     29.1 million shares of  Excite@Home  Stock and, as of December 31, 2000 and
     1999, has earned  warrants to purchase an additional 2.1 million shares and
     0.6 million shares, respectively,  of Excite@Home Stock. As of December 31,
     2000 and 1999,  10% and 30% of the  Excite@Home  shares held by the Company
     were contractually  restricted shares (the "Restricted Shares") and 90% and
     70% of the Excite@Home shares held by the Company were unrestricted  shares
     (the "Unrestricted Shares"). The Company has recorded the Restricted Shares
     at  their  historical  cost  of  $0.3  million  and  $0.6  million  and the
     Unrestricted  Shares and  warrants,  which are  classified as available for
     sale, at their  estimated fair value of $151.8 million and $918.0  million,
     respectively,  as of December  31,  2000 and 1999.  The  investment  in the
     Excite@Home  Stock is included in current  investments  as of December  31,
     2000.

     On March 28, 2000 (the "Announcement Date"),  Excite@Home and its principal
     cable partners,  including the Company (the "Founding Cable Stockholders"),
     entered  into an  agreement  (the  "Letter  Agreement")  pursuant  to which
     Excite@Home  and the  Founding  Cable  Stockholders  agreed  to enter  into
     certain  transactions which were completed on August 28, 2000. AT&T granted
     the Company the right to exchange  its  Excite@Home  Stock with AT&T at any
     time between January 1, 2001and June 4, 2002 at a price equal to the higher
     of $48 per  share or the  average  per  share  trading  price  for a 30-day
     trading period (as defined).  The aggregate value of the Excite @Home Stock
     that AT&T would be  required  to  purchase  from the  Company is limited to
     approximately  $1.5 billion.  The Company has the right to elect payment in
     the form of cash or in shares of AT&T common  stock.  The Company  accounts
     for this right as an  investment,  classified as available for sale, at its
     estimated fair value with unrealized gains or losses resulting from changes
     between  measurement  dates  recorded as a component of  accumulated  other
     comprehensive  income.  As of December 31,  2000,  the Company has recorded
     this investment,  which is included in current investments in the Company's
     consolidated  balance sheet, at its estimated fair value of $1.327 billion.
     In January  2001,  the Company  exercised  its right to exchange all of its
     Excite@Home  Corporation  Series A Common  Stock with AT&T at $48 per share
     for approximately 69.6 million shares of AT&T common stock. Under the terms
     of such exercise, the transaction is expected to close by March 31, 2001.

     The Company agreed to enter into a new non-exclusive distribution agreement
     with  Excite@Home  for the period  from June 2002  through  June 2006.  The
     Company  may  elect  to  terminate  its  existing  exclusive   distribution
     agreement with  Excite@Home  (which would otherwise expire in June 2002) or
     the new distribution  agreement at any time beginning June 2001 on at least
     six months notice. In addition,  unearned  warrants  previously held by the
     Company  were  amended  to  eliminate  any  previous   performance  vesting
     conditions  and  the  Company  received  additional  new  warrants  with an
     exercise  price of $29.54 per share to purchase  two shares of  Excite@Home
     Stock for each home passed by the Company's cable communications systems at
     the  Announcement  Date. The new warrants and the unearned  previously held
     warrants vest in installments  every six months  beginning in June 2001 and
     will be fully vested in June 2006 provided that the Company has not elected
     to earlier  terminate its existing or the new distribution  agreement.  The
     new warrants include customary registration rights and will expire in March
     2015.  The  Company's  right to sell its  Excite@Home  Stock to AT&T is not
     dependent upon its election to either continue or terminate its existing or
     the new distribution agreement.

     Internet Capital Group. In August 1999,  Internet Capital Group ("ICG"), an
     investee of the Company  previously  accounted  for under the cost  method,
     completed  an  initial  public  offering  of its  common  stock.  ICG is an
     Internet  holding  company  engaged in managing and  operating a network of
     business-to-business  e-commerce companies.  During the year ended December
     31, 2000,  the Company  sold  approximately  2.3 million  shares of its ICG
     common stock for proceeds of $327.1  million and  recognized a pre-tax gain
     of  $325.9  million.  Such gain was  recorded  as a  reclassification  from
     accumulated other comprehensive income to investment income. As of December
     31, 2000 and 1999,  the Company holds  approximately  21.4 million and 23.7
     million  shares of ICG common  stock and  warrants  and options to purchase
     approximately 0.6 million shares of ICG common stock,  respectively.  As of
     December 31, 2000 and 1999,  the Company has recorded its investment in ICG
     at  its  estimated  fair  value  of  $71.5  million  and  $4.127   billion,
     respectively.


                                     - 46 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Sprint PCS. In November 1998, in connection with the  restructuring  of the
     ownership  and  management  control of Sprint PCS, the Company  recorded to
     other income a pre-tax gain of $758.5 million,  representing the difference
     between  the  aggregate   fair  value  of  the  Sprint  PCS  common  stock,
     convertible  preferred  stock and  warrant  received by the Company and the
     Company's  cost basis in its  partnership  interest  in Sprint  PCS.  As of
     December 31, 2000 and 1999, as adjusted for Sprint PCS' 2-for-1 stock split
     in February 2000, the Company holds  approximately  88.2 million shares and
     93.8 million shares of unregistered Sprint PCS common stock, 123,452 shares
     of Sprint PCS convertible  preferred stock  (convertible into approximately
     4.0 million shares of  unregistered  Sprint PCS common stock) and a warrant
     to purchase  approximately  6.0 million shares of  unregistered  Sprint PCS
     common stock at $12.01 per share (the "Sprint PCS Stock").  The Company has
     registration rights,  subject to customary  restrictions,  which will allow
     the  Company to sell its Sprint PCS Stock.  During the year ended  December
     31,  2000,  the  Company  sold  approximately  5.6 million of its shares of
     Sprint PCS common  stock for  proceeds of $312.0  million and  recognized a
     pre-tax   gain  of   $265.3   million.   Such  gain  was   recorded   as  a
     reclassification  from accumulated other comprehensive income to investment
     income.  As of December  31, 2000 and 1999,  the Company has  recorded  its
     investment in Sprint PCS at its estimated  fair value of $2.150 billion and
     $4.234 billion, respectively (see Note 5).

     Equity Price Risk
     During the year ended  December 31, 1999,  the Company  entered into Equity
     Collars  covering $1.365 billion  notional amount of investment  securities
     which  are  accounted  for at fair  value.  The  Equity  Collars  limit the
     Company's   exposure  to  and  benefits  from  price  fluctuations  in  the
     underlying  equity  securities.  The Equity Collars mature between 2001 and
     2003.  As the  Company  has  accounted  for the Equity  Collars as a hedge,
     changes in the value of the Equity  Collars  were  substantially  offset by
     changes in the value of the  underlying  investment  securities  which were
     also marked-to-market through accumulated other comprehensive income in the
     Company's consolidated balance sheet.

     NTL Incorporated.  In October 1998, the Company received  approximately 4.8
     million shares of NTL  Incorporated  ("NTL")  common stock,  an alternative
     telecommunications  company in the UK, in exchange for all of the shares of
     Comcast UK Cable  Partners  Limited  ("Comcast UK Cable"),  a  consolidated
     subsidiary  of  the  Company,  held  by the  Company.  As a  result  of the
     exchange,  the Company  recorded to other  income a pre-tax  gain of $148.3
     million  during  the  year  ended  December  31,  1998,   representing  the
     difference  between the fair value of the NTL common stock received and the
     Company's  basis in Comcast UK Cable.  During the year ended  December  31,
     1999,  the  Company  sold all 5.8  million  shares (as  adjusted  for NTL's
     5-for-4  stock  split in October  1999) of its NTL  common  stock for total
     proceeds of $498.3 million and recorded to investment income a pre-tax gain
     of $284.2 million.

     Sales of Other Investments
     During the years  ended  December  31,  2000,  1999 and 1998,  the  Company
     recorded  to  investment  income  pre-tax  gains of $233.4  million,  $38.8
     million and $0.7  million,  respectively,  on sales of certain of its other
     investments.

     Impairment Losses
     During the years  ended  December  31,  2000,  1999 and 1998,  the  Company
     recorded to  investment  expense  pre-tax  losses of $74.4  million,  $35.5
     million and $152.8  million,  respectively,  on certain of its  investments
     based on declines in value that were considered other than temporary.

     Investment Expense Related to Call Options
     During the years ended  December  31, 1999 and 1998,  the Company  recorded
     $18.1  million and $105.5  million,  respectively,  of  investment  expense
     related to changes in the value of and the  settlement  of call  options on
     certain  of the  Company's  fair  value  method  investments,  all of which
     expired by November 1999.


                                     - 47 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Equity Method
     The Company records its proportionate interests in the net income (loss) of
     certain of its equity method investees in arrears.  The Company's  recorded
     investments  exceed its  proportionate  interests  in the book value of the
     investees' net assets by $336.3 million as of December 31, 2000 (related to
     the Company's  investments in The Golf Channel and Susquehanna Cable). Such
     excess is being amortized to equity in net income or loss, over a period of
     twenty  years,  which  is  consistent  with  the  estimated  lives  of  the
     underlying assets. The original cost of investments accounted for under the
     equity method  totaled $506.5 million and $235.6 million as of December 31,
     2000  and1999,  respectively.   Summarized  financial  information  is  not
     presented for Sprint PCS, Teleport or Birmingham Cable Corporation  Limited
     and Cable London,  PLC  (together,  the "UK  Investees") as of December 31,
     2000 and 1999 or for the years ended  December  31, 2000 and 1999,  as such
     investments are no longer accounted for under the equity method. Summarized
     financial  information  for the Company's  equity method  investees for the
     year ended December 31, 1998 is as follows (dollars in millions).


<TABLE>
<CAPTION>
<S>                                       <C>             <C>           <C>            <C>        <C>
                                          Sprint                        UK
                                           PCS         Teleport      Investees       Other       Combined
                                           ---         --------      ---------       -----       --------

Year Ended December 31, 1998:
   Combined Results of Operations
     Revenues, net......................  $1,136.5        $605.8        $197.8         $638.6     $2,578.7
     Operating, selling, general and
       administrative expenses..........   2,587.6         558.7         153.3          653.8      3,953.4
     Depreciation and amortization......     749.5         163.4          69.7           69.1      1,051.7
     Operating loss.....................  (2,200.6)       (116.3)        (25.2)         (84.3)    (2,426.4)
     Net loss (a).......................  (2,572.8)       (190.6)        (78.8)        (134.2)    (2,976.4)
   Company's Equity in Net Loss
     Equity in current period net loss..   ($385.9)       ($27.2)       ($28.9)        ($66.4)     ($508.4)
     Amortization expense...............      (3.5)                       (0.5)          (3.5)        (7.5)
                                        ----------    ----------     ---------     ----------    ---------
       Total equity in net loss.........   ($389.4)       ($27.2)       ($29.4)        ($69.9)     ($515.9)
                                        ==========    ==========     =========     ==========    =========
<FN>
---------
(a)  Net  loss  also   represents  loss  from   continuing   operations   before
     extraordinary   items  and  cumulative  effect  of  changes  in  accounting
     principles.
</FN>
</TABLE>

     Golf Channel
     During the year ended  December  31,  2000,  the  Company  exercised a call
     option to purchase shares held by certain  founding  members and members of
     management and purchased shares held by other minority  shareholders of The
     Golf Channel for aggregate  consideration of $137.8 million.  The Company's
     current  ownership  after these  transactions  is 60.3%.  The Company  will
     continue  to record its  investment  in The Golf  Channel  under the equity
     method due to certain  veto  rights  that are held by one of the  remaining
     minority partners.

     The  Company  does  not  have  any   additional   significant   contractual
     commitments with respect to any of its investments.  However, to the extent
     the Company does not fund its investees'  capital calls,  it exposes itself
     to dilution of its ownership interests.

     Cost Method
     It is  not  practicable  to  estimate  the  fair  value  of  the  Company's
     investments  in  privately  held  companies,  accounted  for under the cost
     method, due to a lack of quoted market prices.

                                     - 48 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Gain from Equity Offering of Affiliate
     For the year ended December 31, 1998, Teleport issued shares of its Class A
     Common Stock. As a result of this stock issuance,  the Company recognized a
     $157.8 million increase in its proportionate share of Teleport's net assets
     as gain from equity offering of affiliate.

5.   LONG-TERM DEBT

<TABLE>
<CAPTION>
<S>                                                                                     <C>          <C>
                                                                                            December 31,
                                                                                         2000          1999
                                                                                      ----------     ---------
                                                                                       (Dollars in millions)
     Commercial Paper                                                                   $1,323.5
     Notes payable to banks due in installments through 2009......................       1,751.4      $2,324.0
     9-5/8% Senior notes, due 2002................................................         200.0         200.0
     8-1/8% Senior notes, due 2004................................................         299.9         299.8
     8-3/8% Senior notes, due 2005................................................         696.3
     8-3/8% Senior notes, due 2007................................................         597.2         596.8
     8-7/8% Senior notes, due 2007................................................         249.0         248.9
     6.20% Senior notes, due 2008.................................................         798.2         798.1
     7-5/8% Senior notes, due 2008................................................         197.1         196.8
     7-5/8% Senior notes, due 2008................................................         147.4
     8-7/8% Senior notes, due 2017................................................         545.8         545.7
     8-1/2% Senior notes, due 2027................................................         249.6         249.6
     10-1/4% Senior subordinated debentures, due 2001.............................         100.4         100.4
     9-3/8% Senior subordinated debentures, due 2005..............................                       172.5
     9-1/8% Senior subordinated debentures, due 2006..............................                       144.7
     10-1/2% Senior subordinated debentures, due 2006.............................         123.8
     8-1/4% Senior subordinated debentures, due 2008..............................         149.1
     9-1/2% Senior subordinated debentures, due 2008..............................                       198.5
     10-1/2% Senior subordinated debentures, due 2008.............................                       100.0
     10-5/8% Senior subordinated debentures, due 2012.............................         257.0         257.0
     Zero Coupon Convertible Debentures, due 2020.................................       1,002.0
     7% Disney Notes, due 2007....................................................         132.8         132.8
     ZONES at principal amount, due 2029..........................................       1,806.8       1,806.8
       Non-cash adjustment to carrying value......................................                       666.0
     Other debt, due in installments..............................................         184.0         186.3
                                                                                      ----------     ---------
                                                                                        10,811.3       9,224.7
     Less current portion.........................................................         293.9         517.5
                                                                                      ----------     ---------
                                                                                       $10,517.4      $8,707.2
                                                                                      ==========     =========
</TABLE>


                                     - 49 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Maturities of long-term  debt  outstanding  as of December 31, 2000 for the
     four years after 2001 are as follows (dollars in millions):
         2002.................................................       $448.0
         2003.................................................         69.2
         2004.................................................        308.7
         2005.................................................      3,303.5

     Senior Notes Offerings
     In January 2001,  Comcast Cable sold an aggregate of $1.5 billion of public
     debt  consisting of $500.0 million of 6.375% Senior Notes due 2006 and $1.0
     billion of 6.75% Senior Notes due 2011.  Comcast  Cable used  substantially
     all of the net  proceeds  from  the  offerings  to repay a  portion  of the
     amounts  outstanding  under its  commercial  paper  program and bank credit
     facility.

     Zero Coupon Convertible Debentures
     In December 2000, the Company  issued $1.285  billion  principal  amount at
     maturity of Zero Coupon  Debentures  for  proceeds  of $1.002  billion.  In
     January 2001,  the Company issued an additional  $192.8  million  principal
     amount  at  maturity  of Zero  Coupon  Debentures  for  proceeds  of $150.3
     million.  The Company used  substantially  all of the net proceeds from the
     offering  to repay a  portion  of the  amounts  outstanding  under  Comcast
     Cable's commercial paper program and bank credit facility.

     The Zero Coupon Debentures have a yield to maturity of 1.25%, computed on a
     semi-annual  bond  equivalent  basis.  The Zero  Coupon  Debentures  may be
     converted,  subject to certain  restrictions,  into shares of the Company's
     Class A Special  Common  Stock at the option of the holder at a  conversion
     rate  of  14.2566   shares  per  $1,000   principal   amount  at  maturity,
     representing  an initial  conversion  price of $54.67  per share.  The Zero
     Coupon Debentures are senior unsecured obligations.  The Company may redeem
     for cash all or part of the Zero Coupon Debentures on or after December 19,
     2005.  Holders  may  require  the  Company to  repurchase  the Zero  Coupon
     Debentures on December 19, 2001, 2003, 2005, 2010 and 2015. The Company may
     choose to pay the repurchase  price for 2001, 2003 and 2005  repurchases in
     cash or shares of its Class A Special Common Stock or a combination of cash
     and shares of its Class A Special  Common  Stock.  The  Company may pay the
     repurchase price for the 2010 and 2015 repurchases in cash only.

     Holders may surrender the Zero Coupon Debentures for conversion at any time
     prior to  maturity if the closing  price of the  Company's  Class A Special
     Common Stock is greater than 110% of the accreted  conversion  price for at
     least 20 trading days of the 30 trading days prior to conversion.

     Amounts  outstanding  under the Zero Coupon  Debentures  are  classified as
     long-term in the  Company's  consolidated  balance sheet as of December 31,
     2000 as the Company has both the  ability and the intent to  refinance  the
     Zero Coupon  Debentures on a long-term  basis with amounts  available under
     the Comcast Cable Revolver (see "Comcast Cable  Refinancing"  below) in the
     event  holders  of the Zero  Coupon  Debentures  exercise  their  rights to
     require the Company to  repurchase  the Zero Coupon  Debentures in December
     2001.

     Comcast Cable Refinancing
     In August  2000,  the Company  repaid and  retired all amounts  outstanding
     under the  existing  bank  credit  facilities  of its cable  communications
     subsidiaries, totaling approximately $2.4 billion, with the proceeds from a
     new senior bank credit  facility  and new  commercial  paper  program.  The
     Company's  new senior bank  credit  facility  consists of a $2.25  billion,
     five-year revolving credit facility and a $2.25 billion,  364-day revolving
     credit  facility  (together,  the "Comcast  Cable  Revolver").  The 364-day
     revolving  credit facility  supports  Comcast Cable's new commercial  paper
     program. The Company borrowed $1.4 billion under the five-year facility and
     $1.0 billion  under the  commercial  paper  program to repay and retire the
     subsidiaries' credit facilities.

                                     - 50 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Amounts  outstanding  under the commercial  paper program are classified as
     long-term in the  Company's  consolidated  balance sheet as of December 31,
     2000  as the  Company  refinanced  a  portion  of  these  obligations  on a
     long-term basis with proceeds from the Comcast Cable senior notes offerings
     in January 2001 and has both the ability and the intent to refinance  these
     obligations,  if  necessary,  on a long-term  basis with amounts  available
     under the Comcast Cable Revolver.

     ZONES
     During the fourth  quarter of 1999,  the Company  issued 2.0%  Exchangeable
     Subordinated  Debentures due 2029 (the "ZONES") in the aggregate  principal
     amount of $1.807 billion. At maturity, holders of the ZONES are entitled to
     receive in cash an amount equal to the higher of (a) the  principal  amount
     of the ZONES,  or (b) the  market  value of two shares of Sprint PCS Stock.
     Prior to maturity,  each ZONES is exchangeable at the holders option for an
     amount of cash equal to 95% of the market value of two shares of Sprint PCS
     Stock.

     The ZONES have been accounted for as an indexed debt  instrument  since the
     maturity  value is  dependent  upon the fair  value of  Sprint  PCS  Stock.
     Therefore,  the carrying value of the ZONES was adjusted each balance sheet
     date to reflect the fair value of the underlying  Sprint PCS Stock with the
     change  included  in  (income)  expense  related  to  indexed  debt  in the
     Company's  consolidated  statement  of  operations.  During the years ended
     December 31, 2000 and 1999, the Company  recorded  (income) expense related
     to indexed debt of ($666.0) million and $666.0 million,  respectively.  The
     Company's investment in Sprint PCS was accounted for as available for sale,
     with  changes  in  fair  value  being   reflected  in   accumulated   other
     comprehensive  income (see Note 4). As of December 31, 2000,  the number of
     Sprint  PCS  shares  held by the  Company  exceeded  the  number  of  ZONES
     outstanding.

     Debt Assumed
     In connection with the Lenfest  Acquisition,  the  consolidation  of Garden
     State Cable and the Prime  Acquisition  (see Note 3), the  Company  assumed
     aggregate debt of $2.146 billion with interest rates ranging  between 6.95%
     and 10.5%, and maturities between 2001 and 2008.

     Redemptions of Debt
     During 2000, the Company repurchased certain senior subordinated debentures
     having an aggregate  principal  amount of $615.7 million.  During 1999, the
     Company  repurchased  certain  senior  subordinated  debentures  having  an
     aggregate  principal  amount of $192.2 million and repaid $200.0 million in
     notes  payable to insurance  companies  having an interest rate of 8.6%. In
     March 1999,  the Company issued 8.7 million 3.35%  Exchangeable  Extendable
     Subordinated  Debentures  due 2029 (the  "PHONES")  for gross  proceeds  of
     $718.3 million. At maturity, holders of the PHONES were entitled to receive
     in cash an amount  equal to the higher of (a) the  principal  amount of the
     PHONES,  or (b) the market value of AT&T common  stock.  In July 1999,  the
     Company  redeemed all $718.3 million  principal  amount of the PHONES.  The
     Company  redeemed the PHONES due to its  transaction  with AT&T in which it
     intends  to use AT&T  shares as  consideration  for the  purchase  of cable
     systems from AT&T (see Note 3).

     In March 1998,  the Company  completed the redemption of its $541.9 million
     principal amount 1 1/8% discount  convertible  subordinated  debentures due
     2007 (the "1 1/8%  Debentures").  The Company issued 20.8 million shares of
     its  Class A  Special  Common  Stock  upon  conversion  of  $540.2  million
     principal amount of 1 1/8% Debentures  while $1.7 million  principal amount
     of 1 1/8% Debentures was redeemed for cash at a redemption price of 67.112%
     of  the  principal   amount,   together  with  accrued  interest   thereon.
     Stockholders'  equity was increased by the full amount of 1 1/8% Debentures
     converted  plus  accrued  interest,  less  unamortized  debt  issue  costs.
     Unamortized debt issue costs related to the 1 1/8% Debentures  redeemed for
     cash were not  significant.  The issuance of the Company's  Class A Special
     Common Stock upon  conversion of the 1 1/8% Debentures had no impact on the
     Company's consolidated statement of cash flows due its noncash nature.

     Extraordinary Items
     Extraordinary items for the years ended December 31, 2000, 1999 and 1998 of
     $23.6  million,  $51.0 million and $4.2 million,  respectively,  consist of
     unamortized debt issue costs and debt extinguishment  costs, net of related
     tax

                                     - 51 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     benefits,  expensed  principally  in connection  with the  redemptions  and
     refinancings of certain indebtedness described above.

     Interest Rates
     Bank debt interest rates vary based upon one or more of the following rates
     at the option of the Company:

        Prime rate to prime plus .75%;
        Federal Funds rate plus .5% to 1.25%; and
        LIBOR plus .19% to 1.875%.

     As of December 31, 2000 and 1999, the Company's  effective weighted average
     interest  rate on its variable rate debt  outstanding  was 7.34% and 6.67%,
     respectively.

     Interest Rate Risk Management
     The  Company is exposed to the market  risk of adverse  changes in interest
     rates. To manage the volatility relating to these exposures,  the Company's
     policy is to maintain a mix of fixed and variable  rate debt and enter into
     various interest rate derivative transactions as described below.

     Using Swaps, the Company agrees to exchange,  at specified  intervals,  the
     difference  between  fixed and  variable  interest  amounts  calculated  by
     reference to an agreed-upon  notional  principal  amount.  Caps are used to
     lock in a maximum  interest rate should variable rates rise, but enable the
     Company to otherwise  pay lower market  rates.  Collars limit the Company's
     exposure to and benefits from interest rate  fluctuations  on variable rate
     debt to within a certain range of rates.

     All derivative  transactions must comply with a board-approved  derivatives
     policy.  In  addition to  prohibiting  the use of  derivatives  for trading
     purposes or that increase risk, this policy requires  quarterly  monitoring
     of the portfolio,  including portfolio  valuation,  measuring  counterparty
     exposure and performing sensitivity analyses.

     The following table  summarizes the terms of the Company's  existing Swaps,
     Caps and Collars as of December 31, 2000 and 1999 (dollars in millions):

<TABLE>
<CAPTION>
<S>                                     <C>            <C>               <C>               <C>
                                       Notional                           Average         Estimated
                                        Amount         Maturities      Interest Rate     Fair Value
                                        ------         ----------      -------------     ----------

     As of December 31, 2000
     Variable to Fixed Swaps            $377.7         2001-2003           5.2%              $3.7
     Fixed to Variable Swaps             450.0         2004-2008           7.7%               3.2

     As of December 31, 1999
     Variable to Fixed Swaps          $1,111.8         2000-2003           5.6%             $16.9
     Fixed to Variable Swaps             300.0            2004             7.7%              (3.9)
     Caps                                140.0            2000             6.8%
     Collar                               50.0            2000           6.3%/4.0%            0.1
</TABLE>

     The  notional  amounts of interest  rate  instruments,  as presented in the
     above table, are used to measure interest to be paid or received and do not
     represent the amount of exposure to credit loss.  The estimated  fair value
     approximates  the  proceeds  (costs) to settle the  outstanding  contracts.
     While Swaps,  Caps and Collars  represent an integral part of the Company's
     interest rate risk management program, their incremental effect on interest
     expense  for the  years  ended  December  31,  2000,  1999 and 1998 was not
     significant.

     Estimated Fair Value
     The Company's  long-term debt had estimated fair values of $10.251  billion
     and $9.231  billion as of  December  31, 2000 and 1999,  respectively.  The
     estimated  fair value of the  Company's  publicly  traded  debt is based on
     quoted

                                     - 52 -

<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     market prices for that debt. Interest rates that are currently available to
     the  Company  for  issuance  of  debt  with  similar  terms  and  remaining
     maturities are used to estimate fair value for debt issues for which quoted
     market prices are not available.

     Debt Covenants
     Certain of the Company's  subsidiaries' loan agreements contain restrictive
     covenants which, for example, limit the subsidiaries' ability to enter into
     arrangements  for the  acquisition of property and equipment,  investments,
     mergers and the incurrence of additional debt.  Certain of these agreements
     contain financial covenants which require that certain ratios and cash flow
     levels be maintained and contain certain  restrictions on dividend payments
     and advances of funds to the Company. The Company and its subsidiaries were
     in compliance with all financial covenants for all periods presented.

     As of  December  31,  2000,  $286.3  million of the  Company's  cash,  cash
     equivalents and short-term investments is restricted to use by subsidiaries
     of the Company under  contractual  or other  arrangements.  Restricted  net
     assets of the Company's  subsidiaries were approximately $1.1 billion as of
     December 31, 2000.

     Lines and Letters of Credit
     As of December 31,  2000,  certain  subsidiaries  of the Company had unused
     lines of credit of $2.182 billion under their respective credit facilities.

     As of December 31, 2000,  the Company and certain of its  subsidiaries  had
     unused  irrevocable  standby  letters of credit  totaling $138.6 million to
     cover potential fundings under various agreements.

6.   STOCKHOLDERS' EQUITY

     Preferred Stock
     The Company is authorized to issue, in one or more series,  up to a maximum
     of 20.0 million  shares of preferred  stock.  The shares can be issued with
     such designations,  preferences,  qualifications,  privileges, limitations,
     restrictions,  options,  conversion  rights  and other  special  or related
     rights as the Company's  board of directors  shall from time to time fix by
     resolution.

     In June 1997, the Company issued the Series B Preferred Stock. The Series B
     Preferred  Stock has a 5.25%  pay-in- kind annual  dividend.  Dividends are
     paid  quarterly  through  the  issuance  of  additional  shares of Series B
     Preferred  Stock (the  "Additional  Shares")  and are  cumulative  from the
     issuance date (except that dividends on the  Additional  Shares will accrue
     from the date such  Additional  Shares are issued).  The Series B Preferred
     Stock,  including the Additional  Shares, is convertible,  at the option of
     the  holder,  into 42.4  million  shares of the  Company's  Class A Special
     Common Stock, subject to adjustment in certain limited circumstances, which
     equals an initial  conversion  price of $11.77 per share,  increasing  as a
     result of the  Additional  Shares to $16.96 per share on June 30, 2004. The
     Series B Preferred Stock is mandatorily redeemable on June 30, 2017, or, at
     the option of the  Company  beginning  on June 30, 2004 or at the option of
     the  holder on June 30,  2004 or on June 30,  2012.  Upon  redemption,  the
     Company,  at its option, may redeem the Series B Preferred Stock with cash,
     Class A  Special  Common  Stock  or a  combination  thereof.  The  Series B
     Preferred  Stock is generally  non-voting.  In December  2000,  the Company
     issued  approximately  38.3  million  shares of its Class A Special  Common
     Stock to the holder in  connection  with the  holder's  election to convert
     $533.6  million at  redemption  value of Series B Preferred  Stock.  As the
     Company intends to redeem the Series B Preferred Stock with Class A Special
     Common  Stock  upon  redemption,  the  Series B  Preferred  Stock  has been
     classified as a component of  stockholders'  equity as of December 31, 2000
     and 1999.

     Common Stock
     The Company's Class A Special Common Stock is generally  nonvoting and each
     share of the Company's  Class A Common Stock is entitled to one vote.  Each
     share of the Company's Class B Common Stock is entitled to fifteen

                                     - 53 -

<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     votes and is convertible,  share for share, into Class A or Class A Special
     Common Stock, subject to certain restrictions.

     Stock Split
     In March 1999, the Company's  board of directors  authorized an increase in
     the number of  authorized  shares of the Company's  Class A Special  Common
     Stock from 500 million shares to 2.5 billion  shares and also  authorized a
     two- for-one  stock split in the form of a 100% stock  dividend (the "Stock
     Split")  payable  in May  1999.  The  dividend  was paid in Class A Special
     Common Stock to the holders of Class A Common,  Class A Special  Common and
     Class B Common Stock. The average number of shares  outstanding and related
     prices,  per share amounts,  share  conversions  and stock option data have
     been retroactively restated to reflect the Stock Split. The Company's board
     of directors  also  eliminated  the  quarterly  cash dividend of $.0117 per
     share on all classes of its common stock.  The last quarterly cash dividend
     was paid in March 1999.

     Repurchase Program
     Based on the  trade  date for stock  repurchases,  during  the years  ended
     December  31,  2000,  1999 and 1998,  the Company  repurchased  9.1 million
     shares,  1.0 million shares and 0.6 million  shares,  respectively,  of its
     common stock for aggregate  consideration of $324.9 million,  $30.7 million
     and  $12.9  million,   respectively,   pursuant  to  its   Board-authorized
     repurchase programs.

     As part of the  repurchase  program,  during the years ended  December  31,
     2000,  1999 and 1998,  the Company  sold Comcast Put Options on 2.0 million
     shares,  5.5 million  shares and 4.0 million  shares of its Class A Special
     Common  Stock,  respectively.  The Comcast Put Options  give the holder the
     right to require the Company to repurchase such shares at specified  prices
     on  specific  dates.  All  Comcast  Put  Options  sold during 1999 and 1998
     expired  unexercised.  Comcast Put Options on 0.7  million  shares  expired
     unexercised  during the fourth  quarter of 2000 with the remaining  Comcast
     Put  Options set to mature on specific  dates  during the first  quarter of
     2001.  The amount the Company would be obligated to pay to repurchase  such
     shares upon exercise of the outstanding Comcast Put Options, totaling $54.6
     million,  was  reclassified  from  additional  capital to common equity put
     options in the Company's December 31, 2000 consolidated  balance sheet. The
     difference  between the  proceeds  from the sale of the Comcast Put Options
     and their estimated fair value was not significant as of December 31, 2000.

     Share Exchanges
     During the years  ended  December  31, 2000 and 1999,  the  Company  issued
     approximately  1.0  million  shares and 4.6  million  shares of its Class A
     Special  Common  Stock,  respectively,  in exchange for  approximately  1.1
     million  shares  and  4.9  million  shares  of its  Class A  Common  Stock,
     respectively. The Class A Common Stock was subsequently retired.

     Stock-Based Compensation Plans
     As of December  31,  2000,  the Company and its  subsidiaries  have several
     stock-based compensation plans for certain employees,  officers,  directors
     and other persons designated by the applicable  compensation  committees of
     the boards of  directors of the Company and its  subsidiaries.  These plans
     are described below.

     Comcast  Option Plans.  The Company  maintains  qualified and  nonqualified
     stock option plans for certain employees, directors and other persons under
     which fixed stock options are granted and the option price is generally not
     less than the fair value of a share of the underlying  stock at the date of
     grant (collectively,  the "Comcast Option Plans"). Under the Comcast Option
     Plans, 59.3 million shares of Class A Special Common Stock were reserved as
     of December 31, 2000. Option terms are generally from five to 10 1/2 years,
     with options  generally  becoming  exercisable  between two and 9 1/2 years
     from the date of grant.


                                     - 54 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     A summary of the  activity  of the Comcast  Option  Plans as of and for the
     years ended December 31, 2000, 1999 and 1998 is presented below (options in
     thousands):

<TABLE>
<CAPTION>
<S>                                      <C>       <C>           <C>         <C>           <C>            <C>

                                              2000                      1999                       1998
                                      ---------------------     ---------------------     -----------------------
                                                  Weighted-                 Weighted-                   Weighted-
                                                   Average                   Average                     Average
                                                  Exercise                  Exercise                    Exercise
                                       Options      Price        Options      Price        Options        Price
                                      ---------  -----------    ---------  -----------    ---------    -----------
     Class A Special Common Stock

     Outstanding at beginning of year    40,416    $16.01        43,002      $11.09        32,220         $7.75

     Granted                             15,300     39.43         7,403       34.16        16,350         16.53

     Exercised                           (4,805)     8.60        (7,527)       6.76        (3,970)         6.60

     Canceled                            (1,293)    25.98        (2,462)      12.90        (1,598)        10.48
                                      ---------               ---------                 ---------
     Outstanding at end of year          49,618     23.69        40,416       16.01        43,002         11.09
                                      =========               =========                 =========
     Exercisable at end of year          13,267     11.35        10,947        8.19        15,390         $7.30
                                      =========               =========                 =========


     Class B Common Stock

     Outstanding at beginning of year                                                         658         $2.85

     Exercised                                                                               (658)         2.85
                                                                                        ---------
     Outstanding at end of year
                                                                                        =========


     Exercisable at end of year
                                                                                        =========
</TABLE>
     The  following  table  summarizes  information  about  the Class A Specia l
     Common  Stock  options  outstanding  under the Comcast  Option  Plans as of
     December 31, 2000 (options in thousands):


<TABLE>
<CAPTION>
<S>                                         <C>         <C>             <C>          <C>          <C>
                                                     Options Outstanding                 Options Exercisable
                                          ------------------------------------------  -------------------------
                                                           Weighted-
                                                            Average       Weighted-                 Weighted-
     Range of                                Number        Remaining       Average      Number       Average
     Exercise                              Outstanding    Contractual     Exercise    Exercisable    Exercise
     Prices                                at 12/31/00       Life           Price     at 12/31/00     Price
     -------------------                  ------------- ---------------  -----------  -----------  ------------
     $4.17 to $10.58                           13,088      3.4 years       $8.26        8,297        $8.14

     $11.00 to $16.94                          12,385      7.3 years      $16.19        4,182       $15.99

     $17.09 to $37.56                          13,066      8.6 years      $31.61          756       $19.42

     $37.75 to $53.13                          11,079      9.3 years      $40.96           32       $46.00
                                          -----------                              ----------
                                               49,618                                  13,267
                                          ===========                              ==========
</TABLE>

     The  weighted-average  fair  value at date of  grant  of a Class A  Special
     Common Stock  option  granted  under the Comcast  Option Plans during 2000,
     1999 and 1998 was $21.20, $20.41 and $8.54, respectively. The fair value of
     each option grant is estimated on the date of grant using the Black-Scholes
     option-pricing  model  with  the  following  weighted-average  assumptions:
     dividend  yield  of  -0-%,   -0-%  and  .44%  for  2000,   1999  and  1998,
     respectively;  expected volatility of 35.8%, 36.1% and 31.3% for 2000, 1999
     and 1998, respectively;  risk-free interest rate of 6.3%, 5.8% and 5.6% for
     2000, 1999 and 1998, respectively;  expected option lives of 8.0 years, 9.9
     years and 9.9 years for 2000, 1999 and 1998, respectively; and a forfeiture
     rate of 3.0% for all years.


                                     - 55 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Subsidiary  Option Plans.  Certain of the Company's  subsidiaries  maintain
     qualified and  nonqualified  combination  stock  option/stock  appreciation
     rights  ("SAR") plans  (collectively,  the "Tandem  Plans") for  employees,
     officers,  directors and other designated persons.  Under the Tandem Plans,
     the option price is generally  not less than the fair value,  as determined
     by an independent  appraisal,  of a share of the underlying common stock at
     the date of grant. If the SAR feature of the Tandem Plans is elected by the
     eligible  participant,  the  participant  receives 75% of the excess of the
     fair value of a share of the  underlying  common  stock  over the  exercise
     price of the option to which it is attached at the  exercise  date.  Option
     holders  have stated an  intention  not to exercise  the SAR feature of the
     Tandem Plans.  Because the exercise of the option  component is more likely
     than the  exercise  of the SAR  feature,  compensation  expense is measured
     based on the stock option  component.  Under the Tandem  Plans,  option/SAR
     terms are ten years  from the date of grant,  with  options/SARs  generally
     becoming exercisable over four to five years from the date of grant.

     The QVC Tandem Plan is the most  significant  of the Tandem Plans.  Summary
     information  related to the QVC Tandem Plan as of December 31,  2000,  1999
     and 1998 is presented below (options/SARs in thousands):


<TABLE>
<CAPTION>
<S>                                                              <C>            <C>             <C>
                                                                   2000            1999           1998
                                                                -----------     ----------     -----------

Options/SARs outstanding at end
   of year......................................................        219            200             206
                                                                ===========     ==========     ===========
Weighted-average exercise price of
   options/SARs outstanding
   at end of year...............................................    $789.51        $618.02         $500.82
                                                                ===========     ==========     ===========
Options/SARs exercisable at end
   of year......................................................         79             80              37
                                                                ===========     ==========     ===========

Weighted-average exercise price
   of options/SARs exercisable
   at end of year...............................................    $606.92        $505.86         $397.46
                                                                ===========     ==========     ===========
</TABLE>


     As of the latest  valuation  date,  the fair value of a share of QVC Common
Stock was $1,216.00.

                                     - 56 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Had  compensation  expense  for the  Company's  aforementioned  stock-based
     compensation  plans  been  determined  based on the fair value at the grant
     dates for awards  under those plans under the  provisions  of SFAS No. 123,
     the Company's net income and net income per share would have changed to the
     pro forma amounts  indicated  below (dollars in millions,  except per share
     data):


<TABLE>
<CAPTION>
<S>                                                                <C>              <C>               <C>
                                                                    2000             1999            1998
                                                                 ----------       ----------      ----------
     Net income  - As reported.................................    $2,021.5         $1,065.7          $972.1
     Net income  - Pro forma...................................     1,918.1          1,005.5           936.4

     Net income  for common stockholders -
          As reported..........................................    $1,998.0         $1,036.0          $943.0
     Net income  for common stockholders -
          Pro forma............................................     1,894.6            975.8           907.3

     Basic earnings  for common stockholders
          per common share - As reported.......................       $2.24            $1.38           $1.29
     Basic earnings  for common stockholders
          per common share - Pro forma.........................        2.13             1.30            1.24

     Diluted earnings  for common stockholders
          per common share - As reported.......................       $2.13            $1.30           $1.21
     Diluted earnings  for common stockholders
          per common share - Pro forma.........................        2.02             1.23            1.17
</TABLE>


     The pro forma  effect on net  income and net income per share for the years
     ended December 31, 2000,  1999 and 1998 by applying SFAS No. 123 may not be
     indicative  of the pro forma  effect on net income or loss in future  years
     since SFAS No. 123 does not take into  consideration pro forma compensation
     expense  related  to  awards  made  prior to  January  1,  1995  and  since
     additional awards in future years are anticipated.

     Other Stock-Based Compensation Plans
     The Company  maintains a restricted  stock program  under which  management
     employees may be granted restricted shares of the Company's Class A Special
     Common Stock. The shares awarded vest annually, generally over a period not
     to exceed five years from the date of the award,  and do not have voting or
     dividend rights until vesting occurs.  At December 31, 2000, there were 1.2
     million unvested shares granted under the program,  of which 728,000 vested
     in January 2001.  During the years ended December 31, 2000,  1999 and 1998,
     504,000,  170,000  and  656,000  shares  were  granted  under the  program,
     respectively,  with a  weighted-average  grant date market value of $37.80,
     $43.22 and $17.33 per share, respectively.  Compensation expense recognized
     during the years ended December 31, 2000,  1999 and 1998 under this program
     was $9.2 million, $4.7 million and $5.3 million, respectively.

     Certain of the Company's subsidiaries have SAR plans for certain employees,
     officers,  directors  and other  persons (the "SAR  Plans").  Under the SAR
     Plans,  eligible  participants are entitled to receive a cash payment equal
     to  100% of the  excess,  if  any,  of the  fair  value  of a share  of the
     underlying  common stock at the exercise date over the fair value of such a
     share at the grant date. The SARs have a term of ten years from the date of
     grant  and  become  exercisable  over four to five  years  from the date of
     grant.  Compensation expense related to the SAR Plans of $2.2 million, $6.4
     million and $14.8 million was recorded  during the years ended December 31,
     2000,  1999 and 1998,  respectively.  Compensation  expense during the year
     ended December 31, 1998 included $11.6 million  related to the  termination
     of a subsidiary SAR Plan.


                                     - 57 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


7.   INCOME TAXES

     The  Company   joins  with  its  80%  or  more  owned   subsidiaries   (the
     "Consolidated  Group") in filing  consolidated  federal income tax returns.
     QVC and E! Entertainment,  each file separate  consolidated  federal income
     tax returns. Income tax expense consists of the following components:

<TABLE>
<CAPTION>
<S>                                                                       <C>           <C>            <C>
                                                                              Year Ended December 31,
                                                                         2000           1999           1998
                                                                       ---------      --------       --------
                                                                               (Dollars in millions)

     Current expense
     Federal.........................................................     $321.4        $606.7         $135.5
     State...........................................................       42.8         188.4           27.5
     Foreign.........................................................        2.5           2.0
                                                                       ---------      --------       --------
                                                                           366.7         797.1          163.0
                                                                       ---------      --------       --------

     Deferred expense (benefit)
     Federal.........................................................      998.6         (65.2)         424.6
     State...........................................................       76.0          (8.2)           6.4
                                                                       ---------      --------       --------
                                                                         1,074.6         (73.4)         431.0
                                                                       ---------      --------       --------
     Income tax expense..............................................   $1,441.3        $723.7         $594.0
                                                                       =========      ========       ========

     The effective  income tax expense of the Company differs from the statutory
     amount because of the effect of the following items:


                                                                              Year Ended December 31,
                                                                         2000           1999           1998
                                                                       ---------      --------       --------
                                                                               (Dollars in millions)
                                                                                      --------       --------

     Federal tax at statutory rate...................................   $1,260.6        $525.0         $545.1
     Non-deductible depreciation and amortization....................      102.1          49.8           41.0
     State income taxes, net of federal benefit......................       77.2         117.1           22.0
     Foreign (income) losses and equity in net losses of affiliates..        8.0          (2.0)         (11.2)
     Other...........................................................       (6.6)         33.8           (2.9)
                                                                       ---------      --------       --------

     Income tax expense..............................................   $1,441.3        $723.7         $594.0
                                                                       =========      ========       ========
</TABLE>


                                     - 58 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Significant  components  of the Company's net deferred tax liability are as
follows:


<TABLE>
<CAPTION>
<S>                                                                       <C>              <C>
                                                                              December 31,
                                                                         2000             1999
                                                                       ---------        ---------
                                                                         (Dollars in millions)
                                                                                        ---------

     Deferred tax assets:
        Net operating loss carryforwards........................          $289.8           $240.0
        Reserves for bad debts and obsolete inventory...........           109.0            106.9
        Differences between book and tax basis of
          indexed debt securities...............................                            223.1
        Other...................................................           163.5            153.5
        Less: Valuation allowance...............................                           (178.2)
                                                                       ---------        ---------
                                                                           562.3            545.3
                                                                       ---------        ---------

     Deferred tax liabilities:
        Temporary differences, principally book and tax basis
          of property and equipment and deferred charges........         5,234.8          1,854.5
        Differences between book and tax basis
          in investments........................................         1,838.2          3,959.9
        Differences between book and tax basis of
          indexed debt securities...............................            65.9
                                                                       ---------        ---------
                                                                         7,138.9          5,814.4
                                                                       ---------        ---------
     Net deferred tax liability.................................        $6,576.6         $5,269.1
                                                                       =========        =========
</TABLE>

     The Company  recorded  $3.308 billion of deferred income tax liabilities in
     2000  in  connection  with  acquisitions   principally   related  to  basis
     differences  in property and  equipment and deferred  charges.  The Company
     recorded  ($3.055)  billion,  $2.730 billion and $489.4 million of deferred
     income  taxes in 2000,  1999 and 1998,  respectively,  in  connection  with
     unrealized  (losses) gains on marketable  securities  which are included in
     other comprehensive income.

     The Company has recorded net deferred tax liabilities of $789.9 million and
     $2.119 billion, as of December 31, 2000 and 1999, respectively,  which have
     been  included  in  current  liabilities,   related  primarily  to  current
     investments.   The  Company  has  net  operating  loss   carryforwards   of
     approximately  $470.0  million  which expire  primarily in periods  through
     2019.

8.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION

     The Company  made cash  payments  for  interest of $705.8  million,  $529.2
     million and $418.9 million  during the years ended December 31, 2000,  1999
     and 1998, respectively.

     The Company made cash payments for income taxes of $669.0  million,  $190.5
     million and $129.2 million  during the years ended December 31, 2000,  1999
     and 1998,  respectively.  The current tax  payments  principally  relate to
     capital gains on security transactions,  liquidated damages, and the income
     attributable to QVC.

     During the year ended  December 31, 2000,  the Company  acquired all of the
     capital  stock and/or  partnership  interests not  previously  owned by the
     Company of Lenfest, Garden State Cable, Jones Intercable, Prime and Comcast
     MHCP,  principally  through the issuance of the  Company's  Class A Special
     Common Stock and the  conversion  of  convertible  notes.  In addition,  on
     December 31, 2000, the Company completed its cable systems

                                     - 59 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     exchange  with  AT&T  (see  Note 3).  The fair  values  of the  assets  and
     liabilities acquired by the Company during the year ended December 31, 2000
     are presented as follows (in millions):


          Current assets...............................           $198.1
          Investments..................................            437.3
          Property, plant & equipment..................          1,030.9
          Deferred charges.............................         14,558.6
          Current liabilities..........................           (282.4)
          Long-term debt...............................         (2,146.5)
          Deferred income taxes........................         (3,308.0)
                                                            ------------
               Net assets acquired.....................        $10,488.0
                                                            ============

9.   COMMITMENTS AND CONTINGENCIES

     Commitments
     The Company and the owners of the 34%  interest in Comcast  Spectacor  that
     the  Company  does not own (the  "Minority  Group")  each have the right to
     initiate an "exit"  process  under  which the fair market  value of Comcast
     Spectacor would be determined by appraisal.  Following such  determination,
     the  Company  would  have the option to acquire  the  interests  in Comcast
     Spectacor  owned by the Minority  Group based on the appraised  fair market
     value.  In the event the Company did not exercise this option,  the Company
     and the Minority  Group would then be required to use their best efforts to
     sell Comcast Spectacor.

     The Walt Disney Company ("Disney"),  in certain circumstances,  is entitled
     to cause Comcast  Entertainment  Holdings LLC  ("Entertainment  Holdings"),
     which is owned  50.1% by the  Company  and  49.9% by  Disney,  to  purchase
     Disney's entire interest in Entertainment  Holdings at its then fair market
     value (as determined by an appraisal  process).  If Entertainment  Holdings
     elects not to purchase  Disney's  interests,  Disney has the right,  at its
     option,  to purchase either the Company's  entire interest in Entertainment
     Holdings  or all  of the  shares  of  stock  of E!  Entertainment  held  by
     Entertainment Holdings in each case at fair market value. In the event that
     Disney  exercises its rights,  as described  above, a portion or all of the
     Disney  Notes  (see Note 5) may be  replaced  with a three year note due to
     Disney.

     Liberty Media Group ("Liberty"),  a majority owned subsidiary of AT&T, may,
     at certain times,  trigger the exercise of certain exit rights with respect
     to its investment in QVC. If the exit rights are triggered, the Company has
     first right to purchase the stock in QVC held by Liberty at  Liberty's  pro
     rata  portion of the fair market value (on a going  concern or  liquidation
     basis,  whichever is higher, as determined by an appraisal process) of QVC.
     The Company may pay  Liberty for such stock,  subject to certain  rights of
     Liberty  to  consummate  the  purchase  in the most tax-  efficient  method
     available,  in cash, the Company's  promissory  note maturing not more than
     three  years  after  issuance,  the  Company's  equity  securities  or  any
     combination thereof. If the Company elects not to purchase the stock of QVC
     held by Liberty,  then  Liberty  will have a similar  right to purchase the
     stock of QVC held by the  Company.  If Liberty  elects not to purchase  the
     stock of QVC held by the  Company,  then  Liberty and the Company  will use
     their best efforts to sell QVC.




                                     - 60 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


     Minimum  annual  rental   commitments  for  office  space,   equipment  and
     transponder service agreements under noncancellable  operating leases as of
     December 31, 2000 are as follows:
                                                           (Dollars
                                                          in millions)
                                                          ------------

              2001........................................   $73.0
              2002........................................    59.7
              2003........................................    55.9
              2004........................................    50.8
              2005........................................    41.5
              Thereafter..................................   228.0

     Rental expense of $76.7 million,  $71.1 million and $64.8 million for 2000,
     1999 and 1998, respectively, has been charged to operations.

     Contingencies
     The Company is subject to legal  proceedings  and claims which arise in the
     ordinary course of its business.  In the opinion of management,  the amount
     of ultimate  liability  with respect to these  actions will not  materially
     affect the  financial  position,  results of operations or liquidity of the
     Company.

     In  connection  with a license  awarded  to an  affiliate,  the  Company is
     contingently  liable in the event of  nonperformance  by the  affiliate  to
     reimburse a bank which has provided a performance guarantee.  The amount of
     the  performance  guarantee  is  approximately  $500  million;  however the
     Company's  current  estimate of the amount of expenditures  (principally in
     the  form of  capital  expenditures)  that  will  be made by the  affiliate
     necessary to comply with the performance  requirements will not exceed $150
     million.



                                     - 61 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (Continued)


10.  FINANCIAL DATA BY BUSINESS SEGMENT

     The following  represents  the  Company's  significant  business  segments,
     "Cable" and "Commerce." The components of net income (loss) below operating
     income (loss) are not separately evaluated by the Company's management on a
     segment  basis (see the  Company's  consolidated  statement of  operations)
     (dollars in millions).

<TABLE>
<CAPTION>
<S>                                                                        <C>          <C>             <C>        <C>
                                                                                                      Corporate
                                                                             Cable       Commerce     and Other(1)    Total
                                                                            --------     --------     -----------   --------
   2000
   Revenues ............................................................    $4,185.0     $3,535.9        $497.7     $8,218.6
   Operating income (loss) before depreciation and amortization (2) ....     1,899.6        619.2         (48.5)     2,470.3
   Depreciation and amortization .......................................     2,417.7        125.9          87.7      2,631.3
   Operating income (loss) .............................................      (518.1)       493.3        (136.2)      (161.0)
   Interest expense ....................................................       515.7         34.9         140.8        691.4
   Assets ..............................................................    25,750.3      2,503.0       7,491.2     35,744.5
   Long-term debt ......................................................     6,711.0        302.0       3,504.4     10,517.4
   Capital expenditures ................................................     1,248.1        155.9         232.8      1,636.8
   1999
   Revenues ............................................................    $2,929.3     $3,167.4        $432.5     $6,529.2
   Operating income (loss) before depreciation and amortization (2) ....     1,353.0        538.8         (11.8)     1,880.0
   Depreciation and amortization .......................................     1,026.6        117.2          72.2      1,216.0
   Operating income (loss) .............................................       326.4        421.6         (84.0)       664.0
   Interest expense ....................................................       353.0         39.6         145.7        538.3
   Assets ..............................................................    10,855.3      2,243.6      15,586.7     28,685.6
   Long-term debt ......................................................     4,735.3        476.7       3,495.2      8,707.2
   Capital expenditures ................................................       739.6         80.1          74.1        893.8
   1998
   Revenues ............................................................    $2,277.4     $2,676.4        $465.2     $5,419.0
   Operating income (loss) before depreciation and amortization (2) ....     1,096.6        434.2         (34.1)     1,496.7
   Depreciation and amortization .......................................       674.2        126.1         139.3        939.6
   Operating income (loss) .............................................       422.4        308.1        (173.4)       557.1
   Interest expense ....................................................       223.6         51.1         192.0        466.7
   Assets ..............................................................     6,449.4      2,101.8       6,159.3     14,710.5
   Long-term debt ......................................................     3,462.1        626.8       1,375.3      5,464.2
   Capital expenditures ................................................       711.1         67.2         120.6        898.9

<FN>
--------------
(1)  Other includes  segments not meeting  certain  quantitative  guidelines for
     reporting.   Other   includes   certain   operating   businesses   such  as
     Comcast-Spectacor,   E!  Entertainment,  the  Company's  domestic  wireline
     telecommunications  and international  wireless  operations,  the Company's
     consolidated UK cable and  telecommunications  operations (prior to October
     29,  1998),  the  Company's  DBS  operations  (prior to April 1,  1998) and
     elimination entries related to the segments presented.  Corporate and other
     assets consist primarily of the Company's investments (see Note 4).
(2)  Operating  income (loss) before  depreciation  and amortization is commonly
     referred to in the Company's businesses as "operating cash flow (deficit)."
     Operating cash flow is a measure of a company's ability to generate cash to
     service its obligations, including debt service obligations, and to finance
     capital and other expenditures. In part due to the capital intensive nature
     of the Company's businesses and the resulting significant level of non-cash
     depreciation  and amortization  expense,  operating cash flow is frequently
     used  as  one  of the  bases  for  comparing  businesses  in the  Company's
     industries,  although the Company's  measure of operating cash flow may not
     be comparable to similarly  titled measures of other  companies.  Operating
     cash flow is the primary basis used by the Company's  management to measure
     the operating  performance of its businesses.  Operating cash flow does not
     purport  to  represent  net  income  or  net  cash  provided  by  operating
     activities,  as those terms are defined under generally accepted accounting
     principles,  and  should  not  be  considered  as an  alternative  to  such
     measurements as an indicator of the Company's performance.
</FN>
</TABLE>

                                     - 62 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 and 1998 (Concluded)

11.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                                                 <C>         <C>        <C>          <C>         <C>
                                                                     First      Second      Third       Fourth       Total
                                                                    Quarter     Quarter    Quarter   Quarter (3)     Year
                                                                    -------     -------    -------   ----------      ----
                                                                            (Dollars in millions, except per share data)
   2000 (1)
   Revenues .....................................................   $1,938.9    $1,912.1   $1,960.0     $2,407.6    $8,218.6
   Operating income before depreciation and amortization (2) ....      586.9       602.8      605.7        674.9     2,470.3
   Operating income (loss) ......................................       41.2       (31.6)     (56.4)      (114.2)     (161.0)
   Income (loss) from continuing operations
            before extraordinary items ..........................     (186.4)      198.8    1,249.1        783.6     2,045.1
   Basic earnings (loss) for common
            stockholders per common share
     Income (loss) from continuing operations
            before extraordinary items ..........................       (.23)        .21       1.37          .87        2.27
     Net income (loss) ..........................................       (.24)        .20       1.37          .86        2.24
   Diluted earnings (loss) for common
            stockholders per common share
     Income (loss) from continuing operations
            before extraordinary items ..........................       (.23)        .20       1.29          .81        2.16
     Net income (loss) ..........................................       (.24)        .19       1.29          .80        2.13

   1999 (1)
   Revenues .....................................................   $1,446.7    $1,549.2   $1,599.3     $1,934.0    $6,529.2
   Operating income before depreciation and amortization (2) ....      425.1       457.3      463.9        533.7     1,880.0
   Operating income .............................................      186.6       149.8      151.0        176.6       664.0
   Income (loss) from continuing operations
            before extraordinary items ..........................      101.8       826.3       20.4       (167.6)      780.9
   Basic earnings (loss) for common
            stockholders per common share
     Income (loss) from continuing operations
            before extraordinary items ..........................        .13        1.10        .02         (.23)       1.00
     Net income (loss) ..........................................        .10        1.10        .44         (.24)       1.38
   Diluted earnings (loss) for common
            stockholders per common share
     Income (loss) from continuing operations
            before extraordinary items ..........................        .12        1.01        .03         (.23)        .95
     Net income (loss) ..........................................        .10        1.01        .41         (.24)       1.30
<FN>
--------------
(1)  Results of operations for 2000 were affected by the Lenfest  Acquisition in
     the first quarter,  the Prime  Acquisition  and the gain  recognized on the
     Excite@Home  transaction in the third  quarter,  the gain on the AT&T cable
     systems exchange in the fourth quarter and the ZONES fair value adjustments
     throughout  2000 (see Notes 3 and 5).  Results of operations  for 1999 were
     affected by the acquisition of a controlling  interest in Jones  Intercable
     and the receipt of the MediaOne  termination  fee in the second quarter and
     the ZONES fair value adjustment in the fourth quarter (see Notes 3 and 5).
(2)  See Note 10, note 2.
(3)  The Company's  consolidated results of operations for the fourth quarter of
     2000 and  1999  are  also  affected  by the  seasonality  of the  Company's
     commerce operations.
</FN>
</TABLE>


                                     - 63 -

<PAGE>



ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
       FINANCIAL DISCLOSURE

     None.

                                    PART III

     The information  called for by Item 10, Directors and Executive Officers of
the Registrant (except for the information  regarding  executive officers called
for by Item 401 of Regulation  S-K which is included in Part I hereof as Item 4A
in accordance with General  Instruction G(3)), Item 11, Executive  Compensation,
Item 12, Security  Ownership of Certain  Beneficial  Owners and Management,  and
Item 13, Certain Relationships and Related Transactions,  is hereby incorporated
by  reference  to our  definitive  Proxy  Statement  for our  Annual  Meeting of
Shareholders  presently  scheduled to be held in June 2001, which shall be filed
with the  Securities and Exchange  Commission  within 120 days of the end of our
latest fiscal year.



















                                     - 64 -

<PAGE>



                                     PART IV

ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) The following consolidated financial statements of ours are included in
Part II, Item 8:

           Independent Auditors' Report.................................31
           Consolidated Balance Sheet--December 31, 2000 and 1999.......32
           Consolidated Statement of Operations--Years
             Ended December 31, 2000, 1999 and 1998.....................33
           Consolidated Statement of Cash Flows--Years
             Ended December 31, 2000, 1999 and 1998.....................34
           Consolidated Statement of Stockholders' Equity--
             Years Ended December 31, 2000, 1999 and 1998...............35
           Notes to Consolidated Financial Statements...................36

     (b) (i) The following  financial  statement  schedules  required to be
         filed by Items 8 and 14(d) of Form 10-K are included in Part IV:

         Schedule I - Condensed Financial Information of Registrant
                 Unconsolidated (Parent Only)
         Schedule II - Valuation and Qualifying Accounts

         All other schedules are omitted  because they are not  applicable,  not
         required or the required  information  is included in the  consolidated
         financial statements or notes thereto.

     (c) Reports on Form 8-K:

         None.

     (d) Exhibits required to be filed by Item 601 of Regulation S-K:

          3.1(a)     Amended and  Restated  Articles of  Incorporation  filed on
                     July 24, 1990  (incorporated by reference to Exhibit 3.1(a)
                     to our  Annual  Report  on Form  10-K  for the  year  ended
                     December 31, 1995).
          3.1(b)     Amendment to Restated  Articles of  Incorporation  filed on
                     July 14, 1994  (incorporated by reference to Exhibit 3.1(b)
                     to our  Annual  Report  on Form  10-K  for the  year  ended
                     December 31, 1995).
          3.1(c)     Amendment to Restated  Articles of  Incorporation  filed on
                     July 12, 1995  (incorporated by reference to Exhibit 3.1(c)
                     to our  Annual  Report  on Form  10-K  for the  year  ended
                     December 31, 1995).
          3.1(d)     Amendment to Restated  Articles of  Incorporation  filed on
                     June 24, 1996  (incorporated by reference to Exhibit 4.1(d)
                     to our  Registration  Statement  on Form S-3,  as  amended,
                     filed on July 16, 1996).
          3.1(e)     Form of Statement of  Designations,  Preferences and Rights
                     of  Series B  Convertible  Preferred  Stock of the  Company
                     (incorporated  by reference to Exhibit 3.1 to our Quarterly
                     Report on Form 10-Q for the quarter ended June 30, 1997).
          3.1(f)     Amendment to Restated Articles of Incorporation.
          3.2        Amended and Restated By-Laws  (incorporated by reference to
                     Exhibit  3.1 to our  Quarterly  Report on Form 10-Q for the
                     quarter ended March 31, 1999).
          4.1        Specimen Class A Common Stock Certificate  (incorporated by
                     reference to Exhibit 2(a) to our Registration  Statement on
                     Form S-7 filed on September 17, 1980).
          4.2        Specimen   Class  A  Special   Common   Stock   Certificate
                     (incorporated  by  reference  to Exhibit 4(2) to our Annual
                     Report on Form 10-K for the year ended December 31, 1986).
          4.3        Indenture,  dated  as of  October  17,  1991,  between  the
                     Company and Bank of  Montreal/Harris  Trust  (successor  to
                     Morgan  Guaranty  Trust  Company of New  York),  as Trustee
                     (incorporated  by  reference  to  Exhibit 2 to our  Current
                     Report on Form 8-K filed on October 31, 1991).

                                     - 65 -

<PAGE>



          4.4        Form  of   Debenture   relating  to  our   10-1/4%   Senior
                     Subordinated Debentures due 2001 (incorporated by reference
                     to Exhibit  4(19) to our Annual Report on Form 10-K for the
                     year ended December 31, 1991).
          4.5        Form of  Debenture  relating  to our  $300,000,000  10-5/8%
                     Senior  Subordinated  Debentures due 2012  (incorporated by
                     reference  to Exhibit  4(17) to our  Annual  Report on Form
                     10-K for the year ended December 31, 1992).
          4.6        Indenture,  dated as of February 20,  1991,  between us and
                     Bankers  Trust  Company,   as  Trustee   (incorporated   by
                     reference to Exhibit 4.3 to our  Registration  Statement on
                     Form S-3, filed on January 11, 1990).
          4.7        Form of Debenture relating to our $1,477,750,000  Principal
                     Amount at Maturity of Zero  Coupon  Convertible  Debentures
                     due 2020.
          10.1*      Comcast  Corporation 1986 Non-Qualified  Stock Option Plan,
                     as  amended  and  restated,  effective  December  10,  1996
                     (incorporated  by  reference  to Exhibit 10.3 to our Annual
                     Report on Form 10-K for the year ended December 31, 1996).
          10.2*      Comcast  Corporation 1987 Stock Option Plan, as amended and
                     restated,  effective  December  15, 1998  (incorporated  by
                     reference to Exhibit 10.2 to our Annual Report on Form 10-K
                     for the year ended December 31, 1998).
          10.3*      Comcast  Corporation 1996 Stock Option Plan, as amended and
                     restated,   effective  June  21,  1999   (incorporated   by
                     reference to Exhibit 10.1 to our  Quarterly  Report on Form
                     10-Q for the quarter ended June 30, 1999).
          10.4*      Comcast  Corporation  1996 Deferred  Compensation  Plan, as
                     amended and restated, effective December 19, 2000.
          10.5*      Comcast  Corporation 1990 Restricted Stock Plan, as amended
                     and  restated,  effective  June 21, 1999  (incorporated  by
                     reference to Exhibit 10.3 to our  Quarterly  Report on Form
                     10-Q for the quarter ended June 30, 1999).
          10.6*      1992 Executive Split Dollar Insurance Plan (incorporated by
                     reference  to Exhibit  10(12) to our Annual  Report on Form
                     10-K for the year ended December 31, 1992).
          10.7*      Comcast  Corporation  1996 Cash Bonus Plan,  as amended and
                     restated, effective December 19, 2000.
          10.8*      Comcast  Corporation  1996  Executive  Cash Bonus Plan,  as
                     amended and restated, effective December 19, 2000.
          10.9*      Compensation  and  Deferred  Compensation  Agreement by and
                     between  Comcast  Corporation  and  Ralph  J.  Roberts,  as
                     amended and restated  (incorporated by reference to Exhibit
                     10.2 to our  Quarterly  Report on Form 10-Q for the quarter
                     ended March 31, 2000).
          10.10*     Compensation  Agreement by and between Comcast  Corporation
                     and Brian L. Roberts  (incorporated by reference to Exhibit
                     10.1 to our  Quarterly  Report on Form 10-Q for the quarter
                     ended March 31, 2000).
          10.11      The  Comcast  Corporation  Retirement-Investment  Plan,  as
                     amended and restated  (incorporated by reference to Exhibit
                     10.3 to our  Quarterly  Report on Form 10-Q for the quarter
                     ended March 31, 2000).
          10.12      Defined Contribution Plans Master Trust Agreement,  between
                     Comcast Corporation and State Street Bank and Trust Company
                     (incorporated   by   reference   to  Exhibit  10.2  to  our
                     Registration  Statement  on Form S-8  filed on  October  5,
                     1995).
          10.13      Tax Sharing Agreement,  dated as of December 2, 1992, among
                     Storer  Communications,  Inc., TKR Cable I, Inc., TKR Cable
                     II, Inc., TKR Cable III, Inc.,  AT&T Corp. (as successor to
                     Tele-Communications,  Inc.),  the  Company  and each of the
                     Departing   Subsidiaries   that  are  signatories   thereto
                     (incorporated  by  reference  to  Exhibit 4 to our  Current
                     Report on Form 8-K filed on December 17,  1992,  as amended
                     by Form 8 filed January 8, 1993).
          10.14*     Comcast  Corporation  1997  Deferred  Stock Option Plan, as
                     amended and restated, effective December 19, 2000.

----------
* Constitutes a management contract or compensatory plan or arrangement.


                                     - 66 -
<PAGE>



          10.15      Amended and Restated  Stockholders  Agreement,  dated as of
                     February 9, 1995, among the Company, Comcast QVC, Inc., QVC
                     Programming Holdings, Inc., Liberty Media Corporation,  QVC
                     Investment,  Inc. and Liberty QVC,  Inc.  (incorporated  by
                     reference to Exhibit 10.5 to our  Quarterly  Report on Form
                     10-Q for the quarter ended March 31, 1995).

          10.16(a)   Credit Agreement, dated as of February 15, 1995, among QVC,
                     Inc.  and  the  Banks  listed  therein   (incorporated   by
                     reference  to  Exhibit  (b)(6) to  Amendment  No. 21 to the
                     Tender Offer  Statement on Schedule 14D-1 filed on February
                     17, 1995 by QVC Programming Holdings, Inc., the Company and
                     AT&T Corp. (as successor to Tele-Communications, Inc.) with
                     respect to the tender offer for all  outstanding  shares of
                     QVC, Inc.).

          10.16(b)** Amendment  No. 3, dated as of July 19, 1996,  to the Credit
                     Agreement,  dated as of February 15, 1995,  among QVC, Inc.
                     and the Banks listed therein.
          10.17      Indenture  dated as of May 1, 1997,  between  Comcast Cable
                     Communications, Inc. and The Bank of New York (as successor
                     in interest to Bank of Montreal Trust Company), as Trustee,
                     in respect of Comcast Cable  Communications,  Inc.'s 8-1/8%
                     Notes due 2004,  8-3/8%  Notes due 2007,  8-7/8%  Notes due
                     2017,  8-1/2% Notes due 2027, 6.20% Notes due 2008,  6.375%
                     Notes due 2006 and 6.75%  Notes due 2011  (incorporated  by
                     reference to Exhibit 4.1(a) to the  Registration  Statement
                     on Form S-4 of Comcast Cable Communications, Inc.).
          10.18      Purchase  and Sale  Agreement  dated as of January 19, 1999
                     among SBC  Communications  Inc.,  Comcast Cellular Holdings
                     Corporation,  Comcast  Financial  Corporation  and  Comcast
                     Corporation  (incorporated by reference to Exhibit 10.34 to
                     our Annual Report on Form 10-K for the year ended  December
                     31, 1998).
          10.19      Agreement  and Plan of  Merger,  dated as of  November  16,
                     1999,  by  and  among  Comcast  Corporation,   Comcast  LCI
                     Holdings,  Inc.,  a wholly  owned  subsidiary  of  Comcast,
                     Lenfest  Communications,  Inc.  ("Lenfest")  and  Lenfest's
                     stockholders as named therein.  (incorporated  by reference
                     to Exhibit 10.1 to our Current  Report on Form 8-K filed on
                     December 13, 1999).
          10.20      Asset  Exchange  Agreement,  dated as of August  11,  2000,
                     among AT&T Corp. and Comcast  Corporation  (incorporated by
                     reference to Exhibit 10.1 to our  Quarterly  Report on Form
                     10-Q for the quarter ended September 30, 2000).
          10.21      Agreement  and Plan of  Reorganization,  dated as of August
                     11,  2000,   among  Comcast   Corporation,   Comcast  Cable
                     Communications,   Inc.,   Comcast  CCCI  II,  LLC,  Comcast
                     Teleport,    Inc.,   Comcast   Heritage,    Inc.,   Comcast
                     Communications    Properties,    Inc.,    and   AT&T   Corp
                     (incorporated by reference to Exhibit 10.2 to our Quarterly
                     Report on Form 10-Q for the  quarter  ended  September  30,
                     2000).
          10.22      Five-Year  Revolving Credit  Agreement,  dated as of August
                     24, 2000, among Comcast Cable Communications,  Inc. and the
                     Financial   Institutions  Party  Hereto,  Banc  of  America
                     Securities  LLC and Chase  Securities  Inc.,  as Joint Lead
                     Arrangers  and Joint Book  Managers,  BNY Capital  Markets,
                     Inc. and Salomon Smith Barney Inc., as  Co-Arrangers,  Bank
                     of  America,  N.A.,  as  Administrative  Agent,  Swing Line
                     Lender  and  Letter  of  Credit   Issuing   Lender,   Chase
                     Securities  Inc., as Syndication  Agent and Citibank,  N.A.
                     and  The  Bank of New  York,  as Co-  Documentation  Agents
                     (incorporated  by  reference to Exhibit 10.4 to the Comcast
                     Cable  Communications,  Inc.  Quarterly Report on Form 10-Q
                     for the quarter ended September 30, 2000).
          10.23      364-Day Revolving Credit Agreement,  dated as of August 24,
                     2000,  among  Comcast  Cable  Communications,  Inc. and the
                     Financial   Institutions  Party  Hereto,  Banc  of  America
                     Securities  LLC and Chase  Securities  Inc.,  as Joint Lead
                     Arrangers  and Joint Book  Managers,  BNY Capital  Markets,
                     Inc. and Salomon Smith Barney Inc., as  Co-Arrangers,  Bank
                     of America, N.A., as Administrative Agent, Chase Securities
                     Inc., as Syndication Agent and Citibank,  N.A. and The Bank
                     of New York, as  Co-Documentation  Agents  (incorporated by
                     reference   to   Exhibit   10.5   to  the   Comcast   Cable
                     Communications,  Inc. Quarterly Report on Form 10-Q for the
                     quarter ended September 30, 2000).

----------
** Pursuant to Item  601(b)(4)(iii)(A)  of Regulation S-K, the Registrant agrees
to furnish a copy of the referenced agreement to the Commission upon request.

                                     - 67 -

<PAGE>



          10.24      Asset  Exchange  Closing  Agreement  dated as of January 1,
                     2001  among  Comcast  Corporation,   the  Comcast  Parties,
                     Adelphia   Communications   Corporation  and  the  Adelphia
                     Parties.
          21         List of Subsidiaries.
          23.1       Consent of Deloitte & Touche LLP.
          23.2       Consent of KPMG LLP.
          99.1       Report of Independent  Public  Accountants to QVC, Inc. for
                     the year ended December 31, 1998.









                                     - 68 -

<PAGE>



                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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  in  Philadelphia,
Pennsylvania on March 2, 2001.


                                            By:   /s/ Brian L. Roberts
                                                  ------------------------------
                                                  Brian L. Roberts
                                                  President and Director




Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
     Signature                                   Title                               Date
     ---------                                   -----                               ----

<S>                           <C>                                                <C>
/s/ Ralph J. Roberts          Chairman of the Board of Directors; Director           March 2, 2001
--------------------------
Ralph J. Roberts

/s/ Julian A. Brodsky           Vice Chairman of the Board of Directors;             March 2, 2001
--------------------------                     Director
Julian A. Brodsky

/s/ Brian L. Roberts            President; Director (Principal Executive             March 2, 2001
--------------------------                     Officer)
Brian L. Roberts

/s/ John R. Alchin                Executive Vice President, Treasurer                March 2, 2001
--------------------------            (Principal Financial Officer)
John R. Alchin

/s/ Lawrence J. Salva                   Senior Vice President                        March 2, 2001
--------------------------         (Principal Accounting Officer)
Lawrence J. Salva

/s/ Sheldon M. Bonovitz                         Director                             March 2, 2001
--------------------------
Sheldon M. Bonovitz

/s/ Joseph L. Castle II                         Director                             March 2, 2001
--------------------------
Joseph L. Castle II

/s/ Felix G. Rohatyn                            Director                             March 2, 2001
--------------------------
Felix G. Rohatyn

/s/ Bernard C. Watson                           Director                             March 2, 2001
--------------------------
Bernard C. Watson

/s/ Irving A. Wechsler                          Director                             March 2, 2001
--------------------------
Irving A. Wechsler

/s/ Anne Wexler                                 Director                             March 2, 2001
--------------------------
Anne Wexler
</TABLE>


                                               - 69 -

<PAGE>



                               COMCAST CORPORATION AND SUBSIDIARIES
                               ------------------------------------

                          SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF
                          -----------------------------------------------

                              REGISTRANT UNCONSOLIDATED (PARENT ONLY)
                              ---------------------------------------

                                      CONDENSED BALANCE SHEET

                                 (In millions, except share data)


<TABLE>
<CAPTION>
<S>                                                                                 <C>

                                                                                     December 31,
ASSETS                                                                                   1999
------                                                                                ----------
   Cash and cash equivalents.............................................                   $8.6
   Other current assets..................................................                   16.2
                                                                                      ----------
     Total current assets................................................                   24.8

   Investments in and amounts due from subsidiaries
     eliminated upon consolidation.......................................               14,664.6
   Property and equipment, net...........................................                   11.7
   Other assets, net.....................................................                   66.7
                                                                                      ----------
                                                                                       $14,767.8
                                                                                      ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

   Accrued interest......................................................                  $34.9
   Other current liabilities.............................................                  694.3
                                                                                      ----------
     Total current liabilities...........................................                  729.2
                                                                                      ----------

   Long-term debt, less current portion (including adjustment
     to carrying value of $666.0 million)................................                3,147.5
                                                                                      ----------
   Deferred income taxes and other.......................................                  549.8
                                                                                      ----------

   Stockholders' equity
       5.25% series B mandatorily redeemable convertible,
       $1,000 par value; issued, 569,640 at redemption value.............                  569.6
     Class A special common stock, $1 par value - authorized,
       2,500,000,000 shares; issued, 716,442,482;........................                  716.4
     Class A common stock, $1 par value - authorized,
       200,000,000 shares; issued, 25,993,380............................                   26.0
     Class B common stock, $1 par value - authorized,
       50,000,000 shares; issued, 9,444,375..............................                    9.4
     Additional capital..................................................                3,527.0
     Accumulated deficit.................................................                 (619.8)
     Accumulated other comprehensive income..............................                6,112.7
                                                                                      ----------
       Total stockholders' equity........................................               10,341.3
                                                                                      ----------
                                                                                       $14,767.8
                                                                                      ==========
</TABLE>



                                              - 70 -

<PAGE>



                                 COMCAST CORPORATION AND SUBSIDIARIES
                                 ------------------------------------

                           SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF
                           ------------------------------------------------

                               REGISTRANT UNCONSOLIDATED (PARENT ONLY)
                               ---------------------------------------

                      CONDENSED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                      ---------------------------------------------------------

                                 (In millions, except per share data)


<TABLE>
<CAPTION>
<S>                                                                           <C>             <C>
                                                                           Year Ended December 31,
                                                                             1999            1998
                                                                          ----------      ----------
REVENUES, principally intercompany fees eliminated
   upon consolidation..............................................           $377.7          $320.1

GENERAL AND ADMINISTRATIVE EXPENSES................................             91.3            83.2
                                                                          ----------      ----------

OPERATING INCOME...................................................            286.4           236.9

OTHER (INCOME) EXPENSE
   Interest expense, including intercompany interest, net..........            275.8           239.1
   Expense related to indexed debt.................................            666.0
   Equity in net income of affiliates and other....................         (1,652.4)         (976.2)
                                                                          ----------      ----------
                                                                              (710.6)         (737.1)
                                                                          ----------      ----------

INCOME BEFORE INCOME TAX BENEFIT
   AND EXTRAORDINARY ITEMS.........................................            997.0           974.0

INCOME TAX BENEFIT.................................................           (113.5)           (2.1)
                                                                          ----------      ----------

INCOME BEFORE EXTRAORDINARY ITEMS..................................          1,110.5           976.1

EXTRAORDINARY ITEMS................................................            (44.8)           (4.0)
                                                                          ----------      ----------

NET INCOME.........................................................          1,065.7           972.1

ACCUMULATED DEFICIT
   Beginning of year...............................................         (1,488.2)       (2,415.9)
   Retirement of common stock......................................            (25.3)          (10.0)
   Share exchange..................................................           (172.0)
   Cash dividends, $.0467 per share in 1998........................                            (34.4)
                                                                          ----------      ----------

   End of year.....................................................          ($619.8)      ($1,488.2)
                                                                          ==========      ==========

</TABLE>


                                                - 71 -

<PAGE>



                                 COMCAST CORPORATION AND SUBSIDIARIES
                                 ------------------------------------

                           SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF
                           ------------------------------------------------

                               REGISTRANT UNCONSOLIDATED (PARENT ONLY)
                               ---------------------------------------

                                  CONDENSED STATEMENT OF CASH FLOWS
                                  ---------------------------------

                                            (In millions)



<TABLE>
<CAPTION>
<S>                                                                          <C>               <C>
                                                                            Year Ended December 31,
                                                                              1999            1998
                                                                           ----------       ---------
OPERATING ACTIVITIES
   Net income......................................................          $1,065.7          $972.1
   Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation and amortization.................................               6.8            13.2
     Non-cash interest expense, net................................                               3.7
     Non-cash expense related to indexed debt......................             666.0
     Equity in net income of affiliates............................          (1,593.0)         (976.6)
     Extraordinary items...........................................              44.8             4.0
     Deferred income taxes and other...............................             292.9           104.2
                                                                           ----------       ---------
                                                                                483.2           120.6

     Changes in working capital....................................              79.0           155.2
                                                                           ----------       ---------
         Net cash provided by operating activities.................             562.2           275.8
                                                                           ----------       ---------

FINANCING ACTIVITIES
   Proceeds from borrowings........................................           2,525.4
   Retirement and repayment of debt................................            (962.9)          (50.6)
   Issuances of common stock and sales of put options
     on common stock...............................................              17.1            41.8
   Repurchases of common stock.....................................             (30.7)          (12.9)
   Dividends.......................................................              (9.4)          (36.0)
   Other...........................................................             (23.0)          (32.8)
                                                                           ----------       ---------
         Net cash provided by (used in) financing activities.......           1,516.5           (90.5)
                                                                           ----------       ---------

INVESTING ACTIVITIES
   Net transactions with affiliates................................          (2,087.1)         (164.0)
   Capital expenditures and other..................................             (14.2)           (2.9)
                                                                           ----------       ---------
         Net cash used in investing activities.....................          (2,101.3)         (166.9)
                                                                           ----------       ---------

(DECREASE) INCREASE IN CASH AND
   CASH EQUIVALENTS................................................             (22.6)           18.4

CASH AND CASH EQUIVALENTS, beginning of year.......................              31.2            12.8
                                                                           ----------       ---------

CASH AND CASH EQUIVALENTS, end of year.............................              $8.6           $31.2
                                                                           ==========       =========
</TABLE>



                                                - 72 -

<PAGE>


                                 COMCAST CORPORATION AND SUBSIDIARIES
                                 ------------------------------------

                           SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                           -----------------------------------------------

                             YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                             --------------------------------------------

                                            (In millions)




                                                                    Additions
<TABLE>
<CAPTION>
                                                    Balance at     Charged to         Deductions        Balance
                                                    Beginning       Costs and            from           at End
                                                     of Year        Expenses          Reserves(A)       of Year
                                                     -------        --------          -----------       -------
Allowance for Doubtful Accounts

<S>                                                  <C>              <C>                <C>            <C>
2000                                                 $136.6           $65.9              $60.8          $141.7

1999                                                  120.7            48.6               32.7           136.6

1998                                                  108.8            52.2               40.3           120.7


Allowance for Obsolete
  Electronic Retailing Inventories

2000                                                  $89.2           $46.3              $30.0          $105.5

1999                                                   60.9            61.9               33.6            89.2

1998                                                   44.5            39.0               22.6            60.9
</TABLE>




(A) Uncollectible accounts and obsolete inventory written off.










                                                - 73 -