================================================================================
                                    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, 1998
                                       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

                              COMCAST CORPORATION
                            [GRAPHIC OMITTED - LOGO]
             (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 Common Stock, $1.00 par value
               Class A Special 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, 1998, the aggregate  market value of the Class A Common Stock
and Class A Special  Common Stock held by  non-affiliates  of the Registrant was
$1.755 billion and $19.234 billion, respectively.

                           --------------------------
As of December 31, 1998, there were 328,630,366 shares of Class A Special Common
Stock, 31,690,063 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 1999.
================================================================================
<PAGE>
                               COMCAST CORPORATION
                          1998 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.................................20
Item 8   Financial Statements and Supplementary Data.........................29
Item 9   Changes in and Disagreements with Accountants on 
         Accounting and Financial Disclosure.................................61

                                    PART III

Item 10  Directors and Executive Officers of the Registrant..................61
Item 11  Executive Compensation..............................................61
Item 12  Security Ownership of Certain Beneficial Owners and Management......61
Item 13  Certain Relationships and Related Transactions......................61

                                     PART IV

Item 14  Exhibits, Financial Statement Schedules and 
         Reports on Form 8-K.................................................62
SIGNATURES...................................................................67

     This Annual  Report on Form 10-K is for the year ending  December 31, 1998.
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 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 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

     The cable communications  industry and the provision of programming content
may be affected by, among other things:
     o    changes in laws and regulations,
     o    changes in the competitive environment,
     o    changes in technology,
     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 providers to carry our content,
     o    general economic conditions.
<PAGE>
                                     PART I

ITEM 1    BUSINESS

     We are  principally  engaged both in  developing,  managing  and  operating
hybrid fiber-coaxial  broadband cable  communications  networks and in providing
programming content, primarily through QVC, our electronic retailing subsidiary.
We are currently the fourth-largest cable communications  system operator in the
United States and are in the process of implementing  high-speed Internet access
service and digital video  applications to enhance the products available on our
cable networks.

     Our  consolidated   cable  operations  served   approximately  4.5  million
subscribers and passed  approximately  7.4 million homes in the United States as
of December 31, 1998. We own interests in other cable  communications  companies
serving more than 237,000  subscribers.  We expect to complete  transactions  in
1999 that will give us an ownership  and  management  interest in cable  systems
which, upon closing of certain pending  transactions,  will serve  approximately
1.1 million subscribers.

     We provide  programming  content through our  majority-owned  subsidiaries,
QVC, Inc. and E! Entertainment  Television,  Inc., and through other programming
investments,  including  Comcast  SportsNet,  The Golf Channel,  Speedvision and
Outdoor  Life.  Through  QVC, we market a wide  variety of products  directly to
consumers  primarily  on   merchandise-focused   television  programs.   QVC  is
available, on a full and part-time basis, to over 70 million homes in the United
States,  over 7.3  million  homes in the United  Kingdom and Ireland and over 14
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 report for information about our operations by industry segment.

                      GENERAL DEVELOPMENTS OF OUR BUSINESS

     We entered into a number of significant transactions in 1998 and subsequent
to December 31, 1998. We have summarized these  transactions below and have more
fully described them in Notes 1 and 3 to our consolidated  financial  statements
in Item 8 of this Annual Report.

     Acquisition of Greater Philadelphia Cablevision

     In February 1999, we agreed to acquire  Greater  Philadelphia  Cablevision,
Inc., a subsidiary of Greater Media,  Inc. that operates a cable  communications
system serving  approximately 79,000 subscribers in Philadelphia,  Pennsylvania.
We will issue  approximately  4.2 million  shares of our Class A Special  Common
Stock to complete the  acquisition.  The acquisition is expected to close in the
fourth  quarter of 1999 if we receive  all the  necessary  regulatory  and other
approvals.

     Sale of Comcast Cellular

     In January  1999,  we agreed to sell our wholly owned  subsidiary,  Comcast
Cellular Corporation, to SBC Communications, Inc. for approximately $400 million
in cash and the  assumption of  approximately  $1.3 billion of Comcast  Cellular
debt.  Comcast Cellular provides telephone  communications  services pursuant to
licenses granted by the Federal  Communications  Commission to more than 829,000
subscribers in and around the City of Philadelphia, the State of Delaware and in
a  significant  portion of the State of New  Jersey.  We expect to  recognize  a
pre-tax gain on the sale of  approximately  $600 million.  We expect to complete
this  sale  in the  third  quarter  of  1999 if we  receive  all  the  necessary
regulatory and other approvals.

     Sale of Primestar

     As of  December  31,  1998,  we  own a 9.5%  interest  in  Primestar,  Inc.
Primestar  acquires,  originates and provides  television  programming  services
delivered by  satellite to  subscribers  through a network of  distributors.  In
January 1999,  Primestar  announced the sale of its direct  broadcast  satellite
service  to  Hughes  Electronics  Corporation  (a  division  of  General  Motors
Corporation  and the parent  company of DirecTV,  a direct  broadcast  satellite
service  competing  with our cable  communications  systems) for $1.8 billion in
cash and stock.  The sale of Primestar to Hughes  Electronics  is subject to the
consent of certain Primestar lenders and the receipt of necessary regulatory and
other approvals.
<PAGE>
     Investment in Prime Communications

     In December 1998, we agreed to invest in Prime  Communications LLC, a cable
television  operator with cable  communications  systems  serving  approximately
430,000  subscribers.  During the  fourth  quarter  of 1998,  we  acquired a $50
million 12.75%  subordinated  note due 2008 from Prime.  In addition,  under the
terms of the  agreement,  we will lend Prime  approximately  $735 million in the
form of a 6% ten year note,  which  transaction  we expect to occur in the third
quarter of 1999.  In return we will  receive a  convertible  note  giving us the
right to acquire 90% of Prime.  The note cannot be converted until the build out
of  certain of  Prime's  cable  systems is  complete  and  regulatory  and other
approvals are obtained, which is expected to occur in the third quarter of 2002.
Upon conversion of the note, we expect to assume  approximately  $550 million of
Prime debt.  We will have the option to acquire the  remaining  10%  interest in
Prime for approximately $82 million, plus accrued interest at 7% per annum.

     Sale of Sprint PCS

     In November 1998, Sprint Corporation assumed total ownership and management
control of Sprint PCS, a personal  communications  services  company serving the
United States.  In exchange for our 15%  partnership  interest in Sprint PCS, we
received  approximately 47.2 million shares of unregistered  Series 2 Sprint PCS
common stock,  61,726 shares of Sprint PCS convertible  preferred  stock,  which
converts into  approximately 2.0 million shares of unregistered  Series 2 Sprint
PCS common stock, and a warrant to purchase  approximately 3.0 million shares of
unregistered  Series 2 Sprint PCS common stock at $24.02 per share.  As a result
of this  exchange,  we recognized a pre-tax gain of  approximately  $758 million
during  the fourth  quarter of 1998.  We have  registration  rights,  subject to
customary restrictions, which will allow us to sell the Sprint PCS stock that we
received.

     Offering of Subsidiary Debt

     In November  1998,  Comcast Cable  Communications,  Inc., one of our wholly
owned subsidiaries, sold $800 million aggregate principal amount of 6.20% senior
notes  due  2008  in a  public  offering.  Interest  on  the  notes  is  payable
semi-annually  on May 15 and November 15 of each year,  commencing May 15, 1999.
The notes are not redeemable prior to maturity. Comcast Cable used substantially
all of the net  proceeds  from  the  offering  to  repay  existing  intercompany
borrowings and for general corporate purposes.

     Sale of Comcast UK Cable

     In  October  1998,  we  exchanged  all of our  shares of  Comcast  UK Cable
Partners Limited,  one of our consolidated  subsidiaries,  with NTL Incorporated
for  approximately  4.8 million shares of  unregistered  NTL common stock.  As a
result of this  exchange,  we  recognized a pre-tax gain of  approximately  $148
million during the fourth quarter of 1998. We have registration rights,  subject
to  customary  restrictions,  which will allow us to sell the NTL shares that we
received.

     AT&T Acquisition of Teleport

     In July 1998,  we  exchanged  all of our shares of Teleport  Communications
Group  Inc.,  a  competitive  local  exchange  carrier,   with  AT&T  Corp.  for
approximately 24.2 million shares of unregistered AT&T common stock. As a result
of this  exchange,  we recognized a pre-tax gain of  approximately  $1.1 billion
during  the third  quarter  of 1998.  We have  registration  rights,  subject to
customary  restrictions,  which  will allow us to sell the AT&T  shares  that we
received.

     Acquisition of Jones Intercable

     In May and  August  1998,  we  announced  agreements  to  purchase  certain
interests in Jones Intercable,  Inc., for $700 million.  We expect to close this
acquisition in the first half of 1999 if we receive all the necessary regulatory
and  other  approvals.  Upon  completion  of  this  acquisition,   we  will  own
approximately 12.8 million shares of Jones Intercable's Class A common stock and
2.9  million   shares  of  its  common  stock.   Those  shares  will   represent
approximately  37% of the  economic  and 47% of the  voting  interest  in  Jones
Intercable. In addition, the 2.9 million shares of common stock that we will own
will represent approximately 57% of the outstanding common stock and will enable
us to elect  75% of the Board of  Directors  of Jones  Intercable.  We expect to
consolidate  Jones  Intercable in our financial  statements  upon closing of the
acquisition.

                                      - 2 -
<PAGE>
                          DESCRIPTION OF OUR BUSINESSES

Cable Communications

     Technology and Capital Improvements

     Our  broadband  cable  networks  receive  signals  by means  of: 

     o    special antennae,

     o    microwave relay systems,

     o    earth stations.

     These networks distribute a variety of video,  telecommunications  and data
services to residential and commercial subscribers.

     In accordance with the October 1997 "social  contract" we entered into with
the FCC, 80% of our cable subscribers will be served by a system with a capacity
of at least 550-MHz and at least 60% of our cable  subscribers will be served by
a system with a capacity of at least 750-MHz by March 31, 1999. In addition,  we
will provide free cable service  connections,  cable modems and modem service to
schools and to 250 public libraries in communities  when we commercially  deploy
cable modem service to residential customers in those communities.

     In addition to meeting our "social contract" commitments,  we are deploying
fiber optic cable and upgrading the technical quality of our broadband networks.
As a result,  the reliability and capacity of our systems has increased,  aiding
in the delivery of  additional  video  programming  and other  services  such as
enhanced  digital video,  high-speed  Internet access service and,  potentially,
telephony.  During 1998, we introduced our digital converter cable service in 10
markets.  As  of  December  31,  1998,  approximately  78,000  subscribers  were
receiving our digital service.  Digital converter cable service allows us to use
digital compression to increase the channel capacity of our cable communications
systems to more than 100 channels, as well as to improve picture quality.

     Franchises

     Cable   communications   systems  are   constructed   and  operated   under
non-exclusive  franchises granted by state or local governmental authorities and
are subject to federal,  state and local legislation and regulation.  Franchises
typically contain many conditions which may include:

     o    rate and service conditions,

     o    construction schedules,

     o    types of  programming  and  provision of services to schools and other
          public institutions,

     o    insurance and indemnity bond requirements.

     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 most cases,  we
need the consent of the franchising  authority to transfer our  franchises.  The
franchises are granted for varying lengths of time.

     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. We
have approximately 825 franchises in the United States.

     Revenue Sources

     We  receive  the  majority  of our  revenues  from  subscription  services.
Subscribers  typically  pay 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.  Packages  of  channels  offered  to  subscribers  may  consist  of
television signals of:

     o    national television networks,

     o    local and distant  independent,  specialty and educational  television
          stations,

     o    satellite-delivered programming,

     o    locally originated programs,

     o    audio programming,

     o    electronic retailing programs.

     We also offer, for an additional monthly fee, one or more premium services,
such as:

     o    Home Box Office(R),

     o    Cinemax(R),

     o    Showtime(R),

     o    The Movie Channel(TM),

     o    Encore(R).

                                      - 3 -
<PAGE>
     These 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.

     We also generate revenues from advertising  sales,  pay-per-view  services,
installation services, commissions from electronic retailing and other services.
Pay-per-view  services  permit  a  subscriber  to  order,  for a  separate  fee,
individual  feature  motion  pictures  and  special  event  programs,   such  as
professional  boxing,  professional  wrestling  and  concerts.  We also generate
revenues  from the sale of  advertising  time to local,  regional  and  national
advertisers on non-broadcast channels.

     In December 1996, we began marketing @Home  Corporation's  high-speed cable
modem services 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 @Home.  Subscribers can
then access online  information,  including the Internet,  at faster speeds than
that of  conventional or Integrated  Service  Digital  Network  modems.  Through
@Home, we provide businesses with Internet connectivity  solutions and networked
business applications.  @Home and Comcast aggregate content, sell advertising to
businesses and provide services to residential  subscribers.  As of December 31,
1998,  the Comcast @Home service was available to over 1.8 million homes in nine
markets and served more than 51,000 customers.

     Our sales efforts are primarily directed toward increasing  penetration and
generating  incremental  revenues  in our  franchise  areas.  We sell our  cable
communications services through:

     o    telemarketing,

     o    direct mail advertising,

     o    door-to-door selling,

     o    local media advertising.

     Programming

     We  generally  pay either a monthly  fee per  subscriber  per  channel or a
percentage  of certain  revenues  for  programming.  Our  programming  costs are
increased by:

     o    increases in the number of subscribers,

     o    expansion of the number of channels provided to customers,

     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 anticipate that future contract renewals will result
in  programming  costs that are higher than our costs  today,  particularly  for
sports programming.

     Customer Service

     We are currently  consolidating 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.  Because  of  these
technological advances, we can better serve our subscriber base and cross-market
new products and  services.  We have 10 call centers in operation as of December
31, 1998 which serve approximately 2.4 million  subscribers.  Subscribers in our
remaining cable systems receive  customer service  primarily  through our local,
system-based representatives.

                                      - 4 -

<PAGE>
     Comcast's Cable Systems

     The table  below  summarizes  Homes  Passed,  Cable  Subscribers  and Cable
Penetration  information for our cable communications  systems as of December 31
(homes and subscribers in thousands):

<TABLE>
<CAPTION>
                                                          1998          1997           1996(5)       1995           1994
<S>                                                     <C>           <C>             <C>          <C>            <C>  
Homes Passed (1)(4)..................................     7,382         7,138           6,975        5,570          5,491
Cable Subscribers (2)(4).............................     4,511         4,366           4,280        3,407          3,307
Cable Penetration (3)(4).............................     61.1%         61.2%           61.4%        61.2%          60.2%
<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
     Homes Passed.

(4)  The  information  consists  of cable  systems  whose  financial  results we
     consolidate.  The  information  does not include  341,000  Homes Passed and
     237,000 Cable Subscribers in non-consolidated  cable communications systems
     in which we have ownership and management  interests.  The information also
     does not include  pending  acquisitions  (see "General  Developments of Our
     Business").

(5)  In November  1996,  we acquired the cable  operations  of The E.W.  Scripps
     Company.
</FN>
</TABLE>

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

     System Clusters

     We manage  most of our cable  systems in  geographic  clusters.  Clustering
permits us to deliver customer service and support in a more uniform,  efficient
and cost effective  manner.  The following table summarizes Homes Passed,  Cable
Subscribers and Cable  Penetration for our eight largest regional cable clusters
as of December 31, 1998 (homes and subscribers in thousands):

<TABLE>
<CAPTION>
                                                        Homes               Cable             Cable
Geographic Cluster                                     Passed            Subscribers       Penetration
<S>                                                    <C>                 <C>                 <C>  
Mid-Atlantic.........................................    2,147.9             1,409.4             65.6%
Michigan.............................................      978.5               480.7             49.1%
Tennessee............................................      499.2               326.3             65.4%
Southern California..................................      517.2               271.4             52.5%
West Florida.........................................      413.4               269.9             65.3%
Sacramento...........................................      464.1               247.9             53.4%
Southeast Florida....................................      452.1               236.4             52.3%
Indianapolis.........................................      243.5               147.4             60.5%
                                                     -----------         -----------       -----------
                                                         5,715.9             3,389.4             59.3%
Other Systems........................................    1,666.0             1,121.3             67.3%
                                                     -----------         -----------
Total................................................    7,381.9             4,510.7             61.1%
                                                     ===========         ===========
</TABLE>

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

                                      - 5 -

<PAGE>
     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    multichannel,  multipoint  distribution  service  operators,  commonly
          known  as  MMDS or  wireless  cable  operators,  which  use  low-power
          microwave   frequencies  to  transmit  video   programming  and  other
          information over-the-air to subscribers,

     o    other cable  operators who build and operate cable systems in the same
          communities that we serve, commonly known as overbuilders,

     o    interactive online computer services,

     o    newspapers, magazines and book stores,

     o    movie theaters,

     o    live concerts and sporting events,

     o    home video products, including videotape cassette recorders.

     Our cable  communications  systems will be competitive if we provide,  at a
reasonable  price  to  subscribers,  superior  technical  performance,  superior
customer  service  and  a  greater  variety  of  video   programming  and  other
communications services than are available from our competitors.

     Modifications to federal law in 1996 changed the regulatory  environment in
which our cable  communications  systems  operate.  Federal law now 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:

     o    provide  video  services  within and outside their  telephone  service
          areas  through  a  variety  of  methods,   including  broadband  cable
          networks,  satellite  program  distribution and wireless  transmission
          facilities,

     o    have  announced  plans to construct and operate  cable  communications
          systems in various states.

     A local telephone company,  Ameritech,  has obtained approximately 14 cable
franchises in communities in Michigan that we also serve.  It competes  directly
with us in these areas by  providing  video and other  broadband  communications
services  to  subscribers.   New   facilities-based   competitors  such  as  RCN
Corporation  and  Knology  Holdings,  Inc.  are now  offering  cable and related
communications services in several areas where we hold franchises.

     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  systems
under our  franchises.  We cannot predict the likelihood of success of competing
video or  broadband  service  ventures  by local  telephone  companies  or other
businesses.  Nor can we predict the impact of these competitive  ventures on our
cable communications systems and other businesses.

     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 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 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 10.6 million individual households,  condominiums, apartment
and office  complexes  in the  United  States.  DBS  providers  with  medium and
high-power  satellites  typically  offer  to  their  subscribers  more  than 150
channels of programming, including program services similar to those provided by
cable systems.

                                      - 6 -
<PAGE>
     DBS systems use video  compression  technology to increase channel capacity
and digital  technology  to improve the  quality of the signals  transmitted  to
their subscribers.  DBS service currently has certain competitive advantages and
disadvantages compared to cable service.  Advantages of DBS service include more
programming,  greater  channel  capacity  and the  digital  quality  of  signals
delivered to  subscribers.  The  disadvantages  of DBS service  include high up-
front customer  equipment and installation costs and a lack of local programming
and local service.

     Two major  companies  are  currently  offering  nationwide  high-power  DBS
services.  Both companies have recently announced separate transactions that, if
completed,  may  significantly  enhance the number of channels on which they can
provide   programming  to  subscribers  and  may  improve   significantly  their
competitive  positions  against  cable  operators.  We are unable to predict the
effect these transactions may have on our business and operations.

     Our cable systems also compete for  subscribers  with SMATV systems.  SMATV
systems  typically are not subject to  regulation  like local  franchised  cable
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 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 franchised cable
systems access to these complexes. Courts have reviewed challenges to these laws
and have reached  varying  results.  Our ability to compete for  subscribers  in
residential  and  commercial  developments  served by SMATV system  operators is
uncertain.  However, we are developing  competitive packages of services (video,
data and telephony) to offer to these residential and commercial developments.

     Cable systems also compete with MMDS or wireless cable  systems,  which are
authorized  to  operate  in areas  served  by our  cable  systems.  Federal  law
significantly  limits  certain  local  restrictions  on  the  use  of  roof-top,
satellite  and  microwave   antennae  to  receive   satellite   programming  and
over-the-air broadcasting services.

     Many of our  cable  systems  are  currently  offering,  or  plan to  offer,
interactive  online computer  services to subscribers.  These cable systems will
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,

     o    long distance telephone companies.

     Recently,  a number of companies,  including telephone companies and ISP's,
have  requested  local  authorities  and the FCC to require  cable  operators to
provide access to cable's  broadband  infrastructure so that these companies may
deliver  Internet  services  directly to customers over cable  facilities.  In a
recent  report to Congress,  the FCC  declined to  institute  an  administrative
proceeding  to examine  this issue at this time.  At the present  time,  several
local  jurisdictions  are  attempting  to impose access  obligations  on a cable
operator as a condition for obtaining municipal consent for franchise transfers;
however, such conditions are currently being challenged in court. It is expected
that the FCC, Congress, and state and local regulatory authorities will continue
to consider actions in this area.

     The deployment of Asymmetric Digital  Subscriber Line technology,  known as
ADSL,  will allow Internet  access to subscribers  at data  transmission  speeds
equal to or  greater  than that of modems  over  conventional  telephone  lines.
Several telephone  companies are introducing ADSL service and have requested the
FCC  to  allow  them  to  provide  high-speed   broadband  services,   including
interactive  online services,  without regard to present service  boundaries and
other  regulatory  restrictions.  We are unable to  predict  the  likelihood  of
success of the online  services  offered by our competitors or the impact on our
business and operations of these competitive ventures.

     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 of this Annual Report 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.

Electronic Retailing

     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  providers 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.

                                     - 7 -
<PAGE>
     Revenue Sources

     QVC sells a variety of consumer products and accessories including jewelry,
housewares,  electronics,  apparel  and  accessories,   collectibles,  toys  and
cosmetics. It 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  approximately  58 million cable television  homes.  Approximately  1.5
million  additional  cable television homes receive QVC on a less than full time
basis.   Approximately  9.8  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.

     QVC sells products over electronic media in Germany, the United Kingdom and
Ireland. In the UK and Ireland,  this service currently reaches over 7.3 million
cable television and home satellite  dish-served homes. In Germany, this service
currently is available to over 14 million cable  television  and home  satellite
dish-served homes.  However,  we estimate that only 4.6 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

     An exclusive,  protected,  non-preemptible  transponder on a communications
satellite transmits the QVC domestic signal. QVC subleases  transponders for the
transmission of its signals to the UK and Germany. Each communications satellite
has a number of separate  transponders.  If our transponder  fails, QVC's signal
will be transferred to a spare transponder.  If no transponder is available, the
signal will be  transferred  to a  preemptible  transponder  located on the same
satellite or, if available,  to a transponder on another  satellite owned by the
same  lessor.  The  transponder  cannot  be  preempted  in  favor of a user of a
"protected"  transponder  that has failed.  QVC has never had an interruption in
programming  due to transponder  failure.  Because it has the exclusive use of a
protected,  non-preemptible  transponder,  interruption  is  unlikely  to occur.
However,  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.

     Program Providers

     We have entered into affiliation agreements with video program providers in
the US to carry QVC programming.  Generally,  there are no additional charges to
subscribers  for the  distribution  of QVC.  In return for  carrying  QVC,  each
programming provider 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   provider's  service  area.  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.
Affiliation  agreements  covering  most of QVC's cable  television  homes can be
terminated  in the  sixth  year of their  respective  terms  by the  programming
provider  unless the  programming  provider  earns a specified  minimum level of
sales  commissions.  QVC's  sales  are  currently  at levels  that meet  minimum
requirements. The affiliation agreements provide for the programming provider to
broadcast  commercials  regarding QVC on other channels and to distribute  QVC's
advertising material to subscribers.  As of December 31, 1998, approximately 27%
of the  total  homes  reached  by QVC were  attributable  to  QVC's  affiliation
agreements  with us and  TeleCommunications,  Inc.,  the indirect owner of a 43%
interest in QVC, and their respective subsidiaries.

     If QVC can successfully negotiate with programming providers,  then renewal
of these  affiliation  agreements will be on favorable  terms.  QVC competes for
cable channels  against similar  electronic  retailing  programming,  as well as
against  alternative  programming  supplied by other  sources,  including  news,
public affairs,

                                      - 8 -
<PAGE>
entertainment and sports programmers.  QVC's business depends on its affiliation
with  programming  providers  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  providers 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,  launch and equipment purchase support.  QVC will continue to recruit
additional programming providers and seek to enlarge its audience. Despite these
efforts,  it is difficult  to both renew or reach  affiliation  agreements  with
programming providers.

     Competition

     QVC operates in a highly competitive environment.  As a general merchandise
retailer,  QVC competes for consumer  expenditures  and interest 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. Many of QVC's competitors are connected in chain or
franchise systems. On television, QVC competes with other  satellite-transmitted
programs for channel space and viewer  loyalty.  We believe that,  until digital
compression is utilized on a large-scale basis, most programming  providers will
not devote more than two  channels to televised  shopping and may allocate  only
one. Large-scale use of digital compression is several years in the future. Many
systems have limited  channel  capacity and may be precluded from adding any new
programs at the present time. The development and use of digital  compression is
expected to provide programming providers with greater channel capacity. Greater
channel  capacity would increase the  opportunity  for QVC, in addition to other
home   shopping   programs,   to  be   distributed   on   additional   channels.

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

Other Programming Investments

     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, 1998 include:

<TABLE>
<CAPTION>
                                                                                                  Ownership           
Investment                                                Description                            Percentage           
-----------------------------      ----------------------------------------------------------    -----------
<S>                                <C>                                                               <C>   
CN8-The Comcast Network            Regional and local programming                                     100.0%
Comcast SportsNet                  Regional sports programming and events                              46.4%
E! Entertainment                   Entertainment-related news and original programming                 39.7%
The Golf Channel                   Golf-related programming                                            43.3%
Outdoor Life                       Outdoor activities                                                  16.8%
Speedvision                        Automotive, marine and aviation                                     14.8%
Sunshine Network                   Regional sports, public affairs and general entertainment           13.0%
Viewer's Choice                    Pay-per-view programming                                            11.1%
</TABLE>

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

     CN8-The Comcast Network

     We created CN8-The Comcast Network,  our regional  programming  service, in
late  1996.  We  deliver  CN8 to more  than 2.0  million  cable  subscribers  in
Pennsylvania,  New Jersey  and  Maryland.  CN8  provides  original  programming,
including local and regional news and public affairs,  regional  sports,  health
and cooking and family-oriented programming.

     Comcast SportsNet

     In July 1996,  we acquired a 66%  interest in Comcast  Spectacor,  L.P.,  a
partnership that owns the Philadelphia  Flyers NHL hockey team, the Philadelphia
76ers NBA basketball team, and their arenas. In October 1997, Comcast- Spectacor
and the owner of the  Philadelphia  Phillies major league baseball team launched
Comcast SportsNet,  a 24-hour regional sports programming network which provides
sports  related  programming,  including  Flyers,  76ers and  Phillies  games to
approximately 2.6 million viewers in the Philadelphia region.  Comcast SportsNet
has entered into affiliation agreements with many of the video program providers
in the  Philadelphia  television  market.  Comcast  SportsNet  is  delivered  to
affiliates terrestrially.

     E! Entertainment

     E! Entertainment is our entertainment-related  news and information service
with distribution to approximately 53 million customers as of December 31, 1998.
E!  Entertainment  seeks to attract viewers based on  international  interest in
Hollywood and entertainment industry news, information and features. We obtained
a controlling interest in E! Entertainment in March 1997.

                                      - 9 -
<PAGE>
     The Golf Channel

     The  Golf  Channel  is  a  24-hour  network  devoted  exclusively  to  golf
programming.   The  programming  schedule  includes  live  golf  coverage,  golf
instruction programs and golf news.

     Outdoor Life and Speedvision

     Outdoor  Life  presents  programming  consisting  primarily of outdoor life
themes. Speedvision presents a variety of programming of interest to automobile,
boat and airplane enthusiasts  including news,  historical and other information
and event coverage.

     The Sunshine Network

     The  Sunshine  Network is a regional  sports  and public  affairs  network,
providing  programming  emphasizing  Florida's  local sports teams and events in
Florida.  Programming  rights on the network include eight  professional  teams,
including  the Orlando Magic and Miami Heat NBA  basketball  teams and the Tampa
Bay Lightning NHL hockey team.

     Viewer's Choice

     Viewer's  Choice is the  brand-name of a cable  operator-controlled  buying
cooperative for pay-per-view programming.

     Internet Related Investments

     We have made  investments  in  various  Internet-based  programming-related
enterprises to participate in the growing  interest among  consumers in this new
media distribution system.
                           ---------------------------

                           LEGISLATION AND REGULATION

Cable Communications

     The  Communications  Act of 1934  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, and 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 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 providers,

     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,

     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,  as
well as for certain  non-basic cable programming  services,  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,

     o    the  installation,  sale and lease of equipment used by subscribers to
          receive  basic  service,  such as converter  boxes and remote  control
          units.
                                     - 10 -
<PAGE>
     Several years ago the FCC 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 FCC regulations also permit  franchising  authorities to
file  complaints with the FCC concerning  rates we charge for certain  non-basic
cable programming service tiers.

     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
          certain multi-channel groups of new non-basic programming,

     o    eliminate rate regulation of non-basic cable programming service tiers
          after March 31, 1999,  although  Congress may consider  legislation to
          extend the period  during  which  non-basic  rates  remain  subject to
          regulation,

     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,

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

     Over the past few years, we have reached agreements with various regulatory
bodies  to  resolve  outstanding  rate  disputes.  In  addition  to the  "social
contract" we reached with the FCC, we settled pending local rate  proceedings in
1998  involving our basic  service  rates in certain of our systems.  We believe
that the resolution of these  proceedings did not have a material adverse impact
on our financial position, results of operations or liquidity.

     Content Requirements

     The Communications  Act and the FCC's regulations  contain broadcast signal
carriage requirements that allow 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 requires a cable operator to devote up to one-third
of its activated channel capacity for the mandatory carriage of local commercial
television  stations.  The  Communications  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,

     o    certain low-power television stations.

     The FCC has also  initiated an  administrative  proceeding  to consider the
requirements,  if any, for the mandatory  carriage of digital television signals
offered by local  broadcasters.  We are unable to  predict  the  outcome of this
proceeding  or the impact of any new carriage  requirements  on the operation 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 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,

                                     - 11 -
<PAGE>
     o    requires   such   programmers   to  sell   their   satellite-delivered
          programming to other video program distributors,

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

     In two  recent  administrative  determinations,  the FCC's  Cable  Services
Bureau   concluded   that  the   program   access   rules   did  not   apply  to
terrestrially-delivered  programming,  such as Comcast SportsNet.  These matters
are expected to be reviewed by the FCC.

     The FCC and Congress are presently  considering  proposals that may enhance
the ability of DBS providers and other video program distributors to gain access
to  additional  programming  and to transmit  local  broadcast  signals to local
markets.  These proposals,  if adopted,  will likely increase competition to our
cable systems.

     The Communications  Act contains  restrictions on the transmission by cable
operators of obscene or indecent  programming.  It requires  cable  operators to
block fully both the video and audio  portion of  sexually  explicit or indecent
programming  on channels  that are  primarily  dedicated  to  sexually  oriented
programming or  alternatively  to carry such  programming  only at "safe harbor"
time periods.  A three-judge  federal  district  recently  determined  that this
provision was  unconstitutional;  however, the federal government announced that
it will appeal 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,

     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;

     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.  The FCC is also  considering  proposals by
various  Internet  service  providers  to gain access to our cable  systems on a
common  carrier  basis.  We cannot  predict if such proposals will be adopted or
whether,  if  adopted,  they  will  have a  material  impact  upon our  business
operations.

     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,

          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 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 telecommunications 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.

     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 could 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  franchises  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' First Amendment  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.  While a
federal district court has declared this limitation to be  unconstitutional  and
delayed its  enforcement,  the FCC  recently  reconsidered  its cable  ownership
regulations and:

     o    reaffirmed  its  30%  nationwide   subscriber   ownership  limit,  but
          maintained  its  voluntary  stay on  enforcement  of  that  regulation
          pending further action,

     o    reaffirmed   its   subscriber    ownership    information    reporting
          requirements,

     o    opened an administrative proceeding to reevaluate its cable television
          attribution rules.

Also  pending  on appeal is a  challenge  to the  statutory  and FCC  regulatory
limitations  on the number of channels that can be occupied on a cable system by
a video  programmer  in which a cable  operator  has an  attributable  ownership
interest.  We are unable to predict the outcome of these judicial and regulatory
proceedings  or the impact of any  ownership  restrictions  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 not yet completed its review of other regulations which prohibit
the common  ownership of other  broadcasting  interests and cable systems in the
same geographical areas.

     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;

     o    preempted  legal  barriers  to  telecommunications   competition  that
          previously existed in state and local laws and regulations;

                                     - 13 -
<PAGE>
     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  recently  overturned  various parts of the FCC's open
video rules,  including the FCC's preemption of local  franchising  requirements
for open video  operators.  We expect the FCC to modify its open video  rules to
comply  with the  federal  court's  decision,  but we are unable to predict  the
impact any 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 current rate formula,  which is
being  reevaluated  by the FCC,  governs the maximum rate certain  utilities may
charge for attachments to their poles and conduit by cable  operators  providing
only  cable   services  and,   until  2001,  by  certain   companies   providing
telecommunications  services.  The FCC also  adopted a second rate  formula that
will be effective in 2001 and will govern 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 have challenged the new rules in court.
A federal  district  court  recently  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;  the  utilities  involved in that
litigation  have appealed the lower court's  decision.  We are unable to predict
the outcome of this  litigation  or the ultimate  impact of any revised FCC rate
formula or of any new pole  attachment  rate  regulations  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,

     o    technical standards and equipment compatibility.

     The FCC actively  regulates other parts of our cable operations,  involving
such areas as:

     o    hiring and promotion of employees and use of outside vendors,

     o    consumer protection and customer service,

     o    technical standards and testing of cable facilities,

     o    consumer electronics equipment compatibility,

     o    registration of cable systems,

     o    maintenance of various records and public inspection files,

     o    microwave frequency usage,

     o    antenna structure notification, marking and lighting.

     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 communications services.

                                     - 14 -
<PAGE>
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,  but 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. The possible simplification, modification or elimination of
the  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  cannot  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 rights to use this music are controlled
by music performance rights societies who negotiate on behalf of their copyright
owners for license fees covering each performance. The cable industry and one of
these  societies 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  performance  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
cannot  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    territory of the franchisee,

     o    indemnification of the franchising authority,

     o    use and occupancy of public streets,

     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. Neither the outcome of these
proceedings nor their impact upon our cable  operations can be predicted at this
time.

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

                                     - 15 -
<PAGE>
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,  Ireland and Germany are regulated by the media  authorities in those
countries.

                                    EMPLOYEES

     As of December 31, 1998, we had approximately  17,000  employees.  Of these
employees,  approximately  8,800  were  associated  with  cable  communications,
approximately 5,700 were associated with electronic  retailing and approximately
2,500 were associated with other  divisions.  We believe that our  relationships
with our employees are good.

ITEM 2       PROPERTIES

     Cable Communications

     A central receiving apparatus,  distribution cables,  converters,  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.

     Electronic Retailing

     Television  studios,  customer  service  call  centers,  business  offices,
product warehouses and distribution centers are the principal physical assets of
our  electronic  retailing  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  electronic  retailing   operations.   QVC's  warehousing  and  distribution
facilities will continue to be upgraded over the next several years.

     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 1999, or as soon thereafter
as each of their  successors is elected and qualified.  The following table sets
forth certain information concerning our principal executive officers, including
their ages, positions and tenure as of December 31, 1998:

<TABLE>
<CAPTION>
                                                Officer                                                                 
Name                              Age            Since                          Position with Comcast
----------------------------   ----------     ------------     --------------------------------------------------------
<S>                                <C>            <C>          <C>
Ralph J. Roberts                   78             1969         Chairman of the Board of Directors; Director
Julian A. Brodsky                  65             1969         Vice Chairman of the Board of Directors; Director
Brian L. Roberts                   39             1986         President; Director
Lawrence S. Smith                  51             1988         Executive Vice President
John R. Alchin                     50             1990         Senior Vice President; Treasurer
Stanley L. Wang                    58             1981         Senior Vice President; General Counsel; Secretary
</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,   a  privately-held  investment  company,  our
controlling shareholder,  for more than five years. 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.

     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,  1998,  our  shares  owned  by  Sural  constituted
approximately  76% 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 also a Director of @Home Corporation.  Mr. Roberts
is a son of Ralph J. Roberts.

     Lawrence S. Smith was named our Executive  Vice President in December 1995.
Prior to that time,  Mr. Smith served as our Senior Vice President for more than
five years. Mr. Smith is our Principal Accounting Officer.

     John R. Alchin has served as our Treasurer and as Senior Vice President for
more than five years. Mr. Alchin is our Principal Financial Officer.

     Stanley L. Wang has  served as our Senior  Vice  President,  Secretary  and
General Counsel for more than five years.

                                     - 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 the Class A Special and Class A
Common Stock as furnished by Nasdaq.

<TABLE>
<CAPTION>
                                                              Class A                                             
                                                              Special                           Class A
                                                      ------------------------------------------------------------
                                                          High           Low               High            Low
<S>                                                   <C>             <C>               <C>             <C>
1998
First Quarter......................................    $37  3/16      $29   7/8          $36   7/8       $30   1/8
Second Quarter.....................................     41 11/16       33 13/16           40   1/2        32   7/8
Third Quarter......................................     48   3/4       37   3/8           48  1/16        37   1/2
Fourth Quarter.....................................     59             40  9/16           57   7/8        40   1/4
1997
First Quarter......................................    $19   3/8      $16   7/8          $18 15/16       $16   3/8
Second Quarter.....................................     22   1/4       14   5/8           22  3/16        14   1/2
Third Quarter......................................     25   3/4       19   3/4           25   5/8        19 13/16
Fourth Quarter.....................................     32  9/16       25 19/32           32   3/4        25 11/16
</TABLE>

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

   We began paying quarterly cash dividends on our Class A Common Stock in 1977.
Since 1978,  we have paid equal  dividends  on shares of both our Class A Common
Stock  and our  Class B Common  Stock.  Since  December  1986,  when the Class A
Special Common Stock was issued,  we have paid equal  dividends on shares of our
Class A Special,  Class A and Class B Common  Stock.  We declared  dividends  of
$.0933 for each of the years ended  December  31, 1998 and 1997 on shares of our
Class A Special,  Class A and Class B Common Stock.  The declaration and payment
of future dividends and their amount depend upon our results of operations,  our
financial  condition and capital needs, and upon contractual  restrictions on us
and our subsidiaries and other factors.

   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 the
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,  1998,  there were 2,381  record  holders of our Class A
Special Common Stock, 1,760 record holders of our Class A Common Stock and three
record holders of our Class B Common Stock.

                                     - 18 -

<PAGE>
ITEM 6        SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                     1998(1)      1997(1)      1996(1)       1995      1994
                                                   -------------------------------------------------------------
                                                          (Dollars in millions, except per share data)
                                                   -------------------------------------------------------------
<S>                                                   <C>          <C>          <C>         <C>       <C>     
Statement of Operations Data:
Revenues...........................................   $5,145.3     $4,467.7     $3,612.3    $2,988.1  $1,089.2
Operating income...................................      557.1        466.6        465.9       397.7     213.4
Income (loss) from continuing operations before                                                                
     extraordinary items...........................    1,007.7       (182.9)        (6.4)       48.0     (46.1)
Loss from discontinued operations (2)..............       31.4         25.6         46.1        85.8      29.2
Extraordinary items................................       (4.2)       (30.2)        (1.0)       (6.1)    (11.7)
Net income (loss)..................................      972.1       (238.7)       (53.5)      (43.9)    (87.0)

Basic earnings (loss) for common stockholders                                                                    
  per common share (3)                                                                                           
     Income (loss) from continuing operations                                                                  
        before extraordinary items.................      $2.67       ($0.58)      ($0.02)      $0.20    ($0.20)
     Loss from discontinued operations (2).........      (0.09)       (0.08)       (0.19)      (0.36)    (0.12)
     Extraordinary items...........................      (0.01)       (0.09)                   (0.03)    (0.05)
                                                   -----------  -----------  -----------  ---------- ---------
     Net income (loss).............................      $2.57       ($0.75)      ($0.21)     ($0.19)   ($0.37)
                                                   ===========  ===========  ===========  ========== ========= 
                                             
Diluted earnings (loss) for common                                                   
  stockholders per common share (3)                                                  
     Income (loss) from continuing operations                                        
        before extraordinary items.................      $2.50       ($0.58)      ($0.02)      $0.20    ($0.20)
     Loss from discontinued operations (2).........      (0.08)       (0.08)       (0.19)      (0.36)    (0.12)
     Extraordinary items...........................      (0.01)       (0.09)                   (0.03)    (0.05)
                                                   -----------  -----------  -----------  ---------- ---------
     Net income (loss).............................      $2.41       ($0.75)      ($0.21)     ($0.19)   ($0.37)
                                                   ===========  ===========  ===========  ========== ========= 
Cash dividends declared per common share (3).......    $0.0933      $0.0933      $0.0933     $0.0933   $0.0933

Balance Sheet Data (at year end):
Total assets.......................................  $14,817.4    $11,326.8    $10,660.4    $8,159.9  $5,480.0
Working capital....................................    2,531.7         44.9         15.5       604.6      29.4
Long-term debt.....................................    5,464.2      5,334.1      5,998.3     6,014.8   4,066.0
Stockholders' equity (deficiency)..................    3,815.3      1,646.5        551.6      (827.7)   (726.8)

Supplementary Financial Data:
Operating income before depreciation and                                                                         
     amortization (4)..............................   $1,496.7     $1,293.1     $1,047.0      $881.0    $459.9   
Net cash provided by (used in) (5).................
     Operating activities..........................    1,079.7        855.3        644.5       466.7     339.7
     Financing activities..........................      809.2        283.9        (88.0)    1,785.7   1,089.2
     Investing activities..........................   (1,427.3)    (1,056.5)      (749.5)   (2,060.3) (1,254.4)
<FN>
----------
(1)  You should see "Management's Discussion and Analysis of Financial Condition
     and Results of  Operations"  for a  discussion  of events  which affect the
     comparability of the information reflected in this financial data.
(2)  In January  1999,  we agreed to sell Comcast  Cellular  Corporation  to SBC
     Communications,  Inc. This represents the results of Comcast Cellular which
     is presented as a discontinued operation for all periods presented.
(3)  We have adjusted these for our three-for-two stock split effective February
     2, 1994.
(4)  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 the our industries,  although our measure
     of operating cash flow may not be comparable to similarly  titled  measures
     of other  companies.  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.
(5)  This  represents  net cash  provided  by (used  in)  operating  activities,
     financing  activities  and  investing  activities  as  presented in the our
     consolidated statement of cash flows.
</FN>
</TABLE>

                                     - 19 -
<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
long-term  investments,  as well as our  existing  cash,  cash  equivalents  and
short-term investments.

     In January  1999,  we agreed to sell our wholly owned  subsidiary,  Comcast
Cellular  Corporation  ("Comcast  Cellular"),  to SBC  Communications,  Inc. for
approximately  $400 million in cash and the  assumption  of  approximately  $1.3
billion of Comcast  Cellular  debt. We expect to recognize a pre-tax gain on the
sale of approximately $600 million. We expect to complete this sale in the third
quarter of 1999 if we receive all the necessary  regulatory and other approvals.
The results of Comcast Cellular have been presented as a discontinued  operation
in our consolidated financial statements.

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,  short-term investments,
lines of credit and other external financing.

     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,
1998 and 1997 were  $4.524  billion  and  $573.0  million,  respectively.  As of
December 31, 1998, our cash, cash equivalents and short-term investments include
$3.635  billion of our  investments  in AT&T Corp.  ("AT&T"),  Sprint  PCS,  NTL
Incorporated   ("NTL"),   Tele-Communications,   Inc.  ("TCI"),   Liberty  Media
Corporation ("Liberty") and TCI Ventures Group, Inc. ("TCI Ventures") (see Notes
3 and 4 to our  consolidated  financial  statements  included  in Item 8). As of
December 31, 1998,  $258.5 million of our cash, cash  equivalents and short-term
investments  is restricted to use by  subsidiaries  under  contractual  or other
arrangements.

     Investments

     See Notes 3 and 4 to our consolidated financial statements included in Item
8.

     We do not have any additional  significant  contractual funding commitments
with respect to any of our  investments.  However,  to the extent we do not fund
our investees'  capital calls, we expose  ourselves to dilution of our ownership
interests.  We  continually  evaluate  our existing  investments  as well as new
investment opportunities.

     Investment Rights

     In July  1996,  we  acquired a 66%  interest  in  Comcast  Spectacor,  L.P.
("Comcast-Spectacor"), the owner of two professional sports teams and two arenas
in Philadelphia,  Pennsylvania.  We have the right to purchase the remaining 34%
interest in  Comcast-Spectacor  from our partner for its pro rata portion of the
fair  market  value (on a going  concern  basis as  determined  by an  appraisal
process) of  Comcast-Spectacor.  Our partner also has the right to require us to
purchase  its  interests  under the same terms.  We may pay our partner for such
interests  in shares of our Class A Special  Common  Stock,  subject  to certain
restrictions.  If our  partner  exercises  its exit  rights  and we elect not to
purchase  its  interest,  we and our partner  will use our best  efforts to sell
Comcast-Spectacor.

     The Walt Disney Company ("Disney"),  in certain circumstances,  is entitled
to cause Comcast Entertainment Holdings LLC (the "LLC"), which is owned 50.1% by
us and 49.9% by Disney,  to purchase  Disney's entire interest in the LLC at its
then fair market  value (as  determined  by an  appraisal  process).  If the LLC
elects not to purchase Disney's interests,  Disney has the right, at its option,
to purchase either our entire interest in the LLC or all of the

                                     - 20 -
<PAGE>
shares of stock of E! Entertainment  Television,  Inc. ("E! Entertainment") held
by the LLC, in each case at fair market value.  If Disney  exercises its rights,
as described above, a portion or all of our $132.8 million  aggregate  principal
amount ten-year, 7% notes payable to Disney (the "Disney Notes") may be replaced
with a three year note due to Disney.

     We and Liberty,  a majority owned subsidiary of TCI, own  approximately 57%
and 43%, respectively, of QVC, Inc. ("QVC"), an electronic retailer. We, through
a management  agreement,  are  responsible for the day to day operations of QVC.
Liberty may, at certain times following  February 9, 2000,  trigger the exercise
of certain exit rights with respect to its investment in QVC. If the exit rights
are  triggered,  we have  first  right  to  purchase  Liberty's  stock in QVC 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. We 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,
our  promissory  note  maturing  not more than three years after  issuance,  our
equity  securities or any combination  thereof.  If we elect 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 us. If Liberty  elects not to purchase the stock of QVC
held by us, then we and Liberty will use our best efforts to sell QVC.

     We own  55%  of  MHCP  Holdings,  L.L.C.  ("MHCP  Holdings"),  an  indirect
subsidiary   of  ours  which  holds   cable   communications   systems   serving
approximately 644,000 subscribers as of December 31, 1998. The California Public
Employees Retirement System ("CalPERS") owns the remaining 45% of MHCP Holdings.
At any time after December 18, 2001, CalPERS may elect to liquidate its interest
in MHCP  Holdings at a price  based upon the fair value of CalPERS'  interest in
MHCP Holdings,  adjusted,  under certain circumstances,  for certain performance
criteria  relating to the fair value of MHCP  Holdings  or to our common  stock.
Except in certain  limited  circumstances,  we have the  option to satisfy  this
liquidity  arrangement  by purchasing  CalPERS'  interest for cash,  through the
issuance of our common stock (subject to certain limitations) or by selling MHCP
Holdings.

     Year 2000 Issue

     The Year 2000 Issue is the result of computer  programs being written using
two  digits  rather  than four to define  the  applicable  year.  Certain of our
computer programs that have  date-sensitive  software may recognize a date using
"00" as the year 1900 rather than the year 2000 (the "Year 2000 Issue"). If this
situation   occurs,   the  potential  exists  for  computer  system  failure  or
miscalculations   by  computer   programs,   which  could  cause  disruption  of
operations.

     We are in the process of evaluating  and  addressing the impact of the Year
2000 Issue on our  operations  to ensure  that our  information  technology  and
business  systems  recognize  calendar Year 2000. We are utilizing both internal
and external resources in implementing our Year 2000 program,  which consists of
the following phases:

     o    Assessment  Phase.   Structured   evaluation,   including  a  detailed
          inventory  outlining  the impact  that the Year 2000 Issue may have on
          current operations.

     o    Detailed Planning Phase.  Establishment of priorities,  development of
          specific  action  steps and  allocation  of  resources  to address the
          issues identified in the Assessment Phase.

     o    Conversion Phase. Implementation of the necessary system modifications
          as outlined in the Detailed Planning Phase.

     o    Testing Phase.  Verification that the modifications implemented in the
          Conversion  Phase will be  successful in resolving the Year 2000 Issue
          so that all inventory items will function properly,  both individually
          and on an integrated basis.

     o    Implementation  Phase.  Final roll-out of fully tested components into
          an operational unit.

     Based on an  inventory  conducted  in  1997,  we have  identified  computer
systems that will require modification or replacement so that they will properly
utilize dates beyond December 31, 1999. Many of our critical systems are new and
are already Year 2000 compliant as a result of the recent rebuild of many of our
cable communications systems. In addition, we have initiated communications with
all of our significant software suppliers and service bureaus to determine their
plans for remediating the Year 2000 Issue in their software which we use or rely
upon.

     As of December 31, 1998,  we are in the  Conversion  Phase of our Year 2000
remediation  program and have entered the Testing  Phase with respect to certain
of our key systems.  Through  December 31, 1998, we have incurred  approximately
$4.7 million in connection with our Year 2000 remediation  program.  We estimate
that we will incur between approximately $8 million to $17 million of additional
expense  through  December  1999 in  connection  with our Year 2000  remediation
program. Our estimate to complete the remediation plan includes the

                                     - 21 -
<PAGE>
estimated time  associated  with  mitigating the Year 2000 Issue for third party
software.  However,  we cannot  guarantee that the systems of other companies on
which we rely will be converted on a timely basis,  or that a failure to convert
by another company would not have a material adverse effect on us.

     Our  management  will continue to  periodically  report the progress of our
Year 2000 remediation  program to the Audit Committee of our Board of Directors.
We plan to complete the Year 2000  mitigation by the third quarter of 1999.  Our
management has investigated and may consider potential  contingency plans in the
event that our Year 2000 remediation program is not completed by that date.

     The costs of the project and the date on which we plan to complete the Year
2000 modifications and replacements are based on our best estimates,  which were
derived using assumptions of future events including the continued  availability
of resources and the reliability of third party modification plans.  However, we
cannot  guarantee that these estimates will be achieved and actual results could
differ  materially  from  those  plans.  Specific  factors  that may cause  such
material  differences include, but are not limited to, the availability and cost
of personnel  with  appropriate  necessary  skills and the ability to locate and
correct all relevant computer code and similar uncertainties.

     We believe that with  modifications to existing software and conversions to
new  software,  the  Year  2000  Issue  can  be  mitigated.   However,  if  such
modifications  and  conversions  are not made,  or are not  completed  within an
adequate time frame, the Year 2000 Issue could have a material adverse impact on
our operations.

     Capital Expenditures

     During  1999,  we expect to incur  approximately  $750  million  of capital
expenditures,  including $550 million primarily for the upgrading and rebuilding
of certain of our cable  communications  systems and the  deployment  of digital
converters  and cable  modems  (excluding  pending  acquisitions),  $85  million
primarily for the upgrading of QVC's warehousing and distribution facilities and
$40 million primarily for the upgrading of our cellular  communications  systems
(assuming the sale of Comcast Cellular closes during the third quarter of 1999).
The amount of such capital expenditures for years subsequent to 1999 will depend
on  numerous  factors,  many of which are  beyond  our  control.  These  factors
include:
     o    whether competition in a particular market necessitates a cable system
          upgrade,

     o    whether a particular  cable system has  sufficient  capacity to handle
          new product  offerings  including  the offering of cable modem,  cable
          telephony and telecommunications services,

     o    whether and to what  extent we will be able to recover our  investment
          under FCC rate guidelines and other factors, and

     o    whether we acquire  additional  cable  systems in need of upgrading or
          rebuilding.

     National  manufacturers are the primary sources 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.   We  anticipate  capital   expenditures  for  years
subsequent to 1999 will continue to be significant.  As of December 31, 1998, 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.

     We have  historically  utilized a strategy of  financing  our  acquisitions
through the  issuance of our common stock or through the issuance of senior debt
at the acquired operating  subsidiary level, through the issuance of senior debt
at the intermediate holding company and parent company levels and through public
offerings of subsidiary stock and debt instruments.  As of December 31, 1998 and
1997, our long-term  debt,  including  current  portion,  was $5.578 billion and
$5.466 billion,  respectively,  of which 18.0% and 17.7%,  respectively,  was at
variable rates.

     Interest Rate Risk Management

     We are  exposed to market risk  including  changes in  interest  rates.  To
manage  the  volatility  relating  to these  exposures,  we enter  into  various
derivative  transactions  pursuant to our policies in areas such as counterparty
exposure  and  hedging  practices.  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,
                                     - 22 -
<PAGE>
to be significant.

     Interest Rate Risk

     The use of interest rate risk management instruments, such as interest rate
exchange  agreements  ("Swaps"),  interest  rate  cap  agreements  ("Caps")  and
interest  rate collar  agreements  ("Collars"),  is required  under the terms of
certain of our  outstanding  debt  agreements.  Our policy is to manage interest
costs using a mix of fixed and  variable  rate debt.  Using  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.  Caps are used to lock in a maximum  interest rate should variable rates
rise,  but enable us to otherwise  pay lower  market  rates.  Collars  limit our
exposure to and benefits from interest rate  fluctuations  on variable rate debt
to within a certain range of rates.

     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, 1998 (dollars in millions):
<TABLE>
<CAPTION>
                                                          Expected Maturity Date                          Fair Value at
                                  1999       2000       2001       2002       2003    Thereafter   Total     12/31/98
<S>                               <C>       <C>       <C>        <C>          <C>    <C>        <C>        <C>     
Debt

Fixed Rate....................      $7.3      $18.3     $227.6     $105.6       $7.3   $3,705.6   $4,071.7   $4,489.0
   Average Interest Rate......      9.0%       8.1%       9.5%       8.6%       9.2%       8.3%       8.4%

Variable Rate.................    $106.2     $185.9     $322.9     $370.5     $520.5              $1,506.0   $1,506.0
   Average Interest Rate......      5.4%       5.6%       5.8%       5.8%       6.1%                  5.9%

Interest Rate Instruments

Variable to Fixed Swaps (1)...     $50.0     $504.1     $127.5     $143.5      $36.7     $200.0   $1,061.8    ($13.3)
   Average Pay Rate...........      5.7%       5.5%       4.9%       4.9%       4.9%       7.7%       5.7%
   Average Receive Rate.......      5.0%       5.0%       5.3%       5.3%       5.4%       5.9%       5.3%
Caps..........................    $240.0                                                            $240.0
   Average Cap Rate...........      7.0%                                                              7.0%
Collar........................                $50.0                                                  $50.0
   Average Cap Rate...........                 6.3%                                                   6.3%
   Average Floor Rate.........                 4.0%                                                   4.0%
<FN>
(1)  Includes  $361.8  million of Swaps which become  effective in the year 2000
     maturing through 2003 and $200.0 million of Swaps which become effective in
     the year 2000 maturing 2008.
</FN>
</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,  1998,  plus the  borrowing  margin in
effect for each credit  facility at December 31, 1998.  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, 1998. 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, 1998,  1997 and 1996 was not
significant.

     Equity Price Risk

     In connection with the share repurchase programs authorized by our Board of
Directors, we sold put options on shares of our Class A Special Common Stock. We
sold put options on 2.75  million  shares,  2.0  million  shares and 1.0 million
shares during 1998, 1997 and 1996, respectively. The put options give the holder
the  right to  require  us to  repurchase  such  shares at  specified  prices on
specific dates.  The put options sold during 1997 and 1996 expired  unexercised.
The amount we would be obligated to pay to repurchase  such shares upon exercise
of the put  options,  totaling  $111.2  million  and  $31.4  million,  has  been
reclassified  from  additional  capital  to common  equity  put  options  in our
December 31, 1998 and 1997  consolidated  balance sheet. The difference  between
the proceeds from the sale of these put options and their  estimated  fair value
was not significant as of December 31, 1998 and 1997.

                                     - 23 -

<PAGE>
Statement of Cash Flows

     Cash and cash equivalents  increased $461.6 million as of December 31, 1998
from December 31, 1997. The increase 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 $1.080 billion for the year ended December 31, 1998 due  principally
to our operating  income from  continuing  operations  before  depreciation  and
amortization  (see  "Results  of  Operations"),  including  the  effects  of the
consolidation of Comcast-Spectacor  effective January 1, 1998 (see Note 3 to our
consolidated  financial  statements  included in Item 8), and changes in working
capital as a result of the timing of receipts and disbursements.

     Net cash provided by financing activities from continuing operations, which
includes  borrowings  and  repayments  of  debt,  as well as the  issuances  and
repurchases  of our equity  securities,  was $809.2  million  for the year ended
December 31, 1998. During 1998, we borrowed $1.938 billion, consisting primarily
of  $797.9  million  of  6.20%  senior  notes  due 2008 and  $827.0  million  of
subsidiary  revolving  credit in connection with a refinancing.  During 1998, we
repaid $1.113 billion of our long-term  debt,  primarily in connection  with the
refinancing of certain subsidiary indebtedness. In addition, during 1998, we had
net issuances of $28.9 million of our common stock and we paid cash dividends of
$36.0  million  on our  common  stock and  Series A  Preferred  Stock.  Deferred
financing  costs of $16.3  million  were  incurred  during 1998  principally  in
connection with the issuance of the 6.20% senior notes due 2008.

     Net cash used in investing activities from continuing operations was $1.427
billion  for the year  ended  December  31,  1998.  Net cash  used in  investing
activities includes  acquisitions of cable  communications  systems, net of cash
acquired,  of  $309.7  million,   capital  contributions  to  and  purchases  of
investments of $202.1 million and capital expenditures of $898.9 million, offset
by proceeds from the sales of short-term  investments and call options of $169.5
million  and  proceeds  from the  repayment  of a loan by an  investee  of $74.7
million.  The sale of Comcast UK Cable  resulted in a reduction to cash and cash
equivalents  of $140.4 million due to the receipt of  approximately  4.8 million
shares of NTL in exchange  for all of our shares in Comcast UK Cable (see Note 3
to our consolidated financial statements included in Item 8).

Results of Operations

     The  effects  of  our  recent   acquisitions   and  the   consolidation  of
Comcast-Spectacor  effective  January 1, 1998,  as well as  increased  levels of
capital expenditures,  were to increase significantly our revenues and expenses,
resulting in substantial  increases in our operating income before  depreciation
and  amortization,  depreciation  expense,  amortization  expense  and  interest
expense.  Investment  income has increased  significantly in 1998 as a result of
the  gains  we   recognized   on  the  exchange  of  our  interest  in  Teleport
Communications  Group Inc.  ("Teleport")  for AT&T common stock,  the Sprint PCS
restructuring  and the  exchange  of our  interest  in  Comcast UK Cable for NTL
common stock. In addition,  our equity in net losses of affiliates has increased
principally as a result of losses incurred by Sprint PCS. See "Operating Results
by Business Segment" and "Consolidated Analysis".

                                     - 24 -
<PAGE>
     Our summarized consolidated financial information for the three years ended
December 31, 1998 is as follows (dollars in millions, "NM" denotes percentage is
not meaningful):
<TABLE>
<CAPTION>
                                                                      Year Ended
                                                                     December 31,            Increase/(Decrease)
                                                                   1998         1997           $             %
<S>                                                              <C>          <C>            <C>           <C>  
Revenues......................................................   $5,145.3     $4,467.7       $677.6        15.2%
Cost of goods sold from electronic retailing..................    1,462.0      1,270.2        191.8        15.1
Operating, selling, general and administrative expenses.......    2,186.6      1,904.4        282.2        14.8
                                                                 --------      -------     --------            
Operating income before depreciation and amortization (1) ....    1,496.7      1,293.1        203.6        15.7
Depreciation..................................................      463.9        404.1         59.8        14.8
Amortization..................................................      475.7        422.4         53.3        12.6
                                                                 --------      -------     --------            
Operating income..............................................      557.1        466.6         90.5        19.4
                                                                 --------      -------     --------            
Interest expense..............................................      466.7        458.9          7.8         1.7
Investment income.............................................   (1,828.0)      (149.4)     1,678.6          NM
Equity in net losses of affiliates............................      515.9        343.8        172.1        50.1
Gain from equity offering of affiliate........................     (157.8)        (7.7)       150.1          NM
Other expense.................................................        2.9          9.7         (6.8)      (70.1)
Income tax expense............................................      594.0         70.4        523.6          NM
Minority interest.............................................      (44.3)       (76.2)       (31.9)      (41.9)
                                                                 --------      -------     --------            
Income (loss) from continuing operations before
   extraordinary items........................................   $1,007.7      ($182.9)    $1,190.6          NM
                                                                 ========      =======     ======== 
</TABLE>

<TABLE>
<CAPTION>
                                                                      Year Ended
                                                                     December 31,            Increase/(Decrease)
                                                                   1997         1996           $             %
<S>                                                              <C>          <C>            <C>           <C>  
Revenues......................................................   $4,467.7     $3,612.3       $855.4        23.7%
Cost of goods sold from electronic retailing..................    1,270.2      1,114.2        156.0        14.0
Operating, selling, general and administrative expenses.......    1,904.4      1,451.1        453.3        31.2
                                                                 --------      -------     --------            
Operating income before depreciation and amortization (1) ....    1,293.1      1,047.0        246.1        23.5
Depreciation..................................................      404.1        259.2        144.9        55.9
Amortization..................................................      422.4        321.9        100.5        31.2
                                                                 --------      -------     --------            
Operating income..............................................      466.6        465.9          0.7         0.2
                                                                 --------      -------     --------            
Interest expense..............................................      458.9        448.4         10.5         2.3
Investment income.............................................     (149.4)      (120.0)        29.4        24.5
Equity in net losses of affiliates............................      343.8        144.8        199.0          NM
Gain from equity offering of affiliate........................       (7.7)       (40.6)       (32.9)      (81.0)
Other expense (income)........................................        9.7        (21.3)        31.0          NM
Income tax expense............................................       70.4        109.0        (38.6)      (35.4)
Minority interest.............................................      (76.2)       (48.0)        28.2        58.8
                                                                 --------      -------     --------            
Loss from continuing operations before extraordinary items....    ($182.9)       ($6.4)      $176.5          NM
                                                                 ========      =======     ======== 
<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 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  Communications"  and "Electronic  Retailing." 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 Communications

     As a result of the acquisition of the cable television operations ("Scripps
Cable") of The E.W.  Scripps Company (the "Scripps  Acquisition"),  we commenced
consolidating the financial results of Scripps Cable effective November 1, 1996.
The following table presents financial  information for the years ended December
31,  1998,  1997 and 1996  for our  cable  communications  segment  (dollars  in
millions): 
<TABLE>
<CAPTION>
                                                          Year Ended
                                                          December 31,                         Increase
                                                     1998              1997               $                 %
<S>                                                 <C>              <C>                <C>                <C> 
Service income...................................   $2,277.4         $2,073.0           $204.4             9.9%
Operating, selling, general and
     administrative expenses.....................    1,180.8          1,085.3             95.5             8.8
                                                    --------         --------           ------
Operating income before depreciation
     and amortization (a)........................   $1,096.6           $987.7           $108.9            11.0%
                                                    ========         ========           ======

                                                          Year Ended
                                                          December 31,                         Increase
                                                     1997              1996               $                 %
<S>                                                 <C>              <C>                <C>                <C> 
Service income...................................   $2,073.0         $1,641.0           $432.0            26.3%
Operating, selling, general and
     administrative expenses.....................    1,085.3            837.2            248.1            29.6
                                                    --------         --------           ------
Operating income before depreciation
     and amortization (a)........................     $987.7           $803.8           $183.9            22.9%
                                                    ========           ======           ======
<FN>
---------------
(a) See footnote (1) on page 25.
</FN>
</TABLE>

     Of the respective  $204.4  million and $432.0 million  increases in service
income for the years ended December 31, 1998 and 1997,  $30.2 million and $280.4
million  are   attributable  to  the  effects  of  the   acquisitions  of  cable
communications  systems,  $31.8  million and $27.1 million are  attributable  to
subscriber growth, $109.0 million and $108.9 million relate to changes in rates,
$20.5 million and $8.6 million are  attributable to growth in cable  advertising
sales and $12.9 million and $7.0 million relate to other product offerings.

     Of the respective $95.5 million and $248.1 million  increases in operating,
selling,  general and  administrative  expenses for the years ended December 31,
1998 and 1997,  $15.8 million and $145.3 million are attributable to the effects
of the  acquisitions of cable  communications  systems,  $48.9 million and $34.9
million are  attributable  to increases in the costs of cable  programming  as a
result of subscriber growth,  additional channel offerings and changes in rates,
$5.3 million and $5.9 million are  attributable  to growth in cable  advertising
sales,  $1.5 million and $15.6  million are  attributable  to increases in costs
associated with customer service and $24.0 million and $46.4 million result from
increases  in the  costs of  labor,  other  volume  related  expenses  and costs
associated  with new product  offerings.  We  anticipate  that the cost of cable
programming will increase in the future as cable  programming rates increase and
additional sources of cable programming become available.

                                     - 26 -
<PAGE>
     Electronic Retailing

     The  following  table sets forth the operating  results for our  electronic
retailing segment (dollars in millions):

<TABLE>
<CAPTION>
                                                          Year Ended
                                                          December 31,                         Increase
                                                     1998              1997               $                 %
<S>                                                 <C>              <C>                <C>               <C>  
Net sales from electronic retailing..............   $2,402.7         $2,082.5           $320.2            15.4%
Cost of goods sold from electronic retailing.....    1,462.0          1,270.2            191.8            15.1
Operating, selling, general and administrative
     expenses....................................      506.5            474.6             31.9             6.7
                                                    --------         --------           ------
Operating income before depreciation
     and amortization (a)........................     $434.2           $337.7            $96.5            28.6%
                                                    ========         ========           ======
Gross margin.....................................       39.2%            39.0%
                                                    ========         ========
</TABLE>

<TABLE>
<CAPTION>
                                                          Year Ended
                                                          December 31,                         Increase
                                                     1997              1996               $                 %
<S>                                                 <C>              <C>                <C>               <C>  
Net sales from electronic retailing..............   $2,082.5         $1,835.8           $246.7            13.4%
Cost of goods sold from electronic retailing.....    1,270.2          1,114.2            156.0            14.0
Operating, selling, general and administrative
     expenses....................................      474.6            421.3             53.3            12.7
                                                    --------         --------           ------
Operating income before depreciation
     and amortization (a)........................     $337.7           $300.3            $37.4            12.5%
                                                    ========         ========           ======
Gross margin.....................................       39.0%            39.3%
                                                    ========         ========
<FN>
---------------
(a) See footnote (1) on page 25.
</FN>
</TABLE>

     The respective  increases in net sales from electronic  retailing of $320.2
million and $246.7  million for the years ended  December  31, 1998 and 1997 are
primarily attributable to the effects of 5.6% and 7.4% increases,  respectively,
in the average  number of homes  receiving  QVC services in the US and 11.8% and
13.7%  increases,  respectively,  in the average  number of homes  receiving QVC
services in the UK.

     An allowance for returned  merchandise is provided as a percentage of sales
based on historical  experience.  The return provision was  approximately 21% of
gross sales for each of the years ended December 31, 1998, 1997 and 1996.

     The increases in cost of goods sold from electronic retailing are primarily
related to the growth in net sales.  The changes in gross margin  between  these
periods are primarily due to slight changes in product mix from year to year.

     Of  the   respective   increases  in   operating,   selling,   general  and
administrative  expenses of $31.9  million and $53.3 million for the years ended
December 31, 1998 and 1997,  $21.7 million and $30.6 million are attributable to
higher sales volume, $3.2 million and $25.5 million are attributable to start-up
costs incurred by QVC in Germany,  which began  operations in the fourth quarter
of 1996,  and the  remaining  changes are primarily  attributable  to additional
costs  associated  with new  businesses,  offset by the  reduction  in  expenses
realized  upon   consolidation  of  QVC's   multichannel   operations  in  1996.

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

     Consolidated Analysis

     The $59.8  million  increase in  depreciation  expense from 1997 to 1998 is
primarily attributable to the effects of capital expenditures, the consolidation
of  Comcast-Spectacor  effective  January  1,  1998,  increased  losses on asset
disposals in connection with our cable communications rebuild activities and the
acquisition of cable  communications  systems.  The $144.9  million  increase in
depreciation expense from 1996 to 1997 is primarily  attributable to the effects
of capital  expenditures and the effects of the Scripps  Acquisition in November
1996.

     The $53.3  million  increase in  amortization  expense from 1997 to 1998 is
primarily attributable to the

                                     - 27 -
<PAGE>
consolidation of Comcast-Spectacor effective January 1, 1998 and the acquisition
of cable  communications  systems.  The $100.5 million  increase in amortization
expense  from  1996 to 1997 is  primarily  attributable  to the  effects  of the
Scripps Acquisition in November 1996.

     We anticipate that, for the foreseeable future,  interest expense will be a
significant cost to us and will have a significant adverse effect on our ability
to realize  net  earnings.  We believe we will  continue  to be able to meet our
obligations  through  our  ability  both to  generate  operating  income  before
depreciation and amortization and to obtain external financing.

     The $1.679  billion  increase  in  investment  income  from 1997 to 1998 is
primarily  attributable to the $1.092 billion gain recognized on the exchange of
our  interest  in  Teleport  for AT&T  common  stock,  the $758.5  million  gain
recognized  on the  restructuring  of Sprint  PCS and the  $148.3  million  gain
recognized  on the  exchange of our  interest in Comcast UK Cable for NTL common
stock,  all recognized in 1998.  These gains were  partially  offset by a $152.8
million loss on certain of our investments based primarily on a decline in value
that we considered other than temporary and investment expense of $105.5 million
incurred  during 1998 related to changes in the value of call options related to
our investment in TCI, TCI Ventures and Liberty common stock.  The $29.4 million
increase in investment income from 1996 to 1997 is primarily attributable to the
$68.9 million gain recognized in 1997 on the sale of our Teleport Class A Common
Stock,  offset,  in part, by the $47.3 million gain recognized upon the exchange
of the shares of Turner  Broadcasting  System,  Inc. ("TBS") held by us for Time
Warner,  Inc.  ("Time Warner") common stock in 1996 as a result of the merger of
Time Warner and TBS in October 1996.

     The $172.1 million and $199.0 million  increases in equity in net losses of
affiliates  from 1997 to 1998 and from 1996 to 1997 are  primarily due to losses
incurred  by Sprint  PCS.  With the  restructuring  of Sprint  PCS in the fourth
quarter of 1998,  we will no longer  account  for our  investment  in Sprint PCS
under  the  equity  method  and,  as  a  result,   will  no  longer  record  our
proportionate  share of Sprint PCS' net losses in our consolidated  statement of
operations (see Notes 3 and 4 to our consolidated  financial statements included
in Item 8).

     During the years ended December 31, 1998,  1997 and 1996,  Teleport  issued
shares of its Class A Common  Stock.  As a result of these stock  issuances,  we
recorded a $157.8  million,  $7.7  million  and $40.6  million  increase  in our
proportionate  share of Teleport's net assets as a gain from equity  offering of
affiliate in our 1998, 1997 and 1996  consolidated  statement of operations.  We
recorded the increase in our  proportionate  share of Teleport's  net assets one
quarter in arrears.

     The $6.8 million  decrease and $31.0 million increase in other expense from
1997 to 1998 and from 1996 to 1997 are primarily  attributable to the effects of
fluctuations in the foreign currency exchange rate.

     The  $523.6  million  increase  and $38.6  million  decrease  in income tax
expense from 1997 to 1998 and from 1996 to 1997 are  primarily  attributable  to
changes  in  our  income  before  income  taxes  and  minority   interest,   and
non-deductible  foreign  losses  and  non-deductible  equity  in net  losses  of
affiliates.

     The $31.9 million decrease and $28.2 million increase in minority  interest
income  from 1997 to 1998 and from 1996 to 1997 are  primarily  attributable  to
minority  interests  in the net loss of  Comcast  UK Cable and the net income of
QVC, and the effects of the consolidation of Comcast-Spectacor effective January
1, 1998.

     Extraordinary items for the years ended December 31, 1998, 1997 and 1996 of
$4.2  million,  $30.2  million  and  $1.0  million,  respectively,   consist  of
unamortized debt acquisition costs and debt extinguishment costs, net of related
tax benefits,  expensed in connection  with the  redemption  and  refinancing of
certain indebtedness.

     For the years ended  December 31, 1998,  1997 and 1996,  our  distributions
from  investees and earnings  before  extraordinary  items,  income tax expense,
equity in net losses of  affiliates  and fixed charges  (interest  expense) were
$2.584 billion, $690.2 million and $695.8 million,  respectively.  Such earnings
were  adequate to cover our fixed  charges  (including  capitalized  interest of
$18.0 million and $32.1 million during 1997 and 1996,  respectively),  of $466.7
million,  $476.9  million and $480.5  million for the years ended  December  31,
1998, 1997 and 1996,  respectively.  Our fixed charges include non-cash interest
expense of $42.5  million,  $56.5  million and $51.5 million for the years ended
December 31, 1998, 1997 and 1996, respectively.

     We believe that our losses will not significantly affect the performance of
our normal business  activities  because of our existing cash, cash  equivalents
and  short-term  investments,  our ability to generate  operating  income before
depreciation and amortization and our ability to obtain external financing.

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

                                     - 28 -
<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,  1998 and 1997,  and the
related consolidated statements of operations, stockholders' equity (deficiency)
and of cash flows for each of the three years in the period  ended  December 31,
1998.  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)  which  statements
reflect  total assets  constituting  14% and 19% of the  Company's  consolidated
total  assets as of December 31, 1998 and 1997 and total  revenues  constituting
47%,  47% and 51% of the  Company's  consolidated  revenues  for the years ended
December 31, 1998, 1997 and 1996, respectively. 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  generally   accepted  auditing
standards.  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, 1998 and 1997, and the results of their  operations and their cash flows for
each of the three years in the period ended December 31, 1998 in conformity with
generally accepted accounting principles.



Deloitte & Touche LLP

Philadelphia, Pennsylvania
February 22, 1999


                                     - 29 -

<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                                    December 31,
ASSETS                                                                        1998                1997
<S>                                                                       <C>                  <C>      
CURRENT ASSETS
   Cash and cash equivalents.............................................    $870.7               $409.1
   Investments...........................................................   3,653.4                163.9
   Accounts receivable, less allowance for doubtful
     accounts of $120.7 and $108.8.......................................     549.3                439.6
   Inventories, net......................................................     343.8                309.9
   Other current assets..................................................     207.1                155.9
                                                                          ---------            ---------
       Total current assets..............................................   5,624.3              1,478.4
                                                                          ---------            ---------
INVESTMENTS..............................................................     602.4              1,235.8
                                                                          ---------            ---------
PROPERTY AND EQUIPMENT...................................................   3,886.7              3,689.5
   Accumulated depreciation..............................................  (1,362.3)            (1,205.9)
                                                                          ---------            ---------
   Property and equipment, net...........................................   2,524.4              2,483.6
                                                                          ---------            ---------
DEFERRED CHARGES
   Franchise and license acquisition costs...............................   4,763.6              4,847.9
   Excess of cost over net assets acquired and other.....................   3,450.9              3,089.5
                                                                          ---------            ---------
                                                                            8,214.5              7,937.4
   Accumulated amortization..............................................  (2,148.2)            (1,808.4)
                                                                          ---------            ---------
   Deferred charges, net.................................................   6,066.3              6,129.0
                                                                          ---------            ---------
                                                                          $14,817.4            $11,326.8
                                                                          =========            =========
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable and accrued expenses.................................  $1,600.3             $1,095.4
   Accrued interest......................................................      73.5                 72.2
   Net liabilities of discontinued operations............................     165.2                133.6
   Deferred income taxes.................................................   1,140.1
   Current portion of long-term debt.....................................     113.5                132.3
                                                                          ---------            ---------
       Total current liabilities.........................................   3,092.6              1,433.5
                                                                          ---------            ---------
LONG-TERM DEBT, less current portion.....................................   5,464.2              5,334.1
                                                                          ---------            ---------
DEFERRED INCOME TAXES....................................................   1,500.1              1,849.5
                                                                          ---------            ---------
MINORITY INTEREST AND OTHER..............................................     834.0              1,031.8
                                                                          ---------            ---------
COMMITMENTS AND CONTINGENCIES

COMMON EQUITY PUT OPTIONS................................................     111.2                 31.4
                                                                          ---------            ---------
STOCKHOLDERS' EQUITY
   Preferred stock - authorized, 20,000,000 shares; 5% series A 
     convertible, no par value; issued, 6,370 at redemption value........      31.9                 31.9
     5.25% series B mandatorily redeemable convertible, $1,000 par value;
     issued, 540,690 and 513,211 at redemption value.....................     540.7                513.2
   Class A special common stock, $1 par value - authorized,
     500,000,000 shares; issued, 328,630,366 and 317,025,969 ............     328.6                317.0
   Class A common stock, $1 par value - authorized,
     200,000,000 shares; issued, 31,690,063 and 31,793,487...............      31.7                 31.8
   Class B common stock, $1 par value - authorized,
     50,000,000 shares; issued, 9,444,375 and 8,786,250 .................       9.4                  8.8
   Additional capital....................................................   3,311.5              3,030.6
   Accumulated deficit...................................................  (1,488.2)            (2,415.9)
   Unrealized gains on marketable securities.............................   1,049.5                140.7
   Cumulative translation adjustments....................................       0.2                (11.6)
                                                                          ---------            ---------
       Total stockholders' equity........................................   3,815.3              1,646.5
                                                                          ---------            ---------
                                                                          $14,817.4            $11,326.8
                                                                          =========            =========
</TABLE>

See notes to consolidated financial statements.

                                     - 30 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in millions, except per share data)
<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                                          1998              1997             1996
<S>                                                                     <C>              <C>               <C>     
REVENUES
   Service income.............................................          $2,742.6         $2,385.2          $1,776.5
   Net sales from electronic retailing........................           2,402.7          2,082.5           1,835.8
                                                                        --------         --------          --------
                                                                         5,145.3          4,467.7           3,612.3
                                                                        --------         --------          --------
COSTS AND EXPENSES
   Operating..................................................           1,410.3          1,204.1             911.8
   Cost of goods sold from electronic retailing...............           1,462.0          1,270.2           1,114.2
   Selling, general and administrative........................             776.3            700.3             539.3
   Depreciation...............................................             463.9            404.1             259.2
   Amortization...............................................             475.7            422.4             321.9
                                                                        --------         --------          --------
                                                                         4,588.2          4,001.1           3,146.4
                                                                        --------         --------          --------
OPERATING INCOME..............................................             557.1            466.6             465.9

OTHER (INCOME) EXPENSE
   Interest expense...........................................             466.7            458.9             448.4
   Investment income..........................................          (1,828.0)          (149.4)           (120.0)
   Equity in net losses of affiliates.........................             515.9            343.8             144.8
   Gain from equity offering of affiliate.....................            (157.8)            (7.7)            (40.6)
   Other......................................................               2.9              9.7             (21.3)
                                                                        --------         --------          --------
                                                                        (1,000.3)           655.3             411.3
                                                                        --------         --------          --------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
   INCOME TAX EXPENSE, MINORITY INTEREST AND
   EXTRAORDINARY ITEMS........................................           1,557.4           (188.7)             54.6
INCOME TAX EXPENSE............................................             594.0             70.4             109.0
                                                                        --------         --------          --------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
   MINORITY INTEREST AND EXTRAORDINARY ITEMS..................             963.4           (259.1)            (54.4)
MINORITY INTEREST.............................................             (44.3)           (76.2)            (48.0)
                                                                        --------         --------          --------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
   EXTRAORDINARY ITEMS........................................           1,007.7           (182.9)             (6.4)

LOSS FROM DISCONTINUED OPERATIONS, net of income tax
   benefit of $19.1 million, $14.8 million and $24.6 million..              31.4             25.6              46.1
                                                                        --------         --------          --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS......................             976.3           (208.5)            (52.5)
EXTRAORDINARY ITEMS ..........................................              (4.2)           (30.2)             (1.0)
                                                                        --------         --------          --------
NET INCOME (LOSS).............................................             972.1           (238.7)            (53.5)
PREFERRED DIVIDENDS...........................................             (29.1)           (14.8)             (0.7)
                                                                        --------         --------          --------
NET INCOME (LOSS) FOR COMMON STOCKHOLDERS.....................            $943.0          ($253.5)           ($54.2)
                                                                        ========         ========          ========
BASIC EARNINGS (LOSS) FOR COMMON STOCKHOLDERS
   PER COMMON SHARE
   Income (loss) from continuing operations before 
     extraordinary items......................................             $2.67            ($.58)            ($.02)
   Loss from discontinued operations..........................              (.09)            (.08)             (.19)
   Extraordinary items........................................              (.01)            (.09)
                                                                        --------         --------          --------
     Net income (loss)........................................             $2.57            ($.75)            ($.21)
                                                                        ========         ========          ========
BASIC WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES  OUTSTANDING.................................             366.5            339.0             247.6
                                                                        ========         ========          ========
DILUTED EARNINGS (LOSS) FOR COMMON STOCKHOLDERS
   PER COMMON SHARE
   Income (loss) from continuing operations before 
     extraordinary items......................................             $2.50            ($.58)            ($.02)
   Loss from discontinued operations..........................              (.08)            (.08)             (.19)
   Extraordinary items........................................              (.01)            (.09)
                                                                        --------         --------          --------
     Net income (loss)........................................             $2.41            ($.75)            ($.21)
                                                                        ========         ========          ========
DILUTED WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING..................................             403.0            339.0             247.6
                                                                        ========         ========          ========
</TABLE>
See notes to consolidated financial statements.

                                     - 31 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
<TABLE>
<CAPTION>
                                                                                  Year Ended December 31,
                                                                         1998              1997             1996
<S>                                                                   <C>             <C>                <C>    
OPERATING ACTIVITIES
   Net income (loss)..........................................            $972.1          ($238.7)           ($53.5)
   Adjustments to reconcile net income (loss) to 
    net cash provided by operating activities from 
    continuing operations:
     Depreciation.............................................             463.9            404.1             259.2
     Amortization.............................................             475.7            422.4             321.9
     Non-cash interest expense, net...........................              29.2             32.3              16.8
     Equity in net losses of affiliates.......................             515.9            343.8             144.8
     Gain from equity offering of affiliate...................            (157.8)            (7.7)            (40.6)
     Gains on investments, net................................          (1,758.5)           (81.0)            (69.2)
     Minority interest........................................             (44.3)           (76.2)            (48.0)
     Loss from discontinued operations........................              31.4             25.6              46.1
     Extraordinary items......................................               4.2             30.2               1.0
     Deferred income taxes and other..........................             418.2            (40.6)             15.0
                                                                       ---------        ---------         ---------
                                                                           950.0            814.2             593.5
     Changes in working capital...............................             129.7             41.1              51.0
                                                                       ---------        ---------         ---------

       Net cash provided by operating activities from
          continuing operations...............................           1,079.7            855.3             644.5
                                                                       ---------        ---------         ---------

FINANCING ACTIVITIES
   Proceeds from borrowings...................................           1,938.0          1,951.1             657.5
   Retirement and repayment of debt...........................          (1,113.4)        (2,586.6)           (559.2)
   Issuance of preferred stock................................                              500.0
   Issuances (repurchases) of common stock, net...............              28.9            470.2            (175.9)
   Dividends..................................................             (36.0)           (34.0)            (26.8)
   Deferred financing costs...................................             (16.3)           (16.9)             (5.0)
   Other......................................................               8.0              0.1              21.4
                                                                       ---------        ---------         ---------

       Net cash provided by (used in) financing activities 
          from continuing operations..........................             809.2            283.9             (88.0)
                                                                       ---------        ---------         ---------

INVESTING ACTIVITIES
   Acquisitions, net of cash acquired.........................            (309.7)          (170.1)            (24.8)
   Proceeds from sales of short-term investments, net.........             145.9             45.6             210.2
   Capital contributions to and purchases of investments......            (202.1)          (268.7)           (475.4)
   Proceeds from sales of and distributions from investments..              23.6            171.1             165.1
   Proceeds from investees' repayments of loans...............              74.7             30.6
   Capital expenditures.......................................            (898.9)          (795.5)           (554.4)
   Sale of subsidiary, net of cash sold.......................            (140.4)
   Additions to deferred charges..............................            (108.4)           (58.8)            (38.0)
   Other......................................................             (12.0)           (10.7)            (32.2)
                                                                       ---------        ---------         ---------

       Net cash used in investing activities from 
          continuing operations...............................          (1,427.3)        (1,056.5)           (749.5)
                                                                       ---------        ---------         ---------

INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS - CONTINUING OPERATIONS...................             461.6             82.7            (193.0)

CASH AND CASH EQUIVALENTS, beginning of year..................             409.1            326.4             519.4
                                                                       ---------        ---------         ---------

CASH AND CASH EQUIVALENTS, end of year........................            $870.7           $409.1            $326.4
                                                                       =========        =========         =========
</TABLE>

See notes to consolidated financial statements.

                                     - 32 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
(Dollars in millions, except per share data)
<TABLE>
<CAPTION>

                                                                                                           Accumulated Other
                                                                                                      Comprehensive Income (Loss)
                                                                                                      Unrealized
                                                                                                         Gains  Cumulative
                                                                                                          on     Transla-
                                     Preferred Stock         Common Stock                    Accumu-   Marketable  tion
                                    Series    Series  Class A                    Additional   lated      Secur-  Adjust-
                                       A         B    Special  Class A    Class B  Capital   Defici t    ities    ments     Total
<S>                                <C>      <C>       <C>       <C>        <C>   <C>       <C>         <C>         <C>   <C>     
BALANCE, JANUARY 1, 1996............$       $          $192.8    $37.7      $8.8   $843.1  ($1,914.3)     $22.2  ($18.0)  ($827.7)
Comprehensive income (loss):
   Net loss.........................                                                           (53.5)
   Unrealized losses on marketable
     securities, net of deferred 
     taxes of ($11.9)................                                                                     (22.1)
   Cumulative translation 
     adjustments ...................                                                                               12.0
Total comprehensive loss............                                                                                        (63.6)
   Issuance of common stock.........                     97.2                     1,526.3                                 1,623.5
   Issuance of preferred stock...... 31.9                                                                                    31.9
   Exercise of options..............                      0.2      0.2                3.0                                     3.4
   Retirement of common stock.......                     (6.9)    (3.9)             (41.4)    (133.2)                      (185.4)
   Cash dividends, common,
      $.0933 per share..............                                                           (26.1)                       (26.1)
   Cash dividends, Series A 
     preferred .....................                                                 (0.7)                                   (0.7)
   Unrecognized gain on issuance of
     common stock of a subsidiary...                                                 11.6                                    11.6
   Temporary equity related to 
     put options ...................                                                (17.5)                                  (17.5)
   Proceeds from sales and 
     extensions of put options......                                                  2.2                                     2.2
                                    -----    ------    ------    -----      ---- --------  ---------   --------    ----  --------

BALANCE, DECEMBER 31, 1996.......... 31.9               283.3     34.0       8.8  2,326.6   (2,127.1)       0.1    (6.0)    551.6
Comprehensive income (loss):
   Net loss.........................                                                          (238.7)
   Unrealized gains on marketable
     securities, net of deferred 
     taxes of $75.8.................                                                                      140.6
   Cumulative translation adjustments                                                                              (5.6)
Total comprehensive loss............                                                                                       (103.7)
   Issuance of common stock.........                     24.9                       475.4                                   500.3
   Issuance of preferred stock......          500.0                                                                         500.0
   Exercise of options..............                      1.0                        14.8                                    15.8
   Conversion of convertible 
     subordinated debt to common 
     stock..........................                      8.4                       210.1                                   218.5
   Retirement of common stock.......                     (0.6)    (2.2)             (22.3)     (17.7)                       (42.8)
   Cash dividends, common,
     $.0933 per share...............                                                           (32.4)                       (32.4)
   Cash dividends, Series A 
     preferred .....................                                                 (1.6)                                   (1.6)
   Series B preferred dividends.....           13.2                                 (13.2)
   Temporary equity related to 
     put options ...................                                                 38.2                                    38.2
   Proceeds from sales and 
     extensions of put options......                                                  2.6                                     2.6
                                    -----    ------    ------    -----      ---- --------  ---------   --------    ----  --------

BALANCE, DECEMBER 31, 1997.......... 31.9     513.2     317.0     31.8       8.8  3,030.6   (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...................                     10.4                       347.2                                   357.6
   Exercise of options..............                      1.4                0.6     33.8                                    35.8
   Retirement of common stock.......                     (0.2)    (0.1)              (2.6)     (10.0)                       (12.9)
   Cash dividends, common, 
     $.0933 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    $328.6    $31.7      $9.4 $3,311.5  ($1,488.2)  $1,049.5    $0.2  $3,815.3
                                    =====    ======    ======    =====      ==== ========  =========   ========    ====  ========
</TABLE>
See notes to consolidated financial statements.

                                     - 33 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

1.   BUSINESS

     Comcast  Corporation  and its  subsidiaries  (the "Company") is principally
     engaged in the  development,  management  and operation of broadband  cable
     networks and the provision of programming content.

     Cable communications includes cable and telecommunications  services in the
     United States ("US").  The Company's  consolidated  cable operations served
     approximately 4.5 million subscribers and passed  approximately 7.4 million
     homes as of December 31, 1998.

     Programming   content  is  provided  through  the  Company's   consolidated
     subsidiaries,  QVC, Inc. ("QVC"),  E! Entertainment  Television,  Inc. ("E!
     Entertainment")  and Comcast SportsNet (see Note 3), and other investments,
     including The Golf Channel,  Speedvision and Outdoor Life. Through QVC, the
     Company  markets a wide variety of products and is available  to, on a full
     and  part-time  basis,  over 70 million  homes in the US,  over 7.3 million
     homes in the United Kingdom ("UK") and over 14 million homes in Germany. E!
     Entertainment is an entertainment-related news and information service with
     distribution to approximately 53 million customers as of December 31, 1998.
     Comcast SportsNet is a regional sports  programming  network which provides
     sports related  programming  to  approximately  2.6 million  viewers in the
     Philadelphia region.

     In January  1999,  the Company  agreed to sell its  indirect  wholly  owned
     subsidiary,  Comcast  Cellular  Corporation  ("Comcast  Cellular"),  to SBC
     Communications,  Inc.  for  approximately  $400  million  in  cash  and the
     assumption of  approximately  $1.3 billion of Comcast  Cellular debt. As of
     December 31,  1998,  Comcast  Cellular  provides  telephone  communications
     services  pursuant  to  licenses  granted  by  the  Federal  Communications
     Commission ("FCC") to more than 829,000  subscribers in and around the City
     of  Philadelphia,  the State of Delaware and a  significant  portion of the
     State of New Jersey.  Revenues for Comcast  Cellular  were $455.2  million,
     $444.9  million and $426.1  million for the years ended  December 31, 1998,
     1997 and 1996,  respectively.  The sale of Comcast  Cellular is expected to
     close in the third  quarter of 1999 subject to the receipt of all necessary
     regulatory  and other  approvals.  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."

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 notes to  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

                                     - 34 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     management   as  of  December  31,  1998  and  1997,   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,  consisting primarily of products held for sale, 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.

     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 and  investments in  partnerships  which are not controlled by the
     Company  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.

     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.

     Deferred Charges
     Franchise and license  acquisition  costs are amortized on a  straight-line
     basis over their  legal or  estimated  useful  lives of 3 to 40 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 of 20 to 40
     years.

                                     - 35 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     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.  Such methodologies  include evaluations based on
     the cash flows generated by the underlying assets or other  determinants of
     fair value.

     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  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 credit up to thirty  days  after date of  shipment.  An  allowance  for
     returned  merchandise  is  provided  as a  percentage  of  sales  based  on
     historical experience.  The return provision was approximately 21% of gross
     sales for each of the years ended December 31, 1998, 1997 and 1996.

     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 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
     long-term investments.

     Capitalized Interest
     Interest  is  capitalized  as part  of the  historical  cost  of  acquiring
     qualifying assets,  including  investments in equity method investees while
     the investee has  activities in progress  necessary to commence its planned
     principal operations. Capitalized interest for the years ended December 31,
     1997 and 1996 was $18.0 million and $32.1 million, respectively.

     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.

                                     - 36 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     Derivative Financial Instruments
     The Company uses derivative financial instruments,  including interest rate
     exchange  agreements  ("Swaps"),  interest rate cap agreements ("Caps") and
     interest  rate  collar  agreements  ("Collars")  to manage its  exposure to
     fluctuations in interest rates and common stock option  contracts to manage
     its  exposure to  fluctuations  in the price of its Class A Special  Common
     Stock ("Comcast Put Options"). The Company also enters into call options on
     certain of its equity investments ("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.  Covered Call
     Options  are  marked  to  market  on  a  current  basis  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.

     New Accounting Pronouncement
     In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
     No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities."
     This statement,  which establishes  accounting and reporting  standards for
     derivatives and hedging activities, is effective for fiscal years beginning
     after June 15, 1999. Upon the adoption of SFAS No. 133, all derivatives are
     required to be recognized in the statement of financial  position as either
     assets or liabilities and measured at fair value.  The Company is currently
     evaluating  the  impact  the  adoption  of SFAS No.  133  will  have on its
     financial position and results of operations.

     Earnings (Loss) for Common Stockholders Per Common Share
     Earnings  (loss) for common  stockholders  per common  share is computed by
     dividing net income (loss),  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 (loss) for common  stockholders per common share ("Diluted
     EPS") for the years ended December 31, 1998, 1997 and 1996, respectively.

                                     - 37 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)

<TABLE>
<CAPTION>
                                                                  (Amounts in millions, except per share data)
                                                                                   Year Ended
                                                                                  December 31,
                                                                        1998           1997         1996
<S>                                                                    <C>          <C>           <C>    
Net income (loss) for common stockholders......................            $943.0       ($253.5)      ($54.2)
Dilutive securities effect on net income (loss) for common
   stockholders................................................               1.0
Preferred dividends............................................              29.1
                                                                   --------------  ------------  -----------
Net income (loss) for common stockholders used for
   Diluted EPS.................................................            $973.1       ($253.5)      ($54.2)
                                                                   ==============  ============  ===========
Weighted average number of common shares outstanding...........             366.5         339.0        247.6
Dilutive securities:
        1 1/8% discount convertible subordinated debentures,
          redeemed March 1998..................................               2.5
        Series A and B convertible preferred stock.............              22.6
        Stock option and restricted stock plans................              11.4
                                                                   --------------  ------------  -----------
Diluted weighted average number of common shares
   outstanding.................................................             403.0         339.0        247.6
                                                                   ==============  ============  ===========
Diluted earnings (loss) for common stockholders per
   common share................................................             $2.41         ($.75)       ($.21)
                                                                   ==============  ============  ===========
</TABLE>

     Put  options  sold by the  Company  on 2.75  million  shares of its Class A
     Special  Common Stock (see Note 6) were  outstanding  during the year ended
     December 31, 1998 but were not included in the  computation  of Diluted EPS
     as the options'  exercise  price was less than the average  market price of
     the Company's Class A Special Common Stock during the period.

     For the years ended  December 31, 1997 and 1996,  the  Company's  potential
     common  shares of 53.2  million  shares  and 42.9  million  shares  have an
     antidilutive  effect on loss for common  stockholders per common share and,
     therefore,  have not been used in determining  the total  weighted  average
     number of common shares outstanding.

     Reclassifications
     Certain  reclassifications  have been made to the prior years' consolidated
     financial statements to conform to those classifications used in 1998.

3.   ACQUISITIONS AND OTHER SIGNIFICANT EVENTS

     Acquisition of Greater Philadelphia Cablevision
     In  February  1999,  the  Company  agreed to acquire  Greater  Philadelphia
     Cablevision,  Inc., a subsidiary  of Greater  Media,  Inc.  that operates a
     cable system serving  approximately  79,000  subscribers  in  Philadelphia,
     Pennsylvania.  The Company will issue  approximately  4.2 million shares of
     its  Class  A  Special  Common  Stock  to  complete  the  acquisition.  The
     acquisition is expected to close in the fourth quarter of 1999,  subject to
     receipt of all necessary regulatory and other approvals.

                                     - 38 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     Sale of Primestar
     As of December 31, 1998,  the Company  owns a 9.5%  interest in  Primestar,
     Inc. ("Primestar").  Primestar acquires, originates and provides television
     programming   services   delivered  by  satellite   through  a  network  of
     distributors.  In January 1999,  Primestar announced the sale of its direct
     broadcast  satellite service to Hughes Electronics  Corporation (a division
     of General Motors  Corporation and the parent company of DirecTV,  a direct
     broadcast satellite service) ("Hughes  Electronics") for approximately $1.8
     billion in cash and stock.  The sale of Primestar to Hughes  Electronics is
     subject to the  consent of certain  Primestar  lenders  and the  receipt of
     necessary regulatory and other approvals.

     Investment in Prime Communications
     In December 1998, the Company agreed to invest in Prime  Communications LLC
     ("Prime"),  a cable television operator with cable  communications  systems
     serving  approximately  430,000  subscribers.  During the fourth quarter of
     1998, the Company acquired a $50 million 12.75%  subordinated note due 2008
     from Prime. In addition, under the terms of the agreement, the Company will
     lend Prime  approximately  $735  million in the form of a 6% ten year note,
     expected to occur in the third quarter of 1999. In return, the Company will
     receive a  convertible  note giving the Company the right to acquire 90% of
     Prime.  The note  cannot be  converted  until the build out of  certain  of
     Prime's cable systems is complete and  regulatory  and other  approvals are
     obtained,  which is  expected to occur in the third  quarter of 2002.  Upon
     conversion of the note, the Company  expects to assume  approximately  $550
     million of Prime  debt.  The  Company  will have the option to acquire  the
     remaining 10% interest in Prime for approximately $82 million, plus accrued
     interest at 7% per annum.

     Sale of Sprint PCS
     The Company,  Tele-Communications,  Inc. ("TCI"), Cox Communications,  Inc.
     ("Cox," and together  with the Company and TCI, the "Cable  Partners")  and
     Sprint  Corporation  ("Sprint")  engaged  in  the  wireless  communications
     business through a limited partnership known as "Sprint PCS."

     In November 1998, Sprint assumed ownership and management control of Sprint
     PCS and issued a new class of Sprint  stock  (the  "Sprint  PCS  Stock") to
     track the performance of Sprint's combined wireless operations. In exchange
     for its 15% interest in Sprint PCS, the Company received approximately 47.2
     million  shares of  unregistered  Series 2 Sprint PCS common stock,  61,726
     shares of Sprint PCS preferred stock  (convertible  into  approximately 2.0
     million  shares of  unregistered  Series 2 Sprint PCS  common  stock) and a
     warrant to purchase approximately 3.0 million shares of unregistered Series
     2 Sprint PCS common stock at $24.02 per share. As a result of the exchange,
     the Company  recognized a pre-tax gain of $758.5  million during the fourth
     quarter of 1998  representing the difference  between the fair value of the
     Sprint PCS common stock,  convertible  preferred stock and warrant, and the
     Company's  basis in Sprint PCS. This gain is included in investment  income
     in the  Company's  consolidated  statement of  operations.  The Company has
     registration rights,  subject to customary  restrictions,  which will allow
     the Company to sell the Sprint PCS Stock received. As of December 31, 1998,
     the Company has recorded its investment in Sprint PCS at its estimated fair
     value.

     The Sprint PCS Stock is divided  into three  categories:  (i) Series 1 (one
     vote per  share) to be held by the  public,  (ii)  Series 2 (1/10  vote per
     share  other  than in class  votes) to be held by the Cable  Partners,  and
     (iii)  Series 3 (one vote per  share) to be held by two of  Sprint's  major
     shareholders.  The Cable  Partners  have  registration  rights,  subject to
     customary  restrictions,  that, if used,  would permit the  monetization of
     their Sprint PCS holdings through equity  offerings or derivatives.  If the
     Series 2 shares are transferred by a Cable Partner,  the transferred shares
     become full vote Series 1 shares.

     Sale of Comcast UK Cable
     In October 1998, the Company received  approximately  4.8 million shares of
     unregistered  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 (the "NTL Transaction").  As
     a result of the exchange, the Company recognized a pre-tax gain of

                                     - 39 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     $148.3  million  during  the  fourth  quarter  of  1998,  representing  the
     difference  between the fair value of the NTL common stock received and the
     Company's  basis in Comcast UK Cable.  Such gain is included in  investment
     income in the  Company's  consolidated  statement  of  operations.  Certain
     conditions agreed to in the NTL Transaction  restrict the Company's ability
     to sell the NTL common  stock  received  for a period of 150 days after the
     closing of the NTL  Transaction.  As of December 31, 1998,  the Company has
     recorded its investment in NTL at its estimated fair value.

     AT&T Acquisition of Teleport
     In July 1998, AT&T Corp. ("AT&T") merged with Teleport Communications Group
     Inc.  ("Teleport")  with  AT&T  as the  surviving  corporation  (the  "AT&T
     Transaction").  Upon closing of the AT&T Transaction,  the Company received
     approximately  24.2  million  shares of  unregistered  AT&T common stock in
     exchange  for the  approximately  25.6 million  shares of Teleport  Class B
     Common Stock held by the Company (see Note 4). As a result of the exchange,
     the Company  recognized a pre-tax gain of $1.092  billion  during the third
     quarter of 1998,  representing the difference between the fair value of the
     AT&T stock  received  and the  Company's  basis in  Teleport.  Such gain is
     included in investment  income in the Company's  consolidated  statement of
     operations.  The  Company has  registration  rights,  subject to  customary
     restrictions,  which allow the Company to effect a registration of the AT&T
     shares  received.  As of December  31,  1998,  the Company has recorded its
     investment in AT&T at its estimated fair value.

     Acquisition of Jones Intercable
     In May 1998,  the  Company  agreed to  purchase  from BCI  Telecom  Holding
     ("BTH") 6.4 million Class A Common Shares in Jones Intercable, Inc. ("Jones
     Intercable"),  and a 49%  interest  in the BTH  subsidiaries  which were to
     continue  to own BTH's  remaining  6.4 million  shares of Jones  Intercable
     Class A Common  Stock.  At the same  time,  the  Company  agreed to acquire
     approximately  2.9 million shares of Common Stock of Jones  Intercable (the
     "Control  Shares"),  if and when  acquired by BTH from  affiliates of Jones
     Intercable's controlling shareholder under an existing option (the "Control
     Option") to acquire such shares (which absent  extraordinary  circumstances
     would not have been  exercisable  until December 2001).  The Company was to
     purchase the remaining 51% of the BTH subsidiaries  when the Control Shares
     were acquired.  The Company,  BTH, Jones Intercable and Jones  Intercable's
     controlling  shareholder  agreed in August 1998 to  accelerate  the Control
     Option  to  permit  its  early  exercise  and  the  early  closing  of  the
     transactions  with BTH. At closing  (expected to occur in the first half of
     1999, subject to the receipt of required regulatory approvals), the Company
     will pay BTH a total of $500  million in cash to acquire  the 12.8  million
     shares of Jones Intercable Class A Common Stock and $200 million in cash to
     acquire  the Control  Shares.  After  closing,  the  Company  will  control
     approximately  37% of the economic and 47% of the voting  interest in Jones
     Intercable.  In addition,  the Control Shares will represent  shares having
     the right to elect  approximately  75% of the Board of  Directors  of Jones
     Intercable. The transaction will be funded either with new borrowings, with
     available  borrowings  under  existing  lines of credit or by other  means.
     Jones Intercable is a public company, which upon closing of certain pending
     transactions, will own or manage cable operations serving approximately 1.0
     million customers.

     E! Entertainment
     On March 31, 1997, the Company,  through Comcast Entertainment Holdings LLC
     (the  "LLC"),  which is owned  50.1% by the  Company  and 49.9% by The Walt
     Disney Company  ("Disney"),  purchased a 58.4% interest in E! Entertainment
     from  Time  Warner,  Inc.  ("Time  Warner")  for  $321.9  million  (the "E!
     Acquisition").  The E! Acquisition was funded by cash  contributions to the
     LLC by the  Company  and  Disney  of $132.8  million  and  $189.1  million,
     respectively.   In  connection  with  the  E!   Acquisition,   the  Company
     contributed its 10.4% interest in E!  Entertainment to the LLC. To fund the
     cash  contribution  to the LLC, the Company  borrowed  $132.8  million from
     Disney in the form of two 10-year, 7% notes (the "Disney Notes").

     In December 1997,  the LLC acquired the 10.4% interest in E!  Entertainment
     held  by Cox  for  $57.1  million.  The  acquisition  was  funded  by  cash
     contributions  to the LLC by the  Company  and Disney of $28.6  million and
     $28.5 million, respectively. As of December 31, 1998 and 1997, the LLC owns
     a 79.2% interest in E! Entertainment.

                                     - 40 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     The Company accounted for the acquisitions under the purchase method and E!
     Entertainment was consolidated with the Company effective March 31, 1997.

     Microsoft Investment
     In June 1997, the Company and Microsoft Corporation ("Microsoft") completed
     a Stock  Purchase  Agreement.  Microsoft  purchased and the Company  issued
     approximately  24.6 million shares of the Company's  Class A Special Common
     Stock at $20.29 per share,  for $500.0  million and  500,000  shares of the
     Company's  newly issued 5.25% Series B Mandatorily  Redeemable  Convertible
     Preferred  Stock,  par value  $1,000  per share  (the  "Series B  Preferred
     Stock"), for $500.0 million (see Note 6).

     Scripps Cable
     In November  1996,  the Company  acquired the cable  television  operations
     ("Scripps Cable") of The E.W. Scripps Company ("E.W.  Scripps") in exchange
     for  approximately  93.0 million  shares of the  Company's  Class A Special
     Common Stock,  valued at $1.552  billion (the "Scripps  Acquisition").  The
     Company accounted for the Scripps Acquisition under the purchase method and
     Scripps Cable was consolidated with the Company effective November 1, 1996.
     As the  consideration  given in exchange  for  Scripps  Cable was shares of
     Class A Special Common Stock,  the Scripps  Acquisition  had no significant
     impact on the Company's consolidated statement of cash flows.

     Comcast-Spectacor
     In July 1996, the Company  completed its  acquisition  (the "Sports Venture
     Acquisition")  of  a  66%  interest  in  the  Philadelphia  Flyers  Limited
     Partnership,  a Pennsylvania  limited partnership  ("PFLP"),  the assets of
     which,  after giving effect to the Sports Venture  Acquisition,  consist of
     (i)  the  National  Basketball  Association  ("NBA")  franchise  to own and
     operate the  Philadelphia  76ers  basketball  team and related  assets (the
     "Sixers"),  (ii) the National  Hockey League  ("NHL")  franchise to own and
     operate the Philadelphia  Flyers hockey team and related assets,  and (iii)
     two adjacent arenas,  leasehold interests in and development rights related
     to the land  underlying  the  arenas  and other  adjacent  parcels  of land
     located  in  Philadelphia,   Pennsylvania  (collectively,   the  "Arenas").
     Concurrent with the completion of the Sports Venture Acquisition,  PFLP was
     renamed Comcast Spectacor, L.P. ("Comcast-Spectacor").

     The Sports Venture  Acquisition  was completed in two steps. In April 1996,
     the Company  purchased  the Sixers for $125.0  million in cash plus assumed
     net  liabilities of $11.0 million  through a partnership  controlled by the
     Company.  To complete the Sports  Venture  Acquisition,  in July 1996,  the
     Company contributed its interest in the Sixers, exchanged approximately 3.5
     million  shares of the  Company's  Class A Special  Common  Stock and 6,370
     shares of the  Company's  newly  issued 5% Series A  Convertible  Preferred
     Stock (the "Series A Preferred Stock") (see Note 6), and paid $15.0 million
     in cash for its current  interest in  Comcast-Spectacor.  The remaining 34%
     interest in  Comcast-Spectacor  is owned by a group,  including  the former
     majority owner of PFLP, who also manages  Comcast-Spectacor  (the "Minority
     Group").  In  connection  with the  Sports  Venture  Acquisition,  Comcast-
     Spectacor  assumed the outstanding  liabilities  relating to the Sixers and
     the Arenas,  including a mortgage and other  obligations of $155.0 million.
     The issuance of the Series A Preferred Stock and the Class A Special Common
     Stock in the  Sports  Venture  Acquisition  had no impact on the  Company's
     consolidated statement of cash flows due to their non-cash nature.

                                     - 41 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


4.   INVESTMENTS
<TABLE>
<CAPTION>
                                                                                       December 31,
                                                                                  1998             1997
                                                                                   (Dollars in millions)
<S>                                                                          <C>                 <C>  
     Equity method................................................                $11.1            $839.1

     Fair value method............................................              4,170.0             346.5

     Cost method  ................................................                 74.7             214.1
                                                                              ---------          --------
                  Total investments...............................              4,255.8           1,399.7
     Less, current investments....................................              3,653.4             163.9
                                                                              ---------          --------
     Non-current investments......................................               $602.4          $1,235.8
                                                                              =========          ========
</TABLE>

     Equity Method
     The Company records its proportionate interests in the net income (loss) of
     substantially  all of its equity method  investees three months in arrears.
     As of December 31, 1997, the Company held interests  representing less than
     20% of the total outstanding  ownership  interests in certain of its equity
     method  investees.  The equity method of accounting  was utilized for these
     investments  based  on the type of  investment  (e.g.  general  partnership
     interest),  board  representation,  participation in a controlling investor
     group,  significant  shareholder rights or a combination of these and other
     factors.  The  Company's  recorded  investments  exceed  its  proportionate
     interests in the book value of the  investees'  net assets by $82.3 million
     as of December 31, 1998  (primarily  related to the  investment in The Golf
     Channel).  Such excess is being  amortized to equity in net income or loss,
     primarily  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  $215.3  million and $1.424
     billion  as  of  December  31,  1998  and  1997,  respectively.  Summarized
     financial  information for the Company's  equity method investees for 1998,
     1997 and 1996 is as follows (dollars in millions).

                                     - 42 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


<TABLE>
<CAPTION>
                                                Sprint                  UK       Comcast
                                                  PCS     Teleport   Investees  Spectacor    Other    Combined
<S>                                            <C>          <C>        <C>      <C>         <C>      <C>     
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)
                                                =======    =======    =======    =======    =======   ======== 

Year Ended December 31, 1997:

   Combined Results of Operations
     Revenues, net..........................     $111.5     $431.3     $197.5     $140.8     $743.9   $1,625.0
     Operating, selling, general and
       administrative expenses..............      959.4      398.5      168.4      117.9      820.9    2,465.1
     Depreciation and amortization..........      194.2      133.9       76.0       46.5       66.2      516.8
     Operating loss.........................   (1,042.1)    (101.1)     (46.9)     (23.6)    (143.2)  (1,356.9)
     Net loss (a)...........................   (1,187.3)    (192.9)     (92.2)     (39.6)    (189.3)  (1,701.3)

   Company's Equity in Net Loss
     Equity in current period net loss......    ($178.1)    ($30.5)    ($34.6)    ($26.2)    ($65.3)   ($334.7)
     Amortization expense...................       (1.5)      (0.2)      (0.6)      (5.4)      (1.4)      (9.1)
                                                -------    -------    -------    -------    -------   -------- 
       Total equity in net loss.............    ($179.6)    ($30.7)    ($35.2)    ($31.6)    ($66.7)   ($343.8)
                                                =======    =======    =======    =======    =======   ======== 

Year Ended December 31, 1996:

   Combined Results of Operations
     Revenues, net..........................       $0.1     $192.9     $155.2                $440.0     $788.2
     Operating, selling, general and
       administrative expenses..............      208.0      180.9      140.9                 486.0    1,015.8
     Depreciation and amortization..........        1.9       57.2       57.6                  60.0      176.7
     Operating loss.........................     (209.8)     (45.2)     (43.3)               (106.0)    (404.3)
     Net loss (a)...........................     (344.9)     (84.8)     (72.2)               (140.8)    (642.7)

   Company's Equity in Net Loss
     Equity in current period net loss......     ($51.7)    ($15.1)    ($28.6)               ($45.9)   ($141.3)
     Amortization income (expense)..........        0.6       (1.1)      (0.3)                 (2.7)      (3.5)
                                                -------    -------    -------    -------    -------   -------- 
       Total equity in net loss.............     ($51.1)    ($16.2)    ($28.9)               ($48.6)   ($144.8)
                                                =======    =======    =======    =======    =======   ======== 
<FN>
---------
(a) see footnote (1) on page 44.
</FN>
</TABLE>

                                     - 43 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


<TABLE>
<CAPTION>
                                               Sprint                  UK       Comcast
                                                 PCS     Teleport   Investees  Spectacor    Other    Combined

<S>                                         <C>        <C>          <C>        <C>        <C>      <C>    
Combined Financial Position

As of December 31, 1998 (2):
     Current assets.....................                                                    $57.8      $57.8
     Noncurrent assets..................                                                    314.7      314.7
     Current liabilities................                                                     41.9       41.9
     Noncurrent liabilities.............                                                    451.4      451.4

As of December 31, 1997:
     Current assets.....................       $317.3     $440.8      $35.9      $84.9     $219.4   $1,098.3
     Noncurrent assets..................      5,483.3    1,675.2      716.4      285.4      915.7    9,076.0
     Current liabilities................        440.2      302.8       74.6      107.7      747.5    1,672.8
     Noncurrent liabilities.............      3,312.9    1,061.6      558.7      188.0      377.2    5,498.4
<FN>
--------
(1)  Net  loss  also   represents  loss  from   continuing   operations   before
     extraordinary   items  and  cumulative  effect  of  changes  in  accounting
     principles.
(2)  Financial position information as of December 31, 1998 is not presented for
     Sprint  PCS,  Teleport,  the UK  Investees  or  Comcast-Spectacor  as  such
     investments were no longer accounted for under the equity method as of that
     date.
</FN>
</TABLE>

     Sprint  PCS.   Effective  November  1998,  the  Company  accounts  for  its
     investment in Sprint PCS under the fair value method (see Note 3).

     Teleport.  For the years ended December 31, 1998,  1997 and 1996,  Teleport
     issued  shares of its  Class A Common  Stock.  As a result  of these  stock
     issuances,  the Company recognized a $157.8 million, $7.7 million and $40.6
     million,  respectively,  increase in its proportionate  share of Teleport's
     net  assets  as a gain from  equity  offering  of  affiliate.  The  Company
     recorded its  proportionate  share of Teleport's  net assets one quarter in
     arrears.  In March  1997,  the  Company  received  2.76  million  shares of
     Teleport  Class A Common Stock from  Teleport in exchange for the Company's
     shares of an alternate access  provider.  In May 1997, the Company sold all
     of its shares of Teleport  Class A Stock for $68.9 million and recognized a
     $68.9 million pre-tax gain,  which is included in investment  income in the
     Company's  1997  consolidated  statement of  operations.  In July 1998,  in
     connection with the AT&T  Transaction  (see Note 3), the Company  exchanged
     its interest in Teleport for shares of AT&T common stock.

     UK  Investees.  In October  1998,  the Company  exchanged  its  interest in
     Comcast UK Cable for shares of NTL common stock (see Note 3).

     Comcast-Spectacor.   Effective   January  1,  1998,   the   Company   began
     consolidating the accounts of Comcast- Spectacor,  an affiliate  previously
     accounted for under the equity  method,  due to certain call rights held by
     the Company which became exercisable effective January 16, 1998.

     Other.  The Company's other equity investees  include  investments in cable
     communications  and  programming  content  providers.  The Company does not
     consider  these  other  equity  method   investments  to  be   individually
     significant to its consolidated  financial position,  results of operations
     or liquidity.

     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.

     Fair Value Method
     The Company  holds  unrestricted  equity  investments  in certain  publicly
     traded  companies,  with an historical  cost  (including  $1.999 billion of
     pre-tax gains  recognized  during 1998 - see Note 3) of $2.555  billion and
     $130.0

                                     - 44 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     million as of  December  31, 1998 and 1997,  respectively.  The Company has
     recorded these investments,  which are classified as available for sale, at
     their  estimated  fair values of $4.170  billion  and $346.5  million as of
     December 31, 1998 and 1997,  respectively.  The unrealized pre-tax gains as
     of  December  31,  1998 and 1997 of  $1.615  billion  and  $216.5  million,
     respectively,  have been  reported in the  Company's  consolidated  balance
     sheet as a  component  of  stockholders'  equity,  net of related  deferred
     income tax expense of $565.1 million and $75.8 million, respectively.

     @Home.  In July 1997,  At Home  Corporation  ("@Home"),  an investee of the
     Company  previously  accounted  for under the equity  method,  completed an
     initial  public  offering of its Series A Common  Stock (the "@Home  IPO").
     @Home provides Internet services to customers and businesses over the cable
     television  infrastructure  in a  limited  number  of  cities  in  the  US.
     Effective  July 1, 1997,  due to the dilution of the  Company's  equity and
     voting interests and other factors subsequent to the @Home IPO, the Company
     discontinued  the equity method of accounting  for its investment in @Home.
     The Company holds approximately 8.0 million contractually restricted shares
     (the "Restricted Shares") and approximately 6.6 million unrestricted shares
     (the  "Unrestricted  Shares")  of @Home  Series A Common  Stock (the "@Home
     Series A  Stock"),  as of  December  31,  1998 and 1997.  The  Company  has
     recorded the Restricted Shares at their historical cost of $1.1 million and
     the  Unrestricted  Shares,  which are  classified as available for sale, at
     their estimated fair value of $486.4 million and $164.6  million,  based on
     the quoted market price of the @Home Series A Stock as of December 31, 1998
     and 1997, respectively.

     TCI. As of December 31, 1998 and 1997, the Company holds  approximately 3.1
     million  shares  of TCI Class A Common  Stock,  approximately  2.4  million
     shares of Liberty Media  Corporation  ("Liberty")  Class A Common Stock and
     approximately  2.3  million  shares  of  TCI  Ventures  Group,  Inc.  ("TCI
     Ventures")  Class A Common  Stock (as adjusted  for the  one-for-two  stock
     split for Liberty and one-for-one  stock split for TCI Ventures in February
     1998)  (together,  the "TCI Stock").  In March 1998,  the Company sold call
     options  relating  to the TCI Stock for $20.7  million.  Such call  options
     expire between March and September 1999. During the year ended December 31,
     1998, the Company  recorded  pre-tax  investment  expense of $105.5 million
     related to the increase in the value of the call options.

     During the years ended December 31, 1997 and 1996,  the Company  recognized
     pre-tax gains of $33.3 million and $82.6 million, respectively, on sales of
     certain of its fair value method investments.  These gains were recorded as
     a reclassification from other comprehensive income to investment income.

     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 and excessive costs involved
     in determining such fair value.

     Impairment Losses
     During the years  ended  December  31,  1998,  1997 and 1996,  the  Company
     recorded pre-tax losses of $152.8 million,  $2.5 million and $15.0 million,
     respectively,  on  certain of its  investments  based on a decline in value
     that was considered other than temporary.  Such pre-tax losses are included
     in investment income in the Company's consolidated statement of operations.

                                     - 45 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


5.   LONG-TERM DEBT
<TABLE>
<CAPTION>
                                                                                         December 31,
                                                                                    1998              1997
                                                                                      (Dollars in millions)
<S>                                                                              <C>               <C>     
   Notes payable to banks and insurance companies, due
     in installments through 2003..........................................       $1,690.8          $1,753.3
   8-1/8% Senior notes, due 2004...........................................          299.8             299.7
   8-3/8% Senior notes, due 2007...........................................          596.5             596.3
   6.20% Senior notes, due 2008............................................          797.9
   8-7/8% Senior notes, due 2017...........................................          545.6             545.5
   8-1/2% Senior notes, due 2027...........................................          249.6             249.6
   11.20% Senior discount debentures, due 2007.............................                            378.3
   10-1/4% Senior subordinated debentures, due 2001........................          125.0             125.0
   9-3/8% Senior subordinated debentures, due 2005.........................          234.1             234.1
   9-1/8% Senior subordinated debentures, due 2006.........................          223.7             250.0
   9-1/2% Senior subordinated debentures, due 2008.........................          200.0             200.0
   10-5/8% Senior subordinated debentures, due 2012........................          282.5             300.0
   1-1/8% Discount convertible subordinated debentures, due 2007...........                            355.9
   7% Disney Notes, due 2007 (see Note 3)..................................          132.8             132.8
   Other debt, due in installments principally through 2000................          199.4              45.9
                                                                                  --------          --------
                                                                                   5,577.7           5,466.4
   Less current portion....................................................          113.5             132.3
                                                                                  --------          --------
                                                                                  $5,464.2          $5,334.1
                                                                                  ========          ========
</TABLE>

   Maturities of long-term debt outstanding as of December 31, 1998 for the four
   years after 1999 are as follows (dollars in millions):

         2000.................................................    $204.2
         2001.................................................     550.5
         2002.................................................     476.1
         2003.................................................     527.8

     Cable Notes
     In November 1998, Comcast Cable  Communications,  Inc. ("Comcast  Cable"),a
     wholly  owned  subsidiary  of the  Company,  sold  $800.0  million of 6.20%
     nonrecourse  public debt due 2008.  Comcast Cable used substantially all of
     the  net  proceeds  from  the  offering  to  repay  existing   intercompany
     borrowings to the Company and for general corporate purposes.

     In May 1997,  Comcast  Cable sold a total of $1.7  billion  of  nonrecourse
     public debt with interest  rates ranging from 8 1/8% to 8 7/8% and maturity
     dates  from 2004 to 2027.  Comcast  Cable  used the net  proceeds  from the
     offerings to repay existing borrowings by their subsidiaries.

     The Cable Notes are unsecured  and  unsubordinated  obligations  of Comcast
     Cable  and rank pari  passu  with all other  unsecured  and  unsubordinated
     indebtedness  and other  obligations of Comcast Cable.  The Cable Notes are
     effectively   subordinated   to  all   liabilities   of   Comcast   Cable's
     subsidiaries, including trade payables. The Cable Notes

                                     - 46 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     are obligations  only of Comcast Cable and are not guaranteed by and do not
     otherwise constitute obligations of the Company.

     The   indenture  for  the  Cable  Notes,   among  other  things,   contains
     restrictions (with certain  exceptions) on the ability of Comcast Cable and
     its Restricted  Subsidiaries (as defined) to: (i) make dividend payments or
     other  restricted  payments;  (ii)  create  liens  or enter  into  sale and
     leaseback transactions;  and (iii) enter into mergers,  consolidations,  or
     sales of all or substantially all of their assets.

     Redemption of 1 1/8% Debentures
     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 10.4 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 acquisition  costs.
     Unamortized  debt  acquisition  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, 1998, 1997 and 1996 of
     $4.2  million,  $30.2 million and $1.0  million,  respectively,  consist of
     unamortized debt acquisition  costs and debt  extinguishment  costs, net of
     related  tax  benefits,   expensed   principally  in  connection  with  the
     redemption and refinancing of certain indebtedness.

     Interest Rates
     The fixed interest rate on notes payable to insurance companies was 8.6% as
     of December 31, 1998.  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  2.0%;  
         Federal Funds rate plus 0.5% to 1.5%; and 
         LIBOR plus 0.375% to 1.875%.

     As of December 31, 1998 and 1997, the Company's  effective weighted average
     interest  rate on its  variable  rate bank debt  outstanding  was 5.80% and
     6.64%, respectively.

     Interest Rate Risk Management
     The Company is exposed to market risk including  changes in interest rates.
     To manage the volatility  relating to these  exposures,  the Company enters
     into various derivative  transactions pursuant to the Company's policies in
     areas such as counterparty  exposure and hedging  practices.  Positions are
     monitored using techniques including market value and sensitivity analyses.

     The use of interest rate risk management  instruments,  such as Swaps, Caps
     and  Collars,  is  required  under the terms of  certain  of the  Company's
     outstanding  debt  agreements.  The Company's  policy is to manage interest
     costs using a mix of fixed and variable rate debt. 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.

                                     - 47 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     The following table  summarizes the terms of the Company's  existing Swaps,
     Caps and Collars as of December 31, 1998 and 1997 (dollars in millions):

<TABLE>
<CAPTION>
                                        Notional                             Average         Estimated
                                         Amount          Maturities       Interest Rate     Fair Value
<S>                                      <C>              <C>             <C>           <C>    
     As of December 31, 1998
     Variable to Fixed Swaps..........   $1,061.8         1999-2008           5.7%            ($13.3)
     Caps.............................      240.0           1999              7.0%
     Collar...........................       50.0           2000            6.3%/4.0%

     As of December 31, 1997
     Variable to Fixed Swaps..........     $550.0         1998-2000           5.6%              $4.2
     Caps.............................      150.0           1998              6.7%
     Collar...........................       50.0           1998            7.0%/4.9%            0.2
</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,  1998,  1997 and 1996 was not
     significant.

     Estimated Fair Value
     The Company's  long-term  debt had estimated  fair values of $5.995 billion
     and $5.848  billion as of  December  31, 1998 and 1997,  respectively.  The
     estimated  fair value of the  Company's  publicly  traded  debt is based on
     quoted  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 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  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 such  restrictive
     covenants  for all periods  presented.  In  addition,  the stock of certain
     subsidiary  companies  is pledged as  collateral  for the notes  payable to
     banks and insurance companies.

     As of  December  31,  1998,  $258.5  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 $2.5 billion as of
     December 31, 1998.

     Lines and Letters of Credit
     As of December 31,  1998,  certain  subsidiaries  of the Company had unused
     lines of credit of $966.8 million, $366.8 million of which is restricted by
     the  covenants of the related debt  agreements  and to  subsidiary  general
     purposes and dividend declaration.

     As of December 31, 1998,  the Company and certain of its  subsidiaries  had
     unused  irrevocable  standby  letters of credit  totaling $121.6 million to
     cover potential fundings associated with several projects.

                                     - 48 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


6.   STOCKHOLDERS' EQUITY (DEFICIENCY)

     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 (the "Board") shall from time to
     time fix by resolution.

     In June 1997, in connection with Microsoft's investment in the Company (see
     Note 3), the  Company  issued the Series B  Preferred  Stock.  The Series B
     Preferred Stock has a 5.25% pay-in-kind annual dividend.  Dividends will be
     paid  quarterly  through  the  issuance  of  additional  shares of Series B
     Preferred Stock (the  "Additional  Shares") and will be 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
     Microsoft, into 21.2 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 $23.54 per share,  increasing as a result of
     the  Additional  Shares to $33.91 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
     Microsoft  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.  As the  Company
     currently  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, 1998.
     The Series B Preferred Stock is generally non-voting.

     In July 1996, in connection with the Sports Venture  Acquisition  (see Note
     3), the  Company  issued  6,370  shares of Series A Preferred  Stock.  Each
     holder of shares of the Series A  Preferred  Stock is  entitled  to receive
     cumulative  cash  dividends  at the annual rate of $250 per share,  payable
     quarterly in arrears.  The Series A Preferred  Stock is redeemable,  at the
     option of the  Company,  beginning  in July 1999 at a  redemption  price of
     $5,000 per share plus  accrued  and  unpaid  dividends,  subject to certain
     conditions  and  conversion  adjustments.  The Series A Preferred  Stock is
     convertible,  at the option of the  holder,  into  shares of the  Company's
     Class A  Special  Common  Stock at a ratio of  209.1175  shares  of Class A
     Special Common Stock for each share of Series A Preferred Stock, subject to
     certain  conditions.  The holders of the Series A  Preferred  Stock are not
     entitled to any voting rights except as otherwise provided by the Company's
     Articles of Incorporation or by applicable law.

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

     Repurchase Program
     Based on the  trade  date for stock  repurchases,  during  the years  ended
     December  31,  1998,  1997 and 1996,  the Company  repurchased  0.3 million
     shares,  2.3 million shares and 10.5 million shares,  respectively,  of its
     common stock for aggregate  consideration  of $12.9 million,  $36.2 million
     and  $180.0  million,   respectively,   pursuant  to  its  Board-authorized
     repurchase programs.

     As part of the repurchase programs, the Company sold Comcast Put Options on
     2.75 million,  2.0 million and 1.0 million  shares,  during the years ended
     December 31, 1998, 1997 and 1996, respectively.

     The Comcast Put Options give the holder the right to require the Company to
     repurchase such shares at specified  prices on specific dates.  The Comcast
     Put Options sold during 1997 and 1996 expired  unexercised.  The amount the
     Company would be obligated to pay to  repurchase  such shares upon exercise
     of the Comcast Put Options,

                                     - 49 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     totaling  $111.2  million and $31.4  million,  has been  reclassified  from
     additional  capital to common equity put options in the Company's  December
     31, 1998 and 1997 consolidated balance sheet, respectively.  The difference
     between the proceeds from the sale of these put options and their estimated
     fair value was not significant as of December 31, 1998 and 1997.

     Stock-Based Compensation Plans
     As of December  31,  1998,  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 Plan. 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 Plan").  Under the Comcast Option Plan,
     31.2 million  shares of Class A Special  Common  Stock were  reserved as of
     December 31, 1998.  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.

     A summary of the  activity  of the  Comcast  Option  Plan as of and for the
     years ended December 31, 1998, 1997 and 1996 is presented below (options in
     thousands):

<TABLE>
<CAPTION>
                                                  1998                    1997                    1996
                                                      Weighted-               Weighted-               Weighted-
                                                       Average                 Average                 Average
                                                      Exercise                Exercise                Exercise
                                         Options        Price     Options       Price       Options     Price

<S>                                        <C>        <C>          <C>          <C>          <C>         <C>   
     Class A Special Common Stock
     Outstanding at beginning of year..    16,110     $15.50       14,851       $14.54       14,208      $14.25
     Granted...........................     8,175      33.06        2,599        19.47        1,308       17.41
     Exercised.........................    (1,985)     13.20         (795)        9.95         (199)       8.72
     Canceled..........................      (799)     20.96         (545)       16.40         (466)      16.08
                                           ------                  ------                    ------
     Outstanding at end of year........    21,501      22.18       16,110        15.50       14,851       14.54
                                           ======                  ======                    ======
     Exercisable at end of year........     7,695     $14.59        7,693       $13.91        6,875      $13.40
                                           ======                  ======                    ======

     Class A Common Stock
     Outstanding at beginning of year..                                                         229       $4.87
     Exercised.........................                                                        (229)       4.87
     Canceled..........................
                                                                                             ------
     Outstanding at end of year........
                                                                                             ======
     Exercisable at end of year........
                                                                                             ======

     Class B Common Stock
     Outstanding at beginning of year..       658      $5.70          658        $5.70          658       $5.70
     Exercised.........................      (658)      5.70
                                           ------                  ------                    ------
     Outstanding at end of year.......                                658        $5.70          658       $5.70
                                           ======                  ======                    ======

     Exercisable at end of year........                               658        $5.70          658       $5.70
                                           ======                  ======                    ======
</TABLE>

                                     - 50 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     The following table summarizes information about the Class A Special Common
     Stock options  outstanding under the Comcast Option Plan as of December 31,
     1998 (options in thousands):

<TABLE>
<CAPTION>
                                       Options Outstanding                         Options Exercisable
                                             Weighted-
     Range of               Number            Average         Weighted-          Number          Weighted-
     Exercise             Outstanding        Remaining         Average         Exercisable        Average
     Prices               at 12/31/98    Contractual Life  Exercise Price      at 12/31/98    Exercise Price
<S>                         <C>           <C>                  <C>              <C>              <C>  
     $6.22 to $12.08          3,376         1.5 years            $8.78            2,916            $8.62
     $13.42 to $18.38         4,794         6.7 years            15.89            1,198            14.45
     $18.63 to $32.86         7,440         5.2 years            22.65            3,581            19.50
     $33.88 to $55.19         5,891         9.5 years            34.40
                             ------                                               -----
                             21,501                                               7,695
                             ======                                               =====
</TABLE>

     The  weighted-average  fair  value at date of  grant  of a Class A  Special
     Common Stock option granted under the Comcast Option Plan during 1998, 1997
     and 1996 was $17.07, $10.18 and $9.71, 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  .44%,   .52%  and  .53%  for  1998,   1997  and  1996,
     respectively;  expected volatility of 31.3%, 30.1% and 34.9% for 1998, 1997
     and 1996, respectively;  risk-free interest rate of 5.6%, 6.5% and 6.8% for
     1998, 1997 and 1996,  respectively;  expected option lives of 9.9 years for
     all years; and a forfeiture rate of 3.0% for all years.

     QVC Tandem Plan. QVC established a qualified and  nonqualified  combination
     stock option/Stock Appreciation Rights ("SAR") plan (collectively, the "QVC
     Tandem  Plan")  during 1995 for  employees,  officers,  directors and other
     persons  designated  by  the  Compensation  Committee  of  QVC's  Board  of
     Directors.  Under the QVC Tandem Plan,  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 of QVC (the "QVC Common Stock") at the
     date of grant.  As of the latest  valuation date, the fair value of a share
     of QVC Common Stock was $741.79.  If the SAR feature of the QVC Tandem Plan
     is elected by the eligible participant, the participant receives 75% of the
     excess of the fair value of a share of QVC 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 QVC
     Tandem Plan.  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 QVC Tandem Plan, option/SAR
     terms are ten years  from the date of grant,  with  options/SARs  generally
     becoming exercisable over four years from the date of grant. As of December
     31, 1998,  230,000 shares of QVC Common Stock were reserved under the plan.
     Compensation  expense of $1.0  million,  $3.4  million and $4.0 million was
     recorded  under the QVC Tandem  Plan during the years  ended  December  31,
     1998, 1997 and 1996, respectively.

                                     - 51 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     A summary of the  activity  of the QVC Tandem  Plan as of and for the years
     ended December 31, 1998, 1997 and 1996 is presented below  (options/SARs in
     thousands):

<TABLE>
<CAPTION>
                                           1998                      1997                     1996
                                               Weighted-                 Weighted-                  Weighted-
                                                Average                   Average                    Average
                                    Options/   Exercise      Options/    Exercise       Options/    Exercise
                                      SARs       Price         SARs        Price          SARs        Price
<S>                                      <C>   <C>                 <C>    <C>                <C>    <C>    
     Outstanding at
         beginning of year.......        180   $363.99             164    $192.16            142    $177.05
     Granted.....................         72    664.76              74     601.28             26     271.23
     Exercised...................        (41)   186.01             (55)    177.05
     Canceled....................         (5)   511.01              (3)    262.20             (4)    177.05
                                      ------                    ------                    ------
     Outstanding at end of year..        206    500.82             180     363.99            164     192.16
                                      ======                    ======                    ======
     Exercisable at end of year..         37   $397.46              20    $205.42             36    $177.05
                                      ======                    ======                    ======
</TABLE>

     The  following  table   summarizes   information   about  the  options/SARs
     outstanding under the QVC Tandem Plan as of December 31, 1998 (options/SARs
     in thousands):
<TABLE>
<CAPTION>
                                            Options/SARs OutstandingOptions/SARs Exercisable
                                                          Weighted-
                                         Number            Average                   Number
     Exercise                          Outstanding        Remaining                Exercisable
     Prices                            at 12/31/98    Contractual Life             at 12/31/98

<S>                                       <C>         <C>                           <C>
      $177.05                                64          6.4 years                     19
       522.31                                 2          7.5 years                      1
       585.19                                 6          8.0 years                      2
       634.25                                71          8.8 years                     15
       651.84                                46          9.7 years
       688.14                                10          9.2 years
       741.79                                 7          9.8 years
                                         ------                                     -----
                                            206                                        37
                                         ======                                     =====
</TABLE>

     The  weighted-average  fair  value at date of grant of a QVC  Common  Stock
     option/SAR  granted  during 1998,  1997 and 1996 was  $296.67,  $331.93 and
     $385.13,  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:  no dividend yield for all years;
     expected volatility of 20% for all years;  risk-free interest rate of 4.9%,
     6.2% and 6.8% for 1998, 1997 and 1996, respectively;  expected option lives
     of 10 years for all years; and a forfeiture rate of 3.0% for all years.

                                     - 52 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)

     Had compensation  expense for the Company's two 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 (loss) and net income (loss) per share would have
     changed to the pro forma  amounts  indicated  below  (dollars in  millions,
     except per share data):

<TABLE>
<CAPTION>
                                                                 1998              1997              1996
<S>                                                              <C>            <C>                <C>    
     Net income (loss) - As reported......................       $972.1         ($238.7)           ($53.5)
     Net income (loss) - Pro forma........................        936.4          (252.0)            (61.0)

     Net income (loss) for common stockholders -
         As reported......................................       $943.0         ($253.5)           ($54.2)
     Net income (loss) for common stockholders -
         Pro forma........................................        907.3          (266.7)            (61.7)


     Basic earnings (loss) for common stockholders
         per common share - As reported...................        $2.57           ($.75)            ($.21)
     Basic earnings (loss) for common stockholders
         per common share - Pro forma.....................         2.48            (.79)             (.24)

     Diluted earnings (loss) for common stockholders
         per common share - As reported...................        $2.41           ($.75)            ($.21)
     Diluted earnings (loss) for common stockholders
         per common share - Pro forma.....................         2.33            (.79)             (.24)
</TABLE>

     The pro forma effect on net income  (loss) and net income  (loss) per share
     for the years ended  December 31, 1998,  1997 and 1996 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, 1998, there were 1.0
     million unvested shares granted under the program,  of which 167,000 vested
     in January 1999.  During the years ended December 31, 1998,  1997 and 1996,
     328,000,  208,000  and  951,000  shares  were  granted  under the  program,
     respectively,  with a  weighted-average  grant date market value of $34.66,
     $17.36 and $19.16 per share, respectively.  Compensation expense recognized
     during the years ended December 31, 1998,  1997 and 1996 under this program
     was $5.3 million, $7.1 million and $5.5 million, respectively. There was no
     significant   difference   between  the  amount  of  compensation   expense
     recognized by the Company  during the years ended  December 31, 1998,  1997
     and 1996 and the amount that would have been  recognized  had  compensation
     expense been determined under the provisions of SFAS No. 123.

     The Company and QVC  established SAR plans during 1996 and 1995 for certain
     employees,  officers,  directors  and other  persons (the "QVC SAR Plans").
     Under the QVC SAR Plans,  eligible  participants  are entitled to receive a
     cash payment  from the Company or QVC equal to 100% of the excess,  if any,
     of the fair value of a share of QVC 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.  During the years ended  December  31,  1998,
     1997 and 1996, 5,000, 4,000 and 11,000 SARs were awarded, respectively, and
     20,000 SARs were  outstanding  at December  31,  1998,  of which 6,000 were
     exercisable.  Compensation  expense  related  to the QVC SAR  Plans of $3.2
     million, $3.4 million and $4.5 million was recorded during the years ended

                                     - 53 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     December 31, 1998,  1997 and 1996,  respectively.  There was no significant
     difference  between the amount of compensation  expense  recognized and the
     amount  that would  have been  recognized  had  compensation  expense  been
     determined under the provisions of SFAS No. 123.

     E!  Entertainment  established  a SAR  plan  in  1995  for  certain  of its
     employees and officers (the "E! SAR Plan").  By written  agreement  between
     the  participants  and E!  Entertainment,  the E! SAR  Plan was  terminated
     effective  December  31,  1998 in  exchange  for a  lump-sum  payment  of a
     negotiated  amount which was paid in February 1999.  Terms of the agreement
     also  included the complete and full release of E!  Entertainment  from any
     further  liability  associated with the E! SAR Plan.  Compensation  expense
     related to the E! SAR Plan was $11.6  million and $7.0  million  during the
     years  ended  December  31,  1998  and  1997,  respectively.  There  was no
     significant   difference   between  the  amount  of  compensation   expense
     recognized and the amount that would have been recognized had  compensation
     expense been determined under the provisions of SFAS No. 123.

7.   INCOME TAXES

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

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                                     1998             1997                1996
                                                                              (Dollars in millions)
<S>                                                                 <C>                <C>               <C>  
     Current expense
     Federal....................................................    $135.5             $94.4             $82.0
     State......................................................      27.5              24.7              23.0
                                                                  --------           -------          --------
                                                                     163.0             119.1             105.0
                                                                  --------           -------          --------
     Deferred expense (benefit)
     Federal....................................................     424.6             (47.5)              4.3
     State......................................................       6.4              (1.2)             (0.3)
                                                                  --------           -------          --------
                                                                     431.0             (48.7)              4.0
                                                                  --------           -------          --------
     Income tax expense.........................................    $594.0             $70.4            $109.0
                                                                  ========           =======          ========
</TABLE>

                                     - 54 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


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

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                                     1998             1997                1996
                                                                              (Dollars in millions)

<S>                                                                 <C>               <C>                <C>  
     Federal tax at statutory rate..............................    $545.1            ($66.1)            $19.1
     Non-deductible depreciation and amortization...............      41.0              42.6              32.0
     State income taxes, net of federal benefit.................      22.0              15.3              14.8
     Non-deductible (deductible) foreign (income) losses
       and equity in net losses of affiliates...................     (11.2)             53.1              27.5
     Additions to valuation allowance...........................       3.0              16.3              18.3
     Other......................................................      (5.9)              9.2              (2.7)
                                                                    ------             -----            ------

     Income tax expense.........................................    $594.0             $70.4            $109.0
                                                                    ======             =====            ======
</TABLE>

     Deferred  income  tax  expense   (benefit)   resulted  from  the  following
     differences between financial and income tax reporting:
<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                                     1998             1997              1996
                                                                              (Dollars in millions)

<S>                                                               <C>               <C>               <C>    
     Depreciation and amortization.........................         ($69.0)           ($94.5)           ($60.0)
     Accrued expenses not currently deductible.............          (26.7)            (13.2)             (6.3)
     Non-deductible reserves for bad debts,
       obsolete inventory and sales returns................           (9.6)            (10.9)            (11.0)
     Temporary differences associated with sale
       or exchange of securities...........................          508.8               6.4              30.9
     Losses from affiliated partnerships...................           (9.6)             45.9              25.6
     Change in net operating loss carryforwards............           35.5               2.2               3.0
     Change in valuation allowance and other...............            1.6              15.4              21.8
                                                                    ------            ------            ------
     Deferred income tax expense (benefit).................         $431.0            ($48.7)             $4.0
                                                                    ======            ======            ======
</TABLE>

                                     - 55 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     Significant  components  of the Company's net deferred tax liability are as
follows:
<TABLE>
<CAPTION>
                                                                          December 31,
                                                                     1998             1997
                                                                      (Dollars in millions)
<S>                                                               <C>               <C>     
     Deferred tax assets:
       Net operating loss carryforwards....................         $324.7            $343.8
       Differences between book and
         tax basis of property and equipment
         and deferred charges..............................           24.5              24.5
       Reserves for bad debts, obsolete inventory
         and sales returns.................................           94.4              84.8
       Other...............................................           89.6              62.9
       Less: Valuation allowance...........................         (282.5)           (279.5)
                                                                  --------          --------
                                                                    $250.7            $236.5
                                                                  --------          --------
     Deferred tax liabilities:
       Temporary differences, principally book and
       tax basis of property and equipment and
       deferred charges....................................        1,582.6           1,785.6
       Differences between book and tax basis
         in investments....................................        1,201.4             207.9
                                                                  --------          --------
                                                                   2,784.0           1,993.5
                                                                  --------          --------
     Net deferred tax liability............................       $2,533.3          $1,757.0
                                                                  ========          ========
</TABLE>

     The Company recorded  approximately $489.4 million of deferred income taxes
     in 1998 in connection with unrealized gains on marketable  securities which
     are included in other comprehensive income.

     The deferred tax liability is net of deferred tax assets of $106.9  million
     and $92.5 million as of December 31, 1998 and 1997, respectively, which are
     included in other  current  assets in the  Company's  consolidated  balance
     sheet. Further, the Company has recorded deferred tax liabilities of $1.140
     billion related to current  investments which have been included in current
     liabilities.  The Company's valuation allowance against deferred tax assets
     includes approximately $120.0 million for which any subsequent tax benefits
     recognized  will be  allocated  to reduce  goodwill  and  other  noncurrent
     intangible  assets.  For income tax reporting  purposes,  the  Consolidated
     Group and Comcast Communications  Properties,  Inc. have net operating loss
     carryforwards   for  which  deferred  tax  assets  have  been  recorded  of
     approximately $150.0 million and $45.0 million, respectively,  which expire
     primarily in periods through 2018.

     During the year ended  December  31, 1998,  the Company  settled all issues
     primarily  related to the deductibility of amortization of cable television
     distribution   rights  raised  by  the  Internal  Revenue  Service  in  its
     examination of QVC, through fiscal tax year 1993. Such settlement  resulted
     in a reversal of previously  recorded  deferred tax  liabilities  of $135.5
     million. As a result of the settlement,  the Company recorded an adjustment
     to reduce  goodwill by $119.7 million during 1998. Such adjustment has been
     excluded from the Company's consolidated statement of cash flows due to its
     noncash nature.

8.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION

     The Company  made cash  payments  for  interest of $418.9  million,  $467.2
     million and $408.1 million  during the years ended December 31, 1998,  1997
     and 1996, respectively.

                                     - 56 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     The Company made cash payments for income taxes of $129.2  million,  $113.7
     million and $101.3 million  during the years ended December 31, 1998,  1997
     and 1996, respectively.

9.   COMMITMENTS AND CONTINGENCIES

     Commitments
     The  Company  has  the  right  to  purchase  the   minority   interests  in
     Comcast-Spectacor from the Minority Group for the Minority Group's pro rata
     portion of the fair market value (on a going concern basis as determined by
     an appraisal process) of Comcast-Spectacor. The Minority Group also has the
     right to require  the  Company to  purchase  its  interests  under the same
     terms.  The Company may pay the Minority Group for such interests in shares
     of  the  Company's  Class  A  Special  Common  Stock,  subject  to  certain
     restrictions.  If the  Minority  Group  exercises  its exit  rights and the
     Company elects not to purchase their interest, the Company and the Minority
     Group will use their best efforts to sell Comcast-Spectacor.

     Disney, in certain circumstances,  is entitled to cause the LLC to purchase
     Disney's  entire  interest  in the LLC at its then  fair  market  value (as
     determined  by an  appraisal  process).  If the LLC elects not to  purchase
     Disney's interests, Disney has the right, at its option, to purchase either
     the Company's  entire  interest in the LLC or all of the shares of stock of
     E! Entertainment held by the LLC, 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 Notes 3 and 5) may be  replaced  with a three
     year note due to Disney.

     Liberty,  a  majority  owned  subsidiary  of TCI,  may,  at  certain  times
     following  February 9, 2000,  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 Liberty's stock in QVC 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.

     At any time after  December  18,  2001,  the  California  Public  Employees
     Retirement  System  ("CalPERS") may elect to liquidate its interest in MHCP
     Holdings,  L.L.C. ("MHCP Holdings"), a 55% owned indirect subsidiary of the
     Company (which holds cable  communications  systems  serving  approximately
     644,000  subscribers  as of December  31,  1998) in which  CalPERS owns the
     remaining  45%  interest,  at a price based upon the fair value of CalPERS'
     interest in MHCP  Holdings,  adjusted,  under  certain  circumstances,  for
     certain performance criteria relating to the fair value of MHCP Holdings or
     to the Company's common stock. Except in certain limited circumstances, the
     Company,  at  its  option,  may  satisfy  this  liquidity   arrangement  by
     purchasing  CalPERS'  interest  for  cash,  through  the  issuance  of  the
     Company's common stock (subject to certain  limitations) or by selling MHCP
     Holdings.

                                     - 57 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


     Minimum  annual  rental   commitments  for  office  space,   equipment  and
     transponder service agreements under noncancellable  operating leases as of
     December 31, 1998 are as follows:
                                                           (Dollars
                                                         in millions)

             1999........................................   $45.1
             2000........................................    47.6
             2001........................................    43.2
             2002........................................    40.5
             2003........................................    39.9
             Thereafter..................................   202.0

     Rental expense of $64.8 million,  $65.8 million and $44.2 million for 1998,
     1997 and 1996, 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.


                                     - 58 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (Continued)


10.  FINANCIAL DATA BY BUSINESS SEGMENT

     The following  represents  the  Company's  significant  business  segments,
     "Cable  Communications"  and "Electronic  Retailing." 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>
                                                                     Cable      Electronic     Corporate
                                                                Communications   Retailing   and Other(1)     Total
<S>                                                                <C>           <C>            <C>          <C>     
   1998
   Revenues.....................................................   $2,277.4      $2,402.7         $465.2     $5,145.3
   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       2,208.7        6,159.3     14,817.4
   Long-term debt...............................................    3,462.1         626.8        1,375.3      5,464.2
   Capital expenditures.........................................      711.1          67.2          120.6        898.9

   1997
   Revenues.....................................................   $2,073.0      $2,082.5         $312.2     $4,467.7
   Operating income (loss) before depreciation
     and amortization (2).......................................      987.7         337.7          (32.3)     1,293.1
   Depreciation and amortization................................      626.1         115.0           85.4        826.5
   Operating income (loss)......................................      361.6         222.7         (117.7)       466.6
   Interest expense.............................................      227.9          56.3          174.7        458.9
   Assets.......................................................    6,057.8       2,268.3        3,000.7     11,326.8
   Long-term debt...............................................    2,554.9         768.8        2,010.4      5,334.1
   Capital expenditures.........................................      497.8          97.3          200.4        795.5

   1996
   Revenues.....................................................   $1,641.0      $1,835.8         $135.5     $3,612.3
   Operating income (loss) before depreciation
     and amortization (2).......................................      803.8         300.3          (57.1)     1,047.0
   Depreciation and amortization................................      420.3         107.7           53.1        581.1
   Operating income (loss)......................................      383.5         192.6         (110.2)       465.9
   Interest expense.............................................      228.3          65.2          154.9        448.4
   Assets.......................................................    6,938.3       2,162.7        1,559.4     10,660.4
   Long-term debt...............................................    3,078.1         842.6        2,077.6      5,998.3
   Capital expenditures.........................................      290.9          63.6          199.9        554.4
<FN>
--------------
(1)  Other includes  segments not meeting  certain  quantitative  guidelines for
     reporting.   Other  includes  certain   operating   businesses,   including
     Comcast-Spectacor  (effective January 1, 1998), E! Entertainment (effective
     March 31, 1997), 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 before  depreciation and amortization is commonly referred
     to in the Company's  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 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 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>

                                     - 59 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 and 1996 (Concluded)

11.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
                                                   First           Second          Third         Fourth         Total
                                                  Quarter          Quarter        Quarter      Quarter (5)      Year
                                                                (Dollars in millions, except per share data)
<S>                                               <C>            <C>            <C>             <C>          <C>     
   1998 (2)
   Revenues...................................... $1,254.5       $1,205.9       $1,238.0        $1,446.9     $5,145.3
   Operating income before depreciation
     and amortization (1)........................    348.8          353.4          373.2           421.3      1,496.7
   Operating income..............................    109.4          124.1          132.9           190.7        557.1
   Income (loss) from continuing operations
     before extraordinary items (3)..............    (68.9)         (79.9)         723.7           432.8      1,007.7
   Basic earnings (loss) for common
     stockholders per common share
      Income (loss) from continuing operations
       before extraordinary items................    (0.21)         (0.24)          1.96            1.15         2.67
     Net income (loss)...........................    (0.24)         (0.25)          1.93            1.12         2.57
   Diluted earnings (loss) for common 
     stockholders per common share 
      Income (loss) from continuing operations
       before extraordinary items................    (0.21)         (0.24)          1.80            1.07         2.50
     Net income (loss)...........................    (0.24)         (0.25)          1.78            1.04         2.41
   Cash dividends per common share...............    .0233          .0233          .0233           .0233        .0933

   1997 (4)
   Revenues...................................... $1,026.9       $1,068.3       $1,089.0        $1,283.5     $4,467.7
   Operating income before depreciation
     and amortization (1)........................    296.0          316.6          313.6           366.9      1,293.1
   Operating income..............................    111.5           92.2           99.5           163.4        466.6
   Loss from continuing operations before
     extraordinary items.........................    (53.1)         (11.8)         (49.3)          (68.7)      (182.9)
   Basic loss for common stockholders per
     common share
     Loss from continuing operations
       before extraordinary items................    (0.16)         (0.04)         (0.17)          (0.21)       (0.58)
     Net loss....................................    (0.20)         (0.12)         (0.19)          (0.25)       (0.75)
   Diluted loss for common stockholders
       per common share
     Loss from continuing operations before
       extraordinary items.......................    (0.16)         (0.04)         (0.17)          (0.21)       (0.58)
     Net loss....................................    (0.20)         (0.12)         (0.19)          (0.25)       (0.75)
   Cash dividends per common share...............    .0233          .0233          .0233           .0233        .0933
<FN>
--------------
(1)  See Note 10, note 2.
(2)  Results of  operations  for 1998  include the results of  Comcast-Spectacor
     which was consolidated effective January 1, 1998 and the results of Comcast
     UK Cable through October 29, 1998 (see Note 3).
(3)  Results of operations were affected by the gain on the AT&T  Transaction in
     the  third  quarter  of 1998 and the gains on the NTL  Transaction  and the
     Sprint PCS restructuring in the fourth quarter of 1998 (see Note 3).
(4)  Results of operations for the second quarter of 1997 include the results of
     E!  Entertainment,  which have been  consolidated  effective March 31, 1997
     (see Note 3).
(5)  The Company's  consolidated results of operations for the fourth quarter of
     1998 and  1997  are  also  affected  by the  seasonality  of the  Company's
     electronic retailing operations.
</FN>
</TABLE>

                                     - 60 -
<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 1999, which shall be filed
with the  Securities and Exchange  Commission  within 120 days of the end of our
latest fiscal year.



                                     - 61 -

<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...................................29
              Consolidated Balance Sheet--December 31, 1998 and 1997.........30
              Consolidated Statement of Operations--Years
                Ended December 31, 1998, 1997 and 1996.......................31
              Consolidated Statement of Cash Flows--Years
                Ended December 31, 1998, 1997 and 1996.......................32
              Consolidated Statement of Stockholders' Equity
                (Deficiency)--Years Ended December 31, 1998, 1997 and 1996...33
              Notes to Consolidated Financial Statements.....................34

     (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 5% Series A Convertible  Preferred Stock of the Company
                      (incorporated  by  reference  to  Exhibit  4.1(e)  to  our
                      Registration  Statement  on Form  S-3  filed  on July  16,
                      1996).
          3.1(f)      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).
          3.2         Amended and Restated By-Laws (incorporated by reference to
                      Exhibit  3(ii) to our  Annual  Report on Form 10-K for the
                      year ended December 31, 1993).
          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, File No. 2-69178).
          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).

                                     - 62 -
<PAGE>
          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).
          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         Form of  Debenture  relating  to our  $200,000,000  9-1/2%
                      Senior  Subordinated  Debentures due 2008 (incorporated by
                      reference  to Exhibit  4(18) to our Annual  Report on Form
                      10-K for the year ended December 31, 1992).
          4.7         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 (File No. 33-32830), filed on January 11, 1990).
          4.8         Form of Debenture  relating to our $250.0  million  9-3/8%
                      Senior  Subordinated  Debentures due 2005 (incorporated by
                      reference to Exhibit 4.1 to our  Quarterly  Report on Form
                      10-Q for the quarter ended June 30, 1995).
          4.9         Form of Debenture  relating to our $250.0  million  9-1/8%
                      Senior  Subordinated  Debentures due 2006 (incorporated by
                      reference  to Exhibit  4.13 to our  Annual  Report on Form
                      10-K for the year ended December 31, 1995).
          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.
          10.3*       Comcast Corporation 1996 Stock Option Plan, as amended and
                      restated, effective December 15, 1998.
          10.4*       Comcast  Corporation 1996 Deferred  Compensation  Plan, as
                      amended and restated, effective December 15, 1998.
          10.5*       Comcast Corporation 1990 Restricted Stock Plan, as amended
                      and restated, effective December 15, 1998.
          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 15, 1998.
          10.8*       Comcast  Corporation 1996 Executive Cash Bonus Plan, dated
                      August 15,  1996  (incorporated  by  reference  to Exhibit
                      10.10 to our Annual Report on Form 10-K for the year ended
                      December 31, 1996).
          10.9*       Compensation  and Deferred  Compensation  Agreement by and
                      between  Comcast  Corporation  and  Ralph J.  Roberts,  as
                      amended   and   restated,   effective   August  31,   1998
                      (incorporated   by   reference  to  Exhibit  10.1  to  our
                      Quarterly  Report  on  Form  10-Q  for the  quarter  ended
                      September 30, 1998).
          10.10       The Comcast  Corporation  Retirement-Investment  Plan,  as
                      amended and restated  effective  January 1, 1993  (revised
                      through September 30, 1995)  (incorporated by reference to
                      Exhibit  10.1 to our  Registration  Statement  on Form S-8
                      filed on October 5, 1995).
          10.11       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).
--------
* Constitutes a management contract or compensatory plan or arrangement.

                                     - 63 -
<PAGE>
          10.12       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., 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).
          10.13*      Comcast  Corporation  1997 Deferred  Stock Option Plan, as
                      amended  and   restated,   effective   December  18,  1997
                      (incorporated  by reference to Exhibit 10.13 to our Annual
                      Report on Form 10-K for the year ended December 31, 1997).
          10.14       Note  Purchase  Agreement,  dated as of November 15, 1992,
                      among Comcast Storer, Inc., Storer  Communications,  Inc.,
                      Comcast   Storer   Finance  Sub,  Inc.  and  each  of  the
                      respective   purchasers  named  therein  (incorporated  by
                      reference  to Exhibit 6 to our Current  Report on Form 8-K
                      filed on  December  17,  1992,  as amended by Form 8 filed
                      January 8, 1993).
          10.15       Payment  Agreement,  dated  December  2,  1992,  among the
                      Company,  Comcast Storer, Inc., SCI Holdings, Inc., Storer
                      Communications,   Inc.   and   each   of   the   Remaining
                      Subsidiaries that are signatories thereto (incorporated by
                      reference  to Exhibit 7 to our Current  Report on Form 8-K
                      filed on  December  17,  1992,  as amended by Form 8 filed
                      January 8, 1993).
          10.16       Intercreditor and Collateral Agency Agreement, dated as of
                      December 2, 1992,  among  Comcast  Storer,  Inc.,  Comcast
                      Cable Communications,  Inc., Storer Communications,  Inc.,
                      the  banks  party  to the  Credit  Agreement  dated  as of
                      December 2, 1992, the purchasers of the Senior Notes under
                      the separate  Note  Purchase  Agreements  each dated as of
                      November 15, 1992, the Senior Lenders (as defined therein)
                      and The  Bank  of New  York as  collateral  agent  for the
                      Senior Lenders  (incorporated by reference to Exhibit 8 to
                      our Current Report on Form 8-K filed on December 17, 1992,
                      as amended by Form 8 filed January 8, 1993).
          10.17       Tax Sharing Agreement, dated December 2, 1992, between the
                      Company  and  Comcast  Storer,   Inc.   (incorporated   by
                      reference  to Exhibit 9 to our Current  Report on Form 8-K
                      filed on  December  17,  1992,  as amended by Form 8 filed
                      January 8, 1993).
          10.18       Pledge  Agreement,  dated as of December 2, 1992,  between
                      Comcast  Cable  Communications,  Inc.  and The Bank of New
                      York  (incorporated  by  reference  to  Exhibit  10 to our
                      Current  Report on Form 8-K filed on December 17, 1992, as
                      amended by Form 8 filed January 8, 1993).
          10.19       Pledge  Agreement,  dated as of December 2, 1992,  between
                      Comcast   Storer,   Inc.   and  The   Bank  of  New   York
                      (incorporated  by  reference  to Exhibit 11 to our Current
                      Report on Form 8-K filed on December 17, 1992,  as amended
                      by Form 8 filed January 8, 1993).
          10.20       Pledge  Agreement,  dated as of December 2, 1992,  between
                      Storer  Communications,  Inc.  and The  Bank  of New  York
                      (incorporated  by  reference  to Exhibit 12 to our Current
                      Report on Form 8-K filed on December 17, 1992,  as amended
                      by Form 8 filed January 8, 1993).
          10.21       Note  Pledge  Agreement,  dated as of  December  2,  1992,
                      between  Comcast  Storer,  Inc.  and The  Bank of New York
                      (incorporated  by  reference  to Exhibit 13 to our Current
                      Report on Form 8-K filed on December 17, 1992,  as amended
                      by Form 8 filed January 8, 1993).
          10.22       Guaranty Agreement,  dated as of December 2, 1992, between
                      Storer  Communications,  Inc.  and The  Bank  of New  York
                      (incorporated  by  reference  to Exhibit 14 to our Current
                      Report on Form 8-K filed on December 17, 1992,  as amended
                      by Form 8 filed January 8, 1993).
          10.23       Guaranty Agreement,  dated as of December 2, 1992, between
                      Comcast  Storer Finance Sub, Inc. and The Bank of New York
                      (incorporated  by  reference  to Exhibit 15 to our Current
                      Report on Form 8-K filed on December 17, 1992,  as amended
                      by Form 8 filed January 8, 1993).
          10.24       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).
--------
* Constitutes a management contract or compensatory plan or arrangement.

                                     - 64 -
<PAGE>
          10.25(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  Tele-Communications,  Inc. with respect to the tender
                      offer for all outstanding shares of QVC, Inc.).
          10.25(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.
          10.26       Comcast MHCP Holdings, L.L.C. Amended and Restated Limited
                      Liability  Company  Agreement,  dated as of  December  18,
                      1994,  among  Comcast  Cable  Communications,   Inc.,  The
                      California  Public  Employees'  Retirement System and, for
                      certain limited  purposes,  the Company  (incorporated  by
                      reference  to Exhibit  10.1 to our Current  Report on Form
                      8-K filed on January 6, 1995).
          10.27       Credit  Agreement,  dated as of December 22,  1994,  among
                      Comcast MH Holdings,  Inc., the banks listed therein,  The
                      Chase Manhattan Bank (National  Association),  NationsBank
                      of Texas, N.A. and the Toronto-Dominion Bank, as Arranging
                      Agents,  The Bank of New  York,  The Bank of Nova  Scotia,
                      Canadian  Imperial  Bank of Commerce  and Morgan  Guaranty
                      Trust  Company  of  New  York,  as  Managing   Agents  and
                      NationsBank  of  Texas,  N.A.,  as  Administrative   Agent
                      (incorporated  by reference to Exhibit 10.2 to our Current
                      Report on Form 8-K filed on January 6, 1995).
          10.28       Pledge Agreement,  dated as of December 22, 1994,  between
                      Comcast MH Holdings,  Inc. and NationsBank of Texas, N.A.,
                      as the secured party (incorporated by reference to Exhibit
                      10.3 to our Current Report on Form 8-K filed on January 6,
                      1995).
          10.29       Pledge Agreement,  dated as of December 22, 1994,  between
                      Comcast Communications Properties, Inc. and NationsBank of
                      Texas,  N.A.,  as  the  Secured  Party   (incorporated  by
                      reference  to Exhibit  10.4 to our Current  Report on Form
                      8-K filed on January 6, 1995).
          10.30       Affiliate  Subordination  Agreement  (as the  same  may be
                      amended,  modified,  supplemented,   waived,  extended  or
                      restated from time to time, this "Agreement"), dated as of
                      December 22, 1994, among the Company, Comcast MH Holdings,
                      Inc., (the "Borrower"), any affiliate of the Borrower that
                      shall  have  become a party  thereto  and  NationsBank  of
                      Texas,  N.A.,  as  Administrative  Agent  under the Credit
                      Agreement  dated  as  of  December  22,  1994,  among  the
                      Borrower,  the Banks listed  therein,  The Chase Manhattan
                      Bank (National  Association),  NationsBank of Texas,  N.A.
                      and The  Toronto-Dominion  Bank, as Arranging Agents,  The
                      Bank  of New  York,  The  Bank of  Nova  Scotia,  Canadian
                      Imperial  Bank  of  Commerce  and  Morgan  Guaranty  Trust
                      Company  of  New  York,  as  Managing   Agents,   and  the
                      Administrative Agent (incorporated by reference to Exhibit
                      10.5 to our Current Report on Form 8-K filed on January 6,
                      1995).
          10.31       Registration Rights and Price Protection Agreement,  dated
                      as of December  22,  1994,  by and between the Company and
                      The  California   Public   Employees'   Retirement  System
                      (incorporated  by reference to Exhibit 10.8 to our Current
                      Report on Form 8-K filed on January 6, 1995).
          10.32**     Credit  Agreement,  dated as of November 15,  1996,  among
                      Comcast SCH  Holdings,  Inc.,  the banks  listed  therein,
                      Nationsbank of Texas,  N.A., as  Documentation  Agent, The
                      Chase  Manhattan Bank, as Syndication  Agent,  The Bank of
                      New York,  The Chase  Manhattan  Bank and  Nationsbank  of
                      Texas, N.A., as Managing Agents, and The Bank of New York,
                      as Administrative Agent.
          10.33       Indenture  dated as of May 1, 1997,  between Comcast Cable
                      Communications,  Inc. and 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 and 6.20%
                      Notes  due 2008  (incorporated  by  reference  to  Exhibit
                      4.1(a) to the Registration Statement on Form S-4 (File No.
                      333-30745) of Comcast Cable
                      Communications, Inc.).
----------
* Constitutes a management contract or compensatory plan or arrangement.
** 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.

                                     - 65 -
<PAGE>
          10.34       Purchase and Sale  Agreement  dated as of January 19, 1999
                      among SBC  Communications  Inc., Comcast Cellular Holdings
                      Corporation,  Comcast  Financial  Corporation  and Comcast
                      Corporation.
          21          List of Subsidiaries.
          23.1        Consent of Deloitte & Touche LLP.
          23.2        Consent of KPMG LLP.
          27.1        Financial Data Schedule.
          99.1        Report of Independent  Public Accountants to QVC, Inc., as
                      of  December  31,  1998 and 1997 and for the  years  ended
                      December 31, 1998, 1997 and 1996.


                                     - 66 -
<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 February 26, 1999.

                                             Comcast Corporation


                                             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                                     Dated
<S>                                     <C>                                                    <C> 
/s/ Ralph J. Roberts                                                                      
-------------------------------
Ralph J. Roberts                           Chairman of the Board of Directors; Director        February 26, 1999

/s/ Julian A. Brodsky                                                                   
-------------------------------              Vice Chairman of the Board of Directors;          February 26, 1999
Julian A. Brodsky                                            Director

/s/ Brian L. Roberts                                                                   
-------------------------------              President; Director (Principal Executive          February 26, 1999
Brian L. Roberts                                             Officer)

/s/ Lawrence S. Smith                                                                   
-------------------------------                      Executive Vice President                  February 26, 1999
Lawrence S. Smith                                 (Principal Accounting Officer)

/s/ John R. Alchin                                                                   
-------------------------------            Senior Vice President, Treasurer (Principal         February 26, 1999
John R. Alchin                                          Financial Officer)

/s/ Gustave G. Amsterdam                                                                   
-------------------------------
Gustave G. Amsterdam                                         Director                          February 26, 1999

/s/ Sheldon M. Bonovitz                                                                   
-------------------------------
Sheldon M. Bonovitz                                          Director                          February 26, 1999

/s/ Joseph L. Castle II                                                                   
-------------------------------
Joseph L. Castle II                                          Director                          February 26, 1999

/s/ Bernard C. Watson                                                                   
-------------------------------
Bernard C. Watson                                            Director                          February 26, 1999

/s/ Irving A. Wechsler                                                                   
-------------------------------
Irving A. Wechsler                                           Director                          February 26, 1999

/s/ Anne Wexler                                                                   
-------------------------------
Anne Wexler                                                  Director                          February 26, 1999
</TABLE>


                                     - 67 -
<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>
                                                                                    December 31,
<S>                                                                        <C>                  <C>     
ASSETS                                                                        1998                1997

   Cash and cash equivalents.............................................     $31.2                $12.8
   Other current assets..................................................      18.4                  5.9
                                                                           --------             --------
     Total current assets................................................      49.6                 18.7

   Investments in and amounts due from subsidiaries
     eliminated upon consolidation.......................................   5,679.6              3,487.0
   Property and equipment, net...........................................      14.0                 38.5
   Other assets, net.....................................................      23.5                 45.5
                                                                           --------             --------
                                                                           $5,766.7             $3,589.7
                                                                           ========             ========

LIABILITIES AND STOCKHOLDERS' EQUITY 

   Accrued interest......................................................     $30.5                $35.0
   Other current liabilities.............................................     286.3                108.1
                                                                           --------             --------
     Total current liabilities...........................................     316.8                143.1
                                                                           --------             --------

   Long-term debt........................................................   1,065.3              1,464.9
                                                                           --------             --------
   Deferred income taxes and other.......................................     458.1                303.8
                                                                           --------             --------
   Common equity put options.............................................     111.2                 31.4
                                                                           --------             --------

   Stockholders' equity
     Preferred stock - authorized, 20,000,000 shares; 
       5% series A convertible, no par value; issued,
       6,370 at redemption value.........................................      31.9                 31.9
       5.25% series B mandatorily redeemable convertible,
       $1,000 par value; issued, 540,690 and 513,211
       at redemption value...............................................     540.7                513.2
     Class A special common stock, $1 par value - authorized,
       500,000,000 shares; issued, 328,630,366 and 317,025,969...........     328.6                317.0
     Class A common stock, $1 par value - authorized,
       200,000,000 shares; issued, 31,690,063 and 31,793,487.............      31.7                 31.8
     Class B common stock, $1 par value - authorized,
       50,000,000 shares; issued, 9,444,375 and 8,786,250................       9.4                  8.8
     Additional capital..................................................   3,311.5              3,030.6
     Accumulated deficit.................................................  (1,488.2)            (2,415.9)
     Unrealized gains on marketable securities, including
       securities held by subsidiaries...................................   1,049.5                140.7
     Cumulative translation adjustments of subsidiaries..................       0.2                (11.6)
                                                                           --------             --------
       Total stockholders' equity........................................   3,815.3              1,646.5
                                                                           --------             --------
                                                                           $5,766.7             $3,589.7
                                                                           ========             ========
</TABLE>

                                     - 68 -
<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>
                                                                                   Year Ended December 31,
                                                                          1998              1997             1996
<S>                                                                    <C>              <C>               <C>       
REVENUES, principally intercompany fees eliminated
   upon consolidation.........................................            $320.1           $286.8            $212.0

GENERAL AND ADMINISTRATIVE EXPENSES...........................              83.2             69.5              55.6
                                                                       ---------        ---------         --------- 

OPERATING INCOME..............................................             236.9            217.3             156.4

OTHER (INCOME) EXPENSE
   Interest expense, including intercompany interest, net.....             239.1            231.2             263.6
   Equity in net (income) losses of affiliates and other......            (976.2)           238.6             (16.3)
                                                                       ---------        ---------         --------- 
                                                                          (737.1)           469.8             247.3
                                                                       ---------        ---------         --------- 

INCOME (LOSS) BEFORE INCOME TAX BENEFIT
   AND EXTRAORDINARY ITEMS....................................             974.0           (252.5)            (90.9)

INCOME TAX BENEFIT............................................              (2.1)           (16.6)            (37.4)
                                                                       ---------        ---------         --------- 

INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS......................             976.1           (235.9)            (53.5)

EXTRAORDINARY ITEMS...........................................              (4.0)            (2.8)
                                                                       ---------        ---------         --------- 

NET INCOME (LOSS).............................................             972.1           (238.7)            (53.5)

ACCUMULATED DEFICIT
   Beginning of year..........................................          (2,415.9)        (2,127.1)         (1,914.3)
   Retirement of common stock.................................             (10.0)           (17.7)           (133.2)
   Cash dividends, $.0933 per share per year..................             (34.4)           (32.4)            (26.1)
                                                                       ---------        ---------         --------- 

   End of year................................................         ($1,488.2)       ($2,415.9)        ($2,127.1)
                                                                       =========        =========         ========= 
</TABLE>

                                     - 69 -
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES

                SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF

                     REGISTRANT UNCONSOLIDATED (PARENT ONLY)

                        CONDENSED STATEMENT OF CASH FLOWS

                                  (In millions)

<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                                          1998              1997             1996
<S>                                                                       <C>             <C>                <C>    
OPERATING ACTIVITIES
   Net income (loss)..........................................            $972.1          ($238.7)           ($53.5)
   Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
     Depreciation and amortization............................              13.2              7.0               8.9
     Non-cash interest expense, net...........................               3.7            106.8             136.2
     Equity in net (income) losses of affiliates..............            (976.6)           275.2             (15.2)
     Extraordinary items......................................               4.0              2.8
     Deferred income taxes and other..........................             104.2             88.9              68.4
                                                                       ---------         --------          -------- 
                                                                           120.6            242.0             144.8

     Changes in working capital...............................             155.2            (80.1)             41.3
                                                                       ---------         --------          -------- 
         Net cash provided by operating activities............             275.8            161.9             186.1
                                                                       ---------         --------          -------- 

FINANCING ACTIVITIES
   Retirement and repayment of debt ..........................             (50.6)           (59.5)
   Issuance of preferred stock................................                              500.0
   Issuances (repurchases) of common stock, net...............              28.9            470.2            (175.9)
   Dividends..................................................             (36.0)           (34.0)            (26.8)
   Other......................................................             (32.8)            12.7              43.0
                                                                       ---------         --------          -------- 
         Net cash (used in) provided by financing activities..             (90.5)           889.4            (159.7)
                                                                       ---------         --------          -------- 

INVESTING ACTIVITIES
   Net transactions with affiliates...........................            (164.0)        (1,026.4)              9.5
   Capital expenditures.......................................              (2.9)           (18.6)            (20.8)
   Other......................................................                               (3.2)            (13.0)
                                                                       ---------         --------          -------- 
         Net cash used in investing activities................            (166.9)        (1,048.2)            (24.3)
                                                                       ---------         --------          -------- 

INCREASE IN CASH AND CASH EQUIVALENTS.........................              18.4              3.1               2.1

CASH AND CASH EQUIVALENTS, beginning of year..................              12.8              9.7               7.6
                                                                       ---------         --------          -------- 

CASH AND CASH EQUIVALENTS, end of year........................             $31.2            $12.8              $9.7
                                                                       =========         ========          ========
</TABLE>

                                     - 70 -
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

                                  (In millions)

<TABLE>
<CAPTION>

                                                                     Additions
                                                       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>   
   1998.....................................            $108.8        $52.2        $40.3       $120.7

   1997.....................................              94.0         55.1         40.3        108.8

   1996.....................................              78.0         45.2         29.2         94.0



Allowance for Obsolete
  Electronic Retailing Inventories

   1998.....................................             $44.5        $39.0        $22.6        $60.9

   1997.....................................              34.7         37.0         27.2         44.5

   1996.....................................              28.5         29.7         23.5         34.7

</TABLE>


(A) Uncollectible accounts and obsolete inventory written off.

                                     - 71 -