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

                                    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, 2002

                                       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 001-15471

                          COMCAST HOLDINGS CORPORATION
                         (formerly Comcast Corporation)
             (Exact name of registrant as specified in its charter)


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

         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:
               2.0% Exchangeable Subordinated Debentures due 2029
                        _________________________________

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                      NONE
                          ____________________________
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.
                                                              [ Not Applicable ]

                                            __________________________

Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act).

                    Yes                                 No      X

As of the end of its fiscal year, all of the Registrant's  voting and non-voting
common  equity  securities  were  held  either  directly  or  indirectly  by its
affiliate, Comcast Corporation.

                           __________________________

As of December 31, 2002,  there were 21,591,115  shares of Class A Common Stock,
916,198,519 shares of Class A Special Common Stock and 9,444,375 shares of Class
B Common Stock outstanding.

                           __________________________

The Registrant  meets the conditions set forth in General  Instructions I (1)(a)
and (b) of Form  10-K  and is  therefore  filing  this  form  with  the  reduced
disclosure format.

                           __________________________

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

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<PAGE>



                                          COMCAST HOLDINGS CORPORATION
                                          2002 FORM 10-K ANNUAL REPORT
                                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                     PART I
<S>  <C>                                                                                                     <C>
Item 1   Business........................................................................................... 2
Item 2   Properties.........................................................................................14
Item 3   Legal Proceedings..................................................................................15
Item 4   Submission of Matters to a Vote of Security Holders................................................17

                                                    PART II
Item 5   Market for the Registrant's Common Equity and Related Stockholder Matters..........................17
Item 6   Selected Financial Data............................................................................17
Item 7   Management's Discussion and Analysis of Financial Condition and Results of Operations..............18
Item 7A  Quantitative and Qualitative Disclosures About Market Risk.........................................26
Item 8   Financial Statements and Supplementary Data........................................................27
Item 9   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...............64

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

                                                    PART IV
Item 14  Controls and Procedures ...........................................................................64
Item 15  Exhibits, Financial Statement Schedules, and Reports on Form 8-K...................................64
SIGNATURES..................................................................................................67
CERTIFICATIONS..............................................................................................70
</TABLE>


     This Annual  Report on Form 10-K is for the year ended  December  31, 2002.
This Annual Report modifies and supersedes  documents filed prior to this Annual
Report.  Information that we file with the SEC in the future will  automatically
update and supersede information contained in this Annual Report. In this Annual
Report, "Comcast Holdings," "we," "us," "our" and the "Company" refer to Comcast
Holdings  Corporation  and its  subsidiaries,  and  "Comcast"  refers to Comcast
Corporation.

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

Factors Affecting Future Operations

     Factors that may cause our actual results to differ  materially from any of
our forward-looking  statements presented in this Annual Report include, but are
not limited to:

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



<PAGE>



                                     PART I
ITEM 1    BUSINESS

     We are a Pennsylvania corporation that was organized in 1969.

     We are involved in three principal lines of business:

     o    Cable-through  the development,  management and operation of broadband
          communications  networks,  including  video,  high-speed  Internet and
          phone service,
     o    Commerce-through QVC, our electronic retail- ing subsidiary, and
     o    Content-through our consolidated  programming  investments,  including
          Comcast Spectacor,  Comcast SportsNet, Comcast SportsNet Mid-Atlantic,
          Cable Sports Southeast, E! Entertainment  Television,  Style, The Golf
          Channel,  Outdoor Life Network,  G4, and through our other programming
          investments.

     We are an indirect,  wholly-owned  subsidiary of Comcast  Corporation,  the
largest cable operator in the United States, and have deployed digital cable and
high- speed Internet service to the substantial majority of our cable systems.

     Our  consolidated   cable  operations  served   approximately  8.5  million
subscribers, passed approximately 14.2 million homes, and provided digital cable
to more than 2.2 million  subscribers  and high-speed  Internet to more than 1.5
million subscribers in the United States as of December 31, 2002.

     Through  QVC, we market a wide  variety of products  directly to  consumers
primarily on  merchandise-focused  television programs. As of December 31, 2002,
QVC was available,  on a full and part-time  basis, to 85.9 million homes in the
United States,  11.4 million homes in the United Kingdom,  25.8 million homes in
Germany and 8.4 million homes in Japan.

     We  have  our   principal   executive   offices  at  1500  Market   Street,
Philadelphia, PA 19102-2148. Our telephone number is (215) 665-1700. Comcast has
a world wide web site at http://www.comcast.com. Copies of the annual, quarterly
and current  reports we file with the SEC, and any  amendments to those reports,
are available on Comcast's  web site.  The  information  posted on Comcast's web
site is not incorporated into this Annual Report.

                  FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS

     Refer to Note 12 to our consolidated  financial statements included in Item
8 for information about our operations by business segment.

                      GENERAL DEVELOPMENTS OF OUR BUSINESS

Comcast's Acquisition of Broadband

     On November 18, 2002,  Comcast  consummated the acquisition of AT&T Corp.'s
broadband  business,  which  we  refer  to  as  the  Broadband  acquisition.  In
connection  with the  closing of the  Broadband  acquisition,  our  shareholders
received  shares of Comcast Class A common stock,  Class A Special  common stock
and Class B common  stock in  exchange  for shares of our Class A common  stock,
Class A Special common stock and Class B common stock, respectively, based on an
exchange  ratio of 1 to 1. Comcast also issued stock options to purchase  shares
of Comcast  common stock in exchange for all of our  outstanding  stock options,
based on an exchange  ratio of 1 to 1. As a result of Comcast's  acquisition  of
Broadband,  we are now an  indirect,  wholly  owned  subsidiary  of Comcast.  On
November 18, 2002,  Comcast  changed its name from AT&T Comcast  Corporation  to
Comcast  Corporation and we changed our name from Comcast Corporation to Comcast
Holdings Corporation.

The Cross-Guarantee Structure

     To simplify Comcast's capital structure,  effective with the acquisition of
Broadband, Comcast and four of its cable holding company subsidiaries, including
our wholly  owned  subsidiary  Comcast  Cable  Communications,  Inc.,  fully and
unconditionally  guaranteed each other's debt securities and other  indebtedness
for borrowed money. Comcast Holdings is not a guarantor, and none of its debt is
guaranteed.  As of December 31, 2002, $24.729 billion of Comcast's and Comcast's
subsidiaries'   debt   securities   were   entitled  to  the   benefits  of  the
cross-guarantee  structure,  including  $7.897 billion of Comcast  Cable's debt.
Comcast  MO  of  Delaware,  Inc.  (formerly,  MediaOne  of  Delaware,  Inc.  and
Continental  Cablevision,  Inc.) was not originally part of the  cross-guarantee
structure.  On March 12, 2003, Comcast announced the successful  completion of a
bondholder consent solicitation related to Comcast MO of Delaware's $1.7 billion
aggregate principal amount in debt securities to permit it to become part of the
cross- guarantee structure.

                                      - 2 -

<PAGE>



                          DESCRIPTION OF OUR BUSINESSES

We are  involved in three  principal  lines of  business:  Cable,  Commerce  and
Content. The following section describes each of these lines of business.

Cable

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

<TABLE>
<CAPTION>
                                               2002     2001(1)   2000(1)  1999(1)      1998
                                            ---------- --------- ------------------- ----------
<S>                                           <C>       <C>       <C>       <C>         <C>
Cable
    Homes Passed (2).......................    14,189    13,929    12,679    9,522       7,382
    Subscribers (3)........................     8,539     8,471     7,607    5,720       4,511
    Penetration............................      60.2%     60.8%     60.0%    60.1%       61.1%

Digital Cable
    "Digital Ready" Subscribers (4)........     8,539     8,375     7,258    4,637       1,570
    Subscribers (5)........................     2,246     1,741     1,207      454          72
    Penetration............................      26.3%     20.8%     16.6%     9.8%        4.6%

High-Speed Internet
    "Available" Homes (6)..................    12,611    10,400     6,360    3,259       1,804
    Subscribers............................     1,526       948       400      142          51
    Penetration............................      12.1%      9.1%      6.3%     4.4%        2.8%

Phone (7)
    "Available" Homes (6)..................       274
    Subscribers............................        40
    Penetration............................      14.4%

<FN>
(1)   In April 1999,  we acquired a  controlling  interest in Jones  Intercable,
      Inc. In January 2000, we acquired Lenfest  Communications,  Inc. and began
      consolidating the results of Comcast  Cablevision of Garden State, L.P. In
      August 2000, we acquired  Prime  Communications  LLC. On December 31, 2000
      and January 1, 2001, we completed our cable  systems  exchanges  with AT&T
      and  Adelphia  Communications,  respectively.  In April and June 2001,  we
      acquired  cable  systems  serving an  aggregate of  approximately  697,000
      subscribers from AT&T. The subscriber  information as of December 31, 2000
      excludes the effects of our exchange with AT&T.
(2)   A home is "passed" if we can connect it to our distribution system without
      further extending the transmission lines. As described in Note 3 below, in
      the case of certain  multiple  dwelling units, or MDUs, homes "passed" are
      counted on an adjusted basis.
(3)   Generally,  a dwelling or commercial unit with one or more television sets
      connected  to a system  counts  as one  cable  subscriber.  In the case of
      certain MDUs, we count cable subscribers on an FCC equivalent basis.
(4)   A subscriber is "digital  ready" if the subscriber is in a market where we
      have launched our digital cable  service.
(5)   A dwelling with one or more digital  converter boxes counts as one digital
      cable subscriber.  On average, as of December 31, 2002, each digital cable
      subscriber had 1.4 digital set-top boxes.
(6)   A home is  "available"  if we can  connect it to our  distribution  system
      without further upgrading the transmission  lines and we offer the service
      in that area.
(7)   Prior to 2002, the number of phone  "available"  homes and subscribers was
      not material.
</FN>
</TABLE>


                                      - 3 -

<PAGE>


     Cable Services

     We  offer  a  variety  of  services  over  our  cable  networks,  including
traditional analog video, digital cable,  high-speed Internet and phone service.
Available  service  offerings  depend  on the  bandwidth  capacity  of the cable
system. The greater the bandwidth, the greater the information carrying capacity
of the system. As of December 31, 2002, 86% of our cable subscribers were served
by a system  with a capacity  of at least  750-MHz and 95% with a capacity of at
least 550-MHz and capable of handling two-way communications. By deploying fiber
optic cable and upgrading the technical  quality of our cable  networks,  we can
increase  the  reliability  and  capacity  of our  systems  and  we can  deliver
additional video  programming and other services such as enhanced digital video,
high-speed Internet and phone.

     Traditional Analog Video Services

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

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

     Basic  programming.  Our basic cable service typically  consists of between
10-20 channels of programming.  This service  generally  consists of programming
provided by national television  networks,  local broadcast television stations,
locally-originated  programming,  including  governmental and public access, and
limited satellite-delivered programming.

     Expanded basic  programming.  Our expanded  basic cable service,  which may
vary in size depending on the system's channel  capacity,  generally  includes a
group of  satellite-delivered or non-broadcast channels in addition to the basic
channel line-up.

     Premium services.  Our premium services generally offer, without commercial
interruption,  feature motion pictures, live and taped sporting events, concerts
and other special  features.  The charge for premium  services  depends upon the
type and number of premium channels selected by the subscriber.

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

     Digital Cable Services

     Digital  compression  technology  enables us to substantially  increase the
number of channels our cable systems can carry,  thereby providing a significant
number of additional programming choices to our subscribers. Digital compression
technology  can convert up to twelve  analog  signals into a digital  format and
compress  these  signals  into the  bandwidth  normally  occupied  by one analog
signal.  At the home, a set-top video terminal,  often referred to as a "digital
set-top box," converts the digital signal into analog signals that can be viewed
on a television set.

     Subscribers  typically pay us on a monthly basis for digital cable services
and generally may discontinue services at any time. Monthly rates vary generally
according  to the level of  service  and the  number of  digital  set-top  boxes
selected by the subscriber.

     Subscribers  to our  digital  cable  service  receive  one or  more  of the
following:

     o    an interactive program guide,

     o    multiple channels of digital music,

     o    basic and expanded basic programming,

     o    "multiplexes"  of  premium  channels  which  are  varied as to time of
          broadcast or programming content theme,

     o    additional pay-per-view programming, such as more pay-per-view options
          and/or frequent showings of the most popular films,

     o    video-on-demand  service,  commonly  known as VOD,  including  popular
          television programs at no additional charge, and

     o    high-definition television.

     We have and will  continue to upgrade our cable systems so that we are able
to provide  these and other new services such as  interactive  television to our
subscribers.

     High-Speed Internet Services

     Residential  subscribers  can connect  their  personal  computers via cable
modems to access online  information,  including the Internet,  at faster speeds
than that of  conventional  modems.  Prior to March 2002, in areas served by our
cable  systems  we  marketed  high-


                                     - 4 -
<PAGE>

speed Internet services operated by a third-party Internet service provider.  By
March 2002, we had moved all of our high-speed  Internet  subscribers to our own
high-  speed  Internet  gateway.  In addition  to  offering  our own  high-speed
Internet  service,  we have  agreements  with a number of  third-party  Internet
service  providers,  or  ISPs  under  which  we  make  available  access  to our
facilities  and the ISP markets a high-speed  Internet  service that is provided
over our cable systems.  We also provide  businesses with Internet  connectivity
solutions and networked business applications.

     Phone Services

     In some of the areas where cable plant has been upgraded,  we use our cable
network to provide  local  telephone  services  and to resell  third-party  long
distance services to our phone subscribers.

     Advertising Sales

     We generate  revenues from the sale of advertising time to local,  regional
and  national  advertisers  on non-  broadcast  channels we carry over our cable
systems.

     Other Revenue Sources

     We also generate  revenues from  installation  services,  commissions  from
third-party electronic retailing and from other services.

     Sales and Marketing

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

     o    telemarketing,

     o    direct mail advertising,

     o    door-to-door selling,

     o    cable television advertising,

     o    local media advertising, and

     o    retail outlets.

     Programming

     We  generally  acquire  a  license  for  the  programming  we  sell  to our
subscribers  by paying a monthly  fee to the  licensor on a per  subscriber  per
channel basis. Our programming costs are increased by:

     o    growth in the number of subscribers,

     o    expansion of the number of channels provided to subscribers, and

     o    increases in contract rates from programming suppliers.

     We attempt to secure long-term  programming contracts with volume discounts
and/or  marketing  support  and  incentives  from  programming  suppliers.   Our
programming  contracts  are generally for a fixed period of time and are subject
to negotiated  renewal.  We expect our  programming  costs to remain our largest
single expense item for the foreseeable  future.  In recent years, the cable and
satellite video industries have  experienced a substantial  increase in the cost
of  programming,  particularly  sports  programming.  We expect this increase to
continue,  and we may not be able to pass  programming  cost increases on to our
subscribers.  The inability to pass these  programming  cost increases on to our
subscribers  would have a material adverse impact on our operating  results.  In
addition,  as we upgrade the channel capacity of our systems and add programming
to our  basic,  expanded  basic  and  digital  programming  tiers,  we may  face
increased programming costs.

     We also expect to be subject to  increasing  financial and other demands by
broadcasters to obtain the required consent for the  retransmission of broadcast
programming to our subscribers.  We cannot predict the financial impact of these
negotiations  or the effect on our  subscribers  should we be  required  to stop
offering this programming.

     Customer Service

     We have  organized  most of our cable  systems  into  geographic  clusters.
Clustering  improves  our ability to sell  advertising,  enhances our ability to
efficiently introduce and market new products, and allows us to more efficiently
and effectively  provide customer service and support. As part of our clustering
strategy,  we have  consolidated  our local customer  service  operations of our
historical  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.

     Competition

     Analog Video and Digital Cable Services

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

     o   program  distributors  that use  direct  broadcast  satellite,  or DBS,
         systems that transmit  satellite signals  containing video programming,
         data and

                                      - 5 -

<PAGE>



          other  information to receiving dishes of varying sizes located on the
          subscriber's premises,

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

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

     o    other operators who build and operate wireline  communications systems
          in the same  communities  that we serve,  including those operating as
          franchised cable operations or under an alternative  regulatory scheme
          known as Open Video Systems, or OVS,

     o    interactive online computer services,  including Internet distribution
          of movies,

     o    newspapers, magazines and book stores,

     o    movie theaters,

     o    live concerts and sporting events, and

     o    video stores and home video products.

     In recent years,  Congress has enacted  legislation and the FCC has adopted
regulatory  policies intended to provide a favorable  operating  environment for
existing  competitors  and for potential new  competitors  to our cable systems.
These competitors include DBS, wireline communications  providers, also known as
overbuilders,  SMATVs and Multichannel Multipoint Distribution Service, or MMDS.
The FCC has recently created a new wireless service, known as Multichannel Video
Distribution and Data Service, or MVDDS, that we also expect to compete with our
cable  systems.  In order to compete  effectively,  our cable systems  strive to
provide,  at a reasonable  price to  subscribers,  new  products  and  services,
superior technical performance,  superior customer service and a greater variety
of video programming.

     DBS  Systems.   According  to  recent   government  and  industry  reports,
conventional,   medium  and  high-power   satellites   currently  provide  video
programming  to over 20 million  customers in the United  States.  DBS providers
with high-power  satellites  typically offer to their  subscribers more than 300
channels of programming, including programming services substantially similar to
those  provided by our cable  systems.  Two  companies,  DIRECTV  and  EchoStar,
provide service to substantially all of these DBS subscribers.

     DBS  service can be  received  throughout  the  continental  United  States
through  the  installation  of a small  roof top or  side-mounted  antenna.  DBS
systems use video  compression  technology  to  increase  channel  capacity  and
digital   technology  to  improve  the  quality  and  quantity  of  the  signals
transmitted to their subscribers.  Our digital cable service is competitive with
the programming,  channel capacity and the digital quality of signals  delivered
to subscribers by DBS systems.

     Federal legislation establishes, among other things, a permanent compulsory
copyright license that permits satellite  carriers to retransmit local broadcast
television  signals to subscribers who reside in the local television  station's
market. These companies are transmitting local broadcast signals in most markets
which we serve. As a result,  satellite carriers are competitive to cable system
operators like us because they offer programming which closely resembles what we
offer. These satellite carriers are attempting to expand their service offerings
to include, among other things, high-speed Internet service.

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

     Overbuilds.  We  operate  our cable  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.  Certain  facilities-based
competitors offer cable and other communications services in various areas where
we hold franchises. We anticipate that facilities-based competitors will develop
in other franchise areas that we serve.

     Local telephone companies.  Federal law allows local telephone companies to
provide,  directly  to  subscribers,   a  wide  variety  of  services  that  are
competitive with our cable services, including video and Internet services

                                      - 6 -

<PAGE>



within and outside their telephone service areas.  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.

     High-Speed Internet Services

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

     o    existing ISPs,

     o    local telephone companies, and

     o    long distance telephone companies.

     The  deployment  of digital  subscriber  line,  or DSL,  technology  allows
Internet  access to be  provided to  subscribers  over  telephone  lines at data
transmission  speeds  substantially  greater  than that of  conventional  analog
modems. Numerous companies,  including telephone companies,  have introduced DSL
service,  and certain  telephone  companies  are seeking to provide  high- speed
Internet  services  without  regard  to  present  service  boundaries  and other
regulatory restrictions.  The FCC recently adopted an order that will reduce the
obligations of local telephone companies to offer their broadband  facilities on
a wholesale basis to competitors, and the FCC is considering further measures to
deregulate the retail broadband offerings of local telephone companies, as well.
Congress may also consider measures to deregulate such broadband offerings.

     A number of cable operators have reached agreements to provide unaffiliated
ISPs access to their cable systems in the absence of regulatory requirements. We
reached "access" agreements with several national and regional third-party ISPs.
In addition,  in connection with the restructuring of Time Warner  Entertainment
Company, L.P., or TWE, in which Comcast owns a 27.6% interest as a result of the
Broadband acquisition, Comcast will enter into a three-year non-exclusive access
agreement with AOL Time Warner.  The Company also has agreed to offer  Microsoft
an access agreement on terms no less favorable than those provided to other ISPs
with  respect to  specified  cable  systems.  We cannot  provide any  assurance,
however,  that regulatory  authorities  will not impose "open access" or similar
requirements on us as part of an industry-wide  requirement.  These requirements
could adversely affect our results of operations.

     Phone Services

     Our phone service  competes  against  incumbent  local  exchange  carriers,
cellular  telephone  service  providers and competitive  local exchange carriers
(including  established long distance companies) in the provision of local voice
services.  Many of these  carriers  are  expanding  their  offerings  to include
high-speed Internet service,  such as DSL. The incumbent local exchange carriers
have   substantial   capital   and  other   resources,   longstanding   customer
relationships and extensive existing facilities and network rights-of-way. A few
competitive  local  exchange  carriers  also have  existing  local  networks and
significant financial resources.

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

Commerce

     QVC is a domestic and  international  electronic media general  merchandise
retailer which produces and distributes merchandise-focused television programs,
via satellite,  to affiliated video program  distributors for  retransmission to
subscribers.  At QVC,  program  hosts and guests  describe and  demonstrate  the
products and viewers  place orders  directly  with QVC. As of December 31, 2002,
QVC was available,  on a full and part-time  basis, to 85.9 million homes in the
United  States,  11.4 million homes in the United Kingdom  ("UK"),  25.8 million
homes in Germany and 8.4 million  homes in Japan.  We estimate that 13.3 million
homes in Germany have programmed  their television sets to receive this service.
We own approximately 57% of QVC.

     On  March  3,  2003,  Comcast  announced  that  Liberty  Media  Corporation
delivered a notice to us, pursuant to the stockholders  agreement between us and
Liberty,  that  triggers  an exit  rights  process  with  respect  to  Liberty's
approximate  42% interest in QVC. We and Liberty  will attempt to negotiate  the
fair  market  value of QVC prior to March 31,  2003.  If we and  Liberty  cannot
agree,  an appraisal  process will determine the value of QVC. We will then have
the right to purchase  Liberty's interest in QVC at the determined value. We may
pay Liberty for the QVC stock in cash,  in a promissory  note  maturing not more
than  three  years  after  issuance,  in  Comcast's  equity  securities  or in a
combination  of these,  subject to  Liberty's  right to  request  payment in all
equity securities and the parties' obligation to use reasonable efforts to

                                      - 7 -

<PAGE>



consummate  the purchase in the most tax efficient  method  available  (provided
that Comcast is not required to issue securities  representing more than 4.9% of
the outstanding equity or vote of its common stock). If we elect not to purchase
Liberty's  interest in QVC,  Liberty then will have a similar  right to purchase
our approximate 57% interest in QVC. If neither we nor Liberty elect to purchase
the  interest of the other,  then we and  Liberty  are  required to use our best
efforts to sell QVC;  either  company is permitted to be a purchaser in any such
sale. We and Liberty may agree not to enter into a transaction,  or may agree to
a transaction other than that specified in the stockholders agreement. Under the
current terms of the stockholders  agreement between us and Liberty, we would no
longer control QVC if we elect not to purchase Liberty's interest in QVC.

     Revenue Sources

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

     Viewers  place  orders to  purchase  QVC  merchandise  by either  calling a
toll-free telephone number to speak to a telemarketing  operator, by using their
touch-tone  telephone to call QVC's integrated  automated  ordering system which
gives customers the ability to place orders without  speaking to a telemarketing
operator,  or by using their personal  computer to place orders on QVC.com.  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  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 65.5 million cable  television  homes.  An additional 0.4 million cable
television  homes  receive  QVC on a less than full time basis and 20.0  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 also offers an interactive shopping service,  QVC.com, on the Internet.
QVC.com offers a diverse array of merchandise, on-line, 24 hours a day, 7 days a
week.  QVC.com  also  maintains a mailing  list which e- mails  product  news to
customers who choose to receive it.

     QVC Transmission

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

     Program Distributors

     QVC has entered into affiliation agreements with video program distributors
to carry QVC programming.  There are no charges to the programming  distributors
for the  distribution  of QVC.  In return for  carrying  QVC,  each  programming
distributor  receives an allocated  portion,  based upon market share,  of up to
five percent of the net sales of  merchandise  sold to customers  located in the
programming   distributor's  service  area.  QVC  has  entered  into  multi-year
affiliation  agreements  with various cable and satellite  system  operators for
carriage  of QVC  programming.  The  terms of most  affiliation  agreements  are
automatically  renewable for one-year terms unless terminated by either party on
at least 90 days notice  prior to the end of the term.  Most of the  affiliation
agreements  provide for the  programming  distributor  to broadcast  commercials
regarding QVC on other channels and to distribute QVC's advertising  material to
subscribers.

     QVC's business depends on its affiliation with programming distributors for
the  transmission of QVC programming.  If a significant  number of homes were no
longer served because of  termination or non-renewal of affiliation  agreements,
our financial results could be adversely affected. QVC has incentive programs to
induce programming distributors to enter into or extend

                                      - 8 -

<PAGE>



affiliation  agreements,   to  increase  the  number  of  homes  under  existing
affiliation agreements,  or to enhance channel placement of the QVC programming.
These  incentives  include  various  forms of  marketing,  carriage  and  launch
support.  QVC will continue to recruit additional  programming  distributors and
seek to enlarge its audience.

     Competition

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

Content

     We  have  made   investments  in  cable   television   networks  and  other
programming-related enterprises as a means of generating additional revenues and
subscriber interest. Our consolidated programming investments as of December 31,
2002 include:

<TABLE>
<CAPTION>
                                         Economic
                                         Ownership
Investment                              Percentage                                Description
---------------------------------------------------------------------------------------------------------------
<S>                                       <C>
Comcast Spectacor                         66.3%           Live sporting events, concerts and other events
Comcast SportsNet                         78.3            Regional sports programming and events
Comcast SportsNet Mid-Atlantic           100.0            Regional sports programming and events
Cable Sports Southeast                    62.2            Regional sports programming and events
E! Entertainment                          39.7            Entertainment-related news and original programming
Style                                     39.7            Lifestyle-related programming
The Golf Channel                          91.3            Golf-related programming
Outdoor Life Network                     100.0            Outdoor sports and leisure programming
CN8-The Comcast Network                  100.0            Regional and local programming
G4                                        93.6            Programming focused on video and computer games
</TABLE>

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

     Consolidated Programming Investments

     Comcast  Spectacor.  Comcast  Spectacor  is our  group of  businesses  that
perform live sporting  events and that own or manage  facilities  and venues for
sports  activities,  sports events,  concerts and other special events.  Comcast
Spectacor consists  principally of the Philadelphia  Flyers NHL hockey team, the
Philadelphia  76ers NBA basketball  team and two large  multi-purpose  arenas in
Philadelphia.

     We and the minority owner group in Comcast Spectacor each have the right to
initiate  an  "exit"  process  under  which  the fair  market  value of  Comcast
Spectacor  would be determined by appraisal.  Following such  determination,  we
would have the option to acquire the interests in Comcast Spectacor owned by the
minority  owner group based on the  appraised  fair market  value.  If we do not
exercise this option,  we and the minority owner group would then be required to
use our best efforts to sell Comcast Spectacor.

     Comcast   SportsNet.   Comcast   SportsNet,   or   CSN,   is  our   24-hour
terrestrially-delivered   network  which  provides  sports-related  programming,
including the Philadelphia  Flyers NHL hockey team, the  Philadelphia  76ers NBA
basketball team and the Philadelphia Phillies MLB baseball team to approximately
2.9 million  subscribers in the Philadelphia  region. The exit process described
in the previous paragraph includes the minority owner group's interest in CSN.

     Comcast  SportsNet  Mid-Atlantic.  Comcast SportsNet  Mid-Atlantic,  or CSN
Mid-Atlantic,   is  our  24-hour   satellite-delivered  network  which  provides
sports-related  programming,  including the Baltimore Orioles MLB baseball team,
the  Washington  Wizards NBA  basketball  team and the  Washington  Capitals NHL
hockey team.  CSN  Mid-Atlantic  serves  approximately  4.3 million  subscribers
primarily in Delaware, Maryland,  Pennsylvania,  Virginia,  Washington, D.C. and
West Virginia.


                                      - 9 -

<PAGE>



     Cable   Sports   Southeast.   Cable   Sports   Southeast,   or  CSS,  is  a
satellite-delivered network which provides sports-related programming and sports
news geared toward college  athletics to approximately  3.9 million  subscribers
primarily in Alabama, Arkansas, Florida, Georgia, Kentucky,  Mississippi,  North
Carolina, South Carolina and Tennessee.

     E! Entertainment.  E! Entertainment is our 24-hour network with programming
dedicated to the world of entertainment. Programming formats include behind-the-
scenes specials,  original movies and series, news, talk shows and comprehensive
coverage of  entertainment  industry awards shows and film festivals  worldwide.
The network has  distribution  to  approximately  71 million  subscribers in the
United States.

     We hold the majority of our interest in E!  Entertainment  through  Comcast
Entertainment  Holdings,  LLC,  which is owned 50.1% by us and 49.9% by The Walt
Disney Company.  Under a limited  liability company agreement between Disney and
us, we  control  E!  Entertainment's  operations.  As a result of the  Broadband
acquisition and in certain other  circumstances,  under the agreement  Disney is
entitled to trigger a potential  exit  process in which  Entertainment  Holdings
would have the right to  purchase  Disney's  entire  interest  in  Entertainment
Holdings at its then fair market value (as determined by an appraisal  process).
If Disney exercises this right within a specified time period, and Entertainment
Holdings elects not to purchase Disney's interest,  Disney then has the right to
purchase,  at  appraised  fair  market  value,  either  our entire  interest  in
Entertainment Holdings or all of the shares of stock of E! Entertainment held by
Entertainment Holdings. In the event that Disney exercises its right and neither
Disney's nor our interest is purchased,  Entertainment Holdings will continue to
be owned as it is today, as if the exit process had not been triggered.

     Style.  Style,  a division  of E!  Entertainment,  is our 24- hour  network
dedicated  to fashion,  home  design,  beauty,  health,  fitness and more,  with
distribution to approximately 24 million subscribers in the United States.

     The  Golf  Channel.  The  Golf  Channel  is  our  24-hour  network  devoted
exclusively to golf  programming  with  distribution to approximately 47 million
subscribers  in the  United  States.  The  programming  schedule  includes  live
tournaments, golf instruction programs and golf news.

     Outdoor Life Network.  Outdoor Life Network is our 24-hour  network devoted
exclusively to outdoor  adventure  sports and outdoor  leisure  recreation  with
distribution to approximately 43 million  subscribers in the United States.  Its
programming  features the premiere  events and series in a wide range of outdoor
activities  including  biking,  sailing,  skiing,   snowboarding,   professional
bullriding and fishing.

     CN8-The   Comcast   Network.   CN8-The  Comcast  Network  is  our  regional
programming  network  delivered to approximately 6 million cable  subscribers in
Maryland, Delaware, Pennsylvania, New Jersey, Connecticut, Massachusetts and New
Hampshire. CN8 provides exclusive original programs,  including news, talk, high
school,  college  and  professional  sports,  cooking,  music,  comedy and other
family-oriented entertainment.

     G4.  G4 is our  24-hour  network  dedicated  to the  world of video  games.
Targeted to young viewers 12-34,  G4 is committed to creating a lifestyle  brand
that is the  source of  entertainment,  news and  information  about  electronic
games, including video, computer,  online and wireless platforms. We launched G4
in April 2002. G4 has distribution to approximately 9 million subscribers.

     Other Programming Interests. We also own other non-controlling interests in
programming investments including iN DEMAND, a pay-per-view and video-on- demand
service, and the Discovery Health Channel.

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

                           LEGISLATION AND REGULATION

     Our  cable  and  phone  businesses  are  subject  to  numerous   regulatory
requirements,  prohibitions and limitations imposed by various federal and state
laws,  local ordinances and our franchise  agreements.  Our commerce and content
businesses  are generally  not subject to direct  governmental  regulation.  Our
high-speed Internet business,  while not currently regulated,  may be subject to
regulation in the future.  Laws and regulations  affect the prices we can charge
for some services, such as basic cable service and associated  customer-premises
equipment,  the costs we incur - for example,  for  attaching our wires to poles
owned by utility  companies,  the relationships we establish with our suppliers,
subscribers and competitors, and many other aspects of our business.

     The most  significant  federal law  affecting  our cable  businesses is the
Communications Act of 1934, as amended. The provisions of the Communications Act
and the  manner in which the FCC,  state and local  authorities,  and the courts
implement  and  interpret  those  provisions,  affect our ability to develop and
execute  business  plans,  our  ability  to raise  capital  and the  competitive
dynamics between and among different sectors of the

                                     - 10 -

<PAGE>



communications  and entertainment  industries in which we operate.  The FCC also
has  the  authority  to  enforce  its  regulations  through  the  imposition  of
substantial fines, the issuance of cease and desist orders and the imposition of
other administrative sanctions, such as the revocation of FCC licenses needed to
operate some of the transmission  facilities we use in connection with our cable
businesses.

     We believe we are currently in substantial  compliance  with all applicable
statutory and regulatory  requirements  imposed by, or under, the Communications
Act, but caution that the precise  requirements of the law are not always clear.
Moreover,  many  laws  and  regulations  can be  interpreted  in  after-the-fact
enforcement  proceedings  or  private  party  litigation  in a  manner  that  is
inconsistent  with the judgments we have made.  We also note that  regulators at
all levels of government frequently consider changing,  and sometimes do change,
existing  rules or  interpretations  of existing  rules,  or prescribe new ones.
Judicial  decisions  often  alter  the  regulatory  framework  in ways  that are
inconsistent with regulator,  business and investor  expectations.  In addition,
our  cable  business  can be  significantly  affected  by the  enactment  of new
legislation.  Owing in part to the "public interest" ramifications traditionally
associated with ownership of electronic media,  Congress seriously considers the
enactment of new legislative  requirements virtually every year. Even though new
laws  infrequently  result,  we always face the risk that  Congress will approve
legislation significantly affecting the cable industry.

     A major objective of Congress and the FCC is to increase competition in all
communications  services,  including those central to our business. For example,
over the last ten years,  Congress removed barriers to local telephone companies
offering video services in their local service areas, and the FCC has authorized
MVDDS, a new wireless service for providing multichannel video programming,  and
may soon  consider a proposal that could allow utility power lines to be used to
provide video and  high-speed  Internet  services.  Our cable  business could be
affected by any new competitors that enter the video  marketplace as a result of
these and similar  efforts by Congress  or the FCC. In  particular,  we could be
materially  disadvantaged  if we are  subject  to new  regulations  that  do not
equally affect our satellite, wireline and wireless competitors.

     There are potential  risks  associated  with various  proceedings  that are
currently  pending  at the FCC,  in the  courts,  and before  federal  and state
legislatures  and  local  franchise   authorities.   We  believe  few  of  these
proceedings  hold the potential to materially  affect our ability to conduct our
cable business. Among the more substantial areas of exposure are the following:

     Broadband  Acquisition.  The FCC  approved  the  Broadband  acquisition  in
November  2002  subject  to  various  conditions.  The  most  significant  are a
requirement for the divestiture of Comcast's interest in TWE, a requirement that
the TWE interest be placed in trust pending divesture, and safeguards that limit
Comcast's  involvement  in the  programming-related  activities  of TWE  and two
partnerships  held jointly by Comcast and TWE.  Complying with these  conditions
will limit  Comcast's  flexibility  as to the timing and nature of a sale of the
TWE interest and, in the interim,  will constrain our business dealings with TWE
and AOL Time Warner.  Comcast has fully complied with those  conditions,  and is
committed to meeting its obligations under the FCC's merger order going-forward.

     Ownership Limits.  The FCC is considering  imposing  "horizontal  ownership
limits" that would limit the  percentage  of  multichannel  video  subscribers -
those that subscribe to cable, DBS, MMDS and other  multichannel  distributors -
that any single  provider  could serve  nationwide.  A federal  appellate  court
struck down the previous 30% limit,  and the FCC is now  considering  this issue
anew. As Comcast  already serves nearly 29% of multichannel  video  subscribers,
limits  similar to those  originally  imposed would restrict our ability to take
advantage of future growth  opportunities.  The FCC is also assessing whether it
should  reinstate  "vertical  ownership  limits"  on the  number  of  affiliated
programming  services  a cable  operator  may  carry on its cable  systems  (the
previous limit of 40% of the first 75 channels had also been  invalidated by the
federal appellate court). While our video programming  interests are modest, new
vertical limits could affect our content- related business plans.  Finally,  the
FCC is  considering  revisions  to its  ownership  attribution  rules that would
affect which cable subscribers are counted under any horizontal  ownership limit
and which programming interests are counted for purposes of a vertical ownership
limit.

     Pricing.  The  Communications  Act and the FCC's  regulations  and policies
limit the prices that cable systems may charge for basic  services and equipment
in  communities  that are not subject to  effective  competition,  as defined by
federal  law.  Failure to comply  with these  rate  rules  could  result in rate
reductions and refunds for subscribers. In addition, various advocacy groups are
urging Congress to impose new rate regulations on the cable industry.  We cannot
now predict  whether or when  Congress may agree to these or similar  proposals.
Also,  various  competitors  are  trying  to  persuade  the FCC and the  Justice
Department to limit our ability to respond to increased  competition by offering
promotions or other  discounts in an effort to retain  existing  subscribers  or
regain those we have lost.  We believe our  competitive  pricing  practices  are
lawful and pro-competitive. If we

                                     - 11 -

<PAGE>



cannot make  individualized  offers to subscribers that would otherwise choose a
different provider, our subscriber attrition may increase, or our overall prices
may need to be reduced, or both.

     High-Speed  Internet Service.  Ever since high-speed cable Internet service
was introduced,  some local governments and various competitors sought to impose
regulatory  requirements on how we deal with third-party  ISPs. Thus far, only a
few local  governments  have  imposed  such  requirements,  and the courts  have
invalidated all of them. Likewise, the FCC has refused to treat our service as a
common carrier "telecommunications service," but has instead classified it as an
"interstate   information   service,"  which  has  historically  meant  that  no
regulations apply.  Nonetheless,  the FCC's decision remains subject to judicial
review - a decision by a federal appellate court is expected later this year. In
addition,  the FCC  itself is still  considering  whether  it should  impose any
regulatory requirements and also whether local franchising authorities should be
permitted  to impose  fees or other  requirements,  such as  service  quality or
customer service standards.  A few franchising  authorities have sued us seeking
payment of franchise fees on high-speed  Internet service revenues.  Further,  a
number of software and content providers and electronic retailers are now urging
the FCC to adopt  certain  "nondiscrimination  principles"  that  purport  to be
intended to allow  Internet  customers  access to the Internet  content of their
choosing (something we already provide).  We cannot now predict whether these or
similar regulations will be adopted and, if so, what effects, if any, they would
have on our business.

     Internet  Regulation.  Congress and federal  regulators have adopted a wide
range of measures  affecting  Internet  use,  including,  for example,  consumer
privacy, copyright protection, defamation liability, taxation and obscenity, and
state  and  local  governmental   organizations  have  adopted  Internet-related
regulations,   as  well.  These  various  governmental  jurisdictions  are  also
considering  additional  regulations  in these and other areas,  such as service
pricing,  service and product quality, and intellectual property ownership.  The
adoption of new laws or the  adaptation of existing  laws to the Internet  could
have a material adverse effect on our Internet business.

     Must-Carry/Retransmission Consent. Cable companies are currently subject to
a requirement that they carry, without compensation, the programming transmitted
by most commercial and non-commercial local television stations.  Alternatively,
local television stations may negotiate for  "retransmission  consent," that is,
terms and conditions to govern our ability to transmit the TV broadcast  signals
that cable subscribers expect to receive. As broadcasters transition from analog
to digital transmission technologies,  the FCC is considering whether to require
cable  companies to  simultaneously  carry both analog and digital  signals of a
single  broadcaster,  and once  digital  carriage  is  required,  whether  cable
companies may be required to carry multiple  digital  program  streams that each
broadcaster  may  transmit.  If either of those  questions  is  answered  in the
affirmative,  we would have less freedom to allocate the usable  spectrum of our
cable plant to provide the services that we believe will be of greatest interest
to our  subscribers.  This could  diminish  our  ability  to attract  and retain
subscribers.  We cannot now predict whether the FCC will impose these or similar
carriage obligations on us.

     Program Access. The Communications Act and the FCC's "program access" rules
prevent  satellite  video  programmers  affiliated  with  cable  operators  from
favoring cable operators over competing multichannel video distributors, such as
DBS, and limit the ability of such  programmers to offer  exclusive  programming
arrangements  to cable  operators.  The FCC recently  extended  the  exclusivity
restrictions through October 2007. The FCC has concluded that the program access
rules do not apply to programming services, such as Comcast SportsNet,  that are
delivered  terrestrially.  However, the FCC has indicated that it may reconsider
how it regulates cable operators with regional sports  programming  interests in
its cable  ownership  rulemaking.  Any decision by the FCC or Congress to single
out for new  regulation  cable  operators  like  us,  who have  regional  sports
programming interests, could have an adverse impact on our cable and programming
businesses.   Some  initiatives  are  underway  to  enact  program   access-type
regulations at the state or local level. We believe any such  regulations  would
be preempted by federal law or otherwise unlawful, but we cannot predict at this
time whether such regulations will be enacted or enforceable.

     Consumer  Electronics  Equipment  Compatibility.  The  FCC has  launched  a
rulemaking  to  implement  a recent  agreement  between  the cable and  consumer
electronics industries aimed at promoting the manufacture of "plug- and-play" TV
sets that can  connect  directly  to the cable  network  without  the need for a
set-top box.  The FCC is  considering  adopting a number of proposed  rules that
would,  among other  things:  direct  cable  operators  to  implement  technical
standards in their networks to support these digital  television  sets;  require
operators  to  provide a  sufficient  supply of  conditional  access  devices to
subscribers who want to receive scrambled  programming services on their digital
television  sets; and require  operators to support basic home recording  rights
and copy protection rules for digital programming content. Failure by the FCC to
implement the agreement could adversely affect our  relationships  with consumer
electronics retail outlets (where DBS has traditionally

                                     - 12 -

<PAGE>



enjoyed an advantage) and slow the growth of subscribership to our digital cable
service.

     Phone Service.  Our phone  business is subject to federal,  state and local
regulation.   In  general,   the  Communications  Act  imposes   interconnection
requirements and universal service obligations on all telecommunications service
providers,  including  those that  provide  traditional  circuit-switched  phone
service over cable  facilities,  and more  significant  regulations on incumbent
local exchange carriers,  such as Verizon and SBC. The FCC has initiated several
rulemakings which, in the aggregate,  could significantly  change the rules that
apply to telephone competition,  including the relationship between wireless and
wireline  providers,  long distance and local providers,  and incumbents and new
entrants,  and it is  unclear  how  those  proceedings  will  affect  our  phone
business.  We are also conducting  trials of Internet  Protocol phone service on
our cable network,  and will begin a limited commercial  offering in 2003. While
the FCC and most state public utility  commissions  have thus far refrained from
regulating  Internet Protocol phone service,  it is uncertain whether regulators
will continue to follow that approach.

     Franchise  Matters.  Cable operators  generally operate their cable systems
pursuant to non-exclusive franchises granted by a franchising authority or other
state or local governmental entity. While the terms and conditions of franchises
vary materially from  jurisdiction to jurisdiction,  these franchises  typically
last for a fixed term,  obligate the  franchisee to pay franchise  fees and meet
service quality, customer service, and other requirements, and are terminable if
the franchisee fails to comply with material provisions.  The Communications Act
includes provisions  governing the franchising process,  including,  among other
things,  renewal procedures  designed to protect incumbent  franchisees  against
arbitrary  denials of renewal.  We anticipate that our future franchise  renewal
prospects generally will be favorable.

     State Taxes.  Some states are  considering  imposing  new taxes,  including
sales taxes, on cable service. We cannot predict at this time whether such taxes
will be enacted or what impact they might have on our business.

     Other Regulatory  Issues.  There are a number of other  regulatory  matters
under review by Congress,  the FCC, and other federal agencies that could affect
our cable business. We briefly highlight those issues below:

     o    Cable/Broadcast   Cross-Ownership:   The  FCC  eliminated  regulations
          precluding the cross- ownership of a national broadcasting network and
          a cable  system  and,  pursuant  to a  federal  court  order,  the FCC
          recently repealed its regulations  prohibiting the common ownership of
          other   broadcasting   interests   and  cable   systems  in  the  same
          geographical areas.

     o    Tier Buy Through:  The  Communications Act requires cable operators to
          allow subscribers to purchase premium or pay-per-view services without
          the necessity of  subscribing  to any tier of service,  other than the
          basic  service  tier.  The  applicability  of  this  rule  in  certain
          situations  remains unclear,  and adverse decisions by the FCC on this
          issue could affect our pricing and packaging of such services.

     o    Leased  Access/PEG:   The   Communications  Act  permits   franchising
          authorities  to require  cable  operators  to set aside  channels  for
          public, educational and governmental access programming,  and 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.  Neither Congress nor the FCC
          is  considering  changes  to  these  requirements,  but  it is  always
          possible that revisions could be made that would place further burdens
          on the channel capacity of our cable systems.

     o    Obscenity:  The  Communications  Act  prohibits  the  transmission  of
          obscene  programming over cable systems.  Some members of Congress and
          the  FCC  and  some  consumers  have  expressed   concerns  about  the
          distribution of certain adult programming over cable systems.

     o    Set-Top Box  Regulation:  Current FCC rules bar cable  operators  from
          leasing subscribers integrated digital set-top boxes effective January
          1, 2005. We have urged  elimination  of the ban on the grounds that it
          will  limit  consumer  choice,   increase  the  cost  of  set-top  box
          equipment,  and slow the  deployment  of digital cable  services,  but
          there is no assurance that the FCC will accept our position.

     o    MDU Access:  The FCC has adopted  rules to promote  competitive  entry
          into the MDU market.  These  rules are  intended to make it easier for
          new multichannel  video service  providers to compete with established
          cable operators.  Although the FCC has declined to prohibit  exclusive
          MDU service agreements held by incumbent cable operators including us,
          that decision could be appealed and possibly changed.

                                     - 13 -

<PAGE>



     o    Pole  Attachments:  The  Communications  Act requires  that  utilities
          provide  cable  systems  with  nondiscriminatory  access  to any pole,
          conduit or  right-of-way  controlled  by the utility,  and the FCC has
          adopted rules, upheld by the courts, that regulate the rates utilities
          may charge for such access. The utilities continue to litigate various
          aspects of the FCC's pole  attachment  rulemakings,  and recent  court
          decisions leave open the possibility that the FCC could alter the pole
          attachment rate levels paid by cable operators that provide high-speed
          Internet  and  cable  television  offerings  over  those  attachments,
          although the FCC has given no indication  that it will do so.  Adverse
          decisions in these  proceedings  could  potentially  increase our pole
          attachment costs.

     o    Privacy  Regulation:  The Communications  Act generally  restricts the
          nonconsensual  collection  and  disclosure  of  subscribers'  personal
          information  by  cable  operators.  A  strict  interpretation  of  the
          Communications  Act  could  severely  limit  the  ability  of  service
          providers  to collect  and use  personal  information  for  commercial
          purposes. In addition,  the Federal Trade Commission has adopted rules
          that will place sharp limits on the  telemarketing  practices of cable
          operators, and the FCC is considering adopting similar rules, as well.

     o    Copyright  Regulation.  In  exchange  for filing  certain  reports and
          contributing a percentage of their revenue to a U.S. federal copyright
          royalty  pool,  cable  operators  can  obtain  blanket  permission  to
          retransmit   copyrighted  material  on  broadcast  signals.  The  U.S.
          Copyright  Office has recommended that Congress revise this compulsory
          licensing  scheme,  although  Congress has thus far declined to do so.
          The elimination or substantial  modification  of the cable  compulsory
          license  could   adversely   affect  our  ability  to  obtain  certain
          programming  and  substantially  increase our  programming  costs.  In
          addition,  we pay standard industry licensing fees to use music in the
          programs we provide to subscribers, including local advertising, local
          origination  programming and pay-per-view events. These licensing fees
          have been the source of  litigation  between  the cable  industry  and
          music  performance  rights  organizations  in the past,  and we cannot
          predict with certainty  whether  license fee disputes may arise in the
          future.

     o    Other Areas:  The FCC actively  regulates  other  aspects of our cable
          business,   including,   among  other  things:  (1)  the  blackout  of
          syndicated,  network,  and sports  programming;  (2) customer  service
          standards;  (3) advertising in children's  programming;  (4) political
          advertising;    (5)   origination   cablecasting;    (6)   sponsorship
          identification;  (7) closed captioning of video programming; (8) equal
          employment opportunity; (9) lottery programming;  (10) emergency alert
          systems;  and (11)  technical  standards  relating to operation of the
          cable network. The FCC is not considering any significant revisions to
          these  rules at this  time,  but we are  unable to  predict  how these
          regulations  might be changed  in the future and how any such  changes
          might affect our business.

     In all these  areas and a  variety  of  others,  we face the  potential  of
increased regulation.  Given the intensely competitive nature of every aspect of
our business, we believe that increased regulation is not warranted.  We can not
provide  any  assurance,  however,  that  regulation  of our  business  will not
increase.
                                    EMPLOYEES

     As of December 31, 2002, we had approximately  42,000  employees.  Of these
employees, approximately 20,000 were associated with cable, approximately 15,000
were associated with commerce and  approximately  7,000 were associated with our
other divisions.  Approximately 1,000 of our employees are covered by collective
bargaining  agreements  or have  organized  but are not  covered  by  collective
bargaining agreements.  We believe that our relationships with our employees are
good.

ITEM 2       PROPERTIES

     Cable

     A central receiving  apparatus,  distribution cables,  servers,  analog and
digital  converters,  cable  modems,  customer  service  call  centers and local
business offices are the principal  physical assets of a cable 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.


                                     - 14 -

<PAGE>

     Commerce

     Television  studios,  customer  service  call  centers,  business  offices,
product warehouses and distribution centers are the principal physical assets of
our commerce operations.  These assets include QVC's studios and offices, Studio
Park, located in West Chester,  Pennsylvania,  and office, customer service call
centers and warehouses in the US, UK,  Germany and Japan.  QVC owns the majority
of these  assets.  In order to keep pace  with  technological  advances,  QVC is
maintaining,  periodically  upgrading and rebuilding the physical  components of
our commerce operations.

     Content

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

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

ITEM 3       LEGAL PROCEEDINGS

     Litigation  has been filed  against us as a result of our  alleged  conduct
with respect to our  investment in and  distribution  relationship  with At Home
Corporation.  At Home was a provider of high-speed  Internet  access and content
services which filed for bankruptcy  protection in September 2001. Filed actions
are: (i) class action  lawsuits  against us, Brian L. Roberts (our President and
Chief  Executive  Officer  and  a  director),   AT&T  (the  former   controlling
shareholder of At Home and also a former distributor of the At Home service) and
other  corporate and  individual  defendants in the Superior  Court of San Mateo
County,  California,  alleging  breaches of fiduciary duty on the part of us and
the other  defendants in connection  with  transactions  agreed to in March 2000
among At Home, us, AT&T and Cox Communications, Inc. (Cox is also an investor in
At Home and a former  distributor  of the At Home  service);  (ii) class  action
lawsuits  against  Comcast Cable  Communications,  Inc.,  AT&T and others in the
United States  District  Court for the Southern  District of New York,  alleging
securities law violations  and common law fraud in connection  with  disclosures
made by At Home in 2001;  and  (iii) a  lawsuit  brought  in the  United  States
District Court for the District of Delaware in the name of At Home by certain At
Home bondholders against us, Brian L. Roberts, Cox and others, alleging breaches
of fiduciary duty relating to the March 2000  transactions  and seeking recovery
of alleged  short- swing  profits of at least $600  million  pursuant to Section
16(b)  of the  Securities  Exchange  Act of 1934  purported  to have  arisen  in
connection with certain transactions relating to At Home stock effected pursuant
to the March 2000 agreements.  The actions in San Mateo County,  California have
been stayed by the United States  Bankruptcy Court for the Northern  District of
California,  the court in which At Home filed for  bankruptcy,  as violating the
automatic  bankruptcy  stay. In the Southern  District of New York actions,  the
court  ordered  the  actions  consolidated  into a  single  action.  An  amended
consolidated  class action  complaint was filed on November 8, 2002.  All of the
defendants served motions to dismiss on February 11, 2003.

     We deny any  wrongdoing in connection  with the claims which have been made
against us, our subsidiaries  and Brian L. Roberts,  and intend to defend all of
these claims vigorously. In management's opinion, the final disposition of these
claims is not  expected to have a material  adverse  effect on our  consolidated
financial position,  but could possibly be material to our consolidated  results
of  operations  of any one period.  Further,  no assurance can be given that any
adverse outcome would not be material to our consolidated financial position.

     Some  of the  entities  formerly  attributed  to  Broadband  which  are now
subsidiaries  of Comcast  are  parties to an  affiliation  term sheet with Starz
Encore Group LLC, an affiliate of Liberty  Media  Corporation,  which extends to
2022. The term sheet requires annual fixed price payments, subject to adjustment
for various factors,  including inflation.  The term sheet also requires Comcast
to pay two-thirds of Starz Encore's programming costs above levels designated in
the term sheet.

     By letter dated May 29, 2001,  Broadband disputed the enforceability of the
excess  programming pass- through  provisions of the Starz Encore term sheet and
questioned the validity of the term sheet as a whole.  Broadband also has raised
certain issues  concerning  the  uncertainty of the provisions of the term sheet
and the contractual  interpretation and application of certain of its provisions
to, among other things,  the acquisition  and  disposition of cable systems.  In
July 2001,  Starz Encore filed a lawsuit in Colorado state court seeking payment
of the 2001 excess  programming costs and a declaration that the term sheet is a
binding and enforceable  contract.  In October 2001,  Broadband and Starz Encore
agreed to delay any further  proceedings in the litigation until August 31, 2002
to allow the parties time to continue  negotiations  toward a potential business
resolution of this dispute. As part of this standstill agreement,  Broadband and
Starz Encore settled Starz Encore's claim for the 2001 excess programming costs,
and Broadband agreed to continue to make the standard monthly payments due

                                     - 15 -

<PAGE>



under the term sheet,  with a full  reservation  of rights with respect to these
payments. In connection with the standstill agreement,  the court granted a stay
on  October  30,  2001.  The terms of the stay  order  allowed  either  party to
petition the court to lift the stay after April 30, 2002 and to proceed with the
litigation. Broadband and Starz Encore agreed to extend the standstill agreement
to and including  January 31, 2003, with a requirement  that the parties attempt
to mediate the dispute.  A mediation session held in January 2003 did not result
in any resolution of the matter.

     On November 18, 2002,  Comcast filed suit against Starz Encore Group LLC in
the United States District Court for the Eastern  District of  Pennsylvania.  We
seek a declaratory  judgment that, pursuant to our rights under a March 17, 1999
contract  with a  predecessor  of  Starz  Encore,  upon  the  completion  of the
Broadband  acquisition  that  contract  now provides the terms under which Starz
Encore  programming is acquired and transmitted by Comcast's  cable systems.  On
January 8, 2003,  Starz  Encore  filed a motion to  dismiss  the  lawsuit on the
grounds  that  claims  asserted by Comcast  raised  issues of state law that the
United  States  District  Court  should  decline to decide.  We and Comcast have
responded,  contesting  these  assertions  The motion has been  submitted to the
Court for decision.

     On January 31, 2003, Starz Encore filed an amended complaint in its lawsuit
against  Broadband in Colorado  state court.  The amended  complaint adds us and
Comcast as  defendants  and adds new claims  against us,  Comcast and  Broadband
asserting alleged breaches of, and interference  with, the standstill  agreement
relating to the lawsuit  filed by us and  Comcast in federal  District  Court in
Pennsylvania  and to the  defendants'  position that since the completion of the
Broadband acquisition the March 17, 1999 contract provides the terms under which
Starz Encore programming is acquired and transmitted by our cable systems.

     On March 3, 2003,  Starz  Encore  filed a motion for leave to file a second
amended complaint that would add allegations that Broadband has breached certain
joint-marketing  obligations  under the term sheet and that we and Comcast  have
breached certain  joint-marketing  obligations under the March 17, 1999 contract
and other agreements.  We, Comcast and Broadband intend to oppose Starz Encore's
motion  for  leave to file a second  amended  complaint  and,  in light of Starz
Encore's  pending  motion for leave to amend,  have sought an  extension of time
from the Court to respond to Starz Encore's amended complaint.

     An  entity  formerly  attributed  to  Broadband,  which  is  now  Comcast's
subsidiary,  is party to a master  agreement  that may not expire until December
31, 2012,  under which it purchases  certain billing  services from CSG Systems,
Inc. The master agreement  requires monthly payments,  subject to adjustment for
inflation.  The master  agreement also contains a most favored nation  provision
that may affect the amounts paid thereunder.

     On May 10,  2002,  Broadband  filed a demand for  arbitration  against  CSG
before the American Arbitration  Association asserting,  among other things, the
right to  terminate  the master  agreement  and seeking  damages  under the most
favored nation provision or otherwise. On May 31, 2002, CSG answered Broadband's
arbitration demand and asserted various counterclaims,  including for (i) breach
of the master  agreement;  (ii) a  declaration  that Comcast is now bound by the
master  agreement to use CSG as its exclusive  provider for certain  billing and
customer care services; (iii) tortious interference with prospective contractual
relations;  and (iv) civil conspiracy. A hearing in the arbitration is scheduled
to commence on May 5, 2003.

     On June 21,  2002,  CSG  filed a lawsuit  against  us in  federal  court in
Denver,  Colorado  asserting  claims  related  to the master  agreement  and the
pending arbitration.  On November 4, 2002, CSG withdrew its complaint against us
without prejudice. On November 15, 2002, Comcast initiated a lawsuit against CSG
in federal  court in  Philadelphia,  Pennsylvania  asserting  that cable systems
owned by us are not  required to use CSG as a billing  service or customer  care
provider pursuant to the master  agreement,  and that the former Broadband cable
systems  Comcast now owns may be added to a billing  service  agreement  between
Comcast and CSG. CSG moved to dismiss or stay the lawsuit on the ground that the
issues raised by the complaint  could be wholly or  substantially  determined by
the  above-mentioned  arbitration.  By Order dated  February 10, 2003, the Court
stayed the lawsuit until further notice.

     In management's  opinion, the final disposition of the Starz Encore and CSG
contractual  disputes is not expected to have a material  adverse  effect on our
consolidated financial position or results of operations.  However, no assurance
can be given that any adverse outcome would not be material to our  consolidated
financial position or results of operations.

     We are subject to other  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 such actions is not expected to  materially
affect our financial condition, results of operations or liquidity.


                                     - 16 -

<PAGE>



ITEM 4         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Information  for this Item is omitted  pursuant to SEC General  Instruction I to
Form 10-K.


                                     PART II

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

Common Stock

     Absence of Trading Market

     Through the closing of Comcast's  acquisition  of Broadband on November 18,
2002, our Class A common stock was included on Nasdaq under the symbol CMCSA and
our Class A Special  common stock was included on Nasdaq under the symbol CMCSK.
There was no  established  public  trading  market for our Class B common stock.
Subsequent to the closing of the Broadband acquisition,  our common stock is not
publicly traded.  Therefore,  there is no established  public trading market for
our common stock, and none is expected to develop in the foreseeable future.

     Holders

     All of our  shares of common  stock are owned  directly  or  indirectly  by
Comcast.

     Dividends

     None.





ITEM 6         SELECTED FINANCIAL DATA

Information  for this Item is omitted  pursuant to SEC General  Instruction I to
Form 10-K.








                                     - 17 -

<PAGE>



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

     Information for this item is omitted pursuant to SEC General  Instruction I
to Form 10-K, except as noted below.

     We  are  an  indirect,  wholly  owned  subsidiary  of  Comcast  Corporation
("Comcast").

Overview

     We  have  grown  significantly  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.  We
have  generally  financed  our  acquisitions  and capital  expenditures  through
issuances  of  our  common  stock,   borrowings  of  long-term  debt,  sales  of
investments and from existing cash, cash equivalents and short-term investments.

General Developments of Business

     Refer to "General Developments of Our Business" in Part I and Note 4 to our
financial statements included in Item 8 for a discussion of our acquisitions and
other significant events.

Significant and Subjective Estimates

     The following discussion and analysis of our results of operations is based
upon  our  consolidated  financial  statements,  which  have  been  prepared  in
accordance with accounting  principles  generally accepted in the United States.
The preparation of these financial statements requires us to make estimates that
affect the reported amounts of assets,  liabilities,  revenues and expenses, and
related  disclosure of contingent assets and liabilities.  We base our judgments
on historical  experience and on various other  assumptions  that we believe are
reasonable  under the  circumstances,  the  results  of which form the basis for
making  estimates about the carrying  values of assets and liabilities  that are
not readily  apparent from other  sources.  Actual results may differ from these
estimates under different assumptions or conditions.

     Refer  to  Note 2 to our  financial  statements  included  in  Item 8 for a
discussion of our accounting policies with respect to these and other items.

Results of Operations

     The effects of our 2001 and 2000  acquisitions and cable systems  exchanges
were to increase  our  revenues  and  expenses,  resulting  in  increases in our
operating income before depreciation and amortization.

     Refer to Notes 4 and 10 to our financial  statements included in Item 8 for
a discussion of our acquisitions and cable systems exchanges,  and of the effect
of these transactions on our balance sheet.

     We adopted Statement of Financial  Accounting  Standards  ("SFAS") No. 142,
"Goodwill  and  Intangible  Assets," on January 1, 2002,  as required by the new
statement.  See  "Amortization"  on page 20 for a  discussion  of the impact the
adoption of the new statement had on our consolidated results of operations.


                                     - 18 -

<PAGE>



     Our summarized consolidated financial information for the three years ended
December 31, 2002 is as follows (dollars in millions, "NM" denotes percentage is
not meaningful):

<TABLE>
<CAPTION>
                                                                        Year Ended
                                                                       December 31,         Increase/(Decrease)
                                                                     2002         2001          $          %
                                                                  ----------    ---------   ---------  ---------
<S>                                                                  <C>           <C>         <C>          <C>
Revenues........................................................     $11,276       $9,836      $1,440       14.6%
Cost of goods sold from electronic retailing....................       2,793        2,514         279       11.1
Operating, selling, general and administrative expenses.........       4,933        4,652         281        6.0
Depreciation....................................................       1,425        1,211         214       17.7
Amortization....................................................         213        2,205      (1,992)     (90.3)
                                                                  ----------    ---------   ---------  ---------
Operating income (loss).........................................       1,912         (746)      2,658         NM
                                                                  ----------    ---------   ---------  ---------
Interest expense................................................        (725)        (734)         (9)      (1.2)
Investment income (expense).....................................        (658)       1,062      (1,720)        NM
Equity in net losses of affiliates..............................        (103)         (29)         74      255.2
Other income....................................................          (4)       1,301      (1,305)    (100.3)
Income tax expense..............................................        (246)        (470)       (224)     (47.7)
Minority interest...............................................        (196)        (160)         36       22.5
                                                                  ----------    ---------   ---------  ---------
Income (loss) before cumulative effect of accounting change.....        ($20)        $224       ($244)    (108.9%)
                                                                  ==========    =========   =========  =========
Operating income before depreciation and amortization (1) ......      $3,550       $2,670        $880       33.0%
                                                                  ==========    =========   =========  =========

                                                                        Year Ended
                                                                       December 31,         Increase/(Decrease)
                                                                     2001         2000          $          %
                                                                  ----------    ---------   ---------  ---------
Revenues........................................................      $9,836       $8,357      $1,479       17.7%
Cost of goods sold from electronic retailing....................       2,514        2,285         229       10.0
Operating, selling, general and administrative expenses.........       4,652        3,614       1,038       28.7
Depreciation....................................................       1,211          837         374       44.7
Amortization....................................................       2,205        1,782         423       23.7
                                                                  ----------    ---------   ---------  ---------
Operating loss..................................................        (746)        (161)        585      363.4
                                                                  ----------    ---------   ---------  ---------
Interest expense................................................        (734)        (728)          6        0.8
Investment income...............................................       1,062          984          78        7.9
Income related to indexed debt..................................                      666        (666)    (100.0)
Equity in net losses of affiliates..............................         (29)         (22)          7       31.8
Other income....................................................       1,301        2,826      (1,525)     (54.0)
Income tax expense..............................................        (470)      (1,429)       (959)     (67.1)
Minority interest...............................................        (160)        (115)         45       39.1
                                                                  ----------    ---------   ---------  ---------
Income before cumulative effect of accounting change............        $224       $2,021     ($1,797)     (88.9%)
                                                                  ==========    =========   =========  =========
Operating income before depreciation and amortization (1) ......      $2,670       $2,458        $212        8.6%
                                                                  ==========    =========   =========  =========
<FN>
____________
(1)  Operating income before  depreciation and amortization is commonly referred
     to in our  businesses  as  "EBITDA."  EBITDA  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, EBITDA
     is  frequently  used as one of the bases for  comparing  businesses  in our
     industries,  although  our  measure  of  EBITDA  may not be  comparable  to
     similarly titled measures of other  companies.  EBITDA is the primary basis
     used  by  our  management  to  measure  the  operating  performance  of our
     businesses.  EBITDA  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.
</FN>
</TABLE>



                                     - 19 -

<PAGE>



Consolidated Operating Results

     Revenues

     The increases in  consolidated  revenues from 2001 to 2002 and from 2000 to
2001 are primarily  attributable  to increases in service  revenues in our Cable
segment and to increases in net sales in our  Commerce  segment (see  "Operating
Results by Business Segment" below).  The remaining  increases are primarily the
result of increases in revenues from our content operations,  principally due to
growth in our historical operations and the effects of our acquisitions in 2001.

     On January 1, 2002,  we adopted EITF 01-9,  "Accounting  for  Consideration
Given to a Customer  (Including a Reseller of the Vendor's  Products)"  and EITF
01-14,  "Income  Statement   Characterization  of  Reimbursements  Received  for
'Out-of-Pocket'  Expenses  Incurred."  We have  reclassified  our  statement  of
operations  for all periods  presented  to reflect the adoption of EITF 01-9 and
EITF  01-14.  The  changes  in  classification  had no  impact  on our  reported
operating income (loss) or financial condition. Refer to Note 2 to our financial
statements included in Item 8 for a discussion of EITF 01-9 and EITF 01-14.

     Cost of goods sold from electronic retailing

     Refer to the "Commerce"  section of "Operating Results by Business Segment"
below for a discussion  of the  increases in cost of goods sold from  electronic
retailing.

     Operating, selling, general and administrative expenses

     The   increases   in   consolidated   operating,   selling,   general   and
administrative  expenses  from 2001 to 2002 and from 2000 to 2001 are  primarily
attributable  to  increases  in expenses in our Cable  segment  and, to a lesser
extent, to increases in expenses in our Commerce segment (see "Operating Results
by Business Segment" below). The remaining increases are primarily the result of
increased expenses in our content  operations,  principally due to growth in our
historical operations and the effects of our acquisitions in 2001.

     Depreciation

     The  increases in  depreciation  expense from 2001 to 2002 and from 2000 to
2001 are primarily  attributable to our Cable segment and are principally due to
the effects of our recent  acquisitions,  our cable  systems  exchanges  and our
capital   expenditures.   Depreciation  expense  in  our  Commerce  segment  was
essentially unchanged. The remaining increases in depreciation expense from 2000
to 2001 are  primarily  the result of increases in  depreciation  in our content
operations,  principally  due to the effects of our  acquisitions  and increased
levels of capital expenditures.

     Amortization

     Of the $1.992 billion  decrease in amortization  expense from 2001 to 2002,
$2.002  billion is  attributable  to the  adoption of SFAS No. 142 on January 1,
2002. The remaining  change is primarily the result of increases in amortization
expense  in our  content  operations,  principally  due to  the  effects  of our
acquisitions.  The $423 million  increase in  amortization  expense from 2000 to
2001 is primarily due to the effects of our acquisitions. Refer to Note 6 to our
financial  statements included in Item 8 for the pro forma impact of adoption of
SFAS No. 142 on amortization expense.

     Operating Results by Business Segment

     The following  represent the operating results of our significant  business
segments, "Cable" and "Commerce." The remaining components of our operations are
not independently significant to our consolidated financial condition or results
of operations.  Refer to Note 12 to our financial  statements included in Item 8
for a summary of our financial data by business segment.


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



                                     - 20 -

<PAGE>



     Cable
     The following  table presents  financial  information for our Cable segment
(dollars in millions).

<TABLE>
<CAPTION>
                                                                      Year Ended
                                                                     December 31,                Increase
                                                                  2002          2001           $           %
                                                               ----------    ----------     --------    -------
<S>                                                                <C>           <C>            <C>        <C>
Video.........................................................     $4,710        $4,278         $432       10.1%
High-speed Internet...........................................        590           294          296      100.7
Advertising sales.............................................        383           326           57       17.5
Other.........................................................        275           232           43       18.5
Franchise fees................................................        201           193            8        4.1
                                                               ----------    ----------     --------    -------
     Revenues.................................................      6,159         5,323          836       15.7

Operating, selling, general and administrative expenses.......      3,526         3,269          257        7.9
                                                               ----------    ----------     --------    -------

Operating income before depreciation and
amortization (a)..............................................     $2,633        $2,054         $579       28.2%
                                                               ==========    ==========     ========    =======

                                                                      Year Ended
                                                                     December 31,                Increase
                                                                  2001          2000           $           %
                                                               ----------    ----------     --------    -------
Video.........................................................     $4,278        $3,651         $627       17.2%
High-speed Internet...........................................        294           114          180      157.9
Advertising sales.............................................        326           290           36       12.4
Other.........................................................        232           153           79       51.6
Franchise fees................................................        193           154           39       25.3
                                                               ----------    ----------     --------    -------
     Revenues.................................................      5,323         4,362          961       22.0

Operating, selling, general and administrative expenses.......      3,269         2,459          810       32.9
                                                               ----------    ----------     --------    -------

Operating income before depreciation and
     amortization (a).........................................     $2,054        $1,903         $151        7.9%
                                                               ==========    ==========     ========    =======
<FN>
_______________
(a) See footnote (1) on page 18.
</FN>
</TABLE>

     Video revenue consists of our basic, expanded basic, premium, pay-per-view,
equipment  and digital  cable  services.  Of the $432  million and $627  million
increases  in video  revenues  from  2001 to 2002 and  from  2000 to 2001,  $139
million and $339 million,  respectively,  are attributable to the effects of our
acquisitions  of cable systems and $293 million and $288 million,  respectively,
relate to changes in rates and subscriber  growth in our historical  operations,
driven principally by growth in digital subscribers,  and to a lesser extent, to
the effects of a higher- priced digital service offering made in the second half
of 2000. During 2002, we added approximately 505,000 digital subscribers through
growth in our historical operations.  During 2001 and 2000, through acquisitions
and growth in our  historical  operations,  we added  approximately  534,000 and
753,000 digital subscribers, respectively.

     The  increases in  high-speed  Internet  revenue from 2001 to 2002 and from
2000  to  2001  are  primarily  due  to  the  addition  of  high-speed  Internet
subscribers.  During 2002, we added  approximately  578,000 high-speed  Internet
subscribers through growth in our historical  operations.  During 2001 and 2000,
through  acquisitions  and  growth  in  our  historical  operations,   we  added
approximately 548,000 and 258,000 high-speed Internet subscribers, respectively.

     The increase in  advertising  sales revenue from 2001 to 2002 is due to the
effects of a stronger  advertising  market and the  continued  leveraging of our
market-wide fiber interconnects.  The increase in advertising sales revenue from
2000 to 2001 was  attributable  to the  effects  of new  advertising  contracts,
market-wide  fiber  interconnects  and the continued  leveraging of our existing
fiber networks, helping to offset an otherwise weak advertising environment.

     Other  revenue  includes  phone  revenues,   installation  revenues,  guide
revenues, commissions from electronic retailing, revenues of our regional sports
programming networks and revenue from other product offerings. The increase from
2001 to 2002 in  other  revenue  is  primarily  attributable  to  growth  in our
historical operations. The

                                     - 21 -

<PAGE>



increase  from 2000 to 2001 in other  revenue is primarily  attributable  to the
effects of our acquisition of Home Team Sports (now known as CSN  Mid-Atlantic).
The  remaining  increases  from 2000 to 2001 are  attributable  to growth in our
historical operations.

     The increase in operating,  selling,  general and  administrative  expenses
from 2001 to 2002 is primarily  attributable  to the effects of increases in the
costs of cable  programming,  increases in labor costs and other volume- related
expenses in our historical  operations,  and, to a lesser extent, to the effects
of high-speed  Internet subscriber growth. This increase was partially offset by
the effects of management fees charged by the Company to subsidiaries of Comcast
during 2002.

     On September 28, 2001, At Home Corporation ("At Home"), our former provider
of high-speed  Internet  services,  filed for protection under Chapter 11 of the
U.S.  Bankruptcy Code. In October 2001, we amended our agreement with At Home to
continue service to our existing and new subscribers during October and November
2001.  We agreed  to be  charged a higher  rate than we had  incurred  under our
previous  agreement.  On December 3, 2001,  we reached a  definitive  agreement,
approved by the Bankruptcy  Court, with At Home pursuant to which At Home agreed
to continue to provide  high-speed  Internet  services to our  existing  and new
subscribers  through  February 28, 2002. In December  2001, we began to transfer
our  high-speed  Internet  subscribers  from  the At  Home  network  to our  new
Comcast-owned  and managed  network.  We completed  this  transition in February
2002.  Operating  expenses in our  consolidated  statement of operations for the
year ended  December 31, 2001 include $140 million of net  incremental  expenses
incurred  in the fourth  quarter of 2001 in the  continuation  of service to and
transition of our high-speed Internet  subscribers from At Home's network to our
network.

     The remaining  increases from 2000 to 2001 in operating,  selling,  general
and administrative expenses are primarily due to the effects of our acquisitions
and  exchanges of cable  systems,  as well as to the effects of increases in the
costs of cable programming,  high-speed  Internet  subscriber growth,  and, to a
lesser extent, increases in labor costs and other volume related expenses in our
historical operations.

     Our  cost of  programming  increases  as a  result  of  changes  in  rates,
subscriber  growth,  additional  channel  offerings  and  our  acquisitions  and
exchanges of cable  systems.  We anticipate the cost of cable  programming  will
increase  in the  future as cable  programming  rates  increase  and  additional
sources of cable programming become available.


                                     - 22 -

<PAGE>



     Commerce

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

<TABLE>
<CAPTION>
                                                                       Year Ended
                                                                      December 31,                Increase
                                                                   2002           2001          $          %
                                                                 ---------      --------     -------     ------
<S>                                                                 <C>           <C>           <C>        <C>
Net sales from electronic retailing...........................      $4,381        $3,917        $464       11.8%
Cost of goods sold from electronic retailing..................       2,793         2,514         279       11.1
Operating, selling, general and administrative expenses.......         730           681          49        7.2
                                                                 ---------      --------     -------     ------
Operating income before depreciation and
     amortization (a).........................................        $858          $722        $136       18.7%
                                                                 =========      ========     =======     ======
Gross margin..................................................        36.3%         35.8%
                                                                 =========      ========

                                                                       Year Ended
                                                                      December 31,                Increase
                                                                   2001           2000          $          %
                                                                 ---------      --------     -------     ------
Net sales from electronic retailing...........................      $3,917        $3,536        $381       10.8%
Cost of goods sold from electronic retailing..................       2,514         2,285         229       10.0
Operating, selling, general and administrative expenses.......         681           632          49        7.8
                                                                 ---------      --------     -------     ------
Operating income before depreciation and
     amortization (a).........................................        $722          $619        $103       16.7%
                                                                 =========      ========     =======     ======
Gross margin..................................................        35.8%         35.4%
                                                                 =========      ========
<FN>
_______________
(a) See footnote (1) on page 18.
</FN>
</TABLE>

     Of the $464 million and $381 million increases in net sales from electronic
retailing  from  2001 to 2002  and  from  2000 to 2001,  $296  million  and $332
million,  respectively,  is attributable to increases in net sales in the United
States. This growth is principally the result of increases in the average number
of homes receiving QVC services and in net sales per home as follows:

<TABLE>
<CAPTION>
                                                                        Year Ended December 31,
                                                                      2002                  2001
                                                              --------------------- ---------------------
<S>                                                                    <C>                   <C>
Increase in average number of homes in U.S....................         3.6%                  3.8%
Increase in net sales per home in U.S.........................         5.3%                  6.5%
</TABLE>

     It is  unlikely  that  the  number  of  homes  receiving  the  QVC  service
domestically  will  continue to grow at rates  comparable to prior periods given
that the QVC service is already received by approximately  97% of all U.S. cable
television homes and  substantially  all satellite  television homes in the U.S.
Future growth in sales will depend  increasingly  on continued  additions of new
customers from homes already  receiving the QVC service and continued  growth in
repeat sales to existing customers.

     The  remaining  increases of $168 million and $49 million in net sales from
electronic  retailing  from  2001 to 2002  and from  2000 to 2001 are  primarily
attributable to increases in net sales in Germany, Japan and the United Kingdom,
offset,  in part, by the effects of  fluctuations in foreign  currency  exchange
rates during the periods.

     The increases in cost of goods sold from 2001 to 2002 and from 2000 to 2001
are primarily  related to the growth in net sales. The increases in gross margin
are primarily due to the effects of increases in product margins.

     The increases in operating,  selling,  general and administrative  expenses
from 2001 to 2002 and from  2000 to 2001 are  primarily  attributable  to higher
variable costs and personnel costs associated with the increase in sales volume.

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



                                     - 23 -

<PAGE>



     Consolidated Analysis

     Interest Expense

     We anticipate  that, for the foreseeable  future,  interest expense will be
significant.  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.

     Investment Income (Expense)

     Investment income (expense) includes the following (in millions):

<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                                           2002        2001        2000
                                                                         ---------   ---------   ---------
<S>                                                                         <C>         <C>        <C>
Interest and dividend income...........................................        $45         $77        $171
(Losses) gains on sales and exchanges of investments, net..............        (48)        485         887
Investment impairment losses...........................................       (247)       (972)        (74)
Reclassification of unrealized gains...................................                  1,330
Unrealized (loss) gain on trading securities...........................     (1,446)        285
Mark to market adjustments on derivatives related
     to trading securities.............................................      1,182        (185)
Mark to market adjustments on derivatives and hedged items.............       (144)         42
                                                                         ---------   ---------   ---------

     Investment income (expense).......................................      ($658)     $1,062        $984
                                                                         =========   =========   =========
</TABLE>

     The investment  impairment losses for the years ended December 31, 2002 and
2001 relate  principally to an other than temporary decline in our investment in
AT&T Corp.

     During the year ended  December 31, 2001, we wrote-off our investment in At
Home common  stock based upon a decline in the  investment  that was  considered
other than  temporary.  In connection  with the  realization of this  impairment
loss, we reclassified to investment income (expense) the accumulated  unrealized
gain of $238  million  on our  investment  in At Home  common  stock  which  was
previously  recorded as a component of accumulated  other  comprehensive  income
(loss). We recorded this accumulated unrealized gain prior to our designation of
our right under a stockholders' agreement as a hedge of our investment in the At
Home common stock.

     In June 2001,  we and AT&T  entered  into an  Amended  and  Restated  Share
Issuance  Agreement  (the  "Share  Issuance  Agreement").   AT&T  issued  to  us
approximately  80.3  million  unregistered  shares of AT&T  common  stock and we
agreed to settle our right  under the Share  Exchange  Agreement  to exchange an
aggregate 31.2 million At Home shares and warrants held by us for shares of AT&T
common stock. Under the terms of the Share Issuance  Agreement,  we retained the
At Home  shares  and  warrants  held by us. We  recorded  to  investment  income
(expense) a pre-tax  gain of $296  million,  representing  the fair value of the
increased  consideration  received  by us to settle  our  right  under the Share
Exchange Agreement.

     In connection  with the  reclassification  of our  investment in Sprint PCS
from  an  available  for  sale  security  to a  trading  security  in  2001,  we
reclassified to investment  income (expense) the accumulated  unrealized gain of
$1.092 billion on our investment in Sprint PCS which was previously  recorded as
a component of accumulated other comprehensive income (loss).

     Income Related to Indexed Debt

     Prior to the adoption of SFAS No. 133 on January 1, 2001,  we accounted for
the ZONES as an indexed debt  instrument  since the maturity  value is dependent
upon the fair value of Sprint PCS common stock.  During the year ended  December
31, 2000, we recorded  income related to indexed debt of $666 million to reflect
the fair value of the underlying Sprint PCS stock.

     Equity in Net Losses of Affiliates

     The  increase  in equity in net losses of  affiliates  from 2001 to 2002 is
primarily due to other than  temporary  declines in certain of our equity method
investees, the effects of our additional investments,  changes in the net income
or loss of our  equity  method  investees,  as  well  as to the  effects  of the
discontinuance of amortization of

                                     - 24 -

<PAGE>



equity method goodwill as a result of the adoption of SFAS No. 142 on January 1,
2002. The increase from 2000 to 2001 is primarily attributable to the effects of
our additional investments,  as well as the effects of changes in the net income
or loss of our equity method investees.

     Other Income

     On October 30, 2001, we acquired from Fox  Entertainment  Group, Inc. ("Fox
Entertainment")  the approximate  83.2% interest in Outdoor Life Network ("OLN")
not previously  owned by us. Upon closing of the  acquisition,  we exchanged our
14.5% interest in Speedvision  Network ("SVN"),  together with a previously made
loan, for Fox  Entertainment's  interest in OLN. In connection with the exchange
of our interest in SVN, we recorded a pre-tax gain of $107 million, representing
the difference between the estimated fair value of our interest in SVN as of the
closing date of the transaction and our cost basis in SVN.

     On January 1, 2001, we completed  our cable systems  exchange with Adelphia
Communications  Corporation  ("Adelphia").  We received  cable  systems  serving
approximately 445,000 subscribers from Adelphia and Adelphia received certain of
our cable systems serving approximately 441,000 subscribers.  We recorded a pre-
tax gain of $1.199 billion,  representing  the difference  between the estimated
fair value of $1.799 billion as of the closing date of the  transaction  and our
cost basis in the systems exchanged.

     On December 31, 2000, we completed our cable systems exchange with AT&T. We
received cable systems serving  approximately  770,000 subscribers from AT&T and
AT&T  received  certain  of our  cable  systems  serving  approximately  700,000
subscribers.  We recorded a pre-tax  gain of $1.711  billion,  representing  the
difference  between the estimated fair value of $2.840 billion as of the closing
date of the transaction and our cost basis in the systems exchanged.

     In August  2000,  we obtained  the right to  exchange  our At Home Series A
Common  Stock with AT&T and we waived  certain  of our At Home  Board  level and
shareholder rights under a stockholders'  agreement. We also agreed to cause our
existing  appointee to the At Home Board of Directors to resign.  In  connection
with the transaction, we recorded a pre-tax gain of $1.045 billion, representing
the estimated fair value of the investment as of the closing date.

     In August  2000,  we exchanged  all of the capital  stock of a wholly owned
subsidiary which held certain wireless  licenses for  approximately  3.2 million
shares of AT&T common stock.  In connection  with the exchange,  we recognized a
pre-tax gain of $98 million,  representing the difference between the fair value
of the  AT&T  shares  received  of  $100  million  and  our  cost  basis  in the
subsidiary.

     Income Tax Expense

     The decreases in income tax expense from 2001 to 2002 and from 2000 to 2001
are  primarily  the result of the effects of changes in our income  before taxes
and minority interest, and non-deductible goodwill amortization.

     Minority Interest

     The  increase in minority  interest  from 2001 to 2002 is  attributable  to
increases  in the  net  income  of  our  less  than  wholly  owned  consolidated
subsidiaries.  The increase in minority  interest from 2000 to 2001 is primarily
attributable  to the  effects  of  changes in the net income or loss of our less
than wholly owned consolidated subsidiaries.

     Cumulative Effect of Accounting Change

     Upon adoption of SFAS No. 133, we recognized as income a cumulative  effect
of accounting  change,  net of related income taxes,  of $385 million during the
year ended December 31, 2001. The income consisted of a $400 million  adjustment
to  record  the debt  component  of our  ZONES at a  discount  from its value at
maturity and $192 million principally  related to the  reclassification of gains
previously  recognized as a component of accumulated other comprehensive  income
(loss) on our equity  derivative  instruments,  net of related  deferred  income
taxes of $207 million.

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

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




                                     - 25 -

<PAGE>



ITEM 7A         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk Management

     We are exposed to the market risk of adverse  changes in interest rates. We
maintain a mix of fixed and variable rate debt and enter into various derivative
transactions pursuant to our policies to manage the volatility relating to these
exposures.  We  monitor  our  interest  rate  risk  exposures  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. We manage the credit risks associated with our derivative
financial   instruments   through  the   evaluation   and   monitoring   of  the
creditworthiness of the counterparties.  Although we may be exposed to losses in
the event of nonperformance by the counterparties, we do not expect such losses,
if any, to be significant.

     We  use  interest  rate  exchange  agreements  ("Swaps")  to  exchange,  at
specified intervals,  the difference between fixed and variable interest amounts
calculated by reference to an  agreed-upon  notional  principal  amount.  We use
interest rate lock  agreements  ("Rate Locks") to hedge the risk that cash flows
related to the interest  payments on an  anticipated  issuance or  assumption of
fixed rate debt may be adversely affected by interest rate fluctuations.  We use
interest rate cap agreements  ("Caps") to lock in a maximum interest rate should
variable rates rise,  but enable us to otherwise pay lower market rates.  We use
interest  rate  collar  agreements  ("Collars")  to 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, 2002 (dollars in millions):

<TABLE>
<CAPTION>
                                                                                                              Fair
                                                                                                            Value at
                                      2003    2004      2005     2006    2007   Thereafter     Total        12/31/02
                                      ----    ----      ----     ----    ----   ----------     -----        --------
<S>                                      <C>     <C>       <C>      <C>    <C>        <C>         <C>           <C>
Debt
Fixed Rate..........................     $13     $324      $709     $650   $988       $5,749      $8,433        $8,650
   Average Interest Rate............    8.8%     7.8%      8.4%     7.1%   8.3%         7.3%        7.5%

Variable Rate.......................     $10               $835                           $2        $847          $847
   Average Interest Rate............    2.8%               2.9%                         7.4%        2.9%

Interest Rate Instruments
Variable to Fixed Swaps.............     $72                                                         $72           ($2)
   Average Pay Rate.................    4.9%                                                        4.9%
   Average Receive Rate.............    1.4%                                                        1.4%
</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 costs to settle the outstanding contracts. We estimate interest
rates on variable debt 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,  2002,  plus the  borrowing  margin in effect for each  credit
facility at December 31, 2002. We estimate average receive rates on the Variable
to Fixed  Swaps using the average  implied  forward  LIBOR rates for the year of
maturity  based on the yield curve in effect at December 31, 2002.  While Swaps,
Rate Locks,  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, 2002, 2001 and 2000 was not significant.

     Equity Price Risk Management

     We have entered into cashless collar  agreements (the "Equity Collars") and
prepaid forward sales agreements  ("Prepaid Forward Sales") which we account for
at fair value.  The Equity Collars and Prepaid  Forward Sales limit our exposure
to and benefits from price fluctuations in the Sprint PCS common stock accounted
for as trading securities.  Refer to Note 5 to our financial statements included
in Item 8 for a discussion of our Prepaid Forward Sales.

     During  2002 and 2001,  the change in the fair value of our  investment  in
Sprint  PCS common  stock was  substantially  offset by the  changes in the fair
value of the Equity Collars and the  derivative  components of the ZONES and the
Prepaid  Forward  Sales.   See  "Results  of  Operations  -  Investment   Income
(Expense)."

                                     - 26 -

<PAGE>



ITEM 8        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Comcast Holdings Corporation
Philadelphia, Pennsylvania

We have audited the accompanying  consolidated balance sheet of Comcast Holdings
Corporation  (formerly known as Comcast  Corporation) and its subsidiaries  (the
"Company")  as of  December  31,  2002 and 2001,  and the  related  consolidated
statements of  operations,  stockholders'  equity and cash flows for each of the
three years in the period ended December 31, 2002.  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 conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects,  the financial  position of Comcast Holdings  Corporation and
its  subsidiaries  as of December  31,  2002 and 2001,  and the results of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2002, in conformity with accounting  principles  generally accepted
in the United States of America.

As discussed in Note 2 to the  consolidated  financial  statements,  the Company
adopted  Statement of Financial  Accounting  Standards No. 133,  "Accounting for
Derivative Instruments and Hedging Activities," as amended, effective January 1,
2001,  and Statement of Financial  Accounting  Standards No. 142,  "Goodwill and
Other Intangible Assets," effective January 1, 2002.





Deloitte & Touche LLP

Philadelphia, Pennsylvania
March 17, 2003


                                     - 27 -

<PAGE>



COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

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


<TABLE>
<CAPTION>
                                                                                          December 31,
                                                                                     2002              2001
                                                                                   ---------         ---------
<S>                                                                                     <C>               <C>
ASSETS
CURRENT ASSETS
   Cash and cash equivalents..................................................          $676              $350
   Investments................................................................           525             2,623
   Accounts receivable, less allowance for doubtful accounts of $160 and $154          1,015               967
   Inventories, net...........................................................           479               455
   Deferred income taxes......................................................           129               129
   Other current assets.......................................................           153               154
                                                                                   ---------         ---------
       Total current assets...................................................         2,977             4,678
                                                                                   ---------         ---------
NOTE RECEIVABLE FROM AFFILIATE................................................           191
INVESTMENTS...................................................................           627             1,679
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $3,604 and  $2,726.         6,916             7,011
FRANCHISE RIGHTS..............................................................        16,611            16,533
GOODWILL......................................................................         6,446             6,289
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $975 and $665.....         1,481             1,687
OTHER NONCURRENT ASSETS, net..................................................           440               384
                                                                                   ---------         ---------
                                                                                     $35,689           $38,261
                                                                                   =========         =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable...........................................................          $792              $698
   Accrued expenses and other current liabilities.............................         1,874             1,661
   Due to affiliates..........................................................            76
   Deferred income taxes......................................................            46               404
   Current portion of long-term debt..........................................            23               460
                                                                                   ---------         ---------
       Total current liabilities..............................................         2,811             3,223
                                                                                   ---------         ---------
LONG-TERM DEBT, less current portion..........................................         9,257            11,742
                                                                                   ---------         ---------
NOTE PAYABLE TO AFFILIATE.....................................................            22
                                                                                   ---------         ---------
DEFERRED INCOME TAXES.........................................................         6,836             6,376
                                                                                   ---------         ---------
OTHER NONCURRENT LIABILITIES..................................................         1,265             1,567
                                                                                   ---------         ---------
MINORITY INTEREST.............................................................         1,133               880
                                                                                   ---------         ---------
COMMITMENTS AND CONTINGENCIES (NOTE 11)
STOCKHOLDERS' EQUITY
   Preferred stock - authorized 20,000,000 shares; issued, zero...............
   Class A common stock, $1.00 par value - authorized,
     200,000,000 shares; issued, 21,591,115 and 21,829,422 ...................            22                22
   Class A special common stock, $1.00 par value - authorized,
     2,500,000,000 shares; issued 916,198,519 and 937,256,465; outstanding,
     916,198,519 and 913,931,554..............................................           916               914
   Class B common stock, $1.00 par value - authorized, 50,000,000
          shares; issued, 9,444,375 ..........................................             9                 9
   Additional capital.........................................................        11,818            11,752
   Retained earnings..........................................................         1,595             1,632
   Accumulated other comprehensive income.....................................             5               144
                                                                                   ---------         ---------
       Total stockholders' equity.............................................        14,365            14,473
                                                                                   ---------         ---------
                                                                                     $35,689           $38,261
                                                                                   =========         =========
</TABLE>


See notes to consolidated financial statements.

                                                     - 28 -

<PAGE>




COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in millions)

<TABLE>
<CAPTION>
                                                                                            Year Ended December 31,
                                                                                            2002      2001      2000
                                                                                          --------  --------  --------
<S>                                                                                         <C>       <C>       <C>
REVENUES
   Service revenues......................................................................   $6,895    $5,919    $4,821
   Net sales from electronic retailing...................................................    4,381     3,917     3,536
                                                                                          --------  --------  --------
                                                                                            11,276     9,836     8,357
                                                                                          --------  --------  --------
COSTS AND EXPENSES
   Operating (excluding depreciation)....................................................    3,015     2,906     2,210
   Cost of goods sold from electronic retailing (excluding depreciation).................    2,793     2,514     2,285
   Selling, general and administrative...................................................    1,918     1,746     1,404
   Depreciation..........................................................................    1,425     1,211       837
   Amortization..........................................................................      213     2,205     1,782
                                                                                          --------  --------  --------
                                                                                             9,364    10,582     8,518
                                                                                          --------  --------  --------
OPERATING INCOME (LOSS)..................................................................    1,912      (746)     (161)
OTHER INCOME (EXPENSE)
   Interest expense......................................................................     (725)     (734)     (728)
   Investment income (expense)...........................................................     (658)    1,062       984
   Income related to indexed debt........................................................                          666
   Equity in net losses of affiliates....................................................     (103)      (29)      (22)
   Other income (expense)................................................................       (4)    1,301     2,826
                                                                                          --------  --------  --------
                                                                                            (1,490)    1,600     3,726
                                                                                          --------  --------  --------
INCOME BEFORE INCOME TAXES, MINORITY INTEREST AND CUMULATIVE
   EFFECT OF ACCOUNTING CHANGE...........................................................      422       854     3,565
INCOME TAX EXPENSE.......................................................................     (246)     (470)   (1,429)
                                                                                          --------  --------  --------
INCOME BEFORE MINORITY INTEREST AND CUMULATIVE
   EFFECT OF ACCOUNTING CHANGE...........................................................      176       384     2,136
MINORITY INTEREST........................................................................     (196)     (160)     (115)
                                                                                          --------  --------  --------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE..............................      (20)      224     2,021
CUMULATIVE EFFECT OF ACCOUNTING CHANGE...................................................                385
                                                                                          --------  --------  --------
NET INCOME (LOSS)........................................................................     ($20)     $609    $2,021
                                                                                          ========  ========  ========
</TABLE>

See notes to consolidated financial statements.

                                                         - 29 -

<PAGE>



COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)


<TABLE>
<CAPTION>
                                                                                 Year Ended December 31,
                                                                             2002         2001         2000
                                                                           ---------    ---------    ---------
<S>                                                                             <C>          <C>        <C>
OPERATING ACTIVITIES
   Net income (loss)....................................................        ($20)        $609       $2,021
   Adjustments to reconcile net income (loss) to net cash provided
     by operating activities:
     Depreciation.......................................................       1,425        1,211          837
     Amortization.......................................................         213        2,205        1,782
     Non-cash interest expense, net.....................................          42           43           14
     Non-cash income related to indexed debt............................                                  (666)
     Equity in net losses of affiliates.................................         103           29           22
     Losses (gains) on investments and other (income) expense, net......         704       (2,303)      (3,679)
     Minority interest..................................................         196          160          115
     Cumulative effect of accounting change.............................                     (385)
     Deferred income taxes..............................................          30         (241)       1,075
     Proceeds from sales of trading securities..........................                      367
     Other..............................................................           5           55           63
                                                                           ---------    ---------    ---------
                                                                               2,698        1,750        1,584
     Changes in working capital, net of effects of acquisitions
          and divestitures
       Increase in accounts receivable, net.............................         (49)         (16)        (196)
       Increase in inventories, net.....................................         (25)         (16)         (36)
       (Increase) decrease in other current assets......................         (53)         (27)          14
       Increase (decrease) in accounts payable, accrued expenses and other
         current liabilities............................................         319         (114)        (177)
                                                                           ---------    ---------    ---------
                                                                                 192         (173)        (395)

       Net cash provided by operating activities........................       2,890        1,577        1,189
                                                                           ---------    ---------    ---------

FINANCING ACTIVITIES
   Proceeds from borrowings.............................................       1,579        5,687        5,435
   Retirements and repayments of debt...................................      (3,594)      (4,188)      (5,356)
   Proceeds from settlement of interest rate exchange agreements........          57
   Proceeds from note payable to affiliate..............................          22
   Capital distributions to parent......................................        (212)
   Net transactions with affiliates.....................................          76
   Issuances of common stock and sales of put options on common stock...          19           27           31
   Repurchases of common stock..........................................                      (27)        (325)
   Equity contributions from a minority partner to a subsidiary.........          13           19           30
   Deferred financing costs.............................................          (2)         (23)         (56)
                                                                           ---------    ---------    ---------

       Net cash (used in) provided by financing activities..............      (2,042)       1,495         (241)
                                                                           ---------    ---------    ---------

INVESTING ACTIVITIES
   Acquisitions, net of cash acquired...................................         (17)      (1,329)        (187)
   Proceeds from sales of (purchases of) short-term investments, net....           9           (6)       1,028
   Capital contributions to and purchases of investments................         (56)        (317)      (1,011)
   Proceeds from sales and settlements of investments...................       1,241          806          997
   Capital expenditures.................................................      (1,478)      (2,182)      (1,637)
   Additions to intangible and other noncurrent assets..................        (221)        (346)        (409)
                                                                           ---------    ---------    ---------

       Net cash used in investing activities............................        (522)      (3,374)      (1,219)
                                                                           ---------    ---------    ---------


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........................         326         (302)        (271)

CASH AND CASH EQUIVALENTS, beginning of year............................         350          652          923
                                                                           ---------    ---------    ---------

CASH AND CASH EQUIVALENTS, end of year..................................        $676         $350         $652
                                                                           =========    =========    =========
</TABLE>


See notes to consolidated financial statements.

                                                         - 30 -

<PAGE>



COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Dollars in millions)


<TABLE>
<CAPTION>
                                                                                            Accumulated Other
                                                                                              Comprehensive
                                                                                              Income (Loss)
                                                                                           -------------------
                                                        Common Stock                       Retained     Unreal-
                                         Series B  -------------------------                Earnings     ized  Cumulative
                                         Preferred          Class A           Additional  (Accumulated   Gains Translation
                                          Stock   Class A   Special   Class B   Capital      Deficit)  (Losses) Adjustments   Total
                                         ------------------------------------------------------------------------------------------
<S>                                         <C>      <C>     <C>         <C>    <C>         <C>         <C>          <C>   <C>
BALANCE, JANUARY 1, 2000 ................   $570     $26     $716        $9     $3,527      ($620)      $6,120       ($7)  $10,341
Comprehensive loss:
   Net income............................                                                   2,021
   Unrealized losses on marketable
     securities, net of deferred
     taxes of $2,789.....................                                                               (5,180)
   Reclassification adjustments for
     gains included in net income,
     net of deferred taxes of $266                                                                        (494)
   Cumulative translation adjustments....                                                                             (6)
Total comprehensive loss.................                                                                                   (3,659)
   Acquisitions..........................                     156                7,585                                       7,741
   Stock compensation plans..............                       3                   54        (28)                              29
   Retirement of common stock............             (3)      (6)                 (42)      (274)                            (325)
   Conversion of Series B preferred......   (533)              38                  495
   Series B preferred dividends..........     23                                   (23)
   Share exchange........................             (1)       1                   44        (44)
   Temporary equity related to put
     options ............................                                          (41)                                        (41)
                                            -----  -----   ------     -----    -------     ------       ------    ------   -------

BALANCE, DECEMBER 31, 2000...............     60      22      908         9     11,599      1,055          446       (13)   14,086
Comprehensive income:
   Net income............................                                                     609
   Unrealized gains on marketable
     securities, net of deferred
     taxes of $114.......................                                                                  212
   Reclassification adjustments for
     gains included in net income, net
     of deferred taxes of $264 ..........                                                                 (491)
   Unrealized losses on effective
     portion of cash flow hedges, net
     of deferred taxes of $0.3                                                                              (1)
   Cumulative translation adjustments....                                                                             (9)
Total comprehensive income...............                                                                                      320
   Stock compensation plans..............                       3                   52        (16)                              39
   Retirement of common stock............                      (1)                 (10)       (16)                             (27)
   Conversion of Series B preferred......    (60)               4                   56
   Temporary equity related to put
     options ............................                                           55                                          55
                                            -----  -----   ------     -----    -------     ------       ------    ------   -------

BALANCE, DECEMBER 31, 2001...............             22      914         9     11,752      1,632          166       (22)   14,473
Comprehensive loss:
   Net loss..............................                                                     (20)
   Unrealized losses on marketable
     securities, net of deferred
     taxes of $165.......................                                                                 (307)
   Reclassification adjustments for
     losses included in net loss, net
     of deferred taxes of $92 ...........                                                                  169
   Unrealized losses on effective
     portion of cash flow hedges,
     net of deferred taxes of $0.3.......                                                                  (1)
   Cumulative translation adjustments....
Total comprehensive loss.................                                                                                     (159)
   Stock compensation plans..............                       2                   48        (17)                              33
   Employee stock purchase plan..........                                           10                                          10
   Net capital contribution from parent..                                            8                                           8
                                            -----  -----   ------     -----    -------     ------       ------    ------   -------

BALANCE, DECEMBER 31, 2002...............   $        $22     $916        $9    $11,818     $1,595          $27      ($22)  $14,365
                                            =====  =====   ======     =====    =======     ======       ======    ======   =======

</TABLE>


See notes to consolidated financial statements.

                                                         - 31 -

<PAGE>

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000


1.   ORGANIZATION AND BUSINESS

     On  November  18,  2002,   Comcast   Corporation   (formerly  AT&T  Comcast
     Corporation)  ("Comcast")  consummated  the  acquisition  of  AT&T  Corp.'s
     ("AT&T")  broadband business (the "Broadband  acquisition").  In connection
     with the  closing of the  Broadband  acquisition,  shareholders  of Comcast
     Holdings  Corporation  (formerly Comcast  Corporation) and its subsidiaries
     (the "Company")  received  shares of Comcast Class A common stock,  Class A
     Special common stock and Class B common stock in exchange for shares of the
     Company's  Class A common stock,  Class A Special  common stock and Class B
     common stock,  respectively,  based on an exchange ratio of 1 to 1. Comcast
     also issued  stock  options to purchase  shares of Comcast  common stock in
     exchange for all of the Company's  outstanding  stock options,  based on an
     exchange  ratio  of 1 to  1.  As  a  result  of  Comcast's  acquisition  of
     Broadband,  the Company is now an  indirect,  wholly  owned  subsidiary  of
     Comcast.  On November 18, 2002,  Comcast changed its name from AT&T Comcast
     Corporation to Comcast  Corporation  and the Company  changed its name from
     Comcast Corporation to Comcast Holdings Corporation.

     The  Company is  involved  in three  principal  lines of  business:  cable,
     commerce and content.  The Company's cable business is principally involved
     in the  development,  management and operation of broadband  communications
     networks in the United States. The Company's  consolidated cable operations
     served  approximately 8.5 million subscribers and passed approximately 14.2
     million homes as of December 31, 2002.

     The  Company  conducts  its  commerce  business  through  its  consolidated
     subsidiary,  QVC, Inc. ("QVC"). QVC, an electronic retailer, markets a wide
     variety of products directly to consumers primarily on  merchandise-focused
     television programs.  QVC was available,  on a full and part-time basis, to
     approximately  85.9  million  homes in the US,  approximately  11.4 million
     homes in the United  Kingdom  ("UK"),  approximately  25.8 million homes in
     Germany and  approximately  8.4 million  homes in Japan as of December  31,
     2002.

     The  Company's   content   business  is  provided   through  the  Company's
     consolidated  subsidiaries,  including Comcast Spectacor,  E! Entertainment
     Television,  Inc. ("E!  Entertainment"),  The Golf Channel ("TGC"), Outdoor
     Life  Network  ("OLN")  and  G4  Media,  LLC  ("G4"),   and  through  other
     programming  investments (see Note 4). The Company's  content business also
     includes the Company's three 24-hour regional sports programming  networks,
     Comcast   SportsNet   ("CSN"),   Comcast   SportsNet   Mid-Atlantic   ("CSN
     Mid-Atlantic") and Cable Sports Southeast  ("CSS").  The Company's regional
     sports programming  networks are included in the Company's cable segment as
     they derive a  substantial  portion of their  revenues  from the  Company's
     cable operations and are managed by cable segment management.

     The  Company's  cable and commerce  operations  represent the Company's two
     reportable segments under accounting  principles  generally accepted in the
     United States. See Note 12 for a summary of the Company's financial data by
     business segment.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Basis of Consolidation
     The consolidated  financial  statements include the accounts of the Company
     and all entities  that the Company  directly or  indirectly  controls.  All
     significant  intercompany  accounts  and  transactions  among  consolidated
     entities have been eliminated.

     Variable Interest Entities
     The Company  accounts for its  interests in variable  interest  entities in
     accordance   with   Financial    Accounting    Standards   Board   ("FASB")
     Interpretation No. 46,  "Consolidation of Variable Interest Entities" ("FIN
     46"). The Company  consolidates all variable interest entities for which it
     is the primary  beneficiary  and for which the entities do not  effectively
     disperse  risks among parties  involved.  Variable  interest  entities that
     effectively disperse risks are not consolidated unless the Company holds an
     interest or combination of interests that effectively recombines risks

                                     - 32 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     that were previously dispersed. The Company adopted the initial recognition
     and  measurement  provisions  of FIN  46  effective  January  1,  2002,  as
     permitted  by the  Interpretation.  The adoption of FIN 46 had no impact on
     the Company's financial condition or results of operations.

     Management's Use of Estimates
     The Company prepares its financial statements in conformity with accounting
     principles generally accepted in the United States which require management
     to make  estimates  and  assumptions  that affect the reported  amounts and
     disclosures.  Actual results could differ from those  estimates.  Estimates
     are used when  accounting  for  certain  items  such as sales  returns  and
     allowances,  allowances  for  doubtful  accounts,  reserves  for  inventory
     obsolescence,    investments   and   derivative   financial    instruments,
     depreciation and amortization, asset impairment, non-monetary transactions,
     certain acquisition-related liabilities,  pensions and other postretirement
     benefits, income taxes and contingencies.

     Fair Values
     The Company has determined  the estimated  fair value amounts  presented in
     these consolidated  financial statements 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 in these  consolidated  financial  statements  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.  The Company based these fair value  estimates on pertinent
     information  available to management as of December 31, 2002 and 2001.  The
     Company has not  comprehensively  updated  these fair value  estimates  for
     purposes of these consolidated financial statements since such dates.

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

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

     Investments
     Investments consist principally of equity securities.

     Investments  in  entities  in which the Company has the ability to exercise
     significant  influence  over the operating  and  financial  policies of the
     investee  are  accounted  for  under  the  equity  method.   Equity  method
     investments  are  recorded at original  cost and adjusted  periodically  to
     recognize the Company's proportionate share of the investees' net income or
     losses  after the date of  investment,  additional  contributions  made and
     dividends received, and impairment losses resulting from adjustments to net
     realizable  value.   Prior  to  the  adoption  of  Statement  of  Financial
     Accounting  Standards  ("SFAS")  No. 142,  "Goodwill  and Other  Intangible
     Assets"  ("SFAS No. 142") on January 1, 2002,  the goodwill  resulting from
     differences   between   the   Company's   recorded   investments   and  its
     proportionate interests in the book value of the investees' net assets were
     amortized  to equity in net income or loss,  primarily  over a period of 20
     years.  Subsequent  to the  adoption of SFAS No. 142, the Company no longer
     amortizes such equity method goodwill (see Note 6).

     Unrestricted  publicly  traded  investments are classified as available for
     sale or trading  securities  and  recorded at their fair value.  Unrealized
     gains or losses  resulting  from changes in fair value between  measurement
     dates for  available  for sale  securities  are  recorded as a component of
     other  comprehensive  income (loss).  Unrealized  gains or losses resulting
     from changes in fair value between measurement dates for trading securities
     are recorded as a component of investment income (expense). Cash flows from
     all trading securities are classified as cash flows from operating

                                     - 33 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     activities  while  cash  flows  from all other  investment  securities  are
     classified  as  cash  flows  from  investing  activities  in the  Company's
     statement of cash flows.

     Restricted  publicly  traded  investments and investments in privately held
     companies  are stated at cost,  adjusted for any known  diminution in value
     (see Note 5).

     Property and Equipment
     The  Company  records  property  and  equipment  at cost.  Depreciation  is
     provided  by the  straight-line  method  over  estimated  useful  lives  as
     follows:

               Buildings and improvements.........................2-40 years
               Operating facilities...............................2-12 years
               Other equipment....................................2-15 years

     The Company  capitalizes  improvements that extend asset lives and expenses
     other  repairs and  maintenance  charges 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.

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

     Intangible Assets
     Cable franchise  rights  represent the value  attributed to agreements with
     local  authorities  that  allow  access  to homes in  cable  service  areas
     acquired in connection with a business combination. The Company capitalizes
     these contractual rights.  Prior to the adoption of SFAS No. 142 on January
     1, 2002, the Company amortized them over periods related to the term of the
     related franchise  agreements.  Subsequent to the adoption of SFAS No. 142,
     the Company no longer  amortizes cable franchise  rights as the Company has
     determined that they have an indefinite life. Costs incurred by the Company
     in  negotiating  and renewing  cable  franchise  agreements are included in
     other intangible assets and are amortized on a straight-line basis over the
     term of the franchise renewal period, generally 10 to 15 years.

     Goodwill is the excess of the  acquisition  cost of an acquired entity over
     the fair  value  of the  identifiable  net  assets  acquired.  Prior to the
     adoption of SFAS No. 142 on January 1, 2002, the Company amortized goodwill
     over  estimated  useful  lives  ranging  principally  from 20 to 30  years.
     Subsequent to the adoption of SFAS No. 142, the Company no longer amortizes
     goodwill.

     Other  intangible  assets  consist   principally  of  cable  and  satellite
     television distribution rights, cable franchise renewal costs,  contractual
     operating  rights,  computer  software,  programming  costs and  rights and
     non-competition   agreements.  The  Company  capitalizes  these  costs  and
     amortizes  them on a  straight-line  basis  over  the  term of the  related
     agreements or estimated useful life.

     Certain of the  Company's  content  subsidiaries  and QVC have entered into
     multi-year  affiliation  agreements with various cable and satellite system
     operators  for  carriage  of  their  respective  programming.  The  Company
     capitalizes cable or satellite  distribution rights and amortizes them on a
     straight-line basis over the term of the related distribution agreements of
     5 to 15 years. The Company classifies the amortization of distribution fees
     paid by its content  subsidiaries  pursuant  to Emerging  Issues Task Force
     ("EITF") 01-9, "Accounting for Consideration Given to a Customer (Including
     a Reseller of the Vendors Products").  Under EITF 01-9, the amortization of
     such fees is  classified  as a  reduction  of revenue  unless  the  content
     subsidiary  receives,  or will receive,  an  identifiable  benefit from the
     cable or satellite system operator  separate from the distribution  fee, in
     which case the Company  recognizes the fair value of the identified benefit
     as an operating expense in the period in which it is received.  The Company
     classifies  the   amortization  of   distribution   fees  paid  by  QVC  as
     amortization expense as the counterparties to QVC's

                                     - 34 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     distribution  agreements do not make revenue payments to QVC.  Amortization
     expense  includes $23 million,  $24 million and $28 million for 2002,  2001
     and 2000, respectively, related to QVC distribution fees.

     See Note 6 for  additional  information  related to goodwill and intangible
     assets.

     Valuation of Long-Lived and Indefinite-Lived Assets
     The Company  periodically  evaluates the  recoverability  of its long-lived
     assets,  including  property and equipment and intangible assets subject to
     amortization, whenever events or changes in circumstances indicate that the
     carrying amount may not be recoverable.  Such evaluations  include analyses
     based on the cash flows generated by the underlying  assets,  profitability
     information,  including estimated future operating results, trends or other
     determinants   of  fair  value.   If  the  total  of  the  expected  future
     undiscounted  cash flows is less than the carrying  amount of the asset,  a
     loss is  recognized  for the  difference  between  the fair  value  and the
     carrying  value of the  asset.  Unless  presented  separately,  the loss is
     included  as a component  of either  depreciation  expense or  amortization
     expense, as appropriate.

     The Company  evaluates the  recoverability  of its goodwill and  indefinite
     life  intangible  assets  annually or more  frequently  whenever  events or
     changes in  circumstances  indicate  that the asset might be impaired.  The
     Company  performs an impairment  assessment of its goodwill one level below
     the segment level for its businesses, except for its cable business. In its
     cable  business,  components  with  similar  economic  characteristics  are
     aggregated into one reporting unit at the cable segment level.  The Company
     performs an  impairment  assessment  of its cable  franchise  rights at the
     cable segment level based on how the Company operates its cable operations.

     The  Company  estimates  the  fair  value  of its  cable  franchise  rights
     primarily based on a multiple of operating  income before  depreciation and
     amortization  ("EBITDA")  generated by the  underlying  assets.  The EBITDA
     multiple  used in the  Company's  evaluation  is  determined  based  on the
     Company's   analyses   of  current   market   transactions,   profitability
     information,  including estimated future operating results, trends or other
     determinants  of fair value.  The Company also  considers  other  valuation
     methods  such  as  discounted  cash  flow  analyses.  If the  value  of the
     Company's cable franchise  rights  determined by these  evaluations is less
     than its carrying amount,  an impairment charge would be recognized for the
     difference  between the estimated  fair value and the carrying value of the
     assets.

     Foreign Currency Translation
     The Company translates assets and liabilities of its foreign  subsidiaries,
     where the functional currency is the local currency, into US dollars at the
     December 31 exchange rate and records the related  translation  adjustments
     as a component of other comprehensive income (loss). The Company translates
     revenues and expenses using average  exchange rates  prevailing  during the
     year.  Foreign currency  transaction gains and losses are included in other
     income.

     Revenue Recognition
     The Company recognizes video,  high-speed  Internet,  and phone revenues as
     service is  provided.  The Company  manages  credit  risk by  disconnecting
     services  to  customers  who  are   delinquent.   The  Company   recognizes
     advertising   sales  revenue  at  estimated   realizable  values  when  the
     advertising is aired. Installation revenues obtained from the connection of
     subscribers to the broadband  communications  network are less than related
     direct   selling  costs.   Therefore,   such  revenues  are  recognized  as
     connections  are  completed.   Revenues  derived  from  other  sources  are
     recognized  when services are provided or events occur.  Under the terms of
     its franchise agreements, the Company is generally required to pay up to 5%
     of its gross revenues  derived from  providing  cable services to the local
     franchising  authority.  The Company  normally passes these fees through to
     its cable  subscribers.  The Company  classifies  fees collected from cable
     subscribers  as a  component  of service  revenues  pursuant to EITF 01-14,
     "Income  Statement   Characterization   of   Reimbursements   Received  for
     'Out-of-Pocket' Expenses Incurred."

     The Company  recognizes net sales from electronic  retailing at the time of
     shipment to  customers.  The  Company  classifies  all amounts  billed to a
     customer  for  shipping  and  handling  within  net sales  from  electronic
     retailing. The

                                     - 35 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     Company's  policy is to allow  customers  to return  merchandise  for up to
     thirty days after date of shipment.  An allowance for returned  merchandise
     is provided as a percentage of sales based on historical experience.

     The Company's content  businesses  recognize  affiliate fees from cable and
     satellite system operators as programming is provided.  Advertising revenue
     is recognized in the period in which  commercial  announcements or programs
     are  telecast  in  accordance  with  the  broadcast  calendar.  In  certain
     instances,  the Company's content  businesses  guarantee viewer ratings for
     their  programming.  A  liability  for  deferred  revenue is  provided  for
     estimated  shortfalls,  which are primarily settled by providing additional
     advertising time.

     Programming Costs
     The Company's cable subsidiaries have received or may receive  distribution
     fees from  programming  networks  for  carriage of their  programming.  The
     Company  reflects  the  deferred  portion of these fees  within  noncurrent
     liabilities  and recognizes  the fees as a reduction of  programming  costs
     (which are included in operating expenses) over the term of the programming
     contract.

     Stock-Based Compensation
     The Company  accounts  for  stock-based  compensation  in  accordance  with
     Accounting  Principles Board ("APB") Opinion No. 25,  "Accounting for Stock
     Issued to Employees," and related interpretations, as permitted by SFAS No.
     123,  "Accounting for Stock-Based  Compensation," as amended.  Compensation
     expense for stock options is measured as the excess,  if any, of the quoted
     market  price of the  stock at the date of the  grant  over the  amount  an
     employee must pay to acquire the stock.  The Company  records  compensation
     expense for restricted stock awards based on the quoted market price of the
     stock at the date of the grant and the vesting period.  The Company records
     compensation  expense for stock appreciation rights based on the changes in
     quoted  market prices of the stock or other  determinants  of fair value at
     the end of the year (see Notes 3 and 8).

     The  following  table  illustrates  the effect on net income  (loss) if the
     Company had applied the fair value  recognition  provisions of SFAS No. 123
     to stock-based compensation (dollars in millions, except per share data):


<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                                         2002          2001          2000
                                                                      ----------    ----------    ----------
<S>                                                                         <C>           <C>         <C>
     Net income (loss), as reported..................................       ($20)         $609        $2,021

     Deduct: Total stock-based compensation
          expense determined under fair value based method
          for all awards, net of related tax effects.................       (143)         (127)         (103)
                                                                      ----------    ----------    ----------

     Pro forma, net income (loss)....................................      ($163)         $482        $1,918
                                                                      ==========    ==========    ==========
</TABLE>


     Total stock-based  compensation expense was determined under the fair value
     method for all awards assuming  accelerated vesting of the stock options as
     permitted  under  SFAS No.  123.  Had the  Company  applied  the fair value
     recognition  provisions of SFAS No. 123 assuming  straight-line rather than
     accelerated  vesting of its stock options,  total stock-based  compensation
     expense,  net of related tax  effects,  would have been $114  million,  $89
     million, and $67 million for 2002, 2001 and 2000, respectively.

     The weighted-average  fair value at date of grant of a Class A common stock
     option  granted under  Comcast's  option plans during 2002 was $10.73.  The
     weighted-average  fair  value at date of grant of a Class A Special  common
     stock option granted under the option plans during 2002,  2001 and 2000 was
     $14.93, $19.07 and $21.20, respectively.

                                     - 36 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     The fair  value  of each  option  granted  during  2002,  2001 and 2000 was
     estimated on the date of grant using the Black-Scholes option-pricing model
     with the following weighted-average assumptions:


<TABLE>
<CAPTION>
                                                                Year Ended December 31,

                                                       2002                       2001               2000
                                         ---------------------------------  -----------------  ----------------
                                             Class A      Class A Special    Class A Special   Class A Special
                                          Common Stock      Common Stock      Common Stock       Common Stock
                                         ---------------  ----------------  -----------------  ----------------
<S>                                               <C>             <C>                <C>                <C>
     Dividend yield.....................          0%              0%                 0%                 0%
     Expected volatility................       29.3%           29.6%              35.7%              35.8%
     Risk-free interest rate............        4.0%            5.1%               5.1%               6.3%
     Expected option lives (in years)...        8.0             8.0                8.0                8.0
     Forfeiture rate....................        3.0%            3.0%               3.0%               3.0%
</TABLE>

    The pro forma effect on net income  (loss) for the years ended  December 31,
    2002,  2001 and 2000 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.

    Postretirement and Postemployment Benefits
    The Company  charges to operations the estimated  costs of retiree  benefits
    and benefits for former or inactive  employees,  after employment but before
    retirement, during the years the employees provide services.

    Investment Income (Expense)
    Investment income (expense)  includes  interest income,  dividend income and
    gains,  net of losses,  on the sales and exchanges of marketable  securities
    and long-term  investments.  The Company recognizes gross realized gains and
    losses using the specific identification method. Investment income (expense)
    also  includes  unrealized  gains or losses on trading  securities,  mark to
    market  adjustments on derivatives and hedged items,  and impairment  losses
    resulting from  adjustments  to the net  realizable  value of certain of the
    Company's investments (see Note 5).

    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 (see Note 9).

    Derivative Financial Instruments
    The Company uses derivative financial  instruments for a number of purposes.
    The  Company  manages  its  exposure to  fluctuations  in interest  rates by
    entering into interest rate  exchange  agreements  ("Swaps"),  interest rate
    lock agreements  ("Rate Locks"),  interest rate cap agreements  ("Caps") and
    interest rate collar agreements ("Collars"). The Company managed the cost of
    its share  repurchases  through  the sale of  equity  put  option  contracts
    ("Comcast Put Options"). The Company manages its exposure to fluctuations in
    the value of certain of its  investments  by  entering  into  equity  collar
    agreements  ("Equity Collars") and equity put option agreements ("Equity Put
    Options").  The Company makes  investments  in  businesses,  to some degree,
    through  the  purchase  of equity  call  option or call  warrant  agreements
    ("Equity  Warrants").  The Company has issued indexed debt  instruments  and
    entered into prepaid forward sale agreements ("Prepaid Forward Sales") whose
    value, in part, is derived from the market value of Sprint PCS common stock,
    and has also sold call  options  on  certain  of its  investments  in equity
    securities in order to monetize a portion of those investments.


                                     - 37 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


    Prior to the  adoption on January 1, 2001 of SFAS No. 133,  "Accounting  for
    Derivatives  and Hedging  Activities,"  as amended ("SFAS No. 133"),  Swaps,
    Caps and Collars were  matched  with either fixed or variable  rate debt and
    periodic cash  payments were accrued on a settlement  basis as an adjustment
    to interest  expense.  Any premiums  associated with these  instruments were
    amortized  over their term and  realized  gains or losses as a result of the
    termination  of  the  instruments  were  deferred  and  amortized  over  the
    remaining  term of the  underlying  debt.  Unrealized  gains and losses as a
    result of these  instruments were recognized when the underlying hedged item
    was extinguished or otherwise terminated. Equity Collars, Equity Put Options
    and Equity Warrants were marked to market on a current basis with the result
    included in accumulated other  comprehensive  income (loss) in the Company's
    consolidated balance sheet.

    On  January  1,  2001,  the  Company  adopted  SFAS No.  133.  SFAS No.  133
    establishes  accounting and reporting standards for derivative  instruments,
    including  certain  derivative  instruments  embedded in other contracts and
    hedging activities.  SFAS No. 133 requires that all derivative  instruments,
    whether  designated  in hedging  relationships  or not,  be  recorded on the
    balance  sheet at their fair  values.  Upon  adoption of SFAS No.  133,  the
    Company  recognized as income a cumulative effect of accounting  change, net
    of related income taxes, of $385 million.  The increase in income  consisted
    of a $400 million adjustment to record the debt component of indexed debt at
    a discount from its value at maturity and $192 million  principally  related
    to the  reclassification  of gains  previously  recognized as a component of
    accumulated  other  comprehensive  income  (loss)  on the  Company's  equity
    derivative instruments, net of related income taxes of $207 million.

    For  derivative  instruments  designated and effective as fair value hedges,
    such as the  Company's  Equity  Collars,  Equity  Put  Options  and Fixed to
    Variable Swaps,  changes in the fair value of the derivative  instrument are
    substantially offset in the consolidated  statement of operations by changes
    in the fair value of the hedged item. For derivative  instruments designated
    as cash flow hedges,  such as the Company's Variable to Fixed Swaps and Rate
    Locks, the effective portion of any hedge is reported in other comprehensive
    income (loss) until it is  recognized in earnings  during the same period in
    which the hedged  item  affects  earnings.  The  ineffective  portion of all
    hedges is  recognized in current  earnings each period.  Changes in the fair
    value of  derivative  instruments  that are not  designated  as a hedge  are
    recorded each period in current earnings.

    When a fair value hedge is terminated,  sold,  exercised or has expired, the
    adjustment in the carrying  amount of the fair value hedged item is deferred
    and recognized into earnings when the hedged item is recognized in earnings.
    When a hedged item is  extinguished  or sold, the adjustment in the carrying
    amount of the hedged item is  recognized in earnings.  When hedged  variable
    rate debt is extinguished,  the previously deferred effective portion of the
    hedge is written off similar to debt extinguishment costs.

    Subsequent to the adoption of SFAS No. 133, Equity Warrants and undesignated
    Equity  Collars  are  marked to market on a current  basis  with the  result
    included  in  investment  income  (expense)  in the  Company's  consolidated
    statement of operations.

    Subsequent to the adoption of SFAS No. 133, derivative  instruments embedded
    in other  contracts,  such as the  Company's  indexed debt  instruments  and
    Prepaid  Forward  Sale,  are  bifurcated  into  their  host  and  derivative
    financial instrument components. The derivative component is recorded at its
    estimated  fair  value in the  Company's  consolidated  balance  sheet  with
    changes in estimated fair value recorded in investment income (expense).

    Proceeds  from sales of Comcast Put Options were  recorded in  stockholders'
    equity and an amount equal to the  redemption  price of the common stock was
    reclassified from permanent equity to temporary equity.  Subsequent  changes
    in the market value of Comcast Put Options were not recorded.

    The Company  periodically  examines those instruments that have been entered
    into by the  Company to hedge  exposure to  interest  rate and equity  price
    risks to ensure that the instruments  are matched with underlying  assets or
    liabilities, reduce the Company's risks relating to interest rates or equity
    prices and, through market value and

                                     - 38 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


    sensitivity  analysis,  maintain a high  correlation to the risk inherent in
    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 7).
    The  Company  manages  the  credit  risks  associated  with  its  derivative
    financial   instruments   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.

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

    Reclassifications
    Certain  reclassifications  have been made to the prior years'  consolidated
    financial statements to conform to those classifications used in 2002.

3.  RECENT ACCOUNTING PRONOUNCEMENTS

    SFAS No. 143
    SFAS No.  143,  "Accounting  for Asset  Retirement  Obligations,"  addresses
    financial  accounting  and reporting  for  obligations  associated  with the
    retirement of tangible long-lived assets and the associated asset retirement
    costs.  SFAS No. 143 is effective for fiscal years  beginning after June 15,
    2002.  The Company  adopted SFAS No. 143 on January 1, 2003. The adoption of
    SFAS No.  143 will not have a  material  impact on the  Company's  financial
    condition or results of operations.

    SFAS No. 148
    The FASB issued SFAS No. 148,  "Accounting  for  Stock-Based  Compensation -
    Transition and  Disclosure,"  in December 2002. SFAS No. 148 amends SFAS No.
    123  to  provide  alternative  methods  of  transition  for an  entity  that
    voluntarily  changes  to the fair  value  based  method  of  accounting  for
    stock-based employee  compensation.  SFAS No. 148 also amends the disclosure
    provisions  of SFAS No.  123 to  require  disclosure  about the  effects  on
    reported  net income of an entity's  stock-based  employee  compensation  in
    interim  financial  statements.  SFAS No. 148 is effective  for fiscal years
    beginning  after  December  31,  2002.  The Company  adopted SFAS No. 148 on
    January 1, 2003.  The Company did not change to the fair value based  method
    of  accounting  for  stock-based  employee  compensation.  Accordingly,  the
    adoption of SFAS No. 148 would only affect the Company's financial condition
    or  results  of  operations  if  Comcast  elects to change to the fair value
    method  specified  in SFAS No.  123.  The  adoption  of SFAS No.  148  will,
    however,  require  the Company to  disclose  the effects of its  stock-based
    employee  compensation in interim  financial  statements  beginning with the
    first quarter of 2003.


                                     - 39 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     FIN 45
     In November  2002,  the FASB  issued  Interpretation  No. 45,  "Guarantor's
     Accounting and Disclosure  Requirements for Guarantees,  Including Indirect
     Guarantees of  Indebtedness  of Others"  ("FIN 45").  FIN 45 expands on the
     accounting guidance of SFAS No.'s 5, 57, and 107 and supercedes FIN 34. FIN
     45  clarifies  that a guarantor  is required to disclose in its interim and
     annual financial  statements its obligations under certain  guarantees that
     it has issued, including the nature and terms of the guarantee, the maximum
     potential  amount of future  payments  under the  guarantee,  the  carrying
     amount, if any, for the guarantor's  obligations  under the guarantee,  and
     the nature and extent of any recourse  provisions  or available  collateral
     that would  enable the  guarantor  to recover  the  amounts  paid under the
     guarantee.  FIN 45 also clarifies that, for certain guarantees, a guarantor
     is required to recognize,  at the inception of a guarantee, a liability for
     the fair value of the obligation  undertaken in issuing the guarantee.  FIN
     45 does not prescribe a specific  approach for  subsequently  measuring the
     guarantor's  recognized  liability over the term of the related  guarantee.
     The initial recognition and initial measurement  provisions of FIN 45 apply
     on a  prospective  basis to certain  guarantees  issued or  modified  after
     December 31, 2002. The disclosure  requirements in FIN 45 are effective for
     financial statements of interim or annual periods ending after December 15,
     2002. The Company adopted the disclosure provisions of FIN 45 in the fourth
     quarter  of 2002  and  adopted  the  initial  recognition  and  measurement
     provisions of FIN 45 on January 1, 2003, as required by the  Interpretation
     (see Note 11).  The  impact of the  adoption  of FIN 45 will  depend on the
     nature and terms of  guarantees  entered into or modified by the Company in
     the future.

4.   ACQUISITIONS AND OTHER SIGNIFICANT EVENTS

     In 2002, the Company had no significant acquisitions.

     In 2001, the Company acquired the regional sports programming  network Home
     Team Sports ("HTS") from Viacom,  Inc.  ("Viacom") and Affiliated  Regional
     Communications, Ltd. ("ARC"), various cable systems serving an aggregate of
     697,000  subscribers  from AT&T,  and  additional  interests in programming
     networks   TGC  and  OLN  from  Fox   Entertainment   Group,   Inc.   ("Fox
     Entertainment"). Upon closing of the OLN acquisition, the Company exchanged
     its 14.5%  interest in the  Speedvision  Network  ("SVN"),  together with a
     previously made loan, for Fox Entertainment's  interest in OLN and recorded
     to other income a pre-tax gain of $107 million, representing the difference
     between the estimated fair value of the Company's interest in SVN as of the
     closing date of the  transaction  and the  Company's  cost basis in SVN. In
     2001, the Company also  completed its cable systems  exchange with Adelphia
     Communications  Corporation  ("Adelphia").  The  Company  recorded to other
     income a  pre-tax  gain of  $1.199  billion,  representing  the  difference
     between the estimated  fair value of $1.799  billion as of the closing date
     of the transaction and the Company's cost basis in the systems exchanged.

     In 2000,  the  Company  acquired  cable  operations  consisting  of Lenfest
     Communications,  Inc.  ("Lenfest"),  including  Lenfest's  50%  interest in
     Comcast Cablevision of Garden State, L.P. ("Garden State Cable"), from AT&T
     and the other Lenfest  stockholders,  the minority interest in Comcast MHCP
     Holdings,  L.L.C.  ("Comcast  MHCP") from the California  Public  Employees
     Retirement System  ("CalPERS"),  the minority interest in Jones Intercable,
     Inc. ("Jones Intercable") from the Jones Intercable shareholders, and Prime
     Communications  LLC  ("Prime")  from  Prime's  shareholders.  In 2000,  the
     Company also  completed its cable systems  exchange with AT&T.  The Company
     recorded to other income a pre-tax gain of $1.711 billion, representing the
     difference  between the  estimated  fair value of $2.840  billion as of the
     closing date of the transaction and the Company's cost basis in the systems
     exchanged.



                                     - 40 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     The  acquisitions  completed  by the  Company  during  2001 and  2000  were
     accounted  for  under  the  purchase  method of  accounting.  As such,  the
     Company's results include the operating results of the acquired  businesses
     from the dates of acquisition.  A summary of the Company's acquisitions and
     cable  systems  exchanges  for  2001  and 2000 is as  follows  (dollars  in
     millions):


<TABLE>
<CAPTION>
                               % Interest
    Acquisition/Exchange        Acquired        Date             Seller                 Consideration            Value
----------------------------- ------------ --------------- ------------------- -------------------------------- --------
<S>                              <C>       <C>             <C>                 <C>                               <C>
2001

OLN                              83.2%     October 30      Fox Entertainment   Cash and 14.5% interest in SVN       $512

AT&T Cable System                 100%     June 30         AT&T                Cash                                 $519

TGC                              30.8%     June 8          Fox Entertainment   Cash                                 $365

AT&T Cable Systems                100%     April 30        AT&T                63.9 million shares of AT&T        $1,423
                                                                               common stock

HTS                               100%     February 14     Viacom and ARC      Cable distribution of                $240
                                                                               programming

Adelphia Exchange                 100%     January 1       Adelphia            Cable systems                      $1,799

2000

AT&T Exchange                     100%     December 31     AT&T                Cable systems                      $2,840

Prime                             100%     August 1        Shareholders        Converted loans, cash and          $1,525
                                                                               assumed debt

Jones Intercable                 60.4%     March 2         Shareholders        35.6 million shares of Comcast     $1,727
                                                                               Holdings common stock

Comcast MHCP                      45%      February 10     CalPERS             Cash                                 $750

Lenfest and                       100%     January 18      AT&T and            120.1 million shares of Comcast    $7,340
Garden State Cable                50%                      shareholders        Holdings common stock and
                                                                               assumed debt
</TABLE>

     The Company's  cable systems  exchanges with Adelphia and AT&T, and certain
     of the Company's  acquisitions did not result in cash payments but affected
     recognized assets and liabilities (see Note 10).


                                     - 41 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     Unaudited Pro Forma Information
     The following  unaudited pro forma information has been presented as if the
     acquisitions  and cable  systems  exchange made by the Company in 2001 each
     occurred on January 1, 2000 and the acquisitions and cable systems exchange
     made by the  Company  in 2000  each  occurred  on  January  1,  1999.  This
     information  is based on  historical  results of  operations,  adjusted for
     acquisition  costs,  and, in the opinion of management,  is not necessarily
     indicative of what the results would have been had the Company operated the
     entities acquired since such dates.


<TABLE>
<CAPTION>
                                                                             (Amounts in millions)
                                                                            Year Ended December 31,
                                                                             2001             2000
                                                                          ----------        ---------
<S>                                                                          <C>               <C>
     Revenues...........................................................     $10,089           $9,151
     Income before cumulative effect of accounting change...............        $149           $1,629
     Net income.........................................................        $534           $1,629
</TABLE>

     Other Income
     In August  2000,  the Company  obtained  the right to exchange  its At Home
     Corporation  ("At Home") Series A Common Stock with AT&T and waived certain
     of its At Home Board  level and  shareholder  rights  under a  stockholders
     agreement (the "Share  Exchange  Agreement"-  see Note 5). The Company also
     agreed to cause its existing appointee to the At Home Board of Directors to
     resign.  In connection with the transaction,  the Company recorded to other
     income a pre-tax gain of $1.045  billion,  representing  the estimated fair
     value of the investment as of the closing date.

     In August 2000, the Company  exchanged all of the capital stock of a wholly
     owned subsidiary which held certain wireless licenses for approximately 3.2
     million shares of AT&T common stock. In connection  with the exchange,  the
     Company   recorded  to  other   income  a  pre-tax  gain  of  $98  million,
     representing  the  difference  between  the fair  value of the AT&T  shares
     received of $100 million and the Company's cost basis in the subsidiary.

5.   INVESTMENTS

<TABLE>
<CAPTION>
                                                                                     December 31,
                                                                               2002                2001
                                                                            -----------         -----------
                                                                                 (Dollars in millions)
                                                                                                -----------
<S>                                                                                <C>               <C>
     Fair value method
          AT&T Corp....................................................            $287              $1,515
          Sprint Corp. PCS Group.......................................             369               2,109
          Other........................................................              74                 136
                                                                            -----------         -----------
                                                                                    730               3,760

     Equity method.....................................................             317                 387
     Cost method.......................................................             105                 155
                                                                            -----------         -----------
          Total investments............................................           1,152               4,302

     Less, current investments.........................................             525               2,623
                                                                            -----------         -----------
     Non-current investments...........................................            $627              $1,679
                                                                            ===========         ===========
</TABLE>

     Fair Value Method
     The Company  holds  unrestricted  equity  investments  in certain  publicly
     traded  companies,  which it accounts for as available  for sale or trading
     securities.  The net unrealized pre-tax gains on investments  accounted for
     as available  for sale  securities  as of December 31, 2002 and 2001 of $70
     million and $280 million, respectively, have been

                                     - 42 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     reported in the  Company's  consolidated  balance  sheet  principally  as a
     component of other  comprehensive  income (loss),  net of related  deferred
     income taxes of $25 million and $95 million, respectively.

     The cost, fair value and gross  unrealized  gains and losses related to the
     Company's available for sale securities are as follows:


<TABLE>
<CAPTION>
                                                                                     December 31,
                                                                               2002                2001
                                                                            -----------         -----------
                                                                                 (Dollars in millions)
<S>                                                                                <C>               <C>
     Cost.............................................................             $269              $1,355
     Gross unrealized gains...........................................               71                 283
     Gross unrealized losses..........................................               (1)                 (3)
                                                                            -----------         -----------

     Fair value.......................................................             $339              $1,635
                                                                            ===========         ===========
</TABLE>

     Equity Method
     The Company's recorded  investments  exceed its proportionate  interests in
     the book value of the  investees' net assets by $149 million as of December
     31, 2002  (principally  related to the Company's  investment in Susquehanna
     Cable).  As a result of the  adoption of SFAS No. 142, the Company does not
     amortize the goodwill  resulting  from this excess but rather will continue
     to test such excess for impairment in accordance  with APB Opinion 18, "The
     Equity Method of Accounting for Investments in Common Stock."

     Equity in net losses of  affiliates  for the year ended  December  31, 2002
     includes  impairment  losses of $53 million,  related  principally to other
     than  temporary  declines in the Company's  investments  in and advances to
     certain of the Company's equity method investees.

     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.

     Investment Income (Expense)
     Investment income (expense) includes the following (in millions):


<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                                           2002        2001        2000
                                                                         ---------   ---------   ---------
<S>                                                                            <C>         <C>        <C>
Interest and dividend income...........................................        $45         $77        $171
(Losses) gains on sales and exchanges of investments, net..............        (48)        485         887
Investment impairment losses...........................................       (247)       (972)        (74)
Reclassification of unrealized gains...................................                  1,330
Unrealized (loss) gain on trading securities...........................     (1,446)        285
Mark to market adjustments on derivatives related to trading
     securities........................................................      1,182        (185)
Mark to market adjustments on derivatives and hedged items.............       (144)         42
                                                                         ---------   ---------   ---------
     Investment income (expense).......................................      ($658)     $1,062        $984
                                                                         =========   =========   =========
</TABLE>

     The investment  impairment losses for the years ended December 31, 2002 and
     2001 relate  principally to other than temporary  declines in the Company's
     investment in AT&T.


                                     - 43 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     During  the year  ended  December  31,  2001,  the  Company  wrote-off  its
     investment  in At Home common stock based upon a decline in the  investment
     that  was  considered   other  than  temporary.   In  connection  with  the
     realization of this impairment loss, the Company reclassified to investment
     income  (expense) the  accumulated  unrealized  gain of $238 million on the
     Company's  investment in At Home common stock which was previously recorded
     as a component  of  accumulated  other  comprehensive  income  (loss).  The
     Company  recorded this  accumulated  unrealized gain prior to the Company's
     designation of its right under the Share  Exchange  Agreement as a hedge of
     the  Company's  investment  in the At Home common stock (see Note 4 - Other
     Income).

     In June 2001,  the Company and AT&T  entered  into an Amended and  Restated
     Share Issuance Agreement (the "Share Issuance  Agreement").  AT&T issued to
     the Company  approximately 80.3 million  unregistered shares of AT&T common
     stock and the Company  agreed to settle its right under the Share  Exchange
     Agreement (see Note 4 - Other Income) to exchange an aggregate 31.2 million
     At Home shares and  warrants  held by the Company for shares of AT&T common
     stock.  Under  the  terms of the  Share  Issuance  Agreement,  the  Company
     retained the At Home shares and warrants  held by it. The Company  recorded
     to investment income (expense) a pre-tax gain of $296 million, representing
     the fair value of the  increased  consideration  received by the Company to
     settle its right under the Share Exchange Agreement.

     In August 2001, the Company entered into a ten year Prepaid Forward Sale of
     4.0 million  shares of Sprint PCS common  stock held by the Company  with a
     fair value of  approximately  $98  million  and the  Company  received  $78
     million in cash.  At  maturity,  the  counterparty  is  entitled to receive
     between 2.5 million and 4.0 million  shares of Sprint PCS common stock,  or
     an equivalent amount of cash at the Company's option, based upon the market
     value of Sprint  PCS  common  stock at that  time.  The  Company  split the
     Prepaid  Forward Sale into its  liability  and  derivative  components  and
     recorded both  components of the Prepaid  Forward Sale  obligation in other
     long-term liabilities.  The Company records the change in the fair value of
     the  derivative  component and the accretion of the liability  component to
     investment income (expense).

     The Company reclassified its investment in Sprint PCS from an available for
     sale security to a trading security in connection with the adoption of SFAS
     No. 133 on January 1, 2001. In connection with this  reclassification,  the
     Company recorded to investment income (expense) the accumulated  unrealized
     gain of $1.092 billion on the Company's  investment in Sprint PCS which was
     previously  recorded  as a component  of  accumulated  other  comprehensive
     income (loss).

6.   GOODWILL AND INTANGIBLE ASSETS

     The changes in the  carrying  amount of goodwill by business  segment  (see
     Note 12) for the periods presented are as follows (in millions):


<TABLE>
<CAPTION>
                                                                                      Corporate
                                                         Cable          Commerce      and Other            Total
                                                      ------------    ------------   ------------   ------------
<S>                                                       <C>               <C>            <C>          <C>
     Balance, December 31, 2001......................       $4,688            $835           $766         $6,289
     Purchase price allocation adjustments...........            5                            152            157
                                                      ------------    ------------   ------------   ------------
     Balance, December 31, 2002......................       $4,693            $835           $918         $6,446
                                                      ============    ============   ============   ============
</TABLE>

     During 2002,  the Company  recorded  the final  purchase  price  allocation
     related to the Company's  acquisition of OLN, which resulted in an increase
     in goodwill and a corresponding  decrease in cable and satellite television
     distribution  rights.  In addition,  during 2002, the Company  recorded the
     final  purchase  price  allocation  related to certain of its cable  system
     acquisitions, which resulted in an increase in goodwill and a corresponding
     decrease in franchise rights.


                                     - 44 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     The gross carrying  amount and  accumulated  amortization  of the Company's
     intangible  assets subject to amortization for the periods presented are as
     follows (in millions):


<TABLE>
<CAPTION>
                                              As of December 31, 2002            As of December 31, 2001
                                          --------------------------------   -------------------------------
                                              Gross                              Gross
                                            Carrying         Accumulated       Carrying       Accumulated
                                             Amount         Amortization        Amount        Amortization
                                          -------------    ---------------   -------------  ----------------
<S>                                              <C>                <C>             <C>              <C>
Cable and satellite television
     distribution rights.................        $1,529             ($491)          $1,588           ($316)

Cable franchise renewal costs and
     contractual operating rights........           314              (100)             267             (70)

Computer software........................           138               (53)             125             (45)

Programming costs and rights.............           194              (144)             162            (117)

Non-competition agreements and other.....           281              (187)             210            (117)
                                          -------------    --------------    -------------  --------------
                                                 $2,456             ($975)          $2,352           ($665)
                                          =============    ==============    =============  ==============
</TABLE>



                                     - 45 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     As of December 31, 2002, the weighted average  amortization  period for the
     Company's  intangible  assets  subject  to  amortization  is 8.7  years and
     estimated  related  amortization  expense  for each of the five years ended
     December 31 is as follows (in millions):


               2003.............................        $231
               2004.............................        $212
               2005.............................        $191
               2006.............................        $161
               2007.............................        $111

     The following pro forma  financial  information  for 2002, 2001 and 2000 is
     presented as if SFAS No. 142 was adopted as of January 1, 2000  (amounts in
     millions, except per share data):


<TABLE>
<CAPTION>
                                                                         Years Ended December 31,
                                                                   2002            2001            2000
                                                                -----------     ----------     ------------
<S>                                                                    <C>            <C>            <C>
Net Income (Loss)
   As reported.........................................                ($20)          $609           $2,021
     Amortization of goodwill..........................                                335              304
     Amortization of equity method goodwill............                                 15               15
     Amortization of franchise rights..................                              1,083              858
                                                                -----------     ----------     ------------
   As adjusted.........................................                ($20)        $2,042           $3,198
                                                                ===========     ==========     ============

   Income (loss) before cumulative effect of
     accounting change, as adjusted....................                ($20)        $1,657           $3,198
                                                                ===========     ==========     ============
</TABLE>

7. LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                                            December 31,
                                                                                         2002          2001
                                                                                      ----------    ----------
                                                                                           (in millions)
<S>                                                                                      <C>         <C>
     Commercial Paper.............................................................        $                397
     Notes payable to banks due in installments through 2009......................           837         1,223
     6.20% - 6-7/8% Senior notes, due 2006-2011...................................         3,053         3,054
     7-1/8% - 7-5/8% Senior notes, due 2008-2013..................................         1,105         1,103
     8-1/8% - 8-7/8% Senior notes, due 2004-2027..................................         2,653         2,660
     9-5/8% Senior notes, due 2002................................................                         200
     8-1/4% - 10-5/8% Senior subordinated debentures, due 2006-2012...............           521           521
     Zero Coupon Convertible Debentures, due 2020.................................            86         1,096
     ZONES at principal amount, due 2029..........................................           699         1,613
     Other, including capital lease obligations...................................           326           335
                                                                                      ----------    ----------
                                                                                           9,280        12,202
     Less current portion.........................................................            23           460
                                                                                      ----------    ----------
                                                                                           9,257       $11,742
                                                                                      ==========    ==========

</TABLE>



                                     - 46 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     Maturities of long-term  debt  outstanding  as of December 31, 2002 for the
     four years after 2003 are as follows (in millions):

                        2004...............................         $324
                        2005...............................       $1,544
                        2006...............................         $650
                        2007...............................         $988

     The Cross-Guarantee Structure
     To simplify Comcast's capital structure,  effective with the acquisition of
     Broadband,  Comcast  and four of its cable  holding  company  subsidiaries,
     including our wholly owned subsidiary  Comcast Cable  Communications,  Inc.
     ("Comcast Cable"),  fully and unconditionally  guaranteed each other's debt
     securities (the  "Cross-Guarantee  Structure").  Comcast  Holdings is not a
     guarantor,  and none of its debt is  guaranteed.  As of December  31, 2002,
     $24.729  billion of Comcast's debt securities were entitled to the benefits
     of the  Cross-Guarantee  Structure,  including  $7.897  billion  of Comcast
     Cable's debt securities.

     Comcast MO of Delaware,  Inc.  (formerly,  MediaOne of  Delaware,  Inc. and
     Continental   Cablevision,   Inc.)  was  not   originally  a  part  of  the
     Cross-Guarantee  Structure.  On  March  12,  2003,  Comcast  announced  the
     successful  completion  of a  bondholder  consent  solicitation  related to
     Comcast MO of Delaware,  Inc.'s $1.7 billion aggregate  principal amount in
     debt  securities  to  permit  it to  become  part  of  the  Cross-Guarantee
     Structure.

     Zero Coupon Convertible Debentures
     The  Company's  Zero Coupon  Debentures  have a yield to maturity of 1.25%,
     computed on a semi-annual bond equivalent basis. The Zero Coupon Debentures
     may be converted, subject to certain restrictions, into shares of Comcast's
     Class A Special  common  stock at the option of the holder at a  conversion
     rate  of  14.2566   shares  per  $1,000   principal   amount  at  maturity,
     representing  an initial  conversion  price of $54.67  per share.  The Zero
     Coupon Debentures are senior unsecured obligations.  The Company may redeem
     for  cash,  at  their  accreted  value,  all or  part  of the  Zero  Coupon
     Debentures on or after December 19, 2005.

     Holders may require the Company to repurchase, at their accreted value, the
     Zero Coupon  Debentures  on December 19,  2003,  2005,  2010 and 2015.  The
     Company  may  choose  to  pay  the  repurchase  price  for  2003  and  2005
     repurchases in cash or shares of Comcast's  Class A Special common stock or
     a combination of cash and shares of Comcast's Class A Special common stock.
     The Company may pay the repurchase  price for the 2010 and 2015 repurchases
     in cash only.

     Holders may surrender the Zero Coupon Debentures for conversion at any time
     prior to maturity if the closing price of Comcast's  Class A Special common
     stock is greater than 110% of the accreted conversion price for at least 20
     trading  days of the 30 trading days prior to  conversion.  During the year
     ended 2002,  the Company  repurchased  from  holders an aggregate of $1.023
     billion  accreted  value of Zero Coupon  Debentures  for cash.  The Company
     refinanced  the  redemption  primarily  with  borrowings  under its  credit
     facilities.

     Amounts  outstanding  under the Zero Coupon  Debentures  are  classified as
     long-term in the  Company's  consolidated  balance sheet as of December 31,
     2002  and  2001 as the  Company  has both the  ability  and the  intent  to
     refinance  the Zero Coupon  Debentures  on a long-term  basis with  amounts
     available under the Company's credit facilities in the event holders of the
     Zero  Coupon  Debentures  exercise  their  rights to require the Company to
     repurchase the Zero Coupon Debentures in December 2003.

     ZONES
     At  maturity,  holders  of the  Company's  2.0%  Exchangeable  Subordinated
     Debentures due 2029 (the "ZONES") are entitled to receive in cash an amount
     equal to the higher of the principal  amount of the ZONES of $1.807 billion
     or the market value of Sprint PCS Stock.  Prior to maturity,  each ZONES is
     exchangeable at the holder's option for

                                     - 47 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     an amount of cash equal to 95% of the market value of Sprint PCS Stock.  As
     of December 31,  2002,  the number of Sprint PCS shares held by the Company
     exceeded the number of ZONES outstanding.

     Prior to the  adoption  of SFAS No. 133 on January  1,  2001,  the  Company
     accounted  for the ZONES as an indexed debt  instrument  since the maturity
     value is dependent upon the fair value of Sprint PCS Stock. Therefore,  the
     carrying value of the ZONES was adjusted each balance sheet date to reflect
     the fair value of the underlying  Sprint PCS Stock with the change included
     in income related to indexed debt in the Company's  consolidated  statement
     of operations.

     Upon  adoption of SFAS No. 133, the Company  split the  accounting  for the
     ZONES into derivative and debt  components.  The Company records the change
     in the fair value of the derivative component of the ZONES (see Note 5) and
     the  change in the  carrying  value of the debt  component  of the ZONES as
     follows (in millions):


<TABLE>
<CAPTION>
                                                                                 Year Ended
                                                                             December 31, 2002
                                                                            --------------------
<S>                                                                                 <C>
Balance at Beginning of Year:
Debt component.............................................................         $  468
Derivative component.......................................................          1,145
                                                                                  --------
Total......................................................................          1,613

Increase in debt component to interest expense.............................             23
Decrease in derivative component to investment income/expense..............           (937)

Balance at End of Year:
Debt component.............................................................            491
Derivative component.......................................................            208
                                                                                  --------
Total......................................................................           $699
                                                                                  ========
</TABLE>

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

         Prime rate to prime plus .625%;
         Federal Funds rate plus .5% to 1.125%; and
         LIBOR plus .14% to 1.625%.

     Excluding the derivative component of the ZONES whose changes in fair value
     are  recorded to  investment  income  (expense),  the  Company's  effective
     weighted  average interest rate on its total debt outstanding was 7.07% and
     6.31% as of December 31, 2002 and 2001, respectively.

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

     Using Swaps, the Company agrees to exchange,  at specified  intervals,  the
     difference  between  fixed and  variable  interest  amounts  calculated  by
     reference to an agreed-upon  notional principal amount. Rate Locks are used
     to hedge the risk that the cash flows  related to the interest  payments on
     an  anticipated  issuance or assumption of fixed rate debt may be adversely
     affected by interest rate fluctuations.  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.

                                     - 48 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


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

     The following  table  summarizes the terms of the Company's  existing Swaps
     (dollars in millions):


<TABLE>
<CAPTION>
                                     Notional                       Average           Average        Estimated
                                      Amount        Maturities      Pay Rate       Receive Rate     Fair Value
                                   -------------  --------------  ------------   ----------------- -------------
<S>                                     <C>            <C>            <C>              <C>             <C>
     As of December 31, 2002
     Variable to Fixed Swaps            $72            2003           4.9%             1.6%            ($2)

     As of December 31, 2001
     Variable to Fixed Swaps           $250         2002-2003         4.9%             2.2%            ($6)
     Fixed to Variable Swaps           $950         2004-2008         3.6%             7.5%             $47
</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, Rate Locks, 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, 2002,  2001 and 2000
     was not significant.

     Estimated Fair Value
     The Company's  debt had estimated fair values of $9.497 billion and $12.559
     billion as of December 31, 2002 and 2001, 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 financial
     covenants  which  require  that  certain  ratios  and cash  flow  levels be
     maintained  and  contain  certain  restrictions  on dividend  payments  and
     advances of funds to the Company.  The Company and its subsidiaries were in
     compliance with all financial covenants for all periods presented.

     As  of  December  31,  2002,   restricted   net  assets  of  the  Company's
     subsidiaries were approximately $1.433 billion.

     Lines and Letters of Credit
     As of December 31,  2002,  certain  subsidiaries  of the Company had unused
     lines of credit of $3.601 billion under their respective credit facilities.

     As of December 31, 2002,  the Company and certain of its  subsidiaries  had
     unused irrevocable  standby letters of credit totaling $68 million to cover
     potential fundings under various agreements.

8.   STOCKHOLDERS' EQUITY

     Preferred Stock
     The Company is authorized to issue, in one or more series,  up to a maximum
     of 20 million shares of preferred stock. The shares can be issued with such
     designations,   preferences,   qualifications,   privileges,   limitations,
     restrictions,  options,  conversion  rights  and other  special  or related
     rights as the Company's  board of directors  shall from time to time fix by
     resolution.


                                     - 49 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     The  Company's  Series B  Preferred  Stock had a 5.25%  pay-in-kind  annual
     dividend.  Dividends were paid quarterly through the issuance of additional
     shares of Series B  Preferred  Stock  (the  "Additional  Shares")  and were
     cumulative  from the issuance date (except that dividends on the Additional
     Shares  accrued  from the date such  Additional  Shares were  issued).  The
     Series B Preferred Stock, including the Additional Shares, was convertible,
     at the option of the holder,  into  approximately  43 million shares of the
     Company's  Class A Special  common stock,  subject to adjustment in certain
     limited circumstances,  which equaled an initial conversion price of $11.77
     per share,  increasing as a result of the  Additional  Shares to $16.96 per
     share on June 30,  2004.  The  Series B  Preferred  Stock  was  mandatorily
     redeemable on June 30, 2017, or, at the option of the Company  beginning on
     June 30,  2004 or at the option of the  holder on June 30,  2004 or on June
     30, 2012. Upon  redemption,  the Company,  at its option,  could redeem the
     Series B  Preferred  Stock with  cash,  Class A Special  common  stock or a
     combination thereof. The Series B Preferred Stock was generally non-voting.
     In December 2000, the Company issued  approximately  38.3 million shares of
     its Class A Special  common  stock to the  holder  in  connection  with the
     holder's  election to convert $533 million at redemption  value of Series B
     Preferred  Stock.  In March 2001,  the  Company  issued  approximately  4.2
     million  shares  of its  Class A  Special  common  stock to the  holder  in
     connection with the holder's  election to convert the remaining $60 million
     at redemption value of Series B Preferred Stock.

     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.
     The Class B common stock is convertible,  share for share,  into Class A or
     Class A Special common stock, subject to certain restrictions.

     Board-Authorized Repurchase Programs
     The  following  table  summarizes  the Company's  repurchases  and sales of
     Comcast Put Options under its Board-  authorized share repurchase  programs
     (shares and dollars in millions):

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                                               2001        2000
                                                                             ---------   ---------
<S>                                                                                  <C>         <C>
Shares repurchased........................................................           1           9
Aggregate consideration...................................................         $27        $325
Comcast Put Options sold..................................................                       2
</TABLE>

     As part of the Company's Board-authorized  repurchase programs, the Company
     sold Comcast Put Options on shares of its Class A Special common stock. The
     Comcast  Put  Options  give the holder the right to require  the Company to
     repurchase such shares at specified  prices on specific dates.  All Comcast
     Put Options sold expired  unexercised.  The Company reclassified the amount
     it would  have been  obligated  to pay to  repurchase  such  shares had the
     Comcast  Put Options  been  exercised,  from  common  equity put options to
     additional capital upon expiration of the Comcast Put Options.


                                     - 50 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     The following  table  summarizes the Company's share activity for the three
years ended December 31, 2002:


<TABLE>
<CAPTION>
                                                                                  Common Stock
                                                                 ----------------------------------------------
                                                   Series B
                                                   Preferred                          Class A
                                                     Stock           Class A          Special        Class B
                                                  ------------   ----------------  -------------  -------------
<S>                                                   <C>             <C>           <C>              <C>
     Balance, January 1, 2000...................       569,640         25,993,380    716,442,482      9,444,375

     Acquisitions...............................                                     155,702,851
     Stock compensation plans...................                             (330)     2,599,151
     Retirement of common stock.................                       (3,106,500)    (6,006,800)
     Conversion of Series B Preferred...........      (533,685)                       38,278,558
     Series B preferred dividends...............        23,495
     Share exchange.............................                       (1,054,300)       998,950
                                                  ------------   ----------------  -------------  -------------

     Balance, December 31, 2000.................        59,450         21,832,250    908,015,192      9,444,375

     Stock compensation plans...................                           (2,828)     2,515,538
     Retirement of common stock.................                                        (808,000)
     Conversion of Series B Preferred...........       (59,450)                        4,208,824
                                                  ------------   ----------------  -------------  -------------

     Balance, December 31, 2001.................                       21,829,422    913,931,554      9,444,375

     Stock compensation plans...................                                       1,803,330
     Retirement of common stock.................                         (238,307)
     Employee Stock Purchase Plan...............                                         463,635
                                                  ------------   ----------------  -------------  -------------

     Balance, December 31, 2002.................                       21,591,115    916,198,519      9,444,375
                                                  ============   ================  =============  =============
</TABLE>

    Stock-Based Compensation Plans
    Prior to the Broadband  acquisition,  the Company and its  subsidiaries  had
    several  stock-based  compensation plans for directors and certain employees
    designated  by the  applicable  compensation  committees  of the  boards  of
    directors of the Company and its subsidiaries.  The Company's  subsidiaries'
    plans  remain  active as of December  31,  2002.  These plans are  described
    below.

    Comcast Option Plans. Through November 18, 2002, the Company sponsored stock
    option plans for  directors  and certain  employees  under which fixed stock
    options are granted and the option price is generally not less than the fair
    value of a share of the underlying stock at the date of grant (collectively,
    the "Comcast Option Plans").  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. Upon completion of the Broadband  acquisition,
    the Company's plans were adopted by Comcast.



                                     - 51 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     The following  table  summarizes  the activity of the Comcast  Option Plans
(options in thousands):

<TABLE>
<CAPTION>
                                           2002                     2001                       2000
                                    ------------------      ---------------------     -----------------------
                                             Weighted-                   Weighted-                 Weighted-
                                              Average                     Average                   Average
                                             Exercise                    Exercise                  Exercise
                                    Options    Price         Options       Price       Options       Price
                                    ------- -----------     ---------   -----------   ---------   -----------
<S>                                  <C>       <C>            <C>        <C>             <C>          <C>
Class A Common Stock
--------------------
Outstanding at beginning of year.
Granted..........................       339    $23.86
Outstanding at end of year.......       339     23.86
                                    =======
Exercisable at end of year.......
                                    =======


Class A Special Common Stock
----------------------------
Outstanding at beginning of year...  55,521    $26.89         49,618     $23.69          40,416       $16.01
Granted............................  13,857     32.29         10,084      37.52          15,300        39.43
Exercised..........................  (2,347)     8.83         (3,360)     10.62          (4,805)        8.60
Canceled...........................  (2,141)    30.38           (821)     30.69          (1,293)       25.98
                                    -------                ---------                  ---------
Outstanding at end of year.........  64,890     28.57         55,521      26.89          49,618        23.69
                                    =======                =========                  =========
Exercisable at end of year.........  22,798     21.08         16,892      15.57          13,267        11.35
                                    =======                =========                  =========
</TABLE>


     As of December 31, 2002, outstanding options on Class A and Class A Special
     common stock include approximately 67,000 options and 42.3 million options,
     respectively,  relating to former employees of the Company who,  subsequent
     to the Broadband acquisition, are employees of Comcast.



                                     - 52 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     The following table summarizes  information  about the options  outstanding
     under  the  Comcast  Option  Plans as of  December  31,  2002  (options  in
     thousands):


<TABLE>
<CAPTION>
                                                     Options Outstanding                 Options Exercisable
                                          ------------------------------------------  -------------------------
                                                                       Weighted-
                                                            Average       Weighted-                 Weighted-
     Range of                                Number        Remaining       Average      Number       Average
     Exercise                              Outstanding    Contractual     Exercise    Exercisable    Exercise
     Prices                                at 12/31/02       Life           Price     at 12/31/02     Price
     -------------------                  ------------- ---------------  -----------  -----------  ------------
<S>                                         <C>           <C>             <C>           <C>           <C>

     Class A Common Stock
     --------------------
     $16.11 - $27.74                              339       10.0 years      $23.86
                                            =========


     Class A Special Common Stock
     ----------------------------
     $6.00 - $15.66                            10,963        2.9 years       $9.97         8,751         $9.96
     $16.94 - $25.58                           13,431        6.5 years       18.39         6,367         17.03
     $27.04 - $35.49                           16,968        8.1 years       34.13         3,241         32.15
     $35.53 - $45.94                           22,042        7.8 years       38.26         3,810         39.13
     $46.00 - $53.13                            1,486        6.9 years       50.53           629         50.40
                                            ---------                                  ---------
                                               64,890                                     22,798
                                            =========                                  =========

</TABLE>

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



                                     - 53 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     The QVC  Tandem  Plan is the most  significant  of the  Tandem  Plans.  The
     following  table  summarizes  information  related to the QVC  Tandem  Plan
     (options/SARs in thousands):

<TABLE>
<CAPTION>
                                                                             At December 31,
                                                                   2002            2001           2000
                                                                -----------     ----------     -----------
<S>                                                                     <C>            <C>             <C>
Options/SARs outstanding at end
   of year......................................................        240            253             219
                                                                ===========     ==========     ===========

Weighted-average exercise price of
   options/SARs outstanding
   at end of year...............................................  $1,086.37        $913.88         $789.51
                                                                ===========     ==========     ===========

Options/SARs exercisable at end
   of year......................................................        115            113              79
                                                                ===========     ==========     ===========

Weighted-average exercise price
   of options/SARs exercisable
   at end of year...............................................    $839.59        $706.51         $606.92
                                                                ===========     ==========     ===========
</TABLE>

     As of the latest  valuation  date,  the fair value of a share of QVC Common
     Stock was $1,768.15.

     Other Stock-Based Compensation Plans
     Prior to the  Broadband  acquisition,  the Company  maintained a restricted
     stock plan under which management  employees were granted  restricted share
     awards of the Company's Class A Special common stock (the "Restricted Stock
     Plan").  The share  awards vest  annually,  generally  over a period not to
     exceed  five  years  from the  date of the  award,  and do not have  voting
     rights.

     The Company also had a deferred stock option plan for directors and certain
     employees  which provided the optionees  with the  opportunity to defer the
     receipt of shares of the Company's Class A Special common stock which would
     otherwise  be  deliverable  upon  exercise by the  optionees of their stock
     options.

     Upon the closing of the Broadband  acquisition,  the Restricted  Stock Plan
     and the deferred stock option plan were adopted by Comcast.

     Certain of the Company's subsidiaries have SAR plans for certain employees,
     officers,  directors  and other  persons (the "SAR  Plans").  Under the SAR
     Plans,  eligible  participants are entitled to receive a cash payment equal
     to  100% of the  excess,  if  any,  of the  fair  value  of a share  of the
     underlying  common stock at the exercise date over the fair value of such a
     share at the grant date. The SARs have a term of ten years from the date of
     grant  and  become  exercisable  over four to five  years  from the date of
     grant.



                                     - 54 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     The  following  table  summarizes  information  related  to  the  Company's
     Restricted Stock Plan and subsidiary SAR Plans:


<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                                2002           2001           2000
                                                              ---------      ---------       -------
<S>                                                             <C>           <C>           <C>
Restricted Stock Plan
Shares granted (in thousands)...............................         61            157           504
Weighted-average fair value per share at date of grant......     $28.47         $39.52        $37.80
Compensation expense (in millions)..........................         $8             $9            $9

SAR Plans
Compensation expense (in millions)..........................         $3             $4            $2
</TABLE>

9.   INCOME TAXES

     Prior to Comcast's  acquisition  of Broadband,  the Company joined with its
     80% or more owned subsidiaries and filed a consolidated  federal income tax
     return.  Effective with the date of the Broadband acquisition,  the Company
     and its  80% or more  owned  subsidiaries  have  joined  with  Comcast  and
     Broadband in filing a consolidated federal income tax return.

     Subsequent  to the  Broadband  acquisition,  Comcast  allocates  income tax
     expense or benefit to the  Company as if the Company  were filing  separate
     income tax returns.  Tax benefits from both losses and tax credits are made
     available  to the  Company  as it is able to  realize  such  benefits  on a
     separate return basis.  The Company pays Comcast for income taxes an amount
     equal to the amount of tax it would pay if it filed a separate  tax return.
     QVC and E! Entertainment each file separate consolidated federal income tax
     returns.  Income tax  expense  consists  of the  following  components  (in
     millions):

<TABLE>
<CAPTION>
                                                                               Year Ended December 31,
                                                                         2002           2001           2000
                                                                       ---------      ---------      ---------
     Current expense
<S>                                                                         <C>            <C>            <C>
     Federal.........................................................       $152           $622           $309
     State...........................................................         59             85             43
     Foreign.........................................................          5              3              2
                                                                       ---------      ---------      ---------
                                                                             216            710            354
                                                                       ---------      ---------      ---------

     Deferred expense (benefit)
     Federal.........................................................         18           (255)           999
     State...........................................................         13             15             76
     Foreign.........................................................         (1)
                                                                       ---------      ---------      ---------
                                                                              30           (240)         1,075
                                                                       ---------      ---------      ---------
     Income tax expense..............................................       $246           $470         $1,429
                                                                       =========      =========      =========
</TABLE>


                                     - 55 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     The  Company's  effective  income tax expense  differs  from the  statutory
     amount because of the effect of the following items (in millions):


<TABLE>
<CAPTION>
                                                                               Year Ended December 31,
                                                                         2002           2001            2000
                                                                       ---------      ---------      ----------
<S>                                                                         <C>            <C>           <C>
     Federal tax at statutory rate...................................       $148           $299          $1,248
     Non-deductible depreciation and amortization....................                       107             102
     State income taxes, net of federal benefit......................         47             65              77
     Foreign losses and equity in net losses of affiliates...........         13              7               8
     Increase in valuation allowance.................................         12
     Adjustment to prior year accrual................................         25
     Other...........................................................          1             (8)             (6)
                                                                       ---------      ---------      ----------

     Income tax expense..............................................       $246           $470          $1,429
                                                                       =========      =========      ==========
</TABLE>


     The  Company's  net  deferred  tax  liability  consists  of  the  following
components (in millions):


<TABLE>
<CAPTION>
                                                                                December 31,
                                                                           2002             2001
                                                                       ---------        ---------
<S>                                                                         <C>              <C>
     Deferred tax assets:
        Net operating loss carryforwards.............................       $314             $243
        Allowances for doubtful accounts and excess
         and obsolete inventory......................................        105              109
        Differences between book and tax basis of investments........         94
        Non- deductible accruals and other...........................        181              167
        Less: Valuation allowance....................................        (12)
                                                                       ---------        ---------
                                                                             682              519
                                                                       =========        =========

     Deferred tax liabilities:
        Temporary differences, principally book and tax basis
          of property and equipment and intangible assets............      6,859            6,329
        Differences between book and tax basis
          of investments.............................................                         645
        Differences between book and tax basis of
          indexed debt securities....................................        576              196
                                                                       ---------        ---------
                                                                           7,435            7,170
                                                                       ---------        ---------
     Net deferred tax liability......................................     $6,753           $6,651
                                                                       =========        =========
</TABLE>

     The  Company  recorded a decrease  of ($144)  million,  ($149)  million and
     ($3.055) billion to deferred income tax liabilities in 2002, 2001 and 2000,
     respectively, in connection with unrealized losses on marketable securities
     which are  included  in other  comprehensive  income  (loss).  The  Company
     recorded  $207  million  of  deferred  income  tax  liabilities  in 2001 in
     connection with the cumulative  effect of accounting  change related to the
     adoption of SFAS No. 133 (see Note 2).

     The Company has  recorded  net  deferred  tax assets of $83 million and net
     deferred tax liabilities of $275 million, as of December 31, 2002 and 2001,
     respectively,  which have been included in current assets and  liabilities,
     related

                                     - 56 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     primarily  to current  investments.  The Company has federal net  operating
     loss  carryforwards  of  approximately  $350 million and various  state net
     operating loss carryforwards, which expire in periods through 2022.

10.  STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION

     The  following  table   summarizes  the  fair  values  of  the  assets  and
     liabilities  associated  with  acquisitions  by the Company through noncash
     transactions (see Note 4) (in millions):

<TABLE>
<CAPTION>
                                                                           Year Ended December 31,
                                                                             2001           2000
                                                                          -----------   ------------
<S>                                                                               <C>           <C>
     Current assets.................................................              $57           $216
     Investments....................................................                             437
     Property and equipment.........................................              580          1,296
     Intangible assets..............................................            3,043         15,400
     Other noncurrent assets........................................
     Current liabilities............................................              (37)          (277)
     Long-term debt.................................................                          (2,147)
     Deferred income taxes..........................................              (77)        (3,308)
                                                                          -----------   ------------
          Net assets acquired.......................................           $3,566        $11,617
                                                                          ===========   ============
</TABLE>

     During 2002, Comcast made a noncash capital  contribution to the Company of
     $220 million.  In addition,  during 2002, the Company  transferred  certain
     assets to Comcast in exchange  for a note  receivable  of $191 million (see
     Note 13).

     The following table summarizes the Company's cash payments for interest and
     income taxes (in millions):


<TABLE>
<CAPTION>
                                                                                 Year Ended December 31,
                                                                                2002      2001        2000
                                                                              --------  --------    --------
<S>                                                                               <C>       <C>         <C>
Interest.................................................................         $683      $660        $706
Income taxes.............................................................         $287      $561        $709
</TABLE>

11.  COMMITMENTS AND CONTINGENCIES

     Commitments
     The Company's programming networks have entered into license agreements for
     programs  and  sporting   events  which  will  be  available  for  telecast
     subsequent to December 31, 2002. In addition, the Company, through Comcast-
     Spectacor,  has employment  agreements with both players and coaches of its
     professional sports teams.  Certain of these employment  agreements,  which
     provide for payments that are guaranteed  regardless of employee  injury or
     termination,  are covered by disability insurance if certain conditions are
     met.

     The following  table  summarizes the Company's  minimum annual  programming
     commitments  under  network  launch and  program  license  agreements,  the
     Company's future commitments under long-term professional sports contracts,
     and the  Company's  minimum  annual  rental  commitments  for office space,
     equipment and transponder service agreements under noncancellable operating
     and capital leases as of December 31, 2002 (in millions):


                                     - 57 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)



<TABLE>
<CAPTION>
                                                           Professional
                                           Programming        Sports      Operating
                                            Agreements       Contracts      Leases      Total
                                          --------------   -------------  ----------  ----------

<S>                                         <C>            <C>           <C>         <C>
         2003...........................       $104           $126          $123        $353
         2004...........................         98            113            92        $303
         2005...........................         97             84            69        $250
         2006...........................        101             50            52        $203
         2007...........................         83             24            44        $151
         Thereafter.....................        485              8           124        $617
</TABLE>

     The following  table  summarizes the Company's  rental  expense  charged to
     operations (in millions):


<TABLE>
<CAPTION>
                                                                                 Year Ended December 31,
                                                                                2002      2001        2000
                                                                              --------  --------    --------
<S>                                                                             <C>       <C>         <C>
Rental expense.............................................................     $155      $121        $98
</TABLE>

     Contingencies
     On  March  3,  2003,  Comcast  announced  that  Liberty  Media  Corporation
     ("Liberty") delivered a notice to the Company, pursuant to the stockholders
     agreement  between the Company and  Liberty,  that  triggers an exit rights
     process  with  respect to  Liberty's  approximate  42% interest in QVC. The
     Company and Liberty will attempt to negotiate  the fair market value of QVC
     prior to March 31,  2003.  If the  Company  and Liberty  cannot  agree,  an
     appraisal  process will  determine  the value of QVC. The Company will then
     have the right to  purchase  Liberty's  interest  in QVC at the  determined
     value.  The  Company  may pay  Liberty  for the QVC  stock  in  cash,  in a
     promissory  note  maturing  not more than three  years after  issuance,  in
     Comcast's  equity  securities  or in a  combination  of these,  subject  to
     Liberty's  right  to  request  payment  in all  equity  securities  and the
     parties' obligation to use reasonable efforts to consummate the purchase in
     the most tax  efficient  method  available  (provided  that  Comcast is not
     required to issue securities representing more than 4.9% of the outstanding
     equity or vote of Comcast's  common  stock).  If the Company  elects not to
     purchase  Liberty's interest in QVC, Liberty then will have a similar right
     to purchase the Company's  approximate  57% interest in QVC. If neither the
     Company nor Liberty  elect to purchase the interest of the other,  then the
     Company  and Liberty  are  required to use their best  efforts to sell QVC;
     either company is permitted to be a purchaser in any such sale. The Company
     and  Liberty may agree not to enter into a  transaction,  or may agree to a
     transaction other than that specified in the stockholders agreement.  Under
     the current  terms of the  stockholders  agreement  between the Company and
     Liberty,  the  Company  would no longer  control  QVC if it  elects  not to
     purchase Liberty's interest in QVC.

     The Company and the minority owner group in Comcast Spectacor each have the
     right to initiate an "exit"  process  under which the fair market  value of
     Comcast  Spectacor  would  be  determined  by  appraisal.   Following  such
     determination,  the Company  would have the option to acquire the interests
     in  Comcast  Spectacor  owned  by the  minority  owner  group  based on the
     appraised  fair market  value.  In the event the Company  does not exercise
     this  option,  the  Company  and the  minority  owner  group  would then be
     required to use their best  efforts to sell  Comcast  Spectacor.  This exit
     process includes the minority owner group's interest in CSN.

     The Company holds the majority of its interest in E! Entertainment  through
     Comcast Entertainment  Holdings, LLC ("Entertainment  Holdings"),  which is
     owned 50.1% by the Company and 49.9% by The Walt Disney Company ("Disney").
     Under a limited liability company agreement between the Company and Disney,
     the Company  controls  E!  Entertainment's  operations.  As a result of the
     Broadband  acquisition  and  in  certain  other  circumstances,  under  the
     agreement  Disney is entitled to trigger a potential  exit process in which
     Entertainment  Holdings  would have the right to purchase  Disney's  entire
     interest  in  Entertainment  Holdings  at its then  fair  market  value (as
     determined by an appraisal process).  If Disney exercises this right within
     a specified time period, and Entertainment  Holdings elects not to purchase
     Disney's interest, Disney then has the right to purchase, at appraised fair
     market value, either

                                     - 58 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     the  Company's  entire  interest  in  Entertainment  Holdings or all of the
     shares of stock of E! Entertainment held by Entertainment  Holdings. In the
     event  that  Disney  exercises  its  right  and  neither  Disney's  nor the
     Company's interest is purchased, Entertainment Holdings will continue to be
     owned as it is today, as if the exit process had not been triggered.

     Litigation  has been  filed  against  the  Company  as a result of  alleged
     conduct of the Company with respect to its  investment in and  distribution
     relationship with At Home Corporation. At Home was a provider of high-speed
     Internet access and content services which filed for bankruptcy  protection
     in September 2001. Filed actions are: (i) class action lawsuits against the
     Company,  Brian L. Roberts (the  Company's  President  and Chief  Executive
     Officer and a director),  AT&T (the former  controlling  shareholder  of At
     Home  and also a  former  distributor  of the At Home  service)  and  other
     corporate  and  individual  defendants  in the Superior  Court of San Mateo
     County, California,  alleging breaches of fiduciary duty on the part of the
     Company and the other defendants in connection with transactions  agreed to
     in March 2000 among At Home, the Company, AT&T and Cox Communications, Inc.
     (Cox is also an investor in At Home and a former distributor of the At Home
     service);  (ii) class action lawsuits against Comcast Cable Communications,
     Inc.,  AT&T and others in the United States District Court for the Southern
     District of New York,  alleging  securities  law  violations and common law
     fraud in connection with  disclosures  made by At Home in 2001; and (iii) a
     lawsuit  brought in the United  States  District  Court for the District of
     Delaware in the name of At Home by certain At Home bondholders  against the
     Company,  Brian L. Roberts, Cox and others,  alleging breaches of fiduciary
     duty  relating  to the March 2000  transactions  and  seeking  recovery  of
     alleged  short- swing profits of at least $600 million  pursuant to Section
     16(b) of the  Securities  Exchange Act of 1934  purported to have arisen in
     connection  with certain  transactions  relating to At Home stock  effected
     pursuant to the March 2000  agreements.  The  actions in San Mateo  County,
     California have been stayed by the United States  Bankruptcy  Court for the
     Northern  District  of  California,  the  court in which At Home  filed for
     bankruptcy,  as violating  the automatic  bankruptcy  stay. In the Southern
     District of New York actions,  the court  ordered the actions  consolidated
     into a single action.  An amended  consolidated  class action complaint was
     filed on November 8, 2002. All of the defendants  served motions to dismiss
     on February 11, 2003.

     The Company denies any wrongdoing in connection  with the claims which have
     been made against the Company,  its subsidiaries and Brian L. Roberts,  and
     intends to defend all of these claims vigorously.  In management's opinion,
     the final  disposition  of these  claims is not expected to have a material
     adverse effect on the Company's  consolidated financial position, but could
     possibly be material to the Company's consolidated results of operations of
     any one period. Further, no assurance can be given that any adverse outcome
     would not be material to such consolidated financial position.

     Some  of the  entities  formerly  attributed  to  Broadband  which  are now
     subsidiaries of Comcast are parties to an affiliation term sheet with Starz
     Encore Group LLC, an affiliate of Liberty Media Corporation,  which extends
     to 2022. The term sheet requires  annual fixed price  payments,  subject to
     adjustment for various factors,  including  inflation.  The term sheet also
     requires  Comcast to pay  two-thirds of Starz  Encore's  programming  costs
     above levels designated in the term sheet.

     By letter dated May 29, 2001,  Broadband disputed the enforceability of the
     excess programming  pass-through  provisions of the Starz Encore term sheet
     and  questioned  the validity of the term sheet as a whole.  Broadband also
     has raised certain issues  concerning the  uncertainty of the provisions of
     the term  sheet  and the  contractual  interpretation  and  application  of
     certain of its  provisions  to, among other  things,  the  acquisition  and
     disposition of cable systems. In July 2001, Starz Encore filed a lawsuit in
     Colorado state court seeking payment of the 2001 excess  programming  costs
     and a  declaration  that  the  term  sheet  is a  binding  and  enforceable
     contract.  In October 2001,  Broadband and Starz Encore agreed to delay any
     further  proceedings in the  litigation  until August 31, 2002 to allow the
     parties  time  to  continue   negotiations   toward  a  potential  business
     resolution of this dispute. As part of this standstill agreement, Broadband
     and  Starz  Encore  settled  Starz  Encore's  claim  for  the  2001  excess
     programming  costs,  and Broadband  agreed to continue to make the standard
     monthly  payments  due under the term  sheet,  with a full  reservation  of
     rights with respect to these  payments.  In connection  with the standstill
     agreement,

                                     - 59 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     the court  granted a stay on October 30, 2001.  The terms of the stay order
     allowed either party to petition the court to lift the stay after April 30,
     2002 and to proceed with the litigation.  Broadband and Starz Encore agreed
     to extend the standstill  agreement to and including January 31, 2003, with
     a requirement that the parties attempt to mediate the dispute.  A mediation
     session  held in  January  2003 did not  result  in any  resolution  of the
     matter.

     On November 18,  2002,  the Company and Comcast  filed suit  against  Starz
     Encore  Group LLC in the  United  States  District  Court  for the  Eastern
     District  of  Pennsylvania.  The Company  and  Comcast  seek a  declaratory
     judgment  that,  pursuant to their rights  under a March 17, 1999  contract
     with a predecessor  of Starz Encore,  upon the  completion of the Broadband
     acquisition  that  contract now provides the terms under which Starz Encore
     programming  is acquired and  transmitted by Comcast's  cable  systems.  On
     January 8, 2003,  Starz Encore filed a motion to dismiss the lawsuit on the
     grounds that claims  asserted by the Company and Comcast  raised  issues of
     state law that the United States  District  Court should decline to decide.
     The Company and Comcast have responded  contesting these  assertions.  That
     motion has been submitted to the Court for decision.

     On January 31, 2003, Starz Encore filed an amended complaint in its lawsuit
     against  Broadband in Colorado state court. The amended  complaint adds the
     Company and Comcast as defendants  and adds new claims against the Company,
     Comcast and Broadband asserting alleged breaches of, and interference with,
     the standstill  agreement  relating to the lawsuit filed by the Company and
     Comcast in federal  District Court in  Pennsylvania  and to the defendants'
     position that since the completion of the Broadband acquisition,  the March
     17,  1999  contract  now  provides  the  terms  under  which  Starz  Encore
     programming is acquired and transmitted by the Company's cable systems.

     On March 3, 2003,  Starz  Encore  filed a motion for leave to file a second
     amended  complaint that would add  allegations  that Broadband has breached
     certain  joint-marketing  obligations  under  the term  sheet  and that the
     Company and Comcast have breached certain joint-marketing obligations under
     the March 17, 1999 contract and other agreements.  The Company, Comcast and
     Broadband intend to oppose Starz Encore's motion for leave to file a second
     amended  complaint and, in light of Starz Encore's pending motion for leave
     to amend,  have  sought an  extension  of time from the Court to respond to
     Starz Encore's amended complaint.

     An  entity  formerly  attributed  to  Broadband,  which  is  now  Comcast's
     subsidiary,  is party  to a master  agreement  that  may not  expire  until
     December 31, 2012,  under which it purchases  certain billing services from
     CSG Systems,  Inc. The master agreement requires monthly payments,  subject
     to adjustment  for  inflation.  The master  agreement  also contains a most
     favored nation provision that may affect the amounts paid thereunder.

     On May 10,  2002,  Broadband  filed a demand for  arbitration  against  CSG
     before the American Arbitration Association asserting,  among other things,
     the right to terminate the master  agreement and seeking  damages under the
     most favored nation  provision or otherwise.  On May 31, 2002, CSG answered
     Broadband's   arbitration   demand  and  asserted  various   counterclaims,
     including for (i) breach of the master  agreement;  (ii) a declaration that
     Comcast is now bound by the master  agreement  to use CSG as its  exclusive
     provider for certain  billing and customer care  services;  (iii)  tortious
     interference  with  prospective  contractual  relations;   and  (iv)  civil
     conspiracy. A hearing in the arbitration is scheduled to commence on May 5,
     2003.

     On June 21, 2002, CSG filed a lawsuit  against the Company in federal court
     in Denver,  Colorado  asserting  claims related to the master agreement and
     the pending  arbitration.  On November 4, 2002,  CSG withdrew its complaint
     against the  Company  without  prejudice.  On November  15,  2002,  Comcast
     initiated  a  lawsuit  against  CSG  in  federal  court  in   Philadelphia,
     Pennsylvania  asserting  that cable  systems  owned by the  Company are not
     required to use CSG as a billing service or customer care provider pursuant
     to the master agreement,  and that the former Broadband cable systems owned
     by Comcast may be added to a billing service  agreement between Comcast and
     CSG. CSG moved to dismiss or stay the lawsuit on the ground that the issues
     raised by the complaint could be wholly or substantially  determined by the
     above-mentioned  arbitration.  By Order dated  February 10, 2003, the Court
     stayed the lawsuit until further notice.

                                     - 60 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


     In management's  opinion, the final disposition of the Starz Encore and CSG
     contractual  disputes is not expected to have a material  adverse effect on
     the Company's  consolidated  financial  position or results of  operations.
     However,  no assurance  can be given that any adverse  outcome would not be
     material to such consolidated financial position or results of operations.

     The Company is subject to other 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 such actions is not expected
     to  materially  affect the  financial  condition,  results of operations or
     liquidity of the Company.

     In  connection  with a license  awarded  to an  affiliate,  the  Company is
     contingently  liable in the event of  nonperformance  by the  affiliate  to
     reimburse a bank which has provided a performance guarantee.  The amount of
     the  performance  guarantee  is  approximately  $200  million;  however the
     Company's  current  estimate of the amount of expenditures  (principally in
     the  form of  capital  expenditures)  that  will  be made by the  affiliate
     necessary to comply with the performance  requirements  will not exceed $75
     million.



                                     - 61 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Continued)


12.  FINANCIAL DATA BY BUSINESS SEGMENT

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

<TABLE>
<CAPTION>
                                                                                                    Corporate
                                                                            Cable      Commerce   and Other(1)     Total
                                                                          ---------   ----------  ------------- ------------
<S>                                                                        <C>         <C>            <C>        <C>
2002
Revenues (2)...........................................................      $6,159      $4,381         $736       $11,276
Operating income before depreciation and amortization (3)..............       2,633         858           59         3,550
Depreciation and amortization..........................................       1,276         119          243         1,638
Operating income (loss) ...............................................       1,357         739         (184)        1,912
Interest expense.......................................................         567          14          144           725
Assets.................................................................      29,844       3,000        2,845        35,689
Long-term debt.........................................................       7,908           1        1,348         9,257
Capital expenditures...................................................       1,317         123           38         1,478

2001
Revenues (2)...........................................................      $5,323      $3,917         $596        $9,836
Operating income (loss) before depreciation  and amortization (3)......       2,054         722         (106)        2,670
Depreciation and amortization..........................................       3,044         143          229         3,416
Operating income (loss)................................................        (990)        579         (335)         (746)
Interest expense.......................................................         546          26          162           734
Assets.................................................................      29,085       2,809        6,367        38,261
Long-term debt.........................................................       8,363          63        3,316        11,742
Capital expenditures...................................................       1,855         143          184         2,182

2000
Revenues (2)...........................................................      $4,362      $3,536         $459        $8,357
Operating income (loss) before depreciation  and amortization (3)......       1,903         619          (64)        2,458
Depreciation and amortization..........................................       2,419         126           74         2,619
Operating income (loss)................................................        (516)        493         (138)         (161)
Interest expense.......................................................         516          35          177           728
Assets.................................................................      25,764       2,632        7,478        35,874
Long-term debt.........................................................       6,711         302        3,504        10,517
Capital expenditures...................................................       1,249         156          232         1,637
______________
<FN>
(1)  Other includes  segments not meeting  certain  quantitative  guidelines for
     reporting  including  the  Company's  content  (see  Note  1) and  business
     communications  operations,  as well as elimination  entries related to the
     segments  presented.  Corporate and other assets  consist  primarily of the
     Company's  investments  and  intangible  assets  related  to the  Company's
     content operations (see Notes 5 and 6).
(2)  Revenues include $678 million,  $508 million and $458 million in 2002, 2001
     and 2000,  respectively,  of non-US  revenues,  principally  related to the
     Company's Commerce segment.  No single customer accounted for a significant
     amount of the Company's revenues in any period.
(3)  Operating  income (loss) before  depreciation  and amortization is commonly
     referred to in the Company's businesses as "EBITDA." EBITDA 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,  EBITDA  is  frequently  used as one of the  bases  for  comparing
     businesses in the Company's  industries,  although the Company's measure of
     EBITDA  may  not be  comparable  to  similarly  titled  measures  of  other
     companies.  EBITDA is the primary basis used by the Company's management to
     measure  the  operating  performance  of its  businesses.  EBITDA  does not
     purport  to  represent  net  income  or  net  cash  provided  by  operating
     activities,  as those terms are defined under generally accepted accounting
     principles,  and  should  not  be  considered  as an  alternative  to  such
     measurements as an indicator of the Company's performance.
</FN>
</TABLE>


                                     - 62 -

<PAGE>


COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000 (Concluded)

13.  RELATED PARTY TRANSACTIONS

     QVC  has  an  affiliation   agreement  with  Comcast  Cable  Communications
     Holdings,  Inc.  (formerly AT&T Broadband Corp.), a wholly owned subsidiary
     of Comcast ("CCCH"), to carry QVC's programming. In return for carrying QVC
     programming,  QVC pays CCCH an allocated portion,  based upon market share,
     of a percentage of net sales of merchandise  sold to QVC customers  located
     in CCCH's  service  area.  These  amounts,  which are  included in selling,
     general and administrative expenses in the Company's consolidated statement
     of operations, were not significant during 2002.

     The  Company's  content  businesses  generate a portion  of their  revenues
     through the sale of subscriber services and advertising time to CCCH. These
     amounts,   which  are  included  in  service   revenues  in  the  Company's
     consolidated statement of operations, were not significant during 2002.

     Comcast Cable,  through  management  agreements,  manages the operations of
     CCCH's  subsidiaries,  including  rebuilds  and  upgrades.  The  management
     agreements  generally  provide that Comcast Cable  supervise the management
     and  operations  of the CCCH cable  systems and  arrange for and  supervise
     certain  administrative  functions.  As compensation for such services, the
     agreements  provide for Comcast Cable to charge  management fees based on a
     percentage  of gross  revenues.  These  charges,  which are  recorded  as a
     reduction of selling,  general and administrative expenses in the Company's
     consolidated statement of operations, totaled $113 million during 2002.

     Comcast  Financial Agency  Corporation  ("CFAC"),  an indirect wholly owned
     subsidiary of the Company, provides cash management services to Comcast and
     CCCH.  Under this  arrangement,  Comcast's  and CCCH's  cash  receipts  are
     deposited with and held by CFAC, as custodian and agent,  which invests and
     disburses  such funds at the  direction  of the  Company.  Interest  income
     related to cash  deposited by Comcast and CCCH in CFAC was not  significant
     during 2002.

     The Company  purchases  certain  other  services,  including  insurance and
     employee benefits,  from Comcast under  cost-sharing  arrangements on terms
     that reflect  Comcast's  actual cost.  The Company  reimburses  Comcast for
     certain  other  costs   (primarily   salaries)  under  cost   reimbursement
     arrangements.  These  charges,  which are included in selling,  general and
     administrative   expenses  in  the  Company's   consolidated  statement  of
     operations, totaled $17 million during 2002.

     As of December 31, 2002, note receivable from affiliate  consists of a $191
     million principal amount note receivable from Comcast.  The note receivable
     bears  interest  at a rate of 7.5% as of  December  31,  2002 and is due in
     2012. As of December 31, 2002, note payable to affiliate  consists of a $22
     million principal amount note payable to a subsidiary of Comcast.  The note
     payable  bears  interest  at a rate of 7.5%  and is due in  2012.  Interest
     relating to such notes as of December 31, 2002 was not  significant  and is
     included in due to affiliates in the Company's consolidated balance sheet.


                                     - 63 -

<PAGE>



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

     Not applicable.

                                    PART III

The information  called for by Item 10, Directors and Executive  Officers of the
Registrant,  Item 11,  Executive  Compensation,  Item 12, Security  Ownership of
Certain Beneficial Owners and Management and Related  Stockholder  Matters,  and
Item 13, Certain Relationships and Related Transactions,  is omitted pursuant to
SEC General Instruction I of Form 10-K.

                                     PART IV

ITEM 14       CONTROLS AND PROCEDURES

         (a)  Disclosure  controls and procedures.  Our chief executive  officer
              and  our  co-chief  financial   officers,   after  evaluating  the
              effectiveness  of our  "disclosure  controls and  procedures"  (as
              defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and
              15d-14(c))  as of a date (the  "Evaluation  Date")  within 90 days
              before the filing date of this annual report,  have concluded that
              as of the Evaluation Date, our disclosure  controls and procedures
              were  adequate  and designed to ensure that  material  information
              relating  to us and our  consolidated  subsidiaries  would be made
              known to them by others within those entities.

         (b)  Changes in internal controls. There were no significant changes in
              our internal  controls or to our knowledge,  in other factors that
              could  significantly  affect our internal  controls and procedures
              subsequent to the Evaluation Date.

ITEM 15       EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

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

              Independent Auditors' Report.................................27
              Consolidated Balance Sheet--December 31, 2002 and 2001.......28
              Consolidated Statement of Operations--Years
                Ended December 31, 2002, 2001 and 2000.....................29
              Consolidated Statement of Cash Flows--Years
                Ended December 31, 2002, 2001 and 2000.....................30
              Consolidated Statement of Stockholders' Equity--
                Years Ended December 31, 2002, 2001 and 2000...............31
              Notes to Consolidated Financial Statements...................32

     (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 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:

         (i)  We filed a Current Report on Form 8-K under Item 5 on November 18,
              2002  announcing  that,  in  connection  with the  closing  of the
              transaction  combining  Comcast  Holdings  Corporation  and AT&T's
              broadband  business,  we amended our articles of  incorporation to
              change our name from "Comcast  Corporation"  to "Comcast  Holdings
              Corporation."



                                     - 64 -

<PAGE>



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

          2.1        Composite  copy of Agreement and Plan of Merger dated as of
                     December  19,  2001,  as amended,  among  Comcast  Holdings
                     Corporation  (f/k/a  Comcast   Corporation),   AT&T  Corp.,
                     Comcast Cable  Communications  Holdings,  Inc.  (f/k/a AT&T
                     Broadband Corp.),  Comcast  Corporation (f/k/a AT&T Comcast
                     Corporation)  and  the  other  parties   signatory  thereto
                     (incorporated  by  reference  to Exhibit 2.1 to the Comcast
                     Corporation   Current  Report  on  Form  8-K12g3  filed  on
                     November 18, 2002).
          2.2        Support  Agreement  dated  as  of  December  19,  2001,  as
                     amended,  among AT&T Corp.,  Comcast  Holdings  Corporation
                     (f/k/a Comcast  Corporation),  Comcast  Corporation  (f/k/a
                     AT&T Comcast  Corporation),  Sural LLC and Brian L. Roberts
                     (incorporated  by  reference  to Exhibit 2.3 to the Comcast
                     Corporation  registration  statement  on Form S-4  filed on
                     February 11, 2002).
          2.3        Exchange  Agreement  dated  as  of  December  7,  2001,  as
                     amended, between Microsoft Corporation and Comcast Holdings
                     Corporation  (f/k/a Comcast  Corporation)  (incorporated by
                     reference  to  Exhibit  2.6  to  the  Comcast   Corporation
                     registration  statement  on Form S-4 filed on February  11,
                     2002).
          3.1        Amended and Restated By-Laws  (incorporated by reference to
                     Exhibit  3.1 to our  Quarterly  Report on Form 10-Q for the
                     quarter ended March 31, 1999).
          4.1        Amended and Restated  Five-Year  Revolving Credit Agreement
                     effective as of November 18, 2002,  amending and  restating
                     the Five-Year Revolving Credit Agreement dated as of August
                     24, 2000, among Comcast Cable Communications, Inc., Comcast
                     Corporation (f/k/a AT&T Comcast  Corporation),  the Lenders
                     party thereto and Bank of America,  N.A., as Administrative
                     Agent.  (incorporated  by  reference  to Annex I of Exhibit
                     10.3 to the Comcast Cable  Communications,  Inc.  Quarterly
                     Report on Form 10-Q for the quarter ended March 31, 2002).
          4.2        First Amendment to Amended and Restated Five-Year Revolving
                     Credit  Agreement  dated  as of  February  7,  2003,  among
                     Comcast Cable  Communications,  Inc.,  Comcast  Corporation
                     (f/k/a AT&T Comcast Corporation), the Lenders party thereto
                     and  Bank  of  America,   N.A.,  as  Administrative   Agent
                     (incorporated  by  reference  to Exhibit 4.7 to the Comcast
                     Corporation  Annual  Report on Form 10-K for the year ended
                     December 31, 2002).
          4.3        Amended and Restated  364-Day  Revolving  Credit  Agreement
                     effective as of November 18, 2002,  amending and  restating
                     the 364-Day  Revolving  Credit Agreement dated as of August
                     24, 2000, among Comcast Cable Communications, Inc., Comcast
                     Corporation (f/k/a AT&T Comcast  Corporation),  the Lenders
                     party thereto and Bank of America,  N.A., as Administrative
                     Agent.  (incorporated  by  reference  to Annex I of Exhibit
                     10.4 to the Comcast Cable  Communications,  Inc.  Quarterly
                     Report on Form 10-Q for the quarter ended March 31, 2002).
          4.4        First Amendment to Amended and Restated  364-Day  Revolving
                     Credit  Agreement  dated  as of  February  7,  2003,  among
                     Comcast Cable  Communications,  Inc.,  Comcast  Corporation
                     (f/k/a AT&T  Comcast  Corporation),  the  Lenders  party to
                     thereto and Bank of America,  N.A., as Administrative Agent
                     (incorporated  by  reference  to Exhibit 4.9 to the Comcast
                     Corporation  Annual  Report on Form 10-K for the year ended
                     December 31, 2002).
          4.5        Indenture,  dated as of October 17, 1991,  between  Comcast
                     Holdings  Corporation (f/k/a Comcast  Corporation) and Bank
                     of  Montreal/Harris  Trust  (successor  to Morgan  Guaranty
                     Trust Company of New York), as Trustee, relating to Comcast
                     Holdings' 10-5/8% Senior  Subordinated  Debentures due 2012
                     (incorporated  by  reference  to  Exhibit 2 to our  Current
                     Report on Form 8-K filed on October 31, 1991).
          4.6        Form   of   Debenture    relating   to   Comcast   Holdings
                     Corporation's  (f/k/a Comcast  Corporation) 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).
          4.7        Senior  Indenture dated as of June 15, 1999 between Comcast
                     Holdings  Corporation  (f/k/a Comcast  Corporation) and The
                     Bank of New  York  (as  successor  in  interest  to Bank of
                     Montreal  Trust  Company),   as  Trustee  (incorporated  by
                     reference to Exhibit 4.1 to our  registration  statement on
                     Form S-3 filed on June 23, 1999).
          4.8        Form   of   Debenture    relating   to   Comcast   Holdings
                     Corporation's   (f/k/a  Comcast  Corporation)  Zero  Coupon
                     Convertible  Debentures due 2020 (incorporated by reference
                     to Exhibit  4.7 to our  Annual  Report on Form 10-K for the
                     year ended December 31, 2000).

                                     - 65 -

<PAGE>

          4.9        Indenture  dated as of May 1, 1997,  between  Comcast Cable
                     Communications, Inc. and The Bank of New York (as successor
                     in interest to Bank of Montreal Trust Company), as Trustee,
                     relating to Comcast  Cable  Communications,  Inc.'s  8-1/8%
                     Notes due 2004,  8-3/8%  Notes due 2007,  8- 7/8% Notes due
                     2017,  8-1/2% Notes due 2027, 6.20% Notes due 2008,  6.375%
                     Notes due 2006, 6.75% Notes due 2011, 6.875% Notes due 2009
                     and 7.125%  Notes due 2013  (incorporated  by  reference to
                     Exhibit 4.1(a) to the registration statement on Form S-4 of
                     Comcast Cable Communications, Inc. filed on June 3, 1997).
          4.10       Form of Comcast  Cable  Communications  Inc.'s 8-1/8% Notes
                     due 2004,  8-3/8% Notes due 2007, 8-7/8% Notes due 2017 and
                     8-1/2% Notes due 2027,  6.20% Notes due 2008,  6.375% Notes
                     due 2006,  6.75% Notes due 2011,  6.875% Notes due 2009 and
                     7.125% Notes due 2013 (incorporated by reference to Exhibit
                     4.1(b) to the registration statement on Form S-4 of Comcast
                     Cable Communications, Inc. filed on June 3, 1997).
          4.11       Form of Indenture  among  Comcast  Corporation  (f/k/a AT&T
                     Comcast Corporation),  Comcast Cable Communications,  Inc.,
                     Comcast Cable  Communications  Holdings,  Inc.  (f/k/a AT&T
                     Broadband Corp.),  Comcast Cable Holdings,  LLC (f/k/a AT&T
                     Broadband,  LLC),  Comcast MO Group,  Inc.  (f/k/a MediaOne
                     Group, Inc.), and The Bank of New York, as Trustee relating
                     to Comcast  Cable  Communications  Holdings,  Inc.'s 8.375%
                     Notes due March 15, 2013 and 9.455%  Notes Due November 15,
                     2022  (incorporated  by  reference  to Exhibit  4.18 to the
                     amended  registration  statement  on Form  S-4/A of Comcast
                     Corporation filed on September 26, 2002).
          4.12       Form of Indenture  among  Comcast  Corporation  (f/k/a AT&T
                     Comcast Corporation),  Comcast Cable Communications,  Inc.,
                     Comcast Cable  Communications  Holdings,  Inc.  (f/k/a AT&T
                     Broadband Corp.),  Comcast Cable Holdings,  LLC (f/k/a AT&T
                     Broadband,  LLC),  Comcast MO Group,  Inc.  (f/k/a MediaOne
                     Group, Inc.), and The Bank of New York, as Trustee relating
                     to  Comcast  Corporation's  5.85%  Notes due 2010 and 6.50%
                     Notes Due 2015 (incorporated by reference to Exhibit 4.5 to
                     the   registration   statement   on  Form  S-3  of  Comcast
                     Corporation filed on December 16, 2002).
          4.13       Form of Subordinated  Indenture  between  Comcast  Holdings
                     Corporation  (f/k/a Comcast  Corporation) and Bankers Trust
                     Company,   as  Trustee,   relating   to  Comcast   Holdings
                     Corporation's 2.0% Exchangeable Subordinated Debentures Due
                     2029  and 2.0%  Exchangeable  Subordinated  Debentures  Due
                     November 2029  (incorporated by reference to Exhibit 4.2 to
                     our  registration  statement  on Form S-3 filed on June 23,
                     1999).
          4.14       Form  of  Comcast  Holdings  Corporation's  (f/k/a  Comcast
                     Corporation) 2.0% Exchangeable  Subordinated Debentures Due
                     2029 (ZONES I)  (incorporated  by reference to Exhibit 4 to
                     our Current Report on Form 8-K filed on October 14, 1999).
          4.15       Form  of  Comcast  Holdings  Corporation's  (f/k/a  Comcast
                     Corporation) 2.0% Exchangeable  Subordinated Debentures Due
                     November  2029 (ZONES II)  (incorporated  by  reference  to
                     Exhibit  4 to our  Current  Report  on Form  8-K  filed  on
                     November 3, 1999).
          10.1       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).


__________
Pursuant to Item  601(4)(iii)(A)  of Regulation  S-K, the  registrant  agrees to
furnish upon request to the Securities and Exchange Commission other instruments
defining the rights of holders of long-term debt.




                                     - 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 March 28, 2003.

<TABLE>
<CAPTION>
<S>            <C>
                                                          Comcast Holdings Corporation
                                                          By:  /s/ Brian L. Roberts
                                                               ----------------------------------------------------
                                                                Brian L. Roberts
                                                               President, Chief Executive Officer 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.


               Signature                                           Title                                    Date

/s/ Brian L. Roberts                          President and Chief Executive Officer; Director          March 28, 2003
-------------------------                              (Principal Executive Officer)
Brian L. Roberts

/s/ Lawrence S. Smith                                Executive Vice President; Director                March 28, 2003
-------------------------                             (Co-Principal Financial Officer)
Lawrence S. Smith

/s/ John R. Alchin                                 Executive Vice President and Treasurer              March 28, 2003
-------------------------                             (Co-Principal Financial Officer)
John R. Alchin

/s/ David L. Cohen                                   Executive Vice President; Director                March 28, 2003
-------------------------
David L. Cohen

/s/ Arthur R. Block                                   Senior Vice President; Director                  March 28, 2003
-------------------------
Arthur R. Block

/s/ Lawrence J. Salva                               Senior Vice President and Controller               March 28, 2003
-------------------------                              (Principal Accounting Officer)
Lawrence J. Salva

</TABLE>
















                                     - 67 -

<PAGE>



                          INDEPENDENT AUDITORS' REPORT





Board of Directors and Stockholders
Comcast Holdings Corporation
Philadelphia, Pennsylvania

Our audits of the financial statements referred to in our report dated March 17,
2003 (which report expresses an unqualified  opinion and includes an explanatory
paragraph related to the adoption of Statement of Financial Accounting Standards
No. 133,  "Accounting  for Derivative  Instruments  and Hedging  Activities," as
amended,  effective  January 1, 2001,  and  Statement  of  Financial  Accounting
Standards No. 142, "Goodwill and Other Intangibles,"  effective January 1, 2002)
appearing  in this Annual  Report on Form 10-K of Comcast  Holdings  Corporation
(formerly  known as  Comcast  Corporation)  (the  "Company")  for the year ended
December 31, 2002 also included the financial statement schedule of the Company,
listed in Item 15(b)(i). This financial statement schedule is the responsibility
of the Company's  management.  Our responsibility is to express an opinion based
on  our  audits.  In  our  opinion,  such  financial  statement  schedule,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information set forth therein.


Deloitte & Touche LLP

Philadelphia, Pennsylvania
March 17, 2003


                                     - 68 -

<PAGE>






<TABLE>
<CAPTION>

                                 COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
                                 ---------------------------------------------
                                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                -----------------------------------------------
                                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                                  --------------------------------------------
                                                 (In millions)
                                                 -------------


                                                                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>
2002                                                $154            $107              $101             $160

2001                                                 142              86                74              154

2000                                                 137              66                61              142


Allowance for Excess and Obsolete
  Electronic Retailing Inventories
------------------------------------------

2002                                                $114             $57               $56             $115

2001                                                 105              55                46              114

2000                                                  89              46                30              105



<FN>

(A) Uncollectible accounts and excess and obsolete inventory written off.
</FN>
</TABLE>



                                                     - 69 -

<PAGE>



                                 CERTIFICATIONS

I, Brian L. Roberts, certify that:

1.   I have  reviewed  this  annual  report  on Form  10-K of  Comcast  Holdings
     Corporation;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)  designed  such  disclosure  controls  and  procedures  to  ensure  that
         material  information   relating  to  the  registrant,   including  its
         consolidated  subsidiaries,  is made known to us by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         annual report (the "Evaluation Date"); and

     c)  presented in this annual report our conclusions about the effectiveness
         of the disclosure controls and procedures based on our evaluation as of
         the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     a)  all  significant  deficiencies  in the design or  operation of internal
         controls  which  could  adversely  affect the  registrant's  ability to
         record,   process,   summarize  and  report  financial  data  and  have
         identified  for the  registrant's  auditors any material  weaknesses in
         internal controls; and

     b)  any fraud,  whether or not material,  that involves management or other
         employees  who have a  significant  role in the  registrant's  internal
         controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual report whether there were significant  changes in internal  controls
     or in other  factors  that could  significantly  affect  internal  controls
     subsequent  to the  date  of our  most  recent  evaluation,  including  any
     corrective  actions with regard to  significant  deficiencies  and material
     weaknesses.


Date: March 28, 2003



/s/ Brian L. Roberts
--------------------------------------------
Name: Brian L. Roberts
Chief Executive Officer


                                     - 70 -

<PAGE>



                                 CERTIFICATIONS

I, Lawrence S. Smith, certify that:

1.   I have  reviewed  this  annual  report  on Form  10-K of  Comcast  Holdings
     Corporation;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)  designed  such  disclosure  controls  and  procedures  to  ensure  that
         material  information   relating  to  the  registrant,   including  its
         consolidated  subsidiaries,  is made known to us by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         annual report (the "Evaluation Date"); and

     c)  presented in this annual report our conclusions about the effectiveness
         of the disclosure controls and procedures based on our evaluation as of
         the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     a)  all  significant  deficiencies  in the design or  operation of internal
         controls  which  could  adversely  affect the  registrant's  ability to
         record,   process,   summarize  and  report  financial  data  and  have
         identified  for the  registrant's  auditors any material  weaknesses in
         internal controls; and

     b)  any fraud,  whether or not material,  that involves management or other
         employees  who have a  significant  role in the  registrant's  internal
         controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual report whether there were significant  changes in internal  controls
     or in other  factors  that could  significantly  affect  internal  controls
     subsequent  to the  date  of our  most  recent  evaluation,  including  any
     corrective  actions with regard to  significant  deficiencies  and material
     weaknesses.


Date: March 28, 2003


/s/ Lawrence S. Smith
--------------------------------------------
Name: Lawrence S. Smith
Co-Chief Financial Officer



                                     - 71 -

<PAGE>


                                 CERTIFICATIONS

I, John R. Alchin, certify that:

1.   I have  reviewed  this  annual  report  on Form  10-K of  Comcast  Holdings
     Corporation;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)  designed  such  disclosure  controls  and  procedures  to  ensure  that
         material  information   relating  to  the  registrant,   including  its
         consolidated  subsidiaries,  is made known to us by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         annual report (the "Evaluation Date"); and

     c)  presented in this annual report our conclusions about the effectiveness
         of the disclosure controls and procedures based on our evaluation as of
         the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     a)  all  significant  deficiencies  in the design or  operation of internal
         controls  which  could  adversely  affect the  registrant's  ability to
         record,   process,   summarize  and  report  financial  data  and  have
         identified  for the  registrant's  auditors any material  weaknesses in
         internal controls; and

     b)  any fraud,  whether or not material,  that involves management or other
         employees  who have a  significant  role in the  registrant's  internal
         controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual report whether there were significant  changes in internal  controls
     or in other  factors  that could  significantly  affect  internal  controls
     subsequent  to the  date  of our  most  recent  evaluation,  including  any
     corrective  actions with regard to  significant  deficiencies  and material
     weaknesses.


Date: March 28, 2003


/s/John R. Alchin
--------------------------------------------
Name: John R. Alchin
Co-Chief Financial Officer



                                     - 72 -