================================================================================


                                    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, 2001

                                       OR

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

                            [GRAPHIC OMITTED - LOGO]

                          Commission file number 0-6983


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

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

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

       Registrant's telephone number, including area code: (215) 665-1700
                        --------------------------------
           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      NONE
                        ---------------------------------
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                  Class A Special Common Stock, $1.00 par value
                      Class A Common Stock, $1.00 par value
                          ----------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

       Yes     X                                  No
           ---------                                 ---------

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

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

As of December  31,  2001,  the  aggregate  market  value of the Class A Special
Common Stock and Class A Common Stock held by  non-affiliates  of the Registrant
was $32.484 billion and $751.3 million, respectively.

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

As of December 31, 2001, there were 913,931,554 shares of Class A Special Common
Stock, 21,829,422 shares of Class A Common Stock and 9,444,375 shares of Class B
Common Stock outstanding.

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

                       DOCUMENTS INCORPORATED BY REFERENCE
Part III - The Registrant's definitive Proxy Statement for its Annual Meeting of
Shareholders presently scheduled to be held in June 2002.

================================================================================


<PAGE>



                                                COMCAST CORPORATION
                                            2001 FORM 10-K ANNUAL REPORT
                                                 TABLE OF CONTENTS
                                                       PART I
<TABLE>
<CAPTION>
<S>                                                                                                            <C>
Item 1   Business.................................................................................................1
Item 2   Properties..............................................................................................17
Item 3   Legal Proceedings.......................................................................................18
Item 4   Submission of Matters to a Vote of Security Holders.....................................................18
Item 4A  Executive Officers of the Registrant....................................................................19

                                                      PART II
Item 5   Market for the Registrant's Common Equity and Related Stockholder Matters...............................20
Item 6   Selected Financial Data.................................................................................21
Item 7   Management's Discussion and Analysis of Financial Condition and Results of Operations...................23
Item 8   Financial Statements and Supplementary Data.............................................................38
Item 9   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure....................74

                                                      PART III
Item 10  Directors and Executive Officers of the Registrant......................................................74
Item 11  Executive Compensation..................................................................................74
Item 12  Security Ownership of Certain Beneficial Owners and Management..........................................74
Item 13  Certain Relationships and Related Transactions..........................................................74

                                                      PART IV
Item 14  Exhibits, Financial Statement Schedules and Reports on Form 8-K.........................................75
SIGNATURES.......................................................................................................79
</TABLE>

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

     This Annual  Report on Form 10-K is for the year ended  December  31, 2001.
This Annual Report modifies and supersedes  documents filed prior to this Annual
Report. The SEC allows us to "incorporate by reference" information that we file
with them,  which means that we can  disclose  important  information  to you by
referring you directly to those documents. Information incorporated by reference
is considered to be part of this Annual Report. In addition, information that we
file  with  the  SEC in the  future  will  automatically  update  and  supersede
information  contained in this Annual Report. In this Annual Report,  "Comcast,"
"we," "us" and "our" refer to Comcast Corporation and its subsidiaries.

     You  should  carefully  review the  information  contained  in this  Annual
Report, 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.



<PAGE>



Factors Affecting Future Operations

     On December 19, 2001,  we entered into an Agreement and Plan of Merger with
AT&T Corp.  ("AT&T")  pursuant  to which we agreed to a  transaction  which will
result in the combination of Comcast and a holding  company of AT&T's  broadband
business ("AT&T Broadband").  Refer to "General Developments of Our Business" on
page 2 for a description of this pending transaction.

     Factors that may cause our actual results to differ  materially from any of
our  forward-looking  statements  presented  in this Annual  Report on Form 10-K
include, but are not limited to:

     o    our  businesses  and  those of AT&T  Broadband  may not be  integrated
          successfully or such integration may be more difficult, time-consuming
          or costly than expected,

     o    expected  combination  benefits from the  transaction may not be fully
          realized or realized within the expected time frame,

     o    revenues following the transaction may be lower than expected,

     o    operating  costs,  financing  costs,   subscriber  loss  and  business
          disruption, including, without limitation, difficulties in maintaining
          relationships with employees,  subscribers,  clients or suppliers, may
          be greater than expected following the transaction, and

     o    the  shareholder,  regulatory  and other  approvals  required  for the
          transaction  may  not be  obtained  on the  proposed  terms  or on the
          anticipated schedule.

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

     o    changes in laws and regulations,

     o    changes in the competitive environment,

     o    changes in technology,

     o    industry consolidation and mergers,

     o    franchise related matters,

     o    market  conditions that may adversely  affect the availability of debt
          and equity  financing for working  capital,  capital  expenditures  or
          other purposes,

     o    demand for the programming content we distribute or the willingness of
          other video program distributors to carry our content, and

     o    general economic conditions.

                                     PART I

ITEM 1    BUSINESS

     We are involved in three principal lines of business:

     o    Cable-through  the development,  management and operation of broadband
          communications networks,

     o    Commerce-through QVC, our electronic retailing subsidiary, and

     o    Content-through  our  consolidated   subsidiaries  Comcast  Spectacor,
          Comcast  SportsNet,  Comcast  SportsNet  Mid-Atlantic,  Comcast Sports
          Southeast, E! Entertainment Television, The Golf Channel, Outdoor Life
          Network, G4 Media, and through our other programming investments.

     We are currently the third largest cable  operator in the United States and
have deployed digital cable applications and high-speed  Internet service to the
substantial majority of our cable communications  systems to expand the products
available on our broadband communications networks.

     Our  consolidated   cable  operations  served   approximately  8.5  million
subscribers and passed  approximately 13.9 million homes in the United States as
of December 31, 2001. We have entered into an agreement which will result in the
combination  of Comcast and AT&T  Broadband.  Upon  completion  of this  pending
transaction,   which  is  subject  to  the  receipt  of  necessary  shareholder,
regulatory  and  other  approvals,   we  will  serve  approximately  22  million
subscribers. We expect to close the transaction by the end of 2002.

     Through  QVC, we market a wide  variety of products  directly to  consumers
primarily on  merchandise-focused  television programs. As of December 31, 2001,
QVC was available,  on a full and part-time basis, to approximately 82.1 million
homes in the  United  States,  approximately  9.5  million  homes in the  United
Kingdom,  approximately  23.6  million  homes in Germany and  approximately  3.6
million homes in Japan.

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

<PAGE>

                  FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS

     Refer to Note 12 to our consolidated financial statements in Item 8 of this
Annual Report for information about our operations by business segment.

                      GENERAL DEVELOPMENTS OF OUR BUSINESS

     We entered  into a number of  significant  transactions  in 2001 which have
closed or are expected to close in 2002. We have summarized  these  transactions
below and have more fully described them in Note 5 to our consolidated financial
statements in Item 8 of this Annual Report.

     Agreement and Plan of Merger with AT&T Broadband

     On December 19, 2001,  we entered into an Agreement and Plan of Merger with
AT&T Corp.  ("AT&T")  pursuant  to which we agreed to a  transaction  which will
result in the combination of Comcast and a holding  company of AT&T's  broadband
business  ("AT&T  Broadband")  that  AT&T  will  spin  off to  its  shareholders
immediately  prior to the  combination.  As of December 31, 2001, AT&T Broadband
served approximately 13.6 million subscribers.  If not sold by AT&T prior to the
closing,  the combined  company will also hold AT&T's minority  interest in Time
Warner  Entertainment  ("TWE").  We intend to dispose of the TWE interest in the
event this interest  remains as a part of the combined  company  after  closing.
Under  the  terms  of  the   transaction,   the  combined   company  will  issue
approximately  1.235 billion shares of its voting common stock to AT&T Broadband
shareholders  in exchange  for all of AT&T's  interests in AT&T  Broadband,  and
approximately  115 million  shares of its common stock to Microsoft  Corporation
("Microsoft")  in exchange for AT&T Broadband shares that Microsoft will receive
immediately  prior to the completion of the  transaction for settlement of their
$5 billion aggregate principal amount in quarterly income preferred  securities.
The combined company will also assume or incur approximately $20 billion of AT&T
Broadband  debt.  For each share of a class of common stock of Comcast that they
hold at the time of the merger,  each Comcast shareholder will receive one share
of a corresponding  class of stock of the combined  company.  We expect that the
transaction will qualify as tax-free to both us and to AT&T. We will account for
the transaction as an acquisition under the purchase method of accounting,  with
Comcast as the acquiring entity. The transaction is subject to customary closing
conditions and shareholder,  regulatory and other approvals.  We expect to close
the transaction by the end of 2002.

     Refer  to  Note 5 to our  financial  statements  included  in  Item 8 for a
discussion of this transaction.

     Adelphia Cable Systems Exchange

     On January 1, 2001, we completed  our cable systems  exchange with Adelphia
Communications  Corporation.  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 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 our cost basis in the systems exchanged.

     Home Team Sports Acquisition

     On February  14, 2001,  we acquired  Home Team Sports (now known as Comcast
SportsNet   Mid-Atlantic),   a  regional  sports  programming   network  serving
approximately  4.8 million  homes,  from Viacom,  Inc. and  Affiliated  Regional
Communications,  Ltd. (an affiliate of Fox Cable Network Services, LLC). We also
agreed to increase the distribution of certain of Viacom's and Fox's programming
networks on certain of our cable systems.  The estimated fair value of Home Team
Sports as of the closing date of the acquisition was $240.0 million.

     AT&T Cable Systems Acquisition

     On April 30, 2001, we acquired cable systems serving  approximately 585,000
subscribers from AT&T in exchange for approximately  63.9 million shares of AT&T
common  stock  then  held  by us.  The  market  value  of the  AT&T  shares  was
approximately $1.423 billion, based on the price of the AT&T common stock on the
closing date of the  transaction.  The transaction is expected to qualify as tax
free to both us and to AT&T.

     Acquisition of Controlling Interest in The Golf Channel

     On June 8, 2001,  we acquired the  approximate  30.8%  interest in The Golf
Channel  held  by Fox  Entertainment  Group,  Inc.,  a  subsidiary  of The  News
Corporation  Limited. In addition,  Fox Entertainment and News Corp. agreed to a
five-year  non-competition  agreement. We paid aggregate consideration of $364.9
million  in  cash.  We now own  approximately  91.0%  of The  Golf  Channel  and
consolidate The Golf Channel.

                                      - 2 -
<PAGE>

     Baltimore, Maryland System Acquisition

     On June 30,  2001,  we  acquired  the cable  system  serving  approximately
112,000  subscribers in Baltimore City, Maryland from AT&T for $518.7 million in
cash.

     Acquisition of Outdoor Life Network

     On October 30, 2001, we acquired  from Fox  Entertainment  Group,  Inc. the
approximate 83.2% interest in Outdoor Life Network not previously owned by us by
exchanging our 14.5% interest in Speedvision Network, together with a previously
made loan,  for Fox  Entertainment's  interest  in  Outdoor  Life  Network.  The
estimated  fair value of the  additional  interest we  acquired in Outdoor  Life
Network  as of the  closing  date  of the  transaction  was  approximately  $512
million.  We no longer own any interest in Speedvision  Network and now own 100%
of Outdoor Life Network.

     At Home Services

     On September  28, 2001,  At Home  Corporation,  our provider of  high-speed
Internet services,  filed for protection under Chapter 11 of the U.S. Bankruptcy
Code.  On  December 3, 2001,  At Home  agreed to continue to provide  high-speed
Internet  services to our  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.

                          DESCRIPTION OF OUR BUSINESSES

Cable Communications

     Technology and Capital Improvements

     Our cable communications networks receive signals by means of:

     o    special antennae,

     o    microwave relay systems,

     o    earth stations, and

     o    coaxial and fiber optic cables.

     Products and Services

     We offer a variety  of  services  over our cable  communications  networks,
including  traditional  analog  video,  digital  cable and  high-speed  Internet
service.  Available  service  offerings depend on the bandwidth  capacity of the
cable  communications  system.  Bandwidth,  expressed in megahertz  (MHz),  is a
measure of information-carrying  capacity. It is the range of usable frequencies
that can be carried by a cable communications system. The greater the bandwidth,
the greater the capacity of the system.  As of December 31, 2001,  approximately
82% of our cable subscribers were served by a system with a capacity of at least
750-MHz and  approximately  95% of our cable subscribers were served by a system
with a capacity of at least 550-MHz.

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

     We have deployed fiber optic cable and have upgraded the technical  quality
of the substantial majority of our cable communications  networks.  As a result,
the  reliability  and  capacity of our  systems  have  increased,  aiding in the
delivery of additional  video  programming  and other  services such as enhanced
digital video, high- speed Internet service and, in some areas, telephony.

     Franchises

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

     Although  franchises  historically have been renewed,  renewals may include
less favorable  terms and  conditions  than the existing  franchise.  Under law,
franchises  should  continue  to be renewed  for  companies  that have  provided
adequate service and have complied with existing  franchise terms and applicable
law. We have never had a franchise revoked or otherwise been denied the right to
provide service in a municipality. The franchising authority may choose to award
additional  franchises  to competing  companies at any time.  As of December 31,
2001, we served approximately 1,900 franchise areas in the United States.

                                      - 3 -

<PAGE>



     Traditional Analog Video Services

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

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

     o    basic programming,

     o    expanded basic programming,

     o    premium services, and

     o    pay-per-view 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.

     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.

     Subscribers can also subscribe to our premium services either  individually
or in  packages  of several  channels.  Our premium  services  generally  offer,
without  commercial  interruption,  feature  motion  pictures,  live  and  taped
sporting  events,  concerts and other special  features.  The charge for premium
services depends upon the type and level of service selected by the subscriber.

     Our  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.

     Advanced Service Offerings

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

     o    digital cable television services in substantially all of our systems,
          and

     o    high-speed   Internet  service  installed  in  personal  computers  in
          approximately 75% of our systems.

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

     Digital Cable Services

     Subscribers to our digital cable service may receive:

     o    an interactive program guide,

     o    multiple channels of digital music,

     o    additional expanded basic programming,

     o    additional premium services,

     o    "multiplexes"   of  premium   channels  to  which  a  subscriber  also
          subscribes,  which are varied as to time of broadcast  or  programming
          content theme, and

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

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

     High-Speed Internet Service

     Prior to March 2002, we marketed At Home's high- speed Internet services as
Comcast@Home in areas served by our cable communications systems.  Subsequent to
that time, our high-speed Internet  subscribers are on our network.  Residential
subscribers  can  connect  their  personal  computers  via  cable  modems  to  a
high-speed  national  network  provided  and  managed  by  us to  access  online
information,  including the Internet, at faster speeds than that of conventional
modems.  We also provide  businesses  with Internet  connectivity  solutions and
networked business applications.

                                      - 4 -

<PAGE>



     Other Revenue Sources

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

     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    increases 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 have experienced  increases in our cost of programming
and we anticipate that future contract renewals will result in programming costs
that are higher than our costs today, particularly for sports programming.

     We utilize  interactive  programming guides to provide our subscribers with
current programming information, as well as advertising and other content.

     Customer Service

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

                                      - 5 -

<PAGE>



     Our Cable Communications Systems

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



<TABLE>
<CAPTION>
                                           2001(9)     2000(9)       1999(9)        1998          1997
                                          ----------  ----------   -----------    ---------    ----------
<S>                                         <C>         <C>           <C>           <C>           <C>
Cable
    Homes Passed (1).....................    13,929      12,679        9,522         7,382         7,138
    Subscribers (2)......................     8,471       7,607        5,720         4,511         4,366
    Penetration (3)......................      60.8%       60.0%        60.1%         61.1%         61.2%
Digital Cable
    "Digital Ready" Subscribers (4)......     8,375       7,258        4,637         1,570
    Subscriptions (5)....................     2,336       1,354          515            78
    Penetration (6)......................      27.9%       18.7%        11.1%          5.0%
High-Speed Internet
    "Modem Ready" Homes Passed (7).......    10,400       6,360        3,259         1,804           866
    Subscribers..........................       948         400          142            51            10
    "Modem Ready" Penetration (8)........       9.1%        6.3%         4.4%          2.8%          1.2%
---------------
<FN>
(1)  A home is "passed" if we can connect it to our distribution  system without
     further extending the transmission lines.
(2)  A dwelling with one or more television sets connected to a system counts as
     one cable subscriber.
(3)  Cable  penetration means the number of cable subscribers as a percentage of
     cable homes passed.
(4)  A subscriber is "digital  ready" if the  subscriber is in a market where we
     have launched our digital cable service.
(5)  Each digital converter box counts as one digital cable subscription.
(6)  Digital cable penetration  means the number of digital cable  subscriptions
     as a percentage of "digital  ready"  subscribers.  Certain  subscribers may
     have multiple digital cable subscriptions.
(7)  A home passed is "modem ready" if we can connect it to our Internet service
     connection system without further upgrading the transmission lines.
(8)  "Modem  ready"   penetration  means  the  number  of  high-speed   Internet
     subscribers as a percentage of "modem ready" homes passed.
(9)  In April 1999, we acquired a controlling interest in Jones Intercable, Inc.
     In  January  2000,  we  acquired  Lenfest  Communications,  Inc.  and began
     consolidating  the results of Comcast  Cablevision of Garden State, L.P. In
     August 2000, we acquired Prime Communications LLC. On December 31, 2000 and
     January 1, 2001, we completed our cable systems  exchanges  with AT&T Corp.
     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.
</FN>
</TABLE>

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



                                      - 6 -

<PAGE>



     Competition

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

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

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

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

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

     o    interactive online computer services,

     o    newspapers, magazines and book stores,

     o    movie theaters,

     o    live concerts and sporting events, and

     o    home video products.

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

     o    new products and services,

     o    superior technical performance,

     o    superior customer service, and

     o    a greater variety of video programming.

     Federal  law allows  local  telephone  companies  to  provide,  directly to
subscribers,  a wide  variety of services  that are  competitive  with our cable
communications  services,  including  video and  Internet  services  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.  We are unable to predict the likelihood of success of competing
video or cable service ventures by telephone companies or other businesses.  Nor
can we predict the impact these competitive  ventures might have on our business
and operations.


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

     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.

     In  recent  years,   Congress  has  enacted  legislation  and  the  Federal
Communications  Commission,  commonly  known as the FCC, has adopted  regulatory
policies  intended to provide a favorable  operating  environment  for  existing
competitors  and for  potential  new  competitors  to our  cable  communications
systems.  These competitors  include open video systems,  commonly known as OVS,
and direct  broadcast  satellite  service,  commonly known as DBS, among others.
According to recent  government and industry reports,  conventional,  medium and
high-power  satellites  currently  provide video  programming to over 17 million
individual  households,  condominiums,  apartment  and office  complexes  in the
United States. DBS providers with high-power satellites typically offer to their
subscribers  more  than  300  channels  of  programming,  including  programming
services  substantially  similar to those  provided by our cable  communications
systems.

     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.

     Two  major  companies,   DirecTV  and  Echostar,   are  currently  offering
nationwide  high-power DBS services. On October 29, 2001, the Board of Directors
of General Motors agreed to sell its Hughes Electronics  subsidiary,  the parent
of DirecTV,  to Echostar.  Upon closing of the transaction,  which is subject to
shareholder and regulatory approvals, the combined company would serve more than
16 million subscribers, which constitutes

                                      - 7 -

<PAGE>



approximately 94% of satellite television  subscribers nationwide according to a
recent FCC report.

     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
communications  system  operators like us because they offer  programming  which
closely resembles what we offer.  These companies and others are also developing
ways to bring  advanced  communications  services to their  customers.  They are
currently  offering  satellite-delivered  high-speed  Internet  services  with a
telephone  return path and are beginning to provide true two-way  interactivity.
We are unable to predict the effects these competitive  developments  might have
on our business and operations.

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

     Most of our cable communications  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 Internet service providers, commonly known as ISPs,

     o    local telephone companies, and

     o    long distance telephone companies.

     Various  companies,  including  telephone  companies  and ISPs,  have asked
local,  state and  federal  governments  to mandate  that  cable  communications
systems  operators  provide capacity on their broadband  infrastructure  so that
these  companies  and others may deliver  high-speed  Internet  and  interactive
television  services to customers  over cable  facilities.  In February 2002, we
announced an agreement with a national ISP which will provide our subscribers in
two major  markets  with  access to the ISP's  service,  with the  potential  to
roll-out  this  offering to other of our cable  communications  systems with the
concurrence of both parties.

     The deployment of Digital Subscriber Line technology,  known as DSL, allows
Internet access to subscribers at data  transmission  speeds equal to or greater
than that of modems  over  conventional  telephone  lines.  Numerous  companies,
including  telephone  companies,   have  introduced  DSL  service,  and  certain
telephone companies are seeking to provide high-speed broadband services without
regard to present service boundaries and other regulatory restrictions. Congress
is currently  considering  legislation that, if enacted into law, will eliminate
or reduce  significantly many of the regulatory  restrictions on the offering of
high-speed  broadband  services by local telephone  companies.  We are unable to
predict the outcome of any legislative initiatives, the likelihood of success of
competing  online  services  offered by our  competitors  or what  impact  these
competitive ventures may have on our business and operations.

     We expect advances in communications  technology, as well as changes in the
marketplace  and the  regulatory  and  legislative  environment  to occur in the
future.  We refer you to page 11 for a detailed  discussion of  legislative  and
regulatory  factors.  Other new  technologies  and  services may develop and may
compete with services that our cable communications systems offer. Consequently,
we are unable to predict the effect that  ongoing or future  developments  might
have on our business and operations.

Commerce

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

     Revenue Sources

     QVC sells a variety of consumer products and accessories including jewelry,
housewares,  electronics,  apparel  and  accessories,   collectibles,  toys  and
cosmetics. QVC purchases, or obtains on consignment,  products from domestic and
foreign  manufacturers  and  wholesalers,  often on favorable terms based on the
volume of the transactions. QVC intends to continue

                                      - 8 -

<PAGE>



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 64.1 million cable  television  homes.  An additional 0.6 million cable
television  homes  receive  QVC on a less than full time basis and 17.4  million
home  satellite  dish users receive QVC  programming.  The QVC program  schedule
consists of one-hour and  multi-hour  program  segments.  Each program  theme is
devoted to a  particular  category of product or  lifestyle.  From time to time,
special program segments are devoted to merchandise associated with a particular
celebrity, event, geographical region or seasonal interest.

     QVC sells  products  by means of  electronic  media in the United  Kingdom,
Germany and Japan. In the UK, this service currently  reaches  approximately 9.5
million cable television and home satellite  dish-served homes. In Germany, this
service  currently is available to  approximately  23.6 million cable television
and home  satellite  dish-served  homes.  However,  we  estimate  that only 10.6
million homes in Germany have programmed  their  television sets to receive this
service.  In Japan,  this service is currently  available to  approximately  3.6
million cable television and home satellite dish-served homes.

     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, and has made arrangements 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 future 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.  As of December  31, 2001,  8.8% of the total homes  reached by QVC
were attributable to QVC's affiliation agreement with us.

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

                                      - 9 -

<PAGE>



including department,  discount,  warehouse and specialty stores, mail order and
other direct sellers,  shopping center and mall tenants and conventional  retail
stores.  On  television,  QVC competes with other programs for channel space and
viewer loyalty  against similar  electronic  retailing  programming,  as well as
against  alternative  programming  supplied by other  sources,  including  news,
public  affairs,  entertainment  and  sports  programmers.  The  use of  digital
compression  provides  programming  distributors  with greater channel capacity.
While  greater  channel  capacity  increases  the  opportunity  for  QVC  to  be
distributed,  it  also  may  adversely  impact  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,
2001 include:


<TABLE>
<CAPTION>
Investment                                                     Description
------------------------------------    ----------------------------------------------------------
<S>                                     <C>
Comcast Spectacor                       Live sporting events, concerts and other events
Comcast SportsNet                       Regional sports programming and events
Comcast SportsNet Mid-Atlantic          Regional sports programming and events
Comcast Sports Southeast                Regional sports programming and events
E! Entertainment                        Entertainment-related news and original programming
Style                                   Fashion-related programming
The Golf Channel                        Golf-related programming
Outdoor Life Network                    Outdoor activities
CN8-The Comcast Network                 Regional and local programming
G4 Media                                Interactive video, computer and online 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.

     Comcast SportsNet

     Comcast  SportsNet  ("CSN")  is our  24-hour  regional  sports  programming
network which provides sports- related  programming,  including the Philadelphia
Flyers NHL hockey  team,  the  Philadelphia  76ers NBA  basketball  team and the
Philadelphia Phillies MLB baseball team to approximately 2.9 million subscribers
in the Philadelphia region. CSN is delivered to affiliates terrestrially.

     Comcast SportsNet Mid-Atlantic

     We acquired Home Team Sports (now known as Comcast SportsNet  Mid-Atlantic)
("CSN   Mid-Atlantic")  in  February  2001.  CSN  Mid-Atlantic  is  our  24-hour
satellite-delivered   regional   sports   programming   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  5.4 million  subscribers
primarily in Delaware, Maryland,  Pennsylvania,  Virginia,  Washington, D.C. and
West Virginia.

     Comcast Sports Southeast

     Comcast Sports  Southeast  ("CSS") was created in September  1999. CSS is a
satellite-delivered  regional sports  programming  network which provides sports
programming and sports news geared toward college athletics to approximately 3.0
million subscribers primarily in Alabama, Arkansas,  Florida, Georgia, Kentucky,
Louisiana, 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.


                                     - 10 -

<PAGE>



     Style

     Style,  a  division  of E!  Entertainment,  is our  24-hour  cable  network
dedicated  to fashion,  home  design,  beauty,  health,  fitness and more,  with
distribution to approximately 17 million subscribers.

     The Golf Channel

     We acquired a  controlling  interest in The Golf Channel in June 2001.  The
Golf Channel is our 24-hour network devoted exclusively to golf programming with
distribution to approximately 46 million  subscribers.  The programming schedule
includes live tournaments, golf instruction programs and golf news.

     Outdoor Life Network

     We acquired the approximate  83.2% interest in Outdoor Life Network that we
did not  previously  own in October  2001.  Outdoor  Life Network is our 24-hour
network  devoted  exclusively  to  adventure  and  the  outdoor  lifestyle  with
distribution to approximately 41 million subscribers. Its programming focuses on
a wide range of outdoor activities  including  expeditions,  skiing,  bicycling,
surfing and camping.

     CN8-The Comcast Network

     CN8-The Comcast Network,  our regional programming service, is delivered to
approximately  3.5  million  cable  subscribers  in  Pennsylvania,  New  Jersey,
Delaware and Maryland.  CN8 provides original  programming,  including local and
regional news and public affairs,  regional sports,  health, cooking and family-
oriented programming.

     G4 Media

     G4 Media,  our 24-hour  programming  network,  is  dedicated  to creating a
lifestyle brand that is the source of entertainment,  news and information about
the interactive  entertainment industry,  including video, computer,  online and
wireless  games.  G4 Media is  expected  to launch  during  the  second or third
quarter of 2002.

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

                           LEGISLATION AND REGULATION

Cable

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

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

     The Communications Act and FCC Regulations

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

     o    subscriber rates,

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

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

     o    our franchise agreements with governmental authorities,

     o    cable system ownership limitations and prohibitions, and

     o    our use of utility poles and conduit.

     Subscriber Rates

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

     o    the lowest level of programming service,

                                     - 11 -

<PAGE>



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

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

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

     The Communications Act and the FCC's regulations also:

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

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

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

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

     o    prohibit  regulation  of rates by local  franchising  authorities  for
          other  services  provided  over a cable  system,  such  as  high-speed
          Internet services.

     Content Requirements

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

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

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

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

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

     o    commercial radio stations, and

     o    certain low-power television stations.

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

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

     The Communications Act and the FCC's regulations:

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

                                     - 12 -

<PAGE>



         affiliated company over competitors, and

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

     The FCC has concluded that the program access rules do not apply to certain
terrestrially-delivered  programming, such as CSN. The FCC decision is currently
under  appeal.  The FCC  also is  considering  whether  to  retain  the  current
prohibition,  which is  scheduled  to  expire  in  October  2002,  on  exclusive
programming  distribution  contracts  between  cable  operators  and  affiliated
program distributors.

     The Communications  Act contains  restrictions on the transmission by cable
operators  of obscene  programming.  The  Communications  Act requires the cable
operator,  upon the request of the  subscriber,  to scramble or otherwise  fully
block any channel that is not included in the programming  package  purchased by
the subscriber. Additionally, cable operators are required by the Communications
Act and the FCC's  regulations  to  provide  by sale or lease a lockbox or other
device that permits the subscriber to block the viewing of specific  channels in
the subscriber's home during periods selected by the subscriber.

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

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

     o    advertising in children's programming,

     o    political advertising,

     o    origination cablecasting,

     o    sponsorship identification, and

     o    closed captioning of video programming.

     The FCC has also  initiated a proceeding to evaluate its  jurisdiction  and
regulatory  authority  concerning  the  distribution  over cable  communications
systems of interactive television services, including advanced instant messaging
and interactive menu services.

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

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

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

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

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

     Various  companies,  including  telephone  companies  and ISPs,  have asked
local,  state and federal  governments to mandate that cable  operators  provide
capacity on their  broadband  infrastructure  so that these companies and others
may deliver high-speed Internet and interactive  television services directly to
subscribers  over cable  facilities.  Some cable  operators,  including us, have
successfully  challenged  efforts  by local  franchising  authorities  to impose
unilaterally so-called "open access" requirements.  Although the court decisions
dealing with this issue  generally  have  concluded  that the local  franchising
authority  cannot  regulate  Internet  access  over  cable  systems,  the  legal
rationale for these decisions has varied.

     In connection  with its review of the AOL-Time Warner merger in early 2001,
the FCC and the Federal  Trade  Commission  imposed  certain  access,  technical
performance and other requirements  relating to the merged company's  high-speed
Internet,  Interactive Television,  and advanced Instant Messaging services. The
FCC and the U.S.  Department  of  Justice  (DOJ)  are  currently  reviewing  our
proposed  merger  with  AT&T  Broadband,  but  we do  not  believe  the  factual
circumstances  involved in our merger with AT&T Broadband warrant the imposition
of comparable restrictions on the combined company.

     In  a   decision   adopted  in  March  2002   addressing   the   regulatory
classification of high-speed Internet services,  the FCC concluded that Internet
services delivered over cable operators'  communications  systems are interstate
"information  services," and it confirmed that cable  operators like us, who are
offering  high-speed  Internet  services,  are not  subject  to  common  carrier
requirements  to offer on a  stand-alone  basis to third  parties the  transport
functions underlying the information  services we offer to our subscribers.  The
FCC also  recently  initiated  separate  rulemaking  proceedings  to assess  the
appropriate  regulatory  frameworks,  including  the  role of  local  regulatory
authorities, governing broadband access to the Internet through cable operators'
and telephone companies' communications networks, respectively. In

                                     - 13 -

<PAGE>



the telephone broadband  proceeding,  the FCC has proposed to classify broadband
Internet  services  delivered  by  telephone  companies  over their own wireline
facilities  as  interstate  "information  services."  The  outcome  of these FCC
rulemaking  proceedings  may affect  significantly  our regulatory  obligations,
including whether we will be required to pay local  governmental  franchise fees
and/or federal and state universal service fees on our cable Internet  revenues.
The March 2002 decision of the FCC has been appealed to the courts.

     Some cable operators,  including us, have entered into contracts that allow
independent  ISPs to provide their Internet  services over the cable  operators'
communications  network. We expect such contractual  arrangements to become more
common in the future as cable  operators'  networks  evolve  and as  competitive
alternatives to cable broadband  networks continue to grow, thereby limiting the
need,  if  any,  for  government   action   mandating  access  by  ISPs  to  our
communications  networks.  We cannot  predict the ultimate  outcome of the FCC's
rulemaking proceedings,  the appeal of the FCC decision, the governmental review
of our proposed merger with AT&T Broadband,  or the impact of any new regulatory
requirements on our operations.

     Franchise Matters

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

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

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

     o    encourages competition with our existing cable systems by:

               o    allowing  municipalities  to operate cable  systems  without
                    franchises, and

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

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

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

     o    generally prohibits franchising authorities from:

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

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

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

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

     The Communications Act contains  procedures  designed to protect us against
arbitrary  denials of the  renewal  of our  franchises,  although a  franchising
authority under various  conditions can deny us a franchise  renewal.  Moreover,
even if our  franchise  is  renewed,  the  franchising  authority  may  seek our
agreement to new or  additional  requirements  such as  significant  upgrades in
facilities  and services or increased  franchise fees as a condition of renewal.
Similarly,  if a franchising authority's consent is required for the purchase or
sale  of a cable  system  or  franchise,  the  franchising  authority  may  seek
additional  franchise  requirements  on us in connection with a request for such
consent. Historically,  cable operators providing satisfactory services to their
subscribers  and complying  with the terms of their  franchises  have  typically
obtained franchise renewals.  We believe that we have generally met the terms of
our franchise  agreements and have provided  quality levels of service.  We have
never had a  franchise  revoked or  otherwise  been  denied the right to provide
service in a  municipality.  We  anticipate  that our future  franchise  renewal
prospects generally will be favorable.

     Various courts have considered  whether  franchising  authorities  have the
legal right to limit the number of franchises  awarded within a community and to
impose  certain  substantive  franchise   requirements  (e.g.  access  channels,
universal service and other technical  requirements).  These decisions have been
inconsistent and, until the United States Supreme Court rules

                                     - 14 -

<PAGE>



definitively  on the  scope of cable  operators'  constitutional  and  statutory
protections,  the legality of the franchising  process  generally and of various
specific franchise requirements is likely to be in a state of flux.

     Ownership Limitations

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

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

     o    subscriber ownership information reporting requirements, and

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

     The federal courts have rejected constitutional challenges to the statutory
ownership  limitations;  however,  a federal  appellate court concluded that the
FCC's 30% nationwide  cable  subscriber  ownership  limit and its 40% cap on the
number of  affiliated  programming  channels an operator may carry on its system
were  unconstitutional and that certain of its ownership  attribution rules were
not justified  properly.  The FCC recently initiated a rulemaking  proceeding to
determine  new  horizontal  and  vertical  cable  ownership  limitations  and to
evaluate its attribution standards. We are unable to predict the outcome of this
administrative proceeding or the impact any ownership restrictions might have on
our business and operations.

     The Communications  Act eliminated the statutory  prohibition on the common
ownership,  operation or control of a cable  system and a  television  broadcast
station in the same market.  The FCC eliminated its regulations  which precluded
the cross-ownership of a national broadcasting network and a cable system, and a
federal  appellate  court  recently  ordered  the FCC to repeal its  regulations
prohibiting  the common  ownership  of other  broadcasting  interests  and cable
systems in the same geographical areas.

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

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

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

     o    set  basic  standards  for  relationships  between  telecommunications
          providers, and

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

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

     Pole Attachment Regulation

     The  Communications  Act requires that utilities  provide cable systems and
telecommunications  carriers with nondiscriminatory  access to any pole, conduit
or right-of-way  controlled by the utility. The Communications Act also requires
the FCC to regulate the rates,  terms and conditions imposed by public utilities
for  cable  systems'  use  of  utility  pole  and  conduit  space  unless  state
authorities demonstrate to the FCC that they adequately regulate pole attachment
rates,  as is the case in certain states in which we operate.  In the absence of
state regulation,  the FCC administers pole attachment rates on a formula basis.
The FCC's original rate formula  governs the maximum rate certain  utilities may
charge for attachments to their poles and conduit by cable operators

                                     - 15 -

<PAGE>



providing only cable  services.  The FCC also adopted a second rate formula that
became effective in February 2001 and governs the maximum rate certain utilities
may charge for  attachments  to their poles and conduit by  companies  providing
telecommunications  services,  including cable operators. Any resulting increase
in  attachment  rates due to the FCC's new rate formula will be phased in over a
five-year period in equal annual increments, beginning in February 2001.

     The U.S.  Supreme Court recently upheld the FCC's  jurisdiction to regulate
the rates,  terms and conditions of cable  operators' pole  attachments that are
simultaneously  used to provide  high-speed  Internet access and cable services,
and a federal  appellate  court is currently  evaluating  whether the FCC's rate
formulas,  as applied in a specific case, provide "just  compensation" under the
Federal Constitution.  We have joined in several pending complaints filed at the
FCC by various state cable  associations  challenging  certain  utilities'  rate
increases and the unilateral  imposition of new contract terms. The utilities in
these cases have challenged,  among other things, the  constitutionality  of the
FCC's pole attachment rate formulas. We are unable to predict the outcome of the
legal challenge to the FCC's  regulations or the ultimate impact any revised FCC
rate formula,  any new pole attachment rate  regulations or any  modification of
the FCC's regulatory authority might have on our business and operations.

     Other Regulatory Requirements of the Communications Act and the FCC

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

     o    customer service,

     o    subscriber privacy,

     o    marketing practices,

     o    equal employment opportunity, and

     o    technical standards and equipment compatibility.

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

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

Copyright

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

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

     Our cable  communications  systems  often  utilize music in the programs we
provide  to  subscribers   including  local   advertising,   local   origination
programming and pay-per-view  events.  The right to use this music is controlled
by music  performing  rights  organizations  who  negotiate  on  behalf of their
members for license fees covering each  performance.  The cable industry and one
of these  organizations  previously agreed upon a standard  licensing  agreement
covering the  performance  of music  contained in programs  originated  by cable
operators and in pay-per-view  events. Cable industry  representatives  recently
negotiated  standard  license  agreements  with the two remaining  sizable music
performing rights  organizations  covering cable operators'  locally  originated
programming,  including  advertising  inserted by the  operator  in  programming
produced by other parties.  We expect that these  organizations will now seek to
execute  these  standard  agreements  with most cable  operators,  including us.
Although  each of these  agreements  requires  payment of music license fees for
earlier time periods,  we do not believe that the amount of license fees paid to
such  organizations will be significant to our financial  condition,  results of
operations or liquidity.


                                     - 16 -
<PAGE>

State and Local Regulation

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

     o    cable service rates,

     o    franchise fees,

     o    franchise term,

     o    system construction and maintenance obligations,

     o    system channel capacity,

     o    design and technical performance,

     o    customer service standards,

     o    franchise renewal,

     o    sale or transfer of the franchise,

     o    service territory of the franchisee,

     o    indemnification of the franchising authority,

     o    use and occupancy of public streets, and

     o    types of cable services provided.

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

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

Commerce and Content

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

                                    EMPLOYEES

     As of December 31, 2001, we had approximately  38,000  employees.  Of these
employees,  approximately  20,000  were  associated  with cable  communications,
approximately  11,000 were associated with commerce and approximately 7,000 were
associated with our other divisions.  We believe that our relationships with our
employees are good.


ITEM 2       PROPERTIES

     Cable

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

     Commerce

     Television  studios,  customer  service  call  centers,


                                     - 17 -

<PAGE>


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 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.  QVC's  warehousing  and  distribution
facilities will continue to be upgraded over the next several years.

     Content

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

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

ITEM 3       LEGAL PROCEEDINGS

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

ITEM 4       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable.



                                     - 18 -

<PAGE>



ITEM 4A      EXECUTIVE OFFICERS OF THE REGISTRANT

     The  current  term of office of each of our  officers  expires at the first
meeting  of our  Board  of  Directors  following  the  next  Annual  Meeting  of
Shareholders, presently scheduled to be held in June 2002, or as soon thereafter
as each of their  successors is elected and qualified.  The following table sets
forth certain  information  concerning our executive  officers,  including their
ages, positions and tenure as of December 31, 2001:

<TABLE>
<CAPTION>
                                        Officer
Name                      Age            Since                     Position with Comcast
---------------------  ----------     ------------     --------------------------------------------------------
<S>                        <C>            <C>         <C>
Ralph J. Roberts           81             1969         Chairman of the Board of Directors; Director
Julian A. Brodsky          68             1969         Vice Chairman of the Board of Directors; Director
Brian L. Roberts           42             1986         President; Director
John R. Alchin             53             1990         Executive Vice President; Treasurer
Stephen B. Burke           43             1998         Executive Vice President
Lawrence S. Smith          54             1988         Executive Vice President
Stanley L. Wang            61             1981         Executive Vice President - Law and Administration
Lawrence J. Salva          45             2000         Senior Vice President and Chief Accounting Officer
</TABLE>

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

     Ralph J.  Roberts has served as a Director and as our Chairman of the Board
of Directors for more than five years.  Mr.  Roberts  devotes a major portion of
his time to our business and affairs.  Mr.  Roberts also  presently  serves as a
Director of Comcast  Cable  Communications,  Inc.  Mr.  Roberts is the father of
Brian L. Roberts.

     Julian A. Brodsky has served as a Director and as our Vice  Chairman of the
Board of Directors for more than five years. Mr. Brodsky devotes a major portion
of his time to our business and affairs.  Mr. Brodsky has served as the Chairman
of Comcast  Interactive  Capital,  LP since its formation in January  1999.  Mr.
Brodsky is also a Director of RBB Fund, Inc. and NDS Group plc.

     Brian L.  Roberts has served as our  President  and as a Director  for more
than five years. Mr. Roberts devotes a major portion of his time to our business
and affairs.  Mr.  Roberts is Manager of Sural LLC ("Sural"),  a  privately-held
investment company and our controlling shareholder. As of December 31, 2001, our
shares owned by Sural  constituted  approximately 87% of the voting power of the
two classes of our voting  common stock  combined.  Mr.  Roberts has sole voting
power over stock representing a majority of voting power of all Sural stock and,
therefore,  has voting  control  over  Comcast.  Mr.  Roberts  is our  Principal
Executive  Officer.  Mr. Roberts also presently  serves as a Director of Comcast
Cable  Communications,  Inc. and The Bank of New York.  Mr.  Roberts is a son of
Ralph J. Roberts.

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

     Stephen B. Burke was named an Executive Vice President in January 2000. Mr.
Burke joined the Company in June 1998 as Senior Vice President and has served as
President  of Comcast  Cable  Communications,  Inc.  since  that time.  Prior to
joining the Company,  Mr. Burke served with The Walt Disney Company as President
of ABC  Broadcasting  from January  1996 to June 1998,  and as President of Euro
Disney from October 1992 to January 1996.

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

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

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



                                     - 19 -

<PAGE>



                                     PART II

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

     Our Class A Special  Common  Stock is included  on Nasdaq  under the symbol
CMCSK and our Class A Common Stock is included on Nasdaq under the symbol CMCSA.
There is no established  public trading market for our Class B Common Stock. Our
Class B Common Stock can be converted,  on a share for share basis, into Class A
Special  or Class A Common  Stock.  The  following  table  sets  forth,  for the
indicated  periods,  the closing  price range of our Class A Special and Class A
Common Stock as furnished by Nasdaq.


<TABLE>
<CAPTION>
                                                             Class A
                                                             Special                          Class A
                                                   -------------------------------------------------------------
                                                       High            Low              High            Low
                                                   -------------   -----------      -------------   ------------
2001
<S>                                                     <C>           <C>                <C>           <C>
First Quarter......................................     $45.88        $38.69             $45.25        $38.06
Second Quarter.....................................      45.50         39.50              44.75         38.88
Third Quarter......................................      43.30         32.51              42.70         32.79
Fourth Quarter.....................................      40.18         35.19              40.06         34.95

2000
First Quarter......................................     $54.56        $38.31             $51.44        $36.25
Second Quarter.....................................      44.19         29.75              41.75         29.75
Third Quarter......................................      41.06         31.06              40.69         30.75
Fourth Quarter.....................................      43.94         34.00              43.94         33.88
</TABLE>

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

     Our Board of  Directors  eliminated  the  quarterly  cash  dividend  on all
classes of our common stock in March 1999.  We do not intend to pay dividends on
our Class A Special, Class A or Class B Common Stock for the foreseeable future.

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

     As of December  31, 2001,  there were 4,088  record  holders of our Class A
Special  Common Stock,  1,484 record holders of our Class A Common Stock and one
record holder of our Class B Common Stock.




                                     - 20 -

<PAGE>



ITEM 6        SELECTED FINANCIAL DATA


<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                     2001(1)      2000(1)      1999(1)       1998       1997
                                                   -------------------------------------------------------------
                                                           (Dollars in millions, except per share data)
                                                              -------------------------------------------------
<S>                                                   <C>          <C>          <C>         <C>        <C>
Statement of Operations Data:
Revenues...........................................   $9,674.2     $8,218.6     $6,529.2    $5,419.0   $4,700.4
Operating income (loss)............................     (746.2)      (161.0)       664.0       557.1      466.6
Income (loss) from continuing operations before
     extraordinary items and cumulative effect
     of accounting change..........................      225.6      2,045.1        780.9     1,007.7     (182.9)
Discontinued operations (2)........................                                335.8       (31.4)     (25.6)
Extraordinary items................................       (1.5)       (23.6)       (51.0)       (4.2)     (30.2)
Cumulative effect of accounting change.............      384.5
Net income (loss)..................................      608.6      2,021.5      1,065.7       972.1     (238.7)
Basic earnings (loss) for common stockholders
  per common share (3)
     Income (loss) from continuing operations
        before extraordinary items and cumulative
        effect of accounting change................       $.24        $2.27        $1.00       $1.34      ($.29)
     Discontinued operations (2)...................                                  .45        (.04)      (.04)
     Extraordinary items...........................                    (.03)        (.07)       (.01)      (.04)
     Cumulative effect of accounting change........        .40
                                                   -----------   ----------   ----------  ---------- ----------
     Net income (loss).............................       $.64        $2.24        $1.38       $1.29      ($.37)
                                                   ===========   ==========   ==========  ========== ==========
Diluted earnings (loss) for common
  stockholders per common share (3)
     Income (loss) from continuing operations
        before extraordinary items and cumulative
        effect of accounting change................       $.23        $2.16         $.95       $1.25      ($.29)
     Discontinued operations (2)...................                                  .41        (.03)      (.04)
     Extraordinary items...........................                    (.03)        (.06)       (.01)      (.04)
     Cumulative effect of accounting change .......        .40
                                                   -----------   ----------   ----------  ---------- ----------
     Net income (loss).............................       $.63        $2.13        $1.30       $1.21      ($.37)
                                                   ===========   ==========   ==========  ========== ==========
Cash dividends declared per common share (3).......                                           $.0467     $.0467

Balance Sheet Data (at year end):
Total assets.......................................  $38,131.8    $35,744.5    $28,685.6   $14,710.5  $11,234.3
Working capital....................................    1,419.5      1,670.9      4,771.6     2,497.0       13.6
Long-term debt.....................................   11,741.6     10,517.4      8,707.2     5,464.2    5,334.1
Stockholders' equity...............................   14,473.0     14,086.4     10,341.3     3,815.3    1,646.5

Supplementary Financial Data:
Operating income before depreciation and
     amortization (4)..............................   $2,701.8     $2,470.3     $1,880.0    $1,496.7   $1,293.1
Net cash provided by (used in) (5)
     Operating activities..........................    1,229.5      1,219.3      1,249.4     1,067.7      844.6
     Financing activities..........................    1,476.3       (271.4)     1,341.4       809.2      283.9
     Investing activities..........................   (3,007.3)    (1,218.6)    (2,539.3)   (1,415.3)  (1,045.8)
----------
<FN>
(1)  You should see "Management's Discussion and Analysis of Financial Condition
     and Results of Operations" in Item 7 of this Annual Report for a discussion
     of events which affect the  comparability  of the information  reflected in
     this financial data.
(2)  In July 1999, we sold Comcast Cellular  Corporation to SBC  Communications,
     Inc.  Comcast  Cellular is presented as a  discontinued  operation  for all
     periods presented (see Note 5 to our consolidated  financial  statements in
     Item 8 of this Annual Report).
(3)  We have  adjusted  these for our  two-for-one  stock split in the form of a
     100% stock dividend in May 1999.

                                     - 21 -

<PAGE>



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

                                     - 22 -

<PAGE>



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

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 cash  requirements  for  acquisitions  and capital
expenditures through borrowings of long-term debt, sales of investments and from
existing cash, cash equivalents and short-term investments.

     Except where specifically indicated,  the following management's discussion
and analysis of financial  condition and results of operations  does not include
the anticipated effects of the AT&T Broadband transaction.

General Developments of Business

     Refer to "General Developments of Our Business" in Part I and Note 5 to our
financial  statements in Item 8 for a discussion of our  acquisitions  and other
significant events.

Most Significant and Subjective Estimates

     The  following  discussion  and  analysis of our  financial  condition  and
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 and  assumptions  that affect the reported  amounts of assets,
liabilities,  revenues and expenses, and related disclosure of contingent assets
and  liabilities.  On an on-going  basis,  we evaluate our estimates,  including
those related to sales returns, doubtful accounts, inventories,  investments and
derivative financial instruments,  long-lived assets, non-monetary transactions,
and contingencies. We base our estimates 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  judgments  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.

     We believe the following  represent  the most  significant  and  subjective
estimates used in the preparation of our consolidated financial statements.

     QVC, Inc. ("QVC") is our majority-owned  electronic  retailing  subsidiary.
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.
QVC estimates and maintains  reserves for expected  sales returns and allowances
based  principally  on its return  practices and its historical  experience.  If
actual sales returns  differ from the estimated  return rates  projected by QVC,
QVC may need to  increase  or  decrease  its  reserves  for  sales  returns  and
allowances, which could affect our reported income.

     We maintain allowances for doubtful accounts for estimated losses resulting
from our customers' failure to make required payments. If the future payments by
our  customers  were to differ  from our  estimates,  we may need to increase or
decrease our allowances for doubtful  accounts,  which could affect our reported
income.

     QVC maintains  reserves for excess and obsolete  inventories to reflect its
inventory at the lower of its stated cost or market  value.  QVC's  estimate for
excess and  obsolete  inventory  is based upon QVC's  assumptions  about  future
demand and market conditions.  If future demand and actual market conditions are
more or less favorable than those  projected by QVC, QVC may need to increase or
decrease its reserves  for excess and obsolete  inventories,  which could affect
our reported income.

     We hold  minority  interests in companies  generally  having  operations or
technology  in areas  within our  strategic  focus,  some of which are  publicly
traded and may have highly  volatile share prices.  We also hold  investments in
private  companies that have no active market by which fair values can be easily
assessed.  We  record  an  investment  impairment  charge  when  we  believe  an
investment  has  experienced  a decline in value  that is other than  temporary.
Future  adverse  changes  in market  conditions  or poor  operating  results  of
underlying  investments  could  result in losses or an  inability to recover the
carrying value of the  investments  that may not be reflected in an investment's
current carrying value,  thereby possibly  requiring an impairment charge in the
future.

     We use derivative  financial  instruments  to manage  exposures to interest
rates and equity  prices,  and to manage the cost of our share  repurchases.  We
make investments in businesses,  to some degree,  through the purchase of equity
call option or call warrant agreements.  We have issued indexed debt instruments
and entered  into prepaid  forward sale  agreements  whose  value,  in part,  is
derived from the market value of Sprint PCS common stock,  and we have also sold
call  options on certain of our  investments  in equity  securities  in order to
monetize a

                                     - 23 -

<PAGE>



portion of those investments. We record all our derivative financial instruments
on our  balance  sheet  at  their  estimated  fair  values.  Other  than for the
effective  portion of our derivative  instruments that we designate as cash flow
hedges,  all changes in the fair value of our derivative  financial  instruments
are recorded each period in current  earnings.  The estimated fair values of our
derivative  financial  instruments  are  determined  through  the use of various
valuation models that incorporate certain market assumptions such as volatility,
dividend  yield and interest  rates.  The estimated  fair values  assigned could
change significantly as a result of changes in the underlying assumptions.

     We  periodically  examine  those  instruments  that we have entered into to
hedge  exposure  to  interest  rate and equity  price  risks to ensure  that the
instruments are matched with underlying assets and liabilities, reduce our risks
relating  to interest  rates and equity  prices and,  through  market  value and
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 our
statement of operations.  Although we periodically  monitor hedge effectiveness,
market conditions could cause our hedges to become ineffective, thereby reducing
our ability to manage our risks and requiring  additional amounts to be recorded
through our statement of operations.  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  periodically  evaluate the  recoverability  of our  long-lived  assets,
including  property and  equipment and  intangible  assets,  whenever  events or
changes  in  circumstances   indicate  that  the  carrying  amount  may  not  be
recoverable.  Our 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 value of
an asset  determined by these  evaluations is less than its carrying  amount,  a
loss is recognized  for the  difference  between the fair value and the carrying
value  of the  asset.  Future  adverse  changes  in  market  conditions  or poor
operating  results of the related  business may indicate an inability to recover
the carrying  value of the assets,  thereby  possibly  requiring  an  impairment
charge in the future.

     Periodically,  we enter into non-monetary transactions such as exchanges of
cable systems and exchanges of investments which require us to make estimates of
the fair values of the assets involved in order to record these  transactions in
our financial  statements.  Fair values assigned affect operating results in the
period of the exchange and  possibly in future  periods.  In the case of a cable
systems  exchange,  the  gain  or  loss  on the  systems  sold  and  the  future
depreciation and amortization expense on the assets acquired are affected by the
fair values assigned to the transaction.

     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.

Liquidity and Capital Resources

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

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

     We  have  both  the  ability  and  intent  to  redeem  the  $1.096  billion
outstanding  Zero Coupon  Debentures  with amounts  available  under  subsidiary
credit  facilities if holders  exercise their rights to require us to repurchase
the Zero Coupon Debentures in December 2002. As of December 31, 2001, certain of
our  subsidiaries  had  unused  lines of credit of $3.460  billion  under  their
respective credit facilities.

     Refer  to  Note 7 to our  financial  statements  included  in  Item 8 for a
discussion  of  our  Zero  Coupon  Debentures.  Refer  to the  Contractual  Cash
Obligations  and  Commitments  table on page 28 and to Note 11 to our  financial
statements  included  in  Item  8  for  a  discussion  of  our  commitments  and
contingencies.

AT&T Broadband Transaction

     Excluding  AT&T  Broadband's  exchangeable  notes,  which  are  mandatorily
redeemable at AT&T  Broadband's  option into shares of certain  publicly  traded
companies  held by AT&T  Broadband,  we currently  estimate that an aggregate of
approximately  $20  billion  of  assumed  and  refinanced  indebtedness  will be
required upon completion of the AT&T Broadband transaction. At the completion of
the   transaction,   we  anticipate  that  the  combined   company  will  assume
approximately $7 to $8 billion of

                                     - 24 -

<PAGE>



debt and will require  financing of $11 billion to $14 billion.  The  financing,
while not a condition for the closing, is expected to include:

     o    approximately  $9  billion to $10  billion to retire the  intercompany
          debt  balance  which  AT&T  Broadband  is  expected  to owe AT&T Corp.
          ("AT&T"),

     o    approximately  $1  billion to $2 billion  to  refinance  certain  AT&T
          Broadband  debt that may be put for  redemption  by  investors or that
          will mature on or soon after the closing date for the transaction, and

     o    approximately  $1 billion to $2  billion to provide  appropriate  cash
          reserves  to fund the  operations  and  capital  expenditures  of AT&T
          Broadband after completion of the transaction.

     We are in the process of attempting to secure an aggregate of $12.5 billion
in new indebtedness in order to achieve these funding requirements. If we obtain
this  financing,  we  expect  that we will be  required  to  provide  subsidiary
guarantees, including guarantees by certain of our wholly owned subsidiaries and
by subsidiaries of AT&T Broadband.

     We may  also  use  other  available  sources  of  financing  to fund  these
requirements, including:

     o    our existing cash, cash equivalents and short- term investments, which
          totaled $2.973 billion as of December 31, 2001,

     o    amounts  available  under our  subsidiaries'  lines of  credit,  which
          totaled $3.460 billion as of December 31, 2001, and

     o    through the sales of our and AT&T Broadband's  investments,  including
          AT&T Broadband's investment in Time Warner Entertainment.

     Subsequent  to closing of the AT&T  Broadband  transaction,  we will have a
substantially  higher amount of debt, interest expense and capital  expenditures
at the  combined  company.  If the credit  rating  agencies  determine  that the
combined company is less creditworthy, on a combined basis, than that of Comcast
on an  historical  basis,  it is possible that our cost of and access to capital
could be negatively affected. We currently hold investment grade ratings for our
various debt  securities.  If our debt  securities are downgraded as a result of
our  assumption  of  debt  in the  AT&T  Broadband  transaction,  access  to the
commercial  paper market would likely become  limited and the costs of borrowing
under alternative sources would likely increase.

     Cash, Cash Equivalents and Short-term Investments

     We  have  traditionally   maintained   significant  levels  of  cash,  cash
equivalents  and  short-term   investments  to  meet  our  short-term  liquidity
requirements.  Our cash  equivalents and short-term  investments are recorded at
fair value. Cash, cash equivalents and short-term investments as of December 31,
2001 were $2.973 billion, substantially all of which is unrestricted.

     Investments

     A significant  portion of our investments are in publicly traded  companies
and are reflected at fair value, which fluctuates with market changes.

     We do not have any significant contractual funding commitments with respect
to any of our  investments.  Our ownership  interests in these  investments may,
however, be diluted if we do not fund our investees'  non-binding capital calls.
We  continually  evaluate our existing  investments,  as well as new  investment
opportunities.

     Refer  to  Note 6 to our  financial  statements  included  in  Item 8 for a
discussion of our investments.

     Capital Expenditures

     During  2002,  we expect to incur  approximately  $1.5  billion  of capital
expenditures  in  our  cable,   commerce  and  content   businesses,   including
approximately $1.3 billion for our cable operations.

     We  anticipate  capital  expenditures  for  years  subsequent  to 2002 will
continue  to be  significant.  As of  December  31,  2001,  we do not  have  any
significant contractual obligations for capital expenditures.

     Cable

     We expect our 2002 cable capital  expenditures  will include  approximately
$225  million  for  the  upgrading  and  rebuilding  of  certain  of  our  cable
communications  systems,  approximately $625 million for the deployment of cable
modems,  digital  converters and new service  offerings,  and approximately $450
million for recurring capital projects.

     The amount of our capital  expenditures  for years  subsequent to 2002 will
depend on numerous factors, some of which are beyond our control including:

     o    competition,

     o    cable system capacity of newly acquired systems, and


                                     - 25 -
<PAGE>



     o    the timing and rate of deployment of new services.

     Commerce

     During  2002,  we expect to incur  approximately  $175  million  of capital
expenditures  for  QVC,   primarily  for  the  upgrading  of  QVC's  warehousing
facilities,   distribution   facilities   and   information   systems.   Capital
expenditures in QVC's  international  operations  represent  nearly 50% of QVC's
total capital expenditures.

     Affiliation Agreements

     Certain  of  our  content   subsidiaries  and  QVC  enter  into  multi-year
affiliation  agreements  with various cable and satellite  system  operators for
carriage of their respective  programming.  In connection with these affiliation
agreements, we generally pay a fee to the cable or satellite operator based upon
the number of subscribers.  During 2002, we expect to incur $200 million to $300
million related to these affiliation agreements.

     Financing

     As of December 31, 2001 and 2000,  our long-term  debt,  including  current
portion, was $12.202 billion and $10.811 billion, respectively.

     The $1.391  billion  increase  from  December 31, 2000 to December 31, 2001
results principally from the effects of our net borrowings, offset by the $194.2
million  aggregate  reduction  to the  carrying  value  of  our 2%  Exchangeable
Subordinated Debentures due 2029 (the "ZONES") during 2001.

     Excluding the effects of interest rate risk management  instruments,  13.4%
and 28.5% of our long- term debt,  including current portion, as of December 31,
2001 and 2000,  respectively,  was at variable rates. The decrease from December
31, 2000 to December 31, 2001 in the  percentage  of our variable  rate debt was
due  principally to the effects of our 2001  financings.  See "Statement of Cash
Flows" below.

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

     Refer to Notes 7 and 8 to our financial statements included in Item 8 for a
discussion of our financing activities.

     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 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.


                                     - 26 -

<PAGE>



     The table set forth below  summarizes the fair values and contract terms of
financial  instruments  subject to  interest  rate risk  maintained  by us as of
December 31, 2001 (dollars in millions):

<TABLE>
<CAPTION>
                                                                                                                  Fair
                                                              Expected Maturity Date                            Value at
                                       2002      2003      2004       2005      2006    Thereafter    Total       12/31/01
                                       ----      ----      ----       ----      ----    ----------    -----       --------
<S>                                     <C>        <C>      <C>      <C>       <C>       <C>        <C>         <C>
Debt
Fixed Rate..........................    $210.6     $11.9    $330.9   $708.7    $653.1    $8,656.4   $10,571.6   $10,928.4
   Average Interest Rate............      9.6%      8.6%      7.6%     8.4%      7.0%        5.8%        6.2%

Variable Rate.......................    $249.6     $61.3      $0.1 $1,317.5      $0.1        $1.6    $1,630.2    $1,630.2
   Average Interest Rate............      2.4%      3.4%      5.8%     5.2%      6.9%        6.9%        4.7%

Interest Rate Instruments
Variable to Fixed Swaps.............    $178.6     $71.7                                               $250.3       ($5.5)
   Average Pay Rate.................      4.8%      4.9%                                                 4.9%
   Average Receive Rate.............      2.0%      3.0%                                                 2.3%
Fixed to Variable Swaps (1).........                        $300.0             $300.0      $350.0      $950.0       $46.8
   Average Pay Rate.................                          5.5%               5.9%        6.8%        6.1%
   Average Receive Rate.............                          8.1%               6.4%        7.9%        7.5%

<FN>
(1)  During January and February  2002, we settled all $950.0  million  notional
     amount  of our  Fixed to  Variable  Swaps and  received  proceeds  of $56.8
     million.
</FN>
</TABLE>

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


     The  notional  amounts of interest  rate  instruments,  as presented in the
table  above,  are used to measure  interest to be paid or  received  and do not
represent  the amount of  exposure  to credit  loss.  The  estimated  fair value
approximates  the  proceeds  (costs) to settle  the  outstanding  contracts.  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,  2001,  plus the  borrowing  margin in
effect for each credit  facility  at  December  31,  2001.  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, 2001. While Swaps,  Caps and Collars  represent an integral part of
our interest rate risk management program,  their incremental effect on interest
expense  for  the  years  ended  December  31,  2001,  2000  and  1999  was  not
significant.

     Equity Price Risk Management

     During  1999,  we entered  into  cashless  collar  agreements  (the "Equity
Collars") covering $1.365 billion notional amount of our Sprint PCS common stock
which we account for at fair value. The Equity Collars limit our exposure to and
benefits from price  fluctuations  in the Sprint PCS common stock.  During 2001,
$483.7 million  notional amount of Equity Collars matured and we sold or entered
into prepaid forward sales of the related Sprint PCS common stock. Refer to Note
6 to our financial statements included in Item 8 for a discussion of our prepaid
forward sales of Sprint PCS common stock.  The remaining $881.0 million notional
amount of Equity  Collars  mature between 2002 and 2003. As we had accounted for
the Equity  Collars as a hedge,  changes in the value of the Equity Collars were
substantially  offset by changes  in the value of the  Sprint  PCS common  stock
which were also marked to market through accumulated other comprehensive  income
in our balance sheet through December 31, 2000.

     In  connection  with the  adoption of  Statement  of  Financial  Accounting
Standards ("SFAS") No. 133,  "Accounting for Derivative  Instruments and Hedging
Activities," as amended,  on January 1, 2001, we reclassified  our investment in
Sprint PCS from an available  for sale  security to a trading  security.  During
2001,  the  increase  in the fair value of our  investment  in Sprint PCS common
stock of $284.4  million was partially  offset by the decrease in the fair value
of the Equity  Collars  and the  increase  in the fair  value of the  derivative
components of the ZONES and prepaid forward sales.  See "Results of Operations -
Investment Income" below.

     Accumulated Other Comprehensive Income

     The change in accumulated other comprehensive income from December 31, 2000
to December 31, 2001 is principally  related to realized gains and losses on our
investments  classified as available for sale, and reclassification  adjustments
related to the effects of adoption  of SFAS No. 133.  The change in  accumulated
other  comprehensive  income from  December  31,  1999 to  December  31, 2000 is
principally  related  to the  decline  in  unrealized  gains on our  investments
classified as available

                                     - 27 -

<PAGE>



for sale held throughout the year.

     Contractual Cash Obligations and Commitments

     In January 2002,  the  Securities  and Exchange  Commission  ("SEC") issued
Financial  Reporting Release No. 61,  "Commission  Statement about  Management's
Discussion and Analysis of Financial  Condition and Results of Operations" ("FRR
No. 61"). While FRR No. 61 does not create new or modify existing  requirements,
it does set forth certain views of the SEC regarding  disclosure  that should be
considered by registrants. Among other things, FRR No. 61 encourages registrants
to provide disclosure in one place, within Management's  Discussion and Analysis
of  Financial  Condition  and Results of  Operations,  of the on and off balance
sheet arrangements that may affect liquidity and capital resources.  As there is
no prescribed  format for this  disclosure,  we have segregated our arrangements
that may affect liquidity and capital  resources  between those contractual cash
obligations that are recorded in our financial  statements and those commitments
that are disclosed in the notes to our financial  statements in accordance  with
accounting principles generally accepted in the United States. Future rulemaking
by the SEC  could  result  in the  form and  content  of this  disclosure  being
different  from the  information  that we have  presented  below.  The following
tables  summarize our  obligations  and commitments as of December 31, 2001, and
the  effect  such  obligations  and  commitments  are  expected  to  have on our
liquidity and cash flow in future periods.

<TABLE>
<CAPTION>
                                                                           Payments Due by Period
                                                              -------------------------------------------------
                                                              Less than      1 - 3        4 - 5       After 5
                                                   Total        1 year       years        years        years
                                                 ----------   ----------   ----------   ----------   ----------
                                                                     (dollars in millions)
                                                 ----------   ----------   ----------   ----------   ----------
<S>                                              <C>             <C>          <C>        <C>          <C>
Contractual Cash Obligations
Long-term debt (1)..............................  $12,201.8       $460.2       $404.2     $2,679.4     $8,658.0
Other long-term obligations (2).................      437.4        138.9        179.3         26.5         92.7
                                                 ----------   ----------   ----------   ----------   ----------
     Total contractual cash obligations.........  $12,639.2       $599.1       $583.5     $2,705.9     $8,750.7
                                                 ----------   ----------   ----------   ----------   ----------

Commitments
Operating leases (3)............................     $487.9        $98.6       $146.8        $93.9       $148.6
Programming agreements (4)......................      844.0         95.4        166.6        168.4        413.6
Professional sports contracts (5)...............      403.3        122.5        193.3         79.5          8.0
Guarantees (6)..................................       75.0                      75.0
                                                 ----------   ----------   ----------   ----------   ----------
     Total commitments..........................   $1,810.2       $316.5       $581.7       $341.8       $570.2
                                                 ==========   ==========   ==========   ==========   ==========
------------
<FN>
(1)  The table  presents  maturities of long-term  debt  outstanding,  including
     capital lease obligations,  as of December 31, 2001. Refer to Note 7 to our
     financial  statements included in Item 8 for a description of our long-term
     debt.
(2)  Other long-term  obligations  consist principally of the Company's deferred
     compensation  obligations,  post-  retirement and  post-employment  benefit
     obligations, and program rights payable under license agreements.
(3)  Operating  leases include the Company's  minimum annual rental  commitments
     for office  space,  equipment  and  transponder  service  agreements  under
     noncancellable operating leases.
(4)  Certain of the Company's programming networks (CSN, CSN Mid-Atlantic,  CSS,
     E!, TGC, OLN and G4) have entered into license  agreements for programs and
     sporting events which will be available for telecast subsequent to December
     31, 2001.  Programming agreements represent the Company's minimum aggregate
     commitments under these agreements.
(5)  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.  Professional  sports  contracts
     represent the Company's future commitments under these contracts.
(6)  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.  Refer to Note
     11 to our financial statements included in Item 8 for a description of this
     contingency.
</FN>
</TABLE>


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



                                     - 28 -

<PAGE>



Statement of Cash Flows

     Cash and cash equivalents  decreased $301.5 million as of December 31, 2001
from December 31, 2000. The decrease in cash and cash equivalents  resulted from
cash flows from  operating,  financing  and  investing  activities  as explained
below.

     Net cash  provided  by  operating  activities  from  continuing  operations
amounted to $1.230 billion for the year ended December 31, 2001, due principally
to our operating income before  depreciation  and amortization  (see "Results of
Operations"),  offset by changes in working capital as a result of the timing of
receipts and  disbursements  and the effects of net interest and current  income
tax expense.

     Net cash  provided  by  financing  activities  from  continuing  operations
includes  borrowings  and  repayments  of  debt,  as well as the  issuances  and
repurchases of our equity securities.  Net cash provided by financing activities
from  continuing  operations  was $1.476 billion for the year ended December 31,
2001. During 2001, we borrowed $5.686 billion, consisting of:

     o    $2.991 billion from Comcast Cable's senior notes offerings,

     o    $1.470 billion under Comcast Cable's commercial paper program,

     o    $1.075 billion under revolving credit facilities, and

     o    $150.3 million from our Zero Coupon Debentures offering.

     During 2001,  we repaid $4.188  billion of our long-term debt,  consisting
of:

     o    $2.396 billion under Comcast Cable's commercial paper program,

     o    $1.612 billion on certain of our revolving credit facilities,

     o    $109.6 million of our senior subordinated debentures, and

     o    $70.3 million of our Zero Coupon Debentures.


     In addition,  during 2001, we received proceeds of $27.2 million related to
issuances of our common stock, we repurchased $27.1 million of our common stock,
and we incurred $22.5 million of deferred financing costs.

     Net cash used in investing  activities from continuing  operations includes
the effects of  acquisitions,  net of cash acquired,  purchases of  investments,
capital expenditures and additions to intangible assets, offset by proceeds from
sales of  investments.  Net cash used in investing  activities  from  continuing
operations was $3.007 billion for the year ended December 31, 2001.

     During  2001,  acquisitions,  net of  cash  acquired,  amounted  to  $1.329
billion, consisting primarily of:

     o    $518.7 million for the cable system serving Baltimore City,

     o    $305.9 million for a controlling interest in The Golf Channel, and

     o    $396.8 million for the acquisition of Outdoor Life Network.

Results of Operations

     The effects of our recent  acquisitions  were to increase  our revenues and
expenses, resulting in increases in our operating income before depreciation and
amortization. The increases in our property and equipment, intangible assets and
long-term  debt,  and  the  corresponding  increases  in  depreciation  expense,
amortization  expense and  interest  expense  from 2000 to 2001 and from 1999 to
2000 are  primarily  due to the effects of our  acquisitions,  our cable systems
exchanges and our increased levels of capital expenditures.

     Refer to Notes 5 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 SFAS No. 142, "Goodwill and Other Intangible Assets," on January
1,  2002,  as  required  by the new  statement.  We  refer  you to page 36 for a
discussion of the expected impact the adoption of the new statement will have on
our consolidated financial condition and results of operations.

                                     - 29 -

<PAGE>



     Our summarized consolidated financial information for the three years ended
December 31, 2001 is as follows (dollars in millions, "NM" denotes percentage is
not meaningful):

<TABLE>
<CAPTION>
                                                                       Year Ended
                                                                      December 31,        Increase/(Decrease)
                                                                    2001        2000          $          %
                                                                 ----------   ---------   ----------  --------
<S>                                                                <C>         <C>          <C>           <C>
Revenues........................................................   $9,674.2    $8,218.6     $1,455.6      17.7%
Cost of goods sold from electronic retailing....................    2,514.0     2,284.9        229.1      10.0
Operating, selling, general and administrative expenses.........    4,458.4     3,463.4        995.0      28.7
Depreciation....................................................    1,141.8       837.3        304.5      36.4
Amortization....................................................    2,306.2     1,794.0        512.2      28.6
                                                                 ----------   ---------   ----------  --------
Operating loss..................................................     (746.2)     (161.0)       585.2     363.5
                                                                 ----------   ---------   ----------  --------
Interest expense................................................     (731.8)     (691.4)        40.4       5.8
Investment income...............................................    1,061.7       983.9         77.8       7.9
Income related to indexed debt..................................                  666.0       (666.0)   (100.0)
Equity in net losses of affiliates..............................      (28.5)      (21.3)         7.2      33.8
Other income....................................................    1,301.0     2,825.5     (1,524.5)    (54.0)
Income tax expense..............................................     (470.2)   (1,441.3)      (971.1)    (67.4)
Minority interest...............................................     (160.4)     (115.3)        45.1      39.1
                                                                 ----------   ---------   ----------  --------
Income from continuing operations before extraordinary items
   and cumulative effect of accounting change...................     $225.6    $2,045.1    ($1,819.5)    (89.0%)
                                                                 ==========   =========   ==========  ========
Operating income before depreciation and amortization (1) ......   $2,701.8    $2,470.3       $231.5       9.4%
                                                                 ==========   =========   ==========  ========

                                                                       Year Ended
                                                                      December 31,        Increase/(Decrease)
                                                                    2000        1999          $          %
                                                                 ----------   ---------   ----------  --------
Revenues........................................................   $8,218.6    $6,529.2     $1,689.4      25.9%
Cost of goods sold from electronic retailing....................    2,284.9     2,060.0        224.9      10.9
Operating, selling, general and administrative expenses.........    3,463.4     2,589.2        874.2      33.8
Depreciation....................................................      837.3       572.0        265.3      46.4
Amortization....................................................    1,794.0       644.0      1,150.0     178.6
                                                                 ----------   ---------   ----------  --------
Operating income (loss).........................................     (161.0)      664.0       (825.0)       NM
                                                                 ----------   ---------   ----------  --------
Interest expense................................................     (691.4)     (538.3)       153.1      28.4
Investment income...............................................      983.9       629.5        354.4      56.3
Income (expense) related to indexed debt........................      666.0      (666.0)     1,332.0        NM
Equity in net income (losses) of affiliates.....................      (21.3)        1.4        (22.7)       NM
Other income....................................................    2,825.5     1,409.4      1,416.1     100.5
Income tax expense..............................................   (1,441.3)     (723.7)       717.6      99.2
Minority interest...............................................     (115.3)        4.6       (119.9)       NM
                                                                 ----------   ---------   ----------  --------
Income from continuing operations before
   extraordinary items..........................................   $2,045.1      $780.9     $1,264.2     161.9%
                                                                 ==========   =========   ==========  ========
Operating income before depreciation and amortization (1) ......   $2,470.3    $1,880.0       $590.3      31.4%
                                                                 ==========   =========   ==========  ========
------------
<FN>
(1)  Operating income before  depreciation and amortization is commonly referred
     to in our  businesses as "operating  cash flow."  Operating  cash flow is a
     measure of a company's ability to generate cash to service its obligations,
     including  debt  service  obligations,  and to  finance  capital  and other
     expenditures. In part due to the capital intensive nature of our businesses
     and  the  resulting   significant   level  of  non-cash   depreciation  and
     amortization expense,  operating cash flow is frequently used as one of the
     bases for comparing  businesses in our industries,  although our measure of
     operating cash flow may not be comparable to similarly  titled  measures of
     other  companies.  Operating  cash flow is the  primary  basis  used by our
     management  to  measure  the  operating   performance  of  our  businesses.
     Operating  cash flow does not purport to  represent  net income or net cash
     provided  by  operating  activities,  as  those  terms  are  defined  under
     generally accepted accounting  principles,  and should not be considered as
     an alternative to such measurements as an indicator of our performance. See
     "Statement  of Cash Flows" above for a discussion  of net cash  provided by
     operating activities.
</FN>
</TABLE>

                                     - 30 -

<PAGE>



Consolidated Operating Results

     Revenues

     The increases in  consolidated  revenues from 2000 to 2001 and from 1999 to
2000 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.

     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 2000 to 2001 and from 1999 to 2000 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 and amortization

     The increases in depreciation expense and amortization expense from 2000 to
2001 and from 1999 to 2000 in our Cable segment are primarily due to the effects
of our recent acquisitions, our cable systems exchanges and our increased levels
of capital expenditures.  The increases in depreciation expense and amortization
expense  from 2000 to 2001 and from  1999 to 2000 in our  Commerce  segment  are
primarily  due to the effects of our increased  levels of capital  expenditures.
The remaining  increases in depreciation  expense and amortization  expense from
2000 to  2001  are  primarily  the  result  of  increases  in  depreciation  and
amortization  in our content  operations,  principally due to the effects of our
acquisitions  and  increased  levels  of  capital  expenditures.  The  remaining
increases in depreciation expense and amortization expense from 1999 to 2000 are
principally due to the effects of our increased levels of capital expenditures.

Operating Results by Business Segment

     The following  represent the operating results of our significant  business
segments,  "Cable" and  "Commerce." Our regional  sports  programming  networks,
which consist of Comcast  SportsNet  ("CSN"),  Comcast  SportsNet  Mid- Atlantic
("CSN Mid-Atlantic") and Comcast Sports Southeast ("CSS"),  derive a substantial
portion of their revenues from our cable  operations.  In 2001, as a result of a
change in our internal  reporting  structure,  our regional  sports  programming
networks are now included in our Cable segment for all periods presented. Except
for the  effects of our  acquisitions,  the  change  did not have a  significant
effect on the  comparisons of our operating  results for the periods  presented.
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.

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



                                     - 31 -

<PAGE>



     Cable
     The following  table  presents  financial  information  for the three years
ended December 31, 2001 for our Cable segment (dollars in millions):

<TABLE>
<CAPTION>
                                                                      Year Ended
                                                                     December 31,                Increase
                                                                  2001          2000           $          %
                                                               ----------    ----------     --------    ------
<S>                                                              <C>           <C>            <C>         <C>
Video.........................................................   $4,278.2      $3,651.3       $626.9      17.2%
High-speed Internet...........................................      294.3         114.4        179.9     157.3
Advertising sales.............................................      325.3         290.2         35.1      12.1
Other.........................................................      232.9         152.6         80.3      52.6
                                                               ----------    ----------     --------    ------
     Revenues.................................................    5,130.7       4,208.5        922.2      21.9

Operating, selling, general and administrative expenses.......    3,076.6       2,305.1        771.5      33.5
                                                               ----------    ----------     --------    ------

Operating income before depreciation and amortization (a).....   $2,054.1      $1,903.4       $150.7       7.9%
                                                               ==========    ==========     ========    ======

                                                                      Year Ended
                                                                     December 31,                Increase
                                                                  2000          1999           $          %
                                                               ----------    ----------     --------    ------
Video.........................................................   $3,651.3      $2,588.9     $1,062.4      41.0%
High-speed Internet...........................................      114.4          44.5         69.9     157.1
Advertising sales.............................................      290.2         190.3         99.9      52.5
Other.........................................................      152.6         146.2          6.4       4.4
                                                               ----------    ----------     --------    ------
     Revenues.................................................    4,208.5       2,969.9      1,238.6      41.7

Operating, selling, general and administrative expenses.......    2,305.1       1,611.9        693.2      43.0
                                                               ----------    ----------     --------    ------

Operating income before depreciation and amortization (a).....   $1,903.4      $1,358.0       $545.4      40.2%
                                                               ==========    ==========     ========    ======
---------------
<FN>
(a) See footnote (1) on page 30.
</FN>
</TABLE>

     Video revenue consists of our basic, expanded basic, premium, pay-per-view,
equipment and digital  subscriptions.  Of the $626.9  million and $1.062 billion
increases  in video  revenues  from 2000 to 2001 and from  1999 to 2000,  $339.2
million and $918.0 million are  attributable to the effects of our  acquisitions
and exchanges of cable systems and $287.7  million and $144.4  million relate to
changes in rates and  subscriber  growth in our  historical  operations,  driven
principally by growth in digital  subscriptions,  and to a lesser extent, to the
effects of a higher-priced  digital service  offering made in the second half of
2000. During 2001, 2000 and 1999, through acquisitions and normal operations, we
added  approximately   982,000,   839,000  and  437,000  digital  subscriptions,
respectively.

     The  increases in  high-speed  Internet  revenue from 2000 to 2001 and from
1999  to  2000  are  primarily  due  to  the  addition  of  high-speed  Internet
subscribers.  During  2001,  2000 and  1999,  through  acquisitions  and  normal
operations,  we added  approximately  548,000,  258,000  and  91,000  high-speed
Internet subscribers, respectively (see below).

     The increase in advertising sales revenue from 2000 to 2001 is 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.  Approximately one-half of the increase
from 1999 to 2000 in advertising sales revenue is attributable to the effects of
our  acquisition  of Lenfest  Communications,  Inc.  in January  2000,  with the
remaining increase  attributable to the effects of the 2000 political  campaigns
and increased cable viewership.

     Other revenue includes installation revenues,  guide revenues,  commissions
from electronic retailing,  revenues of our regional sports programming networks
and revenue from other  product  offerings.  The  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),  with the remaining  increase
attributable to growth in our historical  operations.  The increase from 1999 to
2000 is primarily attributable to growth in our historical operations.


                                     - 32 -

<PAGE>



     On September 28, 2001,  At Home  Corporation  ("At Home"),  our 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 $139.5 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 and the increases  from 1999 to
2000 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.

     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
                                                                   2001           2000          $          %
                                                                 ---------      --------     -------     ------
<S>                                                               <C>           <C>           <C>          <C>
Net sales from electronic retailing...........................    $3,917.3      $3,535.9      $381.4       10.8%
Cost of goods sold from electronic retailing..................     2,514.0       2,284.9       229.1       10.0
Operating, selling, general and administrative expenses.......       681.0         631.8        49.2        7.8
                                                                 ---------      --------     -------     ------
Operating income before depreciation and amortization (a).....      $722.3        $619.2      $103.1       16.7%
                                                                 =========      ========     =======     ======
Gross margin..................................................        35.8%         35.4%
                                                                 =========      ========

                                                                       Year Ended
                                                                      December 31,                Increase
                                                                   2000           1999          $          %
                                                                 ---------      --------     -------     ------
Net sales from electronic retailing...........................    $3,535.9      $3,167.4      $368.5       11.6%
Cost of goods sold from electronic retailing..................     2,284.9       2,060.0       224.9       10.9
Operating, selling, general and administrative expenses.......       631.8         568.6        63.2       11.1
                                                                 ---------      --------     -------     ------
Operating income before depreciation and amortization (a).....      $619.2        $538.8       $80.4       14.9%
                                                                 =========      ========     =======     ======
Gross margin..................................................        35.4%         35.0%
                                                                 =========      ========
---------------
<FN>
(a) See footnote (1) on page 30.
</FN>
</TABLE>




                                     - 33 -

<PAGE>



     Of the  $381.4  million  and  $368.5  million  increases  in net sales from
electronic retailing from 2000 to 2001 and from 1999 to 2000, $332.1 million and
$358.3 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,
                                                                      2001                  2000
                                                              --------------------- ---------------------

<S>                                                                    <C>                  <C>
Increase in average number of homes in U.S....................         3.8%                 4.7%
Increase in net sales per home in U.S.........................         6.5%                 8.1%
</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  94% 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 $49.3  million and $10.2  million in net sales
from electronic  retailing from 2000 to 2001 and from 1999 to 2000 are primarily
attributable to increases in net sales in Germany and Japan offset,  in part, by
decreases in net sales in the United Kingdom, and to the effects of fluctuations
in foreign currency exchange rates during the periods.

     The increases in cost of goods sold from 2000 to 2001 and from 1999 to 2000
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  across all
product categories, as well as to the effects of a shift in sales mix.

     The increases in operating,  selling,  general and administrative  expenses
from 2000 to 2001 and from  1999 to 2000 are  primarily  attributable  to higher
variable costs and personnel costs associated with the increase in sales volume.

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


     Consolidated Analysis

     Interest Expense

     The increase in interest  expense from 2000 to 2001 is primarily due to the
increase in our net  borrowings.  The increase in interest  expense from 1999 to
2000 is primarily due to the effects of our  acquisitions  of Lenfest in January
2000 and Jones Intercable in April 1999 and the issuance of the ZONES in October
and November  1999,  offset,  in part, by the net effects of our  borrowings and
repayments and retirements of debt.

     We anticipate that, for the foreseeable future,  interest expense will be a
significant  cost to us.  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.

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


                                     - 34 -

<PAGE>



     Investment Income

     Investment income includes the following (in millions):


<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                                           2001        2000        1999
                                                                         ---------   ---------   ---------
<S>                                                                          <C>        <C>         <C>
Interest and dividend income...........................................      $76.5      $171.6      $172.5
Gains on sales and exchanges of investments, net.......................      485.2       886.7       510.6
Investment impairment losses...........................................     (972.4)      (74.4)      (35.5)
Reclassification of unrealized gains...................................    1,330.3
Unrealized gain on Sprint PCS common stock.............................      284.4
Mark to market adjustments on derivatives related
     to Sprint PCS common stock........................................     (184.6)
Mark to market adjustments on derivatives and hedged items.............       42.3
Settlement of call options.............................................                              (18.1)
                                                                         ---------   ---------   ---------

     Investment income.................................................   $1,061.7      $983.9      $629.5
                                                                         =========   =========   =========
</TABLE>

     The investment impairment loss for the year ended December 31, 2001 relates
principally  to an other than temporary  decline in the Company's  investment in
AT&T, a portion of which was exchanged on April 30, 2001.

     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 the accumulated  unrealized gain of
$237.9  million on our  investment in At Home common stock which was  previously
recorded as a component of accumulated other  comprehensive  income. 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 connection  with the  reclassification  of our  investment in Sprint PCS
from an available for sale security to a trading  security,  we  reclassified to
investment  income  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.

     Income (Expense) 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 years ended December
31,  2000 and 1999,  we recorded  income  (expense)  related to indexed  debt of
$666.0 million and ($666.0) million,  respectively, to reflect the fair value of
the underlying Sprint PCS stock.

     Equity in Net Income (Losses) of Affiliates

     The  changes  in equity in net losses of  affiliates  from 2000 to 2001 and
from 1999 to 2000 are 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  $106.7  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 in exchange for 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

                                     - 35 -

<PAGE>



AT&T in exchange for 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 $98.1  million,  representing  the  difference  between the fair
value of the AT&T shares  received  of $100.0  million and our cost basis in the
subsidiary.

     In May 1999,  we  received a $1.5  billion  termination  fee as  liquidated
damages  from  MediaOne  Group,  Inc.  ("MediaOne")  as a result  of  MediaOne's
termination  of its Agreement  and Plan of Merger with us dated March 1999.  The
termination fee, net of transaction costs, was recorded to other income.

     Income Tax Expense

     The changes in income tax  expense  from 2000 to 2001 and from 1999 to 2000
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  2000  to  2001  is  primarily
attributable  to the  effects  of  changes in the net income or loss of our less
than 100% owned consolidated subsidiaries.  The change in minority interest from
1999 to 2000 is  attributable to the effects of our acquisition of a controlling
interest  in Jones  Intercable,  Inc.  in April  1999,  our  acquisition  of the
California  Public  Employees  Retirement  System's 45% interest in Comcast MHCP
Holdings,  L.L.C.  in  February  2000,  and to the effects of changes in the net
income or loss of our less than 100% owned consolidated subsidiaries.

     Extraordinary Items

     Extraordinary  items for the years ended  December 31, 2001,  2000 and 1999
consist of unamortized debt issue costs and debt extinguishment
costs,  net of related tax benefits,  expensed in connection with the redemption
and refinancing of certain indebtedness.

     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 $384.5 million during the
year  ended  December  31,  2001.  The  income  consisted  of a  $400.2  million
adjustment  to record the debt  component  of our ZONES at a  discount  from its
value at maturity and $191.3 million principally related to the reclassification
of gains previously recognized as a component of accumulated other comprehensive
income on our equity  derivative  instruments,  net of related  deferred  income
taxes of $207.0 million.

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

     Expected Impact of Adoption of SFAS No. 142

     The Financial  Accounting  Standards  Board  ("FASB")  issued SFAS No. 142,
"Goodwill and Other Intangible  Assets," in June 2001. This statement  addresses
how intangible  assets that are acquired  individually  or with a group of other
assets other than in connection with a business  combination should be accounted
for in financial  statements  upon their  acquisition.  The new  statement  also
addresses how goodwill and other intangible assets should be accounted for after
they have been initially recognized in the financial statements.

     We  adopted  SFAS No.  142 on  January  1,  2002,  as  required  by the new
statement.  Upon  adoption,  we will  no  longer  amortize  goodwill  and  other
indefinite  lived  intangible  assets,  which  consist  primarily  of our  cable
franchise  operating  rights.  We will be  required  to test  our  goodwill  and
intangible  assets that are determined to have an indefinite life for impairment
at least  annually.  Other than in the period of adoption or in those periods in
which we may record an asset impairment, we expect that the adoption of SFAS No.
142 will result in increased income as a result of reduced amortization expense.

     The Emerging  Issues Task Force ("EITF") of the FASB is expected to provide
further  guidance on certain  implementation  issues  related to the adoption of
SFAS  No.  142 as it  relates  to  identifiable  intangible  assets  other  than
goodwill. Subject to further guidance to be provided,

                                     - 36 -

<PAGE>



based  upon our  interpretation  of SFAS No.  142,  we may  record a charge as a
cumulative effect of accounting change, net of related deferred income taxes, in
an amount not expected to exceed $1.5  billion upon  adoption of SFAS No. 142 on
January 1, 2002.

     Based on our preliminary  evaluation,  the estimated  effect of adoption of
SFAS No. 142 would have been to decrease  amortization  expense by approximately
$2.0 billion and to increase  deferred income tax expense by approximately  $600
million for the year ended December 31, 2001.

     Expected Impact of Adoption of EITF 01-9

     In November  2001,  the EITF reached a consensus on EITF 01-9,  "Accounting
for  Consideration  Given to a Customer  (Including  a Reseller of the  Vendor's
Products)." EITF 01-9 requires,  among other things,  that consideration paid to
customers should be classified as a reduction of revenue unless certain criteria
are met. Certain of our content  subsidiaries  have paid or may pay distribution
fees to cable television and satellite  broadcast  systems for carriage of their
programming.  We currently  classify the amortization of these distribution fees
as expense in our statement of operations. Upon adoption of EITF 01-9 on January
1, 2002, we will reclassify certain of these distribution fees from expense to a
revenue reduction for all periods presented in our statement of operations.  The
change in classification  will have no impact on our reported  operating loss or
financial  condition  and will not have a  significant  impact on our  revenues.
Refer to Note 3 to our financial statements included in Item 8 for the effect of
adoption of EITF 01-9 on our results of operations.

     Expected Impact of Adoption of EITF 01-14

     In  November  2001,  the FASB staff  announced  EITF Topic  D-103,  "Income
Statement   Characterization  of  Reimbursements  Received  for  'Out-of-Pocket'
Expenses  Incurred," which has subsequently been  recharacterized  as EITF Issue
No. 01-14 ("EITF 01-14").  EITF 01-14 requires that reimbursements  received for
out-of-pocket  expenses incurred be characterized as revenue in the statement of
operations.

     Under the terms of our franchise  agreements,  we are required to pay up to
5% of our gross  revenues  derived from  providing  cable  services to the local
franchising  authority.  We  normally  pass  these  fees  through  to our  cable
subscribers. We currently classify cable franchise fees collected from our cable
subscribers as a reduction of the related  franchise fee expense included within
selling, general and administrative expenses in our statement of operations.

     EITF 01-14,  by analogy,  applies to franchise  fees. Upon adoption of EITF
01-14 on January 1, 2002, we will reclassify franchise fees collected from cable
subscribers from a reduction of selling,  general and administrative expenses to
a component of service  revenues in our statement of  operations.  The change in
classification  will have no impact on our reported  operating  income (loss) or
financial  condition.  Refer to Note 3 to our financial  statements  included in
Item 8 for the effect of adoption of EITF 01-14 on our results of operations.


                                     - 37 -

<PAGE>



ITEM 8        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Comcast Corporation
Philadelphia, Pennsylvania

We  have  audited  the  accompanying   consolidated  balance  sheet  of  Comcast
Corporation  and its  subsidiaries  (the  "Company") as of December 31, 2001 and
2000,  and the related  consolidated  statements  of  operations,  stockholders'
equity and cash flows for each of the three years in the period  ended  December
31, 2001.  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  Corporation  and its
subsidiaries  as of  December  31,  2001  and  2000,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting  principles  generally accepted
in the United States of America.

As  discussed in Notes 2 and 3 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.





Deloitte & Touche LLP

Philadelphia, Pennsylvania
February 5, 2002


                                     - 38 -

<PAGE>



COMCAST CORPORATION AND SUBSIDIARIES

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


<TABLE>
<CAPTION>
                                                                                          December 31,
                                                                                     2001              2000
                                                                                   ---------         ---------
ASSETS
CURRENT ASSETS
<S>                                                                                   <C>               <C>
   Cash and cash equivalents..................................................        $350.0            $651.5
   Investments................................................................       2,623.2           3,059.7
   Accounts receivable, less allowance for doubtful accounts
        of $153.9 and $141.7..................................................         967.4             891.9
   Inventories, net...........................................................         454.5             438.5
   Other current assets.......................................................         153.7             102.8
                                                                                   ---------         ---------
       Total current assets...................................................       4,548.8           5,144.4
                                                                                   ---------         ---------
INVESTMENTS...................................................................       1,679.2           2,661.9
                                                                                   ---------         ---------
PROPERTY AND EQUIPMENT, net of accumulated depreciation
        of $2,725.7 and $1,873.1..............................................       7,011.1           5,519.9
                                                                                   ---------         ---------
INTANGIBLE ASSETS
   Goodwill...................................................................       7,507.3           6,945.1
   Cable franchise operating rights...........................................      20,167.8          17,545.5
   Other intangible assets....................................................       2,833.4           1,485.6
                                                                                   ---------         ---------
                                                                                    30,508.5          25,976.2
   Accumulated amortization...................................................      (5,999.2)         (3,908.7)
                                                                                   ---------         ---------
                                                                                    24,509.3          22,067.5
                                                                                   ---------         ---------
OTHER NONCURRENT ASSETS, net..................................................         383.4             350.8
                                                                                   ---------         ---------
                                                                                   $38,131.8         $35,744.5
                                                                                   =========         =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable...........................................................        $698.2            $813.2
   Accrued expenses and other current liabilities.............................       1,695.5           1,576.5
   Deferred income taxes......................................................         275.4             789.9
   Current portion of long-term debt..........................................         460.2             293.9
                                                                                   ---------         ---------
       Total current liabilities..............................................       3,129.3           3,473.5
                                                                                   ---------         ---------
LONG-TERM DEBT, less current portion..........................................      11,741.6          10,517.4
                                                                                   ---------         ---------
DEFERRED INCOME TAXES.........................................................       6,375.7           5,786.7
                                                                                   ---------         ---------
OTHER NONCURRENT LIABILITIES..................................................       1,532.0           1,108.6
                                                                                   ---------         ---------
MINORITY INTEREST.............................................................         880.2             717.3
                                                                                   ---------         ---------
COMMITMENTS AND CONTINGENCIES (NOTE 11)
COMMON EQUITY PUT OPTIONS.....................................................                            54.6
                                                                                   ---------         ---------
STOCKHOLDERS' EQUITY
   Preferred stock - authorized, 20,000,000 shares
     5.25% series B mandatorily redeemable convertible, $1,000 par value;
     issued, zero and 59,450 at redemption value..............................                            59.5
   Class A special common stock, $1 par value - authorized,
     2,500,000,000 shares; issued, 937,256,465 and 931,340,103; outstanding,
     913,931,554 and 908,015,192..............................................         913.9             908.0
   Class A common stock, $1 par value - authorized,
     200,000,000 shares; issued, 21,829,422 and 21,832,250....................          21.8              21.8
   Class B common stock, $1 par value - authorized,
        50,000,000 shares; issued, 9,444,375..................................           9.4               9.4
   Additional capital.........................................................      11,752.0          11,598.8
   Retained earnings..........................................................       1,631.5           1,056.5
   Accumulated other comprehensive income.....................................         144.4             432.4
                                                                                   ---------         ---------
       Total stockholders' equity.............................................      14,473.0          14,086.4
                                                                                   ---------         ---------
                                                                                   $38,131.8         $35,744.5
                                                                                   =========         =========
</TABLE>


See notes to consolidated financial statements.

                                     - 39 -

<PAGE>



COMCAST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in millions, except per share data)

<TABLE>
<CAPTION>
                                                                                            Year Ended December 31,
                                                                                            2001      2000      1999
                                                                                          --------  --------  --------
REVENUES
<S>                                                                                       <C>       <C>       <C>
   Service revenues...................................................................... $5,756.9  $4,682.7  $3,361.8
   Net sales from electronic retailing...................................................  3,917.3   3,535.9   3,167.4
                                                                                          --------  --------  --------
                                                                                           9,674.2   8,218.6   6,529.2
                                                                                          --------  --------  --------
COSTS AND EXPENSES
   Operating (excluding depreciation)....................................................  2,905.8   2,212.5   1,663.1
   Cost of goods sold from electronic retailing (excluding depreciation).................  2,514.0   2,284.9   2,060.0
   Selling, general and administrative...................................................  1,552.6   1,250.9     926.1
   Depreciation..........................................................................  1,141.8     837.3     572.0
   Amortization..........................................................................  2,306.2   1,794.0     644.0
                                                                                          --------  --------  --------
                                                                                          10,420.4   8,379.6   5,865.2
                                                                                          --------  --------  --------
OPERATING INCOME (LOSS)..................................................................   (746.2)   (161.0)    664.0
OTHER INCOME (EXPENSE)
   Interest expense......................................................................   (731.8)   (691.4)   (538.3)
   Investment income.....................................................................  1,061.7     983.9     629.5
   Income (expense) related to indexed debt..............................................              666.0    (666.0)
   Equity in net income (losses) of affiliates...........................................    (28.5)    (21.3)      1.4
   Other income..........................................................................  1,301.0   2,825.5   1,409.4
                                                                                          --------  --------  --------
                                                                                           1,602.4   3,762.7     836.0
                                                                                          --------  --------  --------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES, MINORITY INTEREST,
   EXTRAORDINARY ITEMS AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE........................    856.2   3,601.7   1,500.0
INCOME TAX EXPENSE.......................................................................   (470.2) (1,441.3)   (723.7)
                                                                                          --------  --------  --------
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST,
   EXTRAORDINARY ITEMS AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE........................    386.0   2,160.4     776.3
MINORITY INTEREST........................................................................   (160.4)   (115.3)      4.6
                                                                                          --------  --------  --------
INCOME FROM CONTINUING OPERATIONS BEFORE EXTRAORDINARY ITEMS
   AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE............................................    225.6   2,045.1     780.9
GAIN FROM DISCONTINUED OPERATIONS, net of income tax expense of $166.1...................                        335.8
                                                                                          --------  --------  --------
INCOME BEFORE EXTRAORDINARY ITEMS AND CUMULATIVE EFFECT OF
   ACCOUNTING CHANGE.....................................................................    225.6   2,045.1   1,116.7
EXTRAORDINARY ITEMS .....................................................................     (1.5)    (23.6)    (51.0)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE...................................................    384.5
                                                                                          --------  --------  --------
NET INCOME...............................................................................    608.6   2,021.5   1,065.7
PREFERRED DIVIDENDS......................................................................              (23.5)    (29.7)
                                                                                          --------  --------  --------
NET INCOME FOR COMMON STOCKHOLDERS.......................................................   $608.6  $1,998.0  $1,036.0
                                                                                          ========  ========  ========
BASIC EARNINGS (LOSS) FOR COMMON STOCKHOLDERS PER COMMON SHARE
   Income from continuing operations before extraordinary items and cumulative
      effect of accounting change........................................................    $0.24     $2.27     $1.00
   Discontinued operations...............................................................                         0.45
   Extraordinary items...................................................................              (0.03)    (0.07)
   Cumulative effect of accounting change................................................     0.40
                                                                                          --------  --------  --------
   Net income............................................................................    $0.64     $2.24     $1.38
                                                                                          ========  ========  ========
BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES  OUTSTANDING..............................    949.7     890.7     749.1
                                                                                          ========  ========  ========
DILUTED EARNINGS (LOSS) FOR COMMON STOCKHOLDERS PER COMMON SHARE
   Income from continuing operations before extraordinary items and cumulative
      effect of accounting change........................................................    $0.23     $2.16     $0.95
   Discontinued operations...............................................................                         0.41
   Extraordinary items...................................................................              (0.03)    (0.06)
   Cumulative effect of accounting change................................................     0.40
                                                                                          --------  --------  --------
   Net income............................................................................    $0.63     $2.13     $1.30
                                                                                          ========  ========  ========
DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING.............................    964.5     948.7     819.9
                                                                                          ========  ========  ========
</TABLE>

See notes to consolidated financial statements.

                                                                          - 40 -

<PAGE>



COMCAST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)


<TABLE>
<CAPTION>
                                                                                 Year Ended December 31,
                                                                             2001         2000         1999
                                                                           ---------    ---------    ---------
<S>                                                                           <C>        <C>          <C>
OPERATING ACTIVITIES
   Net income...........................................................      $608.6     $2,021.5     $1,065.7
   Adjustments to reconcile net income to net cash provided
     by operating activities from continuing operations:
     Depreciation.......................................................     1,141.8        837.3        572.0
     Amortization.......................................................     2,306.2      1,794.0        644.0
     Non-cash interest (income) expense, net............................        40.2        (22.6)       (27.8)
     Non-cash (income) expense related to indexed debt..................                   (666.0)       666.0
     Equity in net (income) losses of affiliates........................        28.5         21.3         (1.4)
     Gains on investments and other income, net.........................    (2,303.3)    (3,679.3)    (1,917.0)
     Minority interest..................................................       160.4        115.3         (4.6)
     Discontinued operations............................................                                (335.8)
     Extraordinary items................................................         1.5         23.6         51.0
     Cumulative effect of accounting change.............................      (384.5)
     Deferred income taxes..............................................      (240.7)     1,074.6        (73.4)
     Other..............................................................        23.6         51.2         41.5
                                                                           ---------    ---------    ---------
                                                                             1,382.3      1,570.9        680.2
     Changes in working capital, net of effects of acquisitions
      and divestitures
       Increase in accounts receivable, net.............................       (15.8)      (195.8)       (89.5)
       Increase in inventories, net.....................................       (16.0)       (35.7)       (91.9)
       (Increase) decrease in other current assets......................       (27.1)        13.7         30.7
       (Decrease) increase in accounts payable, accrued expenses
          and other current liabilities.................................       (93.9)      (133.8)       719.9
                                                                           ---------    ---------    ---------
                                                                              (152.8)      (351.6)       569.2

       Net cash provided by operating activities from continuing
          operations....................................................     1,229.5      1,219.3      1,249.4
                                                                           ---------    ---------    ---------

FINANCING ACTIVITIES
   Proceeds from borrowings.............................................     5,686.4      5,435.3      2,786.6
   Retirements and repayments of debt...................................    (4,187.7)    (5,356.5)    (1,368.2)
   Issuances of common stock and sales of put options on common stock...        27.2         30.5         17.1
   Repurchases of common stock..........................................       (27.1)      (324.9)       (30.7)
   Dividends............................................................                                  (9.4)
   Deferred financing costs.............................................       (22.5)       (55.8)       (51.0)
   Other                                                                                                  (3.0)
                                                                           ---------    ---------    ---------

       Net cash provided by (used in) financing activities from
          continuing operations.........................................     1,476.3       (271.4)     1,341.4
                                                                           ---------    ---------    ---------

INVESTING ACTIVITIES
   Acquisitions, net of cash acquired...................................    (1,329.0)      (187.3)      (755.2)
   Proceeds from liquidated damages, net................................                               1,460.0
   Proceeds from sales of (purchases of) short-term investments, net....        (6.2)     1,028.1     (1,035.5)
   Capital contributions to and purchases of investments................      (317.0)    (1,010.7)    (2,012.2)
   Proceeds from sales of investments...................................     1,172.8        997.3        599.8
   Capital expenditures.................................................    (2,181.7)    (1,636.8)      (893.8)
   Sale of subsidiary, net of cash sold.................................                                 361.1
   Additions to intangible and other noncurrent assets..................      (346.2)      (409.2)      (263.5)
                                                                           ---------    ---------    ---------

       Net cash used in investing activities from continuing operations.    (3,007.3)    (1,218.6)    (2,539.3)
                                                                           ---------    ---------    ---------


(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    - CONTINUING OPERATIONS.............................................      (301.5)      (270.7)        51.5

CASH AND CASH EQUIVALENTS, beginning of year............................       651.5        922.2        870.7
                                                                           ---------    ---------    ---------

CASH AND CASH EQUIVALENTS, end of year..................................      $350.0       $651.5       $922.2
                                                                           =========    =========    =========
</TABLE>


See notes to consolidated financial statements.

                                     - 41 -

<PAGE>



COMCAST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Dollars in millions)


<TABLE>
<CAPTION>
                                                                                                     Accumulated Other
                                                                                                       Comprehensive
                                                                                                       Income (Loss)
                                                                                                    --------------------
                                                                                         Retained
                                         Preferred Stock    Common Stock                 Earnings    Unreal-    Cumul-
                                         ------------- ----------------------            (Accumu-     ized      ative
                                         Series Series Class A                Additional   lated     Gains   Translation
                                           A      B    Special Class A Class B Capital   Deficit)   (Losses)  Adjustments  Total
                                         ------ ------ ------- ------- ------ --------- ----------- --------- ----------  --------
<S>                                      <C>   <C>     <C>      <C>     <C>   <C>        <C>        <C>            <C>   <C>
BALANCE, JANUARY 1, 1999................  $31.9 $540.7  $698.4   $31.7   $9.4  $2,941.7   ($1,488.2) $1,049.5       $0.2  $3,815.3
Comprehensive income:
   Net income...........................                                                    1,065.7
   Unrealized gains on
     marketable securities,
     net of deferred taxes of $2,891.9..                                                              5,370.6
   Reclassification adjustments
     for gains included in net income,
     net of deferred taxes of $161.7....                                                               (300.3)
   Cumulative translation adjustments...                                                                            (7.3)
Total comprehensive income..............                                                                                   6,128.7
   Acquisition..........................                   8.5                    283.2                                      291.7
   Exercise of options..................                   2.2                     23.7                                       25.9
   Conversion of Series A preferred.....  (31.9)           2.7                     29.2
   Retirement of common stock...........                          (0.8)            (4.6)      (25.3)                         (30.7)
   Cash dividends, Series A preferred...                                           (0.8)                                      (0.8)
   Series B preferred dividends.........          28.9                            (28.9)
   Share exchange.......................                   4.6    (4.9)           172.3      (172.0)
   Temporary equity related to put
     options............................                                          111.2                                      111.2
                                         ------ ------ ------- ------- ------ --------- ----------- --------- ----------  --------

BALANCE, DECEMBER 31, 1999 .............         569.6   716.4    26.0    9.4   3,527.0      (619.8)  6,119.8       (7.1) 10,341.3
Comprehensive income:
   Net income...........................                                                    2,021.5
   Unrealized losses on
     marketable securities,
     net of deferred taxes of $2,789.3..                                                             (5,180.1)
   Reclassification adjustments
     for gains included in net income,
     net of deferred taxes of $266.0....                                                               (494.0)
   Cumulative translation adjustments...                                                                            (6.2)
Total comprehensive loss................                                                                                  (3,658.8)
   Acquisitions.........................                 155.7                  7,585.2                                    7,740.9
   Exercise of options..................                   2.6                     53.9       (27.7)                          28.8
   Retirement of common stock...........                  (6.0)   (3.1)           (42.3)     (273.5)                        (324.9)
   Conversion of Series B preferred.....        (533.6)   38.3                    495.3
   Series B preferred dividends.........          23.5                            (23.5)
   Share exchange.......................                   1.0    (1.1)            44.1       (44.0)
   Temporary equity related to put
     options............................                                          (40.9)                                     (40.9)
                                         ------ ------ ------- ------- ------ --------- ----------- --------- ----------  --------

BALANCE, DECEMBER 31, 2000..............          59.5   908.0    21.8    9.4  11,598.8     1,056.5     445.7      (13.3) 14,086.4
Comprehensive income:
   Net income...........................                                                      608.6
   Unrealized gains on
     marketable securities,
     net of deferred taxes of $114.4....                                                                212.5
   Reclassification adjustments
     for gains included in net income,
     net of deferred taxes of $264.4....                                                               (491.1)
   Unrealized losses on effective
     portion of cash flow hedges,
     net of deferred taxes of $0.3......                                                                 (0.6)
   Cumulative translation adjustments...                                                                            (8.8)
Total comprehensive income..............                                                                                     320.6
   Exercise of options..................                   2.5                     53.3       (17.3)                          38.5
   Retirement of common stock...........                  (0.8)                   (10.0)      (16.3)                         (27.1)
   Conversion of Series B preferred.....         (59.5)    4.2                     55.3
   Temporary equity related to put
     options............................                                           54.6                                       54.6
                                         ------ ------ ------- ------- ------ --------- ----------- --------- ----------  --------

BALANCE, DECEMBER 31, 2001.............. $      $       $913.9   $21.8   $9.4 $11,752.0    $1,631.5    $166.5     ($22.1) $14,473.0
                                         ====== ====== ======= ======= ====== ========= =========== ========= ==========  =========
</TABLE>



See notes to consolidated financial statements.

                                                               - 42 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999


1.   BUSINESS

     Comcast  Corporation  and its  subsidiaries  (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  ("US").   The  Company's   consolidated   cable  operations  served
     approximately 8.5 million subscribers and passed approximately 13.9 million
     homes as of December 31, 2001.

     The Company's  commerce  operations  consist of the Company's  consolidated
     subsidiary,  QVC, Inc. and subsidiaries ("QVC"). Through QVC, an electronic
     retailer,  the  Company  markets a wide  variety of  products  directly  to
     consumers primarily on  merchandise-focused  television  programs.  QVC was
     available,  on a full and part- time basis, to  approximately  82.1 million
     homes in the US,  approximately  9.5  million  homes in the United  Kingdom
     ("UK"),  approximately  23.6 million homes in Germany and approximately 3.6
     million homes in Japan as of December 31, 2001.

     Content  is  provided  through  the  Company's  consolidated   subsidiaries
     including Comcast Spectacor,  Comcast SportsNet ("CSN"),  Comcast SportsNet
     Mid-Atlantic ("CSN  Mid-Atlantic"),  Comcast Sports Southeast  ("CSS"),  E!
     Entertainment  Television,  Inc.  ("E!  Entertainment"),  The Golf  Channel
     ("TGC"),  Outdoor Life Network ("OLN") and G4 Media, LLC ("G4 Media"),  and
     through other programming investments (see Note 5).

     The  Company's  cable and commerce  operations  represent the Company's two
     reportable segments under accounting  principles  generally accepted in the
     United States.  The Company's  three 24-hour  regional  sports  programming
     networks,  which  consist  of CSN,  CSN  Mid-Atlantic  and  CSS,  derive  a
     substantial  portion of their revenues from the Company's cable operations.
     In 2001, as a result of a change in its internal reporting  structure,  the
     Company's  regional  sports  programming   networks  are  included  in  the
     Company's  cable  segment  for all  periods  presented.  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.

     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
     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

                                     - 43 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     to  management  as of  December  31,  2001 and 2000.  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.   The  differences  between  the  Company's  recorded
     investments  and its  proportionate  interests  in the  book  value  of the
     investees' net assets are being  amortized to equity in net income or loss,
     primarily over a period of 20 years, which is consistent with the estimated
     lives of the underlying assets.

     Unrestricted  publicly  traded  investments are classified as available for
     sale 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.  Unrealized  gains or losses  resulting  from
     changes in fair value between  measurement dates for trading securities are
     recorded as a component of investment income.

     Restricted  publicly  traded  investments and investments in privately held
     companies  are stated at cost,  adjusted for any known  diminution in value
     (see Note 6).

     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.........................4-40 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
     Goodwill is the excess of the  acquisition  cost of an acquired entity over
     the  fair  value of the  identifiable  net  assets  acquired.  The  Company
     amortizes goodwill over estimated useful lives ranging  principally from 20
     to 30 years.


                                     - 44 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     Cable  franchise   operating  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 and amortizes them over the
     term of the related franchise agreements.  Costs incurred by the Company in
     negotiating  and  renewing  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.

     Other  intangible  assets  consist   principally  of  cable  and  satellite
     television  distribution  rights,  cable system  franchise  renewal  costs,
     contractual  operating  rights,  computer  software,  programming costs and
     rights,  license  acquisition  costs 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.

     See Note 3 for a discussion of the expected impact of adoption of Statement
     of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations"
     ("SFAS No. 141") and SFAS No. 142,  "Goodwill and Other Intangible  Assets"
     ("SFAS No. 142").

     Valuation of Long-Lived Assets
     The Company  periodically  evaluates the  recoverability  of its long-lived
     assets,  including property and equipment and intangible  assets,  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.

     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.  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 (expense).

     Revenue Recognition
     The Company recognizes video, high-speed Internet, and programming revenues
     as service is provided.  The Company  manages credit risk by  disconnecting
     services to cable and high-speed Internet customers who are delinquent. The
     Company recognizes advertising sales revenue at estimated realizable values
     when the  advertising  is aired.  Revenues  derived from other  sources are
     recognized when services are provided or events occur.

     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 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.

     See Note 3 for a discussion of the expected  impact of adoption of Emerging
     Issues Task Force ("EITF") 01-9,  "Accounting for Consideration  Given to a
     Customer (Including a Reseller of the Vendor's Products)" ("EITF 01-9") and
     EITF 01-14, "Income Statement  Characterization of Reimbursements  Received
     for 'Out-of-Pocket' Expenses Incurred" ("EITF 01-14").

                                     - 45 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     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."  Compensation expense for
     stock options is measured as the excess, if any, of the quoted market price
     of the Company's stock at the date of the grant over the amount an employee
     must pay to acquire the stock. The Company records compensation expense for
     restricted  stock awards based on the quoted  market price of the Company's
     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 Company's  stock or other  determinants of fair
     value at the end of the year (see Note 8).

     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
     Investment income 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 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 6).

     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
     cap agreements  ("Caps") and interest rate collar  agreements  ("Collars").
     The Company manages 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  ("Covered  Call  Options")  in order to
     monetize a portion of those investments.

     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 in the Company's  consolidated balance sheet. Covered
     Call

                                     - 46 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     Options are marked to market on a current basis with the result included in
     investment income in the Company's consolidated statement of operations.

     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.

     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,  the
     effective  portion of any hedge is reported in other  comprehensive  income
     until it is  recognized  in  earnings  during the same  period in which the
     hedged item  affects  earnings.  The  ineffective  portion of all hedges 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 are marked to
     market on a current basis with the result included in investment  income 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.

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

     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 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.

     See Note 3 for a discussion of the impact of adoption of SFAS No. 133.


                                     - 47 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     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 2001.

3.   RECENT ACCOUNTING PRONOUNCEMENTS

     SFAS No. 133, as Amended
     On  January  1,  2001,  the  Company  adopted  SFAS No.  133.  SFAS No. 133
     establishes  accounting and reporting standards for derivatives and hedging
     activities.  SFAS No.  133  requires  that all  derivative  instruments  be
     reported 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
     $384.5 million and a cumulative decrease in other comprehensive income, net
     of related income taxes, of $127.0 million.

     The increase in income  consisted of a $400.2 million  adjustment to record
     the debt component of indexed debt at a discount from its value at maturity
     (see Note 7) and $191.3 million principally related to the reclassification
     of  gains  previously  recognized  as  a  component  of  accumulated  other
     comprehensive income on the Company's equity derivative instruments, net of
     related deferred income taxes of $207.0 million (see Note 9).

     The decrease in other  comprehensive  income  consisted  principally of the
     reclassification of the gains noted above.

     SFAS No's. 141 and 142
     The Financial  Accounting  Standards Board ("FASB") issued SFAS No. 141 and
     SFAS No. 142 in June 2001. These statements  address how intangible  assets
     that  are  acquired  individually,  with a  group  of  other  assets  or in
     connection with a business combination should be accounted for in financial
     statements  upon and  subsequent to their  acquisition.  The new statements
     require that all  business  combinations  initiated  after June 30, 2001 be
     accounted for using the purchase method and establish specific criteria for
     the recognition of intangible assets separately from goodwill.

     The Company  adopted  SFAS No. 141 on July 1, 2001,  as required by the new
     statement.  The adoption of SFAS No. 141 did not have a material  impact on
     the Company's financial condition or results of operations.

     The Company adopted SFAS No. 142 on January 1, 2002, as required by the new
     statement.  Upon adoption, the Company will no longer amortize goodwill and
     other indefinite lived intangible assets,  which consist primarily of cable
     franchise  operating  rights.  The  Company  will be  required  to test its
     goodwill and  intangible  assets that are  determined to have an indefinite
     life for impairment at least annually. Other than in the period of adoption
     or in those  periods in which the Company  may record an asset  impairment,
     the  Company  expects  that the  adoption  of SFAS No.  142 will  result in
     increased income as a result of reduced amortization expense.

                                     - 48 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     The EITF of the FASB is  expected  to provide  further  guidance on certain
     implementation issues related to the adoption of SFAS No. 142 as it relates
     to identifiable  intangible assets other than goodwill.  Subject to further
     guidance to be provided,  based upon the Company's  interpretation  of SFAS
     No.  142,  the  Company  may  record a charge  as a  cumulative  effect  of
     accounting  change,  net of related deferred income taxes, in an amount not
     expected to exceed $1.5 billion upon adoption of SFAS No. 142 on January 1,
     2002.

     Based on the Company's  preliminary  evaluation,  the  estimated  effect of
     adoption of SFAS No. 142 would have been to decrease  amortization  expense
     by approximately  $2.0 billion and to increase  deferred income tax expense
     by approximately $600 million for the year ended December 31, 2001.

     SFAS No. 143
     The  FASB   issued  SFAS  No.  143,   "Accounting   for  Asset   Retirement
     Obligations," in June 2001. SFAS No. 143 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.  While the
     Company is  currently  evaluating  the impact the  adoption of SFAS No. 143
     will have on its financial condition and results of operations, it does not
     expect such impact to be material.

     SFAS No. 144
     The FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of
     Long-Lived Assets," in August 2001. SFAS No. 144, which addresses financial
     accounting  and reporting for the  impairment of long-lived  assets and for
     long-lived  assets  to be  disposed  of,  supercedes  SFAS  No.  121 and is
     effective for fiscal years  beginning  after  December 15, 2001.  While the
     Company is  currently  evaluating  the impact the  adoption of SFAS No. 144
     will have on its financial condition and results of operations, it does not
     expect such impact to be material.

     EITF 01-9
     In November  2001,  the EITF  reached a consensus  on EITF 01-9.  EITF 01-9
     requires,  among other things,  that consideration paid to customers should
     be classified as a reduction of revenue  unless  certain  criteria are met.
     Certain  of the  Company's  content  subsidiaries  have  paid  or  may  pay
     distribution  fees to cable television and satellite  broadcast systems for
     carriage  of  their  programming.  The  Company  currently  classifies  the
     amortization  of these  distribution  fees as expense  in its  consolidated
     statement of operations. Upon adoption of EITF 01-9 on January 1, 2002, the
     Company will reclassify  certain of these distribution fees from expense to
     a revenue reduction for all periods presented in its consolidated statement
     of  operations.  The  change in  classification  will have no impact on the
     Company's reported operating loss or financial condition. The effect of the
     reclassification of cable television and satellite  broadcast  distribution
     fees from  expense to a  reduction  of revenue is to  decrease  the amounts
     reported in the Company's  consolidated  statement of operations as follows
     (in millions):


<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                               2001         2000       1999
                                                              -------      -------    -------
<S>                                                             <C>          <C>         <C>
     Service revenues......................................     $35.8        $17.3       $4.6
     Selling, general and administrative expense...........      $4.7         $5.3       $4.2
     Amortization expense..................................     $31.1        $12.0       $0.4
</TABLE>


     EITF 01-14
     In  November  2001,  the FASB staff  announced  EITF Topic  D-103,  "Income
     Statement  Characterization of Reimbursements  Received for 'Out-of-Pocket'
     Expenses  Incurred," which has subsequently  been  recharacterized  as EITF
     01-14. EITF 01-14 requires that  reimbursements  received for out-of-pocket
     expenses   incurred  be  characterized  as  revenue  in  the  statement  of
     operations.


                                     - 49 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     Under the terms of its franchise agreements, the Company is 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 currently classifies cable franchise
     fees  collected  from its cable  subscribers  as a reduction of the related
     franchise fee expense included within selling,  general and  administrative
     expenses in its consolidated statement of operations.

     EITF 01-14,  by analogy,  applies to franchise  fees. Upon adoption of EITF
     01-14 on  January 1, 2002,  the  Company  will  reclassify  franchise  fees
     collected from cable  subscribers from a reduction of selling,  general and
     administrative   expenses  to  a  component  of  service  revenues  in  its
     consolidated  statement of operations.  The change in  classification  will
     have no  impact  on the  Company's  reported  operating  income  (loss)  or
     financial condition.  The effect of the reclassification of cable franchise
     fees is to increase  the amounts  reported  in the  Company's  consolidated
     statement of operations as follows (in millions):


<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                                                  2001         2000       1999
                                                                --------     --------   --------
<S>                                                               <C>          <C>        <C>
     Service revenues.........................................    $192.3       $152.3     $105.6
     Selling, general and administrative expense..............    $192.3       $152.3     $105.6
</TABLE>

4.   EARNINGS PER SHARE

     Earnings for common  stockholders  per common share is computed by dividing
     net income, after deduction of preferred stock dividends,  when applicable,
     by the weighted  average  number of common  shares  outstanding  during the
     period on a basic and diluted basis.

     The  following  table  reconciles  the  numerator  and  denominator  of the
     computations of diluted  earnings for common  stockholders per common share
     ("Diluted EPS") for the years presented.


<TABLE>
<CAPTION>
                                                                     (Amounts in millions, except per share data)
                                                                                      Year Ended
                                                                                     December 31,
                                                                           2001          2000         1999
                                                                           ----          ----         ----
<S>                                                                          <C>         <C>          <C>
     Net income for common stockholders...........................           $608.6      $1,998.0     $1,036.0
     Preferred dividends..........................................                           23.5         29.7
                                                                       ------------  ------------  -----------
     Net income for common stockholders used for
        Diluted EPS...............................................           $608.6      $2,021.5     $1,065.7
                                                                       ============  ============  ===========
     Basic weighted average number of common shares
        outstanding...............................................            949.7         890.7        749.1
     Dilutive securities:
          Series A and B convertible preferred stock..............              1.0          42.5         44.0
          Stock option and restricted stock plans.................             13.8          15.4         26.8
          Put options on Class A Special Common Stock.............                            0.1
                                                                       ------------  ------------  -----------
     Diluted weighted average number of common shares
        outstanding...............................................            964.5         948.7        819.9
                                                                       ============  ============  ===========
     Diluted earnings for common stockholders per
        common share..............................................            $0.63         $2.13        $1.30
                                                                       ============  ============  ===========
</TABLE>


                                     - 50 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     Comcast Put Options on a weighted  average 0.2 million shares,  1.5 million
     shares and 2.7 million shares of its Class A Special Common Stock (see Note
     8) were  outstanding  during the years ended  December 31,  2001,  2000 and
     1999, respectively.  Comcast Put Options outstanding during the years ended
     December 31, 2001 and 1999 were not included in the  computation of Diluted
     EPS as the Comcast Put  Options'  exercise  price was less than the average
     market  price of the  Company's  Class A Special  Common  Stock  during the
     periods.

     In  December  2000 and January  2001,  the Company  issued  $1.478  billion
     principal amount at maturity of Zero Coupon Convertible Debentures due 2020
     (the "Zero Coupon Debentures" - see Note 7). The Zero Coupon Debentures may
     be converted at any time prior to maturity if the closing sale price of the
     Company's Class A Special Common Stock is greater than 110% of the accreted
     conversion  price (as defined).  The Zero Coupon  Debentures  were excluded
     from the  computation  of  Diluted  EPS in 2001  and  2000 as the  weighted
     average  closing sale price of the Company's  Class A Special  Common Stock
     was not greater than 110% of the accreted conversion price.

5.   ACQUISITIONS AND OTHER SIGNIFICANT EVENTS

     Agreement and Plan of Merger with AT&T Broadband
     On December 19,  2001,  the Company  entered into an Agreement  and Plan of
     Merger with AT&T Corp.  ("AT&T")  pursuant to which the Company agreed to a
     transaction  which will  result in the  combination  of the  Company  and a
     holding company of AT&T's broadband  business ("AT&T  Broadband") that AT&T
     will spin off to its shareholders immediately prior to the combination.  As
     of December 31, 2001,  AT&T  Broadband  served  approximately  13.6 million
     subscribers.  Under the terms of the transaction, the combined company will
     issue approximately 1.235 billion shares of its voting common stock to AT&T
     Broadband  shareholders  in exchange  for all of AT&T's  interests  in AT&T
     Broadband,  and  approximately  115 million  shares of its common  stock to
     Microsoft  Corporation  ("Microsoft") in exchange for AT&T Broadband shares
     that  Microsoft  will receive  immediately  prior to the  completion of the
     transaction for settlement of their $5 billion  aggregate  principal amount
     in quarterly  income preferred  securities.  The combined company will also
     assume or incur  approximately $20 billion of AT&T Broadband debt. For each
     share of a class of common  stock of Comcast  that they hold at the time of
     the  merger,   each  Comcast  shareholder  will  receive  one  share  of  a
     corresponding  class of stock of the combined company.  The Company expects
     that the  transaction  will  qualify as tax-free to both the Company and to
     AT&T.

     The Company will account for the  transaction as an  acquisition  under the
     purchase  method of accounting,  with the Company as the acquiring  entity.
     The  identification  of the Company as the acquiring  entity was made after
     careful consideration of all facts and circumstances, as follows:

     Voting Rights in the New Combined  Company.  Former AT&T  shareholders will
     own  approximately  53.7% of the combined  company's  economic interest and
     approximately 60.6% of the combined company's voting interest following the
     merger.  Microsoft will own shares  representing  approximately 5.2% of the
     combined  company's  economic interest and 4.95% of the combined  company's
     voting interest following the merger. No individual former AT&T shareholder
     will have any  significant  ownership  or  voting  interest  following  the
     merger.  Brian  L.  Roberts,  the  Company's  controlling  shareholder  and
     President  ("Mr.  Roberts"),  either  directly  or through his control of a
     family holding company, will own an approximately 33.34% voting interest in
     the  combined  company  following  the  merger  (including  a  33.33%  non-
     dilutable voting interest through  ownership of the Class B common stock of
     the combined  company),  and an approximately  .8% economic  interest.  Mr.
     Roberts  will hold the largest  minority  voting  interest in the  combined
     company. The next largest voting interest held by an individual shareholder
     will be 4.95%,  held by  Microsoft.  Under the  governing  documents of the
     combined  company,  as a result of his ownership of the Class B stock,  Mr.
     Roberts  will have the right to approve any merger  involving  the combined
     company or any other  transaction  in which any other person would own more
     than 10 percent of the stock of the combined company,  the right to approve
     any issuances of Class B stock, and any charter amendments or other actions
     that would limit the rights of the Class B stock.




                                     - 51 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     Governance  Arrangements  Relating to the Board of  Directors.  The initial
     Board of the combined  company will have twelve members,  five of whom will
     be designated by the Company from its existing Board,  five of whom will be
     designated by AT&T from its existing Board, and two of whom will be jointly
     designated by the Company and AT&T and will be independent persons.  Except
     for  pre-approved  designees,  the  individuals  designated  by each of the
     Company  and AT&T will be  mutually  agreed  upon by the  Company and AT&T.
     Pursuant to the terms of the merger  agreement,  existing Company directors
     Ralph J. Roberts, Mr. Roberts,  Sheldon M. Bonovitz,  Julian A. Brodsky and
     Decker Anstrom have been pre-approved as Company director  designees of the
     combined  company and  existing  AT&T  director  and  Chairman  C.  Michael
     Armstrong  ("Mr.   Armstrong")  is  the  sole  pre-approved  AT&T  director
     designee.  The remaining four AT&T designees are subject to the approval of
     the Company.  All of the initial director  designees will hold office until
     the 2005 annual meeting of the combined  company  shareholders.  After this
     initial term, the entire Board will be elected annually.  During the period
     before the 2005 annual  meeting,  Mr.  Roberts  will be the chairman of the
     Board  committee  that  nominates  the slate of directors  for the combined
     company (the "Directors Nominating Committee") if he is the Chairman or the
     CEO of the combined  company.  The remaining  four members of the Directors
     Nominating  Committee  will  consist  of one  director  designee  who is an
     independent  director  selected by the Company's  director  designees,  and
     three independent  directors  selected by the Company's  director designees
     from  the AT&T  director  designees  and the  Company/AT&T  joint  director
     designees.  Since the initial director designees will hold office until the
     2005 annual meeting,  the Directors  Nominating Committee would be expected
     to act only in order to fill vacancies that may occur in director positions
     prior to that meeting.  After the 2005 annual meeting of shareholders,  Mr.
     Roberts  will  continue  to be the  chairman  of the  Directors  Nominating
     Committee  of the  combined  company.  The  remaining  four  members of the
     Directors  Nominating  Committee will be selected by Mr. Roberts from among
     the combined company's independent directors.  Nominations of the Directors
     Nominating Committee will be submitted directly to the shareholders without
     any requirement of Board approval or ratification.

     Governance  Arrangements Relating to Management.  The combined company will
     have an Office of the Chairman,  comprised of the Chairman of the Board and
     the CEO,  from the closing of the merger until the earlier to occur of: (i)
     the 2005 annual meeting of the shareholders, and (ii) the date on which Mr.
     Armstrong  ceases to be Chairman of the Board.  The Office of the  Chairman
     will be the combined company's principal  executive  deliberative body with
     responsibility for corporate strategy,  policy and direction,  governmental
     affairs and other significant matters.  While the Office of the Chairman is
     in effect,  the  Chairman  of the Board and the CEO will advise and consult
     with each  other with  respect  to those  matters.  Mr.  Armstrong,  AT&T's
     Chairman  of the  Board,  will be  Chairman  of the  Board of the  combined
     company.  Mr.  Armstrong  may serve as Chairman of the Board until the 2005
     annual  meeting  of   shareholders.   After  the  2005  annual  meeting  of
     shareholders,  or if Mr. Armstrong ceases to serve as Chairman of the Board
     prior to that date,  Mr.  Roberts  will become the Chairman of the Board of
     the combined company. Removal of the Chairman of the Board will require the
     vote of at least 75% of the entire Board until the earlier to occur of: (i)
     the date on which neither Mr.  Armstrong nor Mr. Roberts is Chairman of the
     Board,  and (ii)  the  fifth  anniversary  of the 2005  annual  meeting  of
     shareholders.  Mr.  Roberts  will be the CEO of the combined  company.  Mr.
     Roberts will also be President of the combined company for as long as he is
     the CEO.  The CEO's  powers  and  responsibilities  will  include:  (i) the
     supervision  and  management  of  the  combined   company's   business  and
     operations,  (ii) all matters related to officers and employees,  including
     hiring and termination,  (iii) all rights and powers typically exercised by
     the chief  executive  officer and president of a corporation,  and (iv) the
     authority to call special meetings of the combined  company Board.  Removal
     of Mr.  Roberts as CEO will  require the vote of at least 75% of the entire
     Board  until the  earlier  to occur of:  (i) the date on which Mr.  Roberts
     ceases to be CEO, and (ii) the fifth anniversary of the 2005 annual meeting
     of the  combined  company  shareholders.  Under  the  terms  of the  merger
     agreement,  Mr.  Roberts  has the  right  to  fill  all  senior  management
     positions of the combined company after consultation with Mr. Armstrong.

     Other  Factors.  The Company made an  unsolicited  offer to purchase all of
     AT&T Broadband. Subsequent to the Company's offer, AT&T solicited bids from
     other potential purchasers.




                                     - 52 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)



     The   headquarters  of  the  combined  company  will  be  in  Philadelphia,
     Pennsylvania,  the current headquarters of the Company. An executive office
     will be  maintained in the New York City  metropolitan  area until at least
     April 2005.

     The Company's  current  investment  in shares of AT&T common stock,  to the
     extent still held by the Company at the time of the AT&T Broadband spin-off
     and merger,  will be exchanged into AT&T shares  (representing its Consumer
     Services  and  Business  Services  Groups).  Therefore,  the  Company  will
     continue to have an investment in the "selling company."  Conversely,  AT&T
     Broadband's  current  investment  in the Company  will either be retired to
     treasury after the merger or used to settle related debt.

                                      *****

     Notwithstanding  that the former AT&T Broadband  shareholders  will, in the
     aggregate,  receive the majority of the voting common stock of the combined
     company,  the Company believes that this fact is outweighed by the totality
     of the  other  facts  and  circumstances  described  above,  with  the most
     significance  being given to Mr.  Roberts'  non-dilutable  minority  voting
     interest,  Mr.  Roberts' role on the  Nominating  Committee of the Board of
     Directors,  Mr.  Roberts  position as CEO and President,  and Mr.  Roberts'
     right to appoint other members of senior management.

     The transaction is subject to customary closing conditions and shareholder,
     regulatory  and  other   approvals.   The  Company  expects  to  close  the
     transaction by the end of 2002.

     At Home Services
     On September  28, 2001,  At Home  Corporation  ("At Home"),  the  Company's
     provider  of  high-speed  Internet  services,  filed for  protection  under
     Chapter 11 of the U.S.  Bankruptcy  Code.  In  October  2001,  the  Company
     amended its  agreement  with At Home to continue  service to the  Company's
     existing and new subscribers  during October and November 2001. The Company
     agreed to be charged a higher rate than it had incurred  under its previous
     agreement.  On  December  3,  2001,  the  Company  and At  Home  reached  a
     definitive  agreement,  approved by the Bankruptcy Court, pursuant to which
     the Company  paid $160 million to At Home and At Home agreed to continue to
     provide  high-speed  Internet  services  to  existing  and new  subscribers
     through  February 28, 2002. In December 2001, the Company began to transfer
     its  high-speed  Internet  subscribers  from  the At  Home  network  to the
     Company's new Company-owned and managed network. The Company completed this
     transition in February 2002.

     In the fourth quarter of 2001, the Company recognized $139.5 million of net
     incremental  expenses  incurred  in  the  continuation  of  service  to and
     transition of the Company's  high-speed Internet subscribers from At Home's
     network to the Company's own network.  This charge is included in operating
     expenses in the Company's consolidated statement of operations.

     Acquisition of Outdoor Life Network
     On October 30, 2001,  the Company  acquired from Fox  Entertainment  Group,
     Inc. ("Fox  Entertainment"),  a subsidiary of The News Corporation  Limited
     ("News Corp.") the approximate  83.2% interest in OLN not previously  owned
     by the Company.  OLN is a 24-hour network devoted  exclusively to adventure
     and the outdoor  lifestyle with  distribution to  approximately  41 million
     subscribers. The Company made the acquisition to increase its investment in
     programming content. The estimated fair value of the additional interest of
     OLN acquired by the Company as of the closing date of the  transaction  was
     approximately  $512  million,  substantially  all of which was allocated to
     affiliation  agreements  and goodwill in  connection  with the  preliminary
     purchase price  allocation.  Upon closing of the  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. In
     connection  with the exchange of its interest in SVN, the Company  recorded
     to  other  income  a  pre-tax  gain of  $106.7  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. The Company no longer owns any interest in SVN and now owns 100% of
     OLN.
                                     - 53 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     Baltimore, Maryland System Acquisition
     On  June  30,  2001,   the  Company   acquired  the  cable  system  serving
     approximately 112,000 subscribers in Baltimore City, Maryland from AT&T for
     $518.7 million in cash. The purchase price is subject to adjustment.

     Acquisition of Controlling Interest in The Golf Channel
     On June 8, 2001, the Company acquired the approximate 30.8% interest in TGC
     held by Fox  Entertainment.  In addition,  Fox Entertainment and News Corp.
     agreed to a five-year non-competition agreement. The Company paid aggregate
     consideration of $364.9 million in cash. The Company  previously  accounted
     for TGC under the equity method. The Company now owns  approximately  91.0%
     of TGC and consolidates TGC.

     AT&T Cable Systems Acquisition
     On April 30, 2001, the Company acquired cable systems serving approximately
     585,000  subscribers from AT&T in exchange for  approximately  63.9 million
     shares of AT&T common stock then held by the  Company.  The market value of
     the AT&T shares was approximately $1.423 billion, based on the price of the
     AT&T common stock on the closing date of the  transaction.  The transaction
     is expected to qualify as tax free to both the Company and to AT&T.

     Home Team Sports Acquisition
     On February 14, 2001,  the Company  acquired Home Team Sports (now known as
     CSN Mid-Atlantic),  a regional sports programming network with distribution
     to approximately 4.8 million homes in the Mid-Atlantic region, from Viacom,
     Inc. ("Viacom") and Affiliated Regional Communications,  Ltd. (an affiliate
     of Fox Cable Network  Services,  LLC  ("Fox")).  The Company also agreed to
     increase  the  distribution  of certain of Viacom's  and Fox's  programming
     networks on certain of the Company's  cable  systems.  The  estimated  fair
     value of Home Team Sports as of the  closing  date of the  acquisition  was
     $240.0 million.

     Adelphia Cable Systems Exchange
     On January 1, 2001, the Company  completed its cable systems  exchange with
     Adelphia  Communications  Corporation  ("Adelphia").  The Company  received
     cable systems serving  approximately  445,000 subscribers from Adelphia and
     Adelphia   received   certain  of  the  Company's   cable  systems  serving
     approximately  441,000 subscribers.  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.

     AT&T Cable Systems Exchange
     On December 31, 2000, the Company completed its cable systems exchange with
     AT&T. The Company  received  cable systems  serving  approximately  770,000
     subscribers  from AT&T and AT&T  received  certain of the  Company's  cable
     systems serving approximately 700,000 subscribers.  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.

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

                                     - 54 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


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

     In  March  2000,  the  Jones  Intercable  shareholders  approved  a  merger
     agreement  pursuant to which the Jones Intercable  shareholders,  including
     Comcast Cable,  received 1.4 shares of the Company's Class A Special Common
     Stock in exchange for each share of Jones  Intercable  Class A Common Stock
     and Common Stock (the "Jones Merger") and Jones  Intercable was merged with
     and into a wholly owned  subsidiary of the Company.  In connection with the
     closing of the Jones Merger, the Company issued  approximately 58.9 million
     shares  of its  Class  A  Special  Common  Stock  to the  Jones  Intercable
     shareholders,  including  approximately 23.3 million shares to a subsidiary
     of the Company and 35.6  million  shares with a value of $1.727  billion to
     the public shareholders.  As required under accounting principles generally
     accepted in the United  States,  the shares held by the  subsidiary  of the
     Company are presented as issued but not  outstanding  (held in treasury) in
     the Company's December 31, 2001 and 2000 consolidated balance sheet.

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

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

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

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

     The  acquisitions  completed  by the Company  during the three years in the
     period ended December 31, 2001 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. During the fourth
     quarter of 2001, the Company  recorded the final purchase price  allocation
     related to the Company's  cable  systems  exchange with AT&T and related to
     the Company's  acquisitions  of Home Team Sports and TGC. The allocation of
     the purchase  price for the other 2001  acquisitions  and the cable systems
     exchange with Adelphia made by the Company is preliminary


                                     - 55 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     pending  completion  of  final  appraisals.  The  Company's  cable  systems
     exchanges with Adelphia and AT&T and certain of the Company's  acquisitions
     had no significant impact on the Company's  consolidated  statement of cash
     flows due to their noncash nature (see Note 10).

     Unaudited Pro Forma Information
     The following  unaudited pro forma information has been presented as if the
     acquisitions  and cable systems  exchanges made by the Company in 2001 each
     occurred on January 1, 2000, the acquisitions  and cable systems  exchanges
     made by the  Company in 2000 each  occurred  on  January  1, 1999,  and the
     acquisitions  made by the Company in 1999 each occurred on January 1, 1998.
     This information is based on historical results of operations, adjusted for
     acquisition  costs,  and, in the opinion of management,  is not necessarily
     indicative of what the results would have been had the Company operated the
     entities acquired since such dates.


<TABLE>
<CAPTION>
                                                                                (Amounts in millions,
                                                                                except per share data)
                                                                               Year Ended December 31,
                                                                            2001        2000         1999
                                                                          ---------   ---------   ----------
<S>                                                                        <C>         <C>          <C>
     Revenues.........................................................     $9,926.9    $9,012.2     $7,566.5
     Income before extraordinary items and cumulative
          effect of accounting change.................................       $150.2    $1,652.3       $252.2
     Net income.......................................................       $533.2    $1,628.7       $201.2
     Diluted EPS......................................................        $0.55       $1.68        $0.21
</TABLE>

     Sale of Comcast Cellular Corporation
     In July 1999,  the Company  sold  Comcast  Cellular  Corporation  ("Comcast
     Cellular") to SBC  Communications,  Inc. for $361.1 million in cash and the
     assumption of $1.315  billion of Comcast  Cellular  debt,  and recognized a
     gain on the sale of $355.9 million,  net of income tax expense. The results
     of operations of Comcast  Cellular  have been  presented as a  discontinued
     operation in accordance with APB Opinion No. 30,  "Reporting the Results of
     Operations - Reporting  the Effects of Disposal of a Segment of a Business,
     and   Extraordinary,   Unusual  and   Infrequently   Occurring  Events  and
     Transactions."  During  the year  ended  December  31,  1999,  the  Company
     recognized losses from discontinued operations of $20.1 million.

     Other Income
     In August  2000,  the Company  obtained  the right to exchange  its 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 6). 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  $98.1  million,
     representing  the  difference  between  the fair  value of the AT&T  shares
     received of $100.0 million and the Company's cost basis in the subsidiary.

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

                                     - 56 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)

6.   INVESTMENTS

<TABLE>
<CAPTION>
                                                                                     December 31,
                                                                               2001                2000
                                                                            -----------         -----------
                                                                                 (Dollars in millions)

     Fair value method
<S>                                                                            <C>                 <C>
          AT&T Corp....................................................        $1,514.9            $1,174.3
          Sprint Corp. PCS Group.......................................         2,109.5             2,149.8
          Other........................................................           136.1             1,873.0
                                                                            -----------         -----------
                                                                                3,760.5             5,197.1
     Cost method.......................................................           155.2               128.4
     Equity method.....................................................           386.7               396.1
                                                                            -----------         -----------
              Total investments........................................         4,302.4             5,721.6
     Less, current investments.........................................         2,623.2             3,059.7
                                                                            -----------         -----------
     Non-current investments...........................................        $1,679.2            $2,661.9
                                                                            ===========         ===========
</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  unrealized  pre-tax  gains  on  these  investments  as of
     December  31,  2001  and  2000  of  $280.3  million  and  $707.1   million,
     respectively,  have been  reported in the  Company's  consolidated  balance
     sheet  principally  as a component of other  comprehensive  income,  net of
     related  deferred  income  taxes  of  $95.3  million  and  $240.0  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,
                                                                               2001                2000
                                                                            -----------         -----------
                                                                                 (Dollars in millions)
<S>                                                                            <C>                 <C>
     Cost.............................................................         $1,355.0            $4,490.0
     Gross unrealized gains...........................................            283.2             1,887.6
     Gross unrealized losses..........................................             (2.9)           (1,180.5)
                                                                            -----------         -----------

     Fair value.......................................................         $1,635.3            $5,197.1
                                                                            ===========         ===========
</TABLE>

     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 5 - 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.   The  Company  has  registration   rights,   subject  to  customary
     restrictions,  which allow the Company to require AT&T to register the AT&T
     shares  received.  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  a  pre-tax  gain  of  $296.3   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  $78.3
     million in cash.  At  maturity,  the  counterparty  is  entitled to receive
     between 2.5 million and 4.0 million shares

                                     - 57 -
<PAGE>

COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     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.

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


<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                                                2001        2000        1999
                                                                              ---------   ---------   ---------

<S>                                                                               <C>        <C>         <C>
     Interest and dividend income...........................................      $76.5      $171.6      $172.5
     Gains on sales and exchanges of investments, net.......................      485.2       886.7       510.6
     Investment impairment losses...........................................     (972.4)      (74.4)      (35.5)
     Reclassification of unrealized gains...................................    1,330.3
     Unrealized gain on Sprint PCS common stock.............................      284.4
     Mark to market adjustments on derivatives related
          to Sprint PCS common stock........................................     (184.6)
     Mark to market adjustments on derivatives and hedged items.............       42.3
     Settlement of call options.............................................                              (18.1)
                                                                              ---------   ---------   ---------

          Investment income.................................................   $1,061.7      $983.9      $629.5
                                                                              =========   =========   =========
</TABLE>

     The investment impairment loss for the year ended December 31, 2001 relates
     principally to an other than temporary decline in the Company's  investment
     in AT&T,  a portion of which was  exchanged on April 30, 2001 (see Note 5 -
     AT&T Cable Systems Acquisition).

     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 the  accumulated  unrealized gain of $237.9 million on the Company's
     investment  in At Home  common  stock  which was  previously  recorded as a
     component of accumulated other  comprehensive  income. 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 5 - Other Income).

     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. As a result,  the Company  reclassified  to investment  income 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.

     Equity Price Risk
     During  1999,  the Company  entered  into Equity  Collars  covering  $1.365
     billion notional amount of the Company's Sprint PCS common stock, which are
     accounted  for at fair  value.  The  Equity  Collars  limit  the  Company's
     exposure to and benefits from price  fluctuations in the underlying  Sprint
     PCS common stock.  During 2001,  $483.7 million  notional  amount of Equity
     Collars  matured and the Company sold or entered into Prepaid Forward Sales
     of the  related  Sprint PCS common  stock.  The  remaining  $881.0  million
     notional  amount of Equity  Collars  mature  between 2002 and 2003.  As the
     Company had  accounted  for the Equity  Collars as a hedge,  changes in the
     value of the Equity  Collars  were  substantially  offset by changes in the
     value of the  Sprint  PCS  common  stock  which  was also

                                      - 58 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     marked-to-market  through  accumulated  other  comprehensive  income in the
     Company's consolidated balance sheet through December 31, 2000.

     Equity Method
     The Company records its proportionate interests in the net income (loss) of
     certain of its equity method investees in arrears.  The Company's  recorded
     investments  exceed its  proportionate  interests  in the book value of the
     investees'   net  assets  by  $188.7   million  as  of  December  31,  2001
     (principally  related to the Company's  investment in  Susquehanna  Cable).
     Such  excess is being  amortized  to equity in net  income or loss,  over a
     period of twenty years, which is consistent with the estimated lives of the
     underlying assets. The original cost of investments accounted for under the
     equity method  totaled $479.8 million and $506.5 million as of December 31,
     2001 and 2000,  respectively.  Upon  adoption of SFAS No. 142,  the Company
     will no longer  amortize  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."

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

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



                                     - 59 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


7.   LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                                            December 31,
                                                                                         2001          2000
                                                                                      ----------    ----------
                                                                                           (in millions)
<S>                                                                                       <C>         <C>
     Commercial Paper.............................................................        $397.3      $1,323.5
     Notes payable to banks due in installments through 2009......................       1,222.7       1,751.4
     9-5/8% Senior notes, due 2002................................................         200.0         200.0
     8-1/8% Senior notes, due 2004................................................         320.4         299.9
     8-3/8% Senior notes, due 2005................................................         697.0         696.3
     6-3/8% Senior notes, due 2006................................................         511.3
     8-3/8% Senior notes, due 2007................................................         597.5         597.2
     8-7/8% Senior notes, due 2007................................................         249.1         249.0
     6.20% Senior notes, due 2008.................................................         798.4         798.2
     7-5/8% Senior notes, due 2008................................................         206.1         197.1
     7-5/8% Senior notes, due 2008................................................         147.7         147.4
     6-7/8% Senior notes, due 2009................................................         751.5
     6-3/4% Senior notes, due 2011................................................         993.1
     7-1/8% Senior notes, due 2013................................................         748.4
     8-7/8% Senior notes, due 2017................................................         545.9         545.8
     8-1/2% Senior notes, due 2027................................................         249.6         249.6
     10-1/4% Senior subordinated debentures, due 2001.............................                       100.4
     10-1/2% Senior subordinated debentures, due 2006.............................         133.0         123.8
     8-1/4% Senior subordinated debentures, due 2008..............................         154.3         149.1
     10-5/8% Senior subordinated debentures, due 2012.............................         247.8         257.0
     Zero Coupon Convertible Debentures, due 2020.................................       1,096.4       1,002.0
     7% Disney Notes, due 2007....................................................         132.8         132.8
     ZONES at principal amount, due 2029..........................................       1,612.6       1,806.8
     Other, including capital lease obligations...................................         188.9         184.0
                                                                                      ----------    ----------
                                                                                        12,201.8      10,811.3
     Less current portion.........................................................         460.2         293.9
                                                                                      ----------    ----------
                                                                                       $11,741.6     $10,517.4
                                                                                      ==========    ==========
</TABLE>

     Maturities of long-term  debt  outstanding  as of December 31, 2001 for the
     four years after 2002 are as follows (in millions):

               2003...............................                $73.2
               2004...............................                331.0
               2005...............................              2,026.2
               2006...............................                653.2

     Senior Notes Offerings
     During  2001,  Comcast  Cable sold an  aggregate  of $3.0 billion of public
     debt.  The Company  used  substantially  all of the net  proceeds  from the
     offerings  to repay a portion  of the  amounts  outstanding  under  Comcast
     Cable's commercial paper program and revolving credit facility, and to fund
     acquisitions.

                                     - 60 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


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

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

     On December  17,  2001,  the  Company  amended the terms of the Zero Coupon
     Debentures to permit  holders of the Zero Coupon  Debentures to require the
     Company to repurchase the Zero Coupon Debentures on December 19, 2002.

     Holders may require the Company to repurchase the Zero Coupon Debentures on
     December 19, 2001,  2002, 2003, 2005, 2010 and 2015. The Company may choose
     to pay the repurchase  price for 2001,  2002, 2003 and 2005  repurchases in
     cash or shares of its Class A Special Common Stock or a combination of cash
     and shares of its Class A Special  Common  Stock.  The  Company may pay the
     repurchase price for the 2010 and 2015 repurchases in cash only.

     On December 19, 2001,  holders of an  aggregate of $70.3  million  accreted
     value of Zero Coupon  Debentures  exercised their right to have the Company
     repurchase their Zero Coupon  Debentures for cash. The Company financed the
     redemption with available cash.

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

     Amounts  outstanding  under the Zero Coupon  Debentures  are  classified as
     long-term in the  Company's  consolidated  balance sheet as of December 31,
     2001  and  2000 as the  Company  has both the  ability  and the  intent  to
     refinance  the Zero Coupon  Debentures  on a long-term  basis with  amounts
     available under the Comcast Cable Revolver (see  "Commercial  Paper" below)
     in the event holders of the Zero Coupon Debentures exercise their rights to
     require the Company to  repurchase  the Zero Coupon  Debentures in December
     2002.

     Commercial Paper
     The  Company's  senior bank credit  facility  consists of a $2.25  billion,
     five-year revolving credit facility and a $2.25 billion,  364-day revolving
     credit  facility  (together,  the "Comcast  Cable  Revolver").  The 364-day
     revolving  credit  facility  supports  Comcast  Cable's   commercial  paper
     program.  Amounts  outstanding  under  the  commercial  paper  program  are
     classified as long-term in the Company's  consolidated  balance sheet as of
     December  31,  2001 and 2000 as the  Company  has both the  ability and the
     intent to refinance these obligations,  if necessary,  on a long-term basis
     with amounts available under the Comcast Cable Revolver.

     ZONES
     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 or the  market
     value of Sprint PCS Stock. Prior to maturity, each ZONES is exchangeable at
     the holder's  option for an amount of cash equal to 95% of the market value
     of Sprint PCS Stock.

                                     - 61 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     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 (expense)  related to indexed debt in the Company's  consolidated
     statement of operations.  As of December 31, 2001, the number of Sprint PCS
     shares held by the Company exceeded the number of ZONES outstanding.

     Upon  adoption  of SFAS No.  133,  the  Company  split the ZONES into their
     derivative and debt components. In connection with the adoption of SFAS No.
     133,  the Company  recorded  the debt  component of the ZONES at a discount
     from its value at  maturity  resulting  in a reduction  in the  outstanding
     balance of the ZONES of $400.2 million (see Note 3).

     The Company  recorded the increase in the fair value of the ZONES (see Note
     6) and the  increase in the  carrying  value of the debt  component  of the
     ZONES as follows (in millions):


<TABLE>
<CAPTION>
                                                                                 Year Ended
                                                                              December 31, 2001
                                                                           -----------------------

<S>                                                                               <C>
     Increase in derivative component to investment expense............           $183.8

     Increase in debt component to interest expense....................            $22.2
</TABLE>


     Extraordinary Items
     Extraordinary  items  consist  of  unamortized  debt  issue  costs and debt
     extinguishment costs, net of related tax benefits,  expensed principally in
     connection with the redemptions and refinancings of certain indebtedness.

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

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

     As of December 31, 2001 and 2000, the Company's  effective weighted average
     interest  rate on its variable rate debt  outstanding  was 2.70% and 7.34%,
     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.  Caps are used to
     lock in a maximum  interest rate should variable rates rise, but enable the
     Company to otherwise  pay lower market  rates.  Collars limit the Company's
     exposure to and benefits from interest rate  fluctuations  on variable rate
     debt to within a certain range of rates.

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


                                     - 62 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


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


<TABLE>
<CAPTION>
                                       Notional                               Average        Estimated
                                        Amount         Maturities          Interest Rate    Fair Value
<S>                                     <C>            <C>                     <C>             <C>
     As of December 31, 2001
     Variable to Fixed Swaps            $250.3         2002-2003               4.9%            ($5.5)
     Fixed to Variable Swaps            $950.0         2004-2008               7.5%            $46.8

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


     The  notional  amounts of interest  rate  instruments,  as presented in the
     above table, are used to measure interest to be paid or received and do not
     represent the amount of exposure to credit loss.  The estimated  fair value
     approximates  the  proceeds  (costs) to settle the  outstanding  contracts.
     While Swaps,  Caps and Collars  represent an integral part of the Company's
     interest rate risk management program, their incremental effect on interest
     expense  for the  years  ended  December  31,  2001,  2000 and 1999 was not
     significant.

     During January and February  2002,  the Company  settled all $950.0 million
     notional  amount of its Fixed to Variable  Swaps and  received  proceeds of
     $56.8 million.

     Estimated Fair Value
     The Company's  long-term debt had estimated fair values of $12.559  billion
     and $10.251  billion as of December  31, 2001 and 2000,  respectively.  The
     estimated  fair value of the  Company's  publicly  traded  debt is based on
     quoted  market  prices for that  debt.  Interest  rates that are  currently
     available  to the  Company  for  issuance  of debt with  similar  terms and
     remaining  maturities  are used to estimate  fair value for debt issues for
     which quoted market prices are not available.

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

     As of  December  31,  2001,  $246.9  million of the  Company's  cash,  cash
     equivalents and short-term investments is restricted to use by subsidiaries
     of the Company under  contractual  or other  arrangements.  Restricted  net
     assets of the Company's  subsidiaries were approximately  $1.233 billion as
     of December 31, 2001.

     Lines and Letters of Credit
     As of December 31,  2001,  certain  subsidiaries  of the Company had unused
     lines of credit of $3.460 billion under their respective credit facilities.

     As of December 31, 2001,  the Company and certain of its  subsidiaries  had
     unused  irrevocable  standby  letters of credit  totaling  $96.1 million to
     cover potential fundings under various agreements.


                                     - 63 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


8.   STOCKHOLDERS' EQUITY

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

     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 42.5 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 $533.6 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  $59.5
     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
     and 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        1999
                                                                               ---------   ---------   ---------
<S>                                                                                  <C>         <C>         <C>
     Shares repurchased........................................................      0.8         9.1         1.0
     Aggregate consideration...................................................    $27.1      $324.9       $30.7
     Comcast Put Options sold..................................................                  2.0         5.5
</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.  The
     difference  between the  proceeds  from the sale of the Comcast Put Options
     and their estimated fair value was not significant as of December 31, 2000.


                                     - 64 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     Stock-Based Compensation Plans
     As of December  31,  2001,  the Company and its  subsidiaries  have several
     stock-based compensation plans for certain employees,  officers,  directors
     and other persons designated by the applicable  compensation  committees of
     the boards of  directors of the Company and its  subsidiaries.  These plans
     are described below.

     Comcast  Option Plans.  The Company  maintains  qualified and  nonqualified
     stock option plans for certain employees, directors and other persons under
     which fixed stock options are granted and the option price is generally not
     less than the fair value of a share of the underlying  stock at the date of
     grant (collectively,  the "Comcast Option Plans"). Under the Comcast Option
     Plans, 55.9 million shares of Class A Special Common Stock were reserved as
     of December 31, 2001. 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.

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


<TABLE>
<CAPTION>
                                              2001                      2000                       1999
                                      ---------------------     ---------------------     -----------------------
                                                  Weighted-                 Weighted-                   Weighted-
                                                   Average                   Average                     Average
                                                  Exercise                  Exercise                    Exercise
                                       Options      Price        Options      Price        Options        Price
                                      ---------  -----------    ---------  -----------    ---------    -----------
<S>                                      <C>       <C>           <C>         <C>           <C>           <C>
     Class A Special Common Stock

     Outstanding at beginning of year    49,618    $23.69        40,416      $16.01        43,002        $11.09
     Granted                             10,084     37.52        15,300       39.43         7,403         34.16
     Exercised                           (3,360)    10.62        (4,805)       8.60        (7,527)         6.76
     Canceled                              (821)    30.69        (1,293)      25.98        (2,462)        12.90
                                      ---------               ---------                 ---------
     Outstanding at end of year          55,521     26.89        49,618       23.69        40,416         16.01
                                      =========               =========                 =========
     Exercisable at end of year          16,892     15.57        13,267       11.35        10,947          8.19
                                      =========               =========                 =========
</TABLE>


     The following table summarizes information about the Class A Special Common
     Stock options outstanding under the Comcast Option Plans as of December 31,
     2001 (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 12/31/01       Life           Price     at 12/31/01     Price
     -------------------                  ------------- ---------------  -----------  -----------  ------------
<S>                                          <C>             <C>           <C>          <C>          <C>
     $4.96 - $6.04                            2,229           1 year        $5.74        2,067        $5.71
     $6.71 - $10.06                           7,095        3.3 years         8.70        4,829         8.95
     $10.11 - $14.94                          4,267        4.9 years        13.13        2,428        13.04
     $15.66 - $22.88                         10,490        6.4 years        17.01        4,809        17.01
     $27.59 - $34.48                          6,112        7.4 years        32.29        2,042        31.96
     $34.50 - $41.38                         21,745        8.9 years        37.78          490        38.52
     $41.44 - $53.13                          3,583        8.3 years        46.05          227        45.71
                                          ---------                                  ---------
                                             55,521                                     16,892
                                          =========                                  =========
</TABLE>


                                     - 65 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


     The  weighted-average  fair  value at date of  grant  of a Class A  Special
     Common Stock  option  granted  under the Comcast  Option Plans during 2001,
     2000 and 1999 was $19.07, $21.20 and $20.41,  respectively.  The fair value
     of each option granted during 2001, 2000 and 1999 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,
                                                                     2001           2000           1999
                                                                   ---------      ---------       -------
<S>                                                                       <C>            <C>           <C>
     Dividend yield................................................       0%             0%            0%
     Expected volatility...........................................    35.7%          35.8%         36.1%
     Risk-free interest rate.......................................     5.1%           6.3%          5.8%
     Expected option lives (in years)..............................      8.0            8.0           9.9
     Forfeiture rate...............................................     3.0%           3.0%          3.0%
</TABLE>

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

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


<TABLE>
<CAPTION>
                                                                             At December 31,
                                                                   2001            2000           1999
                                                                -----------     ----------     -----------
<S>                                                                     <C>            <C>             <C>
Options/SARs outstanding at end
   of year......................................................        253            219             200
                                                                ===========     ==========     ===========
Weighted-average exercise price of
   options/SARs outstanding
   at end of year...............................................    $913.88        $789.51         $618.02
                                                                ===========     ==========     ===========
Options/SARs exercisable at end
   of year......................................................        113             79              80
                                                                ===========     ==========     ===========
Weighted-average exercise price
   of options/SARs exercisable
   at end of year...............................................    $706.51        $606.92         $505.86
                                                                ===========     ==========     ===========
</TABLE>


     As of the latest  valuation  date,  the fair value of a share of QVC Common
Stock was $1,492.00.


                                     - 66 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


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


<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                                         2001          2000          1999
                                                                      ----------    ----------    ----------
<S>                                                                       <C>         <C>           <C>
     Net income:
          As reported................................................     $608.6      $2,021.5      $1,065.7
          Pro forma..................................................     $482.0      $1,918.1      $1,005.5

     Net income for common stockholders:
          As reported................................................     $608.6      $1,998.0      $1,036.0
          Pro forma..................................................     $482.0      $1,894.6        $975.8

     Basic earnings for common stockholders per common share:
          As reported................................................      $0.64         $2.24         $1.38
          Pro forma..................................................      $0.51         $2.13         $1.30

     Diluted earnings for common stockholders per common share:
          As reported................................................      $0.63         $2.13         $1.30
          Pro forma..................................................      $0.50         $2.02         $1.23
</TABLE>

     The pro forma  effect on net  income and net income per share for the years
     ended December 31, 2001,  2000 and 1999 by applying SFAS No. 123 may not be
     indicative  of the pro forma  effect on net income or loss in future  years
     since SFAS No. 123 does not take into  consideration pro forma compensation
     expense  related  to  awards  made  prior to  January  1,  1995  and  since
     additional awards in future years are anticipated.

     Other Stock-Based Compensation Plans
     The  Company  maintains  a  restricted  stock plan under  which  management
     employees may be granted restricted shares of the Company's Class A Special
     Common  Stock  (the  "Restricted  Stock  Plan").  The shares  awarded  vest
     annually, generally over a period not to exceed five years from the date of
     the award, and do not have voting rights.  At December 31, 2001, there were
     714,000  unvested shares granted under the Restricted  Stock Plan, of which
     158,000 vested in January 2002.

     The Company  maintains a deferred stock option plan for certain  employees,
     officers and directors which provides 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.  As of December 31, 2001 and 2000, 5.9 million and 5.0
     million  shares were issuable  under  options  exercised but the receipt of
     which was irrevocably  deferred by the optionees  pursuant to the Company's
     deferred stock option plan.

     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.


                                     - 67 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


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


<TABLE>
<CAPTION>
                                                                          Year Ended December 31,
                                                                     2001           2000           1999
                                                                   ---------      ---------       -------
<S>                                                                      <C>            <C>           <C>
     Restricted Stock Plan
     Shares granted (in thousands)...............................        157            504           170
     Weighted-average fair value per share at date of grant......     $39.52         $37.80        $43.22
     Compensation expense (in millions)..........................       $8.9           $9.2          $4.7

     SAR Plans
     Compensation expense (in millions)..........................       $3.5           $2.2          $6.4
</TABLE>

9.   INCOME TAXES

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


<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                                         2001           2000           1999
                                                                       ---------      ---------      --------
<S>                                                                       <C>            <C>           <C>
     Current expense
     Federal.........................................................     $623.2         $321.4        $606.7
     State...........................................................       84.8           42.8         188.4
     Foreign.........................................................        2.9            2.5           2.0
                                                                       ---------      ---------      --------
                                                                           710.9          366.7         797.1
                                                                       ---------      ---------      --------

     Deferred expense (benefit)
     Federal.........................................................     (255.8)         998.6         (65.2)
     State...........................................................       15.1           76.0          (8.2)
                                                                       ---------      ---------      --------
                                                                          (240.7)       1,074.6         (73.4)
                                                                       ---------      ---------      --------
     Income tax expense..............................................     $470.2       $1,441.3        $723.7
                                                                       =========      =========      ========
</TABLE>

     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,
                                                                         2001           2000           1999
                                                                       ---------      ---------      --------
<S>                                                                       <C>          <C>             <C>
     Federal tax at statutory rate...................................     $299.7       $1,260.6        $525.0
     Non-deductible depreciation and amortization....................      106.6          102.1          49.8
     State income taxes, net of federal benefit......................       64.9           77.2         117.1
     Foreign (income) losses and equity in net losses of affiliates..        7.2            8.0          (2.0)
     Other...........................................................       (8.2)          (6.6)         33.8
                                                                       ---------      ---------      --------

     Income tax expense..............................................     $470.2       $1,441.3        $723.7
                                                                       =========      =========      ========
</TABLE>


                                     - 68 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


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


<TABLE>
<CAPTION>
                                                                              December 31,
                                                                         2001             2000
                                                                       ---------        ---------
<S>                                                                       <C>              <C>
     Deferred tax assets:
        Net operating loss carryforwards........................          $242.8           $289.8
        Allowances for doubtful accounts and excess
           and obsolete inventory...............................           108.7            109.0
        Other...................................................           167.0            163.5
                                                                       ---------        ---------
                                                                           518.5            562.3
                                                                       ---------        ---------

     Deferred tax liabilities:
        Temporary differences, principally book and tax basis
          of property and equipment and intangible assets.......         6,329.0          5,851.7
        Differences between book and tax basis
          in investments........................................           644.9          1,221.3
        Differences between book and tax basis of
          indexed debt securities...............................           195.7             65.9
                                                                       ---------        ---------
                                                                         7,169.6          7,138.9
                                                                       ---------        ---------
     Net deferred tax liability.................................        $6,651.1         $6,576.6
                                                                       =========        =========
</TABLE>

     The Company  recorded  $212.3 million of deferred income tax liabilities in
     2001  in  connection  with  acquisitions   principally   related  to  basis
     differences  in property and equipment and intangible  assets.  The Company
     recorded a decrease  of  ($148.6)  million  and  ($3.055)  billion,  and an
     increase of $2.730 billion to deferred income tax liabilities in 2001, 2000
     and 1999,  respectively,  in connection with  unrealized  gains (losses) on
     marketable securities which are included in other comprehensive income. The
     Company  recorded $207.0 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 3).

     The Company has recorded net deferred tax liabilities of $275.4 million and
     $789.9 million, as of December 31, 2001 and 2000, respectively,  which have
     been  included  in  current  liabilities,   related  primarily  to  current
     investments.   The  Company  has  net  operating  loss   carryforwards   of
     approximately  $250.0  million  which expire  primarily in periods  through
     2019.


                                     - 69 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


10.  STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION

     The  following  table   summarizes  the  fair  values  of  the  assets  and
     liabilities  acquired by the Company through noncash transactions (see Note
     5) (in millions):


<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                                         2001           2000           1999
                                                                       ---------     ----------      --------
<S>                                                                        <C>           <C>             <C>
     Current assets....................................................    $56.6         $216.2          $6.4
     Investments.......................................................                   437.3
     Property, plant & equipment.......................................    580.4        1,295.8          74.0
     Intangible assets.................................................  3,042.7       15,399.4         337.0
     Current liabilities...............................................    (37.0)        (277.3)        (11.1)
     Long-term debt....................................................                (2,146.5)
     Deferred income taxes.............................................    (76.9)      (3,308.0)       (114.6)
                                                                       ---------     ----------      --------
          Net assets acquired.......................................... $3,565.8      $11,616.9        $291.7
                                                                       =========     ==========      ========
</TABLE>

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


<TABLE>
<CAPTION>
                                                                                      Year Ended December 31,
                                                                                     2001      2000        1999
                                                                                   --------  --------    --------
<S>                                                                                  <C>       <C>         <C>
     Interest.................................................................       $660.4    $705.8      $529.2
     Income taxes.............................................................       $561.2    $708.9      $190.5
</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, 2001. 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 these  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 leases as of
     December 31, 2001 (in millions):


<TABLE>
<CAPTION>
                                                                       Professional
                                                      Programming         Sports        Operating
                                                       Agreements        Contracts       Leases        Total
                                                     --------------   ---------------  -----------   ---------
<S>                                                       <C>               <C>             <C>        <C>
         2002.....................................         $95.4             $122.5          $98.6      $316.5
         2003.....................................          82.6              108.8           78.0       269.4
         2004.....................................          84.0               84.5           68.8       237.3
         2005.....................................          82.6               50.8           54.3       187.7
         2006.....................................          85.8               28.7           39.6       154.1
         Thereafter...............................         413.6                8.0          148.6       570.2
</TABLE>


                                     - 70 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


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


<TABLE>
<CAPTION>
                                                                                      Year Ended December 31,
                                                                                     2001      2000        1999
                                                                                   --------  --------    --------
<S>                                                                                  <C>        <C>         <C>
     Rental expense.............................................................     $120.9     $97.6       $88.5
</TABLE>

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

     The Walt Disney Company ("Disney"),  in certain circumstances,  is entitled
     to cause Comcast  Entertainment  Holdings LLC  ("Entertainment  Holdings"),
     which is owned  50.1% by the  Company  and  49.9% by  Disney,  to  purchase
     Disney's entire interest in Entertainment  Holdings at its then fair market
     value (as determined by an appraisal  process).  If Entertainment  Holdings
     elects not to purchase  Disney's  interests,  Disney has the right,  at its
     option,  to purchase either the Company's  entire interest in Entertainment
     Holdings  or all  of the  shares  of  stock  of E!  Entertainment  held  by
     Entertainment Holdings in each case at fair market value. In the event that
     Disney  exercises its rights,  as described  above, a portion or all of the
     Disney  Notes  (see Note 7) may be  replaced  with a three year note due to
     Disney.

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

     The Company is subject to legal  proceedings  and claims which arise in the
     ordinary course of its business.  In the opinion of management,  the amount
     of  ultimate  liability  with  respect to 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.



                                     - 71 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Continued)


12.  FINANCIAL DATA BY BUSINESS SEGMENT

     The following  represents  the  Company's  significant  business  segments,
     "Cable" and "Commerce." The Company's regional sports programming networks,
     which derive a  substantial  portion of their  revenues  from the Company's
     cable operations, were previously included in "Other." In 2001, as a result
     of a change in the Company's  internal reporting  structure,  the Company's
     regional  sports  programming  networks are now  included in the  Company's
     Cable segment for all periods presented (see Note 1). The components of net
     income (loss) below operating income (loss) 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>
   2001
   Revenues (2)....................................................  $5,130.7     $3,917.3         626.2     $9,674.2
   Operating income (loss) before depreciation and amortization (3)   2,054.1        722.3         (74.6)     2,701.8
   Depreciation and amortization...................................   3,043.6        143.3         261.1      3,448.0
   Operating income (loss).........................................    (989.5)       579.0        (335.7)      (746.2)
   Interest expense................................................     546.4         25.9         159.5        731.8
   Assets..........................................................  29,084.6      2,680.5       6,366.7     38,131.8
   Long-term debt..................................................   8,363.2         62.7       3,315.7     11,741.6
   Capital expenditures............................................   1,855.3        142.9         183.5      2,181.7

   2000
   Revenues (2)....................................................  $4,208.5     $3,535.9        $474.2     $8,218.6
   Operating income (loss) before depreciation and amortization (3)   1,903.4        619.2         (52.3)     2,470.3
   Depreciation and amortization...................................   2,419.5        125.9          85.9      2,631.3
   Operating income (loss).........................................    (516.1)       493.3        (138.2)      (161.0)
   Interest expense................................................     515.9         34.9         140.6        691.4
   Assets..........................................................  25,763.9      2,503.0       7,477.6     35,744.5
   Long-term debt..................................................   6,711.0        302.0       3,504.4     10,517.4
   Capital expenditures............................................   1,248.9        155.9         232.0      1,636.8

   1999
   Revenues (2)....................................................  $2,969.9     $3,167.4        $391.9     $6,529.2
   Operating income (loss) before depreciation and amortization (3)   1,358.0        538.8         (16.8)     1,880.0
   Depreciation and amortization...................................   1,028.3        117.2          70.5      1,216.0
   Operating income (loss).........................................     329.7        421.6         (87.3)       664.0
   Interest expense................................................     353.5         39.6         145.2        538.3
   Assets..........................................................  10,863.6      2,243.6      15,578.4     28,685.6
   Long-term debt..................................................   4,735.5        476.7       3,495.0      8,707.2
   Capital expenditures............................................     739.9         80.1          73.8        893.8
--------------
<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 (see Note 6).
(2)  Revenues include $508.1 million, $458.4 million and $448.2 million in 2001,
     2000 and 1999, 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 "operating cash flow (deficit)."
     Operating cash flow is a measure of a company's ability to generate cash to
     service its obligations, including debt service obligations, and to finance
     capital and other expenditures. In part due to the capital intensive nature
     of the Company's businesses and the resulting significant level of non-cash
     depreciation  and amortization  expense,  operating cash flow is frequently
     used  as  one  of the  bases  for  comparing  businesses  in the  Company's
     industries,  although the Company's  measure of operating cash flow may not
     be comparable to similarly  titled measures of other  companies.  Operating
     cash flow is the primary basis used by the Company's  management to measure
     the operating  performance of its businesses.  Operating cash flow does not
     purport to represent net income or net cash
</FN>
</TABLE>

                                     - 72 -

<PAGE>


COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (Concluded)


     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.

13.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)


<TABLE>
<CAPTION>
                                                              First      Second      Third       Fourth       Total
                                                             Quarter     Quarter    Quarter     Quarter       Year
                                                            ---------   ---------  ---------  ------------  ---------
                                                                   (Dollars in millions, except per share data)
<S>                                                          <C>         <C>        <C>          <C>         <C>
  2001
  Revenues.................................................. $2,196.1    $2,298.5   $2,355.5     $2,824.1    $9,674.2
  Operating loss............................................   (100.5)     (133.3)    (178.2)      (334.2)     (746.2)
  Income (loss) before extraordinary items and cumulative
       effect of accounting change..........................    616.7        36.7     (106.8)      (321.0)      225.6
  Basic earnings (loss) for common
       stockholders per common share
    Income (loss) before extraordinary items and cumulative
       effect of accounting change..........................     0.65        0.04      (0.11)       (0.34)       0.24
    Net income (loss).......................................     1.06        0.04      (0.11)       (0.34)       0.64
  Diluted earnings (loss) for common
       stockholders per common share
    Income (loss) before extraordinary items and cumulative
       effect of accounting change..........................     0.64        0.04      (0.11)       (0.34)       0.23
    Net income (loss).......................................     1.04        0.04      (0.11)       (0.34)       0.63
  Operating income before depreciation and amortization (1).    640.9       700.4      705.8        654.7     2,701.8

  2000
  Revenues.................................................. $1,938.9    $1,912.1   $1,960.0     $2,407.6    $8,218.6
  Operating income (loss)...................................     41.2       (31.6)     (56.4)      (114.2)     (161.0)
  Income (loss) before extraordinary items..................   (186.4)      198.8    1,249.1        783.6     2,045.1
  Basic earnings (loss) for common
       stockholders per common share
  Income (loss) before extraordinary items..................    (0.23)       0.21       1.37         0.87        2.27
    Net income (loss).......................................    (0.24)       0.20       1.37         0.86        2.24
  Diluted earnings (loss) for common
       stockholders per common share
  Income (loss) before extraordinary items..................    (0.23)       0.20       1.29         0.81        2.16
    Net income (loss).......................................    (0.24)       0.19       1.29         0.80        2.13
  Operating income before depreciation and amortization (1).    586.9       602.8      605.7        674.9     2,470.3
--------------
<FN>
(1)  See Note 12, note 3.
</FN>
</TABLE>

                                     - 73 -

<PAGE>



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

     None.

                                    PART III

     Except for the information  regarding  executive  officers required by Item
401 of Regulation S-K, which is included in Part I of this Annual Report on Form
10-K as Item 4A in  accordance  with General  Instruction  G(3),  the  following
required  information  is  incorporated  by  reference to our  definitive  Proxy
Statement for our Annual Meeting of Shareholders  presently scheduled to be held
in June 2002:

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

     We will file our  definitive  Proxy  Statement  for our  Annual  Meeting of
Shareholders with the Securities and Exchange  Commission on or before April 30,
2002.



                                     - 74 -

<PAGE>



                                     PART IV

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

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

              Independent Auditors' Report...................................38
              Consolidated Balance Sheet--December 31, 2001 and 2000.........39
              Consolidated Statement of Operations--Years
                Ended December 31, 2001, 2000 and 1999.......................40
              Consolidated Statement of Cash Flows--Years
                Ended December 31, 2001, 2000 and 1999.......................41
              Consolidated Statement of Stockholders' Equity--
                Years Ended December 31, 2001, 2000 and 1999.................42
              Notes to Consolidated Financial Statements.....................43

     (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 and 7(c) on
              December 20, 2001 relating to our announcement that we had entered
              into an Agreement  and Plan of Merger with AT&T Corp.  pursuant to
              which  we  agreed  to a  transaction  which  will  result  in  the
              combination of Comcast  Corporation and AT&T Broadband,  a holding
              company of AT&T's broadband business.

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

          2.1        Agreement  and Plan of Merger dated as of December 19, 2001
                     by and among AT&T  Corp.,  AT&T  Broadband  Corp.,  Comcast
                     Corporation,  AT&T  Broadband  Acquisition  Corp.,  Comcast
                     Acquisition    Corp.    and   AT&T   Comcast    Corporation
                     (incorporated  by  reference  to Exhibit 2.1 to our Current
                     Report on Form 8-K filed on December 20, 2001).
          3.1(a)     Amended and  Restated  Articles of  Incorporation  filed on
                     July 24, 1990  (incorporated by reference to Exhibit 3.1(a)
                     to our  Annual  Report  on Form  10-K  for the  year  ended
                     December 31, 1995).
          3.1(b)     Amendment to Restated  Articles of  Incorporation  filed on
                     July 14, 1994  (incorporated by reference to Exhibit 3.1(b)
                     to our  Annual  Report  on Form  10-K  for the  year  ended
                     December 31, 1995).
          3.1(c)     Amendment to Restated  Articles of  Incorporation  filed on
                     July 12, 1995  (incorporated by reference to Exhibit 3.1(c)
                     to our  Annual  Report  on Form  10-K  for the  year  ended
                     December 31, 1995).
          3.1(d)     Amendment to Restated  Articles of  Incorporation  filed on
                     June 24, 1996  (incorporated by reference to Exhibit 4.1(d)
                     to our  Registration  Statement  on Form S-3,  as  amended,
                     filed on July 16, 1996).
          3.1(e)     Form of Statement of  Designations,  Preferences and Rights
                     of  Series B  Convertible  Preferred  Stock of the  Company
                     (incorporated  by reference to Exhibit 3.1 to our Quarterly
                     Report on Form 10-Q for the quarter ended June 30, 1997).
          3.1(f)     Amendment   to   Restated    Articles   of    Incorporation
                     (incorporated  by reference to Exhibit 3.1(f) to our Annual
                     Report on Form 10-K for the year ended December 31, 2000).

                                     - 75 -

<PAGE>



          3.2        Amended and Restated By-Laws  (incorporated by reference to
                     Exhibit  3.1 to our  Quarterly  Report on Form 10-Q for the
                     quarter ended March 31, 1999).
          4.1        Specimen Class A Common Stock Certificate  (incorporated by
                     reference to Exhibit 2(a) to our Registration  Statement on
                     Form S-7 filed on September 17, 1980).
          4.2        Specimen   Class  A  Special   Common   Stock   Certificate
                     (incorporated  by  reference  to Exhibit 4(2) to our Annual
                     Report on Form 10-K for the year ended December 31, 1986).
          4.3        Indenture,  dated  as of  October  17,  1991,  between  the
                     Company and Bank of  Montreal/Harris  Trust  (successor  to
                     Morgan  Guaranty  Trust  Company of New  York),  as Trustee
                     (incorporated  by  reference  to  Exhibit 2 to our  Current
                     Report on Form 8-K filed on October 31, 1991).
          4.4        Form of  Debenture  relating  to our  $300,000,000  10-5/8%
                     Senior  Subordinated  Debentures due 2012  (incorporated by
                     reference  to Exhibit  4(17) to our  Annual  Report on Form
                     10-K for the year ended December 31, 1992).
          4.5        Form of Debenture relating to our $1,477,750,000  Principal
                     Amount at Maturity of 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).
          10.1*      Comcast  Corporation 1987 Stock Option Plan, as amended and
                     restated,  effective  December  15, 1998  (incorporated  by
                     reference to Exhibit 10.2 to our Annual Report on Form 10-K
                     for the year ended December 31, 1998).
          10.2*      Comcast  Corporation 1996 Stock Option Plan, as amended and
                     restated, effective June 5, 2001 (incorporated by reference
                     to Exhibit  10.1 to our  Quarterly  Report on Form 10-Q for
                     the quarter ended June 30, 2001).
          10.3*      Comcast  Corporation  1996 Deferred  Compensation  Plan, as
                     amended  and   restated,   effective   December   19,  2000
                     (incorporated  by  reference  to Exhibit 10.4 to our Annual
                     Report on Form 10-K for the year ended December 31, 2000).
          10.4*      Comcast  Corporation 1990 Restricted Stock Plan, as amended
                     and  restated,  effective  June 21, 1999  (incorporated  by
                     reference to Exhibit 10.3 to our  Quarterly  Report on Form
                     10-Q for the quarter ended June 30, 1999).
          10.5*      1992 Executive Split Dollar Insurance Plan (incorporated by
                     reference  to Exhibit  10(12) to our Annual  Report on Form
                     10-K for the year ended December 31, 1992).
          10.6*      Comcast  Corporation  1996 Cash Bonus Plan,  as amended and
                     restated,  effective  December  19, 2000  (incorporated  by
                     reference to Exhibit 10.7 to our Annual Report on Form 10-K
                     for the year ended December 31, 2000).
          10.7*      Comcast  Corporation  1996  Executive  Cash Bonus Plan,  as
                     amended through October 1, 2001.
          10.8*      Compensation  and  Deferred  Compensation  Agreement by and
                     between  Comcast  Corporation  and  Ralph  J.  Roberts,  as
                     amended and restated effective June 5, 2001.
          10.9*      Compensation  Agreement by and between Comcast  Corporation
                     and Brian L. Roberts  (incorporated by reference to Exhibit
                     10.1 to our  Quarterly  Report on Form 10-Q for the quarter
                     ended March 31, 2000).
          10.10*     Comcast Corporation Supplemental Executive Retirement Plan,
                     as amended and restated effective June 5, 2001.
          10.11      The  Comcast  Corporation  Retirement-Investment  Plan,  as
                     amended and restated  (incorporated by reference to Exhibit
                     10.3 to our  Quarterly  Report on Form 10-Q for the quarter
                     ended March 31, 2000).
          10.12      Defined Contribution Plans Master Trust Agreement,  between
                     Comcast Corporation and State Street Bank and Trust Company
                     (incorporated   by   reference   to  Exhibit  10.2  to  our
                     Registration  Statement  on Form S-8  filed on  October  5,
                     1995).



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

                                     - 76 -

<PAGE>



          10.13      Tax Sharing Agreement,  dated as of December 2, 1992, among
                     Storer  Communications,  Inc., TKR Cable I, Inc., TKR Cable
                     II, Inc., TKR Cable III, Inc.,  AT&T Corp. (as successor to
                     Tele-Communications,  Inc.),  the  Company  and each of the
                     Departing   Subsidiaries   that  are  signatories   thereto
                     (incorporated  by  reference  to  Exhibit 4 to our  Current
                     Report on Form 8-K filed on December 17,  1992,  as amended
                     by Form 8 filed January 8, 1993).
          10.14*     Comcast  Corporation  1997  Deferred  Stock Option Plan, as
                     amended  and   restated,   effective   November   29,  2001
                     (incorporated   by   reference   to  Exhibit   4.1  to  our
                     Registration  Statement  on Form S-8 filed on  January  22,
                     2002).
          10.15      Amended and Restated  Stockholders  Agreement,  dated as of
                     February 9, 1995, among the Company, Comcast QVC, Inc., QVC
                     Programming Holdings, Inc., Liberty Media Corporation,  QVC
                     Investment,  Inc. and Liberty QVC,  Inc.  (incorporated  by
                     reference to Exhibit 10.5 to our  Quarterly  Report on Form
                     10-Q for the quarter ended March 31, 1995).
          10.16      Indenture  dated as of May 1, 1997,  between  Comcast Cable
                     Communications, Inc. and The Bank of New York (as successor
                     in interest to Bank of Montreal Trust Company), as Trustee,
                     in respect of Comcast Cable  Communications,  Inc.'s 8-1/8%
                     Notes due 2004,  8-3/8%  Notes due 2007,  8-7/8%  Notes due
                     2017,  8-1/2% Notes due 2027, 6.20% Notes due 2008,  6.375%
                     Notes due 2006, 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.).
          10.17      Purchase  and Sale  Agreement  dated as of January 19, 1999
                     among SBC  Communications  Inc.,  Comcast Cellular Holdings
                     Corporation,  Comcast  Financial  Corporation  and  Comcast
                     Corporation  (incorporated by reference to Exhibit 10.34 to
                     our Annual Report on Form 10-K for the year ended  December
                     31, 1998).
          10.18      Agreement  and Plan of  Merger,  dated as of  November  16,
                     1999,  by  and  among  Comcast  Corporation,   Comcast  LCI
                     Holdings,  Inc.,  a wholly  owned  subsidiary  of  Comcast,
                     Lenfest  Communications,  Inc.  ("Lenfest")  and  Lenfest's
                     stockholders as named therein.  (incorporated  by reference
                     to Exhibit 10.1 to our Current  Report on Form 8-K filed on
                     December 13, 1999).
          10.19      Asset  Exchange  Agreement,  dated as of August  11,  2000,
                     among AT&T Corp. and Comcast  Corporation  (incorporated by
                     reference to Exhibit 10.1 to our  Quarterly  Report on Form
                     10-Q for the quarter ended September 30, 2000).
          10.20      Agreement  and Plan of  Reorganization,  dated as of August
                     11,  2000,   among  Comcast   Corporation,   Comcast  Cable
                     Communications,   Inc.,   Comcast  CCCI  II,  LLC,  Comcast
                     Teleport,    Inc.,   Comcast   Heritage,    Inc.,   Comcast
                     Communications    Properties,    Inc.,    and   AT&T   Corp
                     (incorporated by reference to Exhibit 10.2 to our Quarterly
                     Report on Form 10-Q for the  quarter  ended  September  30,
                     2000).
          10.21      Five-Year  Revolving Credit  Agreement,  dated as of August
                     24, 2000, among Comcast Cable Communications,  Inc. and the
                     Financial   Institutions  Party  Hereto,  Banc  of  America
                     Securities  LLC and Chase  Securities  Inc.,  as Joint Lead
                     Arrangers  and Joint Book  Managers,  BNY Capital  Markets,
                     Inc. and Salomon Smith Barney Inc., as  Co-Arrangers,  Bank
                     of  America,  N.A.,  as  Administrative  Agent,  Swing Line
                     Lender  and  Letter  of  Credit   Issuing   Lender,   Chase
                     Securities  Inc., as Syndication  Agent and Citibank,  N.A.
                     and  The  Bank of New  York,  as Co-  Documentation  Agents
                     (incorporated  by  reference to Exhibit 10.4 to the Comcast
                     Cable  Communications,  Inc.  Quarterly Report on Form 10-Q
                     for the quarter ended September 30, 2000).
          10.22      364-Day  Revolving Credit  Agreement,  dated as of July 17,
                     2001,  among  Comcast  Cable  Communications,  Inc. and the
                     Financial   Institutions  Party  Hereto,  Banc  of  America
                     Securities  LLC and Chase  Securities  Inc.,  as Joint Lead
                     Arrangers  and Joint Book  Managers,  BNY Capital  Markets,
                     Inc. and Salomon Smith Barney Inc., as  Co-Arrangers,  Bank
                     of America, N.A., as Administrative Agent, Chase Securities
                     Inc., as Syndication Agent and Citibank,  N.A. and The Bank
                     of New York, as Co-Documentation Agents.


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


                                     - 77 -

<PAGE>





          10.23      Asset  Exchange  Closing  Agreement  dated as of January 1,
                     2001  among  Comcast  Corporation,   the  Comcast  Parties,
                     Adelphia   Communications   Corporation  and  the  Adelphia
                     Parties  (incorporated by reference to Exhibit 10.24 to our
                     Annual Report on Form 10-K for the year ended  December 31,
                     2000).
          21         List of Subsidiaries.
          23.1       Consent of Deloitte & Touche LLP.



                                     - 78 -

<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 29, 2002.

                                               Comcast Corporation


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

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




<TABLE>
<CAPTION>

<S>                                       <C>                                               <C>

        Signature                                           Title                                 Date
        ---------                                           -----                                 ----

/s/ Ralph J. Roberts                     Chairman of the Board of Directors; Director        March 29, 2002
-----------------------------
Ralph J. Roberts

/s/ Julian A. Brodsky                      Vice Chairman of the Board of Directors;          March 29, 2002
-----------------------------                              Director
Julian A. Brodsky

/s/ Brian L. Roberts                       President; Director (Principal Executive          March 29, 2002
-----------------------------                              Officer)
Brian L. Roberts

/s/ John R. Alchin                           Executive Vice President, Treasurer             March 29, 2002
-----------------------------                    (Principal Financial Officer)
John R. Alchin

/s/ Lawrence J. Salva                               Senior Vice President                    March 29, 2002
-----------------------------                   (Principal Accounting Officer)
Lawrence J. Salva

/s/ Decker Anstrom                                         Director                          March 29, 2002
-----------------------------
Decker Anstrom

/s/ Sheldon M. Bonovitz                                    Director                          March 29, 2002
-----------------------------
Sheldon M. Bonovitz

/s/ Joseph L. Castle II                                    Director                          March 29, 2002
-----------------------------
Joseph L. Castle II

/s/ Felix G. Rohatyn                                       Director                          March 29, 2002
-----------------------------
Felix G. Rohatyn

/s/ Bernard C. Watson                                      Director                          March 29, 2002
-----------------------------
Bernard C. Watson

/s/ Irving A. Wechsler                                     Director                          March 29, 2002
-----------------------------
Irving A. Wechsler

/s/ Anne Wexler                                            Director                          March 29, 2002
-----------------------------
Anne Wexler
</TABLE>


                                      -79-
<PAGE>

                          INDEPENDENT AUDITORS' REPORT





Board of Directors and Stockholders
Comcast Corporation
Philadelphia, Pennsylvania

Our audits of the financial  statements referred to in our report dated February
5,  2002  (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)  appearing  in the Annual
Report on Form 10-K of Comcast  Corporation  (the  "Company") for the year ended
December 31, 2001 also included the financial statement schedule of the Company,
listed in Item 14(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.


/s/ Deloitte & Touche LLP

Philadelphia, Pennsylvania
February 5, 2002


                                     - 80 -

<PAGE>


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

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

                                YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                                --------------------------------------------

                                                   (In millions)




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

Allowance for Doubtful Accounts
<S>                                                <C>             <C>                <C>            <C>
2001                                               $141.7          $86.3              $74.1          $153.9

2000                                                136.6           65.9               60.8           141.7

1999                                                120.7           48.6               32.7           136.6


Allowance for Excess and Obsolete
  Electronic Retailing Inventories

2001                                               $105.5          $55.1              $46.3          $114.3

2000                                                 89.2           46.3               30.0           105.5

1999                                                 60.9           61.9               33.6            89.2



<FN>

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

                                                   - 81 -