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                                    FORM 10-K
                         ------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
     (Mark One)
          [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934
               FOR THE FISCAL YEAR ENDED
                                DECEMBER 31, 1999
                                       OR
          [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934
               FOR THE TRANSITION PERIOD FROM ___________ TO ____________

                          Commission file number 0-6983

                            [GRAPHIC OMITTED - LOGO]

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

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

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

       Registrant's telephone number, including area code: (215) 665-1700
                        --------------------------------
           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      NONE
                        ---------------------------------
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                      Class A Common Stock, $1.00 par value
                      Class A Special Common Stock, $1.00 par value
                          ----------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.
            Yes [X]                               No [  ]
                        --------------------------------
Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by  reference in Part III of this Form 10-K or any  amendments  to
this Form 10-K.                                                            [  ]
                           --------------------------
As of December 31, 1999, the aggregate  market value of the Class A Common Stock
and Class A Special  Common Stock held by  non-affiliates  of the Registrant was
$1.195 billion and $35.620 billion, respectively.
                           --------------------------
As of December 31, 1999, there were 716,442,482 shares of Class A Special Common
Stock, 25,993,380 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 2000.
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<PAGE>
                               COMCAST CORPORATION
                          1999 FORM 10-K ANNUAL REPORT
                                TABLE OF CONTENTS
                                     PART I
Item 1  Business..............................................................1
Item 2  Properties...........................................................16
Item 3  Legal Proceedings....................................................16
Item 4  Submission of Matters to a Vote of Security Holders..................16
Item 4A Executive Officers of the Registrant.................................16

                                     PART II
Item 5  Market for the Registrant's Common Equity and
          Related Stockholder Matters........................................18
Item 6  Selected Financial Data..............................................19
Item 7  Management's Discussion and Analysis of Financial Condition
          and Results of Operations..........................................21
Item 8  Financial Statements and Supplementary Data..........................30
Item 9  Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure...........................................63

                                    PART III
Item 10 Directors and Executive Officers of the Registrant...................63
Item 11 Executive Compensation...............................................63
Item 12 Security Ownership of Certain Beneficial Owners and Management.......63
Item 13 Certain Relationships and Related Transactions.......................63

                                     PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K......64
SIGNATURES...................................................................68
                           --------------------------
      This Annual Report on Form 10-K is for the year ending  December 31, 1999.
This Annual Report modifies and supersedes  documents filed prior to this Annual
Report. The SEC allows us to "incorporate by reference" information that we file
with them,  which means that we can  disclose  important  information  to you by
referring you directly to those documents. Information incorporated by reference
is considered to be part of this Annual Report. In addition, information that we
file  with  the  SEC in the  future  will  automatically  update  and  supersede
information  contained in this Annual Report. In this Annual Report,  "Comcast,"
"we," "us" and "our" refer to Comcast Corporation and its subsidiaries.

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

Factors Affecting Future Operations

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

      In  addition,  the cable  communications  industry  and the  provision  of
programming content may be affected by, among other things:

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

ITEM 1    BUSINESS

      We are principally involved in three lines of business:

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

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

      Our  consolidated  cable  operations  served 5.7 million  subscribers  and
passed 9.5  million  homes in the United  States as of  December  31,  1999.  In
January 2000, we acquired Lenfest  Communications,  Inc., a cable communications
company  serving  1.3  million  subscribers.  We have  entered  into a series of
transactions whereby we will acquire, subject to receipt of necessary regulatory
and other approvals,  1.2 million cable subscribers over the next twelve months.
Upon  completion  of these  pending  transactions,  we will  serve  8.2  million
subscribers.

      Through  QVC, we market a wide  variety of products  directly to consumers
primarily on  merchandise-focused  television programs. As of December 31, 1999,
QVC was available,  on a full and part-time  basis,  to over 72 million homes in
the United  States,  over 8 million homes in the United  Kingdom and Ireland and
over 17 million homes in Germany.

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

                  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

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

                      GENERAL DEVELOPMENTS OF OUR BUSINESS

      We entered into a number of significant transactions in 1999 which have or
are expected to close in 2000. We have summarized these  transactions  below and
have  more  fully  described  them  in  Note  3 to  our  consolidated  financial
statements in Item 8 of this Annual Report.

Pending Transactions as of December 31, 1999

      Acquisition of Lenfest Communications, Inc.

      In  January  2000,  we  acquired  Lenfest  Communications,  Inc.,  a cable
communications   company  serving  1.3  million  subscribers  primarily  in  the
Philadelphia area from AT&T Corp. and the Lenfest stockholders for 121.4 million
shares of our Class A Special  Common Stock with a value of $6.077  billion.  In
connection with the acquisition, we assumed $1.777 billion of debt.

      Acquisition of CalPERS' Interest in Jointly Owned Cable Properties

      In February 2000, we acquired the California  Public Employees  Retirement
System's 45% interest in Comcast MHCP Holdings, L.L.C., a 55% owned consolidated
subsidiary  of ours which serves  642,000  cable  subscribers  in Michigan,  New
Jersey and Florida  pursuant to an agreement  entered into in December  1999. In
February  2000,  the  acquisition  closed and,  as a result,  we now own 100% of
Comcast MHCP. The consideration was $750.0 million in cash.

      Jones Intercable Agreement

      In April 1999,  we acquired a  controlling  interest in Jones  Intercable,
Inc., a cable communications  company serving 1.1 million  subscribers,  through
our purchase of 12.8 million shares of Jones Intercable Class A Common Stock and
2.9 million shares of Jones Intercable  Common Stock for $706.3 million in cash.
In  connection  with  the  acquisition,  we  assumed  $1.499  billion  of  Jones
Intercable  debt. In June 1999, we acquired an additional  1.0 million shares of
Jones  Intercable  Class A Common  Stock for  $50.0  million  in cash  through a
private  transaction.  We have  consolidated  the  operating  results  of  Jones
Intercable since April 1999.
<PAGE>
      In December 1999, we entered into a merger agreement with Jones Intercable
to acquire all of the remaining  shares of Jones  Intercable not currently owned
by us. Under the terms of the merger  agreement,  Jones Intercable  shareholders
will  receive 1.4 shares of our Class A Special  Common  Stock for each share of
Jones  Intercable  Class A Common  Stock and  Common  Stock.  As a result of the
merger, we will own 100% of Jones Intercable.  We expect that the merger,  which
is subject to shareholder approval, will close in the first quarter of 2000.

      Time Warner Agreement

      In November 1999, we entered into an agreement to exchange  certain of our
cable  communications  systems with Time Warner Cable, a division of Time Warner
Entertainment  Company,  L.P. Under the terms of the agreement,  we will receive
cable  communications  systems serving 120,000  subscribers.  In exchange,  Time
Warner will receive systems that we currently own serving  133,000  subscribers.
At  closing,  Time Warner will pay us an  equalizing  payment of $31.2  million,
reflecting  the agreed upon  difference  in fair value of the Time Warner assets
and our  assets to be  exchanged,  subject to  adjustment.  The  transaction  is
subject to customary closing conditions and regulatory approvals and is expected
to close in the second quarter of 2000.

      Prime Communications Agreement

      In December 1998, we agreed to invest in Prime Communications LLC, a cable
communications  company  serving 430,000  subscribers.  Pursuant to the terms of
this  agreement,  in December 1998 we acquired from Prime a $50.0 million 12.75%
subordinated  note due 2008  issued by Prime.  In July  1999,  we 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. In November 1999, we made an additional  $20.0 million loan
to Prime (on the same terms as the original loan), and delivered a notice of our
intention  to convert the 6% note.  The note will be  converted  upon receipt of
customary closing conditions and regulatory approvals,  which are expected to be
obtained in the second  quarter of 2000. The owners of Prime have agreed that at
the time of conversion,  they will sell their  remaining 10% equity  interest in
Prime to us for $82.0  million,  plus accrued  interest from July 1999 at 7% per
annum.  As a  result,  we would  then own 100% of Prime  and  assume  management
control of Prime's  operations.  Upon  closing,  we will assume $550  million of
Prime's debt.

      AT&T Agreement

      In May 1999,  we entered into an agreement  with AT&T to exchange  various
cable communications  systems. Under the terms of the agreement, we will receive
cable communications systems serving 1.5 million subscribers.  In exchange, AT&T
will  receive  systems that we currently  own or will  acquire  serving  750,000
subscribers. At closing, we will pay AT&T an equalizing payment of approximately
$3.4  billion  (subject  to  adjustment  based  on  the  actual  number  of  net
subscribers  acquired and the per subscriber  price of certain  subscribers) for
the 750,000 net subscribers to be acquired as a result of the exchanges. We will
pay for the net  subscribers  acquired in  connection  with the  exchanges  with
shares of AT&T  common  stock that we  currently  own or may  acquire  and other
securities  or assets  which would  permit the  exchanges  to be tax-free to the
maximum extent possible.  The agreed upon value of any AT&T common stock used in
the  exchange  that was owned by us at the time of the  agreement  is $54.41 per
share.

      Under the terms of the  agreement,  we also  agreed to offer  AT&T-branded
residential  wireline  telephony  in our cable  communications  system  markets,
provided AT&T has concluded separate  residential  telephony  agreements with at
least two other  non-AT&T  affiliated  multi-system  cable  operators.  AT&T has
agreed to grant us the most  favorable  terms AT&T has reached with any of those
or other multi-system cable operators.

      The majority of the system exchanges are contingent upon the completion of
AT&T's  acquisition of MediaOne Group, Inc., which is expected to close in 2000,
subject to customary closing conditions and regulatory approvals.

      Adelphia Agreement

      In May 1999,  we entered  into an  agreement  to  exchange  certain  cable
communications  systems  with  Adelphia  Communications.  Under the terms of the
agreement,   we  will  receive  cable  communications  systems  serving  464,000
subscribers   from   Adelphia.   In  exchange,   Adelphia   will  receive  cable
communications systems currently owned by us serving 440,000 subscribers. All of
the  systems  involved  in the  systems  exchanges  will be  valued  based  upon
independent  appraisals  with any difference in relative value to be funded with
cash or additional cable  communications  systems. The transaction is subject to
customary closing  conditions and regulatory  approvals and is expected to close
in the third quarter of 2000.

                                      - 2 -
<PAGE>
Completed Transactions During 1999

      MediaOne Group, Inc. Agreement

      In March  1999,  we  entered  into an  Agreement  and Plan of Merger  with
MediaOne pursuant to which MediaOne was to be merged with us. Under the terms of
that agreement, MediaOne could terminate the agreement under certain conditions,
provided  that it pay us a  termination  fee of $1.5  billion in cash.  In April
1999,  AT&T submitted an offer to purchase  MediaOne.  In May 1999, the MediaOne
board of directors  notified us that it had  determined  that the AT&T offer was
superior to our offer.  MediaOne then  terminated  the agreement and paid us the
termination fee.

      Sale of Comcast Cellular Corporation

      In July 1999, we sold Comcast Cellular  Corporation to SBC Communications,
Inc. for $361.1  million in cash and the assumption of $1.315 billion of Comcast
Cellular debt. We recognized a gain on the sale of $355.9 million, net of income
tax expense.
                          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.

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

      As of December 31,  1999,  81% of our cable  subscribers  were served by a
system with a capacity of at least 550-MHz and 60% of our cable subscribers were
served by a system with a capacity of at least 750-MHz.  We are deploying  fiber
optic cable and  upgrading  the  technical  quality 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 access service and,
potentially, telephony.

      We will  incur  significant  capital  expenditures  in the  future for the
upgrading and rebuilding of the cable  communications  systems to be acquired by
us as a  result  of our  acquisition  of  Lenfest  Communications,  our  pending
acquisition of Prime  Communications and the pending system exchanges with AT&T,
Time Warner and Adelphia.

      Franchises

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

      o     rate and service conditions,
      o     construction schedules,
      o     types of programming  and provision of services to schools and other
            public institutions, and
      o     insurance and indemnity bond requirements.

      Our  franchises   typically  provide  for  periodic  payment  of  fees  to
franchising  authorities of up to 5% of "revenues" (as defined by each franchise
agreement).  We normally pass those fees on to  subscribers.  In many cases,  we
need the consent of the franchising  authority to transfer our  franchises.  The
franchises are granted for varying lengths of time.

      Although franchises  historically have been renewed,  renewals may include
less  favorable  terms and  conditions.  Under existing law,  franchises  should
continue to be renewed for  companies  that have provided  adequate  service and
have complied  generally with franchise  terms.  The  franchising  authority may
choose to award additional  franchises to competing companies at any time. As of
January 31, 2000, we have 1,465  franchises in the United States,  including 381
franchises acquired from Lenfest Communications.

      Revenue Sources

      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. Packages of programming services offered to subscribers may consist
of:
      o     national television networks,

                                      - 3 -
<PAGE>
      o     local and distant independent,  specialty and educational television
            stations,
      o     satellite-delivered programming,
      o     locally originated programs,
      o     audio programming, and
      o     electronic retailing programs.


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

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

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

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

      During 1999, we made our digital  cable  service  available to over 80% of
our  subscribers.  As of December 31, 1999, more than 515,000  subscribers  were
receiving our digital cable service for an additional monthly fee. Digital cable
service  allows us to use digital  compression  to  substantially  increase  the
capacity  of our cable  communications  systems,  as well as to improve  picture
quality.

      We market Excite@Home's high-speed cable modem services as Comcast@Home in
areas  served  by  certain  of our  cable  communications  systems.  Residential
subscribers  can  connect  their  personal  computers  via  cable  modems  to  a
high-speed  national network  developed and managed by Excite@Home.  Subscribers
can then access online  information,  including  the Internet,  at faster speeds
than  that  of  conventional  modems.  Through  Excite@Home,   we  also  provide
businesses  with  Internet   connectivity   solutions  and  networked   business
applications.  Together with Excite@Home, we provide national and local content,
sell advertising to businesses and provide services to residential  subscribers.
As of December  31, 1999,  the  Comcast@Home  service was  available to over 3.2
million homes in 14 markets and served 142,000 subscribers.

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

      o     telemarketing,
      o     direct mail advertising,
      o     door-to-door selling, and
      o     local media advertising.

      Programming

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

      o     increases in the number of subscribers,
      o     expansion of the number of channels provided to customers, 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 anticipate that future contract renewals will result
in  programming  costs that are higher than our costs  today,  particularly  for
sports programming.

      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 recently  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. We have 10
call centers in operation as of December 31, 1999 which serve  approximately 2.5
million subscribers.  Subscribers in our remaining cable communications  systems
receive   customer   service   primarily   through   our   local,   system-based
representatives.

                                      - 4 -
<PAGE>
      Our Cable Communications Systems

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

<TABLE>
<CAPTION>
                                                                          1999(8)      1998        1997       1996(8)     1995
                                                                        -----------  -------    ---------    --------    -------
<S>                                                                      <C>         <C>         <C>         <C>         <C>
Basic Cable
      Homes Passed (1)..................................................    9,522       7,382       7,138       6,975     5,570
      Subscribers (2)...................................................    5,720       4,511       4,366       4,280     3,407
      Penetration (3)...................................................     60.1%       61.1%       61.2%       61.4%     61.2%
Digital Cable
      "Digital Ready" Subscribers (4)...................................    4,637       1,570
      Subscribers.......................................................      515          78
      Penetration (5)...................................................     11.1%        5.0%
Comcast@Home
      "Modem Ready" Homes Passed (6)....................................    3,259       1,804         866
      Subscribers.......................................................      142          51          10
      "Modem Ready" Penetration (7).....................................      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 basic cable subscriber.
(3) Basic cable  penetration  means the number of basic cable  subscribers  as a
    percentage of basic 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) Digital cable penetration means the number of digital cable subscribers as a
    percentage of "digital ready" subscribers.
(6) A home passed is "modem ready" if we can connect it to our internet  service
    connection system without further extending the transmission lines.
(7) "Modem ready"  penetration  means the number of Comcast@Home  customers as a
    percentage of "modem ready" homes passed.
(8) In November  1996,  we acquired  the cable  operations  of The E.W.  Scripps
    Company.  In  April  1999,  we  acquired  a  controlling  interest  in Jones
    Intercable, Inc.
</FN>
</TABLE>

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

      Competition

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

      o     local television broadcast stations that provide off-air programming
            which can be received using a roof-top antenna and television set,
      o     program  distributors  that transmit  satellite  signals  containing
            video programming, data and other information to receiving dishes of
            varying sizes located on the subscriber's premises,
      o     satellite  master  antenna  television  systems,  commonly  known as
            SMATV,  which  generally  serve  condominiums,  apartment and office
            complexes and residential developments,
      o     multichannel,  multipoint  distribution service operators,  commonly
            known as MMDS or  wireless  cable  operators,  which  use  low-power
            microwave  frequencies  to  transmit  video  programming  and  other
            information over-the-air to subscribers,
      o     other cable  operators  who build and operate  cable  systems in the
            same communities that we serve, commonly known as overbuilders,
      o     interactive online computer services,
      o     newspapers, magazines and book stores,
      o     movie theaters,
      o     live concerts and sporting events, and
      o     home video products.

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

      o     superior technical performance,
      o     superior customer service,
      o     a greater variety of video programming, and
      o     new products such as digital cable and cable modem  Internet  access
            and potential products such as telephony.

                                      - 5 -
<PAGE>
      Federal law allows  local  telephone  companies  to  provide,  directly to
subscribers,  a wide  variety of services  that are  competitive  with our cable
communications services. Some local telephone companies:

      o     provide video services  within and outside their  telephone  service
            areas  through a  variety  of  methods,  including  cable  networks,
            satellite program distribution and wireless transmission facilities,
            and/or
      o     have announced  plans to construct and operate cable  communications
            systems in various states.

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

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

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

      In the past few years,  Congress has enacted  legislation  and the Federal
Communications  Commission,  commonly  known as the FCC, has adopted  regulatory
policies intended to provide a more favorable operating environment for existing
and new technologies that provide, or have the potential to provide, substantial
competition to our cable  communications  systems.  These  technologies  include
direct  broadcast  satellite  service,  commonly  known  as DBS,  among  others.
According to recent  government and industry reports,  conventional,  medium and
high-power  satellites  currently provide video programming to over 13.1 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  program services
similar to those provided by cable communications systems.

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

      Two  major  companies,   DirecTV  and  Echostar,  are  currently  offering
nationwide  high-power  DBS  services.   Recently  enacted  federal  legislation
establishes,  among other things, a permanent  compulsory copyright license that
permits satellite  carriers to retransmit local broadcast  television signals to
subscribers  who reside  inside the local  television  station's  market.  These
companies have already begun  transmitting  local  broadcast  signals in certain
major televison  markets and have announced their intention to expand this local
television broadcast retransmission service to other domestic markets. With this
legislation,  satellite carriers become more competitive to cable communications
system  operators like us because they are now able to offer  programming  which
more closely  resembles what we offer. We are unable to predict the effects this
legislation and 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

                                      - 6 -
<PAGE>
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.  Our ability to compete for  subscribers  in  residential  and
commercial developments served by SMATV system operators is uncertain.  However,
we are developing  competitive  packages of services (video, data and telephony)
to offer to these residential and commercial developments.

      Cable  communications  systems also  compete  with MMDS or wireless  cable
systems,  which  are  authorized  to  operate  in  areas  served  by  our  cable
communications  systems.  The FCC recently  amended its  regulations  to provide
flexibility  to  wireless  system  operators  to employ  digital  technology  in
delivering  two-way  communications  services,   including  high-speed  Internet
access.  Federal law significantly  limits certain local restrictions on the use
of roof-top,  satellite and microwave antennae to receive satellite  programming
and over-the-air broadcasting services.

      Many of our cable communications  systems are currently offering,  or plan
to offer,  interactive  online computer  services to subscribers.  These systems
will compete  with a number of other  companies,  many of whom have  substantial
resources, such as:

      o     existing Internet service providers, commonly known as ISPs,
      o     local telephone companies, and
      o     long distance telephone companies.

      Recently, a number of companies,  including telephone companies and ISP's,
have  asked  local,  state  and  federal   governments  to  mandate  that  cable
communications  systems operators provide capacity on their cable infrastructure
so that these  companies and others may deliver  Internet  services  directly to
customers  over cable  facilities.  In  response,  several  local  jurisdictions
attempted to impose these capacity  obligations on several cable  communications
operators. Various cable communications companies,  including us, have initiated
litigation challenging these municipal requirements.  In addition, two antitrust
lawsuits  have been filed in federal  courts  alleging  that we and other  cable
communications  companies have improperly  refused to allow our cable facilities
to be used by certain  ISPs to serve their  customers.  Franchise  renewals  and
transfers could become more difficult  depending upon the outcome of this issue.
In a 1999 report to Congress,  the FCC  declined to institute an  administrative
proceeding  to examine this issue.  It is expected that the FCC,  Congress,  and
state and local regulatory authorities will continue to consider actions in this
area.

      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,  including
interactive  online services,  without regard to present service  boundaries and
other  regulatory  restrictions.  We are unable to  predict  the  likelihood  of
success of competing  online services  offered by our competitors or what impact
these competitive ventures may have on our business and operations.

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

Commerce

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

      Revenue Sources

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

      Viewers  place orders to purchase QVC  merchandise  by calling a toll-free
telephone number.  QVC uses automatic call distributing  equipment to distribute
calls to its operators. The majority of all payments for purchases are made with
a major credit card or QVC's  private  label credit card.  QVC's  private  label
credit  card  program  is  serviced  by an  unrelated  third  party.  QVC  ships
merchandise  promptly from its distribution  centers,  typically within 24 hours
after receipt of an order. QVC's

                                      - 7 -
<PAGE>
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 60.6 million cable  television  homes.  An additional 1.3 million cable
television  homes  receive  QVC on a less than full time basis and 11.9  million
home  satellite  dish users receive QVC  programming.  The QVC program  schedule
consists of one-hour and  multi-hour  program  segments.  Each program  theme is
devoted to a  particular  category of product or  lifestyle.  From time to time,
special program segments are devoted to merchandise associated with a particular
celebrity, event, geographical region or seasonal interest.

      QVC sells products over  electronic  media in Germany,  the United Kingdom
and  Ireland.  In the UK and  Ireland,  this  service  currently  reaches over 8
million cable television and home satellite  dish-served homes. In Germany, this
service  currently  is available to over 17 million  cable  television  and home
satellite  dish-served homes.  However, we estimate that only 7 million homes in
Germany have programmed their television sets to receive this service.

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

      QVC Transmission

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

      Program Distributors

      We  have  entered  into   affiliation   agreements   with  video   program
distributors  in  the US to  carry  QVC  programming.  Generally,  there  are no
additional  charges to subscribers  for the  distribution  of QVC. In return for
carrying QVC, each programming  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. 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, 1999,
10.2% of the total homes reached by QVC were  attributable to QVC's  affiliation
agreements  with us and 22% with AT&T,  the indirect  owner of a 43% interest in
QVC, and their respective subsidiaries.

      QVC competes  for cable  channels  against  similar  electronic  retailing
programming,  as well as  against  alternative  programming  supplied  by  other
sources,  including news, public affairs,  entertainment and sports programmers.
QVC's business depends on its affiliation with programming  distributors for the
transmission of QVC programming.  If a significant number of homes are no longer
served because of termination  or  non-renewal  of affiliation  agreements,  our
financial  results could be adversely  affected.  QVC has incentive  programs to
induce programming  distributors to enter into or extend affiliation  agreements
or to increase the number of homes under existing affiliation agreements.  These
incentives  include  various forms of marketing,  launch and equipment  purchase
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  and interest with the entire
retail industry, including department, discount, warehouse and specialty stores,
mail  order and other  direct  sellers,  shopping  center and mall  tenants  and
conventional  retail stores.  On television,  QVC competes with other satellite-
transmitted programs for channel space and viewer loyalty. We believe that until
digital  compression  is  utilized  on a  large-scale  basis,  most  programming
distributors  will not devote more than two channels to  televised  shopping and
may allocate  only one.  Many systems have limited  channel  capacity and may be
precluded from adding any new programs at the present time. The  development and
use of digital compression is expected to provide programming  distributors with
greater  channel   capacity.   Greater  channel   capacity  would  increase  the
opportunity  for  QVC,  in  addition  to other  home  shopping  programs,  to be
distributed on additional channels.

                                      - 8 -
<PAGE>
Content

      We  have  made  investments  in  cable   television   networks  and  other
programming related enterprises as a means of generating additional revenues and
subscriber  interest.  Our  programming  investments  as of  December  31,  1999
include:


<TABLE>
<CAPTION>
                                                                                                Ownership
Investment                                   Description                                       Percentage
-------------------------     ---------------------------------------------------------      ---------------
<S>                                                                                              <C>
CN8-The Comcast Network       Regional and local programming                                     100.0%
Comcast SportsNet             Regional sports programming and events                              46.4%
Comcast Sports Southeast      Regional sports programming and events                             100.0%
E! Entertainment              Entertainment-related news and original programming                 39.7%
Style                         Fashion-related programming                                         39.7%
The Golf Channel              Golf-related programming                                            40.1%
In Demand                     Pay-per-view programming                                            11.1%
Outdoor Life                  Outdoor activities                                                  16.8%
Speedvision                   Automotive, marine and aviation                                     14.8%
The Sunshine Network          Regional sports and public affairs                                  15.6%
</TABLE>

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


      CN8-The Comcast Network

      CN8-The Comcast Network,  our regional programming service is delivered to
more than 4.0 million cable  subscribers in Pennsylvania,  New Jersey,  Delaware
and Maryland.  CN8 provides original  programming,  including local and regional
news and public affairs,  regional sports,  health,  cooking and family-oriented
programming. We intend to introduce similar programming in other areas we serve.

      Comcast SportsNet

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

      Comcast Sports Southeast

      We created Comcast Sports Southeast  ("CSS") in September 1999. We deliver
CSS to  approximately  1.3  million  cable  subscribers  primarily  in  Alabama,
Georgia, Mississippi, South Carolina and Tennessee. CSS is a satellite-delivered
service that provides original sports  programming and sports news geared toward
the Southeast.

      E! Entertainment

      E!  Entertainment is a 24-hour network with  programming  dedicated to the
world of entertainment.  Programming formats include behind-the-scenes specials,
original  movies and  series,  news,  talk shows and  comprehensive  coverage of
entertainment  industry awards shows and film festivals  worldwide.  The network
has approximately 60 million subscribers.  We obtained a controlling interest in
E! Entertainment in March 1997.

      Style

      Style,  one of the  family of E!  Networks,  is our 24- hour  basic  cable
network dedicated to fashion,  home design,  beauty,  health,  fitness and more,
with distribution to approximately 6 million  subscribers.  We launched Style in
October 1998.

      The Golf Channel

      The  Golf  Channel  is a  24-hour  network  devoted  exclusively  to  golf
programming  with  distribution to  approximately  30 million  subscribers.  The
programming  schedule  includes  over  80  live  tournaments,  golf  instruction
programs and golf news. In February  2000, we exercised  certain call rights and
acquired  an  additional  14.6%  interest  for $99.0  million.  As a result,  we
currently own 54.7% of The Golf Channel.

      In Demand

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

      Outdoor Life

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

      Speedvision

      Speedvision  is a 24-hour  network  devoted to  automotive,  aviation  and
marine enthusiasts. Its programming

                                      - 9 -
<PAGE>
includes   original   consumer  news,   motorsports   coverage,   lifestyle  and
instructional programs and historical documentaries.

      The Sunshine Network

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

Investments

      We have  invested  in  emerging  and growing  companies  in three  primary
business areas:

      o     Cable, infrastructure and communications,
      o     Interactive content, and
      o     E-commerce.

As of December 31, 1999, our investments are valued at $13.155 billion,  with an
historical cost of $3.957 billion.

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

                           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,  and  state  and  local  governmental  authorities.  The  courts,  and
especially  the  federal  courts,  play an  important  oversight  role as  these
statutory and regulatory  provisions are interpreted and enforced by the various
federal, state and local governmental units.

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

      The Communications Act and FCC Regulations

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

      o     subscriber rates,
      o     the content of programming we offer our subscribers,  as well as the
            way we sell our  program  packages  to  subscribers  and other video
            program distributors,
      o     the use of our cable systems by local franchising  authorities,  the
            public and other unrelated third parties,
      o     our franchise agreements with governmental authorities,
      o     cable system ownership limitations and prohibitions, and
      o     our use of utility poles and conduit.

      Subscriber Rates

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

      o     the lowest  level of  programming  service,  typically  called basic
            service,  which  generally  includes  local  broadcast  channels and
            public access or  governmental  channels  required by the operator's
            franchise, and
      o     the installation, sale and lease of equipment used by subscribers to
            receive basic  service,  such as converter  boxes and remote control
            units.

      The FCC has adopted detailed rate  regulations,  guidelines and rate forms
that we and the franchising authority must use in connection with the regulation
of our basic service and equipment rates. If the franchising authority concludes
that our rates are not in  accordance  with the FCC's rate  regulations,  it may
require us to reduce our rates and to refund  overcharges to  subscribers,  with
interest.  We may appeal adverse rate  decisions to the FCC. Rate  regulation of
non-basic cable programming service tiers ended after March 31, 1999.

                                     - 10 -
<PAGE>
      The Communications Act and the FCC's regulations also:

      o     prohibit   regulation  of  rates  charged  by  cable  operators  for
            programming  offered on a per channel or per program basis,  and for
            multi- channel groups of non-basic programming,
      o     require  operators to charge uniform rates throughout each franchise
            area that is not subject to effective competition,
      o     prohibit  regulation of non-predatory bulk discount rates offered by
            operators to subscribers in commercial and residential developments,
            and
      o     permit regulated equipment rates to be computed by aggregating costs
            of broad categories of equipment at the franchise,  system, regional
            or company level.

      Over  the  past  few  years,  we  have  reached  agreements  with  various
regulatory  bodies to resolve  outstanding  rate  disputes.  We believe that the
resolution  of these  proceedings  did not  have  and  will not have a  material
adverse impact on our financial position, results of operations or liquidity.

      Content Requirements

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

      o     to elect once every  three  years to require a cable  communications
            system to carry the station, subject to certain exceptions, or
      o     to  negotiate  with us on the terms by which we carry the station on
            our cable  communications  system,  commonly  called  retransmission
            consent.

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

      o     all "distant" commercial  television stations (except for commercial
            satellite-delivered independent "superstations" such as WGN),
      o     commercial radio stations, and
      o     certain low-power television stations.

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

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

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

      o     precludes any satellite  video  programmer  affiliated  with a cable
            company,  or  with a  common  carrier  providing  video  programming
            directly to its  subscribers,  from favoring an  affiliated  company
            over competitors,
      o     requires  such  programmers  to  sell  their  satellite-   delivered
            programming to other video program distributors, and
      o     limits  the  ability  of  such   programmers   to  offer   exclusive
            programming arrangements to their affiliates.

      In two administrative decisions, the FCC's Cable Services Bureau concluded
that  the  program  access  rules  did  not  apply  to   terrestrially-delivered
programming, such as Comcast SportsNet. The FCC is currently reviewing the Cable
Services Bureau's decisions.

      The Communications Act contains  restrictions on the transmission by cable
operators of obscene or indecent  programming.  It requires  cable  operators to
block fully both the video and audio  portion of  sexually  explicit or indecent
programming  on channels  that are  primarily  dedicated  to  sexually  oriented
programming or  alternatively  to carry such  programming  only at "safe harbor"
time  periods.  A  three-judge  federal  district  court  determined  that  this
provision was  unconstitutional.  The United  States  Supreme Court is currently
reviewing the lower court's ruling.

                                     - 11 -
<PAGE>
      The FCC actively  regulates  other aspects of our  programming,  involving
such areas as:

      o     our  use  of  syndicated  and  network  programs  and  local  sports
            broadcast programming,
      o     advertising in children's programming,
      o     political advertising,
      o     origination cablecasting,
      o     sponsorship identification, and
      o     closed captioning of video programming.

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

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

      o     permits  franchising  authorities to require cable  operators to set
            aside  channels  for public,  educational  and  governmental  access
            programming; and
      o     requires  a  cable  system  with 36 or more  activated  channels  to
            designate  a  significant   portion  of  its  channel  capacity  for
            commercial  leased  access by third  parties to provide  programming
            that may compete with services offered by the cable operator.


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

      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 could deny us a franchise renewal.  Moreover,
even if our franchise is renewed,  the franchising  authority may seek to impose
upon us new and  more  onerous  requirements  such as  significant  upgrades  in
facilities  and services or increased  franchise fees as a condition of renewal.
Similarly,  if a franchising authority's consent is required for the purchase or
sale of our cable system or franchise,  the franchising authority may attempt to
impose more  burdensome or onerous  franchise  requirements  on us in connection
with a  request  for  such  consent.  Historically,  cable  operators  providing
satisfactory services to their subscribers and complying with the terms of their
franchises have typically obtained franchise  renewals.  We believe that we have
generally met the terms of our  franchises  and have provided  quality levels of
service.

                                     - 12 -
<PAGE>
We anticipate  that our future  franchise  renewal  prospects  generally will be
favorable.

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

      Ownership Limitations

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

      The Communications Act also authorizes the FCC to impose nationwide limits
on the number of  subscribers  under the  control of a cable  operator.  While a
federal district court has declared this limitation to be  unconstitutional  and
delayed  its   enforcement,   the  FCC  has  reconsidered  its  cable  ownership
regulations and:

      o     reaffirmed  its  30%  nationwide  subscriber  ownership  limit,  but
            maintained  its voluntary  stay on  enforcement  of that  regulation
            pending further court action,
      o     reaffirmed   its   subscriber   ownership    information   reporting
            requirements, and
      o     modified its  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.

Also  pending  on appeal is a  challenge  to the  statutory  and FCC  regulatory
limitations  on the number of channels that can be occupied on a cable system by
a video  programmer  in which a cable  operator  has an  attributable  ownership
interest.  We are unable to predict the outcome of these judicial and regulatory
proceedings or the impact any ownership  restrictions might have on our business
and operations.

      The Communications Act eliminated the statutory  prohibition on the common
ownership,  operation or control of a cable  system and a  television  broadcast
station in the same market.  While the FCC has eliminated its regulations  which
precluded the  cross-ownership  of a national  broadcasting  network and a cable
system,  it has not yet completed its review of other regulations which prohibit
the common  ownership of other  broadcasting  interests and cable systems in the
same geographical areas.

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

      o     eliminated  federal  legal  barriers  to  competition  in the  local
            telephone and cable  communications  businesses,  including allowing
            local  telephone  companies  to offer video  services in their local
            telephone service areas,
      o     preempted state and local laws and regulations which impose barriers
            to telecommunications competitions,
      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,   but  we  are  unable  to  predict  the  impact  these  rule
modifications may have on our business and operations.

      Pole Attachment Regulation

      The  Communications  Act requires the FCC to regulate the rates, terms and
conditions  imposed by public  utilities for cable  systems' use of utility pole
and conduit  space unless  state  authorities  demonstrate  to the FCC that they
adequately  regulate pole attachment  rates, as is the case in certain states in
which we operate.  In the absence of state regulation,  the FCC administers pole
attachment

                                     - 13 -
<PAGE>
rates on a  formula  basis.  The  FCC's  current  rate  formula,  which is being
reevaluated  by the FCC,  governs the maximum rate certain  utilities may charge
for  attachments  to their poles and conduit by cable  operators  providing only
cable   services   and,   until   2001,   by   certain    companies    providing
telecommunications  services.  The FCC also  adopted a second rate  formula that
will be effective in 2001 and will govern the maximum rate certain utilities may
charge  for  attachments  to their  poles and  conduit  by  companies  providing
telecommunications services, including cable operators.

      Any  resulting  increase  in  attachment  rates  due to the FCC's new rate
formula will be phased in over a five-year  period in equal  annual  increments,
beginning in February 2001. Several parties have requested the FCC to reconsider
its new  regulations and several parties have challenged the new rules in court.
A federal  appellate  court  recently  upheld the  constitutionality  of the new
statutory  provision  which  requires that  utilities  provide cable systems and
telecommunications  carriers with nondiscriminatory  access to any pole, conduit
or right-of-way  controlled by the utility. We are unable to predict the outcome
of the legal  challenge to the FCC's new  regulations or the ultimate impact any
revised FCC rate formula or any new pole attachment rate regulations  might have
on our business and operations.

      Other Regulatory Requirements of the
      Communications Act and the FCC

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

      o     customer service,
      o     subscriber privacy,
      o     marketing practices,
      o     equal employment opportunity, and
      o     technical standards and equipment compatibility.

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

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

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

Copyright

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

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

      Our cable  communications  systems  often utilize music in the programs we
provide  to  subscribers   including  local   advertising,   local   origination
programming and pay-per-view  events.  The right to use this music is controlled
by music performance rights societies who negotiate on behalf of their copyright
owners for license fees covering each performance. The cable industry and one of
these  societies have agreed upon a standard  licensing  agreement  covering the
performance of music contained in programs  originated by cable operators and in
pay-per-view  events.  Negotiations  on a  similar  licensing  agreement  are in
process  with  another  music  performance  rights  organization.   Rate  courts
established by a federal court exist to determine appropriate copyright coverage
and payments in the event the parties fail to reach a negotiated settlement.  We
are unable to predict  the  outcome  of these  proceedings  or the amount of any
license fees we may be

                                     - 14 -
<PAGE>
required to pay for the use of music.  We do not believe that the amount of such
fees will be  significant  to our financial  position,  results of operations or
liquidity.

State and Local Regulation

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

      o     cable service rates,
      o     franchise fees,
      o     franchise term,
      o     system construction and maintenance obligations,
      o     system channel capacity,
      o     design and technical performance,
      o     customer service standards,
      o     franchise renewal,
      o     sale or transfer of the franchise,
      o     service territory of the franchisee,
      o     indemnification of the franchising authority,
      o     use and occupancy of public streets, and
      o     types of cable services provided.

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

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

Commerce and Content

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

                                    EMPLOYEES

      As of December 31, 1999, we had approximately  25,700 employees.  Of these
employees,  approximately  12,000  were  associated  with cable  communications,
approximately 9,700 were associated with electronic  retailing and approximately
4,000 were associated with other  divisions.  We believe that our  relationships
with our employees are good.

                                     - 15 -
<PAGE>
ITEM 2    PROPERTIES

      Cable

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

      Commerce

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

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

ITEM 3    LEGAL PROCEEDINGS

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

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      Not applicable.


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 2000, or as soon thereafter
as each of their  successors is elected and qualified.  The following table sets
forth certain information concerning our principal executive officers, including
their ages, positions and tenure as of December 31, 1999:

<TABLE>
<CAPTION>
                                        Officer
Name                         Age         Since               Position with Comcast
--------------------       --------     -------      -----------------------------------------------------
<S>                          <C>          <C>        <C>
Ralph J. Roberts             79           1969       Chairman of the Board of Directors; Director
Julian A. Brodsky            66           1969       Vice Chairman of the Board of Directors; Director
Brian L. Roberts             40           1986       President; Director
Lawrence S. Smith            52           1988       Executive Vice President
John R. Alchin               51           1990       Executive Vice President; Treasurer
Stanley L. Wang              59           1981       Executive Vice President; General Counsel; Secretary
</TABLE>

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

                                     - 16 -
<PAGE>
      Ralph J. Roberts has served as a Director and as our Chairman of the Board
of Directors for more than five years.  Mr.  Roberts  devotes a major portion of
his time to our business and affairs.  Mr.  Roberts has been the President and a
Director of Sural Corporation ("Sural"), a privately-held investment company and
our  controlling  shareholder,  for more  than  five  years.  Mr.  Roberts  also
presently  serves as a  Director  of Jones  Intercable,  Inc.  and  Comcast  LCI
Holdings, Inc. Mr. Roberts is the father of Brian L. Roberts.

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

      Brian L.  Roberts has served as our  President  and as a Director for more
than five years. Mr. Roberts devotes a major portion of his time to our business
and affairs. Mr. Roberts presently serves as Vice President and as a Director of
Sural.  As  of  December  31,  1999,  our  shares  owned  by  Sural  constituted
approximately  85% 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 also presently serves as a Director of The Bank of New
York,  Excite@Home,  Jones Intercable,  Inc., and Comcast LCI Holdings, Inc. Mr.
Roberts is a son of Ralph J. Roberts.

      Lawrence S. Smith was named an Executive  Vice President in December 1995.
Prior to that time,  Mr. Smith served as a Senior Vice  President  for more than
five years. Mr. Smith presently serves as a Director of Jones  Intercable,  Inc.
and Comcast LCI Holdings, Inc.

      John R. Alchin was named an Executive  Vice  President  in February  2000.
Prior to that time,  Mr.  Alchin  served as our  Treasurer  and as a Senior Vice
President  for more than five  years.  Mr.  Alchin  is our  Principal  Financial
Officer. Mr. Alchin presently serves as a Director of Jones Intercable, Inc. and
Comcast LCI Holdings, Inc.

      Stanley L. Wang was named an Executive  Vice  President in February  2000.
Prior to that  time,  Mr.  Wang  served as a Senior  Vice  President  and as our
Secretary  and  General  Counsel for more than five  years.  Mr. Wang  presently
serves as a Director of Jones Intercable, Inc. and Comcast LCI Holdings, Inc.


                                     - 17 -
<PAGE>
                                     PART II

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

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


<TABLE>
<CAPTION>
                                                            Class A
                                                            Special                           Class A
                                             ------------------------------------------------------------------
                                                    High                 Low            High             Low
                                             -----------------      ------------    -----------     -----------
<S>                                             <C>                <C>              <C>             <C>
1999
First Quarter................................    $38   9/16        $29    5/8        $37  11/32      $28  15/16
Second Quarter...............................     42                29   7/16         39  11/16       28    3/8
Third Quarter................................     41   9/16         32    5/8         38   9/16       29   7/16
Fourth Quarter...............................     56    1/2         35  11/16         53    1/8       32   1/16

1998
First Quarter................................    $18  19/32        $14  15/16        $18   7/16      $15   1/16
Second Quarter...............................     20  27/32         16  29/32         20    1/4       16   7/16
Third Quarter................................     24    3/8         18  11/16         24   1/32       18    3/4
Fourth Quarter...............................     29    1/2         20   9/32         28  15/16       20    1/8
</TABLE>

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

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

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

      As of December  31, 1999,  there were 3,662 record  holders of our Class A
Special  Common Stock,  1,792 record holders of our Class A Common Stock and one
record holder of our Class B Common Stock.

                                     - 18 -
<PAGE>
ITEM 6            SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                         1999(1)           1998(1)          1997(1)           1996          1995
                                                     ------------------------------------------------------------------------------
                                                                          (Dollars in millions, except per share data)
<S>                                                     <C>               <C>               <C>              <C>          <C>
Statement of Operations Data:
Revenues............................................    $6,209.2          $5,145.3          $4,467.7         $3,612.3     $2,988.1
Operating income....................................       664.0             557.1             466.6            465.9        397.7
Income (loss) from continuing operations before
      extraordinary items...........................       780.9           1,007.7            (182.9)            (6.4)        48.0
Discontinued operations (2).........................       335.8             (31.4)            (25.6)           (46.1)       (85.8)
Extraordinary items.................................       (51.0)             (4.2)            (30.2)            (1.0)        (6.1)
Net income (loss)...................................     1,065.7             972.1            (238.7)           (53.5)       (43.9)

Basic earnings (loss) for common stockholders
  per common share (3)
      Income (loss) from continuing operations
         before extraordinary items.................       $1.00             $1.34             ($.29)           ($.01)        $.10
      Discontinued operations (2)...................         .45              (.04)             (.04)            (.10)        (.18)
      Extraordinary items...........................        (.07)             (.01)             (.04)                         (.02)
                                                       ---------         ---------         ---------        ---------     --------
      Net income (loss).............................       $1.38             $1.29             ($.37)           ($.11)       ($.10)
                                                       =========         =========         =========        =========     ========
Diluted earnings (loss) for common
  stockholders per common share (3)
      Income (loss) from continuing operations
         before extraordinary items.................        $.95             $1.25             ($.29)           ($.01)        $.10
      Discontinued operations (2)...................         .41              (.03)             (.04)            (.10)        (.18)
      Extraordinary items...........................        (.06)             (.01)             (.04)                         (.02)
                                                       ---------         ---------         ---------        ---------     --------
      Net income (loss).............................       $1.30             $1.21             ($.37)           ($.11)       ($.10)
                                                       =========         =========         =========        =========     ========
Cash dividends declared per common share (3)........                        $.0467            $.0467           $.0467       $.0467

Balance Sheet Data (at year end):
Total assets........................................   $28,685.6         $14,710.5         $11,234.3        $10,660.4     $8,159.9
Working capital.....................................     4,231.5           2,531.7              44.9             15.5        604.6
Long-term debt (4)..................................     8,707.2           5,464.2           5,334.1          5,998.3      6,014.8
Stockholders' equity (deficiency)...................    10,341.3           3,815.3           1,646.5            551.6       (827.7)

Supplementary Financial Data:
Operating income before depreciation and
      amortization (5)..............................    $1,880.0          $1,496.7          $1,293.1         $1,047.0       $881.0
Net cash provided by (used in) (6)..................
      Operating activities..........................     1,249.4           1,067.7             844.6            644.5        466.7
      Financing activities..........................     1,341.4             809.2             283.9            (88.0)     1,785.7
      Investing activities..........................    (2,539.3)         (1,415.3)         (1,045.8)          (749.5)    (2,060.3)
<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 3 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.
(4) Includes a $666.0 million  adjustment to carrying value at December 31, 1999
    (see  Note 5 to our  consolidated  financial  statements  in  Item 8 of this
    Annual Report).

                                     - 19 -
<PAGE>
(5) 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.
(6) This  represents  net cash  provided  by  (used  in)  operating  activities,
    financing  activities  and  investing  activities  as  presented  in the our
    consolidated  statement  of cash flows  which is  included in Item 8 of this
    Annual Report.
</FN>
</TABLE>

                                     - 20 -

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

Overview

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

      In July  1999,  we  completed  the sale of our  wholly  owned  subsidiary,
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. We recognized a gain on the sale of $355.9 million, net of income
tax  expense.  The  results  of  Comcast  Cellular  have  been  presented  as  a
discontinued operation in our consolidated  financial statements.  See Note 3 to
our consolidated financial statements included in Item 8.

General Developments of Business

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

Liquidity and Capital Resources

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

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

      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,
1999 were $8.528 billion, substantially all of which is unrestricted. See Note 4
to our consolidated financial statements included in Item 8.

      Capital Expenditures

      During  2000,  we expect to incur $1.5  billion  of capital  expenditures,
including $1.2 billion  primarily for the upgrading and rebuilding of certain of
our cable  communications  systems and the deployment of digital  converters and
cable modems,  and $190 million  primarily for the upgrading of the  warehousing
and  distribution   facilities  of  our  majority-owned   electronic   retailing
subsidiary, QVC, Inc. ("QVC"). The amount of such capital expenditures for years
subsequent to 2000 will depend on numerous factors, many of which are beyond our
control. These factors include:

      o     whether  competition  in a particular  market  necessitates  a cable
            system upgrade,
      o     whether a particular cable system has sufficient  capacity to handle
            new product offerings  including the offering of cable modem,  cable
            telephony and telecommunications services, and
      o     whether we acquire  additional cable systems in need of upgrading or
            rebuilding.

      National manufacturers are the primary sources of supplies,  equipment and
materials  utilized  in the  construction,  rebuild  and  upgrade  of our  cable
communications  systems.  Costs  have  increased  during  recent  years  and are
expected  to  continue  to  increase  as a  result  of  the  need  to  construct
increasingly complex systems, overall demand for labor and other factors. Future
increases in such costs may be significant to our financial position, results of
operations  and  liquidity.   We  anticipate  capital   expenditures  for  years
subsequent to 2000 will continue to be significant.  As of December 31, 1999, we
do not have any significant contractual obligations for capital expenditures.

      Financing

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

      As of December 31, 1999 and 1998, our long-term  debt,  including  current
portion,  was $9.225  billion and $5.578  billion,  respectively.  Excluding the
effects of interest  rate risk  management  instruments,  25.4% and 27.0% of our
long-term debt as of December 31, 1999 and 1998,  respectively,  was at variable
rates. The $3.647 billion increase in our long-term debt results principally

                                     - 21 -
<PAGE>
from  the  $1.499  billion  of debt  that we  assumed  in  connection  with  our
acquisition  of  a  controlling  interest  in  Jones  Intercable,  Inc.  ("Jones
Intercable") in April 1999, the $1.807 billion of proceeds that we received from
the  issuance  of our 2%  Exchangeable  Subordinated  Debentures  due 2029  (the
"ZONES") in the fourth quarter of 1999, and the $666.0  million  non-cash,  non-
interest bearing adjustment to the carrying value of the ZONES during the fourth
quarter of 1999.

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

      Interest Rate Risk Management

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

      Interest Rate Risk

      The use of interest  rate risk  management  instruments,  such as interest
rate exchange  agreements  ("Swaps"),  interest rate cap agreements ("Caps") and
interest  rate collar  agreements  ("Collars"),  is required  under the terms of
certain of our  outstanding  debt  agreements.  Our policy is to manage interest
costs using a mix of fixed and  variable  rate debt.  Using  Swaps,  we agree to
exchange,  at specified  intervals,  the  difference  between fixed and variable
interest amounts  calculated by reference to an agreed-upon  notional  principal
amount.  Caps are used to lock in a maximum  interest rate should variable rates
rise,  but enable us to otherwise  pay lower  market  rates.  Collars  limit our
exposure to and benefits from interest rate  fluctuations  on variable rate debt
to within a certain range of rates.

      During the year ended  December  31,  1999,  we entered into Swaps with an
aggregate notional amount of $300.0 million and, as part of our acquisition of a
controlling  interest in Jones  Intercable,  we acquired Swaps with an aggregate
notional  amount of $400.0 million.  Swaps with an aggregate  notional amount of
$350.0 million either were  terminated or expired during the year ended December
31, 1999.  During the year ended December 31, 1999, we entered into Caps with an
aggregate  notional  amount of $140.0 million.  Caps with an aggregate  notional
amount of $240.0 million expired during the year ended December 31, 1999.


                                     - 22 -
<PAGE>
      The table set forth below summarizes the fair values and contract terms of
financial  instruments  subject to  interest  rate risk  maintained  by us as of
December 31, 1999 (dollars in millions):

<TABLE>
<CAPTION>
                                                                                                                        Fair
                                                                Expected Maturity Date                                Value at
                                         2000      2001      2002      2003      2004     Thereafter      Total       12/31/99
                                         ----      ----      ----      ----      ----     ----------      -----       --------
<S>                                     <C>       <C>       <C>         <C>     <C>         <C>         <C>          <C>
Debt
Fixed Rate (1)......................    $204.9    $108.1    $205.5      $7.4    $307.9      $5,384.9    $6,218.7     $6,891.0
   Average Interest Rate............      9.5%     10.2%      9.6%      9.2%      8.2%          6.1%        6.5%

Variable Rate.......................    $312.6    $263.8    $556.1    $815.6    $240.1        $151.8    $2,340.0     $2,340.0
   Average Interest Rate............      7.2%      7.5%      7.5%      7.6%      7.5%          7.7%        7.5%

Interest Rate Instruments
Variable to Fixed Swaps (2).........    $554.1    $127.5    $243.6    $186.6                            $1,111.8        $16.9
   Average Pay Rate.................      5.6%      4.9%      5.1%      5.4%                                5.4%
   Average Receive Rate.............      6.7%      7.1%      7.0%      7.0%                                6.8%
Fixed to Variable Swaps.............                                            $300.0                    $300.0        ($3.9)
   Average Pay Rate.................                                              8.6%                      8.6%
   Average Receive Rate.............                                              8.1%                      8.1%
Caps................................    $140.0                                                            $140.0
   Average Cap Rate.................      6.8%                                                              6.8%
Collar..............................     $50.0                                                             $50.0         $0.1
   Average Cap Rate.................      6.3%                                                              6.3%
   Average Floor Rate...............      4.0%                                                              4.0%
<FN>
(1)   Excludes  $666.0 million  adjustment to carrying value of indexed debt due
      2029 which bears no interest.
(2)   Includes  $361.8 million of Swaps which become  effective in the year 2000
      maturing through 2003.
</FN>
</TABLE>

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

      The notional  amounts of interest  rate  instruments,  as presented in the
table  above are used to  measure  interest  to be paid or  received  and do not
represent  the amount of  exposure  to credit  loss.  The  estimated  fair value
approximates the proceeds (costs) to settle the outstanding contracts.  Interest
rates on variable  debt are  estimated by us using the average  implied  forward
London  Interbank  Offer Rate ("LIBOR")  rates for the year of maturity based on
the yield curve in effect at December 31,  1999,  plus the  borrowing  margin in
effect for each credit  facility at December 31, 1999.  Average receive rates on
the  Variable  to Fixed  Swaps are  estimated  by us using the  average  implied
forward LIBOR rates for the year of maturity  based on the yield curve in effect
at December 31, 1999. 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, 1999,  1998 and 1997 was not
significant.

      Equity Price Risk

      In October and  November  1999,  we issued  approximately  24.1 million of
ZONES for  aggregate  proceeds of $1.807  billion.  At maturity,  holders of the
ZONES are  entitled to receive in cash an amount  equal to the higher of (a) the
principal  amount of the ZONES, or (b) the market value of Sprint PCS stock. The
ZONES are being accounted for as an indexed debt  instrument  since the maturity
value is dependent  upon the fair value of Sprint PCS stock.  As of December 31,
1999,  the number of Sprint PCS shares held by us  exceeded  the number of ZONES
outstanding.

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

      Year 2000 Readiness Disclosure

      The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the  applicable  year.  Computer  programs
that have  date-sensitive  software may  recognize a date using "00" as the year
1900  rather  than the year 2000 (the  "Year  2000  Issue").  If this  situation
occurs, the potential exists

                                     - 23 -
<PAGE>
for computer system failure or miscalculations by computer programs, which could
cause  disruption  of  operations.  We evaluated and addressed the impact of the
Year 2000 Issue on our operations to ensure that our information  technology and
business  systems  recognize  calendar  Year 2000. We utilized both internal and
external resources in implementing our Year 2000 program.

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

      As of December  31,  1999,  we have  completed  our Year 2000  remediation
program.  We believe  that all key  systems  are Year 2000  compliant  and as of
February 29, 2000 we have  incurred no  significant  disruption  in  operations.
Further, contingency plans have been created for our key systems and operations.
Additionally,   in  the  majority  of  our   operations,   business   continuity
preparations  have been  implemented to create  post-Year 2000 response teams to
further  mitigate Year 2000 risk.  There can be no guarantee that the systems of
other companies on which we rely are Year 2000  compliant,  or that a failure to
be Year 2000  compliant  by another  company  would not have a material  adverse
effect on us.

      Through December 31, 1999, we have incurred approximately $18.5 million in
connection with our Year 2000 remediation program.

      Our  management  will continue to  periodically  report the results of our
Year 2000 remediation program to the Audit Committee of our Board of Directors.

Statement of Cash Flows

      Cash and cash equivalents  increased $51.5 million as of December 31, 1999
from December 31, 1998. The increase in cash and cash equivalents  resulted from
cash flows from  operating,  financing  and  investing  activities  as explained
below.

      Net cash  provided by  operating  activities  from  continuing  operations
amounted to $1.249 billion for the year ended December 31, 1999 due  principally
to the effects of our acquisition of a controlling  interest in Jones Intercable
in April 1999,  increases in our  operating  income from  continuing  operations
before  depreciation and amortization  (see "Results of Operations") and changes
in working capital as a result of the timing of receipts and disbursements.

      Net cash  provided by financing  activities  from  continuing  operations,
which  includes  borrowings and repayments of debt, as well as the issuances and
repurchases  of our equity  securities,  was $1.341  billion  for the year ended
December 31, 1999. During 1999, we borrowed $2.787 billion, consisting primarily
of $1.807 billion of ZONES,  $718.3 million of 3.35%  Exchangeable  Subordinated
Debentures due 2029 (the "PHONES") and $256.9 million under  revolving  lines of
credit held by our  subsidiaries.  During 1999, we repaid $1.368  billion of our
long-term debt, consisting primarily of $718.3 million of PHONES, $200.0 million
of notes  payable  to  insurance  companies  and  $192.2  million  of  aggregate
repurchases  of various  of our senior  subordinated  debentures.  In  addition,
during 1999,  we made net  purchases of $13.6 million of our common stock and we
paid cash  dividends  of $9.4 million on our common stock and Series A Preferred
Stock.  Deferred  financing  costs of $51.0  million were  incurred  during 1999
principally in connection with the issuances of the ZONES and the PHONES.

      Net cash used in  investing  activities  from  continuing  operations  was
$2.539  billion for the year ended December 31, 1999. Net cash used in investing
activities includes  acquisitions of cable  communications  systems, net of cash
acquired,  of $755.2  million,  consisting  primarily  of our  acquisition  of a
controlling interest in Jones Intercable. Investing activities also includes the
$1.460  billion  termination  fee  proceeds,  net of  transaction  costs that we
received in May 1999 from MediaOne Group,  Inc. During 1999 we made  investments
in US  Government  obligations,  commercial  paper,  repurchase  agreements  and
certificates  of deposit of $1.036  billion.  Investments  made  during  1999 of
$2.012  billion  primarily  include  a $753.5  million  loan in the form of a 6%
ten-year  convertible note that we issued to Prime Communications LLC, a deposit
of $750.0  million made in  connection  with the  acquisition  of the  remaining
minority interest in one of our cable communications systems and the purchase of
long-term  corporate bonds of $201.9 million.  During 1999, we made additions to
deferred  charges of $263.5 million and capital  expenditures of $893.8 million.
During  1999,  we  received  $599.8  million of  proceeds  from the sales of and
distributions  from  investments and $361.1 million of proceeds from the sale of
Comcast Cellular.

                                     - 24 -
<PAGE>
Results of Operations

      The effects of our recent  acquisitions,  as well as  increased  levels of
capital expenditures,  were to increase our revenues and expenses,  resulting in
increases in our operating  income before  depreciation  and  amortization.  The
increases in depreciation  expense,  amortization  expense and interest  expense
from 1998 to 1999 are  primarily  due to the  effects  of our  acquisition  of a
controlling  interest in Jones  Intercable in April 1999,  offset in part by the
effects of the sale of Comcast UK Cable Partners Limited ("Comcast UK Cable"), a
former consolidated subsidiary of ours, in October 1998. In addition, our equity
in net  losses  of  affiliates  has  decreased  principally  as a result  of the
restructuring of Sprint PCS in November 1998. See "Operating Results by Business
Segment" and "Consolidated Analysis."

      Our  summarized  consolidated  financial  information  for the three years
ended  December  31,  1999 is as follows  (dollars  in  millions,  "NM"  denotes
percentage is not meaningful):

<TABLE>
<CAPTION>
                                                                         Year Ended
                                                                         December 31,                 Increase/(Decrease)
                                                                    1999             1998              $                %
                                                                  --------        ---------          ------          ------
<S>                                                               <C>              <C>             <C>                <C>
Revenues........................................................  $6,209.2         $5,145.3        $1,063.9           20.7%
Cost of goods sold from electronic retailing....................   1,740.1          1,462.0           278.1           19.0
Operating, selling, general and administrative expenses.........   2,589.1          2,186.6           402.5           18.4
                                                                  --------        ---------
Operating income before depreciation and amortization (1) ......   1,880.0          1,496.7           383.3           25.6
Depreciation....................................................     572.0            463.9           108.1           23.3
Amortization....................................................     644.0            475.7           168.3           35.4
                                                                  --------        ---------
Operating income................................................     664.0            557.1           106.9           19.2
                                                                  --------        ---------
Interest expense................................................     538.3            466.7            71.6           15.3
Investment (income) expense.....................................    (629.5)           187.8          (817.3)            NM
Expense related to indexed debt.................................     666.0                            666.0             NM
Equity in net (income) losses of affiliates.....................      (1.4)           515.9           517.3             NM
Gain from equity offering of affiliate..........................                     (157.8)         (157.8)            NM
Other income....................................................  (1,409.4)        (2,012.9)         (603.5)         (30.0)
Income tax expense..............................................     723.7            594.0           129.7           21.8
Minority interest income........................................      (4.6)           (44.3)          (39.7)         (89.6)
                                                                  --------        ---------
Income from continuing operations before
   extraordinary items..........................................    $780.9         $1,007.7         ($226.8)         (22.5%)
                                                                  ========        =========

                                                                         Year Ended
                                                                         December 31,                 Increase/(Decrease)
                                                                    1998             1997              $                %
                                                                  --------        ---------          ------          ------
Revenues.......................................................   $5,145.3         $4,467.7          $677.6           15.2%
Cost of goods sold from electronic retailing...................    1,462.0          1,270.2           191.8           15.1
Operating, selling, general and administrative expenses........    2,186.6          1,904.4           282.2           14.8
                                                                  --------        ---------
Operating income before depreciation and amortization (1) .....    1,496.7          1,293.1           203.6           15.7
Depreciation...................................................      463.9            404.1            59.8           14.8
Amortization...................................................      475.7            422.4            53.3           12.6
                                                                  --------        ---------
Operating income...............................................      557.1            466.6            90.5           19.4
                                                                  --------        ---------
Interest expense...............................................      466.7            458.9             7.8            1.7
Investment expense (income)....................................      187.8           (149.4)         (337.2)            NM
Equity in net losses of affiliates.............................      515.9            343.8           172.1           50.1
Gain from equity offering of affiliate.........................     (157.8)            (7.7)          150.1             NM
Other (income) expense.........................................   (2,012.9)             9.7         2,022.6             NM
Income tax expense.............................................      594.0             70.4           523.6             NM
Minority interest income.......................................      (44.3)           (76.2)          (31.9)         (41.9)
                                                                  --------        ---------
Income (loss) from continuing operations before
   extraordinary items.........................................   $1,007.7          ($182.9)       $1,190.6             NM
                                                                  ========        =========
<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,

                                     - 25 -
<PAGE>
      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>

Operating Results by Business Segment

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

      Cable
      The following  table presents  financial  information  for the years ended
December 31, 1999, 1998 and 1997 for our cable segment (dollars in millions):

<TABLE>
<CAPTION>
                                                                        Year Ended
                                                                        December 31,                         Increase
                                                                  1999               1998                $               %
                                                                --------          ----------          --------        -------
<S>                                                             <C>                 <C>                 <C>            <C>
Service income................................................  $2,929.3            $2,277.4            $651.9         28.6%
Operating, selling, general and
      administrative expenses.................................   1,576.3             1,180.8             395.5         33.5
                                                                --------          ----------          --------
Operating income before depreciation
      and amortization (a)....................................  $1,353.0            $1,096.6            $256.4         23.4%
                                                                ========          ==========          ========

                                                                        Year Ended
                                                                        December 31,                         Increase
                                                                  1998               1997                $               %
                                                                --------          ----------          --------        -------
Service income................................................  $2,277.4            $2,073.0            $204.4          9.9%
Operating, selling, general and
      administrative expenses.................................   1,180.8             1,085.3              95.5          8.8
                                                                --------          ----------          --------
Operating income before depreciation
      and amortization (a)....................................  $1,096.6              $987.7            $108.9         11.0%
                                                                ========          ==========          ========
<FN>
---------------
(a) See footnote (1) on page 25.
</FN>
</TABLE>

      Of the respective  $651.9 million and $204.4 million  increases in service
income for the years ended December 31, 1999 and 1998,  $448.4 million and $30.2
million  are   attributable  to  the  effects  of  the   acquisitions  of  cable
communications  systems,  $27.1  million and $31.8 million are  attributable  to
subscriber growth,  $83.6 million and $109.0 million relate to changes in rates,
$21.9 million and $20.5 million are attributable to growth in cable  advertising
sales and $70.9  million and $12.9 million  relate to other  product  offerings,
including the increase in digital cable and cable modem services.

      Of the respective $395.5 million and $95.5 million increases in operating,
selling,  general and  administrative  expenses for the years ended December 31,
1999 and 1998,  $286.2 million and $15.8 million are attributable to the effects
of the  acquisitions of cable  communications  systems,  $45.5 million and $48.9
million are  attributable  to increases in the costs of cable  programming  as a
result of subscriber growth,  additional channel offerings and changes in rates,
$3.4 million and $5.3 million are  attributable  to growth in cable  advertising
sales,  $5.0  million and $1.5  million are  attributable  to increases in costs
associated with customer service and $55.4 million and $24.0 million result from
increases  in the  costs of  labor,  other  volume  related  expenses  and costs
associated  with new product  offerings.  We  anticipate  that the cost of cable
programming will increase in the future as cable  programming rates increase and
additional sources of cable programming become available.

                                     - 26 -
<PAGE>
      Electronic Retailing

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

<TABLE>
<CAPTION>
                                                                     Year Ended
                                                                     December 31,                          Increase
                                                                1999              1998                $                %
                                                              --------          ---------         --------         -------
<S>                                                           <C>                <C>                <C>              <C>
Net sales from electronic retailing.......................... $2,847.4           $2,402.7           $444.7           18.5%
Cost of goods sold from electronic retailing.................  1,740.1            1,462.0            278.1           19.0
Operating, selling, general and administrative expenses......    568.5              506.5             62.0           12.2
                                                               -------          ---------         --------
Operating income before depreciation
      and amortization (a)...................................   $538.8             $434.2           $104.6          24.1%
                                                               =======          =========         ========
Gross margin.................................................    38.9%               39.2%
                                                               ======           =========

                                                                     Year Ended
                                                                     December 31,                          Increase
                                                                1998              1997                $                %
                                                              --------          ---------         --------         -------
Net sales from electronic retailing.......................... $2,402.7           $2,082.5           $320.2           15.4%
Cost of goods sold from electronic retailing.................  1,462.0            1,270.2            191.8           15.1
Operating, selling, general and administrative expenses......    506.5              474.6             31.9            6.7
                                                               -------          ---------         --------
Operating income before depreciation
      and amortization (a)...................................   $434.2             $337.7            $96.5           28.6%
                                                               =======          =========         ========
Gross margin.................................................     39.2%              39.0%
                                                               ======           =========
<FN>
---------------
(a) See footnote (1) on page 25.
</FN>
</TABLE>

      The respective  increases in net sales from electronic retailing of $444.7
million and $320.2  million for the years ended  December  31, 1999 and 1998 are
primarily  attributable to the effects of 4.1%, 11.4% and 35.2% increases in the
average  number of homes  receiving  QVC services in the United  States  ("US"),
United  Kingdom  ("UK")  and  Germany,  respectively,  and 8.5%,  8.4% and 79.6%
increases in the sales per home in the US, UK and Germany, respectively.

      An allowance for returned merchandise is provided as a percentage of sales
based on historical  experience.  The return provision was  approximately 21% of
gross sales for each of the years ended December 31, 1999, 1998 and 1997.

      The  increases  in  cost of  goods  sold  from  electronic  retailing  are
primarily related to the growth in net sales. The change in gross margin between
1998 and 1997 is  primarily  due to slight  changes in product  mix.  The slight
decline  in gross  margin  in 1999  from  1998 is  primarily  related  to higher
warehousing  costs due to a shortage of warehouse  space in the US and inventory
adjustments in Germany.

      Of  the   respective   increases  in  operating,   selling,   general  and
administrative  expenses of $62.0  million and $31.9 million for the years ended
December 31, 1999 and 1998,  $39.8 million and $21.7 million are attributable to
higher  variable  costs  associated  with  the  increase  in sales  volume.  The
remaining  increases are  attributable to higher  personnel costs to support the
increased sales volume in the US, UK and Germany.

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

                                     - 27 -

<PAGE>
      Consolidated Analysis

      Interest Expense

      The  $71.6  million  increase  in  interest  expense  from 1998 to 1999 is
primarily due to the effects of our  acquisition  of a  controlling  interest in
Jones Intercable in April 1999, the issuance of 6.20%  nonrecourse  notes issued
by our wholly owned  subsidiary  Comcast Cable  Communications,  Inc.  ("Comcast
Cable") in November  1998 and the  issuance of the ZONES in October and November
1999, offset, in part, by the effects of the sale of Comcast UK Cable in October
1998.

      We anticipate that, for the foreseeable future, interest expense will be a
significant cost to us and will have a significant adverse effect on our ability
to realize net earnings.

      Investment (Income) Expense

      During the year ended December 31, 1999, we sold all 5.8 million shares of
the NTL  Incorporated  ("NTL")  common stock that we owned for total proceeds of
$498.3 million and recognized a pre-tax gain of $284.2 million.

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

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

      Expense Related to Indexed Debt

      The ZONES are being accounted for as an indexed debt instrument  since the
maturity value is dependent upon the fair value of Sprint PCS Stock.  Therefore,
the carrying  value of the ZONES was increased by $666.0  million during 1999 to
reflect the fair value of the underlying Sprint PCS Stock.

      Gain From Equity Offering of Affiliate

      In April 1998 and  November  1997,  Teleport  Communications  Group,  Inc.
("Teleport") issued shares of its Class A Common Stock. As a result of the stock
issuances, we recognized a $157.8 million increase in our proportionate share of
Teleport's  net assets as a gain from equity  offering of affiliate for the year
ended December 31, 1998. We recorded our  proportionate  share of Teleport's net
losses one quarter in arrears.

      Other Income

      In May 1999, we received the $1.460 billion MediaOne  termination fee, net
of transaction costs.

      In October  1998,  we  recognized a pre-tax gain of $148.3  million on the
exchange of our interest in Comcast UK Cable for NTL common stock.

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

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

      Income Tax Expense

      The $129.7  million  increase in income tax  expense  from 1998 to 1999 is
primarily  the result of the effects of changes in our income  before  taxes and
minority  interest  and  increases  in  state  income  taxes of  certain  of our
subsidiaries.

      Minority Interest Income

      The $39.7 million  decrease in minority  interest income from 1998 to 1999
is attributable  to the effects of our acquisition of a controlling  interest in
Jones Intercable in April 1999, the sale of Comcast UK Cable in October 1998 and
to  changes  in the net  income  or loss  of our  other  less  than  100%  owned
consolidated subsidiaries.

                                     - 28 -
<PAGE>
      Extraordinary Items

      Extraordinary  items for the years ended December 31, 1999,  1998 and 1997
consist of unamortized  debt issue costs and debt  extinguishment  costs, net of
related tax benefits, expensed in connection with the redemption and refinancing
of certain indebtedness.

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



                                     - 29 -
<PAGE>
ITEM 8    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Comcast Corporation
Philadelphia, Pennsylvania

We  have  audited  the  accompanying   consolidated  balance  sheet  of  Comcast
Corporation  and its  subsidiaries  as of December  31,  1999 and 1998,  and the
related consolidated statements of operations,  stockholders' equity and of cash
flows for each of the three years in the period ended  December 31, 1999.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits. We did not audit the consolidated  financial statements of QVC, Inc.
("QVC") (a consolidated  subsidiary) as of December 31, 1998 and for each of the
two years in the period  then  ended,  which  statements  reflect  total  assets
constituting 14% of the Company's  consolidated  total assets as of December 31,
1998 and total revenues constituting 47% of the Company's  consolidated revenues
for each of the years ended December 31, 1998 and 1997.  Those  statements  were
audited  by other  auditors  whose  report  has been  furnished  to us,  and our
opinion,  insofar  as it  relates  to the  amounts  included  in  the  Company's
consolidated  financial  statements  for QVC, is based solely upon the report of
such other auditors.

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

In our  opinion,  based on our  audits and the  report of other  auditors,  such
consolidated  financial statements present fairly, in all material respects, the
financial  position of Comcast  Corporation and its  subsidiaries as of December
31, 1999 and 1998, and the results of their  operations and their cash flows for
each of the three years in the period ended December 31, 1999 in conformity with
generally accepted accounting principles.



Deloitte & Touche LLP

Philadelphia, Pennsylvania
February 24, 2000


                                     - 30 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                                                    December 31,
                                                                                           1999                     1998
                                                                                       ------------             ------------
<S>                                                                                       <C>                      <C>
ASSETS
CURRENT ASSETS
   Cash and cash equivalents......................................................           $922.2                   $870.7
   Investments....................................................................          7,606.0                  3,653.4
   Accounts receivable, less allowance for doubtful
      accounts of $136.6 and $120.7...............................................            673.3                    549.3
   Inventories, net...............................................................            457.0                    343.8
   Other current assets...........................................................            100.1                    100.2
                                                                                       ------------             ------------
         Total current assets.....................................................          9,758.6                  5,517.4
                                                                                       ------------             ------------
INVESTMENTS.......................................................................          5,548.8                    602.4
                                                                                       ------------             ------------
PROPERTY AND EQUIPMENT............................................................          5,099.0                  3,886.7
   Accumulated depreciation.......................................................         (1,700.9)                (1,362.3)
                                                                                       ------------             ------------
   Property and equipment, net....................................................          3,398.1                  2,524.4
                                                                                       ------------             ------------
DEFERRED CHARGES
   Franchise and license acquisition costs........................................          5,155.7                  4,763.6
   Excess of cost over net assets acquired and other..............................          7,566.4                  3,450.9
                                                                                       ------------             ------------
                                                                                           12,722.1                  8,214.5
   Accumulated amortization.......................................................         (2,742.0)                (2,148.2)
                                                                                       ------------             ------------
   Deferred charges, net..........................................................          9,980.1                  6,066.3
                                                                                       ------------             ------------
                                                                                          $28,685.6                $14,710.5
                                                                                       ============             ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable and accrued expenses..........................................         $2,786.5                 $1,600.3
   Accrued interest...............................................................            104.5                     73.5
   Net liabilities of discontinued operations.....................................                                     165.2
   Deferred income taxes..........................................................          2,118.6                  1,033.2
   Current portion of long-term debt..............................................            517.5                    113.5
                                                                                       ------------             ------------
         Total current liabilities................................................          5,527.1                  2,985.7
                                                                                       ------------             ------------
LONG-TERM DEBT, less current portion (including adjustment to carrying value of
   $666.0 million and zero).......................................................          8,707.2                  5,464.2
                                                                                       ------------             ------------
DEFERRED INCOME TAXES.............................................................          3,150.5                  1,500.1
                                                                                       ------------             ------------
MINORITY INTEREST AND OTHER.......................................................            959.5                    834.0
                                                                                       ------------             ------------
COMMITMENTS AND CONTINGENCIES.....................................................
COMMON EQUITY PUT OPTIONS.........................................................                                     111.2
                                                                                       ------------             ------------
STOCKHOLDERS' EQUITY
   Preferred stock - authorized, 20,000,000 shares; 5% series A convertible,
      no par value; issued, zero and 6,370 at redemption value....................                                      31.9
      5.25% series B mandatorily redeemable convertible, $1,000 par value;
      issued, 569,640 and 540,690 at redemption value.............................            569.6                    540.7
   Class A special common stock, $1 par value - authorized,
      2,500,000,000 shares; issued, 716,442,482 and 698,395,170 ..................            716.4                    698.4
   Class A common stock, $1 par value - authorized,
      200,000,000 shares; issued, 25,993,380 and 31,690,063.......................             26.0                     31.7
   Class B common stock, $1 par value - authorized,
      50,000,000 shares; issued, 9,444,375........................................              9.4                      9.4
   Additional capital.............................................................          3,527.0                  2,941.7
   Accumulated deficit............................................................           (619.8)                (1,488.2)
   Accumulated other comprehensive income.........................................          6,112.7                  1,049.7
                                                                                       ------------             ------------
         Total stockholders' equity...............................................         10,341.3                  3,815.3
                                                                                       ------------             ------------
                                                                                          $28,685.6                $14,710.5
                                                                                       ============             ============
</TABLE>

See notes to consolidated financial statements.

                                     - 31 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                                        Year Ended December 31,
                                                                                1999              1998              1997
                                                                             ----------        ----------        ----------
<S>                                                                            <C>               <C>               <C>
REVENUES
   Service income..........................................................    $3,361.8          $2,742.6          $2,385.2
   Net sales from electronic retailing.....................................     2,847.4           2,402.7           2,082.5
                                                                             ----------        ----------        ----------
                                                                                6,209.2           5,145.3           4,467.7
                                                                             ----------        ----------        ----------
COSTS AND EXPENSES
   Operating...............................................................     1,663.1           1,410.3           1,204.1
   Cost of goods sold from electronic retailing............................     1,740.1           1,462.0           1,270.2
   Selling, general and administrative.....................................       926.0             776.3             700.3
   Depreciation............................................................       572.0             463.9             404.1
   Amortization............................................................       644.0             475.7             422.4
                                                                             ----------        ----------        ----------
                                                                                5,545.2           4,588.2           4,001.1
                                                                             ----------        ----------        ----------
OPERATING INCOME...........................................................       664.0             557.1             466.6

OTHER (INCOME) EXPENSE
   Interest expense........................................................       538.3             466.7             458.9
   Investment (income) expense.............................................      (629.5)            187.8            (149.4)
   Expense related to indexed debt.........................................       666.0
   Equity in net (income) losses of affiliates.............................        (1.4)            515.9             343.8
   Gain from equity offering of affiliate..................................                        (157.8)             (7.7)
   Other (income) expense..................................................    (1,409.4)         (2,012.9)              9.7
                                                                             ----------        ----------        ----------
                                                                                 (836.0)         (1,000.3)            655.3
                                                                             ----------        ----------        ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX
   EXPENSE, MINORITY INTEREST AND EXTRAORDINARY ITEMS......................     1,500.0           1,557.4            (188.7)

INCOME TAX EXPENSE.........................................................       723.7             594.0              70.4
                                                                             ----------        ----------        ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
   MINORITY INTEREST AND EXTRAORDINARY ITEMS...............................       776.3             963.4            (259.1)

MINORITY INTEREST INCOME...................................................         4.6              44.3              76.2
                                                                             ----------        ----------        ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
   EXTRAORDINARY ITEMS.....................................................       780.9           1,007.7            (182.9)

GAIN (LOSS) FROM DISCONTINUED OPERATIONS, net of income tax expense
   (benefit) of $166.1 million, ($19.1) million and ($14.8) million........       335.8             (31.4)            (25.6)
                                                                             ----------        ----------        ----------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS...................................     1,116.7             976.3            (208.5)

EXTRAORDINARY ITEMS .......................................................       (51.0)             (4.2)            (30.2)
                                                                             ----------        ----------        ----------
NET INCOME (LOSS)..........................................................     1,065.7             972.1            (238.7)

PREFERRED DIVIDENDS........................................................       (29.7)            (29.1)            (14.8)
                                                                             ----------        ----------        ----------
NET INCOME (LOSS) FOR COMMON STOCKHOLDERS..................................    $1,036.0            $943.0           ($253.5)
                                                                             ==========        ==========        ==========
BASIC EARNINGS (LOSS) FOR COMMON STOCKHOLDERS PER COMMON SHARE
   Income (loss) from continuing operations before extraordinary items.....       $1.00             $1.34             ($.29)
   Discontinued operations.................................................         .45              (.04)             (.04)
   Extraordinary items.....................................................        (.07)             (.01)             (.04)
                                                                             ----------        ----------        ----------
   Net income (loss).......................................................       $1.38             $1.29             ($.37)
                                                                             ==========        ==========        ==========
BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES  OUTSTANDING................       749.1             733.0             678.0
                                                                             ==========        ==========        ==========
DILUTED EARNINGS (LOSS) FOR COMMON STOCKHOLDERS PER COMMON SHARE
   Income (loss) from continuing operations before extraordinary items.....        $.95             $1.25             ($.29)
   Discontinued operations.................................................         .41              (.03)             (.04)
   Extraordinary items.....................................................        (.06)             (.01)             (.04)
                                                                             ----------        ----------        ----------
   Net income (loss).......................................................       $1.30             $1.21             ($.37)
                                                                             ==========        ==========        ==========
DILUTED WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING...............................................       819.9             806.0             678.0
                                                                             ==========        ==========        ==========
</TABLE>
See notes to consolidated financial statements.

                                     - 32 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)

<TABLE>
<CAPTION>
                                                                                              Year Ended December 31,
                                                                                      1999              1998              1997
                                                                                  ------------      ------------      ------------
<S>                                                                                   <C>                 <C>              <C>
OPERATING ACTIVITIES
   Net income (loss).............................................................     $1,065.7            $972.1           ($238.7)
   Adjustments to reconcile net income (loss) to net cash provided
     by operating activities from continuing operations:
      Depreciation...............................................................        572.0             463.9             404.1
      Amortization...............................................................        644.0             475.7             422.4
      Non-cash interest (income) expense, net....................................        (27.8)             29.2              32.3
      Non-cash expense related to indexed debt...................................        666.0
      Equity in net (income) losses of affiliates................................         (1.4)            515.9             343.8
      Gain from equity offering of affiliate.....................................                         (157.8)             (7.7)
      Gains on investments, net and termination fee..............................     (1,917.0)         (1,758.5)            (81.0)
      Minority interest income...................................................         (4.6)            (44.3)            (76.2)
      Discontinued operations....................................................       (335.8)             31.4              25.6
      Extraordinary items........................................................         51.0               4.2              30.2
      Deferred income taxes and other............................................        (31.9)            418.2             (40.6)
                                                                                  ------------      ------------      ------------
                                                                                         680.2             950.0             814.2
      Changes in working capital.................................................        569.2             117.7              30.4
                                                                                  ------------      ------------      ------------

         Net cash provided by operating activities from continuing operations....      1,249.4           1,067.7             844.6
                                                                                  ------------      ------------      ------------

FINANCING ACTIVITIES
   Proceeds from borrowings......................................................      2,786.6           1,938.0           1,951.1
   Retirement and repayment of debt..............................................     (1,368.2)         (1,113.4)         (2,586.6)
   Issuance of preferred stock...................................................                                            500.0
   (Repurchases) issuances of common stock, net..................................        (13.6)             28.9             470.2
   Dividends.....................................................................         (9.4)            (36.0)            (34.0)
   Deferred financing costs......................................................        (51.0)            (16.3)            (16.9)
   Other.........................................................................         (3.0)              8.0               0.1
                                                                                  ------------      ------------      ------------

         Net cash provided by financing activities from continuing operations....      1,341.4             809.2             283.9
                                                                                  ------------      ------------      ------------

INVESTING ACTIVITIES
   Acquisitions, net of cash acquired............................................       (755.2)           (309.7)           (170.1)
   Proceeds from termination fee, net............................................      1,460.0
   (Purchases of) proceeds from short-term investments, net......................     (1,035.5)            145.9              45.6
   Capital contributions to and purchases of investments.........................     (2,012.2)           (202.1)           (268.7)
   Proceeds from sales of and distributions from investments.....................        599.8              23.6             171.1
   Proceeds from investees' repayments of loans..................................                           74.7              30.6
   Capital expenditures..........................................................       (893.8)           (898.9)           (795.5)
   Sale of subsidiary, net of cash sold..........................................        361.1            (140.4)
   Additions to deferred charges.................................................       (263.5)           (108.4)            (58.8)
                                                                                  ------------      ------------      ------------

         Net cash used in investing activities from continuing operations........     (2,539.3)         (1,415.3)         (1,045.8)
                                                                                  ------------      ------------      ------------


INCREASE IN CASH AND CASH EQUIVALENTS - CONTINUING
   OPERATIONS....................................................................         51.5             461.6              82.7

CASH AND CASH EQUIVALENTS, beginning of year.....................................        870.7             409.1             326.4
                                                                                  ------------      ------------      ------------

CASH AND CASH EQUIVALENTS, end of year...........................................       $922.2            $870.7            $409.1
                                                                                  ============      ============      ============
</TABLE>

See notes to consolidated financial statements.

                                     - 33 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                 Preferred Stock            Common Stock
                                                ------------------ ----------------------------
                                                Series   Series    Class A                         Additional   Accumulated
                                                   A        B      Special    Class A   Class B     Capital       Deficit
                                                ------- -------   --------    -------   -------    ----------   -----------

<S>                                               <C>    <C>       <C>         <C>        <C>       <C>           <C>
BALANCE, JANUARY 1, 1997........................  $31.9            $609.4      $34.0      $8.8      $2,000.5      ($2,127.1)
Comprehensive income (loss):
   Net loss.....................................                                                                     (238.7)
   Unrealized gains on marketable securities,
      net of deferred taxes of $75.8............
   Cumulative translation adjustments...........
Total comprehensive loss........................
   Issuance of common stock.....................                     49.8                              450.5
   Issuance of preferred stock..................          500.0
   Exercise of options..........................                      2.0                               13.8
   Conversion of convertible subordinated
      debt to common stock......................                     16.8                              201.7
   Retirement of common stock...................                     (3.4)      (2.2)                  (19.5)         (17.7)
   Cash dividends, common, $.0467 per share.....                                                                      (32.4)
   Cash dividends, Series A preferred...........                                                        (1.6)
   Series B preferred dividends.................           13.2                                        (13.2)
   Temporary equity related to put options......                                                        38.2
   Proceeds from sales and extensions of put
     options ...................................                                                         2.6
                                                -------  ------    ------     ------    ------     ---------    -----------

BALANCE, DECEMBER 31, 1997......................   31.9   513.2     674.6       31.8       8.8       2,673.0       (2,415.9)
Comprehensive income:
   Net income...................................                                                                      972.1
   Unrealized gains on marketable securities,
      net of deferred taxes of $489.4...........
   Cumulative translation adjustments...........
Total comprehensive income......................
   Conversion of convertible subordinated debt
      to common stock...........................                     20.8                              336.8
   Exercise of options..........................                      3.4                  0.6          31.8
   Retirement of common stock...................                     (0.4)      (0.1)                   (2.4)         (10.0)
   Cash dividends, common, $.0467 per share.....                                                                      (34.4)
   Cash dividends, Series A preferred...........                                                        (1.6)
   Series B preferred dividends.................           27.5                                        (27.5)
   Temporary equity related to put options......                                                       (79.8)
   Proceeds from sales of put options...........                                                        11.4
                                                -------  ------    ------     ------    ------     ---------    -----------

BALANCE, DECEMBER 31, 1998......................   31.9   540.7     698.4       31.7       9.4       2,941.7       (1,488.2)
Comprehensive income:
   Net income...................................                                                                    1,065.7
   Unrealized gains on marketable securities,
      net of deferred taxes of $2,730.2.........
   Cumulative translation adjustments...........
Total comprehensive income......................
   Acquisition..................................                      8.5                              283.2
   Exercise of options..........................                      2.2                               23.7
   Conversion of Series A preferred.............  (31.9)              2.7                               29.2
   Retirement of common stock...................                                (0.8)                   (4.6)         (25.3)
   Cash dividends, Series A preferred...........                                                        (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
                                                -------  ------    ------     ------    ------     ---------    -----------

BALANCE, DECEMBER 31, 1999......................$        $569.6    $716.4      $26.0      $9.4      $3,527.0        ($619.8)
                                                =======  ======    ======     ======    ======     =========    ===========
</TABLE>

<TABLE>
<CAPTION>
                                                            Accumulated Other
                                                      Comprehensive Income (Loss)
                                                 -------------------------------------

                                                 Unrealized
                                                  Gains on     Cumulative
                                                 Marketable    Translation
                                                 Securities    Adjustments      Total
                                                -----------   ------------     -------
<S>                                                <C>           <C>         <C>
BALANCE, JANUARY 1, 1997........................       $0.1          ($6.0)     $551.6
Comprehensive income (loss):
   Net loss.....................................
   Unrealized gains on marketable securities,
      net of deferred taxes of $75.8............      140.6
   Cumulative translation adjustments...........                      (5.6)
Total comprehensive loss........................                                (103.7)
   Issuance of common stock.....................                                 500.3
   Issuance of preferred stock..................                                 500.0
   Exercise of options..........................                                  15.8
   Conversion of convertible subordinated
      debt to common stock......................                                 218.5
   Retirement of common stock...................                                 (42.8)
   Cash dividends, common, $.0467 per share.....                                 (32.4)
   Cash dividends, Series A preferred...........                                  (1.6)
   Series B preferred dividends.................
   Temporary equity related to put options......                                  38.2
   Proceeds from sales and extensions of put
     options ...................................                                   2.6
                                                -----------    -----------   ---------

BALANCE, DECEMBER 31, 1997......................      140.7          (11.6)    1,646.5
Comprehensive income:
   Net income...................................
   Unrealized gains on marketable securities,
      net of deferred taxes of $489.4...........      908.8
   Cumulative translation adjustments...........                      11.8
Total comprehensive income......................                               1,892.7
   Conversion of convertible subordinated debt
      to common stock...........................                                 357.6
   Exercise of options..........................                                  35.8
   Retirement of common stock...................                                 (12.9)
   Cash dividends, common, $.0467 per share.....                                 (34.4)
   Cash dividends, Series A preferred...........                                  (1.6)
   Series B preferred dividends.................
   Temporary equity related to put options......                                 (79.8)
   Proceeds from sales of put options...........                                  11.4
                                                -----------    -----------   ---------

BALANCE, DECEMBER 31, 1998......................    1,049.5            0.2     3,815.3
Comprehensive income:
   Net income...................................
   Unrealized gains on marketable securities,
      net of deferred taxes of $2,730.2.........    5,070.3
   Cumulative translation adjustments...........                     (7.3)
Total comprehensive income......................                               6,128.7
   Acquisition..................................                                 291.7
   Exercise of options..........................                                  25.9
   Conversion of Series A preferred.............
   Retirement of common stock...................                                 (30.7)
   Cash dividends, Series A preferred...........                                  (0.8)
   Series B preferred dividends.................
   Share exchange...............................
   Temporary equity related to put options......                                 111.2
                                                -----------    -----------   ---------

BALANCE, DECEMBER 31, 1999......................   $6,119.8          ($7.1)  $10,341.3
                                                ===========    ===========   =========
</TABLE>

See notes to consolidated financial statements.

                                     - 34 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997


1.    BUSINESS

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

      The Company's cable communications business is principally involved in the
      development,  management and operation of broadband  cable networks in the
      United States ("US").  The Company's  consolidated cable operations served
      approximately 5.7 million subscribers and passed approximately 9.5 million
      homes as of December 31, 1999.

      Commerce is provided through the Company's consolidated  subsidiary,  QVC,
      Inc. ("QVC").  Through QVC, an electronic retailer,  the Company markets a
      wide variety of products  directly to consumers  primarily on merchandise-
      focused television  programs.  QVC was available,  on a full and part-time
      basis,  to over 72 million  homes in the US,  over 8 million  homes in the
      United  Kingdom ("UK") and Ireland and over 17 million homes in Germany as
      of December 31, 1999.

      Content  is  provided  through  the  Company's  consolidated  subsidiaries
      including  Comcast-Spectacor,   Comcast  SportsNet  and  E!  Entertainment
      Television,  Inc.  ("E!  Entertainment"),  and through  other  programming
      investments  including  The Golf  Channel,  Speedvision  and Outdoor Life.
      Comcast SportsNet is a 24-hour regional sports  programming  network which
      provides sports related programming, including the Philadelphia Flyers NHL
      hockey  team,  the   Philadelphia   76ers  NBA  basketball  team  and  the
      Philadelphia  Phillies  MLB  baseball  team to  approximately  2.7 million
      subscribers in the  Philadelphia  region.  E!  Entertainment  is a 24-hour
      network  with  programming  dedicated to the world of  entertainment  with
      distribution to  approximately  60 million  subscribers as of December 31,
      1999.

      Stock Split
      On March 3, 1999, the Company's board of directors  authorized an increase
      in the number of authorized shares of the Company's Class A Special Common
      Stock from 500 million  shares to 2.5 billion  shares.  On that date,  the
      Company's board of directors also authorized a two-for-one  stock split in
      the form of a 100% stock  dividend (the "Stock  Split")  payable on May 5,
      1999 to shareholders of record on April 20, 1999. The dividend was paid in
      Class A Special  Common  Stock to the  holders of Class A Common,  Class A
      Special  Common and Class B Common  Stock.  The  average  number of shares
      outstanding and related prices,  per share amounts,  share conversions and
      stock  option data have been  retroactively  restated to reflect the Stock
      Split. The Company's board of directors also eliminated the quarterly cash
      dividend of $.0117 per share on all classes of its common stock.  The last
      quarterly cash dividend was paid in March 1999.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER ITEMS

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

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

      Fair Values
      The estimated fair value amounts  presented in these notes to consolidated
      financial  statements  have been determined by the Company using available
      market information and appropriate methodologies. However,

                                     - 35 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      considerable  judgment is required in interpreting  market data to develop
      the  estimates  of fair  value.  The  estimates  presented  herein are not
      necessarily  indicative of the amounts that the Company could realize in a
      current market exchange.  The use of different market  assumptions  and/or
      estimation  methodologies may have a material effect on the estimated fair
      value  amounts.   Such  fair  value   estimates  are  based  on  pertinent
      information  available to management as of December 31, 1999 and 1998, and
      have not been comprehensively  revalued for purposes of these consolidated
      financial statements since such dates.

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

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

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

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

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

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

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

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

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

      Capitalized Costs
      Interest  is  capitalized  as part  of the  historical  cost of  acquiring
      qualifying assets,  including investments in equity method investees while
      the investee has activities in progress  necessary to commence its planned
      principal operations. Capitalized interest for the year ended December 31,
      1997 was $18.0 million. The costs associated with

                                     - 36 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


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

      Deferred Charges
      Franchise and license  acquisition  costs are amortized on a straight-line
      basis over their legal or  estimated  useful  lives of 3 to 40 years.  The
      excess  of cost  over  the  fair  value of net  assets  acquired  is being
      amortized on a straight- line basis over  estimated  useful lives of 20 to
      40 years.

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

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

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

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

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

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

                                     - 37 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


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

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

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

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

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

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

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

      New Accounting Pronouncement
      In June 1998, the Financial  Accounting  Standards  Board ("FASB")  issued
      SFAS  No.  133,   "Accounting  for  Derivative   Instruments  and  Hedging
      Activities." This statement establishes accounting and reporting standards
      for derivatives and hedging activities. Upon the adoption of SFAS No. 133,
      all  derivatives  are  required  to be  recognized  in  the  statement  of
      financial  position as either assets or  liabilities  and measured at fair
      value.  In July  1999,  the FASB  issued  SFAS No.  137,  "Accounting  for
      Derivative Instruments and Hedging Activities - Deferral

                                     - 38 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      of the  Effective  Date of FASB  Statement  No. 133 - an amendment of FASB
      Statement No. 133" deferring the effective date for implementation of SFAS
      No. 133 to fiscal  years  beginning  after June 15,  2000.  The Company is
      currently  evaluating the impact the adoption of SFAS No. 133 will have on
      its financial position and results of operations.

      Earnings (Loss) for Common Stockholders Per Common Share
      Earnings  (loss) for common  stockholders  per common share is computed by
      dividing net income (loss),  after deduction of preferred stock dividends,
      when  applicable,   by  the  weighted  average  number  of  common  shares
      outstanding  during the period on a basic and diluted basis. The following
      table  reconciles  the numerator and  denominator of the  computations  of
      diluted earnings (loss) for common stockholders per common share ("Diluted
      EPS") for the years ended December 31, 1999, 1998 and 1997, respectively.

<TABLE>
<CAPTION>
                                                                       (Amounts in millions, except per share data)
                                                                                        Year Ended
                                                                                        December 31,
                                                                               1999         1998         1997
                                                                          ------------   ----------   ---------
<S>                                                                           <C>            <C>        <C>
    Net income (loss) for common stockholders.............................    $1,036.0       $943.0     ($253.5)

    Dilutive securities effect on net income (loss) for common
       stockholders.......................................................                      1.0

    Preferred dividends...................................................        29.7         29.1
                                                                            ----------    ---------    --------
    Net income (loss) for common stockholders used for
       Diluted EPS........................................................    $1,065.7       $973.1     ($253.5)
                                                                            ==========    =========    ========
    Weighted average number of common shares outstanding..................       749.1        733.0       678.0

    Dilutive securities:
          1 1/8% discount convertible subordinated debentures,
            redeemed March 1998...........................................                      5.0

          Series A and B convertible preferred stock......................        44.0         45.2

          Stock option and restricted stock plans.........................        26.8         22.8
                                                                            ----------    ---------    --------
    Diluted weighted average number of common shares
       outstanding........................................................       819.9        806.0       678.0
                                                                            ==========    =========    ========
    Diluted earnings (loss) for common stockholders per
       common share.......................................................       $1.30        $1.21       ($.37)
                                                                            ==========    =========    ========
</TABLE>

      Comcast  Put  Options on a weighted  average  2.7  million  shares and 2.9
      million  shares  of its  Class A Special  Common  Stock  (see Note 6) were
      outstanding during the years ended December 31, 1999 and 1998 but 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.

      For the year ended  December  31, 1997,  the  Company's  potential  common
      shares of 106.4  million  shares have an  antidilutive  effect on loss for
      common stockholders per common share and, therefore, have not been used in
      determining   the  total   weighted   average   number  of  common  shares
      outstanding.

      Reclassifications
      Certain  reclassifications have been made to the prior years' consolidated
      financial statements to conform to those classifications used in 1999.

                                     - 39 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


3.    ACQUISITIONS AND OTHER SIGNIFICANT EVENTS

      Acquisition of Lenfest Communications, Inc.
      In  January  2000,  the  Company  acquired  Lenfest  Communications,  Inc.
      ("Lenfest"),  a cable  communications  company serving  approximately  1.3
      million  subscribers  primarily in the  Philadelphia  area from AT&T Corp.
      ("AT&T") and the Lenfest  stockholders  for  approximately  121.4  million
      shares of the  Company's  Class A  Special  Common  Stock  with a value of
      $6.077 billion.  In connection with the  acquisition,  the Company assumed
      approximately $1.777 billion of debt.

      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"),  a 55%  owned  consolidated  subsidiary  of the
      Company which serves approximately  642,000 cable subscribers in Michigan,
      New Jersey and Florida  pursuant to an agreement  entered into in December
      1999.  In February  2000,  the  acquisition  closed and, as a result,  the
      Company  now owns 100% of  Comcast  MHCP.  The  consideration  was  $750.0
      million in cash.

      Jones Intercable Agreement
      In May 1998,  the  Company  agreed to purchase  from BCI  Telecom  Holding
      ("BTH")  6.4  million  Class A Common  Shares  in Jones  Intercable,  Inc.
      ("Jones  Intercable"),  and a 49% interest in the BTH  subsidiaries  which
      were to  continue  to own  BTH's  remaining  6.4  million  shares of Jones
      Intercable  Class A Common Stock.  At the same time, the Company agreed to
      acquire  approximately  2.9  million  shares  of  Common  Stock  of  Jones
      Intercable  (the  "Control  Shares"),  if and  when  acquired  by BTH from
      affiliates of Jones Intercable's controlling shareholder under an existing
      option  (the  "Control  Option")  to acquire  such  shares  (which  absent
      extraordinary circumstances would not have been exercisable until December
      2001).  The  Company  was  to  purchase  the  remaining  51%  of  the  BTH
      subsidiaries  when the Control  Shares were  acquired.  The Company,  BTH,
      Jones Intercable and Jones Intercable's  controlling shareholder agreed in
      August 1998 to accelerate  the Control Option to permit its early exercise
      and the early closing of the transactions with BTH. The transaction closed
      in April 1999. The Company paid $706.3 million in cash to acquire the 12.8
      million  shares of Jones  Intercable  Class A Common Stock and the Control
      Shares.  In connection  with the  acquisition,  the Company assumed $1.499
      billion of Jones  Intercable  debt (see Note 5). In June 1999, the Company
      purchased an additional  1.0 million  shares of Jones  Intercable  Class A
      Common Stock for $50.0 million through a private transaction. As a result,
      the  Company  controls  39.6% of the  economic  and  48.3%  of the  voting
      interest in Jones  Intercable.  In addition,  the Control Shares represent
      shares  having  the  right  to  elect  approximately  75% of the  Board of
      Directors of Jones  Intercable.  The share  acquisitions  were funded with
      available cash and cash equivalents. Jones Intercable is a public company,
      which owns cable operations serving approximately 1.1 million subscribers.
      The acquisition was accounted for under the purchase method of accounting.
      As such, the operating  results of Jones  Intercable have been included in
      the Company's  consolidated  statement of operations  from the acquisition
      date. The  allocation of the purchase price to the assets and  liabilities
      of Jones Intercable is preliminary pending completion of final appraisals.

      In December 1999, the Company entered into a definitive  merger  agreement
      with Jones  Intercable  to acquire  all of the  remaining  shares of Jones
      Intercable  not  currently  owned by the  Company.  Under the terms of the
      merger agreement, Jones Intercable shareholders will receive 1.4 shares of
      the  Company's  Class A  Special  Common  Stock  for  each  share of Jones
      Intercable  Class A Common  Stock  and  Common  Stock.  As a result of the
      merger, the Company will own 100% of Jones Intercable. The Company expects
      that the merger, which is subject to shareholder  approval,  will close in
      the first quarter of 2000.

      Time Warner Agreement
      In  November  1999,  the Company  entered  into an  agreement  to exchange
      certain of the  Company's  cable  communications  systems with Time Warner
      Cable ("Time Warner"),  a division of Time Warner  Entertainment  Company,
      L.P.  Under the terms of the  agreement,  the Company will  receive  cable
      communications  systems  serving  approximately  120,000  subscribers.  In
      exchange, Time Warner will receive systems that the Company currently

                                     - 40 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      owns serving  approximately  133,000 subscribers.  At closing, Time Warner
      will pay the Company an equalizing  payment of $31.2  million,  reflecting
      the agreed upon difference in fair value of the Time Warner assets and the
      Company's assets to be exchanged,  subject to adjustment.  The transaction
      is subject to customary closing conditions and regulatory approvals and is
      expected to close in the second quarter of 2000.

      Prime Communications Agreement
      In December 1998, the Company agreed to invest in Prime Communications LLC
      ("Prime"),  a cable communications  company serving  approximately 430,000
      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.  In November 1999,  the Company made an additional  $20.0
      million  loan to Prime  (on the  same  terms as the  original  loan),  and
      delivered a notice of the Company's  intention to convert the 6% note. The
      note will be converted  upon receipt of customary  closing  conditions and
      required  regulatory  approvals,  which are expected to be obtained in the
      second  quarter of 2000.  The owners of Prime have agreed that at the time
      of conversion, they will sell their remaining 10% equity interest in Prime
      to the Company,  for  approximately  $82.0 million,  plus accrued interest
      from July 1999 at 7% per annum.  As a result,  the Company  would then own
      100% of Prime and assume management  control of Prime's  operations.  Upon
      closing,  the Company  will assume  approximately  $550 million of Prime's
      debt.

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

      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,  Pennsylvania,  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
      acquisition was accounted for under the purchase method of accounting.  As
      such, the operating results of Greater  Philadelphia have been included in
      the Company's  consolidated  statement of operations  from the acquisition
      date. The  allocation of the purchase price to the assets and  liabilities
      of Greater  Philadelphia is preliminary pending a final appraisal.  As the
      consideration given in exchange for Greater Philadelphia was shares of the
      Company's  Class  A  Special  Common  Stock,   the  Greater   Philadelphia
      acquisition  had  no  significant  impact  on the  Company's  consolidated
      statement of cash flows.

      AT&T Agreement
      In May 1999,  the Company  entered into an agreement with AT&T to exchange
      various cable  communications  systems.  Under the terms of the agreement,
      the  Company   will   receive   cable   communications   systems   serving
      approximately  1.5 million  subscribers.  In  exchange,  AT&T will receive
      systems that the Company  currently owns or will acquire  serving  750,000
      subscribers.  At closing,  the Company will pay AT&T an equalizing payment
      of  approximately  $3.4 billion (subject to adjustment based on the actual
      number of net subscribers acquired and the per subscriber price of certain
      subscribers) for the 750,000 net subscribers to be acquired as a result of
      the exchanges.  The Company will pay for the net  subscribers  acquired in
      connection  with the  exchanges  with shares of AT&T common stock that the
      Company currently owns or may acquire and other securities or assets which
      would permit the exchanges to be tax-free to the maximum extent  possible.
      The agreed upon value of any AT&T common stock used in the  exchange  that
      was owned by the Company at the time of the agreement is $54.41 per share.

                                     - 41 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      Under  the  terms of the  agreement,  the  Company  also  agreed  to offer
      AT&T-branded   residential  wireline  telephony  in  the  Company's  cable
      communications  system  markets,  provided  AT&T  has  concluded  separate
      residential   telephony  agreements  with  at  least  two  other  non-AT&T
      affiliated  multi-system  cable  operators.  AT&T has  agreed to grant the
      Company the most  favorable  terms AT&T has  reached  with any of those or
      other multi-system cable operators.

      The majority of the exchanges are contingent upon the completion of AT&T's
      acquisition of MediaOne  Group,  Inc.  ("MediaOne"),  which is expected to
      close in 2000,  subject to customary  closing  conditions  and  regulatory
      approvals.

      Adelphia Agreement
      In May 1999,  the Company  entered into an  agreement to exchange  certain
      cable communications  systems with Adelphia  Communications  ("Adelphia").
      Under the terms of the agreement,  the Company will receive  approximately
      464,000  cable  subscribers  from  Adelphia.  In exchange,  Adelphia  will
      receive  cable  communications  systems  currently  owned  by the  Company
      serving approximately 440,000 subscribers.  All of the systems involved in
      the system exchanges will be valued based upon independent appraisals with
      any  difference  in relative  value to be funded  with cash or  additional
      cable  communications  systems.  The  transaction  is subject to customary
      closing  and  regulatory  approvals  and is expected to close in the third
      quarter of 2000.

      MediaOne Agreement
      In March 1999,  the Company  entered into an Agreement  and Plan of Merger
      with  MediaOne  pursuant  to  which  MediaOne  was to be  merged  with the
      Company.  Under the terms of that agreement,  MediaOne could terminate the
      agreement  under  certain  conditions,  provided that it pay the Company a
      termination  fee of $1.5 billion in cash. In April 1999, AT&T submitted an
      offer to purchase  MediaOne.  In May 1999, the MediaOne board of directors
      notified  the  Company  that it had  determined  that the AT&T  offer  was
      superior to the Company's  offer.  MediaOne then  terminated the agreement
      and paid the Company the termination  fee. The termination fee is included
      in other income in the Company's consolidated statement of operations, net
      of transaction costs, for the year ended December 31, 1999.

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

      In December 1997,  Entertainment  Holdings extended its carriage agreement
      and  acquired  the  10.4%  interest  in  E!   Entertainment  held  by  Cox
      Communications, Inc. ("Cox") for $57.1 million. The acquisition was funded
      by cash contributions to Entertainment  Holdings by the Company and Disney
      of $28.6 million and $28.5 million,  respectively. As of December 31, 1999
      and  1998,   Entertainment   Holdings   owns  a  79.2%   interest   in  E!
      Entertainment.

      The Company  accounted for the  acquisitions  under the purchase method of
      accounting.  As such, the operating results of E!  Entertainment have been
      included in the Company's  consolidated  statement of operations  from the
      acquisition date.

      Microsoft Investment
      In  June  1997,  the  Company  and  Microsoft  Corporation   ("Microsoft")
      completed a Stock Purchase Agreement.  Microsoft purchased and the Company
      issued approximately 49.2 million shares of the Company's Class A Special

                                     - 42 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      Common Stock at $10.15 per share, for $500.0 million and 500,000 shares of
      the Company's 5.25% Series B Mandatorily  Redeemable Convertible Preferred
      Stock,  par value $1,000 per share (the "Series B Preferred  Stock"),  for
      $500.0 million (see Note 6).

4.    INVESTMENTS

<TABLE>
<CAPTION>
                                                                                 December 31,
                                                                       1999                       1998
                                                                   ------------               ------------
                                                                          (Dollars in millions)
<S>                                                                   <C>                         <C>
      Fair value method........................................       $11,972.1                   $4,170.0
      Cost method..............................................         1,134.6                       74.7
      Equity method............................................            48.1                       11.1
                                                                   ------------               ------------
                  Total investments............................        13,154.8                    4,255.8

      Less, current investments................................         7,606.0                    3,653.4
                                                                   ------------               ------------
      Non-current investments..................................        $5,548.8                     $602.4
                                                                   ============               ============
</TABLE>

      Fair Value Method
      The Company holds  unrestricted  equity  investments  in certain  publicly
      traded  companies,  with an historical cost  (including  $1.999 billion of
      pre-tax gains  recognized  during 1999 and 1998,  respectively)  of $2.558
      billion and $2.555 billion as of December 31, 1999 and 1998, respectively.
      The unrealized  pre-tax gains on these investments as of December 31, 1999
      and 1998 of $9.414  billion and $1.615  billion,  respectively,  have been
      reported in the  Company's  consolidated  balance  sheet as a component of
      other comprehensive  income, net of related deferred income tax expense of
      $3.294 billion and $565.1 million, respectively.

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

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

      The Sprint PCS Stock is divided into three  categories:  (i) Series 1 (one
      vote per  share) to be held by the  public,  (ii)  Series 2 (1/10 vote per
      share  other than in class  votes) to be held by the Cable  Partners,  and
      (iii)  Series 3 (one vote per share) to be held by two of  Sprint's  major
      shareholders.  If the Series 2 shares are  transferred by a Cable Partner,
      the transferred shares become full vote Series 1 shares.

      As of December 31, 1999 and 1998,  the Company has recorded its investment
      in Sprint PCS at its  estimated  fair value of $4.234  billion  and $1.195
      billion, respectively (see Note 5).

                                     - 43 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


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

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

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

      As of December 31, 1999 and 1998,  the Company has recorded its investment
      in AT&T at its estimated fair value of $2.026 billion and $1.830  billion,
      respectively.

      Internet Capital Group. In August 1999, Internet Capital Group ("ICG"), an
      investee of the Company  previously  accounted  for under the cost method,
      completed  an  initial  public  offering  of its common  stock.  ICG is an
      Internet  holding  company  engaged in managing and operating a network of
      business-to-business  e-commerce  companies.  As of December 31, 1999, the
      Company holds  approximately  23.7 million  shares of ICG common stock and
      warrants and options to purchase  approximately  0.6 million shares of ICG
      common  stock.  As of December  31,  1999,  the Company has  recorded  its
      investment in ICG at its estimated fair value of $4.127 billion.

      Excite@Home.  Excite@Home  provides  Internet  services to subscribers and
      businesses  over the  cable  communications  infrastructure  in a  limited
      number of cities in the US. As of December  31, 1999 and 1998 (as adjusted
      for Excite@Home's  two-for-one stock split in May 1999), the Company holds
      approximately  29.1 million  shares of  Excite@Home  Series A Common Stock
      (the "Excite@Home Series A Stock") and warrants and options to purchase an
      additional  0.6  million  shares  of  Excite@Home  Series A  Stock.  As of
      December 31, 1999 and 1998, 30% and 55% of the Excite@Home Series A shares
      held by the Company were contractually  restricted shares (the "Restricted
      Shares")  and 70% and 45% of the  Excite@Home  Series A shares held by the
      Company were unrestricted shares (the "Unrestricted  Shares"). The Company
      has  recorded  the  Restricted  Shares  at their  historical  cost of $0.6
      million and $1.1 million,  respectively,  and the Unrestricted  Shares and
      warrants,  which are classified as available for sale, at their  estimated
      fair value of $918.0  million  and  $486.4  million,  respectively,  as of
      December 31, 1999 and 1998.

                                     - 44 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      NTL Incorporated.  In October 1998, the Company received approximately 4.8
      million shares of NTL  Incorporated  ("NTL") common stock,  an alternative
      telecommunications company in the UK, in exchange for all of the shares of
      Comcast UK Cable  Partners  Limited  ("Comcast UK Cable"),  a consolidated
      subsidiary  of the  Company,  held  by the  Company.  As a  result  of the
      exchange,  the Company  recognized a pre-tax gain of $148.3 million during
      the year ended December 31, 1998,  representing the difference between the
      fair value of the NTL common  stock  received and the  Company's  basis in
      Comcast UK Cable.  Such gain is included in other income in the  Company's
      consolidated statement of operations. As of December 31, 1998, the Company
      recorded  its  investment  in NTL at its  estimated  fair  value of $272.1
      million. During the year ended December 31, 1999, the Company sold all 5.8
      million shares (as adjusted for NTL's 5-for-4 stock split in October 1999)
      of its  NTL  common  stock  for  total  proceeds  of  $498.3  million  and
      recognized  a pre-tax  gain of $284.2  million.  Such gain is  included in
      investment income in the Company's consolidated statement of operations.

      During the years ended December 31, 1999 and 1997, the Company  recognized
      pre-tax gains of $323.0 million and $33.3 million,  respectively, on sales
      of certain of its other fair value  method  investments.  These gains were
      recorded  as  a  reclassification   from  other  comprehensive  income  to
      investment income.

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


                                     - 45 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      Equity Method
      The Company records its  proportionate  interests in the net income (loss)
      of certain of its equity  method  investees  three months in arrears.  The
      Company's recorded  investments exceed its proportionate  interests in the
      book value of the  investees'  net assets by $78.0  million as of December
      31, 1999 (primarily  related to the investment in The Golf Channel).  Such
      excess is being amortized to equity in net income or loss,  primarily over
      a period of 20 years,  which is consistent with the estimated lives of the
      underlying  assets.  The original cost of investments  accounted for under
      the equity method totaled $235.6 million and $215.3 million as of December
      31, 1999 and 1998,  respectively.  Summarized financial information is not
      presented for Sprint PCS, Teleport or Birmingham Cable Corporation Limited
      and Cable London,  PLC (together,  the "UK  Investees") as of December 31,
      1999 and 1998 or for the year ended December 31, 1999, as such investments
      are no longer accounted for under the equity method.  Summarized financial
      information for the Company's  equity method investees for the years ended
      December 31, 1998 and 1997 is as follows (dollars in millions).

<TABLE>
<CAPTION>
                                              Sprint                             UK           Comcast
                                                PCS           Teleport       Investees       Spectacor       Other        Combined
                                            ----------       ---------       ----------      ---------    ----------     ---------
<S>                                          <C>             <C>              <C>            <C>           <C>         <C>
Year Ended December 31, 1998:

   Combined Results of Operations
      Revenues, net........................   $1,136.5          $605.8           $197.8                       $638.6      $2,578.7
      Operating, selling, general and
         administrative expenses...........    2,587.6           558.7            153.3                        653.8       3,953.4
      Depreciation and amortization........      749.5           163.4             69.7                         69.1       1,051.7
      Operating loss.......................   (2,200.6)         (116.3)           (25.2)                       (84.3)     (2,426.4)
      Net loss (a).........................   (2,572.8)         (190.6)           (78.8)                      (134.2)     (2,976.4)

   Company's Equity in Net Loss
      Equity in current period net loss....    ($385.9)         ($27.2)          ($28.9)                      ($66.4)      ($508.4)
      Amortization expense.................       (3.5)                            (0.5)                        (3.5)         (7.5)
                                            ----------       ---------       ----------      ---------    ----------     ---------
         Total equity in net loss..........    ($389.4)         ($27.2)          ($29.4)                      ($69.9)      ($515.9)
                                            ==========       =========       ==========      =========    ==========     =========

Year Ended December 31, 1997:

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

   Company's Equity in Net Loss
      Equity in current period net loss....    ($178.1)         ($30.5)          ($34.6)        ($26.2)       ($65.3)      ($334.7)
      Amortization expense.................       (1.5)           (0.2)            (0.6)          (5.4)         (1.4)         (9.1)
                                            ----------       ---------       ----------      ---------    ----------     ---------
         Total equity in net loss..........    ($179.6)         ($30.7)          ($35.2)        ($31.6)       ($66.7)      ($343.8)
                                            ==========       =========       ==========      =========    ==========     =========
<FN>
---------
(a)   Net  loss  also  represents  loss  from   continuing   operations   before
      extraordinary  items  and  cumulative  effect  of  changes  in  accounting
      principles.
</FN>
</TABLE>

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

                                     - 46 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


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

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

      Impairment Losses
      During the years  ended  December  31,  1999,  1998 and 1997,  the Company
      recorded pre-tax losses of $35.5 million, $152.8 million and $2.5 million,
      respectively,  on certain of its  investments  based on a decline in value
      that was considered other than temporary. Such pre-tax losses are included
      in investment (income) expense in the Company's  consolidated statement of
      operations.

      Gain from Equity Offering of Affiliate
      For the years ended December 31, 1998 and 1997,  Teleport issued shares of
      its  Class A Common  Stock.  As a result  of these  stock  issuances,  the
      Company  recognized  $157.8  million  and $7.7  million  increases  in its
      proportionate share of Teleport's net assets,  respectively,  as gain from
      equity  offering  of  affiliate.  The  Company  recorded  its  increase in
      proportionate  share of Teleport's  net assets one quarter in arrears.  In
      March 1997,  the Company  received 2.76 million shares of Teleport Class A
      Common  Stock from  Teleport in exchange  for the  Company's  shares of an
      alternate access provider. In May 1997, the Company sold all of its shares
      of Teleport Class A Stock for $68.9 million and recognized a $68.9 million
      pre-tax  gain,  which  is  included  in  other  income  in  the  Company's
      consolidated statement of operations.


                                     - 47 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


5.    LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                                     December 31,
                                                                              1999                 1998
                                                                          ------------         ------------
                                                                                (Dollars in millions)
<S>                                                                        <C>                  <C>
      Notes payable to banks and insurance companies, due
         in installments through 2005..................................       $2,324.0             $1,690.8
      9-5/8% Senior notes, due 2002....................................          200.0
      8-1/8% Senior notes, due 2004....................................          299.8                299.8
      8-3/8% Senior notes, due 2007....................................          596.8                596.5
      8-7/8% Senior notes, due 2007....................................          248.9
      6.20% Senior notes, due 2008.....................................          798.1                797.9
      7-5/8% Senior notes, due 2008....................................          196.8
      8-7/8% Senior notes, due 2017....................................          545.7                545.6
      8-1/2% Senior notes, due 2027....................................          249.6                249.6
      10-1/4% Senior subordinated debentures, due 2001.................          100.4                125.0
      9-3/8% Senior subordinated debentures, due 2005..................          172.5                234.1
      9-1/8% Senior subordinated debentures, due 2006..................          144.7                223.7
      10-1/2% Senior subordinated debentures, due 2008.................          100.0
      9-1/2% Senior subordinated debentures, due 2008..................          198.5                200.0
      10-5/8% Senior subordinated debentures, due 2012.................          257.0                282.5
      7% Disney Notes, due 2007 (see Note 3)...........................          132.8                132.8
      24.1 million ZONES at principal amount, due 2029.................        1,806.8
         Non-cash adjustment to carrying value.........................          666.0
      Other debt, due in installments..................................          186.3                199.4
                                                                          ------------         ------------
                                                                               9,224.7              5,577.7
      Less current portion.............................................          517.5                113.5
                                                                          ------------         ------------
                                                                              $8,707.2             $5,464.2
                                                                          ============         ============
</TABLE>

      Maturities of long-term  debt  outstanding as of December 31, 1999 for the
      four years after 2000 are as follows (dollars in millions):

            2001.....................................    $371.9
            2002.....................................     761.6
            2003.....................................     823.0
            2004.....................................     548.0

      ZONES
      In  November  1999,  the Company  issued  approximately  8.0 million  2.0%
      Exchangeable  Subordinated  Debentures due 2029 (the "ZONES II") for gross
      proceeds  of  $657.1   million.   In  October  1999,  the  Company  issued
      approximately 16.1 million 2.0% Exchangeable  Subordinated  Debentures due
      2029 for gross proceeds of $1.15 billion (the "ZONES I", and together with
      the ZONES II,  the  "ZONES")  resulting  in  combined  proceeds  of $1.807
      billion.  The ZONES II mature on November 15, 2029.  The ZONES I mature on
      October  15,  2029.  At  maturity,  holders of the ZONES are  entitled  to
      receive in cash an amount equal to the higher of (a) the principal  amount
      of the ZONES, or (b) the market value of Sprint PCS Stock.

                                     - 48 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      Prior to maturity, each ZONES is exchangeable at the holders option for an
      amount of cash equal to 95% of the market value of Sprint PCS Stock. Prior
      to  maturity,  the  Company  may  redeem  all of the ZONES for cash at the
      higher  of the  original  principal  amount  of ZONES or the then  current
      market  value of the Sprint PCS Stock,  plus,  in either case, a per ZONES
      premium  of (a) 4.5% if  redeemed  prior to the first  anniversary  of the
      ZONES issuance date, (b) 3.0% if redeemed prior to the second  anniversary
      of the  ZONES  issuance  date,  (c) 1.5% if  redeemed  prior to the  third
      anniversary  of the ZONES  issuance  date,  or (d) zero if  redeemed on or
      after the third anniversary of the ZONES issuance date.

      Interest  on the ZONES is payable  quarterly  (subject  to deferral at the
      Company's option) equal to 2.0% per year of the original principal amount,
      plus the amount of the  quarterly  cash dividend paid on a share of Sprint
      PCS Stock.  The  principal  amount of the ZONES will be adjusted if Sprint
      PCS  changes  the  dividend  paid on its  stock  or if there  are  special
      distributions on or in respect of the Sprint PCS Stock.

      The ZONES are unsecured, subordinated obligations ranking equally with all
      of  the  Company's  existing  and  future   subordinated  debt  and  trade
      obligations.

      The ZONES are being accounted for as an indexed debt instrument  since the
      maturity  value is  dependent  upon the fair  value of Sprint  PCS  Stock.
      Therefore, the carrying value of the ZONES was increased by $666.0 million
      during 1999 to reflect the fair value of the  underlying  Sprint PCS Stock
      with the  change  included  in  expense  related  to  indexed  debt in the
      Company's consolidated  statement of operations.  The Company's investment
      in Sprint PCS is accounted for as available for sale, with changes in fair
      value being reflected in accumulated other comprehensive  income (see Note
      4).

      Jones Intercable Assumed Debt
      In April 1999, as part of the  acquisition  of a  controlling  interest in
      Jones Intercable, the Company assumed $1.499 billion of debt held by Jones
      Intercable. As of December 31, 1999, borrowings under credit facilities of
      certain of Jones  Intercable's  subsidiaries  totaling  $922.0 million and
      senior notes totaling $745.7 million,  with interest rates ranging between
      7 5/8% to 10 1/2%, and maturities between 2002 and 2008 were outstanding.

      PHONES
      In  March  1999,  the  Company  issued  8.7  million  3.35%   Exchangeable
      Extendable  Subordinated  Debentures  due 2029  (the  "PHONES")  for gross
      proceeds  of $718.3  million.  At  maturity,  holders of the  PHONES  were
      entitled  to  receive  in cash an  amount  equal to the  higher of (a) the
      principal  amount of the  PHONES,  or (b) the market  value of AT&T common
      stock.

      In July 1999, the Company redeemed all $718.3 million  principal amount of
      the PHONES.  The Company  redeemed the PHONES due to its transaction  with
      AT&T in which it  intends  to use AT&T  shares  as  consideration  for the
      purchase of cable systems from AT&T (see Note 3). In  connection  with the
      PHONES redemption, the Company incurred debt extinguishment costs of $32.3
      million  and  wrote-off  unamortized  debt issue  costs of $15.0  million,
      resulting in an  extraordinary  loss,  net of tax, of $30.8 million during
      the year ended December 31, 1999.

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

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

                                     - 49 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      The Senior Notes are unsecured and  unsubordinated  obligations of Comcast
      Cable and rank pari  passu  with all other  unsecured  and  unsubordinated
      indebtedness and other  obligations of Comcast Cable. The Senior Notes are
      effectively   subordinated   to  all   liabilities   of  Comcast   Cable's
      subsidiaries,  including trade payables.  The Senior Notes are obligations
      only of  Comcast  Cable  and are not  guaranteed  by and do not  otherwise
      constitute obligations of the Company.

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

      Redemption of Debt
      During  1999,  the  Company   repurchased   certain  senior   subordinated
      debentures having a principal amount of $192.2 million. In connection with
      the  repurchases  of these  senior  subordinated  debentures,  the Company
      incurred  debt  extinguishment   costs  of  $19.8  million  and  wrote-off
      unamortized   debt  issue  costs  of  $1.8   million,   resulting   in  an
      extraordinary  loss,  net of tax of $14.0  million  during  the year ended
      December 31, 1999.

      In December  1999,  the Company  repaid $200.0 million in notes payable to
      insurance  companies  having an interest rate of 8.6%. In connection  with
      this repayment,  the Company  incurred debt  extinguishment  costs of $9.2
      million  and  wrote-off  unamortized  debt  issue  costs of $0.3  million,
      resulting in an extraordinary  loss, net of tax of $6.2 million during the
      year ended December 31, 1999.

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

      Extraordinary Items
      Extraordinary  items for the years ended December 31, 1999,  1998 and 1997
      of $51.0 million, $4.2 million and $30.2 million, respectively, consist of
      unamortized debt issue costs and debt extinguishment costs, net of related
      tax benefits,  expensed  principally in connection with the redemption and
      refinancing 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  0.75%;
            Federal  Funds rate plus 0.5% to 1.5%; and
            LIBOR plus 0.375% to 1.875%.

      As of December 31, 1999 and 1998, the Company's effective weighted average
      interest  rate on its variable  rate bank debt  outstanding  was 6.67% and
      5.80%, respectively.

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

                                     - 50 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      The use of interest rate risk management instruments,  such as Swaps, Caps
      and  Collars,  is  required  under the terms of certain  of the  Company's
      outstanding  debt  agreements.  The Company's policy is to manage interest
      costs  using a mix of fixed and  variable  rate  debt.  Using  Swaps,  the
      Company agrees to exchange, at specified intervals, the difference between
      fixed  and  variable  interest  amounts  calculated  by  reference  to  an
      agreed-upon  notional principal amount. Caps are used to lock in a maximum
      interest  rate  should  variable  rates  rise,  but enable the  Company to
      otherwise pay lower market rates.  Collars limit the Company's exposure to
      and benefits  from  interest  rate  fluctuations  on variable rate debt to
      within a certain range of rates.

      The following table summarizes the terms of the Company's  existing Swaps,
      Caps and Collars as of December 31, 1999 and 1998 (dollars in millions):

<TABLE>
<CAPTION>
                                                        Notional                           Average           Estimated
                                                         Amount         Maturities      Interest Rate       Fair Value
                                                         ------         ----------      -------------       ----------
<S>                                                      <C>             <C>             <C>                 <C>
      As of December 31, 1999
      Variable to Fixed Swaps.......................     $1,111.8        2000-2003          5.6%               $16.9
      Fixed to Variable Swaps.......................        300.0          2004             7.7%                (3.9)
      Caps..........................................        140.0          2000             6.8%
      Collar........................................         50.0          2000           6.3%/4.0%              0.1

      As of December 31, 1998
      Variable to Fixed Swaps.......................     $1,061.8        1999-2008          5.7%              ($13.3)
      Caps..........................................        240.0          1999             7.0%
      Collar........................................         50.0          2000           6.3%/4.0%
</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, 1999,  1998 and 1997
      was not significant.

      Estimated Fair Value
      The Company's  long-term  debt had estimated fair values of $9.231 billion
      and $5.995  billion as of December  31, 1999 and 1998,  respectively.  The
      estimated  fair value of the  Company's  publicly  traded debt is based on
      quoted  market  prices for that debt.  Interest  rates that are  currently
      available  to the Company  for  issuance  of debt with  similar  terms and
      remaining  maturities  are used to estimate fair value for debt issues for
      which quoted market prices are not available.

      Debt Covenants
      Certain of the Company's subsidiaries' loan agreements contain restrictive
      covenants which limit the subsidiaries' ability to enter into arrangements
      for the  acquisition of property and equipment,  investments,  mergers and
      the incurrence of additional  debt.  Certain of these  agreements  require
      that certain ratios and cash flow levels be maintained and contain certain
      restrictions  on dividend  payments  and advances of funds to the Company.
      The Company and its subsidiaries  were in compliance with such restrictive
      covenants  for all periods  presented.  In addition,  the stock of certain
      subsidiary  companies is pledged as  collateral  for the notes  payable to
      banks and insurance companies.

      As of December  31,  1999,  $277.1  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
      $3.2 billion as of December 31, 1999.

                                     - 51 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      Lines and Letters of Credit
      As of December 31, 1999,  certain  subsidiaries  of the Company had unused
      lines of credit of $1.063  billion,  $463.0 million of which is restricted
      by the covenants of the related debt agreements and to subsidiary  general
      purposes and dividend declaration.

      As of December 31, 1999, the Company and certain of its  subsidiaries  had
      unused  irrevocable  standby  letters of credit  totaling $65.9 million to
      cover potential fundings associated with several projects.

6.    STOCKHOLDERS' EQUITY

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

      In June 1997, in  connection  with  Microsoft's  investment in the Company
      (see Note 3), the Company issued the Series B Preferred  Stock. The Series
      B Preferred Stock has a 5.25% pay-in-kind annual dividend.  Dividends will
      be paid  quarterly  through the issuance of additional  shares of Series B
      Preferred Stock (the "Additional  Shares") and will be cumulative from the
      issuance date (except that dividends on the Additional  Shares will accrue
      from the date such Additional  Shares are issued).  The Series B Preferred
      Stock,  including the Additional Shares, is convertible,  at the option of
      Microsoft,  into  42.4  million  shares of the  Company's  Class A Special
      Common  Stock,  subject to adjustment  in certain  limited  circumstances,
      which equals an initial  conversion price of $11.77 per share,  increasing
      as a result of the Additional Shares to $16.96 per share on June 30, 2004.
      The Series B Preferred  Stock is mandatorily  redeemable on June 30, 2017,
      or, at the  option of the  Company  beginning  on June 30,  2004 or at the
      option of Microsoft on June 30, 2004 or on June 30, 2012. Upon redemption,
      the Company,  at its option,  may redeem the Series B Preferred Stock with
      cash,  Class A  Special  Common  Stock or a  combination  thereof.  As the
      Company  currently  intends to redeem the  Series B  Preferred  Stock with
      Class A Special Common Stock upon redemption, the Series B Preferred Stock
      has been classified as a component of stockholders'  equity as of December
      31, 1999. The Series B Preferred Stock is generally non-voting.

      Series A Preferred Stock Conversion
      In July 1999, the Company  exercised its right to convert all 6,370 shares
      of its Series A Preferred Stock into  approximately  2.7 million shares of
      its Class A Special Common 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.

      Repurchase Program
      Based on the trade  date for stock  repurchases,  during  the years  ended
      December  31, 1999,  1998 and 1997,  the Company  repurchased  0.8 million
      shares,  0.6 million shares and 4.6 million shares,  respectively,  of its
      common stock for aggregate  consideration of $30.7 million,  $12.9 million
      and  $36.2  million,   respectively,   pursuant  to  its  Board-authorized
      repurchase programs.

      As part of the repurchase  programs,  the Company sold Comcast Put Options
      on 5.5 million and 4.0 million shares, during the years ended December 31,
      1998 and 1997.

      The Comcast  Put Options  give the holder the right to require the Company
      to  repurchase  such shares at  specified  prices on specific  dates.  All
      Comcast Put Options  sold during 1998 and 1997  expired  unexercised.  The
      amount the

                                     - 52 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      Company would have been  obligated to pay to  repurchase  such shares upon
      exercise  of  the  Comcast  Put  Options,   totaling  $111.2  million  was
      reclassified  from additional  capital to common equity put options in the
      Company's December 31, 1998 consolidated balance sheet. Upon expiration in
      1999, the Company  reclassified such amount from common equity put options
      to additional  capital in the Company's  consolidated  balance sheet.  The
      difference  between  the  proceeds  from the sale of these put options and
      their estimated fair value was not significant as of December 31, 1998.

      Share Exchange
      During the year ended December 31, 1999, the Company issued  approximately
      4.6 million  shares of its Class A Special  Common  Stock valued at $172.1
      million in exchange for  approximately  4.9 million  shares of its Class A
      Common Stock. The Class A Common Stock was subsequently retired.

      Stock-Based Compensation Plans
      As of December 31,  1999,  the Company and its  subsidiaries  have several
      stock-based compensation plans for certain employees,  officers, directors
      and other persons designated by the applicable  compensation committees of
      the boards of directors of the Company and its  subsidiaries.  These plans
      are described below.

      Comcast  Option Plan.  The Company  maintains  qualified and  nonqualified
      stock  option plans for certain  employees,  directors  and other  persons
      under  which fixed  stock  options  are  granted  and the option  price is
      generally not less than the fair value of a share of the underlying  stock
      at the date of grant (collectively,  the "Comcast Option Plan"). Under the
      Comcast  Option Plan,  54.2 million shares of Class A Special Common Stock
      were  reserved as of December 31, 1999.  Option terms are  generally  from
      five to 10 1/2 years, with options generally becoming  exercisable between
      two and 9 1/2 years from the date of grant.

      A summary of the  activity  of the  Comcast  Option Plan as of and for the
      years ended December 31, 1999,  1998 and 1997 is presented  below (options
      in thousands):

<TABLE>
<CAPTION>
                                                         1999                           1998                        1997
                                             -----------------------------    -------------------------   -----------------------
                                                               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             43,002        $11.09           32,220       $7.75         29,702    $7.27
      Granted                                       7,403         34.16           16,350       16.53          5,198     9.74
      Exercised                                    (7,527)         6.76           (3,970)       6.60         (1,590)    4.98
      Canceled                                     (2,462)        12.90           (1,598)      10.48         (1,090)    8.20
                                             ------------                     ----------                  ---------
      Outstanding at end of year                   40,416         16.01           43,002       11.09         32,220     7.75
                                             ============                     ==========                  =========
      Exercisable at end of year                   10,947          8.19           15,390       $7.30         15,386    $6.96
                                             ============                     ==========                  =========

      Class B Common Stock
      Outstanding at beginning of year                                               658       $2.85            658    $2.85
      Exercised                                                                     (658)       2.85
                                                                              ----------                  ---------
      Outstanding at end of year                                                                                658    $2.85
                                                                              ==========                  =========

      Exercisable at end of year                                                                                658    $2.85
                                                                                                          =========
</TABLE>

                                     - 53 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      The  following  table  summarizes  information  about  the Class A Special
      Common  Stock  options  outstanding  under the  Comcast  Option Plan as of
      December 31, 1999 (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 12/31/99          Life           Price       at 12/31/99         Price
      ------------------           ---------------  -----------------  ------------  -------------    -------------
<S>                                  <C>            <C>               <C>              <C>           <C>
      $3.17 to $6.04                     4,763          1.9 years         $5.43            3,962         $5.44
      $6.71 to $11.00                   12,758          4.5 years          9.09            6,626          9.39
      $11.04 to $18.63                  15,335          8.3 years         16.27              294         12.74
      $20.80 to $50.13                   7,560          9.3 years         33.83               65         33.99
                                   -----------                                       -----------
                                        40,416                                            10,947
                                   ===========                                       ===========
</TABLE>

      The  weighted-average  fair  value at date of  grant of a Class A  Special
      Common Stock  option  granted  under the Comcast  Option Plan during 1999,
      1998 and 1997 was $20.41, $8.54 and $5.09, respectively. The fair value of
      each  option   grant  is   estimated  on  the  date  of  grant  using  the
      Black-Scholes  option-pricing  model with the  following  weighted-average
      assumptions:  dividend  yield of -0-%,  .44% and .52% for  1999,  1998 and
      1997,  respectively;  expected  volatility  of 36.1%,  31.3% and 30.1% for
      1999, 1998 and 1997,  respectively;  risk-free interest rate of 5.8%, 5.6%
      and 6.5% for 1999, 1998 and 1997,  respectively;  expected option lives of
      9.9 years for all years; and a forfeiture rate of 3.0% for all years.

      QVC Tandem Plan. QVC established a qualified and nonqualified  combination
      stock option/Stock  Appreciation  Rights ("SAR") plan  (collectively,  the
      "QVC Tandem  Plan")  during 1995 for  employees,  officers,  directors and
      other persons  designated by the Compensation  Committee of QVC's Board of
      Directors.  Under the QVC Tandem Plan,  the option price is generally  not
      less than the fair value, as determined by an independent appraisal,  of a
      share of the  underlying  common stock of QVC ("QVC Common  Stock") at the
      date of grant. As of the latest  valuation date, the fair value of a share
      of QVC Common  Stock was  $1,081.00.  If the SAR feature of the QVC Tandem
      Plan is elected by the eligible participant,  the participant receives 75%
      of the excess of the fair  value of a share of QVC  Common  Stock over the
      exercise price of the option to which it is attached at the exercise date.
      Option holders have stated an intention not to exercise the SAR feature of
      the QVC Tandem Plan.  Because the exercise of the option component is more
      likely  than the  exercise  of the SAR  feature,  compensation  expense is
      measured based on the stock option  component.  Under the QVC Tandem Plan,
      option/SAR terms are ten years from the date of grant,  with  options/SARs
      generally becoming  exercisable over four years from the date of grant. As
      of December 31,  1999,  200,000  shares of QVC Common Stock were  reserved
      under the plan.  Compensation  expense of $450,000,  $1.0 million and $3.4
      million  was  recorded  under the QVC Tandem  Plan  during the years ended
      December 31, 1999, 1998 and 1997, respectively.

                                     - 54 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      A summary of the  activity  of the QVC Tandem Plan as of and for the years
      ended December 31, 1999, 1998 and 1997 is presented below (options/SARs in
      thousands):

<TABLE>
<CAPTION>
                                                   1999                     1998                       1997
                                       --------------------------  ------------------------    ----------------------
                                                       Weighted-                 Weighted-                  Weighted-
                                                        Average                   Average                   Average
                                         Options/      Exercise     Options/      Exercise      Options/    Exercise
                                           SARs         Price         SARs         Price          SARs       Price
                                       -----------    -----------  ---------     ----------    ----------  ---------
<S>                                          <C>        <C>           <C>          <C>           <C>        <C>
      Outstanding at
         beginning of year.............        206      $500.82         180        $363.99         164      $192.16
      Granted..........................         42       832.73          72         664.76          74       601.28
      Exercised........................        (42)      651.84         (41)        186.01         (55)      177.05
      Canceled.........................         (6)      637.05          (5)        511.01          (3)      262.20
                                       -----------                  -------                    -------
      Outstanding at end of year.......        200       618.02         206         500.82         180       363.99
                                       ===========                  =======                    =======

      Exercisable at end of year.......         80      $505.86          37        $397.46          20      $205.42
                                       ===========                  =======                    =======
</TABLE>

      The  following  table  summarizes   information   about  the  options/SARs
      outstanding   under  the  QVC  Tandem  Plan  as  of   December   31,  1999
      (options/SARs in thousands):

<TABLE>
<CAPTION>
                                                    Options/SARs Outstanding               Options/SARs Exercisable
                                             ----------------------------------------      ------------------------
                                                                        Weighted-
                                               Number                    Average                    Number
      Exercise                               Outstanding                Remaining                 Exercisable
      Prices                                 at 12/31/99             Contractual Life             at 12/31/99
      --------------                         ------------            ----------------           -------------
<S>                                             <C>                   <C>                           <C>
           $177.05                                 29                    5.5 years                     23
            522.31                                  3                    6.5 years                      2
            585.19                                  3                    7.0 years                      2
            634.25                                 61                    7.8 years                     31
            651.84                                 45                    8.7 years                     18
            688.14                                 10                    8.2 years                      2
            741.79                                 20                    9.1 years                      2
            865.47                                 28                    9.6 years
          1,081.00                                  1                    9.9 years
                                             --------                                           ---------
                                                  200                                                  80
                                             ========                                           =========
</TABLE>

      The  weighted-average  fair value at date of grant of a QVC  Common  Stock
      option/SAR  granted  during 1999,  1998 and 1997 was $407.58,  $296.67 and
      $331.93, respectively. The fair value of each option grant is estimated on
      the date of grant using the  Black-Scholes  option-pricing  model with the
      following weighted-average  assumptions:  no dividend yield for all years;
      expected volatility of 20% for all years; risk-free interest rate of 6.1%,
      4.9% and 6.2% for 1999, 1998 and 1997, respectively; expected option lives
      of 10 years for all years; and a forfeiture rate of 3.0% for all years.

      E! Tandem Plan.  Effective  December 22, 1999, E!  established a qualified
      and  nonqualified  combination  stock  option/Stock   Appreciation  Rights
      ("SAR") Plan (collectively,  the "E! Tandem Plan") for employees, officers
      and  directors  of E!.  Under the E!  Tandem  Plan,  the  option  price is
      generally  not less  than the  fair  market  value,  as  determined  by an
      independent  appraisal,  of a share of the  underlying  common stock of E!
      ("E! Common Stock") at the date of grant. As of the latest valuation date,
      the fair  value of a share of E!  Common  Stock  was  $841.36.  If the SAR
      feature of the E! Tandem Plan is elected by the eligible participant,  the
      participant receives 75% of the

                                     - 55 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      excess of the fair value of a share of E! Common  Stock over the  exercise
      price of the option to which it is attached at the exercise date.  Because
      the Company  believes 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 E! Tandem Plan, option/SAR
      terms  are ten  years  from date of  grant,  with  options/SARs  generally
      becoming  exercisable  over  five  years  from  the date of  grant.  As of
      December 31, 1999,  59,350 shares of E! Common Stock were  reserved  under
      the E! Tandem Plan.  Compensation  expense of $219,000 was recorded  under
      the E! Tandem Plan during the year ended December 31, 1999.

      During 1999,  approximately  27,000 options/SARs with an exercise price of
      $841.36 were granted under the E! Tandem Plan.  At December 31, 1999,  all
      options/SARs  granted remained  outstanding,  of which approximately 4,100
      were  exercisable.  The  weighted-average  remaining  contractual  life of
      options/SARs  outstanding and options/SARs  exercisable as of December 31,
      1999 was 10 years.

      The  weighted-average  fair  value  at date of grant  of E!  Common  Stock
      options/SAR  granted during 1999 was $432.96.  The fair value of each 1999
      option  grant is  estimated  on the date of grant using the  Black-Scholes
      option pricing model with the following weighted-average  assumptions:  no
      dividend  yield;  expected  volatility  of 20%; risk free interest rate of
      6.8%; expected option life of 10 years; and a forfeiture rate of 3%.

      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 (loss) and net income (loss) per share would have
      changed to the pro forma  amounts  indicated  below  (dollars in millions,
      except per share data):

<TABLE>
<CAPTION>
                                                                    1999                   1998                  1997
                                                                   ------                 -------               ------
<S>                                                               <C>                      <C>                  <C>
      Net income (loss) - As reported........................     $1,065.7                 $972.1               ($238.7)
      Net income (loss) - Pro forma..........................      1,005.5                  936.4                (252.0)

      Net income (loss) for common stockholders -
            As reported......................................     $1,036.0                 $943.0               ($253.5)
      Net income (loss) for common stockholders -
            Pro forma........................................        975.8                  907.3                (266.7)

      Basic earnings (loss) for common stockholders
            per common share - As reported...................        $1.38                  $1.29                 ($.38)
      Basic earnings (loss) for common stockholders
            per common share - Pro forma.....................         1.30                   1.24                  (.40)

      Diluted earnings (loss) for common stockholders
            per common share - As reported...................         1.30                  $1.21                 ($.38)
      Diluted earnings (loss) for common stockholders
            per common share - Pro forma.....................         1.23                   1.17                  (.40)
</TABLE>

      The pro forma effect on net income  (loss) and net income (loss) per share
      for the years ended December 31, 1999,  1998 and 1997 by applying SFAS No.
      123 may not be indicative of the pro forma effect on net income or loss in
      future years since SFAS No. 123 does not take into consideration pro forma
      compensation  expense  related to awards made prior to January 1, 1995 and
      since additional awards in future years are anticipated.

      Other Stock-Based Compensation Plans
      The Company  maintains a restricted  stock program under which  management
      employees  may be  granted  restricted  shares  of the  Company's  Class A
      Special Common Stock.  The shares awarded vest annually,  generally over a
      period not to exceed  five  years  from the date of the award,  and do not
      have voting or dividend rights until vesting occurs.

                                     - 56 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      At December 31, 1999, there were 1.6 million unvested shares granted under
      the program,  of which 304,000  vested in January  2000.  During the years
      ended  December  31,  1999,  1998 and 1997,  170,000,  656,000 and 416,000
      shares   were   granted   under   the   program,   respectively,   with  a
      weighted-average  grant date market value of $43.22,  $17.33 and $8.68 per
      share,  respectively.  Compensation  expense  recognized  during the years
      ended  December  31,  1999,  1998 and 1997  under  this  program  was $4.7
      million,  $5.3  million  and  $7.1  million,  respectively.  There  was no
      significant   difference  between  the  amount  of  compensation   expense
      recognized by the Company during the years ended  December 31, 1999,  1998
      and 1997 and the amount that would have been  recognized had  compensation
      expense been determined under the provisions of SFAS No. 123.

      The  Company  and QVC have SAR  plans  for  certain  employees,  officers,
      directors  and  other  persons  (the "QVC SAR  Plans").  Under the QVC SAR
      Plans,  eligible  participants are entitled to receive a cash payment from
      the Company or QVC equal to 100% of the excess,  if any, of the fair value
      of a share of QVC Common Stock at the exercise date over the fair value of
      such a share at the grant date. The SARs have a term of ten years from the
      date of grant and become exercisable over four to five years from the date
      of grant.  During the years ended December 31, 1999, 1998 and 1997, 2,000,
      5,000 and 4,000 SARs were  awarded,  respectively,  and  18,000  SARs were
      outstanding  at December  31,  1999,  of which  10,000  were  exercisable.
      Compensation  expense  related to the QVC SAR Plans of $6.4 million,  $3.2
      million and $3.4 million was recorded  during the years ended December 31,
      1999,  1998 and 1997,  respectively.  There was no significant  difference
      between the amount of compensation  expense recognized and the amount that
      would have been recognized had compensation  expense been determined under
      the provisions of SFAS No. 123.

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

                                     - 57 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


7.    INCOME TAXES

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

<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                                        1999                 1998                 1997
                                                     -----------          -----------          -----------
                                                                     (Dollars in millions)
<S>                                                       <C>                  <C>                   <C>
      Current expense
      Federal.......................................      $606.7               $135.5                $94.4
      State.........................................       188.4                 27.5                 24.7
      Foreign.......................................         2.0
                                                     -----------          -----------          -----------
                                                           797.1                163.0                119.1
                                                     -----------          -----------          -----------

      Deferred expense (benefit)
      Federal.......................................       (65.2)               424.6                (47.5)
      State.........................................        (8.2)                 6.4                 (1.2)
                                                     -----------          -----------          -----------
                                                           (73.4)               431.0                (48.7)
                                                     -----------          -----------          -----------
      Income tax expense............................      $723.7               $594.0                $70.4
                                                     ===========          ===========          ===========
</TABLE>

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


<TABLE>
<CAPTION>
                                                                                          Year Ended December 31,
                                                                                1999                 1998                 1997
                                                                            -----------          -----------          -----------
                                                                                           (Dollars in millions)
<S>                                                                              <C>                  <C>                  <C>
      Federal tax at statutory rate......................................        $525.0               $545.1               ($66.1)
      Non-deductible depreciation and amortization.......................          49.8                 41.0                 42.6
      State income taxes, net of federal benefit.........................         117.1                 22.0                 15.3
      Foreign (income) losses and equity in net losses of affiliates.....          (2.0)               (11.2)                53.1
      Other..............................................................          33.8                 (2.9)                25.5
                                                                            -----------          -----------          -----------

      Income tax expense.................................................        $723.7               $594.0                $70.4
                                                                            ===========          ===========          ===========
</TABLE>

                                     - 58 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


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

<TABLE>
<CAPTION>
                                                                                         December 31,
                                                                                 1999                    1998
                                                                             ------------            ------------
                                                                                    (Dollars in millions)
<S>                                                                                <C>                     <C>
      Deferred tax assets:
         Net operating loss carryforwards.................................         $240.0                  $324.7
         Reserves for bad debts, obsolete inventory
            and sales returns.............................................          106.9                    94.4
         Differences between book and tax basis of
            indexed debt securities.......................................          223.1
         Other............................................................          153.5                    89.6
         Less: Valuation allowance........................................         (178.2)                 (282.5)
                                                                             ------------            ------------
                                                                                    545.3                   226.2
                                                                             ------------            ------------

      Deferred tax liabilities:
         Temporary differences, principally book and tax basis
            of property and equipment and deferred charges................        1,854.5                 1,558.1
         Differences between book and tax basis
            in investments................................................        3,959.9                 1,201.4
                                                                             ------------            ------------
                                                                                  5,814.4                 2,759.5
                                                                             ------------            ------------
      Net deferred tax liability..........................................       $5,269.1                $2,533.3
                                                                             ============            ============
</TABLE>

      The Company recorded  approximately  $400.0 million of deferred income tax
      liabilities  in  1999  in  connection  with  the   acquisitions  of  Jones
      Intercable and Greater  Philadelphia.  The Company recorded  approximately
      $2.730  billion and $489.4  million of deferred  income  taxes in 1999 and
      1998,  respectively,  in connection  with  unrealized  gains on marketable
      securities which are included in other comprehensive income.

      The Company has recorded net deferred tax  liabilities  of $2.119  billion
      and $1.033 billion, as of December 31, 1999 and 1998, respectively,  which
      have been included in current  liabilities,  related  primarily to current
      investments.  Subsidiaries which are not consolidated with the Company for
      income  tax  reporting   purposes  have   aggregate  net  operating   loss
      carryforwards  of  approximately  $500.0 million which expire primarily in
      periods through 2019. A valuation  allowance has been recorded for certain
      of these losses due to uncertainty as to their realization.

8.    STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION

      The Company  made cash  payments for  interest of $529.2  million,  $418.9
      million and $467.2 million during the years ended December 31, 1999,  1998
      and 1997, respectively.

      The Company made cash payments for income taxes of $190.5 million,  $129.2
      million and $113.7 million during the years ended December 31, 1999,  1998
      and 1997, respectively.

9.    COMMITMENTS AND CONTINGENCIES

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

                                     - 59 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


      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.

      Disney,  in certain  circumstances,  is  entitled  to cause  Entertainment
      Holdings 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 Notes 3 and 5) may be  replaced
      with a three year note due to Disney.

      Liberty Media Group ("Liberty"), a majority owned subsidiary of AT&T, may,
      at certain  times  following  February 9, 2000,  trigger  the  exercise of
      certain  exit rights with  respect to its  investment  in QVC. If the exit
      rights are  triggered,  the Company has first right to purchase  Liberty's
      stock in QVC at Liberty's  pro rata portion of the fair market value (on a
      going concern or liquidation basis,  whichever is higher, as determined by
      an appraisal  process) of QVC. The Company may pay Liberty for such stock,
      subject to certain  rights of Liberty to  consummate  the  purchase in the
      most  tax-efficient  method available,  in cash, the Company's  promissory
      note  maturing  not more than three years after  issuance,  the  Company's
      equity securities or any combination thereof. If the Company elects not to
      purchase  the  stock of QVC held by  Liberty,  then  Liberty  will  have a
      similar right to purchase the stock of QVC held by the Company. If Liberty
      elects not to purchase the stock of QVC held by the Company,  then Liberty
      and the Company will use their best efforts to sell QVC.

      Minimum  annual  rental  commitments  for  office  space,   equipment  and
      transponder service agreements under noncancellable operating leases as of
      December 31, 1999 are as follows:
                                                       (Dollars
                                                     in millions)
                                                     ------------

           2000...................................       $61.1
           2001...................................        53.7
           2002...................................        46.7
           2003...................................        44.7
           2004...................................        40.6
           Thereafter.............................       165.5

      Rental expense of $71.1 million, $64.8 million and $65.8 million for 1999,
      1998 and 1997, respectively, has been charged to operations.

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

                                     - 60 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Continued)


10.   FINANCIAL DATA BY BUSINESS SEGMENT

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

<TABLE>
<CAPTION>
                                                                                                           Corporate
                                                                                Cable        Commerce     and Other(1)      Total
                                                                                -----        --------     ------------      -----
<S>                                                                            <C>           <C>              <C>          <C>
   1999
   Revenues..................................................................  $2,929.3      $2,847.4         $432.5       $6,209.2
   Operating income (loss) before depreciation and amortization (2)..........   1,353.0         538.8          (11.8)       1,880.0
   Depreciation and amortization.............................................   1,026.6         117.2           72.2        1,216.0
   Operating income (loss)...................................................     326.4         421.6          (84.0)         664.0
   Interest expense..........................................................     353.0          39.6          145.7          538.3
   Assets....................................................................  10,855.3       2,243.6       15,586.7       28,685.6
   Long-term debt............................................................   4,735.3         476.7        3,495.2        8,707.2
   Capital expenditures......................................................     739.6          80.1           74.1          893.8

   1998
   Revenues..................................................................  $2,277.4      $2,402.7         $465.2       $5,145.3
   Operating income (loss) before depreciation and amortization (2)..........   1,096.6         434.2          (34.1)       1,496.7
   Depreciation and amortization.............................................     674.2         126.1          139.3          939.6
   Operating income (loss)...................................................     422.4         308.1         (173.4)         557.1
   Interest expense..........................................................     223.6          51.1          192.0          466.7
   Assets....................................................................   6,449.4       2,101.8        6,159.3       14,710.5
   Long-term debt............................................................   3,462.1         626.8        1,375.3        5,464.2
   Capital expenditures......................................................     711.1          67.2          120.6          898.9

   1997
   Revenues..................................................................  $2,073.0      $2,082.5         $312.2       $4,467.7
   Operating income (loss) before depreciation and amortization (2)..........     987.7         337.7          (32.3)       1,293.1
   Depreciation and amortization.............................................     626.1         115.0           85.4          826.5
   Operating income (loss)...................................................     361.6         222.7         (117.7)         466.6
   Interest expense..........................................................     227.9          56.3          174.7          458.9
   Assets....................................................................   6,057.8       2,175.8        3,000.7       11,234.3
   Long-term debt............................................................   2,554.9         768.8        2,010.4        5,334.1
   Capital expenditures......................................................     497.8          97.3          200.4          795.5
<FN>
--------------
(1)   Other includes  segments not meeting certain  quantitative  guidelines for
      reporting.  Other includes  certain  operating  businesses and programming
      investments,  including Comcast-Spectacor  (effective January 1, 1998), E!
      Entertainment  (effective March 31, 1997),  the Company's  consolidated UK
      cable and  telecommunications  operations (prior to October 29, 1998), the
      Company's DBS operations (prior to April 1, 1998) and elimination  entries
      related to the segments  presented.  Corporate  and other  assets  consist
      primarily of the Company's investments (see Note 4).
(2)   Operating income before depreciation and amortization is commonly referred
      to in the Company's  businesses as "operating  cash flow."  Operating cash
      flow is a measure of a company's  ability to generate  cash to service its
      obligations,  including debt service  obligations,  and to finance capital
      and other expenditures. In part due to the capital intensive nature of the
      Company's  businesses  and the  resulting  significant  level of  non-cash
      depreciation and amortization  expense,  operating cash flow is frequently
      used  as  one of the  bases  for  comparing  businesses  in the  Company's
      industries,  although the Company's measure of operating cash flow may not
      be comparable to similarly titled measures of other  companies.  Operating
      cash flow is the primary basis used by the Company's management to measure
      the operating performance of its businesses.  Operating cash flow does not
      purport  to  represent  net  income  or net  cash  provided  by  operating
      activities, as those terms are defined under generally accepted accounting
      principles,  and  should  not be  considered  as an  alternative  to  such
      measurements as an indicator of the Company's performance.
</FN>
</TABLE>

                                     - 61 -
<PAGE>
COMCAST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 and 1997 (Concluded)

11.   QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    First        Second         Third       Fourth       Total
                                                                   Quarter       Quarter       Quarter     Quarter (4)    Year
                                                                   -------       -------       -------     -----------    ----
                                                                          (Dollars in millions, except per share data)
<S>                                                                <C>           <C>          <C>          <C>          <C>
   1999 (1)
   Revenues....................................................... $1,374.0      $1,478.6     $1,525.0     $1,831.6     $6,209.2
   Operating income before depreciation and amortization (2)......    425.1         457.3        463.9        533.7      1,880.0
   Operating income...............................................    186.6         149.8        151.0        176.6        664.0
   Income (loss) from continuing operations
         before extraordinary items...............................    101.8         826.3         20.4       (167.6)       780.9
   Basic earnings (loss) for common
         stockholders per common share
          Income (loss) from continuing operations
          before extraordinary items..............................      .13          1.10          .02         (.23)        1.00
         Net income (loss)........................................      .10          1.10          .44         (.24)        1.38
   Diluted earnings (loss) for common
         stockholders per common share
         Income (loss) from continuing operations
         before extraordinary items...............................      .12          1.01          .03         (.23)         .95
         Net income (loss)........................................      .10          1.01          .41         (.24)        1.30
   Cash dividends per common share (5)............................

   1998 (3)
   Revenues....................................................... $1,254.5      $1,205.9     $1,238.0     $1,446.9     $5,145.3
   Operating income before depreciation and amortization (2)......    348.8         353.4        373.2        421.3      1,496.7
   Operating income...............................................    109.4         124.1        132.9        190.7        557.1
   Income (loss) from continuing operations
         before extraordinary items...............................    (68.9)        (79.9)       723.7        432.8      1,007.7
   Basic earnings (loss) for common
         stockholders per common share
   Income (loss) from continuing operations
         before extraordinary items...............................     (.11)         (.12)         .98          .58         1.34
   Net income (loss)..............................................     (.12)         (.12)         .97          .57         1.29
   Diluted earnings (loss) for common
         stockholders per common share
   Income (loss) from continuing operations
         before extraordinary items...............................     (.11)         (.12)         .90          .53         1.25
   Net income (loss)..............................................     (.12)         (.12)         .89          .52         1.21
   Cash dividends per common share (5)............................    .0117         .0117        .0117        .0117        .0467
<FN>
--------------
(1)   Results of  operations  for 1999 were  affected  by the  acquisition  of a
      controlling  interest in Jones  Intercable and the receipt of the MediaOne
      termination fee in the second quarter, and the ZONES fair value adjustment
      in the fourth quarter (see Notes 3 and 5).
(2)   See Note 10, note 2.
(3)   Results of  operations  include  the  results of Comcast UK Cable  through
      October 29, 1998.  Results of operations  were affected by the gain on the
      AT&T/Teleport  merger  in the third  quarter  and the gains on the sale of
      Comcast UK Cable and the Sprint PCS  restructuring  in the fourth  quarter
      (see Note 4).
(4)   The Company's consolidated results of operations for the fourth quarter of
      1999 and  1998  are also  affected  by the  seasonality  of the  Company's
      commerce operations.
(5)   The Company's board of directors eliminated the quarterly cash dividend of
      $.0117 per share on all  classes  of its  common  stock in March 1999 (see
      Note 1).
</FN>
</TABLE>

                                     - 62 -
<PAGE>
ITEM 9    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

      None.

                                    PART III

      The information called for by Item 10, Directors and Executive Officers of
the Registrant (except for the information  regarding  executive officers called
for by Item 401 of Regulation  S-K which is included in Part I hereof as Item 4A
in accordance with General  Instruction G(3)), Item 11, Executive  Compensation,
Item 12, Security  Ownership of Certain  Beneficial  Owners and Management,  and
Item 13, Certain Relationships and Related Transactions,  is hereby incorporated
by  reference  to our  definitive  Proxy  Statement  for our  Annual  Meeting of
Shareholders  presently  scheduled to be held in June 2000, which shall be filed
with the  Securities and Exchange  Commission  within 120 days of the end of our
latest fiscal year.



                                     - 63 -

<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..................................30
            Consolidated Balance Sheet--December 31, 1999 and 1998........31
            Consolidated Statement of Operations--Years
              Ended December 31, 1999, 1998 and 1997......................32
            Consolidated Statement of Cash Flows--Years
              Ended December 31, 1999, 1998 and 1997......................33
            Consolidated Statement of Stockholders' Equity--
              Years Ended December 31, 1999, 1998 and 1997................34
            Notes to Consolidated Financial Statements....................35

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

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

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

      (c)   Reports on Form 8-K:

            (i)   We filed a Current  Report on Form 8-K under Item 5 on October
                  14, 1999 relating to our announcement that we had entered into
                  an underwriting  pursuant to which Salomon Smith Barney,  Inc.
                  agreed  to  purchase   13,982,103   of  the   Company's   2.0%
                  Exchangeable Subordinated Debentures due 2029.

            (ii)  We filed a Current Report on Form 8-K under Item 5 on November
                  3, 1999 relating to our announcement  that we had entered into
                  an underwriting  pursuant to which Salomon Smith Barney,  Inc.
                  and Merrill Lynch, Pierce,  Fenner & Smith Incorporated agreed
                  to  purchase  7,000,000  of the  Company's  2.0%  Exchangeable
                  Subordinated Debentures due 2029.

            (iii) We filed a Current Report on Form 8-K under Item 5 on November
                  17, 1999 relating to our announcement that we had entered into
                  an  agreement  to exchange  certain  cable  systems  with Time
                  Warner Cable, a division of Time Warner Entertainment Company,
                  L.P.

            (iv)  We filed a Current Report on Form 8-K under Item 5 on November
                  17, 1999 relating to our announcement that we had entered into
                  an agreement to acquire Lenfest Communications, Inc.

            (v)   We filed a Current Report on Form 8-K under Item 5 on December
                  13, 1999 which  included our Agreement and Plan of Merger with
                  Lenfest Communications, Inc.

            (vi)  We filed a Current Report on Form 8-K under Item 2 on December
                  17, 1999 which  included  our  Unaudited  Pro Forma  Condensed
                  Consolidated   Financial   Statements  giving  effect  to  the
                  acquisition of Lenfest Communications,  Inc. as of and for the
                  nine months  ended  September  30, 1999 and for the year ended
                  December 31, 1998.

            (vii) We filed a Current Report on Form 8-K under Item 5 on December
                  23, 1999 relating to our announcement that we had entered into
                  an  agreement  to  acquire  the  remaining  interest  in Jones
                  Intercable, Inc. that we do not already own.

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

                                     - 64 -
<PAGE>
    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).
    3.2           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, File No. 2-69178).
    4.2           Specimen Class A Special Common Stock Certificate
                  (incorporated by reference to Exhibit 4(2) to our Annual
                  Report on Form 10-K for the year ended December 31, 1986).
    4.3           Indenture, dated as of October 17, 1991, between the Company
                  and Bank of Montreal/Harris Trust (successor to Morgan
                  Guaranty Trust Company of New York), as Trustee (incorporated
                  by reference to Exhibit 2 to our Current Report on Form 8-K
                  filed on October 31, 1991).
    4.4           Form of Debenture relating to our 10-1/4% Senior Subordinated
                  Debentures due 2001 (incorporated by reference to Exhibit
                  4(19) to our Annual Report on Form 10-K for the year ended
                  December 31, 1991).
    4.5           Form of Debenture relating to our $300,000,000 10-5/8% Senior
                  Subordinated Debentures due 2012 (incorporated by reference to
                  Exhibit 4(17) to our Annual Report on Form 10-K for the year
                  ended December 31, 1992).
    4.6           Form of Debenture relating to our $200,000,000 9-1/2% Senior
                  Subordinated Debentures due 2008 (incorporated by reference to
                  Exhibit 4(18) to our Annual Report on Form 10-K for the year
                  ended December 31, 1992).
    4.7           Indenture, dated as of February 20, 1991, between us and
                  Bankers Trust Company, as Trustee (incorporated by reference
                  to Exhibit 4.3 to our Registration Statement on Form S-3 (File
                  No. 33-32830), filed on January 11, 1990).
    4.8           Form of Debenture relating to our $250.0 million 9-3/8% Senior
                  Subordinated Debentures due 2005 (incorporated by reference to
                  Exhibit 4.1 to our Quarterly Report on Form 10-Q for the
                  quarter ended June 30, 1995).
    4.9           Form of Debenture relating to our $250.0 million 9-1/8% Senior
                  Subordinated Debentures due 2006 (incorporated by reference to
                  Exhibit 4.13 to our Annual Report on Form 10-K for the year
                  ended December 31, 1995).
    10.1*         Comcast Corporation 1986 Non-Qualified Stock Option Plan, as
                  amended and restated, effective December 10, 1996
                  (incorporated by reference to Exhibit 10.3 to our Annual
                  Report on Form 10-K for the year ended December 31, 1996).
    10.2*         Comcast Corporation 1987 Stock Option Plan, as amended and
                  restated, effective December 15, 1998 (incorporated by
                  reference to Exhibit 10.2 to our Annual Report on Form 10-K
                  for the year ended December 31, 1998).
    10.3*         Comcast Corporation 1996 Stock Option Plan, as amended and
                  restated, effective June 21, 1999 (incorporated by reference
                  to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the
                  quarter ended June 30, 1999).
--------
    *   Constitutes a management contract or compensatory plan or arrangement.

                                     - 65 -
<PAGE>
    10.4*         Comcast Corporation 1996 Deferred Compensation Plan, as
                  amended and restated, effective June 21, 1999 (incorporated by
                  reference to Exhibit 10.2 to our Quarterly Report on Form 10-
                  Q for the quarter ended June 30, 1999).
    10.5*         Comcast Corporation 1990 Restricted Stock Plan, as amended and
                  restated, effective June 21, 1999 (incorporated by reference
                  to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the
                  quarter ended June 30, 1999).
    10.6*         1992 Executive Split Dollar Insurance Plan (incorporated by
                  reference to Exhibit 10(12) to our Annual Report on Form 10-K
                  for the year ended December 31, 1992).
    10.7*         Comcast Corporation 1996 Cash Bonus Plan, as amended and
                  restated, effective June 21, 1999 (incorporated by reference
                  to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the
                  quarter ended June 30, 1999).
    10.8*         Comcast Corporation 1996 Executive Cash Bonus Plan, as amended
                  and restated, effective June 21, 1999 (incorporated by
                  reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q
                  for the quarter ended June 30, 1999).
    10.9*         Compensation and Deferred Compensation Agreement by and
                  between Comcast Corporation and Ralph J. Roberts, as amended
                  and restated, effective August 31, 1998 (incorporated by
                  reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q
                  for the quarter ended September 30, 1998).
    10.10         The Comcast Corporation Retirement-Investment Plan, as amended
                  and restated effective January 1, 1993 (revised through
                  September 30, 1995) (incorporated by reference to Exhibit 10.1
                  to our Registration Statement on Form S-8 filed on October 5,
                  1995).
    10.11         Defined Contribution Plans Master Trust Agreement, between
                  Comcast Corporation and State Street Bank and Trust Company
                  (incorporated by reference to Exhibit 10.2 to our Registration
                  Statement on Form S-8 filed on October 5, 1995).
    10.12         Tax Sharing Agreement, dated as of December 2, 1992, among
                  Storer Communications, Inc., TKR Cable I, Inc., TKR Cable II,
                  Inc., TKR Cable III, Inc., Tele-Communications, Inc., the
                  Company and each of the Departing Subsidiaries that are
                  signatories thereto (incorporated by reference to Exhibit 4 to
                  our Current Report on Form 8-K filed on December 17, 1992, as
                  amended by Form 8 filed January 8, 1993).
    10.13*        Comcast Corporation 1997 Deferred Stock Option Plan, as
                  amended and restated, effective June 21, 1999 (incorporated by
                  reference to Exhibit 10.6 to our Quarterly Report on Form 10-Q
                  for the quarter ended June 30, 1999).
    10.14         Tax Sharing Agreement, dated December 2, 1992, between the
                  Company and Comcast Storer, Inc. (incorporated by reference to
                  Exhibit 9 to our Current Report on Form 8-K filed on December
                  17, 1992, as amended by Form 8 filed January 8, 1993).
    10.15         Amended and Restated Stockholders Agreement, dated as of
                  February 9, 1995, among the Company, Comcast QVC, Inc., QVC
                  Programming Holdings, Inc., Liberty Media Corporation, QVC
                  Investment, Inc. and Liberty QVC, Inc. (incorporated by
                  reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q
                  for the quarter ended March 31, 1995).
    10.16(a)      Credit Agreement, dated as of February 15, 1995, among QVC,
                  Inc. and the Banks listed therein (incorporated by reference
                  to Exhibit (b)(6) to Amendment No. 21 to the Tender Offer
                  Statement on Schedule 14D-1 filed on February 17, 1995 by QVC
                  Programming Holdings, Inc., the Company and
                  Tele-Communications, Inc. with respect to the tender offer for
                  all outstanding shares of QVC, Inc.).
    10.16(b)**    Amendment No. 3, dated as of July 19, 1996, to the Credit
                  Agreement, dated as of February 15, 1995, among QVC, Inc. and
                  the Banks listed therein.
    10.17         Comcast MHCP Holdings, L.L.C. Amended and Restated Limited
                  Liability Company Agreement, dated as of December 18, 1994,
                  among Comcast Cable Communications, Inc., The California
                  Public Employees' Retirement System and, for certain limited
                  purposes, the Company (incorporated by reference to Exhibit
                  10.1 to our Current Report on Form 8-K filed on January 6,
                  1995).
--------
    *   Constitutes a management contract or compensatory plan or arrangement.

                                     - 66 -
<PAGE>
    10.18         Credit Agreement, dated as of December 22, 1994, among Comcast
                  MH Holdings, Inc., the banks listed therein, The Chase
                  Manhattan Bank (National Association), NationsBank of Texas,
                  N.A. and the Toronto-Dominion Bank, as Arranging Agents, The
                  Bank of New York, The Bank of Nova Scotia, Canadian Imperial
                  Bank of Commerce and Morgan Guaranty Trust Company of New
                  York, as Managing Agents and NationsBank of Texas, N.A., as
                  Administrative Agent (incorporated by reference to Exhibit
                  10.2 to our Current Report on Form 8-K filed on January 6,
                  1995).
    10.19         Pledge Agreement, dated as of December 22, 1994, between
                  Comcast MH Holdings, Inc. and NationsBank of Texas, N.A., as
                  the secured party (incorporated by reference to Exhibit 10.3
                  to our Current Report on Form 8-K filed on January 6, 1995).
    10.20         Pledge Agreement, dated as of December 22, 1994, between
                  Comcast Communications Properties, Inc. and NationsBank of
                  Texas, N.A., as the Secured Party (incorporated by reference
                  to Exhibit 10.4 to our Current Report on Form 8-K filed on
                  January 6, 1995).
    10.21         Affiliate Subordination Agreement (as the same may be amended,
                  modified, supplemented, waived, extended or restated from time
                  to time, this "Agreement"), dated as of December 22, 1994,
                  among the Company, Comcast MH Holdings, Inc., (the
                  "Borrower"), any affiliate of the Borrower that shall have
                  become a party thereto and NationsBank of Texas, N.A., as
                  Administrative Agent under the Credit Agreement dated as of
                  December 22, 1994, among the Borrower, the Banks listed
                  therein, The Chase Manhattan Bank (National Association),
                  NationsBank of Texas, N.A. and The Toronto-Dominion Bank, as
                  Arranging Agents, The Bank of New York, The Bank of Nova
                  Scotia, Canadian Imperial Bank of Commerce and Morgan Guaranty
                  Trust Company of New York, as Managing Agents, and the
                  Administrative Agent (incorporated by reference to Exhibit
                  10.5 to our Current Report on Form 8-K filed on January 6,
                  1995).
    10.22**       Credit Agreement, dated as of November 15, 1996, among Comcast
                  SCH Holdings, Inc., the banks listed therein, Nationsbank of
                  Texas, N.A., as Documentation Agent, The Chase Manhattan Bank,
                  as Syndication Agent, The Bank of New York, The Chase
                  Manhattan Bank and Nationsbank of Texas, N.A., as Managing
                  Agents, and The Bank of New York, as Administrative Agent.
    10.23         Indenture dated as of May 1, 1997, between Comcast Cable
                  Communications, Inc. and Bank of Montreal Trust Company, as
                  Trustee, in respect of Comcast Cable Communications, Inc.'s
                  8-1/8% Notes due 2004, 8-3/8% Notes due 2007, 8-7/8% Notes due
                  2017, 8-1/2% Notes due 2027 and 6.20% Notes due 2008
                  (incorporated by reference to Exhibit 4.1(a) to the
                  Registration Statement on Form S-4 (File No. 333-30745) of
                  Comcast Cable Communications, Inc.).
    10.24         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).
    10.25         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).
    21            List of Subsidiaries.
    23.1          Consent of Deloitte & Touche LLP.
    23.2          Consent of KPMG LLP.
    27.1          Financial Data Schedule.
    99.1          Report of Independent Public Accountants to QVC, Inc., as of
                  December 31, 1998 and for the years ended December 31, 1998
                  and 1997.

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

                                     - 67 -
<PAGE>
                                   SIGNATURES

       Pursuant  to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its  behalf by the  undersigned,  thereunto  duly  authorized  in  Philadelphia,
Pennsylvania on February 29, 2000.

                                            Comcast Corporation


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

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

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

<S>                           <C>                                                <C>
/s/ Ralph J. Roberts          Chairman of the Board of Directors; Director        February 29, 2000
--------------------------
Ralph J. Roberts

/s/ Julian A. Brodsky           Vice Chairman of the Board of Directors;          February 29, 2000
--------------------------                      Director
Julian A. Brodsky

/s/ Brian L. Roberts            President; Director (Principal Executive          February 29, 2000
--------------------------                      Officer)
Brian L. Roberts

/s/ John R. Alchin                Executive Vice President, Treasurer             February 29, 2000
--------------------------            (Principal Financial Officer)
John R. Alchin

/s/ Lawrence J. Salva                    Senior Vice President                    February 29, 2000
--------------------------           (Principal Accounting Officer)
Lawrence J. Salva

/s/ Gustave G. Amsterdam                        Director                          February 29, 2000
--------------------------
Gustave G. Amsterdam

/s/ Sheldon M. Bonovitz                         Director                          February 29, 2000
--------------------------
Sheldon M. Bonovitz

/s/ Joseph L. Castle II                         Director                          February 29, 2000
--------------------------
Joseph L. Castle II

/s/ Bernard C. Watson                           Director                          February 29, 2000
--------------------------
Bernard C. Watson

/s/ Irving A. Wechsler                          Director                          February 29, 2000
--------------------------
Irving A. Wechsler

/s/ Anne Wexler                                 Director                          February 29, 2000
--------------------------
Anne Wexler
</TABLE>

                                     - 68 -
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES

                 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF

                     REGISTRANT UNCONSOLIDATED (PARENT ONLY)

                             CONDENSED BALANCE SHEET

                        (In millions, except share data)

<TABLE>
<CAPTION>
                                                                                                   December 31,
ASSETS                                                                                     1999                    1998
------                                                                                -------------           ------------
<S>                                                                                     <C>                   <C>
   Cash and cash equivalents........................................................           $8.6                  $31.2
   Other current assets.............................................................           16.2                   18.4
                                                                                      -------------           ------------
      Total current assets..........................................................           24.8                   49.6

   Investments in and amounts due from subsidiaries
      eliminated upon consolidation.................................................       14,664.6                5,679.6
   Property and equipment, net......................................................           11.7                   14.0
   Other assets, net................................................................           66.7                   23.5
                                                                                      -------------           ------------
                                                                                          $14,767.8               $5,766.7
                                                                                      =============           ============

LIABILITIES AND STOCKHOLDERS' EQUITY

   Accrued interest.................................................................          $34.9                  $30.5
   Other current liabilities........................................................          694.3                  286.3
                                                                                      -------------           ------------
      Total current liabilities.....................................................          729.2                  316.8
                                                                                      -------------           ------------

   Long-term debt, less current portion (including adjustment
      to carrying value of $666.0 million and zero).................................        3,147.5                1,065.3
                                                                                      -------------           ------------
   Deferred income taxes and other..................................................          549.8                  458.1
                                                                                      -------------           ------------
   Common equity put options........................................................                                 111.2
                                                                                      -------------           ------------

   Stockholders' equity
      Preferred stock - authorized,  20,000,000 shares; 5% series A convertible,
         no par value; issued,
         zero and 6,370 at redemption value.........................................                                  31.9
         5.25% series B mandatorily redeemable convertible,
         $1,000 par value; issued, 569,640 and 540,690
         at redemption value........................................................          569.6                  540.7
      Class A special common stock, $1 par value - authorized,
         2,500,000,000 shares; issued, 716,442,482 and 698,395,170..................          716.4                  698.4
      Class A common stock, $1 par value - authorized,
         200,000,000 shares; issued, 25,993,380 and 31,690,063......................           26.0                   31.7
      Class B common stock, $1 par value - authorized,
         50,000,000 shares; issued, 9,444,375.......................................            9.4                    9.4
      Additional capital............................................................        3,527.0                2,941.7
      Accumulated deficit...........................................................         (619.8)              (1,488.2)
      Accumulated other comprehensive income........................................        6,112.7                1,049.7
                                                                                      -------------           ------------
         Total stockholders' equity.................................................       10,341.3                3,815.3
                                                                                      -------------           ------------
                                                                                          $14,767.8               $5,766.7
                                                                                      =============           ============
</TABLE>

                                     - 69 -
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES

                SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF

                     REGISTRANT UNCONSOLIDATED (PARENT ONLY)

            CONDENSED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT

                      (In millions, except per share data)

<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                       1999                   1998                  1997
                                                                 -------------         --------------         -------------
<S>                                                                  <C>                    <C>                   <C>
REVENUES, principally intercompany fees eliminated
   upon consolidation............................................       $377.7                 $320.1                $286.8

GENERAL AND ADMINISTRATIVE EXPENSES..............................         91.3                   83.2                  69.5
                                                                 -------------         --------------         -------------

OPERATING INCOME.................................................        286.4                  236.9                 217.3

OTHER (INCOME) EXPENSE
   Interest expense, including intercompany interest, net........        275.8                  239.1                 231.2
   Expense related to indexed debt...............................        666.0
   Equity in net (income) losses of affiliates and other.........     (1,652.4)                (976.2)                238.6
                                                                 -------------         --------------         -------------
                                                                        (710.6)                (737.1)                469.8
                                                                 -------------         --------------         -------------

INCOME (LOSS) BEFORE INCOME TAX BENEFIT
   AND EXTRAORDINARY ITEMS.......................................        997.0                  974.0                (252.5)

INCOME TAX BENEFIT...............................................       (113.5)                  (2.1)                (16.6)
                                                                 -------------         --------------         -------------

INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS.........................      1,110.5                  976.1                (235.9)

EXTRAORDINARY ITEMS..............................................        (44.8)                  (4.0)                 (2.8)
                                                                 -------------         --------------         -------------

NET INCOME (LOSS)................................................      1,065.7                  972.1                (238.7)

ACCUMULATED DEFICIT
   Beginning of year.............................................     (1,488.2)              (2,415.9)             (2,127.1)
   Retirement of common stock....................................        (25.3)                 (10.0)                (17.7)
   Share exchange................................................       (172.0)
   Cash dividends, $.0467 per share in 1998 and 1997.............                               (34.4)                (32.4)
                                                                 -------------         --------------         -------------

   End of year...................................................      ($619.8)             ($1,488.2)            ($2,415.9)
                                                                 =============         ==============         =============
</TABLE>

                                     - 70 -
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES

                SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF

                     REGISTRANT UNCONSOLIDATED (PARENT ONLY)

                        CONDENSED STATEMENT OF CASH FLOWS

                                  (In millions)

<TABLE>
<CAPTION>
                                                                                            Year Ended December 31,
                                                                                  1999                1998             1997
                                                                            --------------      -------------     ------------
<S>                                                                               <C>                  <C>             <C>
OPERATING ACTIVITIES
   Net income (loss).......................................................       $1,065.7             $972.1          ($238.7)
   Adjustments to reconcile net income (loss) to net cash
      provided by operating activities:
      Depreciation and amortization........................................            6.8               13.2              7.0
      Non-cash interest expense, net.......................................                               3.7            106.8
      Non-cash expense related to indexed debt.............................          666.0
      Equity in net (income) losses of affiliates..........................       (1,593.0)            (976.6)           275.2
      Extraordinary items..................................................           44.8                4.0              2.8
      Deferred income taxes and other......................................          292.9              104.2             88.9
                                                                            --------------      -------------     ------------
                                                                                     483.2              120.6            242.0

      Changes in working capital...........................................           79.0              155.2            (80.1)
                                                                            --------------      -------------     ------------
            Net cash provided by operating activities......................          562.2              275.8            161.9
                                                                            --------------      -------------     ------------

FINANCING ACTIVITIES
   Proceeds from borrowings................................................        2,525.4
   Retirement and repayment of debt........................................         (962.9)             (50.6)           (59.5)
   Issuance of preferred stock.............................................                                              500.0
   (Repurchases) issuances of common stock, net............................          (13.6)              28.9            470.2
   Dividends...............................................................           (9.4)             (36.0)           (34.0)
   Other...................................................................          (23.0)             (32.8)            12.7
                                                                            --------------      -------------     ------------
            Net cash provided by (used in) financing activities............        1,516.5              (90.5)           889.4
                                                                            --------------      -------------     ------------

INVESTING ACTIVITIES
   Net transactions with affiliates........................................       (2,087.1)            (164.0)        (1,026.4)
   Capital expenditures and other..........................................          (14.2)              (2.9)           (21.8)
                                                                            --------------      -------------     ------------
            Net cash used in investing activities..........................       (2,101.3)            (166.9)        (1,048.2)
                                                                            --------------      -------------     ------------

(DECREASE) INCREASE IN CASH AND
   CASH EQUIVALENTS........................................................          (22.6)              18.4              3.1

CASH AND CASH EQUIVALENTS, beginning of year...............................           31.2               12.8              9.7
                                                                            --------------      -------------     ------------

CASH AND CASH EQUIVALENTS, end of year.....................................           $8.6              $31.2            $12.8
                                                                            ==============      =============     ============
</TABLE>

                                     - 71 -
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

                                  (In millions)

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

   1999...................................................   $120.7             $48.6             $32.7            $136.6

   1998...................................................    108.8              52.2              40.3             120.7

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



Allowance for Obsolete
  Electronic Retailing Inventories

   1999...................................................    $60.9             $61.9             $33.6             $89.2

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

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


<FN>

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

                                     - 72 -