UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
(Mark One)
(X)  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 for the Quarterly Period Ended:
                               SEPTEMBER 30, 1998
                                       OR

( )  Transition  Report  pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934 for the Transition Period from ________ to ________.

                          Commission File Number 0-6983

                              COMCAST CORPORATION
                            [GRAPHIC OMITTED - LOGO]

             (Exact name of registrant as specified in its charter)

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

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

Registrant's telephone number, including area code:  (215) 665-1700

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

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  twelve months (or for such shorter period that the registrant was
required to file such  reports),  and (2) has been subject to such  requirements
for the past 90 days.

         Yes  __X__                                       No ____
                           --------------------------

As of  September  30,  1998,  there were  328,571,932  shares of Class A Special
Common Stock,  31,771,319 shares of Class A Common Stock and 8,786,250 shares of
Class B Common Stock outstanding.
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998

                                TABLE OF CONTENTS


                                                                           Page
                                                                          Number

PART I.   FINANCIAL INFORMATION

          Item 1.   Financial Statements

                    Condensed Consolidated Balance
                    Sheet as of September 30, 1998 and December 31,
                    1997 (Unaudited).....................................      2

                    Condensed Consolidated Statement of
                    Operations and Accumulated Deficit for
                    the Nine and Three Months Ended September 30,
                    1998 and 1997 (Unaudited)............................      3

                    Condensed Consolidated Statement of Cash
                    Flows for the Nine Months Ended September 30,
                    1998 and 1997 (Unaudited)............................      4

                    Notes to Condensed Consolidated
                    Financial Statements (Unaudited)..................... 5 - 13

          Item 2.   Management's Discussion and Analysis
                    of Financial Condition and Results of
                    Operations.......................................... 14 - 22

PART II.  OTHER INFORMATION

          Item 1.   Legal Proceedings...................................      23

          Item 6.   Exhibits and Reports on Form 8-K....................      23

          SIGNATURE.....................................................      24

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

This Quarterly  Report on Form 10-Q contains  forward  looking  statements  made
pursuant to the "safe harbor"  provisions of the Private  Securities  Litigation
Reform Act of 1995.  Readers are cautioned that such forward looking  statements
involve  risks and  uncertainties  which  could  significantly  affect  expected
results  in the  future  from  those  expressed  in  any  such  forward  looking
statements  made by, or on behalf,  of the Company.  Certain  factors that could
cause actual  results to differ  materially  include,  without  limitation,  the
effects of  legislative  and  regulatory  changes;  the  potential for increased
competition;  technological  changes; the need to generate substantial growth in
the subscriber base by successfully launching,  marketing and providing services
in  identified  markets;  pricing  pressures  which could affect  demand for the
Company's services; the Company's ability to expand its distribution; changes in
labor, programming, equipment and capital costs; the Company's continued ability
to  create  or  acquire  programming  and  products  that  customers  will  find
attractive;  future  acquisitions,   strategic  partnerships  and  divestitures;
general business and economic conditions;  and other risks detailed from time to
time in the Company's  periodic  reports filed with the  Securities and Exchange
Commission.
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998

PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                  (Dollars in millions, except share data)
                                                                                       September 30,     December 31,
                                                                                            1998             1997
<S>                                                                                     <C>               <C>      
ASSETS
CURRENT ASSETS
   Cash and cash equivalents....................................................           $435.0            $413.7
   Short-term investments.......................................................             38.7             163.9
   Investments, available for sale..............................................          1,663.8
   Accounts receivable, less allowance for doubtful
     accounts of $119.0 and $115.0..............................................            502.7             498.8
   Inventories, net.............................................................            368.2             324.0
   Other current assets.........................................................            191.1             159.1
                                                                                        ---------         ---------
       Total current assets.....................................................          3,199.5           1,559.5
                                                                                        ---------         ---------
INVESTMENTS, principally in affiliates..........................................            764.6           1,264.3
                                                                                        ---------         ---------
PROPERTY AND EQUIPMENT..........................................................          4,973.1           4,285.4
   Accumulated depreciation.....................................................         (1,664.4)         (1,388.5)
                                                                                        ---------         ---------
   Property and equipment, net..................................................          3,308.7           2,896.9
                                                                                        ---------         ---------
DEFERRED CHARGES................................................................          9,529.2           9,213.3
   Accumulated amortization.....................................................         (2,436.4)         (2,129.8)
                                                                                        ---------         ---------
   Deferred charges, net........................................................          7,092.8           7,083.5
                                                                                        ---------         ---------
                                                                                        $14,365.6         $12,804.2
                                                                                        =========         =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable and accrued expenses........................................         $1,418.5          $1,195.5
   Accrued interest.............................................................            152.6              89.6
   Current portion of long-term debt............................................            106.4             132.7
                                                                                        ---------         ---------
       Total current liabilities................................................          1,677.5           1,417.8
                                                                                        ---------         ---------
LONG-TERM DEBT, less current portion............................................          6,597.4           6,558.6
                                                                                        ---------         ---------
DEFERRED INCOME TAXES...........................................................          2,301.6           2,112.2
                                                                                        ---------         ---------
MINORITY INTEREST AND OTHER.....................................................          1,026.5           1,037.7
                                                                                        ---------         ---------
COMMITMENTS AND CONTINGENCIES

COMMON EQUITY PUT OPTIONS.......................................................            111.2              31.4
                                                                                        ---------         ---------
STOCKHOLDERS' EQUITY
   Preferred stock - authorized, 20,000,000 shares; 5% series A convertible,
     no par value, issued, 6,370 at redemption value............................             31.9              31.9
     5.25% series B mandatorily redeemable convertible, $1,000 par value,
     issued, 533,685 and 513,211 at redemption value............................            533.7             513.2
   Class A special common stock, $1 par value - authorized,
     500,000,000 shares; issued, 328,571,932 and 317,025,969....................            328.6             317.0
   Class A common stock, $1 par value - authorized,
     200,000,000 shares; issued, 31,771,319 and 31,793,487 .....................             31.8              31.8
   Class B common stock, $1 par value - authorized,
     50,000,000 shares; issued, 8,786,250 ......................................              8.8               8.8
   Additional capital...........................................................          3,287.0           3,030.6
   Accumulated deficit..........................................................         (1,898.7)         (2,415.9)
   Unrealized gains on marketable securities....................................            337.3             140.7
   Cumulative translation adjustments...........................................             (9.0)            (11.6)
                                                                                        ---------         ---------
       Total stockholders' equity...............................................          2,651.4           1,646.5
                                                                                        ---------         ---------
                                                                                        $14,365.6         $12,804.2
                                                                                        =========         =========
</TABLE>
See notes to condensed consolidated financial statements.

                                        2
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998
     CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                        (Amounts in millions, except per share data)
                                                                        Nine Months Ended          Three Months Ended
                                                                          September 30,               September 30,
                                                                        1998        1997           1998         1997
<S>                                                                 <C>          <C>           <C>          <C>       
REVENUES
   Service income.............................................        2,387.9     $2,081.5         781.0       $713.6
   Net sales from electronic retailing........................        1,648.5      1,438.0         573.9        490.6
                                                                    ---------    ---------     ---------    --------- 
                                                                      4,036.4      3,519.5       1,354.9      1,204.2
                                                                    ---------    ---------     ---------    --------- 
COSTS AND EXPENSES
   Operating..................................................        1,077.2        925.5         336.9        314.0
   Cost of goods sold from electronic retailing...............          997.6        869.9         345.2        298.1
   Selling, general and administrative........................          750.1        658.0         252.1        227.1
   Depreciation...............................................          407.3        341.7         138.5        120.2
   Amortization...............................................          390.1        362.0         132.5        121.1
                                                                    ---------    ---------     ---------    --------- 
                                                                      3,622.3      3,157.1       1,205.2      1,080.5
                                                                    ---------    ---------     ---------    --------- 
OPERATING INCOME..............................................          414.1        362.4         149.7        123.7
OTHER (INCOME) EXPENSE
   Interest expense...........................................          437.3        422.8         145.4        143.9
   Investment income..........................................       (1,022.0)      (138.1)     (1,023.2)       (44.5)
   Equity in net losses of affiliates.........................          345.3        217.1         108.3         85.9
   Gain from equity offering of affiliate.....................         (157.8)                     (98.2)
   Other......................................................           (7.0)        13.4          (3.5)         9.0
                                                                    ---------    ---------     ---------    --------- 
                                                                       (404.2)       515.2        (871.2)       194.3
                                                                    ---------    ---------     ---------    --------- 
INCOME (LOSS) BEFORE INCOME TAX EXPENSE, MINORITY
   INTEREST AND EXTRAORDINARY ITEMS...........................          818.3       (152.8)      1,020.9        (70.6)
INCOME TAX EXPENSE............................................          309.3         45.4         309.0          8.5
                                                                    ---------    ---------     ---------    --------- 
INCOME (LOSS) BEFORE MINORITY INTEREST AND
   EXTRAORDINARY ITEMS........................................          509.0       (198.2)        711.9        (79.1)
MINORITY INTEREST.............................................          (44.3)       (66.8)         (5.1)       (27.0)
                                                                    ---------    ---------     ---------    --------- 
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS......................          553.3       (131.4)        717.0        (52.1)
EXTRAORDINARY ITEMS...........................................           (3.0)       (25.9)         (3.0)        (3.1)
                                                                    ---------    ---------     ---------    --------- 
NET INCOME (LOSS).............................................          550.3       (157.3)        714.0        (55.2)
PREFERRED DIVIDENDS...........................................          (21.7)        (7.8)         (7.4)        (7.0)
                                                                    ---------    ---------     ---------    --------- 
NET INCOME (LOSS) FOR COMMON STOCKHOLDERS.....................         $528.6      ($165.1)       $706.6       ($62.2)
                                                                    =========    =========     =========    ========= 
ACCUMULATED DEFICIT
   Beginning of period .......................................      ($2,415.9)   ($2,127.1)    ($2,596.7)   ($2,262.6)
   Net income (loss)..........................................          550.3       (157.3)        714.0        (55.2)
   Common dividends - $.070, $.070, $.0233 and $.0233 per share         (25.8)       (24.0)         (8.7)        (8.3)
   Retirement of common stock.................................           (7.3)       (17.7)         (7.3)
                                                                    ---------    ---------     ---------    --------- 
   End of period..............................................      ($1,898.7)   ($2,326.1)    ($1,898.7)   ($2,326.1)
                                                                    =========    =========     =========    ========= 
BASIC EARNINGS (LOSS) FOR COMMON STOCKHOLDERS
   PER COMMON SHARE
   Income (loss) before extraordinary items...................          $1.46        ($.42)        $1.92        ($.17)
   Extraordinary items........................................           (.01)        (.08)         (.01)        (.01)
                                                                    ---------    ---------     ---------    --------- 
        Net income (loss).....................................          $1.45        ($.50)        $1.91        ($.18)
                                                                    =========    =========     =========    ========= 
BASIC WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES  OUTSTANDING.................................          365.5        333.2         369.3        348.9
                                                                    =========    =========     =========    ========= 
DILUTED EARNINGS (LOSS) FOR COMMON STOCKHOLDERS
   PER COMMON SHARE
   Income (loss) before extraordinary items...................          $1.33        ($.42)        $1.76        ($.17)
   Extraordinary items........................................           (.01)        (.08)         (.01)        (.01)
                                                                    ---------    ---------     ---------    --------- 
        Net income (loss).....................................          $1.32        ($.50)        $1.75        ($.18)
                                                                    =========    =========     =========    ========= 
DILUTED WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES  OUTSTANDING.................................          402.1        333.2         404.3        348.9
                                                                    =========    =========     =========    ========= 
</TABLE>
See notes to condensed consolidated financial statements.

                                        3
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                             (Dollars in millions)
                                                                                        Nine Months Ended September 30,
                                                                                            1998              1997
<S>                                                                                      <C>              <C>     
OPERATING ACTIVITIES
   Net income (loss)............................................................           $550.3           ($157.3)
   Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:
     Depreciation...............................................................            407.3             341.7
     Amortization...............................................................            390.1             362.0
     Non-cash interest expense, net.............................................             30.5              39.4
     Equity in net losses of affiliates.........................................            345.3             217.1
     Gains on investments, net of losses........................................           (976.6)            (98.1)
     Gain from equity offering of affiliate.....................................           (157.8)
     Minority interest..........................................................            (44.3)            (66.8)
     Extraordinary items........................................................              3.0              25.9
     Deferred income taxes and other............................................            191.9             (22.4)
                                                                                          -------          --------
                                                                                            739.7             641.5

     Changes in working capital.................................................             78.9             100.6
                                                                                          -------          --------

           Net cash provided by operating activities............................            818.6             742.1
                                                                                          -------          --------

FINANCING ACTIVITIES
   Proceeds from borrowings.....................................................          1,058.3           2,968.3
   Retirement and repayment of debt.............................................           (922.5)         (3,518.4)
   Issuance of preferred stock..................................................                              500.0
   Issuances of common stock, net...............................................             23.8             499.5
   Issuances of common equity put options.......................................             11.4               2.4
   Repurchases of common stock..................................................             (9.5)            (36.0)
   Dividends....................................................................            (27.1)            (25.2)
   Deferred financing costs.....................................................             (4.8)            (43.8)
   Other........................................................................              4.6              (1.5)
                                                                                          -------          --------

           Net cash provided by financing activities............................            134.2             345.3
                                                                                          -------          --------

INVESTING ACTIVITIES
   Acquisitions, net of cash acquired...........................................           (269.4)           (136.1)
   Proceeds from sales of short-term investments, net...........................            125.2               2.4
   Investments, principally in affiliates.......................................           (137.6)           (180.3)
   Proceeds from sales of and distributions from investments, 
      principally in affiliates ................................................              0.7             169.1
   Proceeds from sales of call options..........................................             20.7
   Proceeds from investees' repayments of loans.................................             74.7              25.2
   Capital expenditures.........................................................           (684.8)           (682.0)
   Additions to deferred charges................................................            (47.0)            (37.5)
   Other........................................................................            (14.0)             (5.9)
                                                                                          -------          --------

           Net cash used in investing activities................................           (931.5)           (845.1)
                                                                                          -------          --------

INCREASE IN CASH AND CASH EQUIVALENTS...........................................             21.3             242.3

CASH AND CASH EQUIVALENTS, beginning of period..................................            413.7             331.3
                                                                                          -------          --------

CASH AND CASH EQUIVALENTS, end of period........................................           $435.0            $573.6
                                                                                          =======          ========
</TABLE>

See notes to condensed consolidated financial statements.

                                        4
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     Basis of Presentation
     The condensed  consolidated  balance sheet as of December 31, 1997 has been
     condensed from the audited  consolidated balance sheet as of that date. The
     condensed  consolidated  balance  sheet  as  of  September  30,  1998,  the
     condensed  consolidated statement of operations and accumulated deficit for
     the  nine  and  three  months  ended  September  30,  1998 and 1997 and the
     condensed  consolidated  statement  of cash flows for the nine months ended
     September 30, 1998 and 1997 have been prepared by Comcast  Corporation (the
     "Company") and have not been audited by the Company's independent auditors.
     In the opinion of management,  all  adjustments  (which include only normal
     recurring  adjustments) necessary to present fairly the financial position,
     results of  operations  and cash flows as of September 30, 1998 and for all
     periods presented have been made.

     Certain information and note disclosures normally included in the Company's
     annual financial  statements prepared in accordance with generally accepted
     accounting  principles  have been  condensed  or omitted.  These  condensed
     consolidated  financial  statements  should be read in conjunction with the
     financial  statements and notes thereto included in the Company's  December
     31, 1997 Annual Report on Form 10-K filed with the  Securities and Exchange
     Commission.  The results of operations for the periods ended  September 30,
     1998 are not necessarily indicative of operating results for the full year.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

     Comprehensive Income (Loss)
     In June  1997,  the FASB  issued  SFAS No.  130,  "Reporting  Comprehensive
     Income."  This  statement,  which  establishes  standards for reporting and
     disclosure  of  comprehensive  income,  is effective for interim and annual
     periods beginning after December 15, 1997. The Company adopted SFAS No. 130
     effective January 1, 1998. Total  comprehensive  income (loss) for the nine
     and three  months  ended  September  30, 1998 and 1997 was $749.5  million,
     ($62.2)  million,  $760.0  million and $36.2 million,  respectively.  Total
     comprehensive  income (loss) includes net income (loss),  unrealized  gains
     (losses) on marketable  securities and foreign currency  translation  gains
     (losses) for the periods presented.

     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,
     by the weighted  average  number of common  shares  outstanding  during the
     period on a basic and diluted basis.

                                        5
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

     The  following  table  reconciles  the  numerator  and  denominator  of the
     computations  of  diluted  earnings  (loss)  per  common  share for  common
     stockholders  ("Diluted EPS") for the nine and three months ended September
     30, 1998 and 1997, respectively.
<TABLE>
<CAPTION>
                                                                        (Amounts in millions, except per share data)
                                                                        Nine Months Ended         Three Months Ended
                                                                          September 30,              September 30,
                                                                        1998         1997          1998         1997

<S>                                                                    <C>         <C>            <C>          <C>    
   Net income (loss) for common stockholders.....................      $528.6      ($165.1)       $706.6       ($62.2)

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

   Net income (loss) for common stockholders used for
     Diluted EPS.................................................      $529.6      ($165.1)       $706.6       ($62.2)
                                                                       ======      =======        ======       ======  

   Weighted average number of common shares outstanding..........       365.5        333.2         369.3        348.9

   Dilutive securities:
        1 1/8% discount convertible subordinated debentures,
          redeemed March 1998....................................         3.4
        Series A and B convertible preferred stock...............        22.6                       22.6
        Stock option and restricted stock plans..................        10.6                       12.4
                                                                       ------      -------        ------       ------

   Diluted weighted average number of common shares
     outstanding.................................................       402.1        333.2         404.3        348.9
                                                                       ======      =======        ======       ======  

   Diluted earnings (loss) for common stockholders per common share     $1.32        ($.50)        $1.75        ($.18) 
                                                                       ======      =======        ======       ======  
</TABLE>

     Put  options  sold by the  Company  on 2.75  million  shares of its Class A
     Special Common stock (see Note 6) were outstanding  during the three months
     ended  September  30,  1998 but were not  included  in the  computation  of
     Diluted EPS as the options' exercise price was less than the average market
     price of the Company's Class A Special Common Stock during the period.

     For the nine and three  months ended  September  30,  1997,  the  Company's
     potential common shares of 61.2 million shares have an antidilutive  effect
     on loss for common  stockholders  per  common  share for the  periods  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  year  condensed
     consolidated  financial statements to conform to those classifications used
     in 1998.

3.   SIGNIFICANT EVENTS

     Sale of Comcast UK Cable
     In February 1998, Comcast UK Cable Partners Limited ("Comcast UK Cable"), a
     consolidated subsidiary of the Company, entered into a definitive agreement
     to be acquired (the "NTL  Transaction")  by NTL  Incorporated  ("NTL"),  an
     alternative  telecommunications  company in the United Kingdom ("UK").  The
     Company received 4.8 million shares of NTL common stock in exchange for all
     of the shares of Comcast UK Cable held by the Company  upon  closing of the
     NTL Transaction on October 29, 1998.  Certain  conditions  agreed to in the
     NTL Transaction restrict the Company's ability to sell the NTL common stock
     to be  received  for a period  of 150 days  after  the  closing  of the NTL
     Transaction. The Company's investment in NTL common stock had a fair value,
     prior to  consideration  of the  restrictions  on the NTL common stock,  of
     approximately  $225.4  million,  based on the quoted market price of $46.75
     per share of NTL common stock as of October 29, 1998.  As of September  30,
     1998 and for the nine months then ended, the assets and revenues of Comcast
     UK Cable totaled $866.0 million and $93.7 million, respectively.

                                        6
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

     AT&T Acquisition of TCGI
     In January  1998,  AT&T Corp.  ("AT&T")  entered into a  definitive  merger
     agreement with Teleport  Communications Group, Inc. ("TCGI").  Upon closing
     of the merger  (the  "AT&T  Transaction")  on July 23,  1998,  the  Company
     received 24.2 million shares of unregistered  AT&T common stock in exchange
     (the  "Exchange")  for the 25.6 million shares of TCGI Class B Common Stock
     held by the Company (see Note 4). As a result of the Exchange,  the Company
     recognized  a pre-tax  gain of  $1.092  billion  during  the nine and three
     months ended September 30, 1998,  representing  the difference  between the
     fair value of the AT&T stock received and the Company's basis in TCGI. Such
     gain  is  included  in  investment   income  in  the  Company's   condensed
     consolidated  statement of operations and accumulated  deficit. The Company
     has registration rights, subject to customary restrictions, which allow the
     Company  to  effect a  registration  of the  AT&T  shares  received.  As of
     September  30,  1998,  the Company has  recorded  its  investment  in AT&T,
     classified as available for sale, at its estimated fair value.

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

4.   INVESTMENTS
<TABLE>
<CAPTION>
                                                                             September 30,     December 31,
                                                                                 1998              1997
                                                                                  (Dollars in millions)
<S>                                                                              <C>             <C>     
           Equity method..........................................               $387.0            $867.6
           Fair value method......................................              1,984.6             346.5
           Cost method............................................                 56.8              50.2
                                                                               --------          --------
                  Total investments...............................              2,428.4           1,264.3
           Less current investments, available for sale...........              1,663.8
                                                                               --------          --------
           Investments, principally in affiliates.................               $764.6          $1,264.3
                                                                               ========          ========
</TABLE>

     Equity Method
     The Company records its proportionate interests in the net income (loss) of
     substantially  all of its  investees,  other  than  the UK  Investees  (see
     below), three months in arrears.  The Company holds interests  representing
     less than 20% of the total  outstanding  ownership  interests in certain of
     its equity  method  investees.  The equity method of accounting is utilized
     for  these  investments  based  on the  type of  investment  (e.g.  general
     partnership interest), board representation, participation in a controlling
     investor group,  significant  shareholder  rights or a combination of these
     and  other  factors.   The  Company's   recorded   investments  exceed  its
     proportionate  interests in the book value of the  investees' net assets by
     $141.2 million as of September 30, 1998 (primarily related to the Company's
     investments in The Golf Channel and Sprint PCS (see below)). Such excess is
     being amortized to equity in net income or loss, primarily over a period of
     twenty  years,  which  is  consistent  with  the  estimated  lives  of  the
     underlying assets. The

                                        7
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

     original cost of investments  accounted for under the equity method totaled
     $1.179 billion and $1.454 billion as of September 30, 1998 and December 31,
     1997, respectively.

     Summarized financial  information for the Company's equity method investees
     is presented below (dollars in millions):
<TABLE>
<CAPTION>
                                                                    Sprint                  UK
                                                                      PCS        TCGI    Investees     Other   Combined
<S>                                                                <C>         <C>        <C>        <C>       <C>     
Nine Months Ended September 30, 1998:

   Combined Results of Operations
     Revenues, net............................................       $477.3     $605.8     $176.5     $584.1   $1,843.7
     Operating, selling, general and
       administrative expenses................................      1,300.0      558.7      136.0      613.5    2,608.2
     Depreciation and amortization............................        389.8      163.4       61.9       55.1      670.2
     Operating loss...........................................     (1,212.5)    (116.3)     (21.4)     (84.5)  (1,434.7)
     Net loss (a).............................................     (1,600.2)    (190.6)     (70.6)    (123.2)  (1,984.6)

   Company's Equity in Net Loss
     Equity in current period net loss........................      ($240.0)    ($27.2)    ($25.9)    ($47.1)   ($340.2)
     Amortization expense.....................................         (2.3)                 (0.5)      (2.3)      (5.1)
                                                                   --------     ------      -----     ------   -------- 
       Total equity in net loss...............................      ($242.3)    ($27.2)    ($26.4)    ($49.4)   ($345.3)
                                                                    =======     ======     ======     ======    ======= 

Three Months Ended September 30, 1998:

   Combined Results of Operations
     Revenues, net............................................       $192.3     $295.3      $60.4      $48.8     $596.8
     Operating, selling, general and
       administrative expenses................................        428.5      257.4       45.8       37.2      768.9
     Depreciation and amortization............................        151.4       66.3       21.1       11.6      250.4
     Operating loss...........................................       (387.6)     (28.4)      (6.5)               (422.5)
     Net loss (a).............................................       (542.2)     (55.9)     (20.0)      (9.3)    (627.4)

   Company's Equity in Net Loss
     Equity in current period net loss........................       ($81.3)     ($7.5)     ($7.7)     ($9.8)   ($106.3)
     Amortization expense.....................................         (0.8)                 (0.2)      (1.0)      (2.0)
                                                                   --------     ------      -----     ------   -------- 
       Total equity in net loss...............................       ($82.1)     ($7.5)     ($7.9)    ($10.8)   ($108.3)
                                                                    =======     ======     ======     ======    ======= 

Combined Financial Position

As of September 30, 1998:
     Current assets...........................................       $431.6     $476.7      $40.2      $57.9   $1,006.4
     Noncurrent assets........................................      6,244.0    3,056.1      739.8      318.0   10,357.9
     Current liabilities......................................        610.5      572.6       79.0       44.3    1,306.4
     Noncurrent liabilities...................................      5,083.4    1,183.6      650.9      441.3    7,359.2
<FN>
------------
(a)  See footnote (1) on page 9.
</FN>
</TABLE>

                                        8
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                    Sprint                  UK
                                                                      PCS       TCGI     Investees    Other    Combined

<S>                                                                <C>        <C>         <C>        <C>      <C>      
Nine Months Ended September 30, 1997:

   Combined Results of Operations
     Revenues, net............................................        $39.0     $300.0     $143.3     $672.1   $1,154.4
     Operating, selling, general and
       administrative expenses................................        588.2      278.9      125.4      708.4    1,700.9
     Depreciation and amortization............................        110.1       93.4       52.5       81.7      337.7
     Operating loss...........................................       (659.3)     (72.3)     (34.6)    (118.0)    (884.2)
     Net loss (1).............................................       (730.2)    (139.1)     (66.2)    (159.7)  (1,095.2)

   Company's Equity in Net Loss
     Equity in current period net loss (2)....................      ($109.5)    ($22.1)    ($25.1)    ($54.0)   ($210.7)
     Amortization expense.....................................         (0.8)      (0.3)      (0.4)      (4.9)      (6.4)
              --                                                    -------     ------     ------     ------   -------- 
       Total equity in net loss...............................      ($110.3)    ($22.4)    ($25.5)    ($58.9)   ($217.1)
                                                                    =======     ======     ======     ======   ========

Three Months Ended September 30, 1997:

   Combined Results of Operations
     Revenues, net............................................        $25.4     $115.8      $50.4     $229.8     $421.4
     Operating, selling, general and
       administrative expenses................................        236.7      107.0       43.2      255.4      642.3
     Depreciation and amortization............................         66.3       37.2       16.5       27.6      147.6
     Operating loss...........................................       (277.6)     (28.4)      (9.3)     (53.2)    (368.5)
     Net loss (1).............................................       (331.4)     (51.4)     (21.4)     (70.1)    (474.3)

   Company's Equity in Net Loss
     Equity in current period net loss........................       ($49.7)     ($7.9)     ($8.4)    ($17.7)    ($83.7)
     Amortization (expense) income............................         (0.7)       0.1       (0.1)      (1.5)      (2.2)
              --                                                    -------     ------     ------     ------   -------- 
       Total equity in net loss...............................       ($50.4)     ($7.8)     ($8.5)    ($19.2)    ($85.9)
                                                                    =======     ======     ======     ======   ========
<FN>
     --------
     (1) Net  loss  also  represents  loss  from  continuing  operations  before
         extraordinary  items and  cumulative  effect of changes  in  accounting
         principle.
     (2) As a result of the  acquisition of E!  Entertainment  Television,  Inc.
         ("E!  Entertainment")  on March 31, 1997, the Company recorded a charge
         representing  the  cumulative  amount that would have been recorded had
         the Company accounted for its investment in E! Entertainment  under the
         equity  method since the date of initial  investment  (the  "Cumulative
         Charge"). Since the Company's proportionate share of E! Entertainment's
         cumulative losses was in excess of the Company's  historical cost basis
         in E!  Entertainment  and as  the  Company  was  under  no  contractual
         obligation  to fund the  losses  of E!  Entertainment,  the  Cumulative
         Charge was  limited  to the  Company's  historical  cost basis of $12.1
         million.  Such amount is included in equity in net losses of affiliates
         in the Company's  condensed  consolidated  statement of operations  and
         accumulated  deficit for the nine months ended September 30, 1997 as it
         is  not  significant  for  restatement  of  the  Company's  prior  year
         financial statements.
</FN>
</TABLE>

     Sprint  PCS.   The  Company,   Tele-Communications,   Inc.   ("TCI"),   Cox
     Communications,  Inc.  ("Cox," and  together  with the Company and TCI, the
     "Cable Partners") and Sprint  Corporation  ("Sprint," and together with the
     Cable  Partners,  the  "Parents"),  engage in the  wireless  communications
     business through a limited  partnership  known as "Sprint PCS." The Company
     made its  initial  investment  in 1994 to  acquire  a general  and  limited
     partnership  interest of 15% in Sprint PCS. As of September  30, 1998,  the
     Company had contributed $669.5 million to Sprint PCS. No additional amounts
     are due with  respect to the  balance  of the  Company's  original  funding
     commitment to Sprint PCS.

                                        9
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

     In May  1998,  the  Parents  announced  an  agreement  (the  "Restructuring
     Agreement")  under which Sprint would assume total ownership and management
     control of Sprint PCS.

     At closing of the Restructuring Agreement, Sprint will issue a new class of
     Sprint stock (the "Sprint PCS Stock") to track the  performance of Sprint's
     combined wireless operations.  Initially,  in exchange for its interests in
     Sprint PCS, the Company will receive an  approximate  11.6% interest in the
     Sprint PCS Stock, consisting of approximately 47.2 million shares of Series
     2 Sprint PCS common stock,  approximately  2.2 million shares of Sprint PCS
     preferred  stock  (convertible  on  specified  terms to Series 2 Sprint PCS
     common stock) and warrants to purchase  approximately 3.0 million shares of
     Sprint PCS Stock. Under the Restructuring Agreement, Sprint will distribute
     its  interest  in the Sprint PCS Stock to its  existing  shareholders.  The
     Restructuring  Agreement  also  contemplates  a subsequent  initial  public
     offering ("IPO") of the Sprint PCS Stock. The Cable Partners'  interests in
     the Sprint  PCS Stock  would be  reduced  proportionately  by the amount of
     ownership  interests  issued in  connection  with an IPO, and in connection
     with any purchases made at that time by two of Sprint's major  shareholders
     under  existing   anti-dilution  rights  -  France  Telecom  S.A.  ("France
     Telecom") and Deutsche Telekom AG ("Deutsche Telekom").

     The Sprint PCS Stock will be 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  France  Telecom  and
     Deutsche Telekom. Under the terms of the Restructuring Agreement, the Cable
     Partners have registration rights, subject to customary restrictions, that,
     if used, would permit the monetization of their Sprint PCS holdings through
     equity offerings or derivatives.  If the Series 2 shares are transferred by
     a Cable Partner, the transferred shares become full vote Series 1 shares.

     On September 25, 1998, Sprint Corporation filed a preliminary  registration
     statement  with the  Securities  and  Exchange  Commission  (the  "SEC") to
     register up to $604.0 million in an IPO of its Sprint PCS Stock. The timing
     of the public offering can not yet be determined.

     On November 13, 1998, the Sprint  stockholders  approved the  Restructuring
     Agreement. The Restructuring Agreement is expected to close on November 23,
     1998, subject to the receipt of necessary regulatory approvals.

     TCGI. In April 1998, in connection  with an  acquisition,  TCGI issued 16.3
     million  shares of its Class A Common  Stock (the "TCGI  Acquisition").  In
     November 1997, TCGI filed a registration statement with the SEC to sell 7.3
     million  shares of TCGI Class A Common  Stock (the "TCGI  Offering").  As a
     result  of  the  TCGI  Acquisition  and  the  TCGI  Offering,  the  Company
     recognized a $157.8 million and $98.2 million increase in its proportionate
     share of TCGI's net assets as a gain from equity  offering of affiliate for
     the nine and three  months ended  September  30,  1998,  respectively.  The
     Company records its proportionate share of TCGI's net assets one quarter in
     arrears.

     UK Investees. As of September 30, 1998, Comcast UK Cable (see Note 3) holds
     a 27.5%  interest  in  Birmingham  Cable  Corporation  Limited  and a 50.0%
     interest in Cable London PLC.

     Comcast-Spectacor.  Effective  January 1,  1998,  the  Company's  condensed
     consolidated   financial   statements   include  the  accounts  of  Comcast
     Spectacor,  L.P.  ("Comcast-Spectacor"),  an affiliate previously accounted
     for under the equity method, due to certain call rights held by the Company
     which became exercisable effective January 16, 1998.

     Other.  The Company's other equity investees  include  investments in cable
     communications   (including   Garden  State   Cablevision   L.P.,  a  cable
     communications   company  serving  more  than  210,000  subscribers  as  of
     September   30,   1998  in  the   State   of  New   Jersey),   cellular/PCS
     telecommunications  and 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.

     Fair Value Method
     The Company  holds  unrestricted  equity  investments  in certain  publicly
     traded  companies,  with an  historical  cost  (including a $1.092  billion
     pre-tax gain  recognized  during the third quarter of 1998 - see Note 3) of
     $1.466 billion and $130.0 million as of September 30, 1998 and December 31,
     1997, respectively.  The Company has recorded these investments,  which are
     classified as available for sale, at their  estimated fair values of $1.985
     billion and 

                                       10
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

     $346.5   million  as  of   September   30,  1998  and  December  31,  1997,
     respectively.  The  unrealized  pre-tax  gains as of September 30, 1998 and
     December 31, 1997 of $518.9 million and $216.5 million, respectively,  have
     been reported in the Company's  condensed  consolidated  balance sheet as a
     component  of  stockholders'  equity,  net of related  deferred  income tax
     expense of $181.6 million and $75.8 million, respectively.

     In March 1998, the Company sold call options  relating to its  unrestricted
     equity investments in TCI, TCI Ventures Group, Inc. and Liberty Media Group
     common  stock  (together,  the "TCI  Stock") for $20.7  million.  Such call
     options expire between March and September 1999.  During the nine and three
     months ended September 30, 1998, the Company  recorded  pre-tax  investment
     (expense) income of ($32.1) million and $8.1 million, respectively, related
     to changes in the value of the call options.

     During the nine and three months  ended  September  30,  1998,  the Company
     recorded a pre-tax  loss of $91.2  million  on  certain of its  investments
     based on a decline in value that is considered  other than temporary.  Such
     pre-tax loss is recorded in investment  income in the  Company's  condensed
     consolidated statement of operations and accumulated deficit.

5.   LONG-TERM DEBT

     Debt Offering
     On November 10, 1998,  the  Company,  through its wholly owned  subsidiary,
     Comcast Cable Communications,  Inc. ("Comcast Cable") announced that it has
     sold $800.0 million  aggregate  principal  amount of 6.20% senior notes due
     2008 in a public offering (the  "Offering").  Interest on the notes will be
     payable semiannually on May 15 and November 15 of each year, commencing May
     15, 1999. The notes are redeemable only upon maturity on November 15, 2008.
     The Company  expects to use all of the net  proceeds  from the Offering for
     general corporate  purposes.  The Offering is expected to close on November
     16, 1998.

     Redemption of 1 1/8% Debentures
     In March 1998,  the Company  completed the redemption of its $541.9 million
     principal amount 1 1/8% discount  convertible  subordinated  debentures due
     2007 (the "1 1/8%  Debentures").  The Company issued 10.4 million shares of
     its  Class A  Special  Common  Stock  upon  conversion  of  $540.2  million
     principal amount of 1 1/8% Debentures  while $1.7 million  principal amount
     of 1 1/8% Debentures was redeemed for cash at a redemption price of 67.112%
     of  the  principal   amount,   together  with  accrued  interest   thereon.
     Stockholders'  equity was increased by the full amount of 1 1/8% Debentures
     converted plus accrued interest,  less unamortized debt acquisition  costs.
     Unamortized  debt  acquisition  costs  related  to  the 1  1/8%  Debentures
     redeemed for cash were not significant. The issuance of the Company's Class
     A Special  Common Stock upon  conversion  of the 1 1/8%  Debentures  had no
     impact on the Company's condensed  consolidated statement of cash flows due
     to its noncash nature.

     Interest Rates
     As of September  30, 1998 and December 31, 1997,  the  Company's  effective
     weighted  average interest rate on its long-term debt outstanding was 8.39%
     and 8.36%, respectively.

     Lines of Credit
     As of  November  2, 1998,  certain  subsidiaries  of the Company had unused
     lines of credit of $870.5 million, $370.5 million of which is restricted by
     the  covenants of the related debt  agreements  and to  subsidiary  general
     purposes and dividend declaration.

6.   STOCKHOLDERS' EQUITY

     Repurchase Program
     In September  1998,  the Company  announced that its Board of Directors had
     authorized a market repurchase program (the "Repurchase  Program") pursuant
     to which  the  Company  may  purchase,  in the open  market  or in  private
     transactions  up  to  $500.0  million  of  its  outstanding  common  equity
     securities,  subject to certain restrictions and market conditions. Through
     September 30, 1998, the Company had repurchased  shares of its common stock
     for  aggregate  consideration  of $9.5 million  pursuant to the  Repurchase
     Program.  Through October 31, 1998, the 

                                       11
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

     Company had repurchased  additional  shares for aggregate  consideration of
     $3.4 million.  In  conjunction  with the Repurchase  Program,  in September
     1998,  the Company sold put options on 2.75  million  shares of its Class A
     Special Common Stock.  The put options give the holder the right to require
     the Company to repurchase such shares at specified prices on specific dates
     during the period  from April  through  September  1999.  Proceeds of $11.4
     million  from the sale of these put options  were  credited  to  additional
     capital.  The amount the Company  would be obligated  to pay to  repurchase
     such shares if all outstanding put options were exercised,  totaling $111.2
     million,  has  been  reclassified  to a  temporary  equity  account  in the
     Company's condensed consolidated balance sheet as of September 30, 1998.

     In April 1997, in connection with the Company's  previous market repurchase
     program which  terminated in May 1997,  the Company sold put options on 2.0
     million shares of its Class A Special Common Stock. The put options,  which
     expired unexercised during April and May 1998, gave the holder the right to
     require the  Company to  repurchase  such  shares at a  specified  price on
     specific  dates  in  April  and May  1998.  Upon  expiration,  the  Company
     reclassified $31.4 million,  the amount it would have been obligated to pay
     to repurchase such shares had the put options been  exercised,  from common
     equity  put  options  to  additional  capital  in the  Company's  condensed
     consolidated balance sheet.

7.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION

     The Company  made cash  payments  for  interest of $334.1  million,  $303.4
     million,  $71.5 million and $69.6 million  during the nine and three months
     ended September 30, 1998 and 1997, respectively.

     The Company made cash  payments for income taxes of $105.2  million,  $89.7
     million,  $17.1 million and $14.7 million  during the nine and three months
     ended September 30, 1998 and 1997, respectively.

     During the three months ended  September 30, 1998, the Company  settled all
     issues  primarily  related to the  deductibility  of  amortization of cable
     television  distribution  rights  raised by the  Internal  Revenue  Service
     ("IRS")  in its  examination  of QVC,  Inc.,  a majority  owned  subsidiary
     ("QVC"),  through  fiscal  tax year 1993.  Such  settlement  resulted  in a
     reversal of previously recorded deferred tax liabilities of $135.5 million.
     As a result of the settlement, the Company recorded an adjustment to reduce
     goodwill by $119.7  million  during the three  months ended  September  30,
     1998.  Such  adjustment  has been  excluded  from the  Company's  condensed
     consolidated statement of cash flows due to its noncash nature.

8.   COMMITMENTS AND 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.

                                       12
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
                                   (Unaudited)

9.   FINANCIAL DATA BY BUSINESS SEGMENT
     (Dollars in millions)
<TABLE>
<CAPTION>
                                                   Domestic
                                                     Cable        Electronic      Cellular
                                                Communications     Retailing   Communications    Other (1)         Total
<S>                                                 <C>            <C>              <C>             <C>          <C>     
Nine Months Ended September 30, 1998
Revenues, net...............................        $1,681.2       $1,648.5         $338.0          $368.7       $4,036.4
Depreciation and amortization...............           495.1           97.0           88.5           116.8          797.4
Operating income (loss).....................           307.4          194.6           47.6          (135.5)         414.1
Interest expense............................           163.0           39.4           82.4           152.5          437.3
Capital expenditures........................           488.2           57.3           41.7            97.6          684.8
Equity in net losses of affiliates..........                                                         345.3          345.3

Three Months Ended September 30, 1998
Revenues, net...............................          $571.7         $573.9         $116.7           $92.6       $1,354.9
Depreciation and amortization...............           171.5           38.7           30.8            30.0          271.0
Operating income (loss).....................           105.7           65.1           16.6           (37.7)         149.7
Interest expense............................            55.1           13.0           29.1            48.2          145.4
Capital expenditures........................           194.5           15.6           24.3            30.8          265.2
Equity in net losses of affiliates..........                                                         108.3          108.3

As of September 30, 1998
Assets......................................        $6,302.2       $2,136.4       $1,454.8        $4,472.2      $14,365.6
Long-term debt, less current portion........         2,699.1          681.9        1,234.2         1,982.2        6,597.4

Nine Months Ended September 30, 1997
Revenues, net...............................        $1,537.0       $1,438.0         $335.4          $209.1       $3,519.5
Depreciation and amortization...............           462.7           79.2           80.7            81.1          703.7
Operating income (loss).....................           261.9          151.7           59.3          (110.5)         362.4
Interest expense............................           174.2           42.1           78.7           127.8          422.8
Capital expenditures........................           367.1           69.6           87.2           158.1          682.0
Equity in net losses of affiliates..........                                                         217.1          217.1

Three Months Ended September 30, 1997
Revenues, net...............................          $515.1         $490.6         $115.1           $83.4       $1,204.2
Depreciation and amortization...............           155.9           27.6           27.1            30.7          241.3
Operating income (loss).....................            92.0           48.7           24.3           (41.3)         123.7
Interest expense............................            54.3           14.2           26.6            48.8          143.9
Capital expenditures........................           115.6           28.5           29.3            61.5          234.9
Equity in net losses of affiliates..........                                                          85.9           85.9
<FN>
---------------
(1)  Other   includes    certain   other   operating    businesses,    including
     Comcast-Spectacor   (effective   January  1,  1998)  and  E!  Entertainment
     (effective  March  31,  1997),  the  Company's  consolidated  UK cable  and
     telecommunications  operations  (see Note 3), the Company's DBS  operations
     (prior to April 1, 1998) and  elimination  entries  related to the segments
     presented.
</FN>
</TABLE>

                                       13
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

Overview

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

General Developments of Business

See Note 3 to the Company's condensed consolidated financial statements included
in Item 1.

Liquidity and Capital Resources

Cash, Cash Equivalents,  Short-term  Investments and Investments,  Available for
Sale The Company has traditionally  maintained  significant levels of cash, cash
equivalents,  short-term investments and investments, available for sale to meet
its  short-term  liquidity  requirements.  Cash,  cash  equivalents,  short-term
investments  and  investments,  available for sale as of September 30, 1998 were
$2.138 billion.  As of September 30, 1998, $406.1 million of the Company's cash,
cash equivalents,  short-term investments and investments, available for sale is
restricted  to use by  subsidiaries  of the Company under  contractual  or other
arrangements,  including $146.8 million which is restricted to use by Comcast UK
Cable Partners Limited  ("Comcast UK Cable"),  a consolidated  subsidiary of the
Company  (see  Note  3  to  the  Company's  condensed   consolidated   financial
statements).

The Company's cash  equivalents and short-term  investments are recorded at cost
which  approximates  their fair value.  As of  September  30,  1998,  short-term
investments have a weighted average maturity of approximately  five months.  The
Company's investments, available for sale are recorded at fair value.

Investments
See Notes 3 and 4 to the Company's condensed  consolidated  financial statements
included in Item 1.

The Company does not have any 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. The Company continually evaluates its existing investments as well as
new investment opportunities.

Financing
See Notes 5 and 6 to the Company's condensed  consolidated  financial statements
included in Item 1.

As of September 30, 1998 and December 31, 1997,  the Company's  long-term  debt,
including current portion, was $6.704 billion and $6.691 billion,  respectively,
of which 22.1% and 17.1%, respectively, was at variable rates.

The Company may from time to time, depending on certain factors including market
conditions, make optional repayments on its debt obligations,  which may include
open market repurchases of its outstanding public notes and debentures.

Year 2000 Issue

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

                                       14
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998


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

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

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

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

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

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

Based on an inventory  conducted in 1997,  the Company has  identified  computer
systems that will require modification or replacement so that they will properly
utilize dates beyond December 31, 1999. Many of the Company's  critical  systems
are new and are already Year 2000 compliant as a result of the recent rebuild of
many of the Company's cable  communications  systems and the implementation of a
fully digital  cellular  communications  network.  In addition,  the Company has
initiated  communications  with all of its  significant  software  suppliers and
service  bureaus to determine their plans for remediating the Year 2000 Issue in
their software which the Company uses or relies upon.

As of September  30, 1998,  the Company is in the  Conversion  Phase of its Year
2000  remediation  program and has entered  the  Testing  Phase with  respect to
certain of its key systems. Through September 30, 1998, the Company has incurred
approximately $5.0 million in connection with its Year 2000 remediation program.
The Company  estimates that it will incur between  approximately  $10 million to
$20 million of additional  expense through  December 1999 in connection with its
Year  2000  remediation   program.   The  Company's  estimate  to  complete  the
remediation plan includes the estimated time associated with mitigating the Year
2000 Issue for third party software. However, there can be no guarantee that the
systems of other  companies  on which the Company  relies will be converted on a
timely basis,  or that a failure to convert by another  company would not have a
material adverse effect on the Company.

Management of the Company will continue to  periodically  report the progress of
its Year 2000 remediation  program to the Audit Committee of the Company's Board
of  Directors.  The Company  plans to complete the Year 2000  mitigation  by the
third  quarter of 1999.  Management  of the  Company  has  investigated  and may
consider  potential  contingency plans in the event that the Company's Year 2000
remediation program is not completed by that date.

The costs of the project and the date on which the Company plans to complete the
Year  2000  modifications  and  replacements  are  based  on  management's  best
estimates,  which were derived using  assumptions of future events including the
continued   availability  of  resources  and  the  reliability  of  third  party
modification plans. However, there can be no guarantee that these estimates will
be  achieved  and actual  results  could  differ  materially  from those  plans.
Specific factors that may cause such material  differences  include, but are not
limited to, the availability  and cost of personnel with  appropriate  necessary
skills and the  ability to locate and  correct all  relevant  computer  code and
similar uncertainties.

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

                                       15
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998


The telecommunications  industry,  including cable and cellular  communications,
and the electronic  retailing industry are experiencing  increasing  competition
and rapid technological changes. The Company's future results of operations will
be affected by its  ability to react to changes in the  competitive  environment
and by its ability to implement new technologies.  However, the Company believes
that competition,  technological  changes and its history of significant  losses
will not significantly affect its ability to obtain financing.

The Company  believes  that it will be able to meet its  current  and  long-term
liquidity and capital  requirements,  including fixed charges,  through its cash
flows from operating  activities,  existing cash, cash  equivalents,  short-term
investments,  investments,  available  for sale and  lines of  credit  and other
external financing.

Statement of Cash Flows

Cash and cash equivalents  increased $21.3 million as of September 30, 1998 from
December 31, 1997 and  increased  $242.3  million as of September  30, 1997 from
December 31, 1996.  Increases in cash and cash  equivalents  resulted  from cash
flows from  operating,  financing and investing  activities  which are explained
below.

Net cash provided by operating  activities amounted to $818.6 million and $742.1
million for the nine months ended September 30, 1998 and 1997, respectively. The
increase of $76.5  million is  principally  due to the increase in the Company's
operating  income  before   depreciation  and  amortization   (see  "Results  of
Operations")  and  changes  in  working  capital  as a result  of the  timing of
receipts  and  disbursements,  including  the  effects of the  consolidation  of
Comcast  Spectacor,  L.P.  ("Comcast-Spectacor")  effective January 1, 1998 (see
Note 4 to the Company's condensed  consolidated financial statements included in
Item  1)  and  the  acquisition  of  E!  Entertainment  Television,   Inc.  ("E!
Entertainment") on March 31, 1997 (the "E! Acquisition").

Net cash provided by financing  activities was $134.2 million and $345.3 million
for the nine months ended September 30, 1998 and 1997, respectively.  During the
nine months ended  September 30, 1998, the Company  borrowed  $1.058 billion and
repaid $922.5 million of its long-term  debt,  primarily in connection  with the
refinancing  of certain  subsidiary  indebtedness  in March 1998.  In  addition,
during the nine months ended  September 30, 1998,  the Company had net issuances
of $23.8 million of its common stock and paid cash dividends of $27.1 million on
its common  stock and Series A Preferred  Stock.  During the nine  months  ended
September 30, 1997, the Company borrowed $2.968 billion, primarily in connection
with the refinancing of certain  subsidiary  indebtedness and the acquisition of
E!  Entertainment  (the "E!  Acquisition"),  and  repaid  $3.518  billion of its
long-term  debt,  primarily  in  connection  with  the  refinancing  of  certain
subsidiary  indebtedness and the redemption of debt. Deferred financing costs of
$43.8  million were  incurred  during the nine months ended  September  30, 1997
related to the issuance of certain subsidiary senior notes. In addition,  during
the nine months ended September 30, 1997, the Company received $1.0 billion from
Microsoft  Corporation  for the issuance of its Class A Special Common Stock and
Series B Preferred Stock, repurchased $36.0 million of its common stock and paid
cash  dividends  of $25.2  million  on its common  stock and Series A  Preferred
Stock.

Net cash used in investing  activities was $931.5 million and $845.1 million for
the nine months ended September 30, 1998 and 1997, respectively. During the nine
months ended September 30, 1998, net cash used in investing  activities includes
acquisitions, net of cash acquired, of $269.4 million, investments in affiliates
of $137.6 million and capital expenditures of $684.8 million, offset by proceeds
from the sales of short-term  investments and call options of $145.9 million and
proceeds  from the repayment of a loan by an investee of $74.7  million.  During
the nine months ended September 30, 1997, net cash used in investing  activities
includes acquisitions,  net of cash acquired, of $136.1 million,  investments in
affiliates of $180.3 million and capital expenditures of $682.0 million,  offset
by the proceeds from the sales of short-term  and  long-term  investments  and a
distribution  from an investee of $171.5 million and proceeds from the repayment
of a loan by an investee of $25.2 million.

Results of Operations

The  effects of the  Company's  recent  acquisitions  and the  consolidation  of
Comcast-Spectacor  effective  January 1, 1998,  as well as  increased  levels of
capital  expenditures,  were to increase  the  Company's  revenues  and expenses
resulting  in  increases  in  its  operating  income  before   depreciation  and
amortization,  depreciation expense,  amortization expense and interest expense.
In addition,  the  Company's  equity in net losses of  affiliates  has increased
principally  as a result of the  start-up  nature of  certain  of the  Company's
equity investees (see "Consolidated Analysis").

                                       16
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998


Summarized  consolidated  financial information for the Company for the nine and
three  months  ended  September  30,  1998 and 1997 is as  follows  (dollars  in
millions, "NM" denotes percentage is not meaningful):

<TABLE>
<CAPTION>
                                                                   Nine Months Ended
                                                                      September 30,         Increase / (Decrease)
                                                                   1998         1997           $             %
<S>                                                              <C>          <C>            <C>           <C>  
Revenues..................................................       $4,036.4     $3,519.5       $516.9        14.7%
Cost of goods sold from electronic retailing..............          997.6        869.9        127.7        14.7
Operating, selling, general and administrative expenses...        1,827.3      1,583.5        243.8        15.4
                                                                 --------     --------
Operating income before depreciation and
   amortization (1).......................................        1,211.5      1,066.1        145.4        13.6
Depreciation..............................................          407.3        341.7         65.6        19.2
Amortization..............................................          390.1        362.0         28.1         7.8
                                                                 --------     --------
Operating income..........................................          414.1        362.4         51.7        14.3
                                                                 --------     --------
Interest expense..........................................          437.3        422.8         14.5         3.4
Investment income.........................................       (1,022.0)      (138.1)       883.9          NM
Equity in net losses of affiliates........................          345.3        217.1        128.2        59.1
Gain from equity offering of affiliate....................         (157.8)                    157.8          NM
Other.....................................................           (7.0)        13.4        (20.4)         NM
Income tax expense........................................          309.3         45.4        263.9          NM
Minority interest.........................................          (44.3)       (66.8)       (22.5)      (33.7)
Extraordinary items.......................................           (3.0)       (25.9)       (22.9)      (88.4)
                                                                 --------     --------
Net income (loss).........................................         $550.3      ($157.3)      $707.6          NM
                                                                 ========     ========
</TABLE>
<TABLE>
<CAPTION>
                                                                   Three Months Ended
                                                                      September 30,         Increase / (Decrease)
                                                                   1998         1997           $             %
<S>                                                              <C>          <C>            <C>           <C>  
Revenues..................................................       $1,354.9     $1,204.2       $150.7        12.5%
Cost of goods sold from electronic retailing..............          345.2        298.1         47.1        15.8
Operating, selling, general and administrative expenses...          589.0        541.1         47.9         8.9
                                                                 --------     --------
Operating income before depreciation and
   amortization (1) ......................................          420.7        365.0         55.7        15.3
Depreciation..............................................          138.5        120.2         18.3        15.2
Amortization..............................................          132.5        121.1         11.4         9.4
                                                                 --------     --------
Operating income..........................................          149.7        123.7         26.0        21.0
                                                                 --------     --------
Interest expense..........................................          145.4        143.9          1.5         1.0
Investment income.........................................       (1,023.2)       (44.5)       978.7          NM
Equity in net losses of affiliates........................          108.3         85.9         22.4        26.1
Gain from equity offering of affiliate....................          (98.2)                     98.2          NM
Other.....................................................           (3.5)         9.0        (12.5)         NM
Income tax expense........................................          309.0          8.5        300.5          NM
Minority interest.........................................           (5.1)       (27.0)       (21.9)      (81.1)
Extraordinary items.......................................           (3.0)        (3.1)        (0.1)       (3.2)
                                                                 --------     --------
Net income (loss).........................................         $714.0       ($55.2)      $769.2          NM
                                                                 ========     ========
<FN>
------------
(1)  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  expense  and  amortization  expense,  operating  cash flow is
     frequently  used  as one of  the  bases  for  comparing  businesses  in the
     Company's industries, although the Company's measure of operating cash flow
     may not be  comparable  to similarly  titled  measures of other  companies.
     Operating  cash flow does not purport to  represent  net income or net cash
     provided  by  operating  activities,  as  those  terms  are  defined  under
     generally accepted accounting

                                       17
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998


     principles,  and  should  not  be  considered  as an  alternative  to  such
     measurements as an indicator of the Company's  performance.  See "Statement
     of Cash Flows"  above for a  discussion  of net cash  provided by operating
     activities.
</FN>
</TABLE>

Operating Results by Business Segment

Domestic Cable Communications

The following table sets forth the operating results for the Company's  domestic
cable communications segment (dollars in millions):

<TABLE>
<CAPTION>
                                                        Nine Months Ended
                                                           September 30,                        Increase
                                                       1998             1997               $                %
<S>                                                 <C>              <C>                <C>                <C> 
Service income...................................   $1,681.2         $1,537.0           $144.2             9.4%
Operating, selling, general and
     administrative expenses.....................      878.7            812.4             66.3             8.2
                                                    --------         --------           ------
Operating income before depreciation
     and amortization (a)........................     $802.5           $724.6            $77.9            10.8%
                                                    ========         ========           ======

                                                       Three Months Ended
                                                           September 30,                        Increase
                                                       1998             1997               $                %
Service income...................................     $571.7           $515.1            $56.6            11.0%
Operating, selling, general and
     administrative expenses.....................      294.5            267.2             27.3            10.2
                                                    --------         --------           ------
Operating income before depreciation
     and amortization (a)........................     $277.2           $247.9            $29.3            11.8%
                                                    ========         ========           ======
<FN>
---------------
(a) See footnote (1) on page 17.
</FN>
</TABLE>

Of the respective  $144.2 million and $56.6 million  increases in service income
for the nine and three month periods from 1997 to 1998,  $20.0 million and $10.1
million  is   attributable   to  the  effects  of  the   acquisitions  of  cable
communications  systems,  $24.8  million and $7.7  million are  attributable  to
subscriber  growth,  $79.0 million and $28.8 million relate to changes in rates,
$14.1 million and $4.8 million are  attributable to growth in cable  advertising
sales and $6.3 million and $5.2 million relate to other product offerings.

Of the  respective  $66.3  million and $27.3  million  increases  in  operating,
selling,  general  and  administrative  expenses  for the nine and three  months
period from 1997 to 1998,  $10.7 million and $5.3 million is attributable to the
effects of the acquisitions of cable communications  systems,  $36.5 million and
$14.1 million are attributable to increases in the costs of cable programming as
a  result  of  changes  in  rates,  subscriber  growth  and  additional  channel
offerings,  $5.8  million  and  $2.2  million  are  attributable  to  growth  in
advertising  sales and $13.3 million and $5.7 million  result from  increases in
the cost of labor,  other volume related  expenses and costs associated with new
product  offerings.   It  is  anticipated  that  the  Company's  cost  of  cable
programming will increase in the future as cable  programming rates increase and
additional sources of cable programming become available.

                                       18
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998


Electronic Retailing

The  following  table  sets  forth  the  operating  results  for  the  Company's
electronic retailing segment,  consisting of the operations of QVC, Inc. and its
subsidiaries  ("QVC"), a majority owned and controlled subsidiary of the Company
(dollars in millions):
 
<TABLE>
<CAPTION>
                                                         Nine Months Ended
                                                           September 30,                        Increase
                                                       1998             1997                $               %
<S>                                                 <C>              <C>                 <C>              <C>  
Net sales........................................   $1,648.5         $1,438.0            $210.5           14.6%
Cost of goods sold...............................      997.6            869.9             127.7           14.7
Operating, selling, general and administrative
     expenses....................................      359.3            337.2              22.1            6.6
                                                    --------         --------            ------
Operating income before depreciation
     and amortization (a)........................     $291.6           $230.9             $60.7           26.3%
                                                    ========         ========            ======

Gross margin.....................................       39.5%            39.5%
                                                    ========         ========

                                                        Three Months Ended
                                                           September 30,                        Increase
                                                       1998             1997                $               %
Net sales........................................     $573.9           $490.6             $83.3           17.0%
Cost of goods sold...............................      345.2            298.1              47.1           15.8
Operating, selling, general and administrative
     expenses....................................      124.9            116.2               8.7            7.5
                                                    --------         --------            ------
Operating income before depreciation
     and amortization (a)........................     $103.8            $76.3             $27.5           36.0%
                                                    ========         ========            ======

Gross margin.....................................       39.9%            39.2%
                                                    ========         ========
<FN>
---------------
(a) See footnote (1) on page 17.
</FN>
</TABLE>

The  respective  increases in net sales of $210.5  million and $83.3 million for
the nine and three  month  periods  from 1997 to 1998 are due to the  effects of
6.2% and 4.3% increases in the average number of homes receiving QVC services in
the United  States  ("US"),  increases in net sales per home and 12.5% and 11.0%
increases in the average  number of homes  receiving  QVC services in the United
Kingdom.

The increases in cost of goods sold are  primarily  related to the growth in net
sales.

Of the $22.1 million increase in operating,  selling, general and administrative
expenses  for the  nine  month  period  from  1997 to  1998,  $21.4  million  is
attributable  to higher  variable  costs  associated  with the increase in sales
volume. The remaining increase is attributable to personnel and facilities based
costs   associated  with  Studio  Park,   QVC's  new   production,   studio  and
administrative  facility  which  was  opened in the  third  quarter  of 1997 and
expansion in the UK and Germany,  partially  offset by savings in marketing  and
promotional costs in the US. Of the $8.7 million increase in operating, selling,
general and  administrative  expenses  for the three  month  period from 1997 to
1998, $8.9 million is attributable to higher variable costs  associated with the
increase in sales volume.  The remaining  decrease is primarily  attributable to
reduced marketing and promotional costs in the US.

                                       19
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998


Cellular Communications

The following table sets forth the operating results for the Company's  cellular
communications segment (dollars in millions):
<TABLE>
<CAPTION>
                                                        Nine Months Ended
                                                           September 30,                    Increase/(Decrease)
                                                      1998             1997                 $               %
<S>                                                   <C>              <C>                 <C>             <C> 
Service income...................................     $338.0           $335.4              $2.6            0.8%
Operating, selling, general and administrative
     expenses....................................      201.9            195.4               6.5            3.3
                                                      ------           ------             -----
Operating income before depreciation
     and amortization (a)........................     $136.1           $140.0             ($3.9)          (2.8%)
                                                      ======           ======             =====

                                                        Three Months Ended
                                                           September 30,                    Increase/(Decrease)
                                                       1998             1997                $               %
Service income...................................     $116.7           $115.1              $1.6            1.4%
Operating, selling, general and administrative
     expenses....................................       69.3             63.7               5.6            8.8
                                                      ------           ------             -----
Operating income before depreciation
     and amortization (a)........................      $47.4            $51.4             ($4.0)          (7.8%)
                                                      ======           ======             =====
<FN>
---------------
(a) See footnote (1) on page 17.
</FN>
</TABLE>

Service income increased by $2.6 million and $1.6 million for the nine and three
month periods from 1997 to 1998, as  subscriber  growth was offset,  in part, by
the effects of increased  use of  promotional  and free minute plans  offered to
subscribers.  These plans  generally  have higher  access fees and  increase the
minutes of use per subscriber while lowering the average rate per minute of use.

The respective  $6.5 million and $5.6 million  increases in operating,  selling,
general and  administrative  expenses for the nine and three month  periods from
1997 to  1998  are  primarily  the  result  of  increases  in  commission  costs
associated with more gross sales in 1998.

Consolidated Analysis

The respective $65.6 million and $18.3 million increases in depreciation expense
for  the  nine  and  three  month  periods  from  1997  to  1998  are  primarily
attributable to the effects of capital  expenditures,  increased losses on asset
disposals in connection with the Company's domestic cable communications rebuild
activities, the consolidation of Comcast- Spectacor and the acquisition of cable
communications systems.

The respective $28.1 million and $11.4 million increases in amortization expense
for  the  nine  and  three  month  periods  from  1997  to  1998  are  primarily
attributable to the effects of the consolidation of Comcast-Spectacor.

The $14.5  million  increase in interest  expense for the nine month period from
1997 to 1998 is attributable to the effects of capitalized  interest  associated
with the  Company's  investment  in Sprint  PCS  during  the nine  months  ended
September 30, 1997, the consolidation of  Comcast-Spectacor,  the E! Acquisition
and an increase in the  Company's  effective  weighted  average  interest  rate,
offset,  in part, by lower levels of debt outstanding.  The Company  anticipates
that, for the foreseeable future, interest expense will be a significant cost to
the Company and will have a significant  adverse effect on the Company's ability
to realize net  earnings.  The Company  believes it will  continue to be able to
meet its  obligations  through its ability  both to  generate  operating  income
before depreciation and amortization and to obtain external financing.

In January 1998, AT&T Corp.  ("AT&T") entered into a definitive merger agreement
with Teleport  Communications Group Inc. ("TCGI"). Upon closing of the merger on
July 23, 1998,  the Company  received 24.2 million shares of  unregistered  AT&T
common stock in exchange (the  "Exchange") for 25.6 million shares of TCGI 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

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<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998


nine and three months ended  September  30, 1998,  representing  the  difference
between the fair value of the AT&T stock  received  and the  Company's  basis in
TCGI.  Such gain is included in  investment  income in the  Company's  condensed
consolidated statement of operations and accumulated deficit.

During the nine and three months ended September 30, 1998, the Company  recorded
a pre-tax loss of $91.2 million on certain of its investments based on a decline
in value that is considered other than temporary.  Such pre-tax loss is included
in  investment  income in the  Company's  condensed  consolidated  statement  of
operations and accumulated deficit.

In March 1998, the Company sold call options relating to its unrestricted equity
investments in  Tele-Communications,  Inc. ("TCI"), TCI Ventures Group, Inc. and
Liberty Media Group common stock (together,  the "TCI Stock") for $20.7 million.
Such call options expire between March and September  1999.  During the nine and
three months ended September 30, 1998, the Company recorded  pre-tax  investment
(expense) income of ($32.1) million and $8.1 million,  respectively,  related to
changes in the value of the call options. In addition, as of September 30, 1998,
the Company  recorded net unrealized  gains (losses) of $47.9 million and ($5.2)
million related to the TCI Stock,  net of deferred income tax expense  (benefit)
of $25.8  million and ($2.8)  million,  to its  condensed  consolidated  balance
sheet,  representing the increase in fair value of the TCI Stock during the nine
and three months ended September 30, 1998, respectively.

During the first  quarter of 1997 the Company  received  2.76 million  shares of
TCGI  Class A Stock  from  TCGI in  exchange  for  the  Company's  shares  of an
alternate  access  provider.  In May 1997, the Company sold all of its shares of
TCGI Class A Stock for $68.9  million  and  recognized  a pre-tax  gain of $68.9
million.  In February  1997,  the Company  sold  options to acquire 25.0 million
shares of Nextel  Communications,  Inc.  ("Nextel")  common  stock to Nextel for
$25.0 million and  recognized a pre-tax gain of $5.0  million.  In January 1997,
the Company sold 1.27 million shares of Time Warner, Inc. ("Time Warner") common
stock,  representing  the Company's  entire  interest in Time Warner,  for $48.6
million and  recognized a pre-tax loss of $3.8  million.  Such pre-tax gains and
pre-tax  loss are  included  in  investment  income in the  Company's  condensed
consolidated statement of operations and accumulated deficit.

The  $128.2  million  and $22.4  million  increases  in equity in net  losses of
affiliates  for the nine and three month periods from 1997 to 1998 are primarily
due to the effects of increased losses incurred by Sprint PCS (see Note 4 to the
Company's condensed consolidated financial statements included in Item 1).

In April 1998,  in  connection  with an  acquisition,  TCGI issued 16.3  million
shares of its Class A Common Stock (the "TCGI  Acquisition").  In November 1997,
TCGI filed a registration  statement with the Securities and Exchange Commission
to sell 7.3  million  shares of TCGI Class A Stock (the "TCGI  Offering").  As a
result of the TCGI Acquisition and the TCGI Offering,  the Company  recognized a
$157.8 million and $98.2 million increase in its  proportionate  share of TCGI's
net assets as a gain from equity  offering of  affiliate  for the nine and three
months  ended  September  30,  1998,  respectively.   The  Company  records  its
proportionate share of TCGI's net losses one quarter in arrears.

The  fluctuations in other (income) expense for the nine and three month periods
from 1997 to 1998 are primarily  attributable  to the effects of fluctuations in
the foreign currency exchange rate.

The $263.9  million and $300.5  million  increases in income tax expense for the
nine and three month  periods from 1997 to 1998 are  primarily the result of the
effects of changes in the Company's  income before taxes and minority  interest,
and  non-deductible  foreign losses and  non-deductible  equity in net losses of
affiliates.

The $22.5 million and $21.9 million  decreases in minority interest for the nine
and three month  periods  from 1997 to 1998 are  primarily  attributable  to the
effects of changes in the net  income  (loss) of QVC and  Comcast UK Cable,  the
consolidation of Comcast-Spectacor and the E! Acquisition.

In connection with the redemption of certain indebtedness,  the Company expensed
unamortized debt  acquisition  costs and incurred debt  extinguishment  costs of
$4.7 million, resulting in an extraordinary loss, net of tax, of $3.0 million or
$0.01 per common  share during the nine and three  months  ended  September  30,
1998. In connection with the refinancing of certain  subsidiaries'  indebtedness
and the redemption of debt, the Company  expensed  unamortized  debt acquisition
costs and incurred debt extinguishment  costs of $39.8 million and $4.7 million,
resulting in an  extraordinary  loss,  net 

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<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998


of tax, of $25.9  million or $.08 per common  share and $3.1 million or $.01 per
common  share  during  the nine and  three  months  ended  September  30,  1997,
respectively.  For the nine and three months ended  September 30, 1998 and 1997,
the Company's  earnings  (net income  (loss) plus income tax expense  (benefit),
equity  in net  losses of  affiliates,  fixed  charges  (interest  expense)  and
extraordinary  items) were $1.645 billion,  $555.7  million,  $1.280 billion and
$186.2 million, respectively. Such earnings were adequate to cover the Company's
fixed  charges  (including  interest  capitalized  of $18.0 million for the nine
months ended  September  30, 1997) of $437.3  million,  $440.8  million,  $145.4
million and $143.9  million for the nine and three  months ended  September  30,
1998 and 1997,  respectively.  Fixed charges include non-cash  interest expense,
net of interest capitalized,  of $37.4 million, $42.7 million, $11.3 million and
$13.8  million for the nine and three months ended  September 30, 1998 and 1997,
respectively.

The  Company  believes  that  its  losses  will  not  significantly  affect  the
performance of its normal business activities because of its existing cash, cash
equivalents,  short-term  investments and  investments,  available for sale, its
ability to generate  operating  income before  depreciation and amortization and
its ability to obtain external financing.

The  Company  believes  that  its  operations  are not  materially  affected  by
inflation.

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<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998


PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

     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.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

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

         10.1*    Compensation  and  Deferred  Compensation   Agreement  by  and
                  between  Comcast  Corporation and Ralph J. Roberts (as amended
                  and restated effective August 31, 1998).

         27.1     Financial Data Schedule.


     (b) Reports on Form 8-K:

         (i)      Comcast Corporation ("Comcast") filed a Current Report on Form
                  8-K  under  Item  5 on  September  17,  1998  relating  to its
                  determination   that  it  would  contribute,   via  a  capital
                  contribution  to its wholly owned  subsidiary,  Comcast  Cable
                  Communications,  Inc., all of the shares in Jones  Intercable,
                  Inc. to be acquired  by Comcast  from BCI Telecom  Holding and
                  affiliates  of  Glenn  R.  Jones  in  transactions  previously
                  announced by Comcast.








----------

*    Constitutes a management contract or compensatory plan or arrangement.


                                       23
<PAGE>
                      COMCAST CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998



                                    SIGNATURE

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.



                                             COMCAST CORPORATION
                                             -----------------------------------





                                             /S/ LAWRENCE S. SMITH
                                             -----------------------------------
                                             Lawrence S. Smith
                                             Executive Vice President
                                             (Principal Accounting Officer)



Date: November 16, 1998


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