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                                    FORM 10-K
                         ------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

              (Mark One)

               [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934
                    FOR THE FISCAL YEAR ENDED

                                DECEMBER 31, 2001

                                       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 333-30745

                       COMCAST CABLE COMMUNICATIONS, INC.
             (Exact name of registrant as specified in its charter)


                 DELAWARE                                  23-2175755
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

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

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

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                      NONE
                          ----------------------------

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                                      NONE
                          ----------------------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

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


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

As of December 31, 2001, there were 138.89 shares of Common Stock outstanding.

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

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

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

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

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

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<PAGE>


<TABLE>
<CAPTION>
                                         COMCAST CABLE COMMUNICATIONS, INC.
                                            2001 FORM 10-K ANNUAL REPORT

                                                  TABLE OF CONTENTS
                                                       PART I
<S>    <C>                                                                                                      <C>
Item 1   Business.................................................................................................1
Item 2   Properties..............................................................................................13
Item 3   Legal Proceedings.......................................................................................14
Item 4   Submission of Matters to a Vote of Security Holders.....................................................14

                                                       PART II
Item 5   Market for the Registrant's Common Equity and Related Stockholder Matters...............................15
Item 6   Selected Financial Data.................................................................................15
Item 7   Management's Discussion and Analysis of Financial Condition and Results of Operations...................16
Item 8   Financial Statements and Supplementary Data.............................................................25
Item 9   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure....................47

                                                      PART III
Item 10  Directors and Executive Officers of the Registrant......................................................47
Item 11  Executive Compensation..................................................................................47
Item 12  Security Ownership of Certain Beneficial Owners and Management..........................................47
Item 13  Certain Relationships and Related Transactions..........................................................47

                                                       PART IV
Item 14  Exhibits, Financial Statement Schedules and Reports on Form 8-K.........................................48
SIGNATURES.......................................................................................................50

</TABLE>

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

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

Factors Affecting Future Operations

     Our businesses may be affected by, among other things:

     o    changes in laws and regulations,

     o    changes in the competitive environment,

     o    changes in technology,

     o    industry consolidation and mergers,

     o    franchise related matters,

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

     o    demand for the programming content we distribute, and

     o    general economic conditions.

<PAGE>

                                     PART I

ITEM 1    BUSINESS

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

     We are a wholly owned subsidiary of Comcast  Corporation  ("Comcast").  Our
consolidated cable operations served  approximately 8.4 million  subscribers and
passed  approximately 13.7 million homes in the United States as of December 31,
2001.

     We are a  Delaware  corporation  that was  organized  in 1981.  We have our
principal  executive offices at 1500 Market Street,  Philadelphia,  Pennsylvania
19102-2148.  Our telephone  number is (215) 665-1700.  We also have a world wide
web site at  http://www.comcast.com.  The information  posted on our web site is
not incorporated into this Annual Report.

                      GENERAL DEVELOPMENTS OF OUR BUSINESS

     We entered  into a number of  significant  transactions  in 2001 which have
closed or are expected to close in 2002. We have summarized  these  transactions
below and have more fully described them in Note 4 to our consolidated financial
statements in Item 8 of this Annual Report.

     Philadelphia Area I Merger

     Comcast  intends to merge,  subject to receipt of necessary  regulatory and
other approvals,  its subsidiary,  Comcast  Cablevision of Philadelphia  Area I,
Inc.  ("Greater   Philadelphia"),   a  cable   communications   company  serving
approximately  86,000 subscribers in Philadelphia,  Pennsylvania,  with and into
us. Upon  completion of the merger,  which is expected to close during 2002, the
operating  results of Greater  Philadelphia will be included in our consolidated
financial statements from the June 1999 date of Comcast's acquisition of Greater
Philadelphia.

     Adelphia Cable Systems Exchange

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

     AT&T Cable Systems Acquisition

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

     Baltimore, Maryland System Acquisition

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

     At Home Services

     On September  28, 2001,  At Home  Corporation,  our provider of  high-speed
Internet services,  filed for protection under Chapter 11 of the U.S. Bankruptcy
Code.  On  December 3, 2001,  At Home  agreed to continue to provide  high-speed
Internet  services to our  subscribers  through  February 28, 2002.  In December
2001, we began to transfer our high-speed Internet  subscribers from the At Home
network  to our  new  Comcast-owned  and  managed  network.  We  completed  this
transition in February 2002.


<PAGE>


                           DESCRIPTION OF OUR BUSINESS

     Technology and Capital Improvements

     Our cable communications networks receive signals by means of:

     o    special antennae,

     o    microwave relay systems,

     o    earth stations, and

     o    coaxial and fiber optic cables.

     Products and Services

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

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

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

     Franchises

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

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

     Traditional Analog Video Services

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

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

     o    basic programming,

     o    expanded basic programming,

     o    premium services, and

     o    pay-per-view programming.

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

     Our expanded basic cable  service,  which may vary in size depending on the
system's channel capacity,  generally includes a group of satellite-delivered or
non-

                                     - 2 -
<PAGE>

broadcast channels in addition to the basic channel line-up.

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

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

     Advanced Service Offerings

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

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

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

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

     Digital Cable Services

     Subscribers to our digital cable service may receive:

     o    an interactive program guide,

     o    multiple channels of digital music,

     o    additional expanded basic programming,

     o    additional premium services,

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

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

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

     High-Speed Internet Service

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

     Other Revenue Sources

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

     Sales and Marketing

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

     o    telemarketing,

     o    direct mail advertising,

     o    door-to-door selling,

     o    cable television advertising,

     o    local media advertising, and

     o    retail outlets.

     Programming

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


                                      - 3 -

<PAGE>



     o    increases in the number of subscribers,

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

     o    increases in contract rates from programming suppliers.


     We attempt to secure long-term  programming contracts with volume discounts
and/or  marketing  support  and  incentives  from  programming  suppliers.   Our
programming  contracts  are generally for a fixed period of time and are subject
to negotiated renewal. We have experienced  increases in our cost of programming
and we anticipate that future contract renewals will result in programming costs
that are higher than our costs today, particularly for sports programming.

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

     Customer Service

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

                                      - 4 -

<PAGE>



     Our Cable Communications Systems

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



<TABLE>
<CAPTION>
                                                  2001(9)     2000(9)    1999(9)      1998       1997
                                                ----------- ----------- ---------- ---------- ----------
<S>                                                <C>         <C>         <C>        <C>        <C>
Cable
     Homes Passed (1)........................       13,749      12,503      9,358      7,382      7,138
     Subscribers (2).........................        8,385       7,522      5,642      4,511      4,366
     Penetration (3).........................         61.0%       60.2%      60.3%      61.1%      61.2%
Digital Cable
     "Digital Ready" Subscribers (4).........        8,289       7,173      4,559      1,570
     Subscriptions (5).......................        2,299       1,339        515         78
     Penetration (6).........................         27.7%       18.7%      11.3%       5.0%
High-Speed Internet
     "Modem Ready" Homes Passed (7)..........       10,241       6,360      3,259      1,804        866
     Subscribers.............................          942         400        142         51         10
     "Modem Ready" Penetration (8)...........          9.2%        6.3%       4.4%       2.8%       1.2%
---------------
<FN>
(1)  A home is "passed" if we can connect it to our distribution  system without
     further extending the transmission lines.

(2)  A dwelling with one or more television sets connected to a system counts as
     one cable subscriber.

(3)  Cable  penetration means the number of cable subscribers as a percentage of
     cable homes passed.

(4)  A subscriber is "digital  ready" if the  subscriber is in a market where we
     have launched our digital cable service.

(5)  Each digital converter box counts as one digital cable subscription.

(6)  Digital cable penetration  means the number of digital cable  subscriptions
     as a percentage of "digital  ready"  subscribers.  Certain  subscribers may
     have multiple digital cable subscriptions.

(7)  A home passed is "modem ready" if we can connect it to our Internet service
     connection system without further upgrading the transmission lines.

(8)  "Modem  ready"   penetration  means  the  number  of  high-speed   Internet
     subscribers as a percentage of "modem ready" homes passed.

(9)  In April 1999,  Comcast  acquired  and  contributed  to us its  controlling
     interest  in Jones  Intercable,  Inc.  In January  2000,  Comcast  acquired
     Lenfest  Communications,  Inc. and in August 2000 the  successor to Lenfest
     was  merged  with  and  into  us.  In  August  2000,   we  acquired   Prime
     Communications LLC. In 2000, we began consolidating  Comcast Cablevision of
     Garden  State,  L.P.  as a  result  of  Comcast's  contribution  of its 50%
     interest in Garden State Cable to us in December 2000. On December 31, 2000
     and January 1, 2001, we and Comcast  completed our cable systems  exchanges
     with AT&T Corp. and Adelphia Communications,  respectively.  The subscriber
     information  as of December  31, 2000  excludes the effects of our exchange
     with AT&T.  In April and June 2001, we acquired  cable  systems  serving an
     aggregate of approximately 697,000 subscribers from AT&T.
</FN>
</TABLE>

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

     Competition

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

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

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

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

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

     o    interactive online computer services,

     o    newspapers, magazines and book stores,

     o    movie theaters,

     o    live concerts and sporting events, and

     o    home video products.

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


                                      - 5 -

<PAGE>



     o    new products and services,

     o    superior technical performance,

     o    superior customer service, and

     o    a greater variety of video programming.

     Federal  law allows  local  telephone  companies  to  provide,  directly to
subscribers,  a wide  variety of services  that are  competitive  with our cable
communications  services,  including  video and  Internet  services  within  and
outside their telephone service areas.

     Telephone   companies   and  other   businesses   construct   and   operate
communications  facilities  that provide  access to the Internet and  distribute
interactive  computer-based services, data and other non-video services to homes
and businesses.  We are unable to predict the likelihood of success of competing
video or cable service ventures by telephone companies or other businesses.  Nor
can we predict the impact these competitive  ventures might have on our business
and operations.

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

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

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

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

     Two  major  companies,   DirecTV  and  Echostar,   are  currently  offering
nationwide  high-power DBS services. On October 29, 2001, the Board of Directors
of General Motors agreed to sell its Hughes Electronics  subsidiary,  the parent
of DirecTV,  to Echostar.  Upon closing of the transaction,  which is subject to
shareholder and regulatory approvals, the combined company would serve more than
16  million  subscribers,  which  constitutes  approximately  94%  of  satellite
television subscribers nationwide according to a recent FCC report.

     Federal legislation establishes, among other things, a permanent compulsory
copyright license that permits satellite  carriers to retransmit local broadcast
television  signals to subscribers who reside in the local television  station's
market. These companies are transmitting local broadcast signals in most markets
which we  serve.  As a  result,  satellite  carriers  are  competitive  to cable
communications  system  operators like us because they offer  programming  which
closely resembles what we offer.  These companies and others are also developing
ways to bring  advanced  communications  services to their  customers.  They are
currently  offering  satellite-delivered  high-speed  Internet  services  with a
telephone  return path and are beginning to provide true two-way  interactivity.
We are unable to predict the effects these competitive  developments  might have
on our business and operations.

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

                                      - 6 -

<PAGE>



complexes.  Courts  have  reviewed  challenges  to these  laws and have  reached
varying results.

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

     o    existing Internet service providers, commonly known as ISPs,

     o    local telephone companies, and

     o    long distance telephone companies.

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

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

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

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

                           LEGISLATION AND REGULATION

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

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

     The Communications Act and FCC Regulations

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

     o    subscriber rates,

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

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

     o    our franchise agreements with governmental authorities,

     o    cable system ownership limitations and prohibitions, and

     o    our use of utility poles and conduit.


                                      - 7 -

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     Subscriber Rates

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

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

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

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

     The Communications Act and the FCC's regulations also:

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

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

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

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

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

     Content Requirements

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

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

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

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

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

     o    commercial radio stations, and

     o    certain low-power television stations.

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

     The  Communications Act requires our cable systems to permit subscribers to
purchase  video  programming on a per channel or a per program basis without the
necessity  of  subscribing  to any tier of  service,  other than the basic cable
service tier. However, we are not required to comply with this requirement until
October 2002 for any of our cable systems that do not have addressable

                                      - 8 -

<PAGE>



converter  boxes  or that  have  other  substantial  technological  limitations.
Although  a  limited  number  of our  systems  do  not  have  the  technological
capability to offer programming in the manner required by the statute,  and thus
currently are exempt from complying with this  requirement,  we anticipate  that
all of our systems will be in compliance with this  requirement by the statutory
deadline.

     The Communications Act and the FCC's regulations:

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

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

     The FCC has concluded that the program access rules do not apply to certain
terrestrially-delivered  programming,  such as Comcast SportsNet,  Comcast's 24-
hour regional sports programming network which is available to approximately 2.9
million  subscribers in the Philadelphia  region.  The FCC decision is currently
under  appeal.  The FCC  also is  considering  whether  to  retain  the  current
prohibition,  which is  scheduled  to  expire  in  October  2002,  on  exclusive
programming  distribution  contracts  between  cable  operators  and  affiliated
program distributors.

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

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

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

     o    advertising in children's programming,

     o    political advertising,

     o    origination cablecasting,

     o    sponsorship identification, and

     o    closed captioning of video programming.

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

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

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

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

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

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

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

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

                                      - 9 -

<PAGE>



Broadband  warrant the  imposition  of comparable  restrictions  on us or on the
combined company.

     In  a   decision   adopted  in  March  2002   addressing   the   regulatory
classification of high-speed Internet services,  the FCC concluded that Internet
services delivered over cable operators'  communications  systems are interstate
"information  services," and it confirmed that cable  operators like us, who are
offering  high-speed  Internet  services,  are not  subject  to  common  carrier
requirements  to offer on a  stand-alone  basis to third  parties the  transport
functions underlying the information  services we offer to our subscribers.  The
FCC also  recently  initiated  separate  rulemaking  proceedings  to assess  the
appropriate  regulatory  frameworks,  including  the  role of  local  regulatory
authorities, governing broadband access to the Internet through cable operators'
and telephone companies' communications networks, respectively. In the telephone
broadband  proceeding,  the FCC has  proposed  to  classify  broadband  Internet
services delivered by telephone  companies over their own wireline facilities as
interstate   "information   services."  The  outcome  of  these  FCC  rulemaking
proceedings  may affect  significantly  our  regulatory  obligations,  including
whether we will be  required  to pay local  governmental  franchise  fees and/or
federal and state  universal  service fees on our cable Internet  revenues.  The
March 2002 decision of the FCC has been appealed to the courts.

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

     Franchise Matters

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

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

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

     o    encourages competition with our existing cable systems by:

          o    allowing   municipalities   to  operate  cable  systems   without
               franchises, and

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

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

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

     o    generally prohibits franchising authorities from:

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

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

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

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

     The Communications Act contains  procedures  designed to protect us against
arbitrary  denials of the  renewal  of our  franchises,  although a  franchising
authority under various  conditions can deny us a franchise  renewal.  Moreover,
even if our  franchise  is  renewed,  the  franchising  authority  may  seek our
agreement to new or  additional  requirements  such as  significant  upgrades in
facilities  and services or increased  franchise fees as a condition of renewal.
Similarly,  if a franchising authority's consent is required for the purchase or
sale  of a cable  system  or  franchise,  the  franchising  authority  may  seek
additional  franchise  requirements  on us in connection with a request for such
consent. Historically, cable operators providing satisfactory services to their

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subscribers  and complying  with the terms of their  franchises  have  typically
obtained franchise renewals.  We believe that we have generally met the terms of
our franchise  agreements and have provided  quality levels of service.  We have
never had a  franchise  revoked or  otherwise  been  denied the right to provide
service in a  municipality.  We  anticipate  that our future  franchise  renewal
prospects generally will be favorable.

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

     Ownership Limitations

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

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

     o    subscriber ownership information reporting requirements, and

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

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

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

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

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

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

     o    set  basic  standards  for  relationships  between  telecommunications
          providers, and

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

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


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     Pole Attachment Regulation

     The  Communications  Act requires that utilities  provide cable systems and
telecommunications  carriers with nondiscriminatory  access to any pole, conduit
or right-of-way  controlled by the utility. The Communications Act also requires
the FCC to regulate the rates,  terms and conditions imposed by public utilities
for  cable  systems'  use  of  utility  pole  and  conduit  space  unless  state
authorities demonstrate to the FCC that they adequately regulate pole attachment
rates,  as is the case in certain states in which we operate.  In the absence of
state regulation,  the FCC administers pole attachment rates on a formula basis.
The FCC's original rate formula  governs the maximum rate certain  utilities may
charge for attachments to their poles and conduit by cable  operators  providing
only cable  services.  The FCC also  adopted a second rate  formula  that became
effective in February  2001 and governs the maximum rate certain  utilities  may
charge  for  attachments  to their  poles and  conduit  by  companies  providing
telecommunications  services,  including cable operators. Any resulting increase
in  attachment  rates due to the FCC's new rate formula will be phased in over a
five-year period in equal annual increments, beginning in February 2001.

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

     Other Regulatory Requirements of the Communications Act and the FCC

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

     o    customer service,

     o    subscriber privacy,

     o    marketing practices,

     o    equal employment opportunity, and

     o    technical standards and equipment compatibility.

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

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

Copyright

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

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

     Our cable  communications  systems  often  utilize music in the programs we
provide  to  subscribers   including  local   advertising,   local   origination
programming and pay-per-view  events.  The right to use this music is controlled
by music  performing  rights  organizations  who  negotiate  on  behalf of their
members for license fees covering each  performance.  The cable industry and one
of these  organizations  previously agreed upon a standard  licensing  agreement
covering the performance of music

                                     - 12 -

<PAGE>



contained in programs originated by cable operators and in pay-per-view  events.
Cable industry  representatives  recently negotiated standard license agreements
with the two remaining  sizable music performing rights  organizations  covering
cable operators' locally originated programming,  including advertising inserted
by the operator in programming  produced by other parties.  We expect that these
organizations will now seek to execute these standard agreements with most cable
operators,  including us. Although each of these agreements  requires payment of
music license fees for earlier time  periods,  we do not believe that the amount
of license fees paid to such  organizations will be significant to our financial
condition, results of operations or liquidity.

State and Local Regulation

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

     o    cable service rates,

     o    franchise fees,

     o    franchise term,

     o    system construction and maintenance
          obligations,

     o    system channel capacity,

     o    design and technical performance,

     o    customer service standards,

     o    franchise renewal,

     o    sale or transfer of the franchise,

     o    service territory of the franchisee,

     o    indemnification of the franchising authority,

     o    use and occupancy of public streets, and

     o    types of cable services provided.

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

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

     As of December 31, 2001, we had approximately 20,000 employees.  We believe
that our relationships with our employees are good.


ITEM 2       PROPERTIES

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

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


                                     - 13 -

<PAGE>



ITEM 3       LEGAL PROCEEDINGS

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

ITEM 4       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

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


                                     - 14 -

<PAGE>



                                     PART II

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

Common Stock

Absence of Trading Market
Our common  stock is not publicly  traded.  Therefore,  there is no  established
public trading  market for the common stock,  and none is expected to develop in
the foreseeable future.

Holders
All of our  shares of common  stock,  $1.00 par  value,  are owned  directly  by
Comcast Corporation.

Dividends
None.

ITEM 6        SELECTED FINANCIAL DATA

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



                                     - 15 -

<PAGE>



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

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

     We are a wholly owned subsidiary of Comcast Corporation ("Comcast").

     In August  2000,  two wholly  owned  subsidiaries  of Comcast,  Comcast LCI
Holdings,   Inc.  ("LCI  Holdings")  and  Comcast  JOIN  Holdings,  Inc.  ("JOIN
Holdings") were merged into us (the  "Reorganization").  Jones Intercable,  Inc.
("Jones Intercable"),  the predecessor to JOIN Holdings, owned cable systems and
was  acquired by Comcast in April 1999 and March 2000.  Lenfest  Communications,
Inc. ("Lenfest"),  the predecessor to LCI Holdings,  owned cable systems and was
acquired by Comcast in January  2000.  The  Reorganization  was accounted for at
Comcast's  historical  cost in a  manner  similar  to a  pooling  of  interests.
Accordingly,  our  financial  statements  include  the  accounts  of the  merged
subsidiaries since the dates of their acquisition by Comcast.

     In  December  2000,  Comcast   contributed  its  50%  interest  in  Comcast
Cablevision of Garden State,  L.P. ("Garden State Cable") (formerly Garden State
Cablevision  L.P.) to us. Garden State Cable was a  partnership  which was owned
50% by  Lenfest  and 50% by  Comcast.  As a  result  of the  Reorganization  and
Comcast's  contribution  of its 50%  interest in Garden State Cable (the "Garden
State  Contribution"),  we now own 100% of Garden State Cable.  The Garden State
Cable  Contribution  was accounted for at Comcast's  historical cost in a manner
similar to a pooling of interests. Accordingly, our financial statements include
the  accounts of Garden State Cable from the date of  Comcast's  acquisition  of
Lenfest.

     Refer to Notes 2 and 4 to our financial statements included in Item 8 for a
discussion of our acquisitions and cable systems exchanges.

Most Significant and Subjective Estimates

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

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

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

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

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

     We periodically examine those instruments that we

                                     - 16 -

<PAGE>



have entered into to hedge  exposure to interest  rate and equity price risks to
ensure that the instruments are matched with underlying  assets and liabilities,
reduce our risks  relating to  interest  rates and equity  prices  and,  through
market value and sensitivity  analysis,  maintain a high correlation to the risk
inherent in the hedged item.  For those  instruments  that do not meet the above
criteria, variations in their fair value are marked-to-market on a current basis
in  our  statement  of  operations.   Although  we  periodically  monitor  hedge
effectiveness,  market conditions could cause our hedges to become  ineffective,
thereby  reducing  our  ability  to manage  our risks and  requiring  additional
amounts to be recorded through our statement of operations. We manage the credit
risks  associated  with  our  derivative   financial   instruments  through  the
evaluation  and  monitoring  of  the  creditworthiness  of  the  counterparties.
Although  we may be  exposed  to losses in the  event of  nonperformance  by the
counterparties, we do not expect such losses, if any, to be significant.

     We  periodically  evaluate the  recoverability  of our  long-lived  assets,
including  property and  equipment and  intangible  assets,  whenever  events or
changes  in  circumstances   indicate  that  the  carrying  amount  may  not  be
recoverable.  Our evaluations include analyses based on the cash flows generated
by the underlying assets, profitability information,  including estimated future
operating  results,  trends or other determinants of fair value. If the value of
an asset  determined by these  evaluations is less than its carrying  amount,  a
loss is recognized  for the  difference  between the fair value and the carrying
value  of the  asset.  Future  adverse  changes  in  market  conditions  or poor
operating  results of the related  business may indicate an inability to recover
the carrying  value of the assets,  thereby  possibly  requiring  an  impairment
charge in the future.

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

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

Liquidity and Capital Resources

     Financing

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

     The $1.848  billion  increase  in our  long-term  debt,  including  current
portion, results principally from the effects of our net borrowings.

     As of December 31, 2001 and 2000,  our long-term  debt,  including  current
portion,  was $8.563  billion and $6.714  billion,  respectively.  Excluding the
effects of interest  rate risk  management  instruments,  14.6% and 36.5% of our
long-term debt,  including  current  portion,  as of December 31, 2001 and 2000,
respectively, was at variable rates.

     In December 2000, Comcast contributed to us $196.7 million principal amount
of our 10 1/2% senior subordinated notes due 2006 which were held by Comcast. As
such,  amounts  outstanding  as of  December  31,  2000  have  been  treated  as
effectively retired.

     In addition  to our  outstanding  long term debt,  we had an  aggregate  of
$860.1  million of notes  payable to Comcast and  Comcast's  subsidiaries  as of
December 31, 2000.

     In 2001,  we sold an  aggregate  of $3.0  billion of public  debt.  We used
substantially  all of the net proceeds  from the offerings to repay a portion of
the amounts  outstanding under our commercial  paper,  revolving credit facility
and notes payable to affiliates, and to fund our acquisitions (see Note 6 to our
financial statements included in Item 8).

     Comcast Agreement and Plan of Merger with AT&T Broadband

     On December 19, 2001,  Comcast entered into an Agreement and Plan of Merger
with AT&T Corp. ("AT&T") pursuant to which Comcast agreed to a transaction which
will  result in the  combination  of  Comcast  and a holding  company  of AT&T's
broadband   business  ("AT&T   Broadband")  that  AT&T  will  spin  off  to  its
shareholders immediately prior to the combination. As of December 31, 2001, AT&T
Broadband  served  approximately  13.6 million  subscribers.  The transaction is
subject to customary  closing  conditions and shareholder,  regulatory and other
approvals and is expected to close by the end of 2002.

     Excluding  AT&T  Broadband's  exchangeable  notes,  which  are  mandatorily
redeemable at AT&T Broadband's

                                     - 17 -

<PAGE>



option into shares of certain  publicly traded companies held by AT&T Broadband,
Comcast  currently  estimates that an aggregate of approximately  $20 billion of
assumed and refinanced indebtedness will be required upon completion of the AT&T
Broadband transaction. At the completion of the transaction, Comcast anticipates
that the combined company will assume approximately $7 to $8 billion of debt and
will require financing of $11 billion to $14 billion. The financing, while not a
condition for the closing, is expected to include:

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

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

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

     Comcast is in the process of  attempting  to secure an  aggregate  of $12.5
billion in new indebtedness in order to achieve these funding  requirements.  If
Comcast  obtains  this  financing,  we will  provide  guarantees  to and receive
guarantees from the combined  company,  as well as certain  subsidiaries of AT&T
Broadband.

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

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

     o    amounts available under Comcast's subsidiaries' lines of credit, which
          totaled  $3.460  billion as of  December  31, 2001  (including  $3.198
          billion of amounts available under our lines of credit), and

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

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

     Interest Rate Risk Management

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

     We  use  interest  rate  exchange  agreements  ("Swaps")  to  exchange,  at
specified intervals,  the difference between fixed and variable interest amounts
calculated by reference to an  agreed-upon  notional  principal  amount.  We use
interest rate cap agreements  ("Caps") to lock in a maximum interest rate should
variable rates rise,  but enable us to otherwise pay lower market rates.  We use
interest  rate  collar  agreements  ("Collars")  to limit  our  exposure  to and
benefits  from  interest  rate  fluctuations  on variable  rate debt to within a
certain range of rates.

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


                                     - 18 -

<PAGE>




<TABLE>
<CAPTION>
                                                          Expected Maturity Date
                              -----------------------------------------------------------------------------
                                                                                                                Fair
                                                                                                              Value at
                                2002       2003       2004       2005       2006     Thereafter     Total     12/31/01
                              ---------  ---------  ---------  ---------  ---------  -----------  ---------  ----------
<S>                              <C>          <C>      <C>        <C>        <C>        <C>        <C>         <C>
Debt
Fixed Rate....................   $203.1       $3.1     $321.2     $697.9     $644.9     $5,445.0   $7,315.2    $7,629.1
   Average Interest Rate......      9.6%       9.6%       7.6%       8.4%       7.0%         7.4%       7.6%

Variable Rate.................                                  $1,247.3                           $1,247.3    $1,247.3
   Average Interest Rate......                                       5.2%                               5.2%

Interest Rate Instruments
Fixed to Variable Swaps(1)....                         $300.0                $300.0       $350.0     $950.0       $46.8
   Average Pay Rate...........                            5.5%                  5.9%         6.8%       6.1%
   Average Receive Rate.......                            8.1%                  6.4%         7.9%       7.5%

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

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

     The  notional  amounts of interest  rate  instruments,  as presented in the
table  above are used to  measure  interest  to be paid or  received  and do not
represent  the amount of  exposure  to credit  loss.  The  estimated  fair value
approximates  the  proceeds  (costs) to settle  the  outstanding  contracts.  We
estimate  interest  rates on  variable  debt using the average  implied  forward
London  Interbank  Offer Rate ("LIBOR")  rates for the year of maturity based on
the yield curve in effect at December 31,  2001,  plus the  borrowing  margin in
effect for each credit  facility  at  December  31,  2001.  We estimate  average
receive rates on the Variable to Fixed Swaps using the average  implied  forward
LIBOR  rates  for the year of  maturity  based on the  yield  curve in effect at
December 31, 2001. While Swaps,  Caps and Collars  represent an integral part of
our interest rate risk management program,  their incremental effect on interest
expense  for  the  years  ended  December  31,  2001,  2000  and  1999  was  not
significant.

     Accumulated Other Comprehensive Income

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

     Contractual Cash Obligations and Commitments

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


                                     - 19 -

<PAGE>


<TABLE>
<CAPTION>
                                                                           Payments Due by Period
                                                              -------------------------------------------------
                                                              Less than      1 - 3        4 - 5       After 5
                                                   Total        1 year       years        years        years
                                                 ----------   ----------   ----------   ----------   ----------
                                                                         (in millions)
<S>                                               <C>            <C>          <C>        <C>          <C>
Contractual Cash Obligations
Long-term debt (1)..............................   $8,562.5       $203.1       $324.3     $2,590.1     $5,445.0
Other long-term obligations (2).................       35.8          8.3         17.7          6.7          3.1
                                                 ----------   ----------   ----------   ----------   ----------
     Total contractual cash obligations.........   $8,598.3       $211.4       $342.0     $2,596.8     $5,448.1
                                                 ==========   ==========   ==========   ==========   ==========

Commitments
Operating leases (3)............................     $150.9        $37.2        $45.2        $24.3        $44.2
                                                 ==========   ==========   ==========   ==========   ==========
------------
<FN>
(1)  The table  presents  maturities of long-term  debt  outstanding,  including
     capital lease obligations,  as of December 31, 2001. Refer to Note 6 to our
     financial  statements included in Item 8 for a description of our long-term
     debt.
(2)  Other   long-term   obligations   consist   principally  of  the  Company's
     post-retirement and post-employment benefit obligations.
(3)  Operating  leases include the Company's  minimum annual rental  commitments
     for office space and equipment under noncancellable operating leases.
</FN>
</TABLE>

Results of Operations

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

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

     We adopted Statement of Financial  Accounting  Standards  ("SFAS") No. 142,
"Goodwill and Other  Intangible  Assets," on January 1, 2002, as required by the
new statement.  We refer you to page 23 for a discussion of the expected  impact
the  adoption  of the new  statement  will  have on our  consolidated  financial
condition and results of operations.


                                     - 20 -

<PAGE>




     Our  summarized  consolidated  financial  information  for the years  ended
December  31, 2001 and 2000 is as follows  (dollars in  millions,  "NM"  denotes
percentage is not meaningful):


<TABLE>
<CAPTION>
                                                                  Year Ended
                                                                  December 31,            Increase / (Decrease)
                                                               2001          2000            $             %
                                                             ---------     ---------     ---------      --------
<S>                                                           <C>           <C>             <C>             <C>
Video.....................................................    $4,227.3      $3,606.0        $621.3          17.2%
High-speed Internet.......................................       293.1         114.4         178.7         156.2
Advertising sales.........................................       323.1         288.6          34.5          12.0
Other.....................................................       159.3         132.9          26.4          19.9
                                                             ---------     ---------     ---------      --------
   Service Revenues.......................................     5,002.8       4,141.9         860.9          20.8
Operating, selling, general and administrative expenses...     2,976.2       2,517.9         458.3          18.2
Depreciation..............................................       955.8         732.8         223.0          30.4
Amortization..............................................     2,031.6       1,649.9         381.7          23.1
                                                             ---------     ---------     ---------      --------
Operating loss............................................      (960.8)       (758.7)        202.1          26.6
                                                             ---------     ---------     ---------      --------
Interest expense..........................................      (546.1)       (515.7)         30.4           5.9
Interest expense on affiliate notes, net..................       (10.6)         (9.1)          1.5          16.5
Investment expense........................................       (69.6)         (1.5)         68.1            NM
Equity in net losses of affiliates........................        (7.5)         (9.3)         (1.8)        (19.4)
Other income..............................................     1,197.1       1,707.3        (510.2)        (29.9)
Income tax (expense) benefit..............................        36.6        (299.9)       (336.5)           NM
                                                             ---------     ---------     ---------      --------
Income (loss) before extraordinary items and
   cumulative effect of accounting change.................     ($360.9)       $113.1       ($474.0)           NM
                                                             =========     =========     =========      =========
Operating income before depreciation and
   amortization (1).......................................    $2,026.6      $1,624.0        $402.6          24.8%
                                                             =========     =========     =========      =========
------------
<FN>
(1)  Operating income before  depreciation and amortization is commonly referred
     to in the cable communications business 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
     cable  communications  business  and the  resulting  significant  level  of
     non-cash  depreciation  and  amortization  expense,  operating cash flow is
     frequently  used as one of the bases for comparing  businesses in the cable
     communications  industry,  although our measure of operating  cash flow may
     not  be  comparable  to  similarly  titled  measures  of  other  companies.
     Operating  cash flow is the primary basis used by our management to measure
     the operating  performance  of our business.  Operating  cash flow does not
     purport  to  represent  net  income  or  net  cash  provided  by  operating
     activities,   as  those  terms  are  defined  under  accounting  principles
     generally accepted in the United States, and should not be considered as an
     alternative to such measurements as an indicator of our performance.
</FN>
</TABLE>

     Service Revenues

     Video revenue consists of our basic, expanded basic, premium, pay-per-view,
equipment and digital  subscriptions.  Of the $621.3  million  increase in video
revenues from 2000 to 2001, $339.2 million is attributable to the effects of our
acquisitions  and  exchanges  of cable  systems  and $282.1  million  relates to
changes in rates and  subscriber  growth in our  historical  operations,  driven
principally by growth in digital  subscriptions,  and to a lesser extent, to the
effects of a higher-priced  digital service  offering made in the second half of
2000.  During  2001,  through  acquisitions  and  normal  operations,  we  added
approximately 960,000 digital subscriptions.

     The increase in high-speed  Internet revenue from 2000 to 2001 is primarily
due to the addition of high- speed Internet  subscribers.  During 2001,  through
acquisitions and normal operations,  we added  approximately  542,000 high-speed
Internet subscribers (see below).

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

     Other revenue includes installation revenues,  guide revenues,  commissions
from electronic retailing,

                                     - 21 -

<PAGE>



telephony revenues, and revenue from other product offerings.  The increase from
2000 to 2001 is primarily attributable to the effects of our acquisitions.

     Operating, Selling, General and Administrative Expenses

     Refer  to  Note 8 to our  financial  statements  included  in  Item 8 for a
discussion of our related party transactions.

     On September 28, 2001,  At Home  Corporation  ("At Home"),  our provider of
high-speed Internet services,  filed for protection under Chapter 11 of the U.S.
Bankruptcy  Code.  In October  2001,  we amended our  agreement  with At Home to
continue service to our existing and new subscribers during October and November
2001.  We agreed  to be  charged a higher  rate than we had  incurred  under our
previous  agreement.  On December 3, 2001,  we reached a  definitive  agreement,
approved by the Bankruptcy  Court, with At Home pursuant to which At Home agreed
to continue to provide  high-speed  Internet  services to our  existing  and new
subscribers  through  February 28, 2002. In December  2001, we began to transfer
our  high-speed  Internet  subscribers  from  the At  Home  network  to our  new
Comcast-owned  and managed  network.  We completed  this  transition in February
2002.  Operating  expenses in our  consolidated  statement of operations for the
year ended December 31, 2001 include $139.5 million of net incremental  expenses
incurred  in the fourth  quarter of 2001 in the  continuation  of service to and
transition of our high-speed Internet  subscribers from At Home's network to our
network.

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

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

     Such increases were  substantially  offset by the effects of the assignment
by Comcast to us in August 2000 of its  intercompany  management and programming
agreements with our subsidiaries.

     Interest Expense

     The  $30.4  million  increase  from  2000 to 2001 is  primarily  due to the
increase in our net borrowings.  We anticipate that, for the foreseeable future,
interest  expense will be a significant  cost to us. We believe we will continue
to be able  to  meet  our  obligations  through  our  ability  both to  generate
operating  income before  depreciation  and  amortization and to obtain external
financing.

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


<TABLE>
<CAPTION>
                                                                          Year Ended December 31,
                                                                             2001          2000
                                                                         ------------  ------------
<S>                                                                             <C>           <C>
Interest and dividend income...........................................         $18.4         $12.0
Gains on sales and exchanges of investments, net.......................          29.3          29.3
Investment impairment losses...........................................         (89.5)        (42.8)
Mark to market adjustments on derivatives..............................         (27.8)
                                                                         ------------  ------------

     Investment expense................................................        ($69.6)        ($1.5)
                                                                         ============  ============
</TABLE>

     Other Income

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

     On December 31, 2000, we completed our cable

                                     - 22 -

<PAGE>



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

     Income Tax (Expense) Benefit

     The change in income tax  (expense)  benefit is primarily the result of the
effects  of our income  (loss)  before  income  taxes,  extraordinary  items and
cumulative   effect  of   accounting   change,   and   non-deductible   goodwill
amortization.

     Cumulative Effect of Accounting Change

     Upon adoption of SFAS No. 133, we recognized as a loss a cumulative  effect
of accounting  change,  net of related income taxes, of $61.3 million during the
year ended December 31, 2001.  The loss  consisted of $94.3 million  principally
related to the  reclassification of losses previously  recognized as a component
of accumulated other  comprehensive  loss on our equity derivative  instruments,
net of related deferred income taxes of $33.0 million.

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

     Anticipated Transaction

     Comcast   intends  to  merge  its   subsidiary,   Comcast   Cablevision  of
Philadelphia  Area  I,  Inc.  ("Greater  Philadelphia")  with  and  into us (the
"Greater Philadelphia  Merger").  The Greater Philadelphia Merger is expected to
close  during  2002,  subject  to  receipt  of  regulatory  approvals.   Greater
Philadelphia  was  acquired  by Comcast on June 30, 1999 for  approximately  8.5
million  shares of Comcast  Class A Special  Common Stock with a value of $291.7
million.  Upon closing, the Greater Philadelphia Merger will be accounted for at
Comcast's historical cost, in a manner similar to a pooling of interests and our
financial  statements will include the results of Greater Philadelphia since the
June 1999 date of Comcast's acquisition.

     Expected Impact of Adoption of SFAS No. 142

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

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

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

     Based on our preliminary  evaluation,  the estimated  effect of adoption of
SFAS No. 142 would have been to decrease  amortization  expense by approximately
$1.9 billion and to increase  deferred income tax expense by approximately  $600
million for the year ended December 31, 2001.

     Expected Impact of Adoption of EITF 01-14

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

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


                                     - 23 -

<PAGE>



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



                                     - 24 -

<PAGE>



ITEM 8        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholder
Comcast Cable Communications, Inc.
Philadelphia, Pennsylvania

We have audited the  accompanying  consolidated  balance  sheet of Comcast Cable
Communications,  Inc. (a wholly owned  subsidiary  of Comcast  Corporation)  and
subsidiaries  (the  "Company") as of December 31, 2001 and 2000, and the related
consolidated  statements of operations,  stockholder's equity and cash flows for
each of the three years in the period ended December 31, 2001.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.  We did not audit the  consolidated  financial  statements  of Jones
Intercable,  Inc.  ("Jones")  (a  consolidated  subsidiary)  for the year  ended
December 31, 1999, which statements  reflect total revenues  constituting 14% of
consolidated  revenues  for that year.  Those  statements  were audited by other
auditors whose report has been  furnished to us, and our opinion,  insofar as it
relates to the amounts included for Jones, is based solely on the report of such
other auditors.

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

In our opinion,  based on our audits and the report of the other auditors,  such
consolidated  financial statements present fairly, in all material respects, the
financial position of Comcast Cable Communications,  Inc. and subsidiaries as of
December 31, 2001 and 2000,  and the results of their  operations and their cash
flows for each of the three years in the period  ended  December  31,  2001,  in
conformity with accounting principles generally accepted in the United States of
America.

As  discussed in Notes 2 and 3 to the  consolidated  financial  statements,  the
Company adopted Statement of Financial Accounting Standards No. 133, "Accounting
for  Derivative  Instruments  and Hedging  Activities,"  as  amended,  effective
January 1, 2001.


Deloitte & Touche LLP

Philadelphia, Pennsylvania
February 5, 2002


                                     - 25 -

<PAGE>

COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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

<TABLE>
<CAPTION>
                                                                                            December 31,
                                                                                        2001             2000
                                                                                      ---------        --------
ASSETS
<S>                                                                                       <C>             <C>
CURRENT ASSETS
   Cash and cash equivalents....................................................          $45.1           $44.2
   Investments..................................................................          100.6            52.6
   Cash held by an affiliate....................................................                           74.2
   Accounts receivable, less allowance for doubtful accounts of $58.2 and $39.9.          267.3           241.7
   Due from affiliates..........................................................          173.1             0.6
   Other current assets.........................................................           75.1            48.0
                                                                                      ---------        --------
       Total current assets.....................................................          661.2           461.3
                                                                                      ---------        --------
INVESTMENTS.....................................................................          178.4           590.9
                                                                                      ---------        --------
NOTES RECEIVABLE FROM AFFILIATES................................................          580.6            99.3
                                                                                      ---------        --------
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $2,326.9 and $1,610.1        6,049.0         4,733.6
                                                                                      ---------        --------
INTANGIBLE ASSETS
   Goodwill.....................................................................        5,329.4         5,248.6
   Cable franchise operating rights.............................................       19,892.2        17,283.5
   Other intangible assets......................................................          682.8           544.3
                                                                                      ---------        --------
                                                                                       25,904.4        23,076.4
   Accumulated amortization.....................................................       (5,028.6)       (3,223.2)
                                                                                      ---------        --------
                                                                                       20,875.8        19,853.2
                                                                                      ---------        --------
OTHER NONCURRENT ASSETS, net....................................................          105.0            65.7
                                                                                      ---------        --------
                                                                                      $28,450.0       $25,804.0
                                                                                      =========       =========
LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES
   Accounts payable.............................................................         $336.1          $412.0
   Accrued expenses and other current liabilities...............................          531.5           386.8
   Accrued interest.............................................................          104.8            74.1
   Current portion of long-term debt............................................          203.1             3.3
                                                                                      ---------        --------
       Total current liabilities................................................        1,175.5           876.2
                                                                                      ---------        --------
LONG-TERM DEBT, less current portion............................................        8,359.4         6,711.0
                                                                                      ---------        --------
NOTES PAYABLE TO AFFILIATES.....................................................                          860.1
                                                                                      ---------        --------
DEFERRED INCOME TAXES, due to affiliate, net....................................        5,400.4         5,016.4
                                                                                      ---------        --------
OTHER NONCURRENT LIABILITIES....................................................          534.5           283.1
                                                                                      ---------        --------
COMMITMENTS AND CONTINGENCIES (NOTE 11)
STOCKHOLDER'S EQUITY
   Common stock, $1 par value - authorized 1,000 shares; issued, 138.89 shares
   Additional capital...........................................................       16,411.4        15,272.8
   Accumulated deficit..........................................................       (3,466.3)       (3,044.1)
   Accumulated other comprehensive income (loss)................................           35.1          (171.5)
                                                                                      ---------        --------
       Total stockholder's equity...............................................       12,980.2        12,057.2
                                                                                      ---------        --------
                                                                                      $28,450.0       $25,804.0
                                                                                      =========       =========
</TABLE>


See notes to consolidated financial statements.


                                     - 26 -

<PAGE>



COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in millions)


<TABLE>
<CAPTION>
                                                                                Year Ended December 31,
                                                                          2001           2000            1999
                                                                        ---------      ---------       --------
<S>                                                                      <C>            <C>            <C>
SERVICE REVENUES..................................................       $5,002.8       $4,141.9       $2,906.5
                                                                        ---------      ---------       --------

COSTS AND EXPENSES
   Operating (excluding depreciation).............................        1,966.0        1,636.8        1,242.4
   Selling, general and administrative............................        1,010.2          881.1          685.3
   Depreciation...................................................          955.8          732.8          490.7
   Amortization...................................................        2,031.6        1,649.9          527.0
                                                                        ---------      ---------       --------
                                                                          5,963.6        4,900.6        2,945.4
                                                                        ---------      ---------       --------

OPERATING LOSS....................................................         (960.8)        (758.7)         (38.9)

OTHER INCOME (EXPENSE)
   Interest expense...............................................         (546.1)        (515.7)        (352.9)
   Interest expense on affiliate notes, net.......................          (10.6)          (9.1)         (10.0)
   Investment income (expense)....................................          (69.6)          (1.5)           6.8
   Equity in net losses of affiliates.............................           (7.5)          (9.3)          (2.4)
   Other income (expense).........................................        1,197.1        1,707.3           (4.2)
                                                                        ---------      ---------       --------
                                                                            563.3        1,171.7         (362.7)
                                                                        ---------      ---------       --------

INCOME (LOSS) BEFORE INCOME TAXES, MINORITY INTEREST,
   EXTRAORDINARY ITEMS AND CUMULATIVE EFFECT OF
   ACCOUNTING CHANGE..............................................         (397.5)         413.0         (401.6)

INCOME TAX (EXPENSE) BENEFIT......................................           36.6         (299.9)          46.2
                                                                        ---------      ---------       --------

INCOME (LOSS) BEFORE MINORITY INTEREST, EXTRAORDINARY
   ITEMS AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE...............         (360.9)         113.1         (355.4)

MINORITY INTEREST.................................................                                        107.9
                                                                        ---------      ---------       --------

INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AND CUMULATIVE
   EFFECT OF ACCOUNTING CHANGE....................................         (360.9)         113.1         (247.5)

EXTRAORDINARY ITEMS...............................................                          (7.1)          (6.2)

CUMULATIVE EFFECT OF ACCOUNTING CHANGE............................          (61.3)
                                                                        ---------      ---------       --------

NET INCOME (LOSS).................................................        ($422.2)        $106.0        ($253.7)
                                                                        =========      =========       ========
</TABLE>



See notes to consolidated financial statements.

                                     - 27 -

<PAGE>



COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)


<TABLE>
<CAPTION>
                                                                                Year Ended December 31,
                                                                          2001           2000            1999
                                                                        ---------      ---------       --------
<S>                                                                       <C>             <C>           <C>
OPERATING ACTIVITIES
   Net income (loss)..............................................        ($422.2)        $106.0        ($253.7)
   Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
     Depreciation.................................................          955.8          732.8          490.7
     Amortization.................................................        2,031.6        1,649.9          527.0
     Non-cash interest expense....................................            5.0            3.2            0.9
     Non-cash interest expense on notes payable to affiliates.....                                          5.0
     Deferred expenses charged by an affiliate....................                          95.9          139.4
     Equity in net losses of affiliates...........................            7.5            9.3            2.4
     Gains on sales of investments and other income, net..........       (1,110.6)      (1,697.1)          (0.9)
     Minority interest............................................                                       (107.9)
     Extraordinary items..........................................                           7.1            6.2
     Cumulative effect of accounting change.......................           61.3
     Deferred income tax expense (benefit), due to affiliate......          (43.7)         288.4          (71.2)
     Other........................................................          (35.8)          (0.1)          (4.4)
                                                                        ---------      ---------       --------
                                                                          1,448.9        1,195.4          733.5
     Changes in working capital, net of effects of
      acquisitions and divestitures
       Increase in accounts receivable, net.......................          (27.1)         (87.3)          (2.4)
       (Increase) decrease in other current assets................          (18.4)          (2.1)          13.9
       Increase in accounts payable,
         accrued expenses and other current liabilities...........           37.7          184.1           36.9
                                                                        ---------      ---------       --------
                                                                             (7.8)          94.7           48.4
                                                                        ---------      ---------       --------
       Net cash provided by operating activities..................        1,441.1        1,290.1          781.9
                                                                        ---------      ---------       --------

FINANCING ACTIVITIES
   Proceeds from borrowings.......................................        5,514.5        4,252.6          176.6
   Repayments of long-term debt...................................       (3,725.1)      (4,628.5)        (201.6)
   Proceeds from notes payable to affiliates......................          912.3          986.2           40.3
   Repayment of notes payable to affiliates.......................       (1,278.8)        (126.1)         (40.3)
   Increase in notes receivable from affiliates...................         (241.3)         (63.8)
   Capital contributions from parent..............................                         418.7          960.1
   Net transactions with affiliates...............................         (151.3)          53.2           (6.4)
   Deferred financing costs and other.............................          (21.2)         (34.6)           8.1
                                                                        ---------      ---------       --------
       Net cash provided by financing activities..................        1,009.1          857.7          936.8
                                                                        ---------      ---------       --------

INVESTING ACTIVITIES
   Acquisitions, net of cash acquired.............................         (594.6)        (164.7)         (41.8)
   (Purchases of) proceeds from sales of short-term investments...            0.1           (0.1)          (0.1)
   Investments in affiliates......................................         (126.4)        (576.3)        (750.0)
   Proceeds from sales of investments.............................          156.6           76.4            5.9
   Capital expenditures...........................................       (1,843.1)      (1,248.0)        (731.8)
   (Increase) decrease in cash held by an affiliate...............           74.2          (40.2)          23.1
   Additions to intangible assets and other.......................         (116.1)        (211.7)        (197.5)
                                                                        ---------      ---------       --------
       Net cash used in investing activities......................       (2,449.3)      (2,164.6)      (1,692.2)
                                                                        ---------      ---------       --------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS..................            0.9          (16.8)          26.5

CASH AND CASH EQUIVALENTS, beginning of year......................           44.2           61.0           34.5
                                                                        ---------      ---------       --------

CASH AND CASH EQUIVALENTS, end of year............................          $45.1          $44.2          $61.0
                                                                        =========      =========       ========
</TABLE>


See notes to consolidated financial statements.



                                     - 28 -

<PAGE>



COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
(Dollars in millions)




<TABLE>
<CAPTION>
                                                                                        Accumulated
                                                                                           Other
                                                  Common     Additional   Accumulated  Comprehensive
                                                  Stock       Capital       Deficit    Income (Loss)   Total
                                                ----------   ----------   -----------  ------------- ---------
<S>                                            <C>                         <C>                 <C>     <C>
BALANCE, JANUARY 1, 1999....................... $              $3,066.2     ($2,896.4)          $3.2    $173.0
   Comprehensive loss:
   Net loss....................................                                (253.7)
   Unrealized gains on marketable securities,
     net of deferred taxes of $13.4............                                                 24.9
   Reclassification adjustments for gains
     included in net loss, net of deferred
     income taxes of $0.2......................                                                 (0.6)
   Total comprehensive loss....................                                                         (229.4)
   Capital contributions from parent...........                 1,865.2                                1,865.2
                                                ----------   ----------   -----------  ------------- ---------

BALANCE, DECEMBER 31, 1999.....................                 4,931.4      (3,150.1)          27.5   1,808.8
   Comprehensive loss:
   Net income..................................                                 106.0
   Unrealized losses on marketable securities,
     net of deferred taxes of $123.4...........                                               (229.3)
   Reclassification adjustments for losses
     included in net income, net of deferred
     income taxes of $16.3.....................                                                 30.3
   Total comprehensive loss....................                                                          (93.0)
   Capital contributions from parent...........                10,341.4                               10,341.4
                                                ----------   ----------   -----------  ------------- ---------

BALANCE, DECEMBER 31, 2000.....................                15,272.8      (3,044.1)        (171.5) 12,057.2
   Comprehensive loss:
   Net loss....................................                                (422.2)
   Unrealized gains on marketable securities,
     net of deferred taxes of $57.1............                                                106.2
   Reclassification adjustments for losses
     included in net loss, net of deferred
     income taxes of $54.1.....................                                                100.4
   Total comprehensive loss....................                                                         (215.6)
   Capital contributions from parent...........                 1,138.6                                1,138.6
                                                ----------   ----------   -----------  ------------- ---------

BALANCE, DECEMBER 31, 2001..................... $             $16,411.4     ($3,466.3)         $35.1 $12,980.2
                                                ==========   ==========   ===========  ============= =========
</TABLE>



See notes to consolidated financial statements.

                                     - 29 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


1.   BUSINESS

     Comcast   Cable   Communications,   Inc.,  a  Delaware   corporation,   and
     subsidiaries  (the  "Company")  is a wholly  owned  subsidiary  of  Comcast
     Corporation  ("Comcast").  The Company and its  subsidiaries are engaged in
     the  development,  management  and  operation of  broadband  communications
     networks in the United States. The Company's  consolidated cable operations
     served  approximately 8.4 million subscribers and passed approximately 13.7
     million homes as of December 31, 2001.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER ITEMS

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

     Reorganization
     In August  2000,  two wholly  owned  subsidiaries  of Comcast,  Comcast LCI
     Holdings,  Inc. ("LCI  Holdings") and Comcast JOIN  Holdings,  Inc.  ("JOIN
     Holdings")  were merged into the Company  (the  "Reorganization").  Lenfest
     Communications,  Inc. ("Lenfest"),  the predecessor to LCI Holdings,  owned
     cable  systems  and  was  acquired  by  Comcast  in  January  2000.   Jones
     Intercable,  Inc. ("Jones  Intercable"),  the predecessor to JOIN Holdings,
     owned  cable  systems  and was  acquired by Comcast in April 1999 and March
     2000. The Reorganization was accounted for at Comcast's  historical cost in
     a manner similar to a pooling of interests.  Accordingly,  the accompanying
     consolidated  financial  statements  include  the  accounts  of the  merged
     subsidiaries  since the dates of their acquisition by Comcast (see Note 4).
     The Reorganization had no significant impact on the Company's  consolidated
     statement of cash flows during the year ended  December 31, 2000 due to its
     noncash nature (see Note 10).

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

     Fair Values
     The Company has determined  the estimated  fair value amounts  presented in
     these consolidated  financial statements using available market information
     and appropriate methodologies.  However,  considerable judgment is required
     in  interpreting  market data to develop the  estimates of fair value.  The
     estimates  presented in these  consolidated  financial  statements  are not
     necessarily  indicative  of the amounts that the Company could realize in a
     current market  exchange.  The use of different market  assumptions  and/or
     estimation  methodologies  may have a material effect on the estimated fair
     value  amounts.  The Company based these fair value  estimates on pertinent
     information  available to management as of December 31, 2001 and 2000.  The
     Company has not  comprehensively  updated  these fair value  estimates  for
     purposes of these consolidated financial statements since such dates.

     A  reasonable   estimate  of  fair  value  of  the  notes  receivable  from
     affiliates,  the notes  payable to  affiliates  and the amounts due from/to
     affiliates in the Company's  consolidated  balance sheet is not practicable
     to obtain  because of the related  party nature of these items and the lack
     of quoted market prices.

     Cash Equivalents and Cash Held by an Affiliate
     Cash  equivalents  consist  principally  of  certificates  of deposit  with
     maturities of three months or less when purchased.  The carrying amounts of
     the Company's cash equivalents approximate their fair values.


                                     - 30 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


     Cash held by an affiliate as of December 31, 2000 consisted of cash held by
     a subsidiary of Comcast under a cash management program (see Note 8).

     Investments
     Investments consist principally of equity securities.

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

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

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

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

              Buildings and improvements .................   5-40 years
              Operating facilities........................   2-12 years
              Other equipment.............................   4-12 years

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

     In connection  with the rebuild and upgrade of cable  systems,  the Company
     depreciates  the  remaining net book value of the assets over the estimated
     rebuild or upgrade period.

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

     Intangible Assets
     Goodwill is the excess of the  acquisition  cost of an acquired entity over
     the  fair  value of the  identifiable  net  assets  acquired.  The  Company
     amortizes goodwill principally over estimated useful lives of 20 years.

     Cable  franchise   operating  rights  represent  the  value  attributed  to
     agreements  with  local  authorities  that  allow  access to homes in cable
     service  areas  acquired in  connection  with a business  combination.  The
     Company  capitalizes these  contractual  rights and amortizes them over the
     term of the related franchise agreements.  Costs incurred by the Company in
     negotiating  and  renewing  franchise  agreements  are  included  in  other
     intangible assets and are amortized on a straight-line  basis over the term
     of the franchise renewal period, generally 10 to 15 years.


                                     - 31 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


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

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

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

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

     See Note 3 for a discussion of the expected  impact of adoption of Emerging
     Issues Task Force ("EITF") 01-14,  "Income  Statement  Characterization  of
     Reimbursements  Received  for  'Out-of-Pocket'  Expenses  Incurred"  ("EITF
     01-14").

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

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

     Income Taxes
     The Company  recognizes  deferred tax assets and  liabilities for temporary
     differences  between the financial reporting basis and the tax basis of the
     Company's  assets and  liabilities  and expected  benefits of utilizing net
     operating  loss  carryforwards.  The impact on deferred taxes of changes in
     tax rates and laws,  if any,  applied to the years during  which  temporary
     differences are expected to be settled,  are reflected in the  consolidated
     financial statements in the period of enactment (see Note 9).

     Derivative Financial Instruments
     The Company uses derivative financial instruments for a number of purposes.
     The Company  manages  its  exposure to  fluctuations  in interest  rates by
     entering into interest rate exchange  agreements  ("Swaps"),  interest rate
     cap agreements  ("Caps") and interest rate collar  agreements  ("Collars").
     The Company makes  investments in businesses,  to some degree,  through the
     purchase of equity call option or warrant agreements ("Equity Warrants").


                                     - 32 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


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

     On  January  1,  2001,  the  Company  adopted  SFAS No.  133.  SFAS No. 133
     establishes accounting and reporting standards for derivative  instruments,
     including certain  derivative  instruments  embedded in other contracts and
     hedging activities.  SFAS No. 133 requires that all derivative instruments,
     whether  designated  in hedging  relationships  or not,  be recorded on the
     balance sheet at their fair values.

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

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

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

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

     The Company does not hold or issue any derivative financial instruments for
     trading purposes and is not a party to leveraged  instruments (see Note 6).
     The  Company  manages  the  credit  risks  associated  with its  derivative
     financial   instruments  through  the  evaluation  and  monitoring  of  the
     creditworthiness of the counterparties. Although the Company may be exposed
     to losses in the event of nonperformance by the counterparties, the Company
     does not expect such losses, if any, to be significant.

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

     Reclassifications
     Certain  reclassifications  have been made to the prior years' consolidated
     financial statements to conform to those classifications used in 2001.


                                     - 33 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


3.   RECENT ACCOUNTING PRONOUNCEMENTS

     SFAS No. 133, as Amended
     On  January  1,  2001,  the  Company  adopted  SFAS No.  133.  SFAS No. 133
     establishes  accounting and reporting standards for derivatives and hedging
     activities.  SFAS No.  133  requires  that all  derivative  instruments  be
     reported on the balance sheet at their fair values.

     Upon  adoption  of  SFAS  No.  133,  the  Company  recognized  as a  loss a
     cumulative  effect of accounting  change,  net of related income taxes,  of
     $61.3 million and a cumulative decrease in other comprehensive  income, net
     of related income taxes, of $54.2 million.

     The  loss   consisted  of  $94.3   million   principally   related  to  the
     reclassification  of  losses  previously   recognized  as  a  component  of
     accumulated  other  comprehensive  loss on the Company's equity  derivative
     instruments, net of related deferred income taxes of $33.0 million.

     The  decrease in other  comprehensive  loss  consisted  principally  of the
     reclassification of the losses noted above.

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

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

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

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

     Based on the Company's  preliminary  evaluation,  the  estimated  effect of
     adoption of SFAS No. 142 would have been to decrease  amortization  expense
     by approximately  $1.9 billion and to increase  deferred income tax expense
     by approximately $600 million for the year ended December 31, 2001.

     SFAS No. 143
     The  FASB   issued  SFAS  No.  143,   "Accounting   for  Asset   Retirement
     Obligations," in June 2001. SFAS No. 143 addresses financial accounting and
     reporting  for  obligations  associated  with the  retirement  of  tangible
     long-lived  assets and the associated asset retirement  costs. SFAS No. 143
     is effective  for fiscal  years  beginning  after June 15, 2002.  While the
     Company is  currently  evaluating  the impact the  adoption of SFAS No. 143
     will have on its financial condition and results of operations, it does not
     expect such impact to be material.

                                     - 34 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


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

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

     Under the terms of its franchise agreements, the Company is required to pay
     up to 5% of its gross revenues derived from providing cable services to the
     local franchising authority. The Company normally passes these fees through
     to its cable subscribers.  The Company currently classifies cable franchise
     fees  collected  from its cable  subscribers  as a reduction of the related
     franchise fee expense included within selling,  general and  administrative
     expenses in its consolidated statement of operations.

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


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

<S>                                                                              <C>          <C>        <C>
     Service revenues.......................................................     $189.4       $149.9     $103.4
     Selling, general and administrative expense............................     $189.4       $149.9     $103.4
</TABLE>

4.   ACQUISITIONS AND OTHER SIGNIFICANT EVENTS

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

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


                                     - 35 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


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

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

     Adelphia Cable Systems Exchange
     On January 1, 2001, the Company and Comcast  completed  their cable systems
     exchange with Adelphia Communications Corporation ("Adelphia"). The Company
     received  cable systems  serving  approximately  445,000  subscribers  from
     Adelphia and  Adelphia  received  certain of the  Company's  cable  systems
     serving  approximately  441,000 subscribers.  The Company recorded to other
     income a  pre-tax  gain of  $1.199  billion,  representing  the  difference
     between the estimated  fair value of $1.799  billion as of the closing date
     of the transaction and the Company's cost basis in the systems exchanged.

     AT&T Cable Systems Exchange
     On December 31, 2000, the Company and Comcast completed their cable systems
     exchange  with AT&T.  The Company  received  cable  communications  systems
     serving  approximately  770,000  subscribers  from  AT&T and AT&T  received
     certain  of the  Company's  cable  systems  serving  approximately  700,000
     subscribers.  The Company recorded to other income a pre-tax gain of $1.711
     billion,  representing  the difference  between the estimated fair value of
     $2.840 billion as of the closing date of the  transaction and the Company's
     cost basis in the systems exchanged.

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

     Acquisition of Jones Intercable, Inc.
     In April 1999, Comcast acquired a controlling interest in Jones Intercable,
     a  cable   communications   company  serving   approximately   1.1  million
     subscribers for aggregate  consideration of $706.3 million in cash. Also on
     that  date,  Comcast  contributed  its  shares in Jones  Intercable  to the
     Company.  In June 1999,  Comcast purchased an additional 1.0 million shares
     of Jones  Intercable  Class A Common  Stock for $50.0  million in cash in a
     private transaction and contributed such shares to the Company.


                                     - 36 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


     In  March  2000,  the  Jones  Intercable  shareholders  approved  a  merger
     agreement  pursuant to which the Jones Intercable  shareholders,  including
     the Company,  received 1.4 shares of Comcast's Class A Special Common Stock
     in exchange  for each share of Jones  Intercable  Class A Common  Stock and
     Common Stock (the "Jones Merger"), and Jones Intercable was merged with and
     into  JOIN  Holdings,   with  JOIN  Holdings  as  the  successor  to  Jones
     Intercable.  In  connection  with the  closing of the  merger,  the Company
     exchanged its 39.6%  interest in Jones  Intercable for  approximately  23.3
     million shares of Comcast Class A Special Common Stock.

     In May 2000,  the Company sold its interest in its wholly owned  subsidiary
     which  held the  Comcast  Class A Special  Common  Stock to a wholly  owned
     subsidiary  of Comcast  in  consideration  for  amounts  due to  affiliates
     totaling $758.1 million related to management fees and programming  charges
     (see  Note  8).  The  Company  did  not  record  any  gain  or  loss on the
     transaction  as it was  between  subsidiaries  under the common  control of
     Comcast.  In August  2000,  JOIN  Holdings was merged into the Company (see
     Note 2).

     Acquisition of CalPERS' Interest in Jointly Owned Cable Properties
     In February 2000,  the Company  acquired the  California  Public  Employees
     Retirement  System's  ("CalPERS")  45% interest in Comcast  MHCP  Holdings,
     L.L.C.  ("Comcast MHCP"),  formerly a 55% owned consolidated  subsidiary of
     the Company which serves  subscribers in Michigan,  New Jersey and Florida.
     As a result,  the Company owns 100% of Comcast MHCP. The  consideration was
     $750.0  million in cash and was  funded  with the  proceeds  from a capital
     contribution that the Company received from Comcast (see Note 8).

     Acquisition of Lenfest Communications, Inc.
     In January 2000, Comcast acquired Lenfest, a cable  communications  company
     serving approximately 1.1 million subscribers primarily in the Philadelphia
     area from AT&T and the other Lenfest  stockholders for approximately  120.1
     million shares of Comcast's  Class A Special Common Stock,  with a value of
     $6.014 billion (the "Lenfest Acquisition").  In connection with the Lenfest
     Acquisition,   Comcast  assumed   approximately  $1.326  billion  of  debt.
     Immediately  upon  closing of the Lenfest  Acquisition,  Lenfest was merged
     with and into LCI Holdings  with LCI Holdings as the  successor to Lenfest.
     In August 2000, LCI Holdings was merged into the Company (see Note 2).

     Consolidation of Comcast Cablevision of Garden State, L.P.
     Comcast  Cablevision of Garden State, L.P. ("Garden State Cable") (formerly
     Garden State  Cablevision  L.P.), a cable  communications  company  serving
     approximately 216,000 subscribers in New Jersey, is a partnership which was
     owned  50% by  Lenfest  and  50% by  Comcast.  In  December  2000,  Comcast
     contributed  its 50% interest in Garden  State Cable to the  Company.  As a
     result of the Lenfest  Acquisition  and Comcast's  contribution  of its 50%
     interest  in Garden  State  Cable,  the Company  owns 100% of Garden  State
     Cable. The contribution of Comcast's 50% interest in Garden State Cable was
     accounted for at Comcast's historical cost in a manner similar to a pooling
     of  interests.   Accordingly,   the  accompanying   consolidated  financial
     statements include the accounts of Garden State Cable since the date of the
     Lenfest Acquisition.

     The  acquisitions  completed  by the Company  during the three years in the
     period ended December 31, 2001 were accounted for under the purchase method
     of accounting. As such, the Company's results include the operating results
     of the acquired businesses from the dates of acquisition. During the fourth
     quarter of 2001, the Company  recorded the final purchase price  allocation
     related to the Company's  cable systems  exchange with AT&T. The allocation
     of the purchase price for the other 2001 acquisitions and the cable systems
     exchange  with  Adelphia  made  by  the  Company  is  preliminary   pending
     completion of final appraisals.  The Company's cable systems exchanges with
     Adelphia and AT&T,  the  contribution  by Comcast of Garden State Cable and
     certain of the  Company's  acquisitions  had no  significant  impact on the
     Company's  consolidated statement of cash flows due to their noncash nature
     (see Note 10).

     Unaudited Pro Forma Information
     The following  unaudited pro forma information has been presented as if the
     acquisitions  and cable systems  exchanges made by the Company in 2001 each
     occurred on January 1, 2000, the acquisitions and cable systems

                                     - 37 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


     exchanges made by the Company in 2000 each occurred on January 1, 1999, and
     the  acquisitions  made by the Company in 1999 each  occurred on January 1,
     1998.  This  information  is based on  historical  results  of  operations,
     adjusted for acquisition  costs, and, in the opinion of management,  is not
     necessarily  indicative of what the results would have been had the Company
     operated the entities acquired since such dates.


<TABLE>
<CAPTION>
                                                                                    (In millions)
                                                                               Year Ended December 31,
                                                                            2001        2000         1999
                                                                         ----------  ----------   ----------

<S>                                                                        <C>         <C>          <C>
     Service revenues..................................................    $5,152.1    $4,699.8     $3,950.6
     Loss before extraordinary items and cumulative
          effect of accounting changes.................................     ($376.0)    ($166.9)   ($1,106.8)
     Net loss..........................................................     ($437.3)    ($174.0)   ($1,113.0)
</TABLE>

5.   INVESTMENTS

     Fair Value Method
     The Company  holds  unrestricted  equity  investments  in certain  publicly
     traded  companies,  which  it  accounts  for as  available  for  sale.  The
     unrealized  pre-tax gains (losses) on these  investments as of December 31,
     2001 and 2000 of $54.0  million and ($263.9)  million,  respectively,  have
     been reported in the Company's consolidated balance sheet as a component of
     other comprehensive  income (loss), net of related deferred income taxes of
     ($18.9) million and $92.4 million, respectively.

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


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

<S>                                                                               <C>                <C>
     Cost.............................................................            $37.3              $751.7
     Gross unrealized gains...........................................             54.0
     Gross unrealized losses..........................................                              ($263.9)
                                                                            -----------         -----------

     Fair value.......................................................            $91.3              $487.8
                                                                            ===========         ===========
</TABLE>

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


<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                                                2001        2000        1999
                                                                              ---------   ---------   ---------
<S>                                                                               <C>         <C>          <C>
     Interest and dividend income...........................................      $18.4       $12.0        $6.0
     Gains on sales and exchanges of investments, net.......................       29.3        29.3         0.8
     Investment impairment losses...........................................      (89.5)      (42.8)
     Mark to market adjustments on derivatives..............................      (27.8)
                                                                              ---------   ---------   ---------

          Investment income (expense).......................................     ($69.6)      ($1.5)       $6.8
                                                                              =========   ==========  =========
</TABLE>


                                     - 38 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


     The investment impairment loss for the year ended December 31, 2001 relates
     principally to an other than temporary decline in the Company's  investment
     in AT&T,  which was  exchanged  on April 30,  2001 (see Note 4 - AT&T Cable
     Systems Acquisition), and Motorola, Inc.

     Equity Method
     The Company records its proportionate interests in the net income (loss) of
     certain of its equity method investees in arrears.  The Company's  recorded
     investments  exceed its  proportionate  interests  in the book value of the
     investees' net assets by $147.3 million as of December 31, 2001 (related to
     the  Company's  investment  in  Susquehanna  Cable).  Such  excess is being
     amortized to equity in net income or loss,  over a period of twenty  years,
     which is consistent with the estimated lives of the underlying  assets. The
     original cost of investments  accounted for under the equity method totaled
     $194.1  million  and  $157.1  million  as of  December  31,  2001 and 2000,
     respectively.  Upon  adoption of SFAS No. 142,  the Company  will no longer
     amortize  this  excess but rather  will  continue  to test such  excess for
     impairment in accordance with Accounting  Principles  Board Opinion No. 18,
     "The Equity Method of Accounting for Investments in Common Stock."

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

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

6.   LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                                        December 31,
                                                                                    2001           2000
                                                                                  --------       ---------
                                                                                       (In millions)
<S>                                                                                 <C>           <C>
     Commercial paper...........................................................    $397.3        $1,323.5
     Notes payable to banks, due 2005...........................................     850.0         1,125.0
     9-5/8% Senior notes, due 2002..............................................     200.0           200.0
     8-1/8% Senior notes, due 2004..............................................     320.4           299.9
     8-3/8% Senior notes, due 2005..............................................     697.0           696.3
     6-3/8% Senior notes, due 2006..............................................     511.3
     8-3/8% Senior notes, due 2007..............................................     597.5           597.2
     8-7/8% Senior notes, due 2007..............................................     249.1           249.0
     6.20% Senior notes, due 2008...............................................     798.4           798.2
     7-5/8% Senior notes, due 2008..............................................     206.1           197.1
     7-5/8% Senior notes, due 2008..............................................     147.7           147.4
     6-7/8% Senior notes, due 2009..............................................     751.5
     6-3/4% Senior notes, due 2011..............................................     993.1
     7-1/8% Senior notes, due 2013..............................................     748.4
     8-7/8% Senior notes, due 2017..............................................     545.9           545.8
     8-1/2% Senior notes, due 2027..............................................     249.6           249.6
     10-1/2% Senior subordinated debentures, due 2006...........................     133.0           123.8
     8-1/4% Senior subordinated debentures, due 2008............................     154.3           149.1
     Other, including capital lease obligations.................................      11.9            12.4
                                                                                  --------       ---------
                                                                                   8,562.5         6,714.3
     Less current portion.......................................................     203.1             3.3
                                                                                  --------       ---------
                                                                                  $8,359.4        $6,711.0
                                                                                  ========       =========
</TABLE>


                                     - 39 -
<PAGE>

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


         2003..............................................         $3.1
         2004..............................................        321.2
         2005..............................................      1,945.2
         2006..............................................        644.9

     In addition to the Company's outstanding long-term debt as presented in the
     table  above,  the  Company  had an  aggregate  of $860.1  million of notes
     payable to Comcast and Comcast's  subsidiaries as of December 31, 2000 (see
     Note 7).

     Contribution of 10 1/2% Senior Subordinated Notes Due 2006
     In  December  2000,  Comcast  contributed  to the  Company  $196.7  million
     principal  amount of the  Company's 10 1/2% senior  subordinated  notes due
     2006  which  were  held by  Comcast.  As such,  amounts  outstanding  as of
     December 31, 2000 have been treated as effectively retired.

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

     Senior Notes
     During 2001,  the Company sold an aggregate of $3.0 billion of public debt.
     The Company used  substantially  all of the net proceeds from the offerings
     to repay a portion of the amounts  outstanding  under its commercial  paper
     program,  revolving credit facility and notes payable to affiliates, and to
     fund its  acquisition  of the Baltimore  City,  Maryland  cable system (see
     Notes 4 and 7).

     Interest on all of the Company's Senior Notes is payable semiannually.  The
     6 3/8% Senior  Notes and the 6.20% Senior  Notes are  redeemable  only upon
     maturity in January 2006 and November 2008, respectively. The 8 1/2% Senior
     Notes are redeemable,  in whole or in part, at the option of the Company at
     any time after May 1, 2009, and the remaining  Senior Notes are redeemable,
     in whole or in part,  at the  option of the  Company  at any time.  In each
     case,  the Senior Notes are  redeemable  at a price equal to the greater of
     (i) 100% of their principal  amount,  plus accrued  interest thereon to the
     date of redemption,  or (ii) the sum of the present values of the remaining
     scheduled payments of principal and interest thereon discounted to the date
     of  redemption  on a  semiannual  basis at the Adjusted  Treasury  Rate (as
     defined),  plus  accrued  interest  on the  Senior  Notes  to the  date  of
     redemption.  Each holder of the 8 1/2% Senior Notes may require the Company
     to  repurchase  all or a portion of the 8 1/2%  Senior  Notes owned by such
     holder on May 1, 2009 at a purchase  price  equal to 100% of the  principal
     amount thereof.

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

     The  indenture  for  the  Senior  Notes,   among  other  things,   contains
     restrictions  (with certain  exceptions)  on the ability of the Company and
     certain of the Company's subsidiaries (as defined) to create liens or enter
     into   sale  and   leaseback   transactions,   and  enter   into   mergers,
     consolidations, or sales of all or substantially all of their assets.


                                     - 40 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


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

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

       Prime rate
       Federal Funds rate plus 0.5%; and
       LIBOR plus 0.19% to 0.8%

     As of December 31, 2001 and 2000, the Company's  effective weighted average
     interest  rate on its variable rate debt  outstanding  was 2.60% and 7.32%,
     respectively.

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

     Using Swaps, the Company agrees to exchange,  at specified  intervals,  the
     difference  between  fixed and  variable  interest  amounts  calculated  by
     reference to an agreed-upon  notional  principal  amount.  Caps are used to
     lock in a maximum  interest rate should variable rates rise, but enable the
     Company to otherwise  pay lower market  rates.  Collars limit the Company's
     exposure to and benefits from interest rate  fluctuations  on variable rate
     debt to within a certain range of rates.

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

     The following table summarizes the terms of the Company's existing Swaps as
     of December 31, 2001 and 2000 (dollars in millions):

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

     As of December 31, 2000
     -----------------------
     Fixed to Variable Swaps.........................     $450.0       2004-2008           7.7%           $3.2
</TABLE>

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

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


                                     - 41 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


     Estimated Fair Value
     The Company's  long-term  debt had estimated  fair values of $8.876 billion
     and $6.872  billion as of  December  31, 2001 and 2000,  respectively.  The
     estimated fair value of the Company's  publicly traded debt is based on the
     quoted  market  prices for that  debt.  Interest  rates that are  currently
     available  to the  Company  for  issuance  of debt with  similar  terms and
     remaining  maturities  are used to estimate  fair value for debt issues for
     which quoted market prices are not available.

     Debt Covenants
     The Comcast  Cable  Revolver  contains  restrictive  covenants  which,  for
     example,  limit the Company's  ability to enter into  arrangements  for the
     acquisition or disposition of property and equipment,  investments, mergers
     and the  incurrence of  additional  debt.  The Comcast Cable  Revolver also
     contains  financial  covenants  which require that certain  ratios and cash
     flow  levels  be  maintained.  The  Company  and its  subsidiaries  were in
     compliance with all financial covenants for all periods presented.

     Lines and Letters of Credit
     As of December 31,  2001,  certain  subsidiaries  of the Company had unused
     lines of credit of $3.198 billion under their respective credit facilities.

     As of December  31, 2001 the  Company and certain of its  subsidiaries  had
     unused  irrevocable  standby  letters of credit  totaling  $52.8 million to
     cover potential fundings under various agreements.

7.   NOTES RECEIVABLE FROM AFFILIATES AND NOTES PAYABLE TO AFFILIATES

     As of December 31, 2001 and 2000, notes receivable from affiliates  consist
     of $557.8 million and $99.3 million  principal  amount of notes  receivable
     from  Comcast  and  certain of its  wholly  owned  subsidiaries.  The notes
     receivable  bear  interest at rates  ranging from 5.75% to 8.76%  (weighted
     average interest rate of 7.11% and 10.05% as of December 31, 2001 and 2000,
     respectively)  and are due  between  2010  and  2027.  Interest  receivable
     relating to such notes of $22.8  million is  included  in notes  receivable
     from affiliates as of December 31, 2001.

     In February 2001,  Comcast  acquired Home Team Sports (now known as Comcast
     SportsNet -  MidAtlantic),  a regional sports  programming  network serving
     approximately  4.8 million homes in the Mid-Atlantic  region,  from Viacom,
     Inc. ("Viacom") and Affiliated Regional Communications,  Ltd. (an affiliate
     of Fox  Cable  Network  Services,  LLC  ("Fox")).  Comcast  also  agreed to
     increase  the  distribution  of certain of Viacom's  and Fox's  programming
     networks on certain of the  Company's  cable  systems.  As of December  31,
     2001,  notes receivable from affiliates  includes $240.0 million  principal
     amount of notes receivable due from Comcast related to these agreements.

     As of December 31, 2000,  notes payable to  affiliates  consisted of $860.1
     million  principal  amount of notes  payable to Comcast  and certain of its
     wholly owned subsidiaries. The notes payable bore interest at rates ranging
     from 7.75% to 8.96% (weighted  average interest rate of 8.05%) and were due
     between 2009 and 2027.

     On May 1, 2001, Comcast contributed subsidiaries with notes receivable from
     affiliates  totaling $493.6 million to the Company in a non-cash  financing
     activity  (see Note 10).  The notes were  subsequently  used to repay notes
     payable to affiliates.

8.   RELATED PARTY TRANSACTIONS

     Comcast, on behalf of the Company,  has an affiliation  agreement with QVC,
     Inc.  ("QVC"),  an electronic  retailer and a majority owned and controlled
     subsidiary of Comcast, to carry its programming. In return for carrying QVC
     programming,  the Company receives an allocated portion,  based upon market
     share, of a percentage of net sales

                                     - 42 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


     of merchandise sold to QVC customers located in the Company's service area.
     These   amounts  are  included  in  service   revenues  in  the   Company's
     consolidated statement of operations.

     Through July 31, 2000, Comcast, through management agreements,  managed the
     operations of the Company's subsidiaries,  including rebuilds and upgrades.
     The management  agreements  generally provided that Comcast would supervise
     the  management  and  operations  of the cable  systems and arrange for and
     supervise  certain  administrative  functions.  As  compensation  for  such
     services,  the agreements provided for Comcast to charge management fees of
     up to 6% of gross revenues.  These charges are included in selling, general
     and  administrative  expenses in the  Company's  consolidated  statement of
     operations.

     Through July 31, 2000, on behalf of the Company,  Comcast secured long-term
     programming contracts that generally provided for payment based on either a
     monthly  fee  per  subscriber  per  channel  or  a  percentage  of  certain
     subscriber revenues. Comcast charged each of the Company's subsidiaries for
     programming on a basis which  generally  approximated  the amount each such
     subsidiary would be charged if it purchased such programming  directly from
     the supplier, subject to limitations imposed by debt facilities for certain
     subsidiaries,  and did not benefit from the  purchasing  power of Comcast's
     consolidated  operations.  These charges are included in operating expenses
     in the Company's consolidated statement of operations.

     Effective August 1, 2000, Comcast assigned its intercompany  management and
     programming  agreements with the Company's subsidiaries and with certain of
     Comcast's  other cable  subsidiaries  to the  Company.  As such,  effective
     August  1,  2000,   amounts   charged  by  the  Company  to  the  Company's
     subsidiaries  for  management  fees and  programming  are eliminated in the
     Company's consolidated financial statements.

     Effective August 1, 2000, the Company purchases  programming from suppliers
     in which  Comcast holds an equity  interest.  These charges are included in
     operating expenses in the Company's consolidated statement of operations.

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

     Effective August 1, 2001, Comcast  contributed its wholly owned subsidiary,
     Comcast  Financial  Agency  Corporation  ("CFAC"),  to  the  Company.  CFAC
     provides cash management  services to the Company.  Under this arrangement,
     the  Company's  cash  receipts  are  deposited  with and  held by CFAC,  as
     custodian  and  agent,  which  invests  and  disburses  such  funds  at the
     direction of the Company.  These amounts were classified as cash held by an
     affiliate in the  Company's  consolidated  balance sheet as of December 31,
     2000.  As of December 31,  2001,  amounts held by CFAC are included in cash
     and cash equivalents in the Company's consolidated balance sheet.

     The Company's related party transactions were as follows (in millions):


<TABLE>
<CAPTION>
                                                                  Year Ended December 31,
                                                               2001        2000        1999
                                                             ---------   ---------   ---------
<S>                                                              <C>         <C>         <C>
     QVC service revenue..................................       $18.1       $14.7       $10.4
     Comcast management fees..............................                   145.5       161.8
     Programming charges with affiliates..................       137.6       835.6       822.5
     Comcast cost-sharing charges.........................       143.1       138.9       104.9
     CFAC investment income...............................         8.7         7.2         2.7
</TABLE>


                                     - 43 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


9.   INCOME TAXES

     The Company  and its 80% or more owned  subsidiaries  join with  Comcast in
     filing a consolidated  federal income tax return.  Comcast allocates income
     tax  expense  or  benefit to the  Company  as if the  Company  was filing a
     separate  federal income tax return.  Tax benefits from both losses and tax
     credits are made  available  to the  Company as it is able to realize  such
     benefits on a separate  return  basis.  The Company pays Comcast for income
     taxes an  amount  equal  to the  amount  of tax it would  pay if it filed a
     separate tax return.

     Income tax expense  (benefit)  consists  of the  following  components  (in
     millions):


<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                                        2001           2000           1999
                                                                      --------       ---------      ---------
<S>                                                                       <C>           <C>              <C>
     Current expense
     Federal.......................................................      $               $             ($18.9)
     State.........................................................       (7.1)          (11.5)          (6.1)
                                                                      --------       ---------      ---------
                                                                          (7.1)          (11.5)         (25.0)
                                                                      --------       ---------      ---------
     Deferred (expense) benefit
     Federal.......................................................       58.1          (206.6)          66.8
     State.........................................................      (14.4)          (81.8)           4.4
                                                                      --------       ---------      ---------
                                                                          43.7          (288.4)          71.2
                                                                      --------       ---------      ---------
     Income tax (expense) benefit..................................      $36.6         ($299.9)         $46.2
                                                                      ========       =========      =========
</TABLE>

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


<TABLE>
<CAPTION>
                                                                               Year Ended December 31,
                                                                         2001           2000           1999
                                                                       ---------      ---------      ---------
<S>                                                                       <C>           <C>             <C>
     Federal tax at statutory rate...................................     $139.1        ($144.6)        $140.6
     Non-deductible depreciation and amortization....................      (84.5)         (82.2)         (25.5)
     State income taxes, net of federal benefit......................      (14.0)         (60.6)          (1.0)
     Increase to valuation allowance.................................                     (14.1)         (75.3)
     Other...........................................................       (4.0)           1.6            7.4
                                                                       ---------      ---------      ---------
     Income tax (expense) benefit....................................      $36.6        ($299.9)         $46.2
                                                                       =========      =========      =========
</TABLE>

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


<TABLE>
<CAPTION>
                                                                                    December 31,
                                                                                2001               2000
                                                                           -----------        -----------
<S>                                                                             <C>                <C>
     Deferred tax assets, net operating loss carryforwards.................     $507.6             $436.7

     Deferred tax liabilities, principally differences between book
          and tax basis of property and equipment and intangible assets....    5,908.0            5,453.1
                                                                           -----------        -----------
     Net deferred tax liability............................................   $5,400.4           $5,016.4
                                                                           ===========        ===========
</TABLE>

     The Company  recorded  $349.5 million of deferred income tax liabilities in
     2001  in  connection  with  acquisitions   principally   related  to  basis
     differences in property and equipment and intangible assets. As of December
     31, 2001,

                                     - 44 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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


     the Company has available net operating loss carryforwards of approximately
     $1.3 billion on a separate return basis,  which expire primarily in periods
     through 2021.

10.  STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION

     The  following  table   summarizes  the  fair  values  of  the  assets  and
     liabilities acquired by the Company through noncash transactions (see Notes
     4 and 6) (in millions):


                                                    Year Ended
                                                   December 31,
                                                2001           2000
                                            ------------   ------------

     Current assets......................          $22.2         $216.2
     Investments.........................          897.3          369.1
     Property, plant and equipment.......          681.3        1,295.8
     Intangible assets...................        2,614.0       15,399.4
     Current liabilities.................          (19.1)        (255.3)
     Long-term debt......................                      (2,146.5)
     Notes payable to affiliates.........          493.6
     Deferred income taxes and other.....         (330.6)      (3,245.6)
                                            ------------   ------------
          Net assets acquired............       $4,358.7      $11,633.1
                                            ============   ============

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


                                                    Year Ended December 31,
                                                   2001      2000        1999
                                                  -------  --------    --------

     Long-term debt interest.....................  $510.4    $501.0      $324.8
     Notes payable to affiliates interest........   $39.3     $16.2        $8.9
     Income taxes................................    $7.4      $6.1        $7.4

     During 2000,  the Company (i) redeemed  certain  shares of its common stock
     for nominal  consideration,  and then (ii) in  consideration  for the Prime
     Contribution  and the  Reorganization,  issued certain shares of its common
     stock to Comcast and to a wholly-owned subsidiary of Comcast,  resulting in
     a net redemption of 861.11 shares.

     During the year  ended  December  31,  1999,  the  Company  eliminated  the
     outstanding  balance  of notes  payable  to  affiliates  of $139.6  million
     through a non-cash capital contribution from Comcast.



                                     - 45 -

<PAGE>


COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
---------------------------------------------------

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

11.  COMMITMENTS AND CONTINGENCIES

     Commitments
     Minimum  annual rental  commitments  for office space and  equipment  under
     noncancelable operating leases are as follows (in millions):

              2002....................................   $37.2
              2003....................................    25.8
              2004....................................    19.4
              2005....................................    13.7
              2006....................................    10.6
              Thereafter..............................    44.2

     Pole  rentals  have  been  excluded  from the  above  schedule  as they are
     generally cancelable after an initial period by either party upon notice.

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


                                                  Year Ended December 31,
                                                 2001      2000        1999
                                               --------  --------    --------
     Rental expense.........................      $60.8     $44.6       $33.7

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

                                     - 46 -

<PAGE>



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

     Not applicable.

                                    PART III

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


                                     - 47 -

<PAGE>



                                     PART IV

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

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

              Independent Auditors' Report..................................25
              Consolidated Balance Sheet--December 31, 2001 and 2000........26
              Consolidated Statement of Operations--Years
                Ended December 31, 2001, 2000 and 1999......................27
              Consolidated Statement of Cash Flows--Years
                Ended December 31, 2001, 2000 and 1999......................28
              Consolidated Statement of Stockholder's Equity --
                Years Ended December 31, 2001, 2000 and 1999................29
              Notes to Consolidated Financial Statements....................30

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

          Schedule II - Valuation and Qualifying Accounts

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

     (c)  Reports on Form 8-K:

          None.

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

                  3.1      Certificate of Incorporation filed on April 2, 1981
                           (incorporated by reference to Exhibit 3.1(a) to our
                           Registration Statement on Form S-4, as amended, filed
                           on September 22, 1997).

                  3.2      By-laws (incorporated by reference to Exhibit 3.2 to
                           our Registration Statement on Form S-4, as amended,
                           filed on September 22, 1997).

                  4.1(a)   Indenture dated as of May 1, 1997 by and between
                           Comcast Cable Communications, Inc. and The Bank of
                           New York (as successor in interest to Bank of
                           Montreal Trust Company), as Trustee (incorporated by
                           reference to Exhibit 4.1(a) to our Registration
                           Statement on Form S-4, as amended, filed on September
                           22, 1997).

                  4.1(b)   Form of Notes relating to our 8 1/8% Senior Notes due
                           2004, 8 3/8% Senior Notes due 2007, 6.20% Senior
                           Notes due 2008, 6.375% Senior Notes due 2006, 6.75%
                           Senior Notes due 2011, 8 7/8% Senior Notes due 2017,
                           8 1/2% Senior Notes due 2027, 6.875% Senior Notes due
                           2009 and 7.125% Senior Notes due 2013 (incorporated
                           by reference to Exhibit 4.1(b) to our Registration
                           Statement on Form S-4, as amended, filed on September
                           22, 1997).

                  10.1     Management Agreement, dated as of April 24, 1997,
                           between Comcast Cable Communications, Inc. and
                           Comcast Corporation (incorporated by reference to
                           Exhibit 10.11 to our Registration Statement on Form
                           S-4, as amended, filed on September 22, 1997).

                  10.2     Promissory Note, dated as of July 2, 1997, between
                           Comcast Cable Communications, Inc. and Comcast
                           Corporation (incorporated by reference to Exhibit
                           10.13 to our Registration Statement on Form S-4, as
                           amended, filed on September 22, 1997).

                  10.3     Agreement and Plan of Merger, dated as of November
                           16, 1999, by and among Comcast Corporation, Comcast
                           LCI Holdings, Inc., a wholly owned subsidiary of
                           Comcast, Lenfest Communications, Inc. ("Lenfest") and
                           Lenfest's stockholders as named therein.
                           (incorporated by reference to Exhibit 10.1 to the
                           Comcast Corporation Current Report on Form 8-K filed
                           on December 13, 1999).


                                     - 48 -

<PAGE>



                  10.4     Agreement and Plan of Merger among Jones Intercable,
                           Inc., Comcast Corporation and Comcast JOIN Holdings,
                           Inc., dated as of December 22, 1999 (incorporated by
                           reference to Exhibit 2.1 to the Comcast Corporation
                           Registration Statement on Form S-4 filed on January
                           10, 2000).

                  10.5     Agreement and Plan of Merger, dated as of July 28,
                           2000, by and among Comcast Cable Communications,
                           Inc., Comcast LCI Holdings, Inc., formerly a wholly
                           owned subsidiary of Comcast Corporation and Comcast
                           JOIN Holdings, Inc., formerly a wholly owned
                           subsidiary of Comcast Corporation (incorporated by
                           reference to Exhibit 10.1 to our Current Report on
                           Form 8-K filed on September 27, 2000).

                  10.6     Asset Exchange Agreement, dated as of August 11,
                           2000, among AT&T Corp. and Comcast Corporation
                           (incorporated by reference to Exhibit 10.1 to the
                           Comcast Corporation Quarterly Report on Form 10-Q for
                           the Quarter Ended September 30, 2000).

                  10.7     Agreement and Plan of Reorganization, dated as of
                           August 11, 2000, among Comcast Corporation, Comcast
                           Cable Communications, Inc., Comcast CCCI II, LLC,
                           Comcast Teleport, Inc., Comcast Heritage, Inc.,
                           Comcast Communications Properties, Inc., and AT&T
                           Corp. (incorporated by reference to Exhibit 10.2 to
                           the Comcast Corporation Quarterly Report on Form 10-Q
                           for the Quarter Ended September 30, 2000).

                  10.8     Five-Year Revolving Credit Agreement, dated as of
                           August 24, 2000, among Comcast Cable Communications,
                           Inc. and the Financial Institutions Party Hereto,
                           Banc of America Securities LLC and Chase Securities
                           Inc., as Joint Lead Arrangers and Joint Book
                           Managers, BNY Capital Markets, Inc. and Salomon Smith
                           Barney Inc., as Co-Arrangers, Bank of America, N.A.,
                           as Administrative Agent, Swing Line Lender and Letter
                           of Credit Issuing Lender, Chase Securities Inc., as
                           Syndication Agent and Citibank, N.A. and The Bank of
                           New York, as Co- Documentation Agents (incorporated
                           by reference to Exhibit 10.4 to our Quarterly Report
                           on Form 10-Q for the Quarter Ended September 30,
                           2000).

                  10.9     364-Day Revolving Credit Agreement, dated as of July
                           17, 2001, among Comcast Cable Communications, Inc.
                           and the Financial Institutions Party Hereto, Banc of
                           America Securities LLC and Chase Securities Inc., as
                           Joint Lead Arrangers and Joint Book Managers, BNY
                           Capital Markets, Inc. and Salomon Smith Barney Inc.,
                           as Co-Arrangers, Bank of America, N.A., as
                           Administrative Agent, Chase Securities Inc., as
                           Syndication Agent and Citibank, N.A. and The Bank of
                           New York, as Co-Documentation Agents. (incorporated
                           by reference to Exhibit 10.22 to the Comcast
                           Corporation Annual Report on Form 10-K for the Year
                           Ended December 31, 2001).

                  10.10    Asset Exchange Closing Agreement dated as of January
                           1, 2001 among Comcast Corporation, the Comcast
                           Parties, Adelphia Communications Corporation and the
                           Adelphia Parties (incorporated by reference to
                           Exhibit 10.24 to the Comcast Corporation Annual
                           Report on Form 10-K for the year ended December 31,
                           2000).

                  12.1     Statement re: Computation of Ratio of Earnings to
                           Fixed Charges.

                  23.1     Consent of Deloitte & Touche LLP.

                  23.2     Consents of Arthur Andersen LLP.

                  99.1     Report of Independent Public Accountants to Jones
                           Intercable, Inc. for the year ended December 31,
                           1999.

                                     - 49 -

<PAGE>



                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf  by  the   undersigned,   thereunto  duly  authorized  in   Philadelphia,
Pennsylvania on March 29, 2002.


                                        Comcast Cable Communications, Inc.


                                        By:   /s/ Brian L. Roberts
                                              ------------------------------
                                              Brian L. Roberts
                                              Vice Chairman and Director


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

<TABLE>
<CAPTION>
SIGNATURE                                         TITLE                                   DATE
---------                                         -----                                   ----

<S>                                  <C>                                            <C>
/s/ Ralph J. Roberts                  Chairman; Director                              March 29, 2002
-----------------------------------
Ralph J. Roberts

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

/s/ Lawrence S. Smith                 Executive Vice President; Director              March 29, 2002
-----------------------------------
Lawrence S. Smith

/s/ Stanley L. Wang                   Executive Vice President, Secretary;            March 29, 2002
-----------------------------------   Director
Stanley L. Wang

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

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

</TABLE>



                                     - 50 -

<PAGE>



                          INDEPENDENT AUDITORS' REPORT




Board of Directors and Stockholder
Comcast Cable Communications, Inc.
Philadelphia, Pennsylvania


Our audits of the financial  statements referred to in our report dated February
5,  2002  (which  report  expresses  an  unqualified  opinion  and  includes  an
explanatory  paragraph  related  to  the  adoption  of  Statement  of  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities,"  as amended,  effective  January 1, 2001)  appearing  in the Annual
Report on Form 10-K of Comcast Cable  Communications,  Inc. (the  "Company") for
the year ended December 31, 2001 also included the financial  statement schedule
of the Company,  listed in Item 14(b)(i).  This financial  statement schedule is
the responsibility of the Company's management. Our responsibility is to express
an  opinion  based on our  audits.  In our  opinion,  such  financial  statement
schedule, when considered in relation to the basic financial statements taken as
a whole,  presents fairly, in all material  respects,  the information set forth
therein.

Deloitte & Touche LLP

Philadelphia, Pennsylvania
February 5, 2002

                                     - 51 -

<PAGE>

<TABLE>
<CAPTION>
                                COMCAST CABLE COMMUNICATIONS, INC. AND SUBSIDIARIES
                                ---------------------------------------------------

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

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

                                                   (In millions)





                                                                          Additions
                                          Balance at                      Charged to      Deductions       Balance
                                          Beginning       Effect of       Costs and          from           at End
                                           of Year      Acquisitions       Expenses      Reserves(A)       of Year
                                           -------      ------------       --------      -----------       -------

Allowance for Doubtful Accounts
-------------------------------
<S>                                         <C>               <C>            <C>             <C>            <C>
2001                                        $39.9             $5.1           $52.5           $39.3          $58.2

2000                                         31.2             10.7            33.7            35.7           39.9

1999                                         19.4              3.1            23.6            14.9           31.2
</TABLE>







(A) Uncollectible accounts written off.

                                                      - 52 -