content: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 10-Q
  (Mark One)
  (X)  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
       Act of 1934 for the Quarterly Period Ended:
  
                                 SEPTEMBER 30, 1997
                                         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 333-31009
  
                           COMCAST CELLULAR HOLDINGS, INC.
               (Exact name of registrant as specified in its charter)
  
             DELAWARE                                          23-2687447
  -------------------------------------------------------------------------------
   (State or other jurisdiction of                         (I.R.S. Employer
    incorporation or organization)                          Identification No.)
  
                1105 North Market Street, Wilmington, Delaware 19801
  -------------------------------------------------------------------------------
                      (Address of principal executive offices)
                                     (Zip Code)
  
  Registrant's telephone number, including area code: (302) 427-8991
                             --------------------------
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding  twelve months (or for such shorter period that the registrant was
  required to file such  reports),  and (2) has been subject to such  requirements
  for the past 90 days.
  
           Yes  X  *                                  No ___
  
  *    The  Registrant  became  subject  to  the  reporting  requirements  of  the
       Securities Act of 1934 on September 30, 1997.
                             --------------------------
  
  As of September 30, 1997, there were 100 shares of Common Stock outstanding.
  
  The Registrant  meets the conditions set forth in General  Instructions H (1)(a)
  and (b) of Form  10-Q  and is  therefore  filing  this  form  with  the  reduced
  disclosure format.
  <PAGE>
  
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
                                  TABLE OF CONTENTS
  
  
  
  
                                                                            Page
                                                                           Number
  
  PART I. FINANCIAL INFORMATION
  
          Item 1. Financial Statements
  
                  Condensed Consolidated Balance
                  Sheet as of September 30, 1997 and December 31,
                  1996 (Unaudited)..............................................2
  
                  Condensed Consolidated Statement of
                  Operations and Accumulated Deficit for
                  the Nine and Three Months Ended September 30,
                  1997 and 1996 (Unaudited).....................................3
  
                  Condensed Consolidated Statement of Cash
                  Flows for the Nine Months Ended September 30,
                  1997 and 1996 (Unaudited).....................................4
  
                  Notes to Condensed Consolidated
                  Financial Statements (Unaudited)..........................5 - 9
  
          Item 2. Management's Discussion and Analysis
                  of Financial Condition and Results of
                  Operations..............................................10 - 16
  
  PART II. OTHER INFORMATION
  
          Item 1. Legal Proceedings............................................17
  
          Item 6. Exhibits and Reports on Form 8-K.............................17
  
          SIGNATURE............................................................18
  
                         -----------------------------------
  
  This Quarterly  Report on Form 10-Q contains  forward  looking  statements  made
  pursuant to the "safe harbor"  provisions of the Private  Securities  Litigation
  Reform Act of 1995.  Readers are cautioned that such forward looking  statements
  involve  risks and  uncertainties  which  could  significantly  affect  expected
  results  in the  future  from  those  expressed  in  any  such  forward  looking
  statements  made by, or on behalf,  of the Company.  Certain  factors that could
  cause actual  results to differ  materially  include,  without  limitation,  the
  effects of  legislative  and  regulatory  changes;  the  potential for increased
  competition;  technological  changes; the need to generate substantial growth in
  the subscriber base by successfully launching,  marketing and providing services
  in  identified  markets;  pricing  pressures  which could affect  demand for the
  Company's services; the Company's ability to expand its distribution; changes in
  labor, equipment and capital costs; future acquisitions,  strategic partnerships
  and  divestitures;  general  business and economic  conditions;  and other risks
  detailed  from time to time in the  Company's  periodic  reports  filed with the
  Securities and Exchange Commission.
  
  <PAGE>
  
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  PART I. FINANCIAL INFORMATION
  
  ITEM 1. FINANCIAL STATEMENTS
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                  (Dollars in thousands, except share data)
                                                                                         September 30,    December 31,
                                                                                             1997             1996
  <S>                                                                                       <C>                <C>   
  ASSETS
  CURRENT ASSETS
     Cash and cash equivalents....................................................          $12,481            $4,980
     Accounts receivable, less allowance for doubtful
       accounts of $5,830 and $3,148..............................................           64,174            66,425
     Inventories..................................................................           22,174            10,458
     Other current assets.........................................................            4,005             3,470
                                                                                         ----------        ----------
         Total current assets.....................................................          102,834            85,333
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................           29,404            29,823
                                                                                         ----------        ----------
  PROPERTY AND EQUIPMENT..........................................................          554,251           467,558
     Accumulated depreciation.....................................................         (163,665)         (114,144)
                                                                                         ----------        ----------
     Property and equipment, net..................................................          390,586           353,414
                                                                                         ----------        ----------
  DEFERRED CHARGES AND OTHER......................................................        1,261,557         1,245,283
     Accumulated amortization.....................................................         (327,755)         (285,671)
                                                                                         ----------        ----------
     Deferred charges and other, net..............................................          933,802           959,612
                                                                                         ----------        ----------
                                                                                         $1,456,626        $1,428,182
                                                                                         ==========        ==========
  LIABILITIES AND STOCKHOLDER'S DEFICIENCY
  CURRENT LIABILITIES
     Accounts payable and accrued expenses........................................          $81,660           $83,831
     Accrued commissions..........................................................            5,745             7,836
     Accrued interest.............................................................           38,239             3,166
     Deferred revenue and customer deposits.......................................           11,299             9,291
     Current portion of long-term debt............................................           10,423             1,902
     Due to affiliates............................................................           51,253            45,926
                                                                                         ----------        ----------
         Total current liabilities................................................          198,619           151,952
                                                                                         ----------        ----------
  LONG-TERM DEBT, less current portion............................................        1,139,596         1,259,325
                                                                                         ----------        ----------
  INVESTMENT IN AND DUE TO AFFILIATES.............................................          112,700           108,804
                                                                                         ----------        ----------
  DEFERRED INCOME TAXES...........................................................          233,963           256,737
                                                                                         ----------        ----------
  MINORITY INTEREST AND OTHER.....................................................            6,605             7,219
                                                                                         ----------        ----------
  
  COMMITMENTS AND CONTINGENCIES
  
  MANDATORILY REDEEMABLE PREFERRED STOCK HELD BY AFFILIATE........................          168,583
                                                                                         ----------        ----------
  STOCKHOLDER'S DEFICIENCY
     Common stock, $.01 par value - authorized, 1,000 shares; issued, 100 shares..
     Additional capital...........................................................          493,320           500,425
     Accumulated deficit..........................................................         (896,760)         (856,280)
                                                                                         ----------        ----------
         Total stockholder's deficiency...........................................         (403,440)         (355,855)
                                                                                         ----------        ----------
                                                                                         $1,456,626        $1,428,182
                                                                                         ==========        ==========
  </TABLE>
  See notes to condensed consolidated financial statements.
  
                                          2
  <PAGE>
  
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                    (Dollars in thousands)
                                                                          Nine Months Ended        Three Months Ended
                                                                            September 30,             September 30,
                                                                         1997         1996         1997         1996
  <S>                                                                  <C>          <C>           <C>          <C>     
  SERVICE INCOME, net...........................................       $335,380     $317,115      $115,107     $110,019
                                                                      ---------    ---------     ---------    --------- 
  
  COSTS AND EXPENSES
     Operating..................................................         28,242       26,415         9,311        9,120
     Selling, general and administrative........................        170,849      177,274        56,102       53,990
     Depreciation and amortization..............................         94,429       84,777        32,980       28,008
                                                                      ---------    ---------     ---------    --------- 
                                                                        293,520      288,466        98,393       91,118
                                                                      ---------    ---------     ---------    --------- 
  
  OPERATING INCOME..............................................         41,860       28,649        16,714       18,901
  
  OTHER (INCOME) EXPENSE
     Interest expense...........................................         89,061       86,131        27,896       30,453
     Investment income..........................................         (1,898)      (2,060)         (328)        (489)
     Equity in net losses of affiliates.........................          4,524        5,102         1,004        1,559
     Litigation settlement......................................                      21,647
     Other......................................................          1,173        2,340           733          242
                                                                      ---------    ---------     ---------    --------- 
                                                                         92,860      113,160        29,305       31,765
                                                                      ---------    ---------     ---------    --------- 
  LOSS BEFORE INCOME TAX BENEFIT AND
     EXTRAORDINARY ITEM.........................................        (51,000)     (84,511)      (12,591)     (12,864)
  
  INCOME TAX BENEFIT............................................        (17,833)     (32,286)       (4,132)      (4,961)
                                                                      ---------    ---------     ---------    --------- 
  
  LOSS BEFORE EXTRAORDINARY ITEM................................        (33,167)     (52,225)       (8,459)      (7,903)
  
  EXTRAORDINARY ITEM............................................         (7,313)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS......................................................        (40,480)     (52,225)       (8,459)      (7,903)
  
  PREFERRED DIVIDENDS...........................................         (7,105)                    (4,844)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS FOR COMMON STOCKHOLDER...............................       ($47,585)    ($52,225)     ($13,303)     ($7,903)
                                                                      =========    =========     =========    ========= 
  
  ACCUMULATED DEFICIT
     Beginning of period .......................................      ($856,280)   ($786,696)    ($888,301)   ($831,018)
     Net loss...................................................        (40,480)     (52,225)       (8,459)      (7,903)
                                                                      ---------    ---------     ---------    --------- 
     End of period..............................................      ($896,760)   ($838,921)    ($896,760)   ($838,921)
                                                                      =========    =========     =========    ========= 
  </TABLE>
  
  See notes to condensed consolidated financial statements.
  
                                          3
  <PAGE>
  
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                               (Dollars in thousands)
                                                                                           Nine Months Ended September 30,
                                                                                              1997             1996
  <S>                                                                                      <C>               <C>      
  OPERATING ACTIVITIES
     Net loss.....................................................................         ($40,480)         ($52,225)
     Adjustments to reconcile net loss to net cash provided
      by operating activities:
       Depreciation and amortization..............................................           94,429            84,777
       Non-cash interest expense..................................................           29,337            51,353
       Equity in net losses of affiliates.........................................            4,524             5,102
       Minority interest..........................................................            1,149               530
       Deferred management fees...................................................            2,211             4,159
       Deferred income taxes and other............................................          (20,599)          (31,113)
       Extraordinary item.........................................................            7,313
                                                                                         ----------        ---------- 
  
                                                                                             77,884            62,583
  
       (Increase) decrease in net accounts receivable, inventories
         and other current assets.................................................          (10,000)           27,195
       Increase in accrued interest...............................................           35,073             1,861
       Decrease in accounts payable and accrued expenses, accrued commissions
         and deferred revenue and customer deposits...............................           (2,254)          (14,377)
                                                                                         ----------        ---------- 
  
             Net cash provided by operating activities............................          100,703            77,262
                                                                                         ----------        ---------- 
  
  FINANCING ACTIVITIES
     Proceeds from borrowings.....................................................        1,018,370           140,000
     Repayments of long-term debt.................................................       (1,155,076)           (1,500) 
  
     Repayments under deferred payment plan.......................................                            (85,413)
     Deferred financing costs.....................................................          (28,353)
     Proceeds from issuance of mandatorily redeemable preferred 
       stock to affiliate.........................................................          161,478
     Net transactions with affiliates.............................................             (932)            5,747
                                                                                         ----------        ---------- 
  
             Net cash (used in) provided by financing activities..................           (4,513)           58,834
                                                                                         ----------        ---------- 
  
  INVESTING ACTIVITIES
     Capital expenditures.........................................................          (87,213)          (69,026)
     Acquisitions, net of cash acquired...........................................                            (13,958)
     Other........................................................................           (1,476)          (24,801)
                                                                                         ----------        ---------- 
  
             Net cash used in investing activities................................          (88,689)         (107,785)
                                                                                         ----------        ---------- 
  
  INCREASE IN CASH AND CASH EQUIVALENTS...........................................            7,501            28,311
  
  CASH AND CASH EQUIVALENTS, beginning of period..................................            4,980            19,640
                                                                                         ----------        ---------- 
  
  CASH AND CASH EQUIVALENTS, end of period........................................          $12,481           $47,951
                                                                                         ==========        ==========
  </TABLE>
  
  See notes to condensed consolidated financial statements.
  
                                          4
  <PAGE>
  
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  1.   ORGANIZATION
  
       Comcast Cellular  Holdings,  Inc. ("the Company") was incorporated on March
       27,  1997  under  the  laws  of the  State  of  Delaware.  At the  date  of
       incorporation,  the Company issued 100 shares of its newly  authorized $.01
       par value  common  stock to Comcast  Corporation  ("Comcast")  and became a
       wholly owned subsidiary of Comcast.
  
       On May 7, 1997,  Comcast  contributed all 100 of the issued and outstanding
       $.01 par value  common  shares of Comcast  Cellular  Corporation  ("Comcast
       Cellular"),  its wholly owned subsidiary, to the Company. This contribution
       was  accounted  for  in  a  manner  similar  to  a  pooling  of  interests.
       Accordingly, the condensed consolidated financial statements of the Company
       include the  accounts of the Company and Comcast  Cellular  for all periods
       presented.   The  Company  is  principally   engaged  in  the  development,
       management  and  operation  of cellular  telephone  communications  systems
       located in Pennsylvania, New Jersey and Delaware.
  
  2.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
       Basis of Presentation
       The condensed  consolidated  balance sheet as of December 31, 1996 has been
       condensed from the audited  consolidated balance sheet as of that date. The
       condensed  consolidated  balance  sheet  as  of  September  30,  1997,  the
       condensed  consolidated statement of operations and accumulated deficit for
       the  nine  and  three  months  ended  September  30,  1997 and 1996 and the
       condensed  consolidated  statement  of cash flows for the nine months ended
       September  30, 1997 and 1996 have been prepared by the Company and have not
       been  audited by the  Company's  independent  auditors.  In the  opinion of
       management,   all   adjustments   (which  include  only  normal   recurring
       adjustments) necessary to present fairly the financial position, results of
       operations  and cash flows as of  September  30,  1997 and for all  periods
       presented have been made.
  
       Certain information and note disclosures normally included in the Company's
       annual financial  statements prepared in accordance with generally accepted
       accounting  principles  have been  condensed  or omitted.  These  condensed
       consolidated  financial  statements  should be read in conjunction with the
       Company's December 31, 1996 audited consolidated financial statements which
       were  included  in  the  Company's  Registration  Statement  on  Form  S-4,
       effective  as of  September  30,  1997,  as filed with the  Securities  and
       Exchange  Commission.  The  results of  operations  for the  periods  ended
       September 30, 1997 are not necessarily  indicative of operating results for
       the full year.
  
       Reclassifications
       Certain  reclassifications  have  been  made to the  prior  year  condensed
       consolidated  financial statements to conform to those classifications used
       in 1997.
  
  3.   ACQUISITIONS AND OTHER SIGNIFICANT EVENTS
  
       Debt Offering
       In May 1997,  the  Company  completed  the sale of $1.0  billion  principal
       amount of 9 1/2% Senior Notes due 2007 (the "Old Notes")  through a private
       offering with registration rights (the "Offering").
  
       Interest  on the Old Notes is  payable in cash  semi-annually  on May 1 and
       November 1 of each year,  commencing on November 1, 1997. The Old Notes are
       redeemable,  in whole or in part, at the option of the Company, at any time
       on or after May 1, 2002 at a redemption price,  initially of 104.75% of the
       principal amount of the Old Notes and declining  annually to 100% on May 1,
       2005, plus accrued and unpaid interest,  if any, to the date of redemption.
       In addition,  prior to May 1, 2000, the Company may redeem the Old Notes at
       a price equal to 108.5% of the  principal  amount,  plus accrued and unpaid
       interest,  if any, to the redemption  date, with the net cash proceeds from
       one or more Public Equity Offerings (as defined);  provided,  however, that
       at least 65% of the  originally  issued  principal  amount of the Old Notes
       would remain  outstanding after giving effect to any such redemption.  Upon
       the occurrence of a Change of Control  Triggering Event (as defined),  each
       holder of the Old  Notes  will have the right to  require  the  Company  to
       repurchase  such holder's Old Notes at 101% of the principal  amount,  plus
       accrued and unpaid interest, if any, to the repurchase date.
  
                                          5
  <PAGE>
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       The Old Notes are general  unsecured  obligations  of the  Company  ranking
       senior to all  subordinated  Indebtedness  (as  defined) of the Company and
       pari passu in right of payment with all other existing and future unsecured
       unsubordinated  Indebtedness  (as  defined)  and other  liabilities  of the
       Company. The Old Notes are subordinate to all liabilities,  including trade
       payables, of the Company's subsidiaries.
  
       The indenture for the Old Notes imposes certain  limitations on the ability
       of the Company and its Restricted Subsidiaries (as defined) to, among other
       things,  incur  Indebtedness  (as defined),  make  Restricted  Payments (as
       defined), including the payment of cash dividends on the Company's Series A
       Preferred Stock (see below), effect certain Asset Sales (as defined), enter
       into certain  transactions  with affiliates,  merge or consolidate with any
       other person or transfer all or  substantially  all of their properties and
       assets.
  
       In October 1997, the Company completed an exchange of 100% of the Old Notes
       for new notes (the "Notes")  (having the terms described  above) which were
       registered under the Securities Act of 1933, as amended.
  
       Redemption of Zero Coupon Notes
       In May 1997,  the Company  contributed  the net proceeds of $971.2  million
       from the  Offering to Comcast  Cellular.  On May 19, 1997 (the  "Redemption
       Date"),  Comcast  Cellular used such proceeds to redeem all of its Series A
       Senior  Participating  Redeemable  Zero Coupon  Notes Due 2000 and Series B
       Senior Participating  Redeemable Zero Coupon Notes Due 2000 (together,  the
       "Zero  Coupon  Notes"),  including  the Zero  Coupon  Notes held by Comcast
       Cellular  Communications,  Inc.  ("CCCI"),  a wholly  owned  subsidiary  of
       Comcast Cellular, and Comcast Financial Corporation ("CFC"), a wholly owned
       subsidiary of Comcast.  Unamortized debt  acquisition  costs related to the
       Zero Coupon Notes were not significant. As of the Redemption Date, the Zero
       Coupon Notes had an aggregate  accreted value of $742.4 million,  including
       the Zero Coupon Notes held by CCCI and CFC with  accreted  values of $114.1
       million and $161.5 million,  respectively. On the Redemption Date, CFC used
       the $161.5 million  received upon  redemption of the Zero Coupon Notes held
       by it to purchase  1,614,775  shares of the Company's newly authorized $.01
       par value,  Series A Preferred Stock (see below).  The Company  contributed
       the $161.5 million  received from the sale of its Series A Preferred  Stock
       to  Comcast  Cellular,  which  in  turn  contributed  such  amount  and the
       remaining net proceeds from the Offering,  totaling $228.8 million, to CCCI
       to repay a portion of the amounts outstanding under its $1.3 billion credit
       agreement with certain banks (the "Credit Agreement").
  
       Repayment of Term Loan and Revolving Credit Loan
       The Credit  Agreement  provided for a term loan in the principal  amount of
       $300.0 million due 2004 (the "Term Loan") and a reducing  revolving  credit
       facility of up to $1.0 billion (the "Revolving  Credit Loan"). In May 1997,
       subsequent to the Offering,  CCCI canceled  $575.0 million of its Revolving
       Credit  Loan,  thereby  reducing  the $1.0  billion  commitment  to  $425.0
       million.  CCCI used the amounts  contributed  by Comcast  Cellular  and the
       proceeds  received  upon  redemption  of the Zero  Coupon  Notes held by it
       (aggregating $504.4 million),  as well as available cash, to repay the Term
       Loan and $205.0 million under the Revolving Credit Loan. In connection with
       the repayment of the Term Loan and the  reduction of the  Revolving  Credit
       Loan  commitment,  during the nine months ended  September  30,  1997,  the
       Company  expensed  unamortized  debt  acquisition  costs of $11.3  million,
       resulting in an  extraordinary  loss,  net of tax, of $7.3  million.  As of
       September 30, 1997,  the Company had  outstanding  $150.0 million under the
       Revolving  Credit Loan. In October 1997,  the Company made an optional debt
       repayment on the Revolving  Credit Loan of $10.0 million with existing cash
       and cash equivalents. Current portion of long-term debt as of September 30,
       1997 includes such amount.
  
       In October 1997, the Company  refinanced the Revolving Credit Loan with the
       proceeds from borrowings  under a new $400.0 million credit  agreement (the
       "New Bank Facility") with certain banks (the "Refinancing"), which consists
       of a $300.0 million five and  one-quarter  year revolving  credit  facility
       (the "Tranche A Facility") and a $100.0 million  364-day  revolving  credit
       facility (the "Tranche B Facility").  Amounts outstanding under the Tranche
       B  Facility  at the  end of the  364-day  period  are  convertible,  at the
       Company's  option,  into a four and one-quarter year term loan.  Borrowings
       under the New Bank Facility bear interest at a rate equal to, at the option
       of the  Company,  either (a) the  greater of the (i) prime rate or (ii) the
       federal funds rate plus 1/2% or (b) the Applicable Margin, as defined based
       on CCCI's leverage ratio, plus the London Interbank  Offered Rate.  Initial
       borrowings  under  the  Tranche A  Facility  of  $215.0  million  were used
       principally to repay existing debt, to pay interest on the Notes, to
  
                                          6
  <PAGE>
  
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       purchase twelve 10-MHz personal  communications  services  ("PCS") licenses
       from  Comcast,  at  Comcast's  cost of $17.5  million,  and to repay  $17.0
       million of previously deferred management fees to Comcast (see Note 5). The
       purchase  of the PCS  licenses  is  subject to the  Federal  Communications
       Commission's  approval of their transfer to the Company. In connection with
       the  Refinancing,  the Company will expense  unamortized  debt  acquisition
       costs of approximately  $5.2 million,  resulting in an extraordinary  loss,
       net of tax, of approximately $3.4 million in the fourth quarter of 1997.
  
       Borrowings  under  the New Bank  Facility  are  senior to the Notes and are
       secured by a pledge of the capital  stock of CCCI's  subsidiaries.  The New
       Bank Facility contains various  covenants,  including  financial  covenants
       restricting  changes in control (or making  such an event of  default)  and
       restricting the payment of dividends,  distributions  and loans or advances
       to the Company.
  
       Authorization and Issuance of Mandatorily Redeemable Preferred Stock
       In May 1997,  the Company  authorized  10,000,000  shares of $.01 par value
       preferred  stock  and  designated  5,200,000  of such  shares  as  Series A
       Preferred  Stock. In May 1997, the Company issued  1,614,775  shares of its
       mandatorily  redeemable Series A Preferred Stock to CFC. Each holder of the
       Series A Preferred  Stock is entitled to receive  cumulative cash dividends
       at the annual  rate of $12 per share,  payable  semi-annually  on May 1 and
       November  1 each  year,  in  arrears.  At the  option  of the  Company,  by
       declaration of the Company's  Board of Directors,  dividends may be paid in
       additional  shares of Series A Preferred  Stock (the  "Additional  Shares")
       instead of cash through May 1, 2007.  To the extent  dividends  are paid in
       Additional Shares, such Additional Shares shall be valued at $100 per share
       with a liquidation value of $100 per share. The Series A Preferred Stock is
       redeemable, at the option of the Company, at any time prior to May 2, 2007,
       at a redemption price of $100 per share, plus accrued and unpaid dividends,
       and is  mandatorily  redeemable on May 2, 2007 after final  maturity of the
       Notes,  subject to certain  conditions.  The  Series A  Preferred  Stock is
       generally non-voting.
  
       Cellular Retail Stores
       In August 1996,  the Company  acquired  twelve  cellular  retail stores and
       direct sales locations  located in  Pennsylvania,  New Jersey and Delaware,
       and related assets from Advanced Telecomm, Inc. for $6.5 million in cash.
       The Company accounted for the acquisition under the purchase method.
  
       Atlantic City Cellular System
       In June 1996,  the  Company  completed  its  acquisition  of the license to
       operate the non-wireline  cellular  telephone system for the Atlantic City,
       NJ Metropolitan  Statistical Area (the "Atlantic City Cellular System") for
       $7.5 million in cash. The Company  accounted for the acquisition  under the
       purchase method and began  consolidating  the Atlantic City Cellular System
       effective June 1, 1996.
  
       Litigation Settlement
       The  Company was  involved in various  civil  lawsuits  and  administrative
       proceedings regarding the ownership,  operation and transfer of the license
       for the Atlantic City Cellular System. In March 1995, the Company, Comcast,
       Telephone  and  Data  Systems,   Inc.   ("TDS"),   United  States  Cellular
       Corporation,  Ellis Thompson and Ellis Thompson  Corporation entered into a
       Settlement   Agreement  (the   "Settlement   Agreement")  with  respect  to
       outstanding  civil  litigation.  During the nine months ended September 30,
       1996, the Company recorded $21.6 million of estimated litigation settlement
       expense  in  its  condensed   consolidated   statement  of  operations  and
       accumulated  deficit.  In June 1996,  the  Company  paid such amount to TDS
       under the Settlement Agreement.
  
       Delaware 1 RSA
       In May 1996, the Company and  Southwestern  Bell Mobile Systems,  through a
       partnership owned 50% by each of them,  purchased the remaining 84% limited
       partnership  interests  of the  Delaware 1 Rural  Statistical  Area ("RSA")
       Limited Partnership,  the licensee of the non-wireline cellular license for
       the Kent and Sussex,  DE RSA (the  "Delaware  1 RSA") for $44.1  million in
       cash, of which the Company's share was $22.1 million. The surviving entity,
       C-SW Cellular  Partnership,  a Delaware general partnership,  now holds the
       cellular  license  for  the  Delaware  1  RSA.  American  Cellular  Network
       Corporation,  an indirect wholly owned  subsidiary of the Company,  manages
       the daily  operations  of the C-SW Cellular  Partnership's  interest in the
       Delaware 1 RSA. The Company's investment 
  
                                          7
  <PAGE>
  
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       of $29.4  million and $29.8  million as of September  30, 1997 and December
       31, 1996,  respectively,  is accounted  for under the equity  method and is
       classified  as   investment   in  affiliate  in  the  Company's   condensed
       consolidated balance sheet.
  
  4.   INVESTMENT IN AND DUE TO AFFILIATES
  
       In 1992,  a  subsidiary  of AWACS,  Inc.,  an  indirect  subsidiary  of the
       Company,  issued a note (the "AWACS Note") with an initial principal amount
       of $51.0 million to purchase,  from a subsidiary of Comcast,  a 40% limited
       partnership  interest  in Garden  State  Cablevision  L.P.  ("Garden  State
       Cablevision").  The AWACS Note bears  interest  at a rate of 11% per annum.
       Interest is payable on a quarterly  basis to the extent of available  cash,
       with any unpaid interest added to principal.  Interest expense on the AWACS
       Note was $3.8 million,  $6.2 million,  $1.3 million and $2.2 million during
       the nine and three months ended September 30, 1997 and 1996,  respectively.
       From the date of issuance  through  September  30, 1997,  $35.5  million of
       principal  and  interest  has been paid on the AWACS Note with the proceeds
       from distributions from Garden State Cablevision.  The balance of the AWACS
       Note, originally due on September 30, 1997, is due on demand.  Accordingly,
       such  balance has been  classified  as current in the  Company's  condensed
       consolidated balance sheet.
  
       Under  the  terms  of the  partnership  agreement,  49.5% of  Garden  State
       Cablevision's net losses are allocated to the Company. Summarized financial
       information  for Garden State  Cablevision as of September 30, 1997 and for
       the nine and three months ended  September  30, 1997 and 1996 is as follows
       (dollars in thousands):
  <TABLE>
  <CAPTION>
                                                                     Nine Months Ended        Three Months Ended
                                                                       September 30,             September 30,
                                                                     1997         1996         1997         1996
  <S>                                                               <C>          <C>        <C>           <C>    
       Results of Operations
       Service income.......................................        $81,754      $74,863    $27,208       $25,394
       Operating, selling, general and administrative
         expenses...........................................        (34,240)     (32,548)   (11,218)      (10,866)
       Depreciation and amortization........................        (33,854)     (36,367)   (10,962)      (12,198)
       Operating income.....................................         13,660        5,948      5,028         2,330
       Net loss.............................................         (8,293)     (10,882)    (2,288)       (3,150)
       Company's equity in net loss.........................         (4,105)      (5,386)    (1,133)       (1,559)
  
                                                                     September 30,
                                                                         1997
       Financial Position
       Current assets...........................................     $    8,026
       Noncurrent assets........................................        148,450
       Current liabilities......................................         20,763
       Noncurrent liabilities...................................        326,274
  </TABLE>
  
  5.   RELATED PARTY TRANSACTIONS
  
       Comcast  and  CCCI  were  parties  to  a  management  agreement  (the  "Old
       Management  Agreement")  pursuant to which Comcast managed the business and
       operations of CCCI. In May 1997,  subsequent to the  redemption of the Zero
       Coupon Notes, the Old Management Agreement was terminated and replaced with
       a new management agreement (the "New Management  Agreement") which provides
       for an  annual  management  fee of 1.5%  of  revenues.  The New  Management
       Agreement  eliminated  the prior  management  fee which was limited to $5.0
       million, subject to annual increases based on the consumer price index. The
       New  Management  Agreement  has a ten year  term.  Management  fees of $4.7
       million,  $4.2  million,  $1.7  million and $1.4  million  were  charged to
       selling,  general  and  administrative  expenses  during the nine and three
       months  ended  September  30, 1997 and 1996,  respectively  (on a pro forma
       basis, giving effect to the New Management  Agreement,  management fees for
       the nine and three months ended September 30, 1997 and 1996 would have been
       $5.0 million, $4.8 million,  $1.7 million and $1.7 million,  respectively).
       As of 
  
                                          8
  <PAGE>
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
                                     (Unaudited)
  
       September 30, 1997 and December 31, 1996, deferred management fees payable,
       which are included in long-term  investment in and due to affiliates in the
       Company's condensed  consolidated  balance sheet, totaled $17.0 million and
       $14.7  million,  respectively.  In November  1997, the Company repaid $17.0
       million of previously deferred management fees to Comcast with a portion of
       the proceeds from the initial  borrowings  under the New Bank Facility (see
       Note 3).
  
  6.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
  
       The  Company  made cash  payments  for  interest  of $24.7  million,  $34.9
       million,  $2.5 million and $14.6  million  during the nine and three months
       ended September 30, 1997 and 1996, respectively.
  
       The Company  made cash  payments  for income  taxes of $0.4  million,  $0.7
       million,  $0.2  million and $0.1  million  during the nine and three months
       ended September 30, 1997 and 1996, respectively.
  
  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 these  actions will not  materially
       affect the  financial  position,  results of operations or liquidity of the
       Company.
  
                                          9
  
  <PAGE>
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS
  
  Overview
  
  Comcast  Cellular  Holdings,   Inc.  ("the  Company"),  a  Delaware  corporation
  incorporated  on March 27, 1997, is a direct wholly owned  subsidiary of Comcast
  Corporation  ("Comcast")  and is a  holding  company  that  conducts  all of its
  operations through its wholly owned subsidiaries,  Comcast Cellular  Corporation
  ("Comcast Cellular"), Comcast Cellular Communications,  Inc. ("CCCI") and CCCI's
  subsidiaries.  On May 7, 1997, Comcast contributed all 100 of Comcast Cellular's
  issued and  outstanding  shares of common stock held by it to the Company.  This
  contribution  has  been  accounted  for in a  manner  similar  to a  pooling  of
  interests.   Accordingly,  the  accompanying  condensed  consolidated  financial
  statements  of the Company  include the  accounts  of Comcast  Cellular  for all
  periods  presented.  The  Company is  principally  engaged  in the  development,
  management and operation of cellular telephone communications systems located in
  Pennsylvania, New Jersey and Delaware.
  
  The Company's  business is capital  intensive and continually  requires cash for
  development,  expansion and debt service.  The Company has  historically met its
  cash needs for operations through its cash flows from operating activities. Cash
  requirements  for  acquisitions  and  capital  expenditures  have been  provided
  through the  Company's  financing  activities,  as well as its existing cash and
  cash equivalents.
  
  General Developments of Business
  
  Cellular Retail Stores
  In August 1996, the Company  acquired  twelve  cellular retail stores and direct
  sales locations  located in Pennsylvania,  New Jersey and Delaware,  and related
  assets  from  Advanced  Telecomm,  Inc.  for $6.5  million in cash.  The Company
  accounted for the acquisition under the purchase method.
  
  Atlantic City Cellular System
  In June 1996,  the Company  completed its  acquisition of the license to operate
  the   non-wireline   cellular   telephone  system  for  the  Atlantic  City,  NJ
  Metropolitan  Statistical  Area (the "Atlantic  City Cellular  System") for $7.5
  million in cash. The Company  accounted for the  acquisition  under the purchase
  method and began  consolidating the Atlantic City Cellular System effective June
  1, 1996.
  
  Delaware 1 RSA
  In May 1996,  the  Company  and  Southwestern  Bell  Mobile  Systems,  through a
  partnership  owned 50% by each of them,  purchased  the  remaining  84%  limited
  partnership  interests of the Delaware 1 Rural  Statistical Area ("RSA") Limited
  Partnership,  the licensee of the non-wireline cellular license for the Kent and
  Sussex,  DE RSA (the  "Delaware 1 RSA") for $44.1  million in cash, of which the
  Company's  share  was  $22.1  million.   The  surviving  entity,  C-SW  Cellular
  Partnership, a Delaware general partnership,  now holds the cellular license for
  the Delaware 1 RSA.  American Cellular Network  Corporation,  an indirect wholly
  owned  subsidiary  of the  Company,  manages  the daily  operations  of the C-SW
  Cellular  Partnership's interest in the Delaware 1 RSA. The Company's investment
  of $29.4  million and $29.8  million as of  September  30, 1997 and December 31,
  1996,  respectively,  is accounted for under the equity method and is classified
  as  investment  in affiliate in the  Company's  condensed  consolidated  balance
  sheet.
  
  LCH Preferred Stock Redemption
  In June 1994, LCH Communications, Inc. redeemed the Class A Redeemable Preferred
  Stock (the "LCH  Preferred  Stock") held by CCCI through the transfer to CCCI of
  100% of the  capital  stock of LIN  Cellular  Communications  Corporation.  As a
  result of such  redemption,  the Company owns 100% of the common stock of AWACS,
  Inc.  ("AWACS"),  a wholly  owned  subsidiary  of CCCI.  Since the  Company  has
  historically  accounted  for the  purchase of AWACS as if it had acquired a 100%
  direct interest,  the redemption of the LCH Preferred Stock had no effect on the
  Company's accounting for AWACS.
  
  In addition to the interest in AWACS,  the redemption of the LCH Preferred Stock
  entitled  the  Company to an  interest in certain  publishing  and  broadcasting
  operations. CCCI issued to Metromedia Company participating preferred stock
  
                                         10
  <PAGE>
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  
  which had economic attributes based on the performance and ultimate value of the
  publishing  and  broadcasting  operations.  In  June  1997,  CCCI  redeemed  the
  participating  preferred stock in exchange for such assets.  As these operations
  are  excluded  from  the  Company's  consolidated   financial  statements,   the
  redemption  of the  participating  preferred  stock had no  financial  statement
  effect.
  
  Liquidity and Capital Resources
  
  Cash and Cash Equivalents
  The Company's cash  equivalents  are recorded at cost which  approximates  their
  fair value.  As of September  30,  1997,  cash and cash  equivalents  were $12.5
  million.
  
  Financing
  In May 1997, the Company  completed the sale of $1.0 billion principal amount of
  9 1/2% Senior Notes due 2007 (the "Old Notes")  through a private  offering with
  registration rights (the "Offering").
  
  Interest on the Old Notes is payable in cash semi-annually on May 1 and November
  1 of each year, commencing on November 1, 1997. The Old Notes are redeemable, in
  whole or in part,  at the option of the Company,  at any time on or after May 1,
  2002 at a redemption price,  initially of 104.75% of the principal amount of the
  Old Notes and declining annually to 100% on May 1, 2005, plus accrued and unpaid
  interest, if any, to the date of redemption.  In addition, prior to May 1, 2000,
  the Company may redeem the Old Notes at a price equal to 108.5% of the principal
  amount,  plus accrued and unpaid interest,  if any, to the redemption date, with
  the net cash  proceeds  from one or more Public  Equity  Offerings (as defined);
  provided,  however,  that at least 65% of the originally issued principal amount
  of the Old  Notes  would  remain  outstanding  after  giving  effect to any such
  redemption.  Upon the  occurrence  of a Change of Control  Triggering  Event (as
  defined),  each  holder of the Old Notes  will  have the  right to  require  the
  Company to repurchase  such holder's Old Notes at 101% of the principal  amount,
  plus accrued and unpaid interest, if any, to the repurchase date.
  
  The Old Notes are general unsecured obligations of the Company ranking senior to
  all  subordinated  Indebtedness  (as  defined)  of the Company and pari passu in
  right of payment  with all other  existing and future  unsecured  unsubordinated
  Indebtedness  (as defined) and other  liabilities of the Company.  The Old Notes
  are subordinate to all liabilities,  including trade payables,  of the Company's
  subsidiaries.
  
  The indenture for the Old Notes imposes  certain  limitations  on the ability of
  the Company and its Restricted Subsidiaries (as defined) to, among other things,
  incur  Indebtedness  (as  defined),   make  Restricted  Payments  (as  defined),
  including  the payment of cash  dividends  on the  Company's  Series A Preferred
  Stock (see below),  effect certain Asset Sales (as defined),  enter into certain
  transactions  with  affiliates,  merge or  consolidate  with any other person or
  transfer all or substantially all of their properties and assets.
  
  In October 1997, the Company  completed an exchange of 100% of the Old Notes for
  new notes (the "Notes") (having the terms described above) which were registered
  under the Securities Act of 1933, as amended.
  
  In May 1997, the Company contributed the net proceeds of $971.2 million from the
  Offering to Comcast Cellular.  On May 19, 1997 (the "Redemption Date"),  Comcast
  Cellular used such  proceeds to redeem all of its Series A Senior  Participating
  Redeemable  Zero  Coupon  Notes  Due  2000 and  Series  B  Senior  Participating
  Redeemable  Zero Coupon  Notes Due 2000  (together,  the "Zero  Coupon  Notes"),
  including the Zero Coupon Notes held by CCCI and Comcast  Financial  Corporation
  ("CFC"),  a wholly owned  subsidiary of Comcast.  Unamortized  debt  acquisition
  costs  related  to  the  Zero  Coupon  Notes  were  not  significant.  As of the
  Redemption Date, the Zero Coupon Notes had an aggregate accreted value of $742.4
  million,  including  the Zero  Coupon  Notes held by CCCI and CFC with  accreted
  values of $114.1  million and $161.5  million,  respectively.  On the Redemption
  Date,  CFC used the $161.5 million  received upon  redemption of the Zero Coupon
  Notes held by it to purchase  1,614,775 shares of the Company's newly authorized
  $.01 par value,  Series A Preferred Stock (see below).  The Company  contributed
  the $161.5  million  received  from the sale of its Series A Preferred  Stock to
  Comcast  Cellular,  which in turn  contributed such amount and the remaining net
  proceeds from the Offering,  totaling $228.8 million, to CCCI to repay a portion
  of the amounts  outstanding under its $1.3 billion credit agreement with certain
  banks (the "Credit Agreement").
  
                                         11
  <PAGE>
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  The Credit Agreement  provided for a term loan in the principal amount of $300.0
  million due 2004 (the "Term Loan") and a reducing  revolving  credit facility of
  up to $1.0 billion (the "Revolving Credit Loan").  Interest is payable quarterly
  at rates  based on a base,  London  Interbank  Offered  Rate or  Certificate  of
  Deposit rate, plus a percentage which varies as the ratio of total  indebtedness
  to annual  operating cash flow (as defined) varies.  In May 1997,  subsequent to
  the Offering, CCCI canceled $575.0 million of its Revolving Credit Loan, thereby
  reducing the $1.0 billion  commitment to $425.0  million.  CCCI used the amounts
  contributed by Comcast Cellular and the proceeds received upon redemption of the
  Zero Coupon Notes held by it (aggregating $504.4 million),  as well as available
  cash, to repay the Term Loan and $205.0 million under the Revolving Credit Loan.
  In  connection  with the  repayment  of the Term Loan and the  reduction  of the
  Revolving  Credit Loan  commitment,  during the nine months ended  September 30,
  1997, the Company expensed  unamortized debt acquisition costs of $11.3 million,
  resulting in an extraordinary loss, net of tax, of $7.3 million. As of September
  30, 1997, the Company had outstanding  $150.0 million under its Revolving Credit
  Loan.  In October  1997,  the Company  made an optional  debt  repayment  on the
  Revolving Credit Loan of $10.0 million with existing cash and cash  equivalents.
  Current portion of long-term debt as of September 30, 1997 includes such amount.
  
  At  the  option  of the  Company,  by  declaration  of the  Company's  Board  of
  Directors,  dividends on the Series A Preferred  Stock may be paid in additional
  shares of Series A Preferred  Stock (the  "Additional  Shares")  instead of cash
  through May 1, 2007. To the extent dividends are paid in Additional Shares, such
  Additional  Shares shall be valued at $100 per share with a liquidation value of
  $100 per share. The Series A Preferred Stock is redeemable, at the option of the
  Company  at any time  prior to May 2, 2007,  at a  redemption  price of $100 per
  share, plus accrued and unpaid dividends,  and is mandatorily  redeemable on May
  2, 2007, after final maturity of the Notes,  subject to certain conditions.  The
  Series A Preferred Stock is generally non-voting.
  
  In October  1997,  the Company  refinanced  the  Revolving  Credit Loan with the
  proceeds from borrowings  under a new $400.0 million credit  agreement (the "New
  Bank  Facility")  with certain  banks (the  "Refinancing")  which  consists of a
  $300.0 million five and one-quarter year revolving credit facility (the "Tranche
  A  Facility")  and a $100.0  million  364-day  revolving  credit  facility  (the
  "Tranche B Facility").  Amounts  outstanding under the Tranche B Facility at the
  end of the 364-day period are convertible,  at the Company's option, into a four
  and  one-quarter  year term loan.  Borrowings  under the New Bank  Facility bear
  interest  at a rate  equal to,  at the  option of the  Company,  either  (a) the
  greater  of the (i) prime rate or (ii) the  federal  funds rate plus 1/2% or (b)
  the  Applicable  Margin,  as defined based on CCCI's  leverage  ratio,  plus the
  London Interbank Offered Rate.  Initial  borrowings under the Tranche A Facility
  of $215.0 million were used  principally to repay existing debt, to pay interest
  on the Notes, to purchase twelve 10-MHz personal communications services ("PCS")
  licenses from Comcast,  at Comcast's cost of $17.5  million,  and to repay $17.0
  million of previously deferred  management fees to Comcast.  The purchase of the
  PCS licenses is subject to the Federal  Communications  Commission's approval of
  their transfer to the Company.  In connection with the Refinancing,  the Company
  will expense  unamortized debt acquisition costs of approximately  $5.2 million,
  resulting in an extraordinary loss, net of tax, of approximately $3.4 million in
  the fourth quarter of 1997.
  
  Borrowings  under the New Bank  Facility are senior to the Notes and are secured
  by a pledge of the capital stock of CCCI's  subsidiaries.  The New Bank Facility
  contains various covenants, including financial covenants restricting changes in
  control  (or making  such an event of default)  and  restricting  the payment of
  dividends, distributions or loans or advances to the Company.
  
  During the fourth  quarter of 1997,  it is  expected  that the  Company  will be
  merged with and into Comcast  Cellular with Comcast Cellular being the surviving
  entity.   Upon  consummation  of  the  merger,  the  Notes  will  become  direct
  obligations of Comcast Cellular.
  
  As of September 30, 1997 and December 31, 1996, the Company's  weighted  average
  interest was 9.11% and 8.74%,  respectively.  The Company continually  evaluates
  its debt structure with the intention of reducing its debt service  requirements
  when desirable.
  
  The Company is a holding  company and  conducts  all of its  operations  through
  subsidiaries  of CCCI.  Consequently,  the  ability  of the  Company  to pay its
  obligations,  including  its  obligation to pay interest on and principal of the
  Notes,  whether at the  maturity  thereof or upon an earlier  redemption  at the
  option of the  Company or the  holders of the Notes,  will be  dependent  on the
  ability of the Company to receive  dividends and other payments or advances from
  its
  
                                         12
  <PAGE>
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  subsidiaries or to obtain additional  capital or other payments or advances,  in
  cash or otherwise from Comcast (which has no obligation to provide such capital,
  payments or advances)  or from another  source.  CCCI and its  subsidiaries  are
  separate  and distinct  legal  entities and have no  obligation,  contingent  or
  otherwise,  to pay any  amounts  due  pursuant  to the  Notes  or to make  funds
  available  therefor.  The  ability of CCCI to pay  dividends  or for CCCI or its
  subsidiaries  to make other payments or advances to the Company will depend upon
  the  operating  results of CCCI and its  subsidiaries  and any  restrictions  on
  paying such  dividends or making such  payments or advances as may be applicable
  to CCCI or any of its  subsidiaries,  such as  those  contained  in the New Bank
  Facility. There can be no assurance that the Company will be able to improve its
  results of  operations  or that  funds will be  available  to the  Company  from
  Comcast, CCCI or other sources on satisfactory terms or at all.
  
  The Company  believes  that it will be able to meet its  current  and  long-term
  liquidity and capital  requirements,  including fixed charges,  through its cash
  flows from operating activities, existing cash and cash equivalents,  borrowings
  under the New Bank Facility and other external financing.
  
  Statement of Cash Flows
  
  Cash and cash  equivalents  increased $7.5 million as of September 30, 1997 from
  December 31, 1996 and  increased  $28.3  million as of  September  30, 1996 from
  December 31, 1995.  Increases in cash and cash  equivalents  resulted  from cash
  flows from  operating,  financing and investing  activities  which are explained
  below.
  
  Net cash provided by operating  activities  was $100.7 million and $77.3 million
  for the nine  months  ended  September  30,  1997 and  1996,  respectively.  The
  increase of $23.4  million from 1996 to 1997 is due primarily to the increase in
  the Company's operating income before depreciation and amortization expense (see
  "Results  of  Operations")  and the  effects of changes in working  capital as a
  result of the timing of receipts and disbursements.
  
  Net cash (used in) provided by financing activities was ($4.5) million and $58.8
  million for the nine months  ended  September  30, 1997 and 1996,  respectively.
  During the nine months ended  September 30, 1997,  the Company  incurred  $998.4
  million of  indebtedness  in  connection  with the Offering  and borrowed  $20.0
  million under the Revolving  Credit Loan, and repaid $1.155 billion of long-term
  borrowings,  including  $628.3 million of Zero Coupon Notes,  the $300.0 million
  Term Loan and $225.0  million  under the  Revolving  Credit  Loan.  In addition,
  during the nine months ended  September 30, 1997,  the Company  received  $161.5
  million from the issuance of its Series A Preferred  Stock.  Deferred  financing
  costs incurred  during the nine months ended  September 30, 1997 were related to
  the issuance of the Old Notes.  During the nine months ended September 30, 1996,
  the Company  borrowed  $140.0  million under the Revolving  Credit Loan and paid
  $85.4 million for equipment  purchased during 1995 subject to a deferred payment
  plan.
  
  Net cash used in investing  activities  was $88.7 million and $107.8 million for
  the nine months ended September 30, 1997 and 1996, respectively. The decrease of
  $19.1  million from 1996 to 1997 is due to the effects of the Delaware RSA 1 and
  Atlantic City Cellular  System  acquisitions  in 1996,  offset by an increase in
  capital expenditures of $18.2 million from 1996 to 1997.
  
  Results of Operations
  
  Summarized  consolidated  financial information for the Company for the nine and
  three  months  ended  September  30,  1997 and 1996 is as  follows  (dollars  in
  millions, "NM" denotes percentage is not meaningful):
  
                                         13
  <PAGE>
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  <TABLE>
  <CAPTION>
                                                          Nine Months Ended
                                                            September 30,                   Increase / (Decrease)
                                                         1997             1996                $               %
  <S>                                                   <C>              <C>                <C>              <C> 
  Service income, net..............................     $335.4           $317.1             $18.3            5.8%
  Operating, selling, general and administrative
       expenses....................................      199.1            203.7              (4.6)          (2.3)
                                                         -----            -----
  Operating income before depreciation and
       amortization (1)............................      136.3            113.4              22.9           20.2
  Depreciation and amortization....................       94.4             84.8               9.6           11.3
                                                         -----            -----
  Operating income.................................       41.9             28.6              13.3           46.5
                                                         -----            -----
  Interest expense.................................       89.1             86.1               3.0            3.5
  Investment income................................       (1.9)            (2.1)             (0.2)          (9.5)
  Equity in net losses of affiliates...............        4.5              5.1              (0.6)         (11.8)
  Litigation settlement............................                        21.6             (21.6)             NM
  Other............................................        1.2              2.4              (1.2)         (50.0)
  Income tax benefit...............................      (17.8)           (32.3)            (14.5)         (44.9)
  Extraordinary item...............................       (7.3)                               7.3              NM
                                                         -----            -----
       Net loss....................................     ($40.5)          ($52.2)           ($11.7)         (22.4)%
                                                         =====            ===== 
  
                                                           Three Months Ended
                                                              September 30,                 Increase / (Decrease)
                                                         1997              1996               $                 %
  
  Service income, net..............................     $115.1           $110.0              $5.1            4.6%
  Operating, selling, general and administrative
       expenses....................................       65.4             63.1               2.3            3.6
                                                         -----            -----
  Operating income before depreciation and
       amortization (1)............................       49.7             46.9               2.8            6.0
  Depreciation and amortization....................       32.9             28.0               4.9           17.5
                                                         -----            -----
  Operating income.................................       16.8             18.9              (2.1)         (11.1)
                                                         -----            -----
  Interest expense.................................       27.9             30.5              (2.6)          (8.5)
  Investment income................................       (0.3)            (0.5)             (0.2)         (40.0)
  Equity in net losses of affiliates...............        1.0              1.6              (0.6)         (37.5)
  Other............................................        0.8              0.2               0.6              NM
  Income tax benefit...............................       (4.1)            (5.0)             (0.9)         (18.0)
                                                         -----            -----
       Net loss....................................      ($8.5)           ($7.9)             $0.6            7.6%
                                                         =====            ===== 
  </TABLE>
  ----------
  (1)  Operating income before  depreciation and amortization is commonly referred
       to in the cellular  industry 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
       cellular   industry  and  the  resulting   significant  level  of  non-cash
       depreciation  and amortization  expense,  operating cash flow is frequently
       used as one of the bases for evaluating cellular businesses. Operating cash
       flow does not  purport  to  represent  net income or net cash  provided  by
       operating  activities,  as those terms are defined under generally accepted
       accounting  principles,  and should not be considered as an  alternative to
       such  measurements  as an  indicator  of  the  Company's  performance.  See
       "--Statement  of Cash Flows" above for a discussion of net cash provided by
       operating activities.
  
                                         14
  <PAGE>
  
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  Service Income, net
  Of the respective $18.3 million and $5.1 million increases in service income for
  the nine and three  month  periods  from 1996 to 1997,  $16.9  million  and $2.3
  million are  attributable to the Company's  subscriber  growth and $11.9 million
  and $4.6 million are  attributable to roamer growth.  Offsetting these increases
  are  decreases of $10.5  million and $1.8  million  resulting  primarily  from a
  reduction  in the  average  rate per  minute of use as a result  of  promotional
  and/or free minutes.
  
  Operating, Selling, General and Administrative Expenses
  The $4.6 million  decrease in  operating,  selling,  general and  administrative
  expenses for the nine month  period from 1996 to 1997 is primarily  attributable
  to  expense  reductions  achieved  through  implementation  of fraud  management
  programs, improved bad debt experience as a result of stronger credit procedures
  and a reduction in commission  costs resulting from fewer gross sales in 1997 as
  compared to the same period in 1996.  The $2.3  million  increase in  operating,
  selling,  general and  administrative  expenses  for the three month period from
  1996 to 1997 is primarily  attributable to an increase in the number of cellular
  retail stores in 1997 as compared to the same period in 1996,  partially  offset
  by  expense  reductions  achieved  through  implementation  of fraud  management
  programs  and  improved  bad debt  experience  as a result  of  stronger  credit
  procedures.
  
  Comcast and CCCI were parties to a  management  agreement  (the "Old  Management
  Agreement")  pursuant to which  Comcast  managed the business and  operations of
  CCCI. In May 1997,  subsequent to the  redemption of the Zero Coupon Notes,  the
  Old  Management  Agreement was  terminated  and replaced  with a new  management
  agreement  (the  "New  Management  Agreement")  which  provides  for  an  annual
  management fee of 1.5% of revenues.  The New Management Agreement eliminated the
  prior  management  fee which was  limited  to $5.0  million,  subject  to annual
  increases based on the consumer price index. The New Management  Agreement has a
  ten year term.  Management fees of $4.7 million,  $4.2 million, $1.7 million and
  $1.4 million were charged to selling, general and administrative expenses during
  the nine and three months ended September 30, 1997 and 1996,  respectively (on a
  pro forma basis, giving effect to the New Management Agreement,  management fees
  for the nine and three months ended  September 30, 1997 and 1996 would have been
  $5.0 million, $4.8 million, $1.7 million and $1.7 million,  respectively). As of
  September  30, 1997 and December 31, 1996,  deferred  management  fees  payable,
  which are  included in  long-term  investment  in and due to  affiliates  in the
  Company's condensed  consolidated balance sheet, totaled $17.0 million and $14.7
  million,  respectively.  In November  1997,  the Company repaid $17.0 million of
  previously  deferred  management  fees to Comcast with a portion of the proceeds
  from the initial borrowings under the New Bank Facility (see "Financing").
  
  Depreciation and Amortization Expense
  The $9.6 million and $4.9 million  increases in  depreciation  and  amortization
  expense for the nine and three month periods from 1996 to 1997 are primarily due
  to the effects of capital expenditures.
  
  Interest Expense
  The $3.0  million  increase in interest  expense for the nine month  period from
  1996 to 1997 is  primarily  due to the  issuance  of the Old  Notes in May 1997,
  offset by the  effects  of lower  levels of debt  outstanding  under the  Credit
  Agreement  as a result of the  repayment  of the Term Loan and a portion  of the
  amounts  outstanding  under the  Revolving  Credit  Loan in May  1997.  The $2.6
  million  decrease  in interest  expense for the three month  period from 1996 to
  1997 is primarily due to a reduction in the Company's  weighted average interest
  rate, offset by higher levels of debt outstanding after the Offering.
  
  In 1992, a subsidiary of AWACS, an indirect subsidiary of the Company,  issued a
  note (the "AWACS  Note") with an initial  principal  amount of $51.0  million to
  purchase,  from a subsidiary of Comcast, a 40% limited  partnership  interest in
  Garden State Cablevision L.P. ("Garden State Cablevision"). The AWACS Note bears
  interest at a rate of 11% per annum. Interest is payable on a quarterly basis to
  the extent of  available  cash,  with any unpaid  interest  added to  principal.
  Interest expense on the AWACS Note was $3.8 million,  $6.2 million, $1.3 million
  and $2.2 million  during the nine and three months ended  September 30, 1997 and
  1996, respectively.  From the date of issuance through September 30, 1997, $35.5
  million  of  principal  and  interest  has been paid on the AWACS  Note with the
  proceeds from distributions  from Garden State  Cablevision.  The balance of the
  AWACS Note, originally due on September 30, 1997, is due on demand. Accordingly,
  such  balance  has  been  classified  as  current  in  the  Company's  condensed
  consolidated balance sheet.
  
                                         15
  <PAGE>
  
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  Equity in Net Losses of Affiliates
  Under  the  terms  of  the   partnership   agreement,   49.5%  of  Garden  State
  Cablevision's net losses are allocated to the Company. During the nine and three
  months ended September 30, 1997 and 1996, the Company  recognized  equity in net
  losses of Garden State Cablevision of $4.1 million,  $5.4 million,  $1.1 million
  and $1.6 million,  respectively.  While no assurances can be given,  the Company
  expects to transfer its interest in Garden State  Cablevision  to Comcast during
  the first quarter of 1998.
  
  Litigation Settlement
  The  Company  was  involved  in  various  civil   lawsuits  and   administrative
  proceedings  regarding the ownership,  operation and transfer of the license for
  the  Atlantic  City  Cellular  System.  In March  1995,  the  Company,  Comcast,
  Telephone and Data Systems,  Inc. ("TDS"),  United States Cellular  Corporation,
  Ellis  Thompson  and  Ellis  Thompson  Corporation  entered  into  a  Settlement
  Agreement  (the  "Settlement  Agreement")  with  respect  to  outstanding  civil
  litigation.  During the nine  months  ended  September  30,  1996,  the  Company
  recorded  $21.6  million  of  litigation  settlement  expense  in its  condensed
  consolidated  statement of operations and accumulated deficit. In June 1996, the
  Company paid such amount to TDS under the Settlement Agreement.
  
  Earnings to Fixed Charges
  For the nine and three months ended  September 30, 1997 and 1996,  the Company's
  distribution from Garden State Cablevision and income before extraordinary item,
  income  tax  benefit,  equity in net  losses  of  affiliates  and fixed  charges
  (interest  expense) was $42.6  million,  $8.7  million,  $16.3 million and $21.1
  million,  respectively.  Such amounts  were not adequate to cover the  Company's
  fixed charges of $89.1 million,  $86.1 million,  $27.9 million and $30.4 million
  for these periods, respectively. Fixed charges include non-cash interest expense
  of $29.3 million, $51.4 million, $1.3 million and $17.6 million for the nine and
  three months ended September 30, 1997 and 1996, respectively.  The inadequacy of
  the Company's  distribution  from Garden State  Cablevision  and income to cover
  fixed charges is primarily due to substantial  non-cash charges for depreciation
  and  amortization  expense of $94.4 million,  $84.8  million,  $32.9 million and
  $28.0  million  during the nine and three  months ended  September  30, 1997 and
  1996,  respectively,  and litigation  settlement  expense during the nine months
  ended September 30, 1996.
  
  The  Company  anticipates  that,  for  the  foreseeable  future,   depreciation,
  amortization  and interest expense will continue to be significant and will have
  a significant  adverse effect on the Company's  ability to realize net earnings.
  The  Company  believes  that  its  losses  will  not  significantly  affect  the
  performance of its normal business  activities  because of its existing cash and
  cash equivalents,  its ability to generate operating income before  depreciation
  and amortization and its ability to obtain external financing.
  
  The  Company  believes  that  its  operations  are not  materially  affected  by
  inflation.
  
                                         16
  
  <PAGE>
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  
  PART II.          OTHER INFORMATION
  
  ITEM 1.           LEGAL PROCEEDINGS
  
       The  Company  is not  party to  litigation  which,  in the  opinion  of the
       Company's management,  will have a material adverse effect on the Company's
       financial position, results of operations or liquidity.
  
  ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K
  
       (a) Exhibits required to be filed by Item 601 of Regulation S-K:
  
           27.1     Financial Data Schedule.
  
       (b) Reports on Form 8-K - none.
  
                                         17
  
  <PAGE>
  
                  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
                                      SIGNATURE
  
           Pursuant to the  requirements  of the  Securities  and  Exchange Act of
  1934,  the  Registrant has duly caused this report to be signed on its behalf by
  the undersigned thereunto duly authorized.
  
  
  
                                       COMCAST CELLULAR HOLDINGS, INC.
                                       -------------------------------------------
  
  
  
  
  
  
                                       /S/ LAWRENCE S. SMITH
                                       -------------------------------------------
                                       Lawrence S. Smith
                                       Executive Vice President
                                       (Principal Accounting Officer)
  
  
  
  Date: November 14, 1997
  
                                         18
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text: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 10-Q
  (Mark One)
  (X)  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
       Act of 1934 for the Quarterly Period Ended:
  
                                 SEPTEMBER 30, 1997
                                         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 333-31009
  
                           COMCAST CELLULAR HOLDINGS, INC.
               (Exact name of registrant as specified in its charter)
  
             DELAWARE                                          23-2687447
  -------------------------------------------------------------------------------
   (State or other jurisdiction of                         (I.R.S. Employer
    incorporation or organization)                          Identification No.)
  
                1105 North Market Street, Wilmington, Delaware 19801
  -------------------------------------------------------------------------------
                      (Address of principal executive offices)
                                     (Zip Code)
  
  Registrant's telephone number, including area code: (302) 427-8991
                             --------------------------
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding  twelve months (or for such shorter period that the registrant was
  required to file such  reports),  and (2) has been subject to such  requirements
  for the past 90 days.
  
           Yes  X  *                                  No ___
  
  *    The  Registrant  became  subject  to  the  reporting  requirements  of  the
       Securities Act of 1934 on September 30, 1997.
                             --------------------------
  
  As of September 30, 1997, there were 100 shares of Common Stock outstanding.
  
  The Registrant  meets the conditions set forth in General  Instructions H (1)(a)
  and (b) of Form  10-Q  and is  therefore  filing  this  form  with  the  reduced
  disclosure format.
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
                                  TABLE OF CONTENTS
  
                                                                            Page
                                                                           Number
  
  PART I. FINANCIAL INFORMATION
  
          Item 1. Financial Statements
  
                  Condensed Consolidated Balance
                  Sheet as of September 30, 1997 and December 31,
                  1996 (Unaudited)..............................................2
  
                  Condensed Consolidated Statement of
                  Operations and Accumulated Deficit for
                  the Nine and Three Months Ended September 30,
                  1997 and 1996 (Unaudited).....................................3
  
                  Condensed Consolidated Statement of Cash
                  Flows for the Nine Months Ended September 30,
                  1997 and 1996 (Unaudited).....................................4
  
                  Notes to Condensed Consolidated
                  Financial Statements (Unaudited)..........................5 - 9
  
          Item 2. Management's Discussion and Analysis
                  of Financial Condition and Results of
                  Operations..............................................10 - 16
  
  PART II. OTHER INFORMATION
  
          Item 1. Legal Proceedings............................................17
  
          Item 6. Exhibits and Reports on Form 8-K.............................17
  
          SIGNATURE............................................................18
  
                         -----------------------------------
  
  This Quarterly  Report on Form 10-Q contains  forward  looking  statements  made
  pursuant to the "safe harbor"  provisions of the Private  Securities  Litigation
  Reform Act of 1995.  Readers are cautioned that such forward looking  statements
  involve  risks and  uncertainties  which  could  significantly  affect  expected
  results  in the  future  from  those  expressed  in  any  such  forward  looking
  statements  made by, or on behalf,  of the Company.  Certain  factors that could
  cause actual  results to differ  materially  include,  without  limitation,  the
  effects of  legislative  and  regulatory  changes;  the  potential for increased
  competition;  technological  changes; the need to generate substantial growth in
  the subscriber base by successfully launching,  marketing and providing services
  in  identified  markets;  pricing  pressures  which could affect  demand for the
  Company's services; the Company's ability to expand its distribution; changes in
  labor, equipment and capital costs; future acquisitions,  strategic partnerships
  and  divestitures;  general  business and economic  conditions;  and other risks
  detailed  from time to time in the  Company's  periodic  reports  filed with the
  Securities and Exchange Commission.
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  PART I. FINANCIAL INFORMATION
  
  ITEM 1. FINANCIAL STATEMENTS
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
                                     (Unaudited)
  (Dollars in thousands, except share data)
                                                                                         September 30,    December 31,
                                                                                             1997             1996
  ASSETS
  CURRENT ASSETS
     Cash and cash equivalents....................................................          $12,481            $4,980
     Accounts receivable, less allowance for doubtful
       accounts of $5,830 and $3,148..............................................           64,174            66,425
     Inventories..................................................................           22,174            10,458
     Other current assets.........................................................            4,005             3,470
                                                                                         ----------        ----------
         Total current assets.....................................................          102,834            85,333
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................           29,404            29,823
                                                                                         ----------        ----------
  PROPERTY AND EQUIPMENT..........................................................          554,251           467,558
     Accumulated depreciation.....................................................         (163,665)         (114,144)
                                                                                         ----------        ----------
     Property and equipment, net..................................................          390,586           353,414
                                                                                         ----------        ----------
  DEFERRED CHARGES AND OTHER......................................................        1,261,557         1,245,283
     Accumulated amortization.....................................................         (327,755)         (285,671)
                                                                                         ----------        ----------
     Deferred charges and other, net..............................................          933,802           959,612
                                                                                         ----------        ----------
                                                                                         $1,456,626        $1,428,182
                                                                                         ==========        ==========
  LIABILITIES AND STOCKHOLDER'S DEFICIENCY
  CURRENT LIABILITIES
     Accounts payable and accrued expenses........................................          $81,660           $83,831
     Accrued commissions..........................................................            5,745             7,836
     Accrued interest.............................................................           38,239             3,166
     Deferred revenue and customer deposits.......................................           11,299             9,291
     Current portion of long-term debt............................................           10,423             1,902
     Due to affiliates............................................................           51,253            45,926
                                                                                         ----------        ----------
         Total current liabilities................................................          198,619           151,952
                                                                                         ----------        ----------
  LONG-TERM DEBT, less current portion............................................        1,139,596         1,259,325
                                                                                         ----------        ----------
  INVESTMENT IN AND DUE TO AFFILIATES.............................................          112,700           108,804
                                                                                         ----------        ----------
  DEFERRED INCOME TAXES...........................................................          233,963           256,737
                                                                                         ----------        ----------
  MINORITY INTEREST AND OTHER.....................................................            6,605             7,219
                                                                                         ----------        ----------
  
  COMMITMENTS AND CONTINGENCIES
  
  MANDATORILY REDEEMABLE PREFERRED STOCK HELD BY AFFILIATE........................          168,583
                                                                                         ----------        ----------
  STOCKHOLDER'S DEFICIENCY
     Common stock, $.01 par value - authorized, 1,000 shares; issued, 100 shares..
     Additional capital...........................................................          493,320           500,425
     Accumulated deficit..........................................................         (896,760)         (856,280)
                                                                                         ----------        ----------
         Total stockholder's deficiency...........................................         (403,440)         (355,855)
                                                                                         ----------        ----------
                                                                                         $1,456,626        $1,428,182
                                                                                         ==========        ==========
  See notes to condensed consolidated financial statements.
  
                                          2
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                                     (Unaudited)
  (Dollars in thousands)
                                                                          Nine Months Ended        Three Months Ended
                                                                            September 30,             September 30,
                                                                         1997         1996         1997         1996
  SERVICE INCOME, net...........................................       $335,380     $317,115      $115,107     $110,019
                                                                      ---------    ---------     ---------    --------- 
  
  COSTS AND EXPENSES
     Operating..................................................         28,242       26,415         9,311        9,120
     Selling, general and administrative........................        170,849      177,274        56,102       53,990
     Depreciation and amortization..............................         94,429       84,777        32,980       28,008
                                                                      ---------    ---------     ---------    --------- 
                                                                        293,520      288,466        98,393       91,118
                                                                      ---------    ---------     ---------    --------- 
  
  OPERATING INCOME..............................................         41,860       28,649        16,714       18,901
  
  OTHER (INCOME) EXPENSE
     Interest expense...........................................         89,061       86,131        27,896       30,453
     Investment income..........................................         (1,898)      (2,060)         (328)        (489)
     Equity in net losses of affiliates.........................          4,524        5,102         1,004        1,559
     Litigation settlement......................................                      21,647
     Other......................................................          1,173        2,340           733          242
                                                                      ---------    ---------     ---------    --------- 
                                                                         92,860      113,160        29,305       31,765
                                                                      ---------    ---------     ---------    --------- 
  LOSS BEFORE INCOME TAX BENEFIT AND
     EXTRAORDINARY ITEM.........................................        (51,000)     (84,511)      (12,591)     (12,864)
  
  INCOME TAX BENEFIT............................................        (17,833)     (32,286)       (4,132)      (4,961)
                                                                      ---------    ---------     ---------    --------- 
  
  LOSS BEFORE EXTRAORDINARY ITEM................................        (33,167)     (52,225)       (8,459)      (7,903)
  
  EXTRAORDINARY ITEM............................................         (7,313)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS......................................................        (40,480)     (52,225)       (8,459)      (7,903)
  
  PREFERRED DIVIDENDS...........................................         (7,105)                    (4,844)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS FOR COMMON STOCKHOLDER...............................       ($47,585)    ($52,225)     ($13,303)     ($7,903)
                                                                      =========    =========     =========    ========= 
  
  ACCUMULATED DEFICIT
     Beginning of period .......................................      ($856,280)   ($786,696)    ($888,301)   ($831,018)
     Net loss...................................................        (40,480)     (52,225)       (8,459)      (7,903)
                                                                      ---------    ---------     ---------    --------- 
     End of period..............................................      ($896,760)   ($838,921)    ($896,760)   ($838,921)
                                                                      =========    =========     =========    =========
  See notes to condensed consolidated financial statements.
  
                                          3
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (Unaudited)
  (Dollars in thousands)
                                                                                           Nine Months Ended September 30,
                                                                                              1997             1996
  OPERATING ACTIVITIES
     Net loss.....................................................................         ($40,480)         ($52,225)
     Adjustments to reconcile net loss to net cash provided
      by operating activities:
       Depreciation and amortization..............................................           94,429            84,777
       Non-cash interest expense..................................................           29,337            51,353
       Equity in net losses of affiliates.........................................            4,524             5,102
       Minority interest..........................................................            1,149               530
       Deferred management fees...................................................            2,211             4,159
       Deferred income taxes and other............................................          (20,599)          (31,113)
       Extraordinary item.........................................................            7,313
                                                                                         ----------        ---------- 
  
                                                                                             77,884            62,583
  
       (Increase) decrease in net accounts receivable, inventories
         and other current assets.................................................          (10,000)           27,195
       Increase in accrued interest...............................................           35,073             1,861
       Decrease in accounts payable and accrued expenses, accrued commissions
         and deferred revenue and customer deposits...............................           (2,254)          (14,377)
                                                                                         ----------        ---------- 
  
             Net cash provided by operating activities............................          100,703            77,262
                                                                                         ----------        ---------- 
  
  FINANCING ACTIVITIES
     Proceeds from borrowings.....................................................        1,018,370           140,000
     Repayments of long-term debt.................................................       (1,155,076)           (1,500) 
  
     Repayments under deferred payment plan.......................................                            (85,413)
     Deferred financing costs.....................................................          (28,353)
     Proceeds from issuance of mandatorily redeemable preferred 
       stock to affiliate.........................................................          161,478
     Net transactions with affiliates.............................................             (932)            5,747
                                                                                         ----------        ---------- 
  
             Net cash (used in) provided by financing activities..................           (4,513)           58,834
                                                                                         ----------        ---------- 
  
  INVESTING ACTIVITIES
     Capital expenditures.........................................................          (87,213)          (69,026)
     Acquisitions, net of cash acquired...........................................                            (13,958)
     Other........................................................................           (1,476)          (24,801)
                                                                                         ----------        ---------- 
  
             Net cash used in investing activities................................          (88,689)         (107,785)
                                                                                         ----------        ---------- 
  
  INCREASE IN CASH AND CASH EQUIVALENTS...........................................            7,501            28,311
  
  CASH AND CASH EQUIVALENTS, beginning of period..................................            4,980            19,640
                                                                                         ----------        ---------- 
  
  CASH AND CASH EQUIVALENTS, end of period........................................          $12,481           $47,951
                                                                                         ==========        ==========
  See notes to condensed consolidated financial statements.
  
                                          4
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  1.   ORGANIZATION
  
       Comcast Cellular  Holdings,  Inc. ("the Company") was incorporated on March
       27,  1997  under  the  laws  of the  State  of  Delaware.  At the  date  of
       incorporation,  the Company issued 100 shares of its newly  authorized $.01
       par value  common  stock to Comcast  Corporation  ("Comcast")  and became a
       wholly owned subsidiary of Comcast.
  
       On May 7, 1997,  Comcast  contributed all 100 of the issued and outstanding
       $.01 par value  common  shares of Comcast  Cellular  Corporation  ("Comcast
       Cellular"),  its wholly owned subsidiary, to the Company. This contribution
       was  accounted  for  in  a  manner  similar  to  a  pooling  of  interests.
       Accordingly, the condensed consolidated financial statements of the Company
       include the  accounts of the Company and Comcast  Cellular  for all periods
       presented.   The  Company  is  principally   engaged  in  the  development,
       management  and  operation  of cellular  telephone  communications  systems
       located in Pennsylvania, New Jersey and Delaware.
  
  2.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
       Basis of Presentation
       The condensed  consolidated  balance sheet as of December 31, 1996 has been
       condensed from the audited  consolidated balance sheet as of that date. The
       condensed  consolidated  balance  sheet  as  of  September  30,  1997,  the
       condensed  consolidated statement of operations and accumulated deficit for
       the  nine  and  three  months  ended  September  30,  1997 and 1996 and the
       condensed  consolidated  statement  of cash flows for the nine months ended
       September  30, 1997 and 1996 have been prepared by the Company and have not
       been  audited by the  Company's  independent  auditors.  In the  opinion of
       management,   all   adjustments   (which  include  only  normal   recurring
       adjustments) necessary to present fairly the financial position, results of
       operations  and cash flows as of  September  30,  1997 and for all  periods
       presented have been made.
  
       Certain information and note disclosures normally included in the Company's
       annual financial  statements prepared in accordance with generally accepted
       accounting  principles  have been  condensed  or omitted.  These  condensed
       consolidated  financial  statements  should be read in conjunction with the
       Company's December 31, 1996 audited consolidated financial statements which
       were  included  in  the  Company's  Registration  Statement  on  Form  S-4,
       effective  as of  September  30,  1997,  as filed with the  Securities  and
       Exchange  Commission.  The  results of  operations  for the  periods  ended
       September 30, 1997 are not necessarily  indicative of operating results for
       the full year.
  
       Reclassifications
       Certain  reclassifications  have  been  made to the  prior  year  condensed
       consolidated  financial statements to conform to those classifications used
       in 1997.
  
  3.   ACQUISITIONS AND OTHER SIGNIFICANT EVENTS
  
       Debt Offering
       In May 1997,  the  Company  completed  the sale of $1.0  billion  principal
       amount of 9 1/2% Senior Notes due 2007 (the "Old Notes")  through a private
       offering with registration rights (the "Offering").
  
       Interest  on the Old Notes is  payable in cash  semi-annually  on May 1 and
       November 1 of each year,  commencing on November 1, 1997. The Old Notes are
       redeemable,  in whole or in part, at the option of the Company, at any time
       on or after May 1, 2002 at a redemption price,  initially of 104.75% of the
       principal amount of the Old Notes and declining  annually to 100% on May 1,
       2005, plus accrued and unpaid interest,  if any, to the date of redemption.
       In addition,  prior to May 1, 2000, the Company may redeem the Old Notes at
       a price equal to 108.5% of the  principal  amount,  plus accrued and unpaid
       interest,  if any, to the redemption  date, with the net cash proceeds from
       one or more Public Equity Offerings (as defined);  provided,  however, that
       at least 65% of the  originally  issued  principal  amount of the Old Notes
       would remain  outstanding after giving effect to any such redemption.  Upon
       the occurrence of a Change of Control  Triggering Event (as defined),  each
       holder of the Old  Notes  will have the right to  require  the  Company  to
       repurchase  such holder's Old Notes at 101% of the principal  amount,  plus
       accrued and unpaid interest, if any, to the repurchase date.
  
                                          5
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       The Old Notes are general  unsecured  obligations  of the  Company  ranking
       senior to all  subordinated  Indebtedness  (as  defined) of the Company and
       pari passu in right of payment with all other existing and future unsecured
       unsubordinated  Indebtedness  (as  defined)  and other  liabilities  of the
       Company. The Old Notes are subordinate to all liabilities,  including trade
       payables, of the Company's subsidiaries.
  
       The indenture for the Old Notes imposes certain  limitations on the ability
       of the Company and its Restricted Subsidiaries (as defined) to, among other
       things,  incur  Indebtedness  (as defined),  make  Restricted  Payments (as
       defined), including the payment of cash dividends on the Company's Series A
       Preferred Stock (see below), effect certain Asset Sales (as defined), enter
       into certain  transactions  with affiliates,  merge or consolidate with any
       other person or transfer all or  substantially  all of their properties and
       assets.
  
       In October 1997, the Company completed an exchange of 100% of the Old Notes
       for new notes (the "Notes")  (having the terms described  above) which were
       registered under the Securities Act of 1933, as amended.
  
       Redemption of Zero Coupon Notes
       In May 1997,  the Company  contributed  the net proceeds of $971.2  million
       from the  Offering to Comcast  Cellular.  On May 19, 1997 (the  "Redemption
       Date"),  Comcast  Cellular used such proceeds to redeem all of its Series A
       Senior  Participating  Redeemable  Zero Coupon  Notes Due 2000 and Series B
       Senior Participating  Redeemable Zero Coupon Notes Due 2000 (together,  the
       "Zero  Coupon  Notes"),  including  the Zero  Coupon  Notes held by Comcast
       Cellular  Communications,  Inc.  ("CCCI"),  a wholly  owned  subsidiary  of
       Comcast Cellular, and Comcast Financial Corporation ("CFC"), a wholly owned
       subsidiary of Comcast.  Unamortized debt  acquisition  costs related to the
       Zero Coupon Notes were not significant. As of the Redemption Date, the Zero
       Coupon Notes had an aggregate  accreted value of $742.4 million,  including
       the Zero Coupon Notes held by CCCI and CFC with  accreted  values of $114.1
       million and $161.5 million,  respectively. On the Redemption Date, CFC used
       the $161.5 million  received upon  redemption of the Zero Coupon Notes held
       by it to purchase  1,614,775  shares of the Company's newly authorized $.01
       par value,  Series A Preferred Stock (see below).  The Company  contributed
       the $161.5 million  received from the sale of its Series A Preferred  Stock
       to  Comcast  Cellular,  which  in  turn  contributed  such  amount  and the
       remaining net proceeds from the Offering,  totaling $228.8 million, to CCCI
       to repay a portion of the amounts outstanding under its $1.3 billion credit
       agreement with certain banks (the "Credit Agreement").
  
       Repayment of Term Loan and Revolving Credit Loan
       The Credit  Agreement  provided for a term loan in the principal  amount of
       $300.0 million due 2004 (the "Term Loan") and a reducing  revolving  credit
       facility of up to $1.0 billion (the "Revolving  Credit Loan"). In May 1997,
       subsequent to the Offering,  CCCI canceled  $575.0 million of its Revolving
       Credit  Loan,  thereby  reducing  the $1.0  billion  commitment  to  $425.0
       million.  CCCI used the amounts  contributed  by Comcast  Cellular  and the
       proceeds  received  upon  redemption  of the Zero  Coupon  Notes held by it
       (aggregating $504.4 million),  as well as available cash, to repay the Term
       Loan and $205.0 million under the Revolving Credit Loan. In connection with
       the repayment of the Term Loan and the  reduction of the  Revolving  Credit
       Loan  commitment,  during the nine months ended  September  30,  1997,  the
       Company  expensed  unamortized  debt  acquisition  costs of $11.3  million,
       resulting in an  extraordinary  loss,  net of tax, of $7.3  million.  As of
       September 30, 1997,  the Company had  outstanding  $150.0 million under the
       Revolving  Credit Loan. In October 1997,  the Company made an optional debt
       repayment on the Revolving  Credit Loan of $10.0 million with existing cash
       and cash equivalents. Current portion of long-term debt as of September 30,
       1997 includes such amount.
  
       In October 1997, the Company  refinanced the Revolving Credit Loan with the
       proceeds from borrowings  under a new $400.0 million credit  agreement (the
       "New Bank Facility") with certain banks (the "Refinancing"), which consists
       of a $300.0 million five and  one-quarter  year revolving  credit  facility
       (the "Tranche A Facility") and a $100.0 million  364-day  revolving  credit
       facility (the "Tranche B Facility").  Amounts outstanding under the Tranche
       B  Facility  at the  end of the  364-day  period  are  convertible,  at the
       Company's  option,  into a four and one-quarter year term loan.  Borrowings
       under the New Bank Facility bear interest at a rate equal to, at the option
       of the  Company,  either (a) the  greater of the (i) prime rate or (ii) the
       federal funds rate plus 1/2% or (b) the Applicable Margin, as defined based
       on CCCI's leverage ratio, plus the London Interbank  Offered Rate.  Initial
       borrowings  under  the  Tranche A  Facility  of  $215.0  million  were used
       principally to repay existing debt, to pay interest on the Notes, to
  
                                          6
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       purchase twelve 10-MHz personal  communications  services  ("PCS") licenses
       from  Comcast,  at  Comcast's  cost of $17.5  million,  and to repay  $17.0
       million of previously deferred management fees to Comcast (see Note 5). The
       purchase  of the PCS  licenses  is  subject to the  Federal  Communications
       Commission's  approval of their transfer to the Company. In connection with
       the  Refinancing,  the Company will expense  unamortized  debt  acquisition
       costs of approximately  $5.2 million,  resulting in an extraordinary  loss,
       net of tax, of approximately $3.4 million in the fourth quarter of 1997.
  
       Borrowings  under  the New Bank  Facility  are  senior to the Notes and are
       secured by a pledge of the capital  stock of CCCI's  subsidiaries.  The New
       Bank Facility contains various  covenants,  including  financial  covenants
       restricting  changes in control (or making  such an event of  default)  and
       restricting the payment of dividends,  distributions  and loans or advances
       to the Company.
  
       Authorization and Issuance of Mandatorily Redeemable Preferred Stock
       In May 1997,  the Company  authorized  10,000,000  shares of $.01 par value
       preferred  stock  and  designated  5,200,000  of such  shares  as  Series A
       Preferred  Stock. In May 1997, the Company issued  1,614,775  shares of its
       mandatorily  redeemable Series A Preferred Stock to CFC. Each holder of the
       Series A Preferred  Stock is entitled to receive  cumulative cash dividends
       at the annual  rate of $12 per share,  payable  semi-annually  on May 1 and
       November  1 each  year,  in  arrears.  At the  option  of the  Company,  by
       declaration of the Company's  Board of Directors,  dividends may be paid in
       additional  shares of Series A Preferred  Stock (the  "Additional  Shares")
       instead of cash through May 1, 2007.  To the extent  dividends  are paid in
       Additional Shares, such Additional Shares shall be valued at $100 per share
       with a liquidation value of $100 per share. The Series A Preferred Stock is
       redeemable, at the option of the Company, at any time prior to May 2, 2007,
       at a redemption price of $100 per share, plus accrued and unpaid dividends,
       and is  mandatorily  redeemable on May 2, 2007 after final  maturity of the
       Notes,  subject to certain  conditions.  The  Series A  Preferred  Stock is
       generally non-voting.
  
       Cellular Retail Stores
       In August 1996,  the Company  acquired  twelve  cellular  retail stores and
       direct sales locations  located in  Pennsylvania,  New Jersey and Delaware,
       and related assets from Advanced Telecomm, Inc. for $6.5 million in cash.
       The Company accounted for the acquisition under the purchase method.
  
       Atlantic City Cellular System
       In June 1996,  the  Company  completed  its  acquisition  of the license to
       operate the non-wireline  cellular  telephone system for the Atlantic City,
       NJ Metropolitan  Statistical Area (the "Atlantic City Cellular System") for
       $7.5 million in cash. The Company  accounted for the acquisition  under the
       purchase method and began  consolidating  the Atlantic City Cellular System
       effective June 1, 1996.
  
       Litigation Settlement
       The  Company was  involved in various  civil  lawsuits  and  administrative
       proceedings regarding the ownership,  operation and transfer of the license
       for the Atlantic City Cellular System. In March 1995, the Company, Comcast,
       Telephone  and  Data  Systems,   Inc.   ("TDS"),   United  States  Cellular
       Corporation,  Ellis Thompson and Ellis Thompson  Corporation entered into a
       Settlement   Agreement  (the   "Settlement   Agreement")  with  respect  to
       outstanding  civil  litigation.  During the nine months ended September 30,
       1996, the Company recorded $21.6 million of estimated litigation settlement
       expense  in  its  condensed   consolidated   statement  of  operations  and
       accumulated  deficit.  In June 1996,  the  Company  paid such amount to TDS
       under the Settlement Agreement.
  
       Delaware 1 RSA
       In May 1996, the Company and  Southwestern  Bell Mobile Systems,  through a
       partnership owned 50% by each of them,  purchased the remaining 84% limited
       partnership  interests  of the  Delaware 1 Rural  Statistical  Area ("RSA")
       Limited Partnership,  the licensee of the non-wireline cellular license for
       the Kent and Sussex,  DE RSA (the  "Delaware  1 RSA") for $44.1  million in
       cash, of which the Company's share was $22.1 million. The surviving entity,
       C-SW Cellular  Partnership,  a Delaware general partnership,  now holds the
       cellular  license  for  the  Delaware  1  RSA.  American  Cellular  Network
       Corporation,  an indirect wholly owned  subsidiary of the Company,  manages
       the daily  operations  of the C-SW Cellular  Partnership's  interest in the
       Delaware 1 RSA. The Company's investment 
  
                                          7
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       of $29.4  million and $29.8  million as of September  30, 1997 and December
       31, 1996,  respectively,  is accounted  for under the equity  method and is
       classified  as   investment   in  affiliate  in  the  Company's   condensed
       consolidated balance sheet.
  
  4.   INVESTMENT IN AND DUE TO AFFILIATES
  
       In 1992,  a  subsidiary  of AWACS,  Inc.,  an  indirect  subsidiary  of the
       Company,  issued a note (the "AWACS Note") with an initial principal amount
       of $51.0 million to purchase,  from a subsidiary of Comcast,  a 40% limited
       partnership  interest  in Garden  State  Cablevision  L.P.  ("Garden  State
       Cablevision").  The AWACS Note bears  interest  at a rate of 11% per annum.
       Interest is payable on a quarterly  basis to the extent of available  cash,
       with any unpaid interest added to principal.  Interest expense on the AWACS
       Note was $3.8 million,  $6.2 million,  $1.3 million and $2.2 million during
       the nine and three months ended September 30, 1997 and 1996,  respectively.
       From the date of issuance  through  September  30, 1997,  $35.5  million of
       principal  and  interest  has been paid on the AWACS Note with the proceeds
       from distributions from Garden State Cablevision.  The balance of the AWACS
       Note, originally due on September 30, 1997, is due on demand.  Accordingly,
       such  balance has been  classified  as current in the  Company's  condensed
       consolidated balance sheet.
  
       Under  the  terms  of the  partnership  agreement,  49.5% of  Garden  State
       Cablevision's net losses are allocated to the Company. Summarized financial
       information  for Garden State  Cablevision as of September 30, 1997 and for
       the nine and three months ended  September  30, 1997 and 1996 is as follows
       (dollars in thousands):
  Nine Months Ended        Three Months Ended
                                                                       September 30,             September 30,
                                                                     1997         1996         1997         1996
  Results of Operations
       Service income.......................................        $81,754      $74,863    $27,208       $25,394
       Operating, selling, general and administrative
         expenses...........................................        (34,240)     (32,548)   (11,218)      (10,866)
       Depreciation and amortization........................        (33,854)     (36,367)   (10,962)      (12,198)
       Operating income.....................................         13,660        5,948      5,028         2,330
       Net loss.............................................         (8,293)     (10,882)    (2,288)       (3,150)
       Company's equity in net loss.........................         (4,105)      (5,386)    (1,133)       (1,559)
  
                                                                     September 30,
                                                                         1997
       Financial Position
       Current assets...........................................     $    8,026
       Noncurrent assets........................................        148,450
       Current liabilities......................................         20,763
       Noncurrent liabilities...................................        326,274
  5.   RELATED PARTY TRANSACTIONS
  
       Comcast  and  CCCI  were  parties  to  a  management  agreement  (the  "Old
       Management  Agreement")  pursuant to which Comcast managed the business and
       operations of CCCI. In May 1997,  subsequent to the  redemption of the Zero
       Coupon Notes, the Old Management Agreement was terminated and replaced with
       a new management agreement (the "New Management  Agreement") which provides
       for an  annual  management  fee of 1.5%  of  revenues.  The New  Management
       Agreement  eliminated  the prior  management  fee which was limited to $5.0
       million, subject to annual increases based on the consumer price index. The
       New  Management  Agreement  has a ten year  term.  Management  fees of $4.7
       million,  $4.2  million,  $1.7  million and $1.4  million  were  charged to
       selling,  general  and  administrative  expenses  during the nine and three
       months  ended  September  30, 1997 and 1996,  respectively  (on a pro forma
       basis, giving effect to the New Management  Agreement,  management fees for
       the nine and three months ended September 30, 1997 and 1996 would have been
       $5.0 million, $4.8 million,  $1.7 million and $1.7 million,  respectively).
       As of 
  
                                          8
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
                                     (Unaudited)
  
       September 30, 1997 and December 31, 1996, deferred management fees payable,
       which are included in long-term  investment in and due to affiliates in the
       Company's condensed  consolidated  balance sheet, totaled $17.0 million and
       $14.7  million,  respectively.  In November  1997, the Company repaid $17.0
       million of previously deferred management fees to Comcast with a portion of
       the proceeds from the initial  borrowings  under the New Bank Facility (see
       Note 3).
  
  6.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
  
       The  Company  made cash  payments  for  interest  of $24.7  million,  $34.9
       million,  $2.5 million and $14.6  million  during the nine and three months
       ended September 30, 1997 and 1996, respectively.
  
       The Company  made cash  payments  for income  taxes of $0.4  million,  $0.7
       million,  $0.2  million and $0.1  million  during the nine and three months
       ended September 30, 1997 and 1996, respectively.
  
  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 these  actions will not  materially
       affect the  financial  position,  results of operations or liquidity of the
       Company.
  
                                          9
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS
  
  Overview
  
  Comcast  Cellular  Holdings,   Inc.  ("the  Company"),  a  Delaware  corporation
  incorporated  on March 27, 1997, is a direct wholly owned  subsidiary of Comcast
  Corporation  ("Comcast")  and is a  holding  company  that  conducts  all of its
  operations through its wholly owned subsidiaries,  Comcast Cellular  Corporation
  ("Comcast Cellular"), Comcast Cellular Communications,  Inc. ("CCCI") and CCCI's
  subsidiaries.  On May 7, 1997, Comcast contributed all 100 of Comcast Cellular's
  issued and  outstanding  shares of common stock held by it to the Company.  This
  contribution  has  been  accounted  for in a  manner  similar  to a  pooling  of
  interests.   Accordingly,  the  accompanying  condensed  consolidated  financial
  statements  of the Company  include the  accounts  of Comcast  Cellular  for all
  periods  presented.  The  Company is  principally  engaged  in the  development,
  management and operation of cellular telephone communications systems located in
  Pennsylvania, New Jersey and Delaware.
  
  The Company's  business is capital  intensive and continually  requires cash for
  development,  expansion and debt service.  The Company has  historically met its
  cash needs for operations through its cash flows from operating activities. Cash
  requirements  for  acquisitions  and  capital  expenditures  have been  provided
  through the  Company's  financing  activities,  as well as its existing cash and
  cash equivalents.
  
  General Developments of Business
  
  Cellular Retail Stores
  In August 1996, the Company  acquired  twelve  cellular retail stores and direct
  sales locations  located in Pennsylvania,  New Jersey and Delaware,  and related
  assets  from  Advanced  Telecomm,  Inc.  for $6.5  million in cash.  The Company
  accounted for the acquisition under the purchase method.
  
  Atlantic City Cellular System
  In June 1996,  the Company  completed its  acquisition of the license to operate
  the   non-wireline   cellular   telephone  system  for  the  Atlantic  City,  NJ
  Metropolitan  Statistical  Area (the "Atlantic  City Cellular  System") for $7.5
  million in cash. The Company  accounted for the  acquisition  under the purchase
  method and began  consolidating the Atlantic City Cellular System effective June
  1, 1996.
  
  Delaware 1 RSA
  In May 1996,  the  Company  and  Southwestern  Bell  Mobile  Systems,  through a
  partnership  owned 50% by each of them,  purchased  the  remaining  84%  limited
  partnership  interests of the Delaware 1 Rural  Statistical Area ("RSA") Limited
  Partnership,  the licensee of the non-wireline cellular license for the Kent and
  Sussex,  DE RSA (the  "Delaware 1 RSA") for $44.1  million in cash, of which the
  Company's  share  was  $22.1  million.   The  surviving  entity,  C-SW  Cellular
  Partnership, a Delaware general partnership,  now holds the cellular license for
  the Delaware 1 RSA.  American Cellular Network  Corporation,  an indirect wholly
  owned  subsidiary  of the  Company,  manages  the daily  operations  of the C-SW
  Cellular  Partnership's interest in the Delaware 1 RSA. The Company's investment
  of $29.4  million and $29.8  million as of  September  30, 1997 and December 31,
  1996,  respectively,  is accounted for under the equity method and is classified
  as  investment  in affiliate in the  Company's  condensed  consolidated  balance
  sheet.
  
  LCH Preferred Stock Redemption
  In June 1994, LCH Communications, Inc. redeemed the Class A Redeemable Preferred
  Stock (the "LCH  Preferred  Stock") held by CCCI through the transfer to CCCI of
  100% of the  capital  stock of LIN  Cellular  Communications  Corporation.  As a
  result of such  redemption,  the Company owns 100% of the common stock of AWACS,
  Inc.  ("AWACS"),  a wholly  owned  subsidiary  of CCCI.  Since the  Company  has
  historically  accounted  for the  purchase of AWACS as if it had acquired a 100%
  direct interest,  the redemption of the LCH Preferred Stock had no effect on the
  Company's accounting for AWACS.
  
  In addition to the interest in AWACS,  the redemption of the LCH Preferred Stock
  entitled  the  Company to an  interest in certain  publishing  and  broadcasting
  operations. CCCI issued to Metromedia Company participating preferred stock
  
                                         10
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  which had economic attributes based on the performance and ultimate value of the
  publishing  and  broadcasting  operations.  In  June  1997,  CCCI  redeemed  the
  participating  preferred stock in exchange for such assets.  As these operations
  are  excluded  from  the  Company's  consolidated   financial  statements,   the
  redemption  of the  participating  preferred  stock had no  financial  statement
  effect.
  
  Liquidity and Capital Resources
  
  Cash and Cash Equivalents
  The Company's cash  equivalents  are recorded at cost which  approximates  their
  fair value.  As of September  30,  1997,  cash and cash  equivalents  were $12.5
  million.
  
  Financing
  In May 1997, the Company  completed the sale of $1.0 billion principal amount of
  9 1/2% Senior Notes due 2007 (the "Old Notes")  through a private  offering with
  registration rights (the "Offering").
  
  Interest on the Old Notes is payable in cash semi-annually on May 1 and November
  1 of each year, commencing on November 1, 1997. The Old Notes are redeemable, in
  whole or in part,  at the option of the Company,  at any time on or after May 1,
  2002 at a redemption price,  initially of 104.75% of the principal amount of the
  Old Notes and declining annually to 100% on May 1, 2005, plus accrued and unpaid
  interest, if any, to the date of redemption.  In addition, prior to May 1, 2000,
  the Company may redeem the Old Notes at a price equal to 108.5% of the principal
  amount,  plus accrued and unpaid interest,  if any, to the redemption date, with
  the net cash  proceeds  from one or more Public  Equity  Offerings (as defined);
  provided,  however,  that at least 65% of the originally issued principal amount
  of the Old  Notes  would  remain  outstanding  after  giving  effect to any such
  redemption.  Upon the  occurrence  of a Change of Control  Triggering  Event (as
  defined),  each  holder of the Old Notes  will  have the  right to  require  the
  Company to repurchase  such holder's Old Notes at 101% of the principal  amount,
  plus accrued and unpaid interest, if any, to the repurchase date.
  
  The Old Notes are general unsecured obligations of the Company ranking senior to
  all  subordinated  Indebtedness  (as  defined)  of the Company and pari passu in
  right of payment  with all other  existing and future  unsecured  unsubordinated
  Indebtedness  (as defined) and other  liabilities of the Company.  The Old Notes
  are subordinate to all liabilities,  including trade payables,  of the Company's
  subsidiaries.
  
  The indenture for the Old Notes imposes  certain  limitations  on the ability of
  the Company and its Restricted Subsidiaries (as defined) to, among other things,
  incur  Indebtedness  (as  defined),   make  Restricted  Payments  (as  defined),
  including  the payment of cash  dividends  on the  Company's  Series A Preferred
  Stock (see below),  effect certain Asset Sales (as defined),  enter into certain
  transactions  with  affiliates,  merge or  consolidate  with any other person or
  transfer all or substantially all of their properties and assets.
  
  In October 1997, the Company  completed an exchange of 100% of the Old Notes for
  new notes (the "Notes") (having the terms described above) which were registered
  under the Securities Act of 1933, as amended.
  
  In May 1997, the Company contributed the net proceeds of $971.2 million from the
  Offering to Comcast Cellular.  On May 19, 1997 (the "Redemption Date"),  Comcast
  Cellular used such  proceeds to redeem all of its Series A Senior  Participating
  Redeemable  Zero  Coupon  Notes  Due  2000 and  Series  B  Senior  Participating
  Redeemable  Zero Coupon  Notes Due 2000  (together,  the "Zero  Coupon  Notes"),
  including the Zero Coupon Notes held by CCCI and Comcast  Financial  Corporation
  ("CFC"),  a wholly owned  subsidiary of Comcast.  Unamortized  debt  acquisition
  costs  related  to  the  Zero  Coupon  Notes  were  not  significant.  As of the
  Redemption Date, the Zero Coupon Notes had an aggregate accreted value of $742.4
  million,  including  the Zero  Coupon  Notes held by CCCI and CFC with  accreted
  values of $114.1  million and $161.5  million,  respectively.  On the Redemption
  Date,  CFC used the $161.5 million  received upon  redemption of the Zero Coupon
  Notes held by it to purchase  1,614,775 shares of the Company's newly authorized
  $.01 par value,  Series A Preferred Stock (see below).  The Company  contributed
  the $161.5  million  received  from the sale of its Series A Preferred  Stock to
  Comcast  Cellular,  which in turn  contributed such amount and the remaining net
  proceeds from the Offering,  totaling $228.8 million, to CCCI to repay a portion
  of the amounts  outstanding under its $1.3 billion credit agreement with certain
  banks (the "Credit Agreement").
  
                                         11
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  The Credit Agreement  provided for a term loan in the principal amount of $300.0
  million due 2004 (the "Term Loan") and a reducing  revolving  credit facility of
  up to $1.0 billion (the "Revolving Credit Loan").  Interest is payable quarterly
  at rates  based on a base,  London  Interbank  Offered  Rate or  Certificate  of
  Deposit rate, plus a percentage which varies as the ratio of total  indebtedness
  to annual  operating cash flow (as defined) varies.  In May 1997,  subsequent to
  the Offering, CCCI canceled $575.0 million of its Revolving Credit Loan, thereby
  reducing the $1.0 billion  commitment to $425.0  million.  CCCI used the amounts
  contributed by Comcast Cellular and the proceeds received upon redemption of the
  Zero Coupon Notes held by it (aggregating $504.4 million),  as well as available
  cash, to repay the Term Loan and $205.0 million under the Revolving Credit Loan.
  In  connection  with the  repayment  of the Term Loan and the  reduction  of the
  Revolving  Credit Loan  commitment,  during the nine months ended  September 30,
  1997, the Company expensed  unamortized debt acquisition costs of $11.3 million,
  resulting in an extraordinary loss, net of tax, of $7.3 million. As of September
  30, 1997, the Company had outstanding  $150.0 million under its Revolving Credit
  Loan.  In October  1997,  the Company  made an optional  debt  repayment  on the
  Revolving Credit Loan of $10.0 million with existing cash and cash  equivalents.
  Current portion of long-term debt as of September 30, 1997 includes such amount.
  
  At  the  option  of the  Company,  by  declaration  of the  Company's  Board  of
  Directors,  dividends on the Series A Preferred  Stock may be paid in additional
  shares of Series A Preferred  Stock (the  "Additional  Shares")  instead of cash
  through May 1, 2007. To the extent dividends are paid in Additional Shares, such
  Additional  Shares shall be valued at $100 per share with a liquidation value of
  $100 per share. The Series A Preferred Stock is redeemable, at the option of the
  Company  at any time  prior to May 2, 2007,  at a  redemption  price of $100 per
  share, plus accrued and unpaid dividends,  and is mandatorily  redeemable on May
  2, 2007, after final maturity of the Notes,  subject to certain conditions.  The
  Series A Preferred Stock is generally non-voting.
  
  In October  1997,  the Company  refinanced  the  Revolving  Credit Loan with the
  proceeds from borrowings  under a new $400.0 million credit  agreement (the "New
  Bank  Facility")  with certain  banks (the  "Refinancing")  which  consists of a
  $300.0 million five and one-quarter year revolving credit facility (the "Tranche
  A  Facility")  and a $100.0  million  364-day  revolving  credit  facility  (the
  "Tranche B Facility").  Amounts  outstanding under the Tranche B Facility at the
  end of the 364-day period are convertible,  at the Company's option, into a four
  and  one-quarter  year term loan.  Borrowings  under the New Bank  Facility bear
  interest  at a rate  equal to,  at the  option of the  Company,  either  (a) the
  greater  of the (i) prime rate or (ii) the  federal  funds rate plus 1/2% or (b)
  the  Applicable  Margin,  as defined based on CCCI's  leverage  ratio,  plus the
  London Interbank Offered Rate.  Initial  borrowings under the Tranche A Facility
  of $215.0 million were used  principally to repay existing debt, to pay interest
  on the Notes, to purchase twelve 10-MHz personal communications services ("PCS")
  licenses from Comcast,  at Comcast's cost of $17.5  million,  and to repay $17.0
  million of previously deferred  management fees to Comcast.  The purchase of the
  PCS licenses is subject to the Federal  Communications  Commission's approval of
  their transfer to the Company.  In connection with the Refinancing,  the Company
  will expense  unamortized debt acquisition costs of approximately  $5.2 million,
  resulting in an extraordinary loss, net of tax, of approximately $3.4 million in
  the fourth quarter of 1997.
  
  Borrowings  under the New Bank  Facility are senior to the Notes and are secured
  by a pledge of the capital stock of CCCI's  subsidiaries.  The New Bank Facility
  contains various covenants, including financial covenants restricting changes in
  control  (or making  such an event of default)  and  restricting  the payment of
  dividends, distributions or loans or advances to the Company.
  
  During the fourth  quarter of 1997,  it is  expected  that the  Company  will be
  merged with and into Comcast  Cellular with Comcast Cellular being the surviving
  entity.   Upon  consummation  of  the  merger,  the  Notes  will  become  direct
  obligations of Comcast Cellular.
  
  As of September 30, 1997 and December 31, 1996, the Company's  weighted  average
  interest was 9.11% and 8.74%,  respectively.  The Company continually  evaluates
  its debt structure with the intention of reducing its debt service  requirements
  when desirable.
  
  The Company is a holding  company and  conducts  all of its  operations  through
  subsidiaries  of CCCI.  Consequently,  the  ability  of the  Company  to pay its
  obligations,  including  its  obligation to pay interest on and principal of the
  Notes,  whether at the  maturity  thereof or upon an earlier  redemption  at the
  option of the  Company or the  holders of the Notes,  will be  dependent  on the
  ability of the Company to receive  dividends and other payments or advances from
  its
  
                                         12
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  subsidiaries or to obtain additional  capital or other payments or advances,  in
  cash or otherwise from Comcast (which has no obligation to provide such capital,
  payments or advances)  or from another  source.  CCCI and its  subsidiaries  are
  separate  and distinct  legal  entities and have no  obligation,  contingent  or
  otherwise,  to pay any  amounts  due  pursuant  to the  Notes  or to make  funds
  available  therefor.  The  ability of CCCI to pay  dividends  or for CCCI or its
  subsidiaries  to make other payments or advances to the Company will depend upon
  the  operating  results of CCCI and its  subsidiaries  and any  restrictions  on
  paying such  dividends or making such  payments or advances as may be applicable
  to CCCI or any of its  subsidiaries,  such as  those  contained  in the New Bank
  Facility. There can be no assurance that the Company will be able to improve its
  results of  operations  or that  funds will be  available  to the  Company  from
  Comcast, CCCI or other sources on satisfactory terms or at all.
  
  The Company  believes  that it will be able to meet its  current  and  long-term
  liquidity and capital  requirements,  including fixed charges,  through its cash
  flows from operating activities, existing cash and cash equivalents,  borrowings
  under the New Bank Facility and other external financing.
  
  Statement of Cash Flows
  
  Cash and cash  equivalents  increased $7.5 million as of September 30, 1997 from
  December 31, 1996 and  increased  $28.3  million as of  September  30, 1996 from
  December 31, 1995.  Increases in cash and cash  equivalents  resulted  from cash
  flows from  operating,  financing and investing  activities  which are explained
  below.
  
  Net cash provided by operating  activities  was $100.7 million and $77.3 million
  for the nine  months  ended  September  30,  1997 and  1996,  respectively.  The
  increase of $23.4  million from 1996 to 1997 is due primarily to the increase in
  the Company's operating income before depreciation and amortization expense (see
  "Results  of  Operations")  and the  effects of changes in working  capital as a
  result of the timing of receipts and disbursements.
  
  Net cash (used in) provided by financing activities was ($4.5) million and $58.8
  million for the nine months  ended  September  30, 1997 and 1996,  respectively.
  During the nine months ended  September 30, 1997,  the Company  incurred  $998.4
  million of  indebtedness  in  connection  with the Offering  and borrowed  $20.0
  million under the Revolving  Credit Loan, and repaid $1.155 billion of long-term
  borrowings,  including  $628.3 million of Zero Coupon Notes,  the $300.0 million
  Term Loan and $225.0  million  under the  Revolving  Credit  Loan.  In addition,
  during the nine months ended  September 30, 1997,  the Company  received  $161.5
  million from the issuance of its Series A Preferred  Stock.  Deferred  financing
  costs incurred  during the nine months ended  September 30, 1997 were related to
  the issuance of the Old Notes.  During the nine months ended September 30, 1996,
  the Company  borrowed  $140.0  million under the Revolving  Credit Loan and paid
  $85.4 million for equipment  purchased during 1995 subject to a deferred payment
  plan.
  
  Net cash used in investing  activities  was $88.7 million and $107.8 million for
  the nine months ended September 30, 1997 and 1996, respectively. The decrease of
  $19.1  million from 1996 to 1997 is due to the effects of the Delaware RSA 1 and
  Atlantic City Cellular  System  acquisitions  in 1996,  offset by an increase in
  capital expenditures of $18.2 million from 1996 to 1997.
  
  Results of Operations
  
  Summarized  consolidated  financial information for the Company for the nine and
  three  months  ended  September  30,  1997 and 1996 is as  follows  (dollars  in
  millions, "NM" denotes percentage is not meaningful):
  
                                         13
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  Nine Months Ended
                                                            September 30,                   Increase / (Decrease)
                                                         1997             1996                $               %
  Service income, net..............................     $335.4           $317.1             $18.3            5.8%
  Operating, selling, general and administrative
       expenses....................................      199.1            203.7              (4.6)          (2.3)
                                                         -----            -----
  Operating income before depreciation and
       amortization (1)............................      136.3            113.4              22.9           20.2
  Depreciation and amortization....................       94.4             84.8               9.6           11.3
                                                         -----            -----
  Operating income.................................       41.9             28.6              13.3           46.5
                                                         -----            -----
  Interest expense.................................       89.1             86.1               3.0            3.5
  Investment income................................       (1.9)            (2.1)             (0.2)          (9.5)
  Equity in net losses of affiliates...............        4.5              5.1              (0.6)         (11.8)
  Litigation settlement............................                        21.6             (21.6)             NM
  Other............................................        1.2              2.4              (1.2)         (50.0)
  Income tax benefit...............................      (17.8)           (32.3)            (14.5)         (44.9)
  Extraordinary item...............................       (7.3)                               7.3              NM
                                                         -----            -----
       Net loss....................................     ($40.5)          ($52.2)           ($11.7)         (22.4)%
                                                         =====            ===== 
  
                                                           Three Months Ended
                                                              September 30,                 Increase / (Decrease)
                                                         1997              1996               $                 %
  
  Service income, net..............................     $115.1           $110.0              $5.1            4.6%
  Operating, selling, general and administrative
       expenses....................................       65.4             63.1               2.3            3.6
                                                         -----            -----
  Operating income before depreciation and
       amortization (1)............................       49.7             46.9               2.8            6.0
  Depreciation and amortization....................       32.9             28.0               4.9           17.5
                                                         -----            -----
  Operating income.................................       16.8             18.9              (2.1)         (11.1)
                                                         -----            -----
  Interest expense.................................       27.9             30.5              (2.6)          (8.5)
  Investment income................................       (0.3)            (0.5)             (0.2)         (40.0)
  Equity in net losses of affiliates...............        1.0              1.6              (0.6)         (37.5)
  Other............................................        0.8              0.2               0.6              NM
  Income tax benefit...............................       (4.1)            (5.0)             (0.9)         (18.0)
                                                         -----            -----
       Net loss....................................      ($8.5)           ($7.9)             $0.6            7.6%
                                                         =====            =====
  ----------
  (1)  Operating income before  depreciation and amortization is commonly referred
       to in the cellular  industry 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
       cellular   industry  and  the  resulting   significant  level  of  non-cash
       depreciation  and amortization  expense,  operating cash flow is frequently
       used as one of the bases for evaluating cellular businesses. Operating cash
       flow does not  purport  to  represent  net income or net cash  provided  by
       operating  activities,  as those terms are defined under generally accepted
       accounting  principles,  and should not be considered as an  alternative to
       such  measurements  as an  indicator  of  the  Company's  performance.  See
       "--Statement  of Cash Flows" above for a discussion of net cash provided by
       operating activities.
  
                                         14
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  Service Income, net
  Of the respective $18.3 million and $5.1 million increases in service income for
  the nine and three  month  periods  from 1996 to 1997,  $16.9  million  and $2.3
  million are  attributable to the Company's  subscriber  growth and $11.9 million
  and $4.6 million are  attributable to roamer growth.  Offsetting these increases
  are  decreases of $10.5  million and $1.8  million  resulting  primarily  from a
  reduction  in the  average  rate per  minute of use as a result  of  promotional
  and/or free minutes.
  
  Operating, Selling, General and Administrative Expenses
  The $4.6 million  decrease in  operating,  selling,  general and  administrative
  expenses for the nine month  period from 1996 to 1997 is primarily  attributable
  to  expense  reductions  achieved  through  implementation  of fraud  management
  programs, improved bad debt experience as a result of stronger credit procedures
  and a reduction in commission  costs resulting from fewer gross sales in 1997 as
  compared to the same period in 1996.  The $2.3  million  increase in  operating,
  selling,  general and  administrative  expenses  for the three month period from
  1996 to 1997 is primarily  attributable to an increase in the number of cellular
  retail stores in 1997 as compared to the same period in 1996,  partially  offset
  by  expense  reductions  achieved  through  implementation  of fraud  management
  programs  and  improved  bad debt  experience  as a result  of  stronger  credit
  procedures.
  
  Comcast and CCCI were parties to a  management  agreement  (the "Old  Management
  Agreement")  pursuant to which  Comcast  managed the business and  operations of
  CCCI. In May 1997,  subsequent to the  redemption of the Zero Coupon Notes,  the
  Old  Management  Agreement was  terminated  and replaced  with a new  management
  agreement  (the  "New  Management  Agreement")  which  provides  for  an  annual
  management fee of 1.5% of revenues.  The New Management Agreement eliminated the
  prior  management  fee which was  limited  to $5.0  million,  subject  to annual
  increases based on the consumer price index. The New Management  Agreement has a
  ten year term.  Management fees of $4.7 million,  $4.2 million, $1.7 million and
  $1.4 million were charged to selling, general and administrative expenses during
  the nine and three months ended September 30, 1997 and 1996,  respectively (on a
  pro forma basis, giving effect to the New Management Agreement,  management fees
  for the nine and three months ended  September 30, 1997 and 1996 would have been
  $5.0 million, $4.8 million, $1.7 million and $1.7 million,  respectively). As of
  September  30, 1997 and December 31, 1996,  deferred  management  fees  payable,
  which are  included in  long-term  investment  in and due to  affiliates  in the
  Company's condensed  consolidated balance sheet, totaled $17.0 million and $14.7
  million,  respectively.  In November  1997,  the Company repaid $17.0 million of
  previously  deferred  management  fees to Comcast with a portion of the proceeds
  from the initial borrowings under the New Bank Facility (see "Financing").
  
  Depreciation and Amortization Expense
  The $9.6 million and $4.9 million  increases in  depreciation  and  amortization
  expense for the nine and three month periods from 1996 to 1997 are primarily due
  to the effects of capital expenditures.
  
  Interest Expense
  The $3.0  million  increase in interest  expense for the nine month  period from
  1996 to 1997 is  primarily  due to the  issuance  of the Old  Notes in May 1997,
  offset by the  effects  of lower  levels of debt  outstanding  under the  Credit
  Agreement  as a result of the  repayment  of the Term Loan and a portion  of the
  amounts  outstanding  under the  Revolving  Credit  Loan in May  1997.  The $2.6
  million  decrease  in interest  expense for the three month  period from 1996 to
  1997 is primarily due to a reduction in the Company's  weighted average interest
  rate, offset by higher levels of debt outstanding after the Offering.
  
  In 1992, a subsidiary of AWACS, an indirect subsidiary of the Company,  issued a
  note (the "AWACS  Note") with an initial  principal  amount of $51.0  million to
  purchase,  from a subsidiary of Comcast, a 40% limited  partnership  interest in
  Garden State Cablevision L.P. ("Garden State Cablevision"). The AWACS Note bears
  interest at a rate of 11% per annum. Interest is payable on a quarterly basis to
  the extent of  available  cash,  with any unpaid  interest  added to  principal.
  Interest expense on the AWACS Note was $3.8 million,  $6.2 million, $1.3 million
  and $2.2 million  during the nine and three months ended  September 30, 1997 and
  1996, respectively.  From the date of issuance through September 30, 1997, $35.5
  million  of  principal  and  interest  has been paid on the AWACS  Note with the
  proceeds from distributions  from Garden State  Cablevision.  The balance of the
  AWACS Note, originally due on September 30, 1997, is due on demand. Accordingly,
  such  balance  has  been  classified  as  current  in  the  Company's  condensed
  consolidated balance sheet.
  
                                         15
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  Equity in Net Losses of Affiliates
  Under  the  terms  of  the   partnership   agreement,   49.5%  of  Garden  State
  Cablevision's net losses are allocated to the Company. During the nine and three
  months ended September 30, 1997 and 1996, the Company  recognized  equity in net
  losses of Garden State Cablevision of $4.1 million,  $5.4 million,  $1.1 million
  and $1.6 million,  respectively.  While no assurances can be given,  the Company
  expects to transfer its interest in Garden State  Cablevision  to Comcast during
  the first quarter of 1998.
  
  Litigation Settlement
  The  Company  was  involved  in  various  civil   lawsuits  and   administrative
  proceedings  regarding the ownership,  operation and transfer of the license for
  the  Atlantic  City  Cellular  System.  In March  1995,  the  Company,  Comcast,
  Telephone and Data Systems,  Inc. ("TDS"),  United States Cellular  Corporation,
  Ellis  Thompson  and  Ellis  Thompson  Corporation  entered  into  a  Settlement
  Agreement  (the  "Settlement  Agreement")  with  respect  to  outstanding  civil
  litigation.  During the nine  months  ended  September  30,  1996,  the  Company
  recorded  $21.6  million  of  litigation  settlement  expense  in its  condensed
  consolidated  statement of operations and accumulated deficit. In June 1996, the
  Company paid such amount to TDS under the Settlement Agreement.
  
  Earnings to Fixed Charges
  For the nine and three months ended  September 30, 1997 and 1996,  the Company's
  distribution from Garden State Cablevision and income before extraordinary item,
  income  tax  benefit,  equity in net  losses  of  affiliates  and fixed  charges
  (interest  expense) was $42.6  million,  $8.7  million,  $16.3 million and $21.1
  million,  respectively.  Such amounts  were not adequate to cover the  Company's
  fixed charges of $89.1 million,  $86.1 million,  $27.9 million and $30.4 million
  for these periods, respectively. Fixed charges include non-cash interest expense
  of $29.3 million, $51.4 million, $1.3 million and $17.6 million for the nine and
  three months ended September 30, 1997 and 1996, respectively.  The inadequacy of
  the Company's  distribution  from Garden State  Cablevision  and income to cover
  fixed charges is primarily due to substantial  non-cash charges for depreciation
  and  amortization  expense of $94.4 million,  $84.8  million,  $32.9 million and
  $28.0  million  during the nine and three  months ended  September  30, 1997 and
  1996,  respectively,  and litigation  settlement  expense during the nine months
  ended September 30, 1996.
  
  The  Company  anticipates  that,  for  the  foreseeable  future,   depreciation,
  amortization  and interest expense will continue to be significant and will have
  a significant  adverse effect on the Company's  ability to realize net earnings.
  The  Company  believes  that  its  losses  will  not  significantly  affect  the
  performance of its normal business  activities  because of its existing cash and
  cash equivalents,  its ability to generate operating income before  depreciation
  and amortization and its ability to obtain external financing.
  
  The  Company  believes  that  its  operations  are not  materially  affected  by
  inflation.
  
                                         16
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
  PART II.          OTHER INFORMATION
  
  ITEM 1.           LEGAL PROCEEDINGS
  
       The  Company  is not  party to  litigation  which,  in the  opinion  of the
       Company's management,  will have a material adverse effect on the Company's
       financial position, results of operations or liquidity.
  
  ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K
  
       (a) Exhibits required to be filed by Item 601 of Regulation S-K:
  
           27.1     Financial Data Schedule.
  
       (b) Reports on Form 8-K - none.
  
                                         17
  COMCAST CELLULAR HOLDINGS, INC. AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1997
  
                                      SIGNATURE
  
           Pursuant to the  requirements  of the  Securities  and  Exchange Act of
  1934,  the  Registrant has duly caused this report to be signed on its behalf by
  the undersigned thereunto duly authorized.
  
                                       COMCAST CELLULAR HOLDINGS, INC.
                                       -------------------------------------------
  
                                       /S/ LAWRENCE S. SMITH
                                       -------------------------------------------
                                       Lawrence S. Smith
                                       Executive Vice President
                                       (Principal Accounting Officer)
  
  Date: November 14, 1997
  
                                         18