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:
                                   MARCH 31, 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 0-6983
  
                                COMCAST CORPORATION
                              [GRAPHIC OMITTED - LOGO]
  
               (Exact name of registrant as specified in its charter)
  
          PENNSYLVANIA                                    23-1709202
  --------------------------------------------------------------------------------
  (State or other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                      Identification No.)
  
                   1500 Market Street, Philadelphia, PA 19102-2148
  --------------------------------------------------------------------------------
                      (Address of principal executive offices)
                                     (Zip Code)
  
  Registrant's telephone number, including area code:  (215) 665-1700
  
                             --------------------------
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding  twelve months (or for such shorter period that the registrant was
  required to file such  reports),  and (2) has been subject to such  requirements
  for the past 90 days.
  
           Yes  __X__                                         No ____
  
                             --------------------------
  
  As of March 31, 1997,  there were  283,525,310  shares of Class A Special Common
  Stock, 33,283,729 shares of Class A Common Stock and 8,786,250 shares of Class B
  Common Stock outstanding.
  
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
                                  TABLE OF CONTENTS
  
  
                                                                             Page
                                                                            Number
  
  PART I.   FINANCIAL INFORMATION
  
            Item 1.   Financial Statements
  
                      Condensed Consolidated Balance
                      Sheet as of March 31, 1997 and December 31,
                      1996 (Unaudited)..........................................2
  
                      Condensed Consolidated Statement of
                      Operations and Accumulated Deficit for
                      the Three Months Ended March 31,
                      1997 and 1996 (Unaudited).................................3
  
                      Condensed Consolidated Statement of Cash
                      Flows for the Three Months Ended March 31, 1997
                      and 1996 (Unaudited)......................................4
  
                      Notes to Condensed Consolidated
                      Financial Statements (Unaudited).....................5 - 12
  
            Item 2.   Management's Discussion and Analysis
                      of Financial Condition and Results of
                      Operations..........................................13 - 21
  
  PART II.  OTHER INFORMATION
  
            Item 1.   Legal Proceedings .......................................22
  
            Item 6.   Exhibits and Reports on Form 8-K ........................22
  
            SIGNATURE..........................................................23
  
                         -----------------------------------
  
  This Quarterly  Report on Form 10-Q contains  forward  looking  statements  made
  pursuant to the "safe harbor"  provisions of the Private  Securities  Litigation
  Reform Act of 1995.  Readers are cautioned that such forward looking  statements
  involve  risks and  uncertainties  which  could  significantly  affect  expected
  results  in the  future  from  those  expressed  in  any  such  forward  looking
  statements  made by, or on behalf of the  Company.  Certain  factors  that could
  cause actual  results to differ  materially  include,  without  limitation,  the
  effects of  legislative  and  regulatory  changes;  the  potential for increased
  competition;  technological  changes; the need to generate substantial growth in
  the subscriber base by successfully launching,  marketing and providing services
  in  identified  markets;  pricing  pressures  which could affect  demand for the
  Company's services; the Company's ability to expand its distribution; changes in
  labor, programming, equipment and capital costs; the Company's continued ability
  to  create  or  acquire  programming  and  products  that  customers  will  find
  attractive;  future  acquisitions,   strategic  partnerships  and  divestitures;
  general business and economic conditions;  and other risks detailed from time to
  time in the Company's  periodic  reports filed with the  Securities and Exchange
  Commission.
  
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  PART I.   FINANCIAL INFORMATION
  
  ITEM 1.   FINANCIAL STATEMENTS
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                   (Dollars in millions, except share data)
                                                                                          March 31,        December 31,
                                                                                            1997                1996
  <S>                                                                                   <C>               <C>   
  ASSETS
  CURRENT ASSETS
     Cash and cash equivalents....................................................           $454.9            $331.3
     Short-term investments.......................................................             85.9             208.3
     Accounts receivable, less allowance for doubtful
       accounts of $103.4 and $97.1...............................................            423.6             439.3
     Inventories, net.............................................................            288.6             258.4
     Other current assets.........................................................            149.8             168.5
                                                                                          ---------         ---------
         Total current assets.....................................................          1,402.8           1,405.8
                                                                                          ---------         ---------
  INVESTMENTS, principally in affiliates .........................................          1,108.0           1,177.7
                                                                                          ---------         ---------
  
  PROPERTY AND EQUIPMENT .........................................................          3,751.2           3,600.1
     Accumulated depreciation.....................................................         (1,136.9)         (1,061.3)
                                                                                          ---------         ---------
     Property and equipment, net..................................................          2,614.3           2,538.8
                                                                                          ---------         ---------
  
  DEFERRED CHARGES................................................................          8,937.9           8,578.8
     Accumulated amortization.....................................................         (1,729.5)         (1,612.5)
                                                                                          ---------         ---------
     Deferred charges, net........................................................          7,208.4           6,966.3
                                                                                          ---------         ---------
                                                                                          $12,333.5         $12,088.6
                                                                                          =========         =========
  LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES
     Accounts payable and accrued expenses........................................         $1,065.8          $1,044.3
     Accrued interest.............................................................             90.2              91.1
     Current portion of long-term debt............................................             92.9             229.5
                                                                                          ---------         ---------
         Total current liabilities................................................          1,248.9           1,364.9
                                                                                          ---------         ---------
  LONG-TERM DEBT, less current portion ...........................................          7,371.3           7,102.7
                                                                                          ---------         ---------
  DEFERRED INCOME TAXES...........................................................          2,119.9           2,140.5
                                                                                          ---------         ---------
  MINORITY INTEREST AND OTHER ....................................................          1,061.0             859.3
                                                                                          ---------         ---------
  COMMITMENTS AND CONTINGENCIES
  
  COMMON EQUITY PUT OPTIONS ......................................................                               69.6
                                                                                          ---------         ---------
  STOCKHOLDERS' EQUITY
     Preferred stock, no par value - authorized, 20,000,000
       shares; issued 5% series A convertible, 6,370 at redemption value .........             31.9              31.9
     Class A special common stock, $1 par value - authorized,
       500,000,000 shares; issued, 283,525,310 and 283,281,675 ...................            283.5             283.3
     Class A common stock, $1 par value - authorized,
       200,000,000 shares; issued, 33,283,729 and 33,959,368 .....................             33.3              34.0
     Class B common stock, $1 par value - authorized,
       50,000,000 shares; issued, 8,786,250 ......................................              8.8               8.8
     Additional capital...........................................................          2,399.0           2,327.4
     Accumulated deficit..........................................................         (2,206.5)         (2,127.9)
     Unrealized (losses) gains on marketable securities                                        (5.9)              0.1
     Cumulative translation adjustments...........................................            (11.7)             (6.0)
                                                                                          ---------         ---------
         Total stockholders' equity...............................................            532.4             551.6
                                                                                          ---------         ---------
                                                                                          $12,333.5         $12,088.6
                                                                                          =========         =========
  </TABLE>
  See notes to condensed consolidated financial statements.
  
                                          2
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                  (Amounts in millions, except per share data)
                                                                                          Three Months Ended March 31,
                                                                                             1997              1996
  <S>                                                                                     <C>               <C>       
  REVENUES
     Service income...............................................................           $651.1            $500.6
     Net sales from electronic retailing..........................................            479.7             450.1
                                                                                          ---------         --------- 
  
                                                                                            1,130.8             950.7
                                                                                          ---------         --------- 
  
  COSTS AND EXPENSES
     Operating....................................................................            297.4             229.8
     Cost of goods sold from electronic retailing.................................            291.9             270.1
     Selling, general and administrative..........................................            207.8             180.7
     Depreciation.................................................................             95.8              68.4
     Amortization.................................................................            116.6              88.5
                                                                                          ---------         --------- 
  
                                                                                            1,009.5             837.5
                                                                                          ---------         --------- 
  
  OPERATING INCOME................................................................            121.3             113.2
  
  OTHER (INCOME) EXPENSE
     Interest expense.............................................................            133.3             134.8
     Investment income............................................................            (12.2)            (18.6)
     Equity in net losses of affiliates...........................................             70.1              34.5
     Other........................................................................              8.9              11.3
                                                                                          ---------         --------- 
  
                                                                                              200.1             162.0
                                                                                          ---------         --------- 
  
  LOSS BEFORE INCOME TAX EXPENSE AND MINORITY INTEREST ...........................            (78.8)            (48.8)
  
  INCOME TAX EXPENSE..............................................................              9.9               0.9
                                                                                          ---------         --------- 
  
  LOSS BEFORE MINORITY INTEREST ..................................................            (88.7)            (49.7)
  
  MINORITY INTEREST...............................................................            (24.0)            (15.1)
                                                                                          ---------         --------- 
  
  NET LOSS .......................................................................            (64.7)            (34.6)
  
  ACCUMULATED DEFICIT
     Beginning of period .........................................................         (2,127.9)         (1,914.3)
     Dividends declared - $.0233 per common share ................................             (7.9)             (5.6)
     Retirement of common stock...................................................             (6.0)            (42.6)
                                                                                          ---------         --------- 
  
     End of period................................................................        ($2,206.5)        ($1,997.1)
                                                                                          =========         ========= 
  
  NET LOSS PER SHARE..............................................................            ($.20)            ($.14)
                                                                                          =========         ========= 
  
  WEIGHTED AVERAGE NUMBER OF COMMON
      SHARES OUTSTANDING DURING THE PERIOD .......................................            325.9             239.4
                                                                                          =========         ========= 
  </TABLE>
  
  See notes to condensed consolidated financial statements.
  
                                          3
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                              (Dollars in millions)
                                                                                           Three Months Ended March 31,
                                                                                              1997              1996
  <S>                                                                                        <C>               <C>   
  OPERATING ACTIVITIES
     Net loss.....................................................................           ($64.7)           ($34.6)
     Adjustments to reconcile net loss to net cash provided
      by operating activities:
       Depreciation...............................................................             95.8              68.4
       Amortization...............................................................            116.6              88.5
       Non-cash interest expense, net.............................................             16.1              16.1
       Equity in net losses of affiliates.........................................             70.1              34.5
       Gain on sales of long-term investments, net of losses .....................             (1.2)
       Minority interest..........................................................            (24.0)            (15.1)
       Deferred income taxes and other............................................             (7.7)             (9.1)
                                                                                            -------           -------
                                                                                              201.0             148.7
  
       Decrease in accounts receivable, net.......................................             36.5              23.6
       (Increase) decrease in inventories, net....................................            (30.2)              2.7
       Decrease in other current assets...........................................              0.3               6.7
       Decrease in accounts payable and accrued expenses .........................             (9.3)            (70.3)
       (Decrease) increase in accrued interest....................................             (0.9)             16.7
                                                                                            -------           -------
  
             Net cash provided by operating activities............................            197.4             128.1
                                                                                            -------           -------
  
  FINANCING ACTIVITIES
     Proceeds from borrowings.....................................................            192.8             191.2
     Retirement and repayment of debt.............................................            (90.9)           (167.4)
     Repurchases of common stock, net.............................................             (7.0)            (38.2)
     Dividends....................................................................             (7.9)             (5.6)
     Other........................................................................             (1.8)             (8.9)
                                                                                            -------           -------
  
             Net cash provided by (used in) financing activities .................             85.2             (28.9)
                                                                                            -------           -------
  
  INVESTING ACTIVITIES
     Acquisitions, net of cash acquired...........................................           (116.5)            (16.2)
     Proceeds from sales of short-term investments, net ..........................            123.6             171.4
     Investments, principally in affiliates.......................................            (32.4)           (153.7)
     Proceeds from sales of and distribution from long-term investments ..........             26.8               2.4
     Proceeds from repayment of loan to investee..................................             25.2
     Capital expenditures.........................................................           (180.0)           (111.4)
     Other........................................................................             (5.7)            (20.6)
                                                                                            -------           -------
  
             Net cash used in investing activities................................           (159.0)           (128.1)
                                                                                            -------           -------
  
  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ...............................            123.6             (28.9)
  
  CASH AND CASH EQUIVALENTS, beginning of period .................................            331.3             539.1
                                                                                            -------           -------
  
  CASH AND CASH EQUIVALENTS, end of period .......................................           $454.9            $510.2
                                                                                            =======           =======
  </TABLE>
  
  
  See notes to condensed consolidated financial statements.
  
                                          4
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
       Basis of Presentation
       The condensed  consolidated  balance sheet as of December 31, 1996 has been
       condensed  from the audited  balance  sheet as of that date.  The condensed
       consolidated  balance  sheet  as  of  March  31,  1997  and  the  condensed
       consolidated  statements of operations and accumulated  deficit and of cash
       flows for the three months ended March 31, 1997 and 1996 have been prepared
       by Comcast  Corporation  (the  "Company")  and have not been audited by the
       Company's  independent   auditors.  In  the  opinion  of  management,   all
       adjustments (which include only normal recurring  adjustments) necessary to
       present fairly the financial position, results of operations and cash flows
       as of March 31, 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
       financial  statements and notes thereto included in the Company's  December
       31, 1996 Annual Report on Form 10-K filed with the  Securities and Exchange
       Commission.  The results of operations  for the period ended March 31, 1997
       are not necessarily indicative of operating results for the full year.
  
  2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
       New Accounting Pronouncements
       Effective  January 1, 1997, the Company adopted the provisions of Statement
       of  Financial  Accounting  Standards  ("SFAS")  No.  125,  "Accounting  for
       Transfers  and  Servicing  of  Financial  Assets  and   Extinguishments  of
       Liabilities," which was issued by the Financial  Accounting Standards Board
       ("FASB") in June 1996.  Under the  provisions  of this  statement,  after a
       transfer of  financial  assets,  an entity  recognizes  the  financial  and
       servicing   assets  it  controls  and  the  liabilities  it  has  incurred,
       derecognizes  financial  assets  when  control  has  been  surrendered  and
       derecognizes liabilities when extinguished.  Adoption of this statement did
       not have a  significant  impact  on the  Company's  consolidated  financial
       position or results of operations.
  
       In February 1997, the FASB issued SFAS No. 128,  "Earnings Per Share." This
       standard,   which  clarifies  and  supersedes  the  current   authoritative
       accounting  literature regarding the computation and disclosure of earnings
       per share,  is  applicable  to  interim  and annual  periods  ending  after
       December  15, 1997 and may not be applied  earlier.  The  Company  does not
       expect  adoption of this standard to result in  significant  changes to the
       Company's calculation or presentation of loss per share.
  
       Net Loss Per Share
       Net loss per share  amounts  were  computed  by  dividing  net loss,  after
       deduction  of  preferred  stock  dividends of $398,000 for the three months
       ended March 31,  1997,  by the  weighted  average  number of common  shares
       outstanding  during the period.  For the three  months ended March 31, 1997
       and 1996,  the  Company's  common stock  equivalents  have an  antidilutive
       effect  on net loss  per  share  and,  therefore,  have  not  been  used in
       determining the total weighted average number of common shares outstanding.
  
       Reclassifications
       Certain  reclassifications  have  been  made to the  prior  year  condensed
       consolidated  financial statements to conform to those classifications used
       in 1997.
  
  3.   ACQUISITIONS AND OTHER SIGNIFICANT EVENTS
  
       Offerings of Subsidiary Debt
       On May 8, 1997, Comcast Cellular Holdings,  Inc.  ("Comcast  Cellular"),  a
       wholly owned subsidiary of the Company,  completed the sale of $1.0 billion
       of 9 1/2%  Senior  Notes due 2007  (the  "Cellular  Notes")  through a 144A
       offering with  registration  rights.  The Cellular Notes are obligations of
       Comcast Cellular and are not
  
                                          5
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       obligations of, nor guaranteed by, the Company.  Comcast  Cellular will use
       the net proceeds  from the  offering to repay  existing  borrowings  by its
       subsidiaries,  including  the Zero Notes (as  defined in Note 5),  with the
       balance, if any, to be used for subsidiary general purposes.
  
       On May 1, 1997,  Comcast Cable  Communications,  Inc.  ("Comcast Cable"), a
       wholly owned subsidiary of the Company,  completed the sale of $1.7 billion
       of notes (the "Cable  Notes")  through a 144A  offering  with  registration
       rights.  The Cable Notes were issued in four tranches:  $300.0 million of 8
       1/8%  Notes due  2004,  $600.0  million  of 8 3/8%  Notes due 2007,  $550.0
       million  of 8 7/8%  Notes due 2017 and  $250.0  million of 8 1/2% Notes due
       2027.  The Notes due 2027 are  subject to  repurchase  at the option of the
       holder in 2009.  The Cable Notes are  obligations  of Comcast Cable and are
       not  obligations  of, nor  guaranteed  by, the Company.  Comcast Cable used
       substantially  all of the net proceeds from the offering to repay  existing
       borrowings by its  subsidiaries  with the balance to be used for subsidiary
       general purposes.
  
       E! Entertainment
       On March 31, 1997, the Company,  through Comcast Entertainment Holdings LLC
       (the  "LLC"),  which is owned  50.1% by the  Company  and 49.9% by The Walt
       Disney Company  ("Disney"),  purchased a 58.4% interest in E! Entertainment
       Television, Inc. ("E! Entertainment"), an entertainment programming service
       that  currently is distributed  to more than 42 million  subscribers,  from
       Time  Warner,   Inc.   ("Time   Warner")   for  $321.9   million  (the  "E!
       Acquisition").  The E! Acquisition was funded by cash  contributions to the
       LLC by the  Company  and  Disney  of $132.8  million  and  $189.1  million,
       respectively.   In  connection  with  the  E!   Acquisition,   the  Company
       contributed its 10.4% interest in E!  Entertainment  to the LLC.  Following
       these transactions,  the LLC owns a 68.8% interest in E! Entertainment.  To
       fund the cash  contribution to the LLC, the Company borrowed $132.8 million
       from Disney in the form of two 10-year, 7% notes (the "Disney Notes").
  
       The Company  accounted for the E! Acquisition under the purchase method and
       E!  Entertainment  was  consolidated  with the Company  effective March 31,
       1997.  The  allocation  of the  purchase  price  relating to the assets and
       liabilities of E! Entertainment is preliminary pending a final appraisal.
  
       After  September 1998,  Disney,  in certain  circumstances,  is entitled to
       request that the LLC purchase  Disney's  entire  interest in the LLC at its
       then fair market value (as determined by an appraisal process).  If the LLC
       elects not to  purchase  Disney's  interest,  Disney has the right,  at its
       option,  to purchase either the Company's entire interest in the LLC or all
       of the shares of stock of E! Entertainment held by the LLC, in each case at
       fair market  value.  In the event that  Disney  exercises  its  rights,  as
       described  above, a portion or all of the Disney Notes may be replaced with
       a three year note due to Disney.
  
       Scripps Cable
       In November  1996,  the Company  acquired the cable  television  operations
       ("Scripps Cable") of The E.W. Scripps Company ("E.W.  Scripps") in exchange
       for 93.048  million  shares of the Company's  Class A Special Common Stock,
       par value $1.00 per share (the "Class A Special Common  Stock"),  valued at
       $1.552 billion (the "Scripps  Acquisition").  The Company accounted for the
       Scripps  Acquisition  under  the  purchase  method  and  Scripps  Cable was
       consolidated with the Company effective November 1, 1996.
  
       The  allocation  of the  purchase  price to the assets and  liabilities  of
       Scripps  Cable is  preliminary  pending  a final  appraisal  and the  final
       purchase price adjustment  between the Company and E.W. Scripps.  The terms
       of  the  Scripps   Acquisition   provide  for,  among  other  things,   the
       indemnification  of the Company by E. W.  Scripps for certain  liabilities,
       including  tax  liabilities,   relating  to  Scripps  Cable  prior  to  the
       acquisition date.
  
       Comcast-Spectacor
       In July 1996, the Company  completed its  acquisition  (the "Sports Venture
       Acquisition")  of  a  66%  interest  in  the  Philadelphia  Flyers  Limited
       Partnership,  a Pennsylvania  limited partnership  ("PFLP"),  the assets of
       which,  after giving effect to the Sports Venture  Acquisition,  consist of
       (i) the National Basketball Association ("NBA")
  
                                          6
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       franchise to own and operate the  Philadelphia  76ers  basketball  team and
       related  assets (the  "Sixers"),  (ii) the National  Hockey League  ("NHL")
       franchise  to own and  operate  the  Philadelphia  Flyers  hockey  team and
       related assets, and (iii) two adjacent arenas,  leasehold  interests in and
       development  rights  related  to the land  underlying  the arenas and other
       adjacent   parcels   of  land   located   in   Philadelphia,   Pennsylvania
       (collectively,  the "Arenas"). Concurrent with the completion of the Sports
       Venture Acquisition, PFLP was renamed Comcast Spectacor, L.P.
       ("Comcast-Spectacor").
  
       The Sports Venture  Acquisition  was completed in two steps. In April 1996,
       the Company  purchased  the Sixers for $125.0  million in cash plus assumed
       net  liabilities  of  approximately  $11.0  million  through a  partnership
       controlled by the Company. To complete the Sports Venture  Acquisition,  in
       July 1996, the Company  contributed  its interest in the Sixers,  exchanged
       approximately  3.5 million  shares of the Company's  Class A Special Common
       Stock  and  6,370  shares  of  the  Company's  newly  issued  5%  Series  A
       Convertible  Preferred Stock and paid $15.0 million in cash for its current
       interest  in  Comcast-Spectacor.  The  remaining  34%  interest in Comcast-
       Spectacor is owned by a group, including the former majority owner of PFLP,
       who also manages Comcast- Spectacor.  In connection with the Sports Venture
       Acquisition, Comcast-Spectacor assumed the outstanding liabilities relating
       to the Sixers and the  Arenas,  including a mortgage  obligation  of $155.0
       million. The Company accounts for its interest in  Comcast-Spectacor  under
       the equity method (see Note 4).
  
       Unaudited Pro Forma Information
       The following  unaudited pro forma  information  for the three months ended
       March 31, 1996 has been presented as if the Scripps Acquisition occurred on
       January  1,  1996.  This  unaudited  pro  forma  information  is  based  on
       historical  results of operations,  adjusted for acquisition costs, and, in
       the  opinion  of  management,  is not  necessarily  indicative  of what the
       results  would  have been had the  Company  operated  Scripps  Cable  since
       January 1, 1996 (dollars in millions, except per share data).
  
                                                           Three Months Ended
                                                             March 31, 1996
             Revenues....................................       $1,025.3
             Net loss....................................          (43.1)
             Net loss per share..........................           (.13)
  
  4.   INVESTMENTS, PRINCIPALLY IN AFFILIATES
  
                                                           March 31,  December 31,
                                                             1997         1996
                                                            (Dollars in millions)
             Equity method...............................    $911.6      $936.4
             Public companies............................     131.3       165.5
             Privately held companies....................      65.1        75.8
                                                           --------    --------
  
                                                           $1,108.0    $1,177.7
                                                           ========    ========
  
       Equity Method
       The Company records its proportionate interests in the net income (loss) of
       substantially  all of its  investees,  other  than  the UK  Investees  (see
       below),  three months in arrears. The Company's recorded investments exceed
       its proportionate  interests in the book value of the investees' net assets
       by  $241.0  million  as  of  March  31,  1997  (primarily  related  to  the
       investments in Comcast-Spectacor  and Sprint PCS (see below)).  Such excess
       is being amortized to equity in net income or loss, primarily over a period
       of  twenty  years,  which is  consistent  with the  estimated  lives of the
       underlying assets. The original cost of investments accounted for under the
       equity method totaled $1.216
  
                                          7
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       billion and $1.241  billion as of March 31,  1997 and  December  31,  1996,
       respectively.  Summarized  financial  information for the Company's  equity
       method investees is presented below (dollars in millions).
  <TABLE>
  <CAPTION>
                                                            Sprint                  UK
                                                              PCS       TCGI     Investees    Other    Combined
  <S>                                                      <C>        <C>          <C>      <C>        <C>    
  Three Months Ended March 31, 1997:
  
     Combined Results of Operations
       Revenues, net...............................           $4.1      $87.4      $44.5     $201.1     $337.1
       Operating, selling, general and
         administrative expenses...................          185.6       81.2       40.2      213.9      520.9
       Depreciation and amortization...............            9.4       26.4       17.4       30.0       83.2
       Operating loss..............................         (190.9)     (20.2)     (13.1)     (42.8)    (267.0)
       Net loss (1)................................         (183.3)     (42.7)     (22.2)     (50.8)    (299.0)
  
     Company's Equity in Net Loss
       Equity in current period net loss (2) ......         ($27.5)     ($6.8)     ($8.4)    ($25.1)    ($67.8)
       Amortization expense........................           (0.1)      (0.2)      (0.1)      (1.9)      (2.3)
                                                           -------    -------      -----    -------    -------
  
         Total equity in net loss..................         ($27.6)     ($7.0)     ($8.5)    ($27.0)    ($70.1)
                                                           =======    =======      =====    =======    =======
  
  Three Months Ended March 31, 1996:
  
     Combined Results of Operations
       Revenues, net...............................         $           $56.4      $42.6     $122.1     $221.1
       Operating, selling, general and
         administrative expenses...................           44.8       52.3       39.1      123.7      259.9
       Depreciation and amortization...............                      15.3       15.4       16.1       46.8
       Operating loss..............................          (44.8)     (11.2)     (11.9)     (17.7)     (85.6)
       Net loss (1)................................          (85.3)     (25.1)     (20.3)     (22.9)    (153.6)
  
     Company's Equity in Net Loss
       Equity in current period net loss ..........         ($12.8)     ($4.8)     ($8.6)     ($6.5)    ($32.7)
       Amortization expense........................                      (0.3)                 (1.5)      (1.8)
                                                           -------    -------      -----    -------    -------
  
         Total equity in net loss..................         ($12.8)     ($5.1)     ($8.6)     ($8.0)    ($34.5)
                                                           =======    =======      =====    =======    =======
  
  Combined Financial Position
  
  As of March 31, 1997:
     Current assets................................         $399.5     $787.6     $121.0     $302.5   $1,610.6
     Noncurrent assets.............................        3,923.9    1,262.5      704.3    1,169.1    7,059.8
     Current liabilities...........................          450.9      242.2       86.4      248.6    1,028.1
     Noncurrent liabilities........................        1,412.5    1,011.0      552.3    1,071.2    4,047.0
  <FN>
  --------
  (1)  Net  loss  also   represents  loss  from   continuing   operations   before
       extraordinary   items  and  cumulative  effect  of  changes  in  accounting
       principle.
  (2)  As  a  result  of  the  E!  Acquisition,  the  Company  recorded  a  charge
       representing  the  cumulative  amount that would have been recorded had the
       Company accounted for its investment in E!  Entertainment  under the equity
       method  since the date of initial  investment  (the  "Cumulative  Charge").
       Since the Company's  proportionate share of E!  Entertainment's  cumulative
       losses  were  in  excess  of the  Company's  historical  cost  basis  in E!
       Entertainment  and as the Company was under no  contractual  obligation  to
       fund the losses of E!  Entertainment,  the Cumulative Charge was limited to
       the  Company's  historical  cost  basis of $12.1  million.  Such  amount is
       included in equity in net losses of affiliates  in the Company's  condensed
       consolidated  statement of operations and accumulated deficit for the three
       months ended March 31, 1997 as it is not significant for restatement of the
       Company's prior year financial statements.
  </FN>
  </TABLE>
  
                                          8
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       Sprint  PCS.   The  Company,   Tele-Communications,   Inc.   ("TCI"),   Cox
       Communications, Inc. ("Cox") and Sprint Corporation ("Sprint," and together
       with the Company, TCI and Cox, the "Parents"),  and certain subsidiaries of
       the  Parents  engage  in the  wireless  communications  business  through a
       limited   partnership  known  as  "Sprint  Spectrum"  or  "Sprint  PCS,"  a
       development  stage enterprise.  The Company made its initial  investment in
       1994 and, as of March 31,  1997,  holds a general  and limited  partnership
       interest of 15% in Sprint PCS.  The  investment  in Sprint PCS is accounted
       for under the equity  method  based on the  Company's  general  partnership
       interest and its representation on the partnership's board of directors.
  
       TCGI.   Through  June  1996,  the  Company  held  investments  in  Teleport
       Communications  Group, Inc. ("TCGI"),  TCG Partners and certain local joint
       ventures (the "Teleport Joint Ventures")  managed by TCGI and TCG Partners.
       TCGI is one of the largest competitive  alternative access providers in the
       United States in terms of route miles.  The Company had a 20.0%  investment
       in TCGI and interests in the Teleport Joint Ventures  ranging from 12.4% to
       20.3%. On June 27, 1996, TCGI sold  approximately  27 million shares of its
       Class A Common Stock (the "TCGI Class A Stock"),  for $16 per share,  in an
       initial public  offering (the "TCGI IPO"). In connection with the TCGI IPO,
       TCGI, the Company and subsidiaries of Cox, TCI and Continental  Cablevision
       ("Continental"  and collectively with Cox, TCI and the Company,  the "Cable
       Stockholders")  entered  into an  agreement  pursuant  to  which  TCGI  was
       reorganized (the "Reorganization").  The Reorganization consisted of, among
       other  things:  (i)  the  acquisition  by TCGI of TCG  Partners;  (ii)  the
       acquisition by TCGI of additional  interests in the Teleport Joint Ventures
       (including  100% of those  interests  held by the  Company);  and (iii) the
       contribution  to TCGI of  $269.0  million  aggregate  principal  amount  of
       indebtedness,  plus  accrued  interest  thereon,  owed by TCGI to the Cable
       Stockholders  (except that TCI retained a $26 million  subordinated note of
       TCGI), including $53.8 million principal amount and $4.1 million of accrued
       interest owed to the Company.  In connection with the  Reorganization,  the
       Company  received  25.6 million  shares of TCGI's Class B Common Stock (the
       "TCGI  Class B Stock").  Each share of TCGI  Class B Stock is  entitled  to
       voting  power  equivalent  to ten  shares  of TCGI  Class  A  Stock  and is
       convertible,  at the option of the  holder,  into one share of TCGI Class A
       Stock.
  
       In addition to the TCGI Class B Stock held by the Company,  as of March 31,
       1997,  the Company held 2.76 million  shares of TCGI Class A Stock received
       from TCGI in exchange for the shares of an alternate  access  provider.  In
       May 1997,  the  Company  sold all of its shares of TCGI Class A Stock.  The
       Company  anticipates  recognizing a $68.9 million  pre-tax gain on the sale
       during the second quarter of 1997.
  
       After giving effect to the  transactions  described above, the Company owns
       TCGI Class B Stock  representing a 19.6% voting interest and a 15.5% equity
       interest.  The Company  continues to account for its interest in TCGI under
       the equity method based on its voting interest  maintained through the TCGI
       Class B Stock,  its  representation  on TCGI's board of  directors  and its
       participation in a TCGI stockholder  agreement granting certain rights to a
       control group.  After giving effect to the above  transactions and assuming
       conversion  of the TCGI Class B Stock held by the Company into TCGI Class A
       Stock,  the  Company's  investment  in  TCGI  would  have a fair  value  of
       approximately $717.4 million,  based on the quoted market price of the TCGI
       Class A Stock as of May 13, 1997.
  
       UK  Investees.  As of March 31,  1997,  Comcast UK Cable  Partners  Limited
       ("Comcast UK Cable"),  a  consolidated  subsidiary of the Company,  holds a
       27.5% interest in Birmingham Cable Corporation Limited and a 50.0% interest
       in Cable London PLC. In  addition,  Comcast UK Cable  historically  held an
       investment in Cambridge  Holding Company Limited  ("Cambridge  Cable").  In
       March 1996,  Comcast UK Cable  purchased  the 50.0%  interest in  Cambridge
       Cable  that it had not  previously  owned  for cash and  approximately  8.9
       million  of its  Class  A  Common  Shares  (the  "Cambridge  Acquisition").
       Following the Cambridge Acquisition, Comcast UK
  
                                          9
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       Cable  owns  100.0% of  Cambridge  Cable  and  consolidated  the  financial
       position and results of operations of Cambridge  Cable  effective March 31,
       1996.
  
       Other. The Company's 12 other equity method investees  include  investments
       in wired  telecommunications  (including Garden State Cablevision,  L.P., a
       cable  communications  company serving more than 205,000  subscribers as of
       March 31, 1997 in the State of New Jersey), wireless telecommunications and
       content providers  (including  Comcast-Spectacor - see Note 3). The Company
       holds  interests  representing  less  than  20%  of the  total  outstanding
       ownership  interest in certain of its other equity  method  investees.  The
       equity method of accounting is utilized for these  investments based on the
       type   of   investment   (i.e.   general   partnership   interest),   board
       representation,  participation in a controlling investor group, significant
       shareholder  rights  or a  combination  of  these  and  other  factors.  In
       addition,  the Company's 66% interest in Comcast-Spectacor is accounted for
       under the equity  method since the Company  does not maintain  control over
       Comcast-Spectacor's  operations.  The Company does not consider these other
       equity  method  inves  ments  to  be   individually   significant   to  its
       consolidated financial position, results of operations or liquidity.
  
       Investments - Public Companies
       The Company  holds  unrestricted  equity  investments  in certain  publicly
       traded  companies  with an  historical  cost of $140.3  million  and $160.3
       million as of March 31,  1997 and  December  31,  1996,  respectively.  The
       Company has recorded these  investments,  which are classified as available
       for sale,  at their  estimated  fair  values of $131.3  million  and $165.5
       million as of March 31,  1997 and  December  31,  1996,  respectively.  The
       unrealized  pre-tax  (loss) gain as of March 31, 1997 and December 31, 1996
       of ($9.0) million and $5.2 million, respectively, have been reported in the
       Company's   condensed   consolidated   balance  sheet  as  a  component  of
       stockholders'  equity, net of related deferred income tax (benefit) expense
       of ($3.1) million and $1.8 million, respectively.
  
       In February  1996,  in  connection  with certain  preemptive  rights of the
       Company under previously  existing  agreements with Nextel  Communications,
       Inc. ("Nextel"),  the Company purchased  approximately 8.16 million shares,
       classified  as long-term  investments  available for sale, of Nextel common
       stock at $12.25  per share,  for $99.9  million.  As of March 31,  1997 and
       December 31, 1996,  the Company  held 3.3 million  shares of Nextel  common
       stock.  In addition,  as of December 31, 1996,  the Company held options to
       acquire an additional 25.0 million shares of Nextel common stock at $16 per
       share. As of December 31, 1996, these options, which had an historical cost
       of $20.0  million,  were included in the above amounts for  investments  in
       publicly traded companies at their fair value of $32.6 million. In February
       1997,  the  Company  sold these  options to Nextel  for $25.0  million  and
       recognized  a pre-tax  gain of $5.0  million  as  investment  income in its
       condensed consolidated statement of operations and accumulated deficit.
  
       The Company  received 1.36 million  shares of Time Warner common stock (the
       "Time Warner Stock") in exchange (the  "Exchange") for all of the shares of
       Turner  Broadcasting  System,  Inc. ("TBS") stock (the "TBS Stock") held by
       the  Company  as a result of the  merger of Time  Warner and TBS in October
       1996. As a result of the Exchange, the Company recognized a pre-tax gain of
       $47.3 million in the fourth  quarter of 1996,  representing  the difference
       between  the  Company's  historical  cost  basis  in the TBS  Stock of $8.9
       million and the new basis for the Company's investment in Time Warner Stock
       of $56.2  million,  which was based on the closing price of the Time Warner
       Stock on the merger date of $41.375 per share. In December 1996 and January
       1997, the Company sold 92,500 shares and 1.27 million shares, respectively,
       of the Time Warner Stock,  representing  the Company's  entire  interest in
       Time  Warner,  for  $3.7  million  and  $48.6  million,   respectively.  In
       connection  with the January 1997 sales,  the Company  recognized a pre-tax
       loss of $3.8  million,  which  is  included  in  investment  income  in the
       Company's  condensed  consolidated  statement of operations and accumulated
       deficit.  As of December 31, 1996,  the 1.27 million  shares of Time Warner
       Stock  held by the  Company  were  recorded  at their  fair  value of $47.4
       million  and were  included  in  short-term  investments  in the  Company's
       condensed consolidated balance sheet.
  
                                         10
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
  5.   LONG-TERM DEBT
  
       Zero Notes
       As of March 31, 1997,  the  Company's  long-term  debt  includes the senior
       participating redeemable zero coupon notes, due 2000 (the "Zero Notes"), of
       a  subsidiary  of  Comcast  Cellular.  The Zero Notes  outstanding  have an
       aggregate face amount payable at maturity of $629.4  million,  accreting at
       11% per annum. If, at maturity, or an earlier redemption date, 35%, subject
       to reduction in certain  circumstances,  of the private  market  value,  as
       determined by applicable procedures, of the Company's cellular subsidiaries
       is greater than the accreted value plus certain premiums, then such greater
       amount will constitute the redemption  price. The holders of the Zero Notes
       have the right,  upon  request of the holders of the majority of the notes,
       to  require  the  Company  to redeem the Zero Notes at any time on or after
       March 5, 1998.
  
       Comcast  Cellular  intends to utilize a portion  of the  proceeds  from the
       offering of the Cellular  Notes in May 1997 (see Note 3) to redeem the Zero
       Notes.  Accordingly,  the accreted value of the Zero Notes,  without giving
       effect to the alternative  formula based on the private market value of the
       cellular  business,  of  $460.0  million  as of  March  31,  1997  has been
       classified as long-term in the  Company's  condensed  consolidated  balance
       sheet as of March 31, 1997.
  
  6.   STOCKHOLDERS' EQUITY
  
       Concurrent  with the  announcement  of the Scripps  Acquisition  in October
       1995, the Company announced that its Board of Directors authorized a market
       repurchase program (the "Repurchase Program") pursuant to which the Company
       could purchase,  at such times and on such terms as it deemed  appropriate,
       up to $500.0 million of its outstanding common equity  securities,  subject
       to certain restrictions and market conditions.  Based on the trade date for
       stock  repurchases,  during the three months ended March 31, 1997 and 1996,
       the  Company   repurchased   675,000   shares  and  3.2   million   shares,
       respectively,  of its common  stock for  aggregate  consideration  of $11.5
       million  and  $56.7  million,  respectively,  pursuant  to  the  Repurchase
       Program. During the term of the Repurchase Program, the Company repurchased
       a  total  of  13.5  million  shares  of  its  common  stock  for  aggregate
       consideration of $228.6 million.  The Repurchase  Program terminated on May
       13, 1997.
  
       As part of the Repurchase  Program,  the Company sold put options on shares
       of its Class A Special  Common  Stock.  Put options on 4.0 million  shares,
       sold by the Company  during 1996 and 1995 and  outstanding  at December 31,
       1996,   expired   unexercised  during  the  first  quarter  of  1997.  Upon
       expiration,  the Company  reclassified  $69.6 million,  the amount it would
       have been  obligated to pay to  repurchase  such shares had the put options
       been exercised, from common equity put options to additional capital in the
       Company's condensed consolidated balance sheet.
  
       In April 1997,  the Company  sold put options on 2.0 million  shares of its
       Class A Special Common Stock.  The put options give the holder the right to
       require the  Company to  repurchase  such  shares at a  specified  price on
       specific  dates in April and May 1998.  The  amount  the  Company  would be
       obligated  to pay to  repurchase  such  shares  upon  exercise  of the  put
       options,  totaling  $31.4 million,  will be  reclassified  from  additional
       capital  to  common   equity  put  options  in  the   Company's   condensed
       consolidated balance sheet during the second quarter of 1997.
  
  7.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
  
       The Company made cash  payments  for interest of $117.1  million and $102.0
       million   during  the  three   months   ended  March  31,  1997  and  1996,
       respectively.
  
       The Company made cash  payments for income taxes of $18.3 million and $15.3
       million   during  the  three   months   ended  March  31,  1997  and  1996,
       respectively.
  
                                         11
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
                                     (Unaudited)
  
  
  8.   CONTINGENCIES
  
       The Company is subject to claims which arise in the ordinary  course of its
       business and other legal  proceedings.  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.   FINANCIAL DATA BY BUSINESS SEGMENT
       (Dollars in millions)
  <TABLE>
  <CAPTION>
  
                                                     Domestic
                                                       Cable        Electronic      Cellular       Corporate
                                                  Communications     Retailing   Communications  and Other (1)       Total
  <S>                                                 <C>            <C>            <C>             <C>           <C>      
  Three Months Ended March 31, 1997
  Revenues, net...............................          $501.1         $479.7         $104.1           $45.9       $1,130.8
  Depreciation and amortization...............           138.8           26.8           30.0            16.8          212.4
  Operating income (loss).....................            91.5           52.3            7.7           (30.2)         121.3
  Interest expense............................            56.7           14.0           24.0            38.6          133.3
  Capital expenditures........................           106.6           15.0           17.9            40.5          180.0
  Equity in net losses of affiliates .........                                                          70.1           70.1
  
  As of March 31, 1997
  Assets......................................        $6,166.5       $2,171.0       $1,434.5        $2,561.5      $12,333.5
  Long-term debt, less current portion .......         3,105.8          829.9        1,136.4         2,299.2        7,371.3
  
  Three Months Ended March 31, 1996
  Revenues, net...............................          $382.3         $450.1          $98.2           $20.1         $950.7
  Depreciation and amortization...............            95.3           26.2           26.3             9.1          156.9
  Operating income (loss).....................            88.8           46.2            2.2           (24.0)         113.2
  Interest expense............................            56.7           18.2           20.8            39.1          134.8
  Capital expenditures........................            54.0            6.1           14.9            36.4          111.4
  Equity in net losses of affiliates .........             0.1                                          34.4           34.5
  <FN>
  ---------------
  (1)  Corporate and other includes certain  operating  businesses and elimination
       entries related to the segments presented.
  </FN>
  </TABLE>
  
                                         12
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  
  ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
          OF OPERATIONS
  
  Overview
  
  The Company has  experienced  significant  growth in recent  years both  through
  strategic  acquisitions and growth in its existing  businesses.  The Company has
  historically  met its cash  needs for  operations  through  its cash  flows from
  operating   activities.   Cash   requirements   for   acquisitions  and  capital
  expenditures have been provided through the Company's  financing  activities and
  sales of long-term  investments,  as well as its existing cash, cash equivalents
  and short-term investments.
  
  General Developments of Business
  
  Offerings of Subsidiary Debt
  On May 8, 1997, Comcast Cellular Holdings,  Inc. ("Comcast Cellular"),  a wholly
  owned  subsidiary  of the Company,  completed the sale of $1.0 billion of 9 1/2%
  Senior  Notes due 2007 (the  "Cellular  Notes")  through  a 144A  offering  with
  registration  rights. The Cellular Notes are obligations of Comcast Cellular and
  are not  obligations of, nor guaranteed by, the Company.  Comcast  Cellular will
  use the net  proceeds  from the  offering to repay  existing  borrowings  by its
  subsidiaries  with  the  balance,  if any,  to be used  for  subsidiary  general
  purposes.
  
  On May 1, 1997, Comcast Cable  Communications,  Inc. ("Comcast Cable"), a wholly
  owned  subsidiary  of the Company,  completed  the sale of $1.7 billion of notes
  (the "Cable Notes") through a 144A offering with registration  rights. The Cable
  Notes were  issued in four  tranches:  $300.0  million of 8 1/8% Notes due 2004,
  $600.0 million of 8 3/8% Notes due 2007, $550.0 million of 8 7/8% Notes due 2017
  and $250.0  million of 8 1/2% Notes due 2027.  The Notes due 2027 are subject to
  repurchase at the option of the holder in 2009. The Cable Notes are  obligations
  of Comcast Cable and are not  obligations  of, nor  guaranteed  by, the Company.
  Comcast  Cable used  substantially  all of the net proceeds from the offering to
  repay existing  borrowings by its  subsidiaries  with the balance to be used for
  subsidiary general purposes.
  
  E! Entertainment
  On March 31, 1997, the Company,  through Comcast Entertainment Holdings LLC (the
  "LLC"), which is owned 50.1% by the Company and 49.9% by The Walt Disney Company
  ("Disney"), purchased a 58.4% interest in E! Entertainment Television, Inc. ("E!
  Entertainment"),   an  entertainment   programming  service  that  currently  is
  distributed to more than 42 million  subscribers,  from Time Warner, Inc. ("Time
  Warner")  for $321.9  million (the "E!  Acquisition").  The E!  Acquisition  was
  funded by cash  contributions  to the LLC by the  Company  and  Disney of $132.8
  million and $189.1 million, respectively. In connection with the E! Acquisition,
  the  Company  contributed  its 10.4%  interest in E!  Entertainment  to the LLC.
  Following these transactions, the LLC owns a 68.8% interest in E! Entertainment.
  To fund the cash  contribution  to the LLC, the Company  borrowed $132.8 million
  from Disney in the form of two 10-year, 7% notes (the "Disney Notes").
  
  The Company  accounted for the E!  Acquisition  under the purchase method and E!
  Entertainment  was consolidated  with the Company  effective March 31, 1997. The
  allocation of the purchase  price  relating to the assets and  liabilities of E!
  Entertainment is preliminary pending a final appraisal.
  
  After September 1998, Disney, in certain  circumstances,  is entitled to request
  that the LLC  purchase  Disney's  entire  interest  in the LLC at its then  fair
  market value (as determined by an appraisal  process).  If the LLC elects not to
  purchase  Disney's  interest,  Disney has the right, at its option,  to purchase
  either the Company's entire interest in the LLC or all of the shares of stock of
  E!  Entertainment  held by the LLC,  in each case at fair market  value.  In the
  event that Disney exercises its rights,  as described above, a portion or all of
  the Disney Notes may be replaced with a three year note due to Disney.
  
                                         13
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  
  Scripps Cable
  In November 1996, the Company acquired the cable television operations ("Scripps
  Cable") of The E.W.  Scripps  Company  ("E.W.  Scripps")  in exchange for 93.048
  million shares of the Company's  Class A Special  Common Stock,  par value $1.00
  per share (the "Class A Special  Common  Stock"),  valued at $1.552 billion (the
  "Scripps Acquisition").  The Company accounted for the Scripps Acquisition under
  the  purchase  method  and  Scripps  Cable  was  consolidated  with the  Company
  effective November 1, 1996.
  
  The  allocation of the purchase  price to the assets and  liabilities of Scripps
  Cable is  preliminary  pending a final  appraisal and the final  purchase  price
  adjustment  between  the  Company  and E.W.  Scripps.  The terms of the  Scripps
  Acquisition  provide for, among other things, the indemnification of the Company
  by E. W. Scripps for certain liabilities, including tax liabilities, relating to
  Scripps Cable prior to the acquisition date.
  
  Comcast-Spectacor
  In July 1996,  the  Company  completed  its  acquisition  (the  "Sports  Venture
  Acquisition") of a 66% interest in the Philadelphia Flyers Limited  Partnership,
  a Pennsylvania limited partnership  ("PFLP"),  the assets of which, after giving
  effect to the Sports Venture Acquisition, consist of (i) the National Basketball
  Association  ("NBA")  franchise  to  own  and  operate  the  Philadelphia  76ers
  basketball  team and related  assets (the  "Sixers"),  (ii) the National  Hockey
  League ("NHL") franchise to own and operate the Philadelphia  Flyers hockey team
  and related assets,  and (iii) two adjacent arenas,  leasehold  interests in and
  development  rights related to the land underlying the arenas and other adjacent
  parcels  of  land  located  in  Philadelphia,  Pennsylvania  (collectively,  the
  "Arenas").  Concurrent  with the completion of the Sports  Venture  Acquisition,
  PFLP was renamed Comcast Spectacor, L.P. ("Comcast-Spectacor").
  
  The Sports Venture  Acquisition  was completed in two steps.  In April 1996, the
  Company  purchased  the  Sixers  for $125.0  million  in cash plus  assumed  net
  liabilities of approximately  $11.0 million through a partnership  controlled by
  the  Company.  To complete the Sports  Venture  Acquisition,  in July 1996,  the
  Company  contributed  its interest in the Sixers,  exchanged  approximately  3.5
  million shares of the Company's Class A Special Common Stock and 6,370 shares of
  the  Company's  newly issued 5% Series A  Convertible  Preferred  Stock and paid
  $15.0  million  in cash  for its  current  interest  in  Comcast-Spectacor.  The
  remaining 34% interest in Comcast-Spectacor  is owned by a group,  including the
  former majority owner of PFLP, who also manages Comcast-Spectacor. In connection
  with the Sports Venture Acquisition,  Comcast-Spectacor  assumed the outstanding
  liabilities  relating  to the  Sixers  and  the  Arenas,  including  a  mortgage
  obligation of $155.0 million.  The Company accounts for its interest in Comcast-
  Spectacor under the equity method.
  
  Liquidity and Capital Resources
  
  Cash, Cash Equivalents and Short-term Investments
  The  Company  has  traditionally  maintained  significant  levels of cash,  cash
  equivalents  and  short-term   investments  to  meet  its  short-term  liquidity
  requirements.  Cash, cash equivalents and short-term investments as of March 31,
  1997 were $540.8 million.  As of March 31, 1997, $354.5 million of the Company's
  cash,  cash  equivalents  and  short-term  investments  was restricted to use by
  subsidiaries of the Company under contractual or other  arrangements,  including
  $165.7 million which is restricted to use by Comcast UK Cable  Partners  Limited
  ("Comcast UK Cable").
  
  The Company's cash, cash equivalents and short-term  investments are recorded at
  cost which  approximates  their fair value.  As of March 31, 1997, the Company's
  short-term  investments  of $85.9  million  had a weighted  average  maturity of
  approximately eight months.
  
  Investments
  The Company, Tele-Communications, Inc. ("TCI"), Cox Communications, Inc. ("Cox,"
  and  together  with the  Company  and  TCI,  the  "Cable  Parents")  and  Sprint
  Corporation ("Sprint," and together with the Cable Parents, the "Parents"),  and
  certain subsidiaries of the Parents (the "Partner  Subsidiaries")  engage in the
  wireless communications
  
                                         14
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  
  business  through a limited  partnership  known as "Sprint  Spectrum" or "Sprint
  PCS," a  development  stage  enterprise.  The Company owns 15% of Sprint PCS and
  accounts for its investment in Sprint PCS under the equity method.
  
  Under the  provisions  of the  Sprint PCS  partnership  agreement,  the  Partner
  Subsidiaries  have  committed to  contribute  $4.2 billion in cash to Sprint PCS
  through 1999, of which the Company's  share is $630.0  million.  Of this funding
  requirement,  the  Company  has made total cash  contributions  to Sprint PCS of
  $451.0 million through March 31, 1997 and issued a $105.0 million  guaranty on a
  portion of Sprint PCS'  outstanding  debt. The Company  anticipates  that Sprint
  PCS'  capital  requirements  over the next  several  years will be  significant.
  Requirements  in excess of committed  capital are planned to be funded by Sprint
  PCS through external financing, including, but not limited to, vendor financing,
  bank financing and securities  offered to the public. In August 1996, Sprint PCS
  sold $750.0  million  principal  amount at  maturity of Senior  Notes and Senior
  Discount Notes due 2006 in a public offering. In October 1996, Sprint PCS closed
  three  credit  agreements  providing  a  total  of  $5.1  billion  in  available
  financing,  including  $2.0 billion in bank financing and $3.1 billion in vendor
  financing. The timing of the Company's remaining capital contributions to Sprint
  PCS is dependent upon a number of factors, including Sprint PCS' working capital
  requirements.  The Company anticipates funding its remaining capital commitments
  to Sprint PCS through its cash flows from  operating  activities,  its  existing
  cash,  cash  equivalents,  short-term  investments  and lines of credit or other
  external financing, or by a combination of these sources.
  
  In February 1996, in connection  with certain  preemptive  rights of the Company
  under  previously   existing   agreements  with  Nextel   Communications,   Inc.
  ("Nextel"),  the Company purchased approximately 8.16 million shares, classified
  as long-term  investments  available  for sale, of Nextel common stock at $12.25
  per share,  for $99.9  million.  As of March 31, 1997 and December 31, 1996, the
  Company held 3.3 million  shares of Nextel  common  stock.  In  addition,  as of
  December  31,  1996,  the Company  held  options to acquire an  additional  25.0
  million shares of Nextel common stock at $16 per share. As of December 31, 1996,
  these options,  which had an historical cost of $20.0 million,  were included in
  investments in publicly  traded  companies at their fair value of $32.6 million.
  In February 1997, the Company sold these options to Nextel for $25.0 million and
  recognized a pre-tax gain of $5.0 million as investment  income in its condensed
  consolidated  statement  of  operations  and  accumulated  deficit.
  
  The Company  received 1.36 million shares of Time Warner common stock (the "Time
  Warner  Stock") in  exchange  (the  "Exchange")  for all of the shares of Turner
  Broadcasting System, Inc. ("TBS") stock (the "TBS Stock") held by the Company as
  a result of the merger of Time  Warner and TBS in October  1996.  As a result of
  the  Exchange,  the Company  recognized a pre-tax  gain of $47.3  million in the
  fourth  quarter of 1996,  representing  the  difference  between  the  Company's
  historical cost basis in the TBS Stock of $8.9 million and the new basis for the
  Company's  investment in Time Warner Stock of $56.2 million,  which was based on
  the  closing  price of the Time  Warner  Stock on the merger date of $41.375 per
  share.  In December  1996 and January  1997,  the Company sold 92,500 shares and
  1.27 million shares,  respectively,  of the Time Warner Stock,  representing the
  Company's  entire  interest in Time Warner,  for $3.7 million and $48.6 million,
  respectively.  In connection with the January 1997 sales, the Company recognized
  a pre-tax loss of $3.8 million,  which is included in  investment  income in the
  Company's  condensed   consolidated  statement  of  operations  and  accumulated
  deficit.  As of December 31, 1996,  the 1.27 million shares of Time Warner Stock
  held by the company were  recorded at their fair value of $47.4 million and were
  included in  short-term  investments  in the  Company's  condensed  consolidated
  balance sheet.
  
  
                                         15
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  
  The Company does not have any  additional  significant  contractual  commitments
  with respect to any of its investments.  However, to the extent the Company does
  not fund its  investees'  capital  calls,  it exposes  itself to dilution of its
  ownership interests.  The Company continually evaluates its existing investments
  as well as new investment opportunities.
  
  Financing
  The Company has  historically  utilized a strategy of financing its acquisitions
  through  senior debt at the  acquired  operating  subsidiary  level.  Additional
  financing  has also  been  obtained  by the  Company  through  the  issuance  of
  subordinated debt at the intermediate  holding company and parent company levels
  and, to some extent,  through public  offerings of a subsidiary  company's stock
  and debt instruments.
  
  The  Company  is in  the  process  of  repaying  or  otherwise  restructuring  a
  significant  portion  of its debt  outstanding  as of March  31,  1997  with the
  proceeds  from the  issuance  of the Cable  Notes and the  Cellular  Notes.  The
  following  information  depicts the impact that these  anticipated  transactions
  would  have on certain  aspects  of the  Company's  outstanding  long-term  debt
  assuming that, as of March 31, 1997, the Cable Notes and Cellular Notes had been
  issued  and  the  Company  had  made  the  anticipated  repayments  (dollars  in
  millions):
  
  <TABLE>
  <CAPTION>
                                                     Actual as of    "Pro forma" as of
                                                    March 31, 1997   March 31, 1997 (1)
  <S>                                                 <C>                <C>     
  Contractual Maturities of Long-Term Debt:
  
       1997 (2)....................................      $76.3              $76.3
       1998........................................      684.9              127.5
       1999........................................      538.7              279.6
       2000........................................      674.1              301.1
       2001........................................    1,300.4              622.2
  
  Unused Lines of Credit (3).......................     $996.7           $1,216.7
  
  Average Interest Rate............................       7.65%              8.04%
  <FN>
  ---------------
  (1)  In connection with the assumed  repayments of debt  outstanding as of March
       31,  1997 with the  proceeds  from the  issuance of the Cable Notes and the
       Cellular Notes, the Company expects to record an extraordinary loss, net of
       tax, of  approximately  $20.0  million in 1997.  There can be no assurances
       that all of the transactions  contemplated by the "pro forma"  presentation
       will occur in the manner  assumed herein or occur at all. The impact of the
       transactions  which  ultimately  occur may yield  results which differ from
       those presented above. 
  (2)  Represents  maturities of long-term  debt for the remaining  nine months of
       1997.
  (3)  Actual as of March 31, 1997 excludes  $625.0 million which was  established
       by a subsidiary of Comcast Cellular for debt refinancing.
  </FN>
  </TABLE>
  
  The  availability  and use of the unused  lines of credit is  restricted  by the
  covenants of the related debt agreements and to subsidiary  general purposes and
  dividend declaration.  The Company continually evaluates its debt structure with
  the intention of reducing its debt service requirements when desirable.
  
  Concurrent with the announcement of the Scripps Acquisition in October 1995, the
  Company  announced  that its Board of Directors  authorized a market  repurchase
  program (the "Repurchase Program") pursuant to which the Company could purchase,
  at such times and on such terms as it deemed  appropriate,  up to $500.0 million
  of its outstanding common equity securities, subject to certain restrictions and
  market  conditions.  Based on the trade date for stock  repurchases,  during the
  three  months  ended March 31, 1997 and 1996,  the Company  repurchased  675,000
  shares and 3.2 million shares,  respectively,  of its common stock for aggregate
  consideration of $11.5 million and $56.7 million, respectively,  pursuant to the
  Repurchase Program. During the term of the Repurchase Program, the
  
                                         16
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  
  Company  repurchased  a total of 13.5  million  shares of its  common  stock for
  aggregate  consideration of $228.6 million. The Repurchase Program terminated on
  May 13, 1997.
  
  As part of the Repurchase Program, the Company sold put options on shares of its
  Class A Special  Common Stock.  Put options on 4.0 million  shares,  sold by the
  Company  during 1996 and 1995 and  outstanding  at December  31,  1996,  expired
  unexercised  during the first  quarter of 1997.  Upon  expiration,  the  Company
  reclassified  $69.6  million,  the amount it would have been obligated to pay to
  repurchase  such shares had the put options been  exercised,  from common equity
  put  options to  additional  capital  in the  Company's  condensed  consolidated
  balance sheet.
  
  In April 1997, the Company sold put options on 2.0 million shares of its Class A
  Special  Common Stock.  The put options give the holder the right to require the
  Company to  repurchase  such  shares at a specified  price on specific  dates in
  April  and May  1998.  The  amount  the  Company  would be  obligated  to pay to
  repurchase such shares upon exercise of the put options, totaling $31.4 million,
  will be reclassified from additional capital to common equity put options in the
  Company's  condensed  consolidated  balance  sheet during the second  quarter of
  1997.
  
                              -------------------------
  
  As  a  result  of  the  Scripps  Acquisition,   the  Company  no  longer  has  a
  stockholders' deficiency.  However, the Company expects to continue to recognize
  significant  losses  for the  foreseeable  future,  resulting  in  decreases  in
  stockholders'  equity.  The  telecommunications  industry,  including  cable and
  cellular communications,  and the electronic retailing industry are experiencing
  increasing  competition and rapid  technological  changes.  The Company's future
  results of operations will be affected by its ability to react to changes in the
  competitive  environment  and by its  ability  to  implement  new  technologies.
  However,  the Company believes that competition,  technological  changes and its
  significant  losses  will  not  significantly   affect  its  ability  to  obtain
  financing.
  
  The Company  believes  that it will be able to meet its  current  and  long-term
  liquidity and capital  requirements,  including fixed charges,  through its cash
  flows from operating  activities,  existing cash, cash  equivalents,  short-term
  investments and lines of credit and other external financing.
  
  Statement of Cash Flows
  
  Cash and cash  equivalents  increased  $123.6  million as of March 31, 1997 from
  December 31, 1996 and decreased $28.9 million as of March 31, 1996 from December
  31, 1995.  Changes in cash and cash  equivalents  resulted  from cash flows from
  operating, financing and investing activities which are explained below.
  
  Net cash provided by operating  activities amounted to $197.4 million and $128.1
  million for the three  months ended March 31, 1997 and 1996,  respectively.  The
  increase of $69.3  million is  principally  due to the increase in the Company's
  operating  income  before   depreciation  and  amortization   (see  "Results  of
  Operations"),  including the effects of the Scripps Acquisition,  and changes in
  working capital as a result of the timing of receipts and disbursements.
  
  Net cash  provided  by (used in)  financing  activities  was $85.2  million  and
  ($28.9)   million  for  the  three   months  ended  March  31,  1997  and  1996,
  respectively. During the three months ended March 31, 1997, the Company borrowed
  $192.8  million,  including  the Disney Notes of $132.8  million and  borrowings
  under its existing  lines of credit,  and repaid $90.9  million of its long-term
  debt.  In  addition,  the Company  made net  repurchases  of $7.0 million of its
  common stock  during the three  months  ended March 31,  1997.  During the three
  months ended March 31,  1996,  the Company  borrowed  $191.2  million  under its
  existing  lines of credit  and repaid  $167.4  million  of its  long-term  debt,
  including approximately $78.5 million under a vendor financing arrangement.  Net
  repurchases  of the  Company's  common stock during the three months ended March
  31, 1996 were $38.2 million.
  
  Net cash used in investing  activities was $159.0 million and $128.1 million for
  the three months ended March 31, 1997 and 1996,  respectively.  During the three
  months ended March 31, 1997, net cash used in investing activities includes the
  
                                         17
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  
  E!  Acquisition,  net of  cash  acquired,  of  $116.5  million,  investments  in
  affiliates of $32.4 million and capital  expenditures of $180.0 million,  offset
  by the proceeds from the sales of short-term  and  long-term  investments  and a
  distribution  from an investee of $150.4  million and the  repayment  of a $25.2
  million loan to Sprint PCS. For the three months ended March 31, 1996,  net cash
  used in  investing  activities  includes  investments  in  affiliates  of $153.7
  million,  including capital contributions to Sprint PCS of $17.0 million and the
  purchase of Nextel shares of $99.9 million,  and capital  expenditures of $111.4
  million,  offset by the  proceeds  from the sales of  short-term  and  long-term
  investments of $173.8 million.
  
  Results of Operations
  
  The effects of the Company's recent acquisitions were to increase  significantly
  the Company's  revenues and expenses  resulting in substantial  increases in its
  operating income before  depreciation and  amortization,  depreciation  expense,
  amortization expense and interest expense. In addition,  the Company's equity in
  net losses of affiliates  has increased  principally as a result of the start-up
  nature of certain of the Company's equity  investees (see "Operating  Results by
  Business Segment" and "Consolidated  Analysis"). As a result of the increases in
  depreciation expense,  amortization expense and interest expense associated with
  these acquisitions and their financing and the increases in equity in net losses
  of  affiliates,  it is expected  that the  Company  will  continue to  recognize
  significant losses for the foreseeable future.
  
  Summarized  consolidated  financial  information  for the  Company for the three
  months ended March 31, 1997 and 1996 is as follows  (dollars in  millions,  "NM"
  denotes percentage is not meaningful):
  
  <TABLE>
  <CAPTION>
                                                                     Three Months Ended
                                                                          March 31,           Increase / (Decrease)
                                                                     1997          1996          $            %
  
  <S>                                                              <C>            <C>          <C>           <C>  
  Revenues..................................................       $1,130.8       $950.7       $180.1        18.9%
  Cost of goods sold from electronic retailing .............          291.9        270.1         21.8         8.1
  Operating, selling, general and administrative expenses ..          505.2        410.5         94.7        23.1
                                                                   --------       ------
  Operating income before depreciation and
     amortization (1) ......................................          333.7        270.1         63.6        23.5
  Depreciation..............................................           95.8         68.4         27.4        40.1
  Amortization..............................................          116.6         88.5         28.1        31.8
                                                                   --------       ------
  Operating income..........................................          121.3        113.2          8.1         7.2
                                                                   --------       ------
  Interest expense..........................................          133.3        134.8         (1.5)       (1.1)
  Investment income.........................................          (12.2)       (18.6)        (6.4)      (34.4)
  Equity in net losses of affiliates........................           70.1         34.5         35.6          NM
  Other.....................................................            8.9         11.3         (2.4)      (21.2)
  Income tax expense........................................            9.9          0.9          9.0          NM
  Minority interest.........................................          (24.0)       (15.1)         8.9        58.9
                                                                   --------       ------
  Net loss..................................................         ($64.7)      ($34.6)       $30.1        87.0%
                                                                   ========       ======
  <FN>
  ------------
  (1)  Operating income before  depreciation and amortization is commonly referred
       to in the Company's  businesses as "operating  cash flow."  Operating  cash
       flow is a measure of a company's  ability to  generate  cash to service its
       obligations, including debt service obligations, and to finance capital and
       other  expenditures.  In part due to the  capital  intensive  nature of the
       Company's  businesses  and the  resulting  significant  level  of  non-cash
       depreciation  expense  and  amortization  expense,  operating  cash flow is
       frequently  used  as one of  the  bases  for  comparing  businesses  in the
       Company's industries. 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.
  </FN>
  </TABLE>
  
                                         18
  
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  
  Operating Results by Business Segment
  
  Domestic Cable Communications
  
  As a result of the Scripps Acquisition,  the Company commenced consolidating the
  financial  results of Scripps Cable  effective  November 1, 1996.  The following
  table presents actual financial information for the three months ended March 31,
  1997 and pro forma  financial  information  for the three months ended March 31,
  1996 as if the  Scripps  Acquisition  occurred  on January  1,  1996.  Pro forma
  financial  information is presented  herein for purposes of analysis and may not
  reflect  what actual  operating  results  would have been had the Company  owned
  Scripps Cable since January 1, 1996 (dollars in millions):
  <TABLE>
  <CAPTION>
                                                                     Three Months Ended
                                                                          March 31,                Increase
                                                                     1997          1996          $            %
  <S>                                                               <C>           <C>          <C>           <C> 
  Service income............................................        $501.1        $457.3       $43.8         9.6%
  Operating, selling, general and
       administrative expenses..............................         270.8         240.6        30.2        12.6
                                                                    ------        ------       -----
  Operating income before depreciation
       and amortization (a).................................        $230.3        $216.7       $13.6         6.3%
                                                                    ======        ======       =====
  <FN>
  ---------------
  (a) See footnote (1) on page 18.
  </FN>
  </TABLE>
  
  Of the $43.8 million  increase in service income for the three month period from
  1996 to 1997, $10.0 million is attributable to subscriber growth,  $32.0 million
  relates to changes in rates and $1.8 million relates to other product offerings.
  
  Of the $30.2 million increase in operating,  selling, general and administrative
  expenses  for the  three  month  period  from  1996 to  1997,  $7.6  million  is
  attributable  to  increases  in the  costs of cable  programming  as a result of
  subscriber  growth,  additional  channel  offerings  and changes in rates,  $5.0
  million is attributable to increases in costs associated with the implementation
  of three regional  customer  service call centers and $17.6 million results from
  increases  in the  cost of  labor,  other  volume  related  expenses  and  costs
  associated with new product offerings. It is anticipated that the Company's cost
  of cable  programming  will  increase in the future as cable  programming  rates
  increase and additional sources of cable programming become available.
  
  Electronic Retailing
  
  The following  table sets forth operating  results for the Company's  electronic
  retailing   segment,   consisting  of  the  operations  of  QVC,  Inc.  and  its
  subsidiaries  ("QVC"), a majority owned and controlled subsidiary of the Company
  (dollars in millions):
  
  <TABLE>
  <CAPTION>
                                                                     Three Months Ended
                                                                          March 31,                Increase
                                                                     1997          1996          $            %
  <S>                                                               <C>           <C>          <C>           <C> 
  Net sales from electronic retailing.......................        $479.7        $450.1       $29.6         6.6%
  Cost of goods sold from electronic retailing .............         291.9         270.1        21.8         8.1
  Operating, selling, general and administrative
       expenses.............................................         108.7         107.6         1.1         1.0
                                                                    ------        ------       -----
  Operating income before depreciation
       and amortization (a).................................         $79.1         $72.4        $6.7         9.3%
                                                                    ======        ======       =====
  
  Gross margin..............................................          39.1%         40.0%
  <FN>
  ---------------
  (a) See footnote (1) on page 18.
  </FN>
  </TABLE>
  
                                         19
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  
  The increase in net sales from  electronic  retailing  of $29.6  million for the
  three month period from 1996 to 1997 is primarily attributable to the effects of
  a 7.1%  and a 14.0%  increase  in the  average  number  of homes  receiving  QVC
  services in the United States and the United Kingdom, respectively.
  
  The  increase  in cost of goods  sold from  electronic  retailing  is  primarily
  related to the growth in net sales. The decline in gross margin from 1996 to the
  same  period in 1997 is a result of a change in product  mix and an  increase in
  shipping and handling costs.
  
  The increase in operating,  selling, general and administrative expenses of $1.1
  million for the three month period from 1996 to 1997 is  primarily  attributable
  to start-up  costs  incurred by QVC in Germany,  which began  operations  in the
  fourth quarter of 1996,  offset,  in part, by the reduction in expenses realized
  upon  consolidation  of QVC's  multichannel  operations  and an  increase in net
  finance fee income from credit card operations.
  
  Cellular Communications
  
  The following table sets forth the operating results for the Company's  cellular
  communications segment (dollars in millions):
  <TABLE>
  <CAPTION>
                                                                     Three Months Ended
                                                                          March 31,            Increase/(Decrease)
                                                                     1997          1996          $            %
  <S>                                                               <C>            <C>          <C>          <C> 
  Service income ...........................................        $104.1         $98.2        $5.9         6.0%
  Operating, selling, general and administrative
       expenses ............................................          66.4          69.7        (3.3)       (4.7)
                                                                    ------         -----        ----
  Operating income before depreciation
       and amortization (a) ................................         $37.7         $28.5        $9.2        32.3%
                                                                    ======         =====        ====
  <FN>
  ---------------
  (a) See footnote (1) on page 18.
  </FN>
  </TABLE>
  
  Of the $5.9 million  increase in service  income for the three month period from
  1996 to 1997, $8.5 million is attributable to the Company's  subscriber  growth.
  Offsetting this increase is a decrease of $2.6 million resulting  primarily from
  a reduction  in the average  rate per minute of use from 1996 to the same period
  in 1997.
  
  The $3.3 million  decrease in  operating,  selling,  general and  administrative
  expenses for the three month period from 1996 to 1997 is primarily  attributable
  to  expense  reductions  achieved  through  implementation  of fraud  management
  programs and a reduction in commission costs resulting from fewer gross sales in
  1997 as compared to the same period in 1996.  These  reductions  were  partially
  offset by increases in volume related expenses resulting from subscriber growth.
  
  Consolidated Analysis
  
  The $27.4 million  increase in  depreciation  expense for the three month period
  from  1996 to 1997 is  primarily  attributable  to the  effects  of the  Scripps
  Acquisition and the effects of capital expenditures.
  
  The $28.1 million  increase in  amortization  expense for the three month period
  from  1996 to 1997 is  primarily  attributable  to the  effects  of the  Scripps
  Acquisition.
  
  The $1.5  million  decrease in interest  expense for the three month period from
  1996 to 1997 is  attributable  to  decreases  in  rates,  offset,  in  part,  by
  increased  levels of debt. The Company  anticipates  that,  for the  foreseeable
  future, interest expense will be a significant cost to the Company and will have
  a significant  adverse effect on the Company's  ability to realize net earnings.
  The Company believes it will continue to be able to meet its obligations
  
                                         20
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  
  through its ability both to generate  operating  income before  depreciation and
  amortization and to obtain external financing.
  
  The $6.4 million  decrease in investment  income for the three month period from
  1996 to 1997 is primarily attributable to the effects of higher average balances
  of cash,  cash  equivalents  and  short-term  investments in 1996 as compared to
  1997. In May 1997,  the Company sold all of its 2.76 million  shares of Teleport
  Communications  Group,  Inc.  Class A  Common  Stock.  The  Company  anticipates
  recognizing a $68.9 million  pre-tax gain on the sale during the second  quarter
  of 1997.
  
  The $35.6 million  increase in equity in net losses of affiliates  for the three
  month  period from 1996 to 1997 is  primarily  due to the  effects of  increased
  losses  incurred  by  Sprint  PCS and  certain  of the  Company's  other  equity
  investees  and the  effects  of the E!  Acquisition  (see  below) and the Sports
  Venture Acquisition.  Based on Sprint PCS' current operations and business plan,
  the Company  anticipates that its proportionate share of Sprint PCS' losses will
  be  significant  in  future  periods.  In  addition,  as  a  result  of  the  E!
  Acquisition,  the Company recorded a charge  representing the cumulative  amount
  that would have been recorded had the Company accounted for its investment in E!
  Entertainment  under the equity method since the date of initial investment (the
  "Cumulative   Charge").   Since  the   Company's   proportionate   share  of  E!
  Entertainment's  cumulative  losses were in excess of the  Company's  historical
  cost  basis in E!  Entertainment  and as the  Company  was under no  contractual
  obligation to fund the losses of E!  Entertainment,  the  Cumulative  Charge was
  limited to the Company's historical cost basis of $12.1 million.  Such amount is
  included  in  equity in net  losses of  affiliates  in the  Company's  condensed
  consolidated  statement  of  operations  and  accumulated  deficit for the three
  months  ended March 31, 1997 as it is not  significant  for  restatement  of the
  Company's prior year financial statements.
  
  The $9.0 million increase in income tax expense for three month period from 1996
  to 1997 is a result of increases in non-deductible  foreign losses and equity in
  net losses of affiliates as well as increased  goodwill  amortization  resulting
  from the Scripps Acquisition.
  
  The $8.9 million  increase in minority  interest for the three month period from
  1996 to 1997 is  primarily  attributable  to the  effects  of changes in the net
  income (loss) of QVC and Comcast UK Cable.
  
  For the three months ended March 31, 1997 and 1996,  the Company's  distribution
  from an investee and earnings before income tax expense, equity in net losses of
  affiliates and fixed charges  (interest  expense) were $150.4 million and $135.6
  million, respectively.  Such earnings were adequate to cover the Company's fixed
  charges,  including interest  capitalized of $8.6 million, of $141.9 million for
  the three months ended March 31, 1997.  Such earnings were not adequate to cover
  the Company's fixed charges,  including interest capitalized of $7.1 million, of
  $141.9 million for the three months ended March 31, 1996.  Fixed charges include
  non-cash  interest,  net of  interest  capitalized,  of $17.0  million and $16.1
  million for the three  months ended March 31, 1997 and 1996,  respectively.  The
  inadequacy  of earnings to cover fixed  charges for the three months ended March
  31, 1996 is primarily due to the substantial  non-cash  charges for depreciation
  expense and amortization expense.
  
  The  Company  believes  that  its  losses  will  not  significantly  affect  the
  performance of its normal business activities because of its existing cash, cash
  equivalents and short-term investments, 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.
  
                                         21
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 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:
  
             (i)    Comcast  Corporation  filed a Current Report on Form 8-K under
                    Item 5 on January 31, 1997 relating to the announcement of its
                    agreement  with The Walt Disney  Company to form a new company
                    to acquire a majority interest in E! Entertainment Television,
                    Inc.
  
             (ii)   Comcast  Corporation  filed a Current Report on Form 8-K under
                    Item 5 on March 27, 1997 relating to its  announcement  of the
                    intention of its wholly  owned  subsidiary,  Comcast  Cellular
                    Holdings,  Inc., to offer approximately $900 million of senior
                    notes in a private placement.
  
  
                                         22
  <PAGE>
                        COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 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 CORPORATION
                                       -------------------------------------------
  
  
  
  
  
  
                                       /S/ LAWRENCE S. SMITH
                                       -------------------------------------------
                                       Lawrence S. Smith
                                       Executive Vice President
                                       (Principal Accounting Officer)
  
  
  
  Date: May 15, 1997
  
                                         23
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 104976}]
metadata_filer: {"company-data": {"conformed-name": "COMCAST CORP", "cik": "0000022301", "assigned-sic": "4841", "irs-number": "231709202", "state-of-incorporation": "PA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-06983", "film-number": "97609191"}, "business-address": {"street1": "1500 MARKET STREET", "city": "PHILADELPHIA", "state": "PA", "zip": "19102-2148", "phone": "2156651700"}, "mail-address": {"street1": "1500 MARKET STREET", "city": "PHILADELPHIA", "state": "PA", "zip": "19102-2148"}}
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:
                                   MARCH 31, 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 0-6983
  
                                COMCAST CORPORATION
                              [GRAPHIC OMITTED - LOGO]
  
               (Exact name of registrant as specified in its charter)
  
          PENNSYLVANIA                                    23-1709202
  --------------------------------------------------------------------------------
  (State or other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                      Identification No.)
  
                   1500 Market Street, Philadelphia, PA 19102-2148
  --------------------------------------------------------------------------------
                      (Address of principal executive offices)
                                     (Zip Code)
  
  Registrant's telephone number, including area code:  (215) 665-1700
  
                             --------------------------
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding  twelve months (or for such shorter period that the registrant was
  required to file such  reports),  and (2) has been subject to such  requirements
  for the past 90 days.
  
           Yes  __X__                                         No ____
  
                             --------------------------
  
  As of March 31, 1997,  there were  283,525,310  shares of Class A Special Common
  Stock, 33,283,729 shares of Class A Common Stock and 8,786,250 shares of Class B
  Common Stock outstanding.
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
                                  TABLE OF CONTENTS
  
                                                                             Page
                                                                            Number
  
  PART I.   FINANCIAL INFORMATION
  
            Item 1.   Financial Statements
  
                      Condensed Consolidated Balance
                      Sheet as of March 31, 1997 and December 31,
                      1996 (Unaudited)..........................................2
  
                      Condensed Consolidated Statement of
                      Operations and Accumulated Deficit for
                      the Three Months Ended March 31,
                      1997 and 1996 (Unaudited).................................3
  
                      Condensed Consolidated Statement of Cash
                      Flows for the Three Months Ended March 31, 1997
                      and 1996 (Unaudited)......................................4
  
                      Notes to Condensed Consolidated
                      Financial Statements (Unaudited).....................5 - 12
  
            Item 2.   Management's Discussion and Analysis
                      of Financial Condition and Results of
                      Operations..........................................13 - 21
  
  PART II.  OTHER INFORMATION
  
            Item 1.   Legal Proceedings .......................................22
  
            Item 6.   Exhibits and Reports on Form 8-K ........................22
  
            SIGNATURE..........................................................23
  
                         -----------------------------------
  
  This Quarterly  Report on Form 10-Q contains  forward  looking  statements  made
  pursuant to the "safe harbor"  provisions of the Private  Securities  Litigation
  Reform Act of 1995.  Readers are cautioned that such forward looking  statements
  involve  risks and  uncertainties  which  could  significantly  affect  expected
  results  in the  future  from  those  expressed  in  any  such  forward  looking
  statements  made by, or on behalf of the  Company.  Certain  factors  that could
  cause actual  results to differ  materially  include,  without  limitation,  the
  effects of  legislative  and  regulatory  changes;  the  potential for increased
  competition;  technological  changes; the need to generate substantial growth in
  the subscriber base by successfully launching,  marketing and providing services
  in  identified  markets;  pricing  pressures  which could affect  demand for the
  Company's services; the Company's ability to expand its distribution; changes in
  labor, programming, equipment and capital costs; the Company's continued ability
  to  create  or  acquire  programming  and  products  that  customers  will  find
  attractive;  future  acquisitions,   strategic  partnerships  and  divestitures;
  general business and economic conditions;  and other risks detailed from time to
  time in the Company's  periodic  reports filed with the  Securities and Exchange
  Commission.
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  PART I.   FINANCIAL INFORMATION
  
  ITEM 1.   FINANCIAL STATEMENTS
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
                                     (Unaudited)
  (Dollars in millions, except share data)
                                                                                          March 31,        December 31,
                                                                                            1997                1996
  ASSETS
  CURRENT ASSETS
     Cash and cash equivalents....................................................           $454.9            $331.3
     Short-term investments.......................................................             85.9             208.3
     Accounts receivable, less allowance for doubtful
       accounts of $103.4 and $97.1...............................................            423.6             439.3
     Inventories, net.............................................................            288.6             258.4
     Other current assets.........................................................            149.8             168.5
                                                                                          ---------         ---------
         Total current assets.....................................................          1,402.8           1,405.8
                                                                                          ---------         ---------
  INVESTMENTS, principally in affiliates .........................................          1,108.0           1,177.7
                                                                                          ---------         ---------
  
  PROPERTY AND EQUIPMENT .........................................................          3,751.2           3,600.1
     Accumulated depreciation.....................................................         (1,136.9)         (1,061.3)
                                                                                          ---------         ---------
     Property and equipment, net..................................................          2,614.3           2,538.8
                                                                                          ---------         ---------
  
  DEFERRED CHARGES................................................................          8,937.9           8,578.8
     Accumulated amortization.....................................................         (1,729.5)         (1,612.5)
                                                                                          ---------         ---------
     Deferred charges, net........................................................          7,208.4           6,966.3
                                                                                          ---------         ---------
                                                                                          $12,333.5         $12,088.6
                                                                                          =========         =========
  LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES
     Accounts payable and accrued expenses........................................         $1,065.8          $1,044.3
     Accrued interest.............................................................             90.2              91.1
     Current portion of long-term debt............................................             92.9             229.5
                                                                                          ---------         ---------
         Total current liabilities................................................          1,248.9           1,364.9
                                                                                          ---------         ---------
  LONG-TERM DEBT, less current portion ...........................................          7,371.3           7,102.7
                                                                                          ---------         ---------
  DEFERRED INCOME TAXES...........................................................          2,119.9           2,140.5
                                                                                          ---------         ---------
  MINORITY INTEREST AND OTHER ....................................................          1,061.0             859.3
                                                                                          ---------         ---------
  COMMITMENTS AND CONTINGENCIES
  
  COMMON EQUITY PUT OPTIONS ......................................................                               69.6
                                                                                          ---------         ---------
  STOCKHOLDERS' EQUITY
     Preferred stock, no par value - authorized, 20,000,000
       shares; issued 5% series A convertible, 6,370 at redemption value .........             31.9              31.9
     Class A special common stock, $1 par value - authorized,
       500,000,000 shares; issued, 283,525,310 and 283,281,675 ...................            283.5             283.3
     Class A common stock, $1 par value - authorized,
       200,000,000 shares; issued, 33,283,729 and 33,959,368 .....................             33.3              34.0
     Class B common stock, $1 par value - authorized,
       50,000,000 shares; issued, 8,786,250 ......................................              8.8               8.8
     Additional capital...........................................................          2,399.0           2,327.4
     Accumulated deficit..........................................................         (2,206.5)         (2,127.9)
     Unrealized (losses) gains on marketable securities                                        (5.9)              0.1
     Cumulative translation adjustments...........................................            (11.7)             (6.0)
                                                                                          ---------         ---------
         Total stockholders' equity...............................................            532.4             551.6
                                                                                          ---------         ---------
                                                                                          $12,333.5         $12,088.6
                                                                                          =========         =========
  See notes to condensed consolidated financial statements.
  
                                          2
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                                     (Unaudited)
  (Amounts in millions, except per share data)
                                                                                          Three Months Ended March 31,
                                                                                             1997              1996
  REVENUES
     Service income...............................................................           $651.1            $500.6
     Net sales from electronic retailing..........................................            479.7             450.1
                                                                                          ---------         --------- 
  
                                                                                            1,130.8             950.7
                                                                                          ---------         --------- 
  
  COSTS AND EXPENSES
     Operating....................................................................            297.4             229.8
     Cost of goods sold from electronic retailing.................................            291.9             270.1
     Selling, general and administrative..........................................            207.8             180.7
     Depreciation.................................................................             95.8              68.4
     Amortization.................................................................            116.6              88.5
                                                                                          ---------         --------- 
  
                                                                                            1,009.5             837.5
                                                                                          ---------         --------- 
  
  OPERATING INCOME................................................................            121.3             113.2
  
  OTHER (INCOME) EXPENSE
     Interest expense.............................................................            133.3             134.8
     Investment income............................................................            (12.2)            (18.6)
     Equity in net losses of affiliates...........................................             70.1              34.5
     Other........................................................................              8.9              11.3
                                                                                          ---------         --------- 
  
                                                                                              200.1             162.0
                                                                                          ---------         --------- 
  
  LOSS BEFORE INCOME TAX EXPENSE AND MINORITY INTEREST ...........................            (78.8)            (48.8)
  
  INCOME TAX EXPENSE..............................................................              9.9               0.9
                                                                                          ---------         --------- 
  
  LOSS BEFORE MINORITY INTEREST ..................................................            (88.7)            (49.7)
  
  MINORITY INTEREST...............................................................            (24.0)            (15.1)
                                                                                          ---------         --------- 
  
  NET LOSS .......................................................................            (64.7)            (34.6)
  
  ACCUMULATED DEFICIT
     Beginning of period .........................................................         (2,127.9)         (1,914.3)
     Dividends declared - $.0233 per common share ................................             (7.9)             (5.6)
     Retirement of common stock...................................................             (6.0)            (42.6)
                                                                                          ---------         --------- 
  
     End of period................................................................        ($2,206.5)        ($1,997.1)
                                                                                          =========         ========= 
  
  NET LOSS PER SHARE..............................................................            ($.20)            ($.14)
                                                                                          =========         ========= 
  
  WEIGHTED AVERAGE NUMBER OF COMMON
      SHARES OUTSTANDING DURING THE PERIOD .......................................            325.9             239.4
                                                                                          =========         =========
  See notes to condensed consolidated financial statements.
  
                                          3
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (Unaudited)
  (Dollars in millions)
                                                                                           Three Months Ended March 31,
                                                                                              1997              1996
  OPERATING ACTIVITIES
     Net loss.....................................................................           ($64.7)           ($34.6)
     Adjustments to reconcile net loss to net cash provided
      by operating activities:
       Depreciation...............................................................             95.8              68.4
       Amortization...............................................................            116.6              88.5
       Non-cash interest expense, net.............................................             16.1              16.1
       Equity in net losses of affiliates.........................................             70.1              34.5
       Gain on sales of long-term investments, net of losses .....................             (1.2)
       Minority interest..........................................................            (24.0)            (15.1)
       Deferred income taxes and other............................................             (7.7)             (9.1)
                                                                                            -------           -------
                                                                                              201.0             148.7
  
       Decrease in accounts receivable, net.......................................             36.5              23.6
       (Increase) decrease in inventories, net....................................            (30.2)              2.7
       Decrease in other current assets...........................................              0.3               6.7
       Decrease in accounts payable and accrued expenses .........................             (9.3)            (70.3)
       (Decrease) increase in accrued interest....................................             (0.9)             16.7
                                                                                            -------           -------
  
             Net cash provided by operating activities............................            197.4             128.1
                                                                                            -------           -------
  
  FINANCING ACTIVITIES
     Proceeds from borrowings.....................................................            192.8             191.2
     Retirement and repayment of debt.............................................            (90.9)           (167.4)
     Repurchases of common stock, net.............................................             (7.0)            (38.2)
     Dividends....................................................................             (7.9)             (5.6)
     Other........................................................................             (1.8)             (8.9)
                                                                                            -------           -------
  
             Net cash provided by (used in) financing activities .................             85.2             (28.9)
                                                                                            -------           -------
  
  INVESTING ACTIVITIES
     Acquisitions, net of cash acquired...........................................           (116.5)            (16.2)
     Proceeds from sales of short-term investments, net ..........................            123.6             171.4
     Investments, principally in affiliates.......................................            (32.4)           (153.7)
     Proceeds from sales of and distribution from long-term investments ..........             26.8               2.4
     Proceeds from repayment of loan to investee..................................             25.2
     Capital expenditures.........................................................           (180.0)           (111.4)
     Other........................................................................             (5.7)            (20.6)
                                                                                            -------           -------
  
             Net cash used in investing activities................................           (159.0)           (128.1)
                                                                                            -------           -------
  
  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ...............................            123.6             (28.9)
  
  CASH AND CASH EQUIVALENTS, beginning of period .................................            331.3             539.1
                                                                                            -------           -------
  
  CASH AND CASH EQUIVALENTS, end of period .......................................           $454.9            $510.2
                                                                                            =======           =======
  See notes to condensed consolidated financial statements.
  
                                          4
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
       Basis of Presentation
       The condensed  consolidated  balance sheet as of December 31, 1996 has been
       condensed  from the audited  balance  sheet as of that date.  The condensed
       consolidated  balance  sheet  as  of  March  31,  1997  and  the  condensed
       consolidated  statements of operations and accumulated  deficit and of cash
       flows for the three months ended March 31, 1997 and 1996 have been prepared
       by Comcast  Corporation  (the  "Company")  and have not been audited by the
       Company's  independent   auditors.  In  the  opinion  of  management,   all
       adjustments (which include only normal recurring  adjustments) necessary to
       present fairly the financial position, results of operations and cash flows
       as of March 31, 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
       financial  statements and notes thereto included in the Company's  December
       31, 1996 Annual Report on Form 10-K filed with the  Securities and Exchange
       Commission.  The results of operations  for the period ended March 31, 1997
       are not necessarily indicative of operating results for the full year.
  
  2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
       New Accounting Pronouncements
       Effective  January 1, 1997, the Company adopted the provisions of Statement
       of  Financial  Accounting  Standards  ("SFAS")  No.  125,  "Accounting  for
       Transfers  and  Servicing  of  Financial  Assets  and   Extinguishments  of
       Liabilities," which was issued by the Financial  Accounting Standards Board
       ("FASB") in June 1996.  Under the  provisions  of this  statement,  after a
       transfer of  financial  assets,  an entity  recognizes  the  financial  and
       servicing   assets  it  controls  and  the  liabilities  it  has  incurred,
       derecognizes  financial  assets  when  control  has  been  surrendered  and
       derecognizes liabilities when extinguished.  Adoption of this statement did
       not have a  significant  impact  on the  Company's  consolidated  financial
       position or results of operations.
  
       In February 1997, the FASB issued SFAS No. 128,  "Earnings Per Share." This
       standard,   which  clarifies  and  supersedes  the  current   authoritative
       accounting  literature regarding the computation and disclosure of earnings
       per share,  is  applicable  to  interim  and annual  periods  ending  after
       December  15, 1997 and may not be applied  earlier.  The  Company  does not
       expect  adoption of this standard to result in  significant  changes to the
       Company's calculation or presentation of loss per share.
  
       Net Loss Per Share
       Net loss per share  amounts  were  computed  by  dividing  net loss,  after
       deduction  of  preferred  stock  dividends of $398,000 for the three months
       ended March 31,  1997,  by the  weighted  average  number of common  shares
       outstanding  during the period.  For the three  months ended March 31, 1997
       and 1996,  the  Company's  common stock  equivalents  have an  antidilutive
       effect  on net loss  per  share  and,  therefore,  have  not  been  used in
       determining the total weighted average number of common shares outstanding.
  
       Reclassifications
       Certain  reclassifications  have  been  made to the  prior  year  condensed
       consolidated  financial statements to conform to those classifications used
       in 1997.
  
  3.   ACQUISITIONS AND OTHER SIGNIFICANT EVENTS
  
       Offerings of Subsidiary Debt
       On May 8, 1997, Comcast Cellular Holdings,  Inc.  ("Comcast  Cellular"),  a
       wholly owned subsidiary of the Company,  completed the sale of $1.0 billion
       of 9 1/2%  Senior  Notes due 2007  (the  "Cellular  Notes")  through a 144A
       offering with  registration  rights.  The Cellular Notes are obligations of
       Comcast Cellular and are not
  
                                          5
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       obligations of, nor guaranteed by, the Company.  Comcast  Cellular will use
       the net proceeds  from the  offering to repay  existing  borrowings  by its
       subsidiaries,  including  the Zero Notes (as  defined in Note 5),  with the
       balance, if any, to be used for subsidiary general purposes.
  
       On May 1, 1997,  Comcast Cable  Communications,  Inc.  ("Comcast Cable"), a
       wholly owned subsidiary of the Company,  completed the sale of $1.7 billion
       of notes (the "Cable  Notes")  through a 144A  offering  with  registration
       rights.  The Cable Notes were issued in four tranches:  $300.0 million of 8
       1/8%  Notes due  2004,  $600.0  million  of 8 3/8%  Notes due 2007,  $550.0
       million  of 8 7/8%  Notes due 2017 and  $250.0  million of 8 1/2% Notes due
       2027.  The Notes due 2027 are  subject to  repurchase  at the option of the
       holder in 2009.  The Cable Notes are  obligations  of Comcast Cable and are
       not  obligations  of, nor  guaranteed  by, the Company.  Comcast Cable used
       substantially  all of the net proceeds from the offering to repay  existing
       borrowings by its  subsidiaries  with the balance to be used for subsidiary
       general purposes.
  
       E! Entertainment
       On March 31, 1997, the Company,  through Comcast Entertainment Holdings LLC
       (the  "LLC"),  which is owned  50.1% by the  Company  and 49.9% by The Walt
       Disney Company  ("Disney"),  purchased a 58.4% interest in E! Entertainment
       Television, Inc. ("E! Entertainment"), an entertainment programming service
       that  currently is distributed  to more than 42 million  subscribers,  from
       Time  Warner,   Inc.   ("Time   Warner")   for  $321.9   million  (the  "E!
       Acquisition").  The E! Acquisition was funded by cash  contributions to the
       LLC by the  Company  and  Disney  of $132.8  million  and  $189.1  million,
       respectively.   In  connection  with  the  E!   Acquisition,   the  Company
       contributed its 10.4% interest in E!  Entertainment  to the LLC.  Following
       these transactions,  the LLC owns a 68.8% interest in E! Entertainment.  To
       fund the cash  contribution to the LLC, the Company borrowed $132.8 million
       from Disney in the form of two 10-year, 7% notes (the "Disney Notes").
  
       The Company  accounted for the E! Acquisition under the purchase method and
       E!  Entertainment  was  consolidated  with the Company  effective March 31,
       1997.  The  allocation  of the  purchase  price  relating to the assets and
       liabilities of E! Entertainment is preliminary pending a final appraisal.
  
       After  September 1998,  Disney,  in certain  circumstances,  is entitled to
       request that the LLC purchase  Disney's  entire  interest in the LLC at its
       then fair market value (as determined by an appraisal process).  If the LLC
       elects not to  purchase  Disney's  interest,  Disney has the right,  at its
       option,  to purchase either the Company's entire interest in the LLC or all
       of the shares of stock of E! Entertainment held by the LLC, in each case at
       fair market  value.  In the event that  Disney  exercises  its  rights,  as
       described  above, a portion or all of the Disney Notes may be replaced with
       a three year note due to Disney.
  
       Scripps Cable
       In November  1996,  the Company  acquired the cable  television  operations
       ("Scripps Cable") of The E.W. Scripps Company ("E.W.  Scripps") in exchange
       for 93.048  million  shares of the Company's  Class A Special Common Stock,
       par value $1.00 per share (the "Class A Special Common  Stock"),  valued at
       $1.552 billion (the "Scripps  Acquisition").  The Company accounted for the
       Scripps  Acquisition  under  the  purchase  method  and  Scripps  Cable was
       consolidated with the Company effective November 1, 1996.
  
       The  allocation  of the  purchase  price to the assets and  liabilities  of
       Scripps  Cable is  preliminary  pending  a final  appraisal  and the  final
       purchase price adjustment  between the Company and E.W. Scripps.  The terms
       of  the  Scripps   Acquisition   provide  for,  among  other  things,   the
       indemnification  of the Company by E. W.  Scripps for certain  liabilities,
       including  tax  liabilities,   relating  to  Scripps  Cable  prior  to  the
       acquisition date.
  
       Comcast-Spectacor
       In July 1996, the Company  completed its  acquisition  (the "Sports Venture
       Acquisition")  of  a  66%  interest  in  the  Philadelphia  Flyers  Limited
       Partnership,  a Pennsylvania  limited partnership  ("PFLP"),  the assets of
       which,  after giving effect to the Sports Venture  Acquisition,  consist of
       (i) the National Basketball Association ("NBA")
  
                                          6
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       franchise to own and operate the  Philadelphia  76ers  basketball  team and
       related  assets (the  "Sixers"),  (ii) the National  Hockey League  ("NHL")
       franchise  to own and  operate  the  Philadelphia  Flyers  hockey  team and
       related assets, and (iii) two adjacent arenas,  leasehold  interests in and
       development  rights  related  to the land  underlying  the arenas and other
       adjacent   parcels   of  land   located   in   Philadelphia,   Pennsylvania
       (collectively,  the "Arenas"). Concurrent with the completion of the Sports
       Venture Acquisition, PFLP was renamed Comcast Spectacor, L.P.
       ("Comcast-Spectacor").
  
       The Sports Venture  Acquisition  was completed in two steps. In April 1996,
       the Company  purchased  the Sixers for $125.0  million in cash plus assumed
       net  liabilities  of  approximately  $11.0  million  through a  partnership
       controlled by the Company. To complete the Sports Venture  Acquisition,  in
       July 1996, the Company  contributed  its interest in the Sixers,  exchanged
       approximately  3.5 million  shares of the Company's  Class A Special Common
       Stock  and  6,370  shares  of  the  Company's  newly  issued  5%  Series  A
       Convertible  Preferred Stock and paid $15.0 million in cash for its current
       interest  in  Comcast-Spectacor.  The  remaining  34%  interest in Comcast-
       Spectacor is owned by a group, including the former majority owner of PFLP,
       who also manages Comcast- Spectacor.  In connection with the Sports Venture
       Acquisition, Comcast-Spectacor assumed the outstanding liabilities relating
       to the Sixers and the  Arenas,  including a mortgage  obligation  of $155.0
       million. The Company accounts for its interest in  Comcast-Spectacor  under
       the equity method (see Note 4).
  
       Unaudited Pro Forma Information
       The following  unaudited pro forma  information  for the three months ended
       March 31, 1996 has been presented as if the Scripps Acquisition occurred on
       January  1,  1996.  This  unaudited  pro  forma  information  is  based  on
       historical  results of operations,  adjusted for acquisition costs, and, in
       the  opinion  of  management,  is not  necessarily  indicative  of what the
       results  would  have been had the  Company  operated  Scripps  Cable  since
       January 1, 1996 (dollars in millions, except per share data).
  
                                                           Three Months Ended
                                                             March 31, 1996
             Revenues....................................       $1,025.3
             Net loss....................................          (43.1)
             Net loss per share..........................           (.13)
  
  4.   INVESTMENTS, PRINCIPALLY IN AFFILIATES
  
                                                           March 31,  December 31,
                                                             1997         1996
                                                            (Dollars in millions)
             Equity method...............................    $911.6      $936.4
             Public companies............................     131.3       165.5
             Privately held companies....................      65.1        75.8
                                                           --------    --------
  
                                                           $1,108.0    $1,177.7
                                                           ========    ========
  
       Equity Method
       The Company records its proportionate interests in the net income (loss) of
       substantially  all of its  investees,  other  than  the UK  Investees  (see
       below),  three months in arrears. The Company's recorded investments exceed
       its proportionate  interests in the book value of the investees' net assets
       by  $241.0  million  as  of  March  31,  1997  (primarily  related  to  the
       investments in Comcast-Spectacor  and Sprint PCS (see below)).  Such excess
       is being amortized to equity in net income or loss, primarily over a period
       of  twenty  years,  which is  consistent  with the  estimated  lives of the
       underlying assets. The original cost of investments accounted for under the
       equity method totaled $1.216
  
                                          7
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       billion and $1.241  billion as of March 31,  1997 and  December  31,  1996,
       respectively.  Summarized  financial  information for the Company's  equity
       method investees is presented below (dollars in millions).
  Sprint                  UK
                                                              PCS       TCGI     Investees    Other    Combined
  Three Months Ended March 31, 1997:
  
     Combined Results of Operations
       Revenues, net...............................           $4.1      $87.4      $44.5     $201.1     $337.1
       Operating, selling, general and
         administrative expenses...................          185.6       81.2       40.2      213.9      520.9
       Depreciation and amortization...............            9.4       26.4       17.4       30.0       83.2
       Operating loss..............................         (190.9)     (20.2)     (13.1)     (42.8)    (267.0)
       Net loss (1)................................         (183.3)     (42.7)     (22.2)     (50.8)    (299.0)
  
     Company's Equity in Net Loss
       Equity in current period net loss (2) ......         ($27.5)     ($6.8)     ($8.4)    ($25.1)    ($67.8)
       Amortization expense........................           (0.1)      (0.2)      (0.1)      (1.9)      (2.3)
                                                           -------    -------      -----    -------    -------
  
         Total equity in net loss..................         ($27.6)     ($7.0)     ($8.5)    ($27.0)    ($70.1)
                                                           =======    =======      =====    =======    =======
  
  Three Months Ended March 31, 1996:
  
     Combined Results of Operations
       Revenues, net...............................         $           $56.4      $42.6     $122.1     $221.1
       Operating, selling, general and
         administrative expenses...................           44.8       52.3       39.1      123.7      259.9
       Depreciation and amortization...............                      15.3       15.4       16.1       46.8
       Operating loss..............................          (44.8)     (11.2)     (11.9)     (17.7)     (85.6)
       Net loss (1)................................          (85.3)     (25.1)     (20.3)     (22.9)    (153.6)
  
     Company's Equity in Net Loss
       Equity in current period net loss ..........         ($12.8)     ($4.8)     ($8.6)     ($6.5)    ($32.7)
       Amortization expense........................                      (0.3)                 (1.5)      (1.8)
                                                           -------    -------      -----    -------    -------
  
         Total equity in net loss..................         ($12.8)     ($5.1)     ($8.6)     ($8.0)    ($34.5)
                                                           =======    =======      =====    =======    =======
  
  Combined Financial Position
  
  As of March 31, 1997:
     Current assets................................         $399.5     $787.6     $121.0     $302.5   $1,610.6
     Noncurrent assets.............................        3,923.9    1,262.5      704.3    1,169.1    7,059.8
     Current liabilities...........................          450.9      242.2       86.4      248.6    1,028.1
     Noncurrent liabilities........................        1,412.5    1,011.0      552.3    1,071.2    4,047.0
  --------
  (1)  Net  loss  also   represents  loss  from   continuing   operations   before
       extraordinary   items  and  cumulative  effect  of  changes  in  accounting
       principle.
  (2)  As  a  result  of  the  E!  Acquisition,  the  Company  recorded  a  charge
       representing  the  cumulative  amount that would have been recorded had the
       Company accounted for its investment in E!  Entertainment  under the equity
       method  since the date of initial  investment  (the  "Cumulative  Charge").
       Since the Company's  proportionate share of E!  Entertainment's  cumulative
       losses  were  in  excess  of the  Company's  historical  cost  basis  in E!
       Entertainment  and as the Company was under no  contractual  obligation  to
       fund the losses of E!  Entertainment,  the Cumulative Charge was limited to
       the  Company's  historical  cost  basis of $12.1  million.  Such  amount is
       included in equity in net losses of affiliates  in the Company's  condensed
       consolidated  statement of operations and accumulated deficit for the three
       months ended March 31, 1997 as it is not significant for restatement of the
       Company's prior year financial statements.
  8
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       Sprint  PCS.   The  Company,   Tele-Communications,   Inc.   ("TCI"),   Cox
       Communications, Inc. ("Cox") and Sprint Corporation ("Sprint," and together
       with the Company, TCI and Cox, the "Parents"),  and certain subsidiaries of
       the  Parents  engage  in the  wireless  communications  business  through a
       limited   partnership  known  as  "Sprint  Spectrum"  or  "Sprint  PCS,"  a
       development  stage enterprise.  The Company made its initial  investment in
       1994 and, as of March 31,  1997,  holds a general  and limited  partnership
       interest of 15% in Sprint PCS.  The  investment  in Sprint PCS is accounted
       for under the equity  method  based on the  Company's  general  partnership
       interest and its representation on the partnership's board of directors.
  
       TCGI.   Through  June  1996,  the  Company  held  investments  in  Teleport
       Communications  Group, Inc. ("TCGI"),  TCG Partners and certain local joint
       ventures (the "Teleport Joint Ventures")  managed by TCGI and TCG Partners.
       TCGI is one of the largest competitive  alternative access providers in the
       United States in terms of route miles.  The Company had a 20.0%  investment
       in TCGI and interests in the Teleport Joint Ventures  ranging from 12.4% to
       20.3%. On June 27, 1996, TCGI sold  approximately  27 million shares of its
       Class A Common Stock (the "TCGI Class A Stock"),  for $16 per share,  in an
       initial public  offering (the "TCGI IPO"). In connection with the TCGI IPO,
       TCGI, the Company and subsidiaries of Cox, TCI and Continental  Cablevision
       ("Continental"  and collectively with Cox, TCI and the Company,  the "Cable
       Stockholders")  entered  into an  agreement  pursuant  to  which  TCGI  was
       reorganized (the "Reorganization").  The Reorganization consisted of, among
       other  things:  (i)  the  acquisition  by TCGI of TCG  Partners;  (ii)  the
       acquisition by TCGI of additional  interests in the Teleport Joint Ventures
       (including  100% of those  interests  held by the  Company);  and (iii) the
       contribution  to TCGI of  $269.0  million  aggregate  principal  amount  of
       indebtedness,  plus  accrued  interest  thereon,  owed by TCGI to the Cable
       Stockholders  (except that TCI retained a $26 million  subordinated note of
       TCGI), including $53.8 million principal amount and $4.1 million of accrued
       interest owed to the Company.  In connection with the  Reorganization,  the
       Company  received  25.6 million  shares of TCGI's Class B Common Stock (the
       "TCGI  Class B Stock").  Each share of TCGI  Class B Stock is  entitled  to
       voting  power  equivalent  to ten  shares  of TCGI  Class  A  Stock  and is
       convertible,  at the option of the  holder,  into one share of TCGI Class A
       Stock.
  
       In addition to the TCGI Class B Stock held by the Company,  as of March 31,
       1997,  the Company held 2.76 million  shares of TCGI Class A Stock received
       from TCGI in exchange for the shares of an alternate  access  provider.  In
       May 1997,  the  Company  sold all of its shares of TCGI Class A Stock.  The
       Company  anticipates  recognizing a $68.9 million  pre-tax gain on the sale
       during the second quarter of 1997.
  
       After giving effect to the  transactions  described above, the Company owns
       TCGI Class B Stock  representing a 19.6% voting interest and a 15.5% equity
       interest.  The Company  continues to account for its interest in TCGI under
       the equity method based on its voting interest  maintained through the TCGI
       Class B Stock,  its  representation  on TCGI's board of  directors  and its
       participation in a TCGI stockholder  agreement granting certain rights to a
       control group.  After giving effect to the above  transactions and assuming
       conversion  of the TCGI Class B Stock held by the Company into TCGI Class A
       Stock,  the  Company's  investment  in  TCGI  would  have a fair  value  of
       approximately $717.4 million,  based on the quoted market price of the TCGI
       Class A Stock as of May 13, 1997.
  
       UK  Investees.  As of March 31,  1997,  Comcast UK Cable  Partners  Limited
       ("Comcast UK Cable"),  a  consolidated  subsidiary of the Company,  holds a
       27.5% interest in Birmingham Cable Corporation Limited and a 50.0% interest
       in Cable London PLC. In  addition,  Comcast UK Cable  historically  held an
       investment in Cambridge  Holding Company Limited  ("Cambridge  Cable").  In
       March 1996,  Comcast UK Cable  purchased  the 50.0%  interest in  Cambridge
       Cable  that it had not  previously  owned  for cash and  approximately  8.9
       million  of its  Class  A  Common  Shares  (the  "Cambridge  Acquisition").
       Following the Cambridge Acquisition, Comcast UK
  
                                          9
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
       Cable  owns  100.0% of  Cambridge  Cable  and  consolidated  the  financial
       position and results of operations of Cambridge  Cable  effective March 31,
       1996.
  
       Other. The Company's 12 other equity method investees  include  investments
       in wired  telecommunications  (including Garden State Cablevision,  L.P., a
       cable  communications  company serving more than 205,000  subscribers as of
       March 31, 1997 in the State of New Jersey), wireless telecommunications and
       content providers  (including  Comcast-Spectacor - see Note 3). The Company
       holds  interests  representing  less  than  20%  of the  total  outstanding
       ownership  interest in certain of its other equity  method  investees.  The
       equity method of accounting is utilized for these  investments based on the
       type   of   investment   (i.e.   general   partnership   interest),   board
       representation,  participation in a controlling investor group, significant
       shareholder  rights  or a  combination  of  these  and  other  factors.  In
       addition,  the Company's 66% interest in Comcast-Spectacor is accounted for
       under the equity  method since the Company  does not maintain  control over
       Comcast-Spectacor's  operations.  The Company does not consider these other
       equity  method  inves  ments  to  be   individually   significant   to  its
       consolidated financial position, results of operations or liquidity.
  
       Investments - Public Companies
       The Company  holds  unrestricted  equity  investments  in certain  publicly
       traded  companies  with an  historical  cost of $140.3  million  and $160.3
       million as of March 31,  1997 and  December  31,  1996,  respectively.  The
       Company has recorded these  investments,  which are classified as available
       for sale,  at their  estimated  fair  values of $131.3  million  and $165.5
       million as of March 31,  1997 and  December  31,  1996,  respectively.  The
       unrealized  pre-tax  (loss) gain as of March 31, 1997 and December 31, 1996
       of ($9.0) million and $5.2 million, respectively, have been reported in the
       Company's   condensed   consolidated   balance  sheet  as  a  component  of
       stockholders'  equity, net of related deferred income tax (benefit) expense
       of ($3.1) million and $1.8 million, respectively.
  
       In February  1996,  in  connection  with certain  preemptive  rights of the
       Company under previously  existing  agreements with Nextel  Communications,
       Inc. ("Nextel"),  the Company purchased  approximately 8.16 million shares,
       classified  as long-term  investments  available for sale, of Nextel common
       stock at $12.25  per share,  for $99.9  million.  As of March 31,  1997 and
       December 31, 1996,  the Company  held 3.3 million  shares of Nextel  common
       stock.  In addition,  as of December 31, 1996,  the Company held options to
       acquire an additional 25.0 million shares of Nextel common stock at $16 per
       share. As of December 31, 1996, these options, which had an historical cost
       of $20.0  million,  were included in the above amounts for  investments  in
       publicly traded companies at their fair value of $32.6 million. In February
       1997,  the  Company  sold these  options to Nextel  for $25.0  million  and
       recognized  a pre-tax  gain of $5.0  million  as  investment  income in its
       condensed consolidated statement of operations and accumulated deficit.
  
       The Company  received 1.36 million  shares of Time Warner common stock (the
       "Time Warner Stock") in exchange (the  "Exchange") for all of the shares of
       Turner  Broadcasting  System,  Inc. ("TBS") stock (the "TBS Stock") held by
       the  Company  as a result of the  merger of Time  Warner and TBS in October
       1996. As a result of the Exchange, the Company recognized a pre-tax gain of
       $47.3 million in the fourth  quarter of 1996,  representing  the difference
       between  the  Company's  historical  cost  basis  in the TBS  Stock of $8.9
       million and the new basis for the Company's investment in Time Warner Stock
       of $56.2  million,  which was based on the closing price of the Time Warner
       Stock on the merger date of $41.375 per share. In December 1996 and January
       1997, the Company sold 92,500 shares and 1.27 million shares, respectively,
       of the Time Warner Stock,  representing  the Company's  entire  interest in
       Time  Warner,  for  $3.7  million  and  $48.6  million,   respectively.  In
       connection  with the January 1997 sales,  the Company  recognized a pre-tax
       loss of $3.8  million,  which  is  included  in  investment  income  in the
       Company's  condensed  consolidated  statement of operations and accumulated
       deficit.  As of December 31, 1996,  the 1.27 million  shares of Time Warner
       Stock  held by the  Company  were  recorded  at their  fair  value of $47.4
       million  and were  included  in  short-term  investments  in the  Company's
       condensed consolidated balance sheet.
  
                                         10
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
  5.   LONG-TERM DEBT
  
       Zero Notes
       As of March 31, 1997,  the  Company's  long-term  debt  includes the senior
       participating redeemable zero coupon notes, due 2000 (the "Zero Notes"), of
       a  subsidiary  of  Comcast  Cellular.  The Zero Notes  outstanding  have an
       aggregate face amount payable at maturity of $629.4  million,  accreting at
       11% per annum. If, at maturity, or an earlier redemption date, 35%, subject
       to reduction in certain  circumstances,  of the private  market  value,  as
       determined by applicable procedures, of the Company's cellular subsidiaries
       is greater than the accreted value plus certain premiums, then such greater
       amount will constitute the redemption  price. The holders of the Zero Notes
       have the right,  upon  request of the holders of the majority of the notes,
       to  require  the  Company  to redeem the Zero Notes at any time on or after
       March 5, 1998.
  
       Comcast  Cellular  intends to utilize a portion  of the  proceeds  from the
       offering of the Cellular  Notes in May 1997 (see Note 3) to redeem the Zero
       Notes.  Accordingly,  the accreted value of the Zero Notes,  without giving
       effect to the alternative  formula based on the private market value of the
       cellular  business,  of  $460.0  million  as of  March  31,  1997  has been
       classified as long-term in the  Company's  condensed  consolidated  balance
       sheet as of March 31, 1997.
  
  6.   STOCKHOLDERS' EQUITY
  
       Concurrent  with the  announcement  of the Scripps  Acquisition  in October
       1995, the Company announced that its Board of Directors authorized a market
       repurchase program (the "Repurchase Program") pursuant to which the Company
       could purchase,  at such times and on such terms as it deemed  appropriate,
       up to $500.0 million of its outstanding common equity  securities,  subject
       to certain restrictions and market conditions.  Based on the trade date for
       stock  repurchases,  during the three months ended March 31, 1997 and 1996,
       the  Company   repurchased   675,000   shares  and  3.2   million   shares,
       respectively,  of its common  stock for  aggregate  consideration  of $11.5
       million  and  $56.7  million,  respectively,  pursuant  to  the  Repurchase
       Program. During the term of the Repurchase Program, the Company repurchased
       a  total  of  13.5  million  shares  of  its  common  stock  for  aggregate
       consideration of $228.6 million.  The Repurchase  Program terminated on May
       13, 1997.
  
       As part of the Repurchase  Program,  the Company sold put options on shares
       of its Class A Special  Common  Stock.  Put options on 4.0 million  shares,
       sold by the Company  during 1996 and 1995 and  outstanding  at December 31,
       1996,   expired   unexercised  during  the  first  quarter  of  1997.  Upon
       expiration,  the Company  reclassified  $69.6 million,  the amount it would
       have been  obligated to pay to  repurchase  such shares had the put options
       been exercised, from common equity put options to additional capital in the
       Company's condensed consolidated balance sheet.
  
       In April 1997,  the Company  sold put options on 2.0 million  shares of its
       Class A Special Common Stock.  The put options give the holder the right to
       require the  Company to  repurchase  such  shares at a  specified  price on
       specific  dates in April and May 1998.  The  amount  the  Company  would be
       obligated  to pay to  repurchase  such  shares  upon  exercise  of the  put
       options,  totaling  $31.4 million,  will be  reclassified  from  additional
       capital  to  common   equity  put  options  in  the   Company's   condensed
       consolidated balance sheet during the second quarter of 1997.
  
  7.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
  
       The Company made cash  payments  for interest of $117.1  million and $102.0
       million   during  the  three   months   ended  March  31,  1997  and  1996,
       respectively.
  
       The Company made cash  payments for income taxes of $18.3 million and $15.3
       million   during  the  three   months   ended  March  31,  1997  and  1996,
       respectively.
  
                                         11
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
                                     (Unaudited)
  
  8.   CONTINGENCIES
  
       The Company is subject to claims which arise in the ordinary  course of its
       business and other legal  proceedings.  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.   FINANCIAL DATA BY BUSINESS SEGMENT
       (Dollars in millions)
  Domestic
                                                       Cable        Electronic      Cellular       Corporate
                                                  Communications     Retailing   Communications  and Other (1)       Total
  Three Months Ended March 31, 1997
  Revenues, net...............................          $501.1         $479.7         $104.1           $45.9       $1,130.8
  Depreciation and amortization...............           138.8           26.8           30.0            16.8          212.4
  Operating income (loss).....................            91.5           52.3            7.7           (30.2)         121.3
  Interest expense............................            56.7           14.0           24.0            38.6          133.3
  Capital expenditures........................           106.6           15.0           17.9            40.5          180.0
  Equity in net losses of affiliates .........                                                          70.1           70.1
  
  As of March 31, 1997
  Assets......................................        $6,166.5       $2,171.0       $1,434.5        $2,561.5      $12,333.5
  Long-term debt, less current portion .......         3,105.8          829.9        1,136.4         2,299.2        7,371.3
  
  Three Months Ended March 31, 1996
  Revenues, net...............................          $382.3         $450.1          $98.2           $20.1         $950.7
  Depreciation and amortization...............            95.3           26.2           26.3             9.1          156.9
  Operating income (loss).....................            88.8           46.2            2.2           (24.0)         113.2
  Interest expense............................            56.7           18.2           20.8            39.1          134.8
  Capital expenditures........................            54.0            6.1           14.9            36.4          111.4
  Equity in net losses of affiliates .........             0.1                                          34.4           34.5
  ---------------
  (1)  Corporate and other includes certain  operating  businesses and elimination
       entries related to the segments presented.
  12
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
          OF OPERATIONS
  
  Overview
  
  The Company has  experienced  significant  growth in recent  years both  through
  strategic  acquisitions and growth in its existing  businesses.  The Company has
  historically  met its cash  needs for  operations  through  its cash  flows from
  operating   activities.   Cash   requirements   for   acquisitions  and  capital
  expenditures have been provided through the Company's  financing  activities and
  sales of long-term  investments,  as well as its existing cash, cash equivalents
  and short-term investments.
  
  General Developments of Business
  
  Offerings of Subsidiary Debt
  On May 8, 1997, Comcast Cellular Holdings,  Inc. ("Comcast Cellular"),  a wholly
  owned  subsidiary  of the Company,  completed the sale of $1.0 billion of 9 1/2%
  Senior  Notes due 2007 (the  "Cellular  Notes")  through  a 144A  offering  with
  registration  rights. The Cellular Notes are obligations of Comcast Cellular and
  are not  obligations of, nor guaranteed by, the Company.  Comcast  Cellular will
  use the net  proceeds  from the  offering to repay  existing  borrowings  by its
  subsidiaries  with  the  balance,  if any,  to be used  for  subsidiary  general
  purposes.
  
  On May 1, 1997, Comcast Cable  Communications,  Inc. ("Comcast Cable"), a wholly
  owned  subsidiary  of the Company,  completed  the sale of $1.7 billion of notes
  (the "Cable Notes") through a 144A offering with registration  rights. The Cable
  Notes were  issued in four  tranches:  $300.0  million of 8 1/8% Notes due 2004,
  $600.0 million of 8 3/8% Notes due 2007, $550.0 million of 8 7/8% Notes due 2017
  and $250.0  million of 8 1/2% Notes due 2027.  The Notes due 2027 are subject to
  repurchase at the option of the holder in 2009. The Cable Notes are  obligations
  of Comcast Cable and are not  obligations  of, nor  guaranteed  by, the Company.
  Comcast  Cable used  substantially  all of the net proceeds from the offering to
  repay existing  borrowings by its  subsidiaries  with the balance to be used for
  subsidiary general purposes.
  
  E! Entertainment
  On March 31, 1997, the Company,  through Comcast Entertainment Holdings LLC (the
  "LLC"), which is owned 50.1% by the Company and 49.9% by The Walt Disney Company
  ("Disney"), purchased a 58.4% interest in E! Entertainment Television, Inc. ("E!
  Entertainment"),   an  entertainment   programming  service  that  currently  is
  distributed to more than 42 million  subscribers,  from Time Warner, Inc. ("Time
  Warner")  for $321.9  million (the "E!  Acquisition").  The E!  Acquisition  was
  funded by cash  contributions  to the LLC by the  Company  and  Disney of $132.8
  million and $189.1 million, respectively. In connection with the E! Acquisition,
  the  Company  contributed  its 10.4%  interest in E!  Entertainment  to the LLC.
  Following these transactions, the LLC owns a 68.8% interest in E! Entertainment.
  To fund the cash  contribution  to the LLC, the Company  borrowed $132.8 million
  from Disney in the form of two 10-year, 7% notes (the "Disney Notes").
  
  The Company  accounted for the E!  Acquisition  under the purchase method and E!
  Entertainment  was consolidated  with the Company  effective March 31, 1997. The
  allocation of the purchase  price  relating to the assets and  liabilities of E!
  Entertainment is preliminary pending a final appraisal.
  
  After September 1998, Disney, in certain  circumstances,  is entitled to request
  that the LLC  purchase  Disney's  entire  interest  in the LLC at its then  fair
  market value (as determined by an appraisal  process).  If the LLC elects not to
  purchase  Disney's  interest,  Disney has the right, at its option,  to purchase
  either the Company's entire interest in the LLC or all of the shares of stock of
  E!  Entertainment  held by the LLC,  in each case at fair market  value.  In the
  event that Disney exercises its rights,  as described above, a portion or all of
  the Disney Notes may be replaced with a three year note due to Disney.
  
                                         13
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  Scripps Cable
  In November 1996, the Company acquired the cable television operations ("Scripps
  Cable") of The E.W.  Scripps  Company  ("E.W.  Scripps")  in exchange for 93.048
  million shares of the Company's  Class A Special  Common Stock,  par value $1.00
  per share (the "Class A Special  Common  Stock"),  valued at $1.552 billion (the
  "Scripps Acquisition").  The Company accounted for the Scripps Acquisition under
  the  purchase  method  and  Scripps  Cable  was  consolidated  with the  Company
  effective November 1, 1996.
  
  The  allocation of the purchase  price to the assets and  liabilities of Scripps
  Cable is  preliminary  pending a final  appraisal and the final  purchase  price
  adjustment  between  the  Company  and E.W.  Scripps.  The terms of the  Scripps
  Acquisition  provide for, among other things, the indemnification of the Company
  by E. W. Scripps for certain liabilities, including tax liabilities, relating to
  Scripps Cable prior to the acquisition date.
  
  Comcast-Spectacor
  In July 1996,  the  Company  completed  its  acquisition  (the  "Sports  Venture
  Acquisition") of a 66% interest in the Philadelphia Flyers Limited  Partnership,
  a Pennsylvania limited partnership  ("PFLP"),  the assets of which, after giving
  effect to the Sports Venture Acquisition, consist of (i) the National Basketball
  Association  ("NBA")  franchise  to  own  and  operate  the  Philadelphia  76ers
  basketball  team and related  assets (the  "Sixers"),  (ii) the National  Hockey
  League ("NHL") franchise to own and operate the Philadelphia  Flyers hockey team
  and related assets,  and (iii) two adjacent arenas,  leasehold  interests in and
  development  rights related to the land underlying the arenas and other adjacent
  parcels  of  land  located  in  Philadelphia,  Pennsylvania  (collectively,  the
  "Arenas").  Concurrent  with the completion of the Sports  Venture  Acquisition,
  PFLP was renamed Comcast Spectacor, L.P. ("Comcast-Spectacor").
  
  The Sports Venture  Acquisition  was completed in two steps.  In April 1996, the
  Company  purchased  the  Sixers  for $125.0  million  in cash plus  assumed  net
  liabilities of approximately  $11.0 million through a partnership  controlled by
  the  Company.  To complete the Sports  Venture  Acquisition,  in July 1996,  the
  Company  contributed  its interest in the Sixers,  exchanged  approximately  3.5
  million shares of the Company's Class A Special Common Stock and 6,370 shares of
  the  Company's  newly issued 5% Series A  Convertible  Preferred  Stock and paid
  $15.0  million  in cash  for its  current  interest  in  Comcast-Spectacor.  The
  remaining 34% interest in Comcast-Spectacor  is owned by a group,  including the
  former majority owner of PFLP, who also manages Comcast-Spectacor. In connection
  with the Sports Venture Acquisition,  Comcast-Spectacor  assumed the outstanding
  liabilities  relating  to the  Sixers  and  the  Arenas,  including  a  mortgage
  obligation of $155.0 million.  The Company accounts for its interest in Comcast-
  Spectacor under the equity method.
  
  Liquidity and Capital Resources
  
  Cash, Cash Equivalents and Short-term Investments
  The  Company  has  traditionally  maintained  significant  levels of cash,  cash
  equivalents  and  short-term   investments  to  meet  its  short-term  liquidity
  requirements.  Cash, cash equivalents and short-term investments as of March 31,
  1997 were $540.8 million.  As of March 31, 1997, $354.5 million of the Company's
  cash,  cash  equivalents  and  short-term  investments  was restricted to use by
  subsidiaries of the Company under contractual or other  arrangements,  including
  $165.7 million which is restricted to use by Comcast UK Cable  Partners  Limited
  ("Comcast UK Cable").
  
  The Company's cash, cash equivalents and short-term  investments are recorded at
  cost which  approximates  their fair value.  As of March 31, 1997, the Company's
  short-term  investments  of $85.9  million  had a weighted  average  maturity of
  approximately eight months.
  
  Investments
  The Company, Tele-Communications, Inc. ("TCI"), Cox Communications, Inc. ("Cox,"
  and  together  with the  Company  and  TCI,  the  "Cable  Parents")  and  Sprint
  Corporation ("Sprint," and together with the Cable Parents, the "Parents"),  and
  certain subsidiaries of the Parents (the "Partner  Subsidiaries")  engage in the
  wireless communications
  
                                         14
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  business  through a limited  partnership  known as "Sprint  Spectrum" or "Sprint
  PCS," a  development  stage  enterprise.  The Company owns 15% of Sprint PCS and
  accounts for its investment in Sprint PCS under the equity method.
  
  Under the  provisions  of the  Sprint PCS  partnership  agreement,  the  Partner
  Subsidiaries  have  committed to  contribute  $4.2 billion in cash to Sprint PCS
  through 1999, of which the Company's  share is $630.0  million.  Of this funding
  requirement,  the  Company  has made total cash  contributions  to Sprint PCS of
  $451.0 million through March 31, 1997 and issued a $105.0 million  guaranty on a
  portion of Sprint PCS'  outstanding  debt. The Company  anticipates  that Sprint
  PCS'  capital  requirements  over the next  several  years will be  significant.
  Requirements  in excess of committed  capital are planned to be funded by Sprint
  PCS through external financing, including, but not limited to, vendor financing,
  bank financing and securities  offered to the public. In August 1996, Sprint PCS
  sold $750.0  million  principal  amount at  maturity of Senior  Notes and Senior
  Discount Notes due 2006 in a public offering. In October 1996, Sprint PCS closed
  three  credit  agreements  providing  a  total  of  $5.1  billion  in  available
  financing,  including  $2.0 billion in bank financing and $3.1 billion in vendor
  financing. The timing of the Company's remaining capital contributions to Sprint
  PCS is dependent upon a number of factors, including Sprint PCS' working capital
  requirements.  The Company anticipates funding its remaining capital commitments
  to Sprint PCS through its cash flows from  operating  activities,  its  existing
  cash,  cash  equivalents,  short-term  investments  and lines of credit or other
  external financing, or by a combination of these sources.
  
  In February 1996, in connection  with certain  preemptive  rights of the Company
  under  previously   existing   agreements  with  Nextel   Communications,   Inc.
  ("Nextel"),  the Company purchased approximately 8.16 million shares, classified
  as long-term  investments  available  for sale, of Nextel common stock at $12.25
  per share,  for $99.9  million.  As of March 31, 1997 and December 31, 1996, the
  Company held 3.3 million  shares of Nextel  common  stock.  In  addition,  as of
  December  31,  1996,  the Company  held  options to acquire an  additional  25.0
  million shares of Nextel common stock at $16 per share. As of December 31, 1996,
  these options,  which had an historical cost of $20.0 million,  were included in
  investments in publicly  traded  companies at their fair value of $32.6 million.
  In February 1997, the Company sold these options to Nextel for $25.0 million and
  recognized a pre-tax gain of $5.0 million as investment  income in its condensed
  consolidated  statement  of  operations  and  accumulated  deficit.
  
  The Company  received 1.36 million shares of Time Warner common stock (the "Time
  Warner  Stock") in  exchange  (the  "Exchange")  for all of the shares of Turner
  Broadcasting System, Inc. ("TBS") stock (the "TBS Stock") held by the Company as
  a result of the merger of Time  Warner and TBS in October  1996.  As a result of
  the  Exchange,  the Company  recognized a pre-tax  gain of $47.3  million in the
  fourth  quarter of 1996,  representing  the  difference  between  the  Company's
  historical cost basis in the TBS Stock of $8.9 million and the new basis for the
  Company's  investment in Time Warner Stock of $56.2 million,  which was based on
  the  closing  price of the Time  Warner  Stock on the merger date of $41.375 per
  share.  In December  1996 and January  1997,  the Company sold 92,500 shares and
  1.27 million shares,  respectively,  of the Time Warner Stock,  representing the
  Company's  entire  interest in Time Warner,  for $3.7 million and $48.6 million,
  respectively.  In connection with the January 1997 sales, the Company recognized
  a pre-tax loss of $3.8 million,  which is included in  investment  income in the
  Company's  condensed   consolidated  statement  of  operations  and  accumulated
  deficit.  As of December 31, 1996,  the 1.27 million shares of Time Warner Stock
  held by the company were  recorded at their fair value of $47.4 million and were
  included in  short-term  investments  in the  Company's  condensed  consolidated
  balance sheet.
  
                                         15
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  The Company does not have any  additional  significant  contractual  commitments
  with respect to any of its investments.  However, to the extent the Company does
  not fund its  investees'  capital  calls,  it exposes  itself to dilution of its
  ownership interests.  The Company continually evaluates its existing investments
  as well as new investment opportunities.
  
  Financing
  The Company has  historically  utilized a strategy of financing its acquisitions
  through  senior debt at the  acquired  operating  subsidiary  level.  Additional
  financing  has also  been  obtained  by the  Company  through  the  issuance  of
  subordinated debt at the intermediate  holding company and parent company levels
  and, to some extent,  through public  offerings of a subsidiary  company's stock
  and debt instruments.
  
  The  Company  is in  the  process  of  repaying  or  otherwise  restructuring  a
  significant  portion  of its debt  outstanding  as of March  31,  1997  with the
  proceeds  from the  issuance  of the Cable  Notes and the  Cellular  Notes.  The
  following  information  depicts the impact that these  anticipated  transactions
  would  have on certain  aspects  of the  Company's  outstanding  long-term  debt
  assuming that, as of March 31, 1997, the Cable Notes and Cellular Notes had been
  issued  and  the  Company  had  made  the  anticipated  repayments  (dollars  in
  millions):
  Actual as of    "Pro forma" as of
                                                    March 31, 1997   March 31, 1997 (1)
  Contractual Maturities of Long-Term Debt:
  
       1997 (2)....................................      $76.3              $76.3
       1998........................................      684.9              127.5
       1999........................................      538.7              279.6
       2000........................................      674.1              301.1
       2001........................................    1,300.4              622.2
  
  Unused Lines of Credit (3).......................     $996.7           $1,216.7
  
  Average Interest Rate............................       7.65%              8.04%
  ---------------
  (1)  In connection with the assumed  repayments of debt  outstanding as of March
       31,  1997 with the  proceeds  from the  issuance of the Cable Notes and the
       Cellular Notes, the Company expects to record an extraordinary loss, net of
       tax, of  approximately  $20.0  million in 1997.  There can be no assurances
       that all of the transactions  contemplated by the "pro forma"  presentation
       will occur in the manner  assumed herein or occur at all. The impact of the
       transactions  which  ultimately  occur may yield  results which differ from
       those presented above. 
  (2)  Represents  maturities of long-term  debt for the remaining  nine months of
       1997.
  (3)  Actual as of March 31, 1997 excludes  $625.0 million which was  established
       by a subsidiary of Comcast Cellular for debt refinancing.
  The  availability  and use of the unused  lines of credit is  restricted  by the
  covenants of the related debt agreements and to subsidiary  general purposes and
  dividend declaration.  The Company continually evaluates its debt structure with
  the intention of reducing its debt service requirements when desirable.
  
  Concurrent with the announcement of the Scripps Acquisition in October 1995, the
  Company  announced  that its Board of Directors  authorized a market  repurchase
  program (the "Repurchase Program") pursuant to which the Company could purchase,
  at such times and on such terms as it deemed  appropriate,  up to $500.0 million
  of its outstanding common equity securities, subject to certain restrictions and
  market  conditions.  Based on the trade date for stock  repurchases,  during the
  three  months  ended March 31, 1997 and 1996,  the Company  repurchased  675,000
  shares and 3.2 million shares,  respectively,  of its common stock for aggregate
  consideration of $11.5 million and $56.7 million, respectively,  pursuant to the
  Repurchase Program. During the term of the Repurchase Program, the
  
                                         16
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  Company  repurchased  a total of 13.5  million  shares of its  common  stock for
  aggregate  consideration of $228.6 million. The Repurchase Program terminated on
  May 13, 1997.
  
  As part of the Repurchase Program, the Company sold put options on shares of its
  Class A Special  Common Stock.  Put options on 4.0 million  shares,  sold by the
  Company  during 1996 and 1995 and  outstanding  at December  31,  1996,  expired
  unexercised  during the first  quarter of 1997.  Upon  expiration,  the  Company
  reclassified  $69.6  million,  the amount it would have been obligated to pay to
  repurchase  such shares had the put options been  exercised,  from common equity
  put  options to  additional  capital  in the  Company's  condensed  consolidated
  balance sheet.
  
  In April 1997, the Company sold put options on 2.0 million shares of its Class A
  Special  Common Stock.  The put options give the holder the right to require the
  Company to  repurchase  such  shares at a specified  price on specific  dates in
  April  and May  1998.  The  amount  the  Company  would be  obligated  to pay to
  repurchase such shares upon exercise of the put options, totaling $31.4 million,
  will be reclassified from additional capital to common equity put options in the
  Company's  condensed  consolidated  balance  sheet during the second  quarter of
  1997.
  
                              -------------------------
  
  As  a  result  of  the  Scripps  Acquisition,   the  Company  no  longer  has  a
  stockholders' deficiency.  However, the Company expects to continue to recognize
  significant  losses  for the  foreseeable  future,  resulting  in  decreases  in
  stockholders'  equity.  The  telecommunications  industry,  including  cable and
  cellular communications,  and the electronic retailing industry are experiencing
  increasing  competition and rapid  technological  changes.  The Company's future
  results of operations will be affected by its ability to react to changes in the
  competitive  environment  and by its  ability  to  implement  new  technologies.
  However,  the Company believes that competition,  technological  changes and its
  significant  losses  will  not  significantly   affect  its  ability  to  obtain
  financing.
  
  The Company  believes  that it will be able to meet its  current  and  long-term
  liquidity and capital  requirements,  including fixed charges,  through its cash
  flows from operating  activities,  existing cash, cash  equivalents,  short-term
  investments and lines of credit and other external financing.
  
  Statement of Cash Flows
  
  Cash and cash  equivalents  increased  $123.6  million as of March 31, 1997 from
  December 31, 1996 and decreased $28.9 million as of March 31, 1996 from December
  31, 1995.  Changes in cash and cash  equivalents  resulted  from cash flows from
  operating, financing and investing activities which are explained below.
  
  Net cash provided by operating  activities amounted to $197.4 million and $128.1
  million for the three  months ended March 31, 1997 and 1996,  respectively.  The
  increase of $69.3  million is  principally  due to the increase in the Company's
  operating  income  before   depreciation  and  amortization   (see  "Results  of
  Operations"),  including the effects of the Scripps Acquisition,  and changes in
  working capital as a result of the timing of receipts and disbursements.
  
  Net cash  provided  by (used in)  financing  activities  was $85.2  million  and
  ($28.9)   million  for  the  three   months  ended  March  31,  1997  and  1996,
  respectively. During the three months ended March 31, 1997, the Company borrowed
  $192.8  million,  including  the Disney Notes of $132.8  million and  borrowings
  under its existing  lines of credit,  and repaid $90.9  million of its long-term
  debt.  In  addition,  the Company  made net  repurchases  of $7.0 million of its
  common stock  during the three  months  ended March 31,  1997.  During the three
  months ended March 31,  1996,  the Company  borrowed  $191.2  million  under its
  existing  lines of credit  and repaid  $167.4  million  of its  long-term  debt,
  including approximately $78.5 million under a vendor financing arrangement.  Net
  repurchases  of the  Company's  common stock during the three months ended March
  31, 1996 were $38.2 million.
  
  Net cash used in investing  activities was $159.0 million and $128.1 million for
  the three months ended March 31, 1997 and 1996,  respectively.  During the three
  months ended March 31, 1997, net cash used in investing activities includes the
  
                                         17
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  E!  Acquisition,  net of  cash  acquired,  of  $116.5  million,  investments  in
  affiliates of $32.4 million and capital  expenditures of $180.0 million,  offset
  by the proceeds from the sales of short-term  and  long-term  investments  and a
  distribution  from an investee of $150.4  million and the  repayment  of a $25.2
  million loan to Sprint PCS. For the three months ended March 31, 1996,  net cash
  used in  investing  activities  includes  investments  in  affiliates  of $153.7
  million,  including capital contributions to Sprint PCS of $17.0 million and the
  purchase of Nextel shares of $99.9 million,  and capital  expenditures of $111.4
  million,  offset by the  proceeds  from the sales of  short-term  and  long-term
  investments of $173.8 million.
  
  Results of Operations
  
  The effects of the Company's recent acquisitions were to increase  significantly
  the Company's  revenues and expenses  resulting in substantial  increases in its
  operating income before  depreciation and  amortization,  depreciation  expense,
  amortization expense and interest expense. In addition,  the Company's equity in
  net losses of affiliates  has increased  principally as a result of the start-up
  nature of certain of the Company's equity  investees (see "Operating  Results by
  Business Segment" and "Consolidated  Analysis"). As a result of the increases in
  depreciation expense,  amortization expense and interest expense associated with
  these acquisitions and their financing and the increases in equity in net losses
  of  affiliates,  it is expected  that the  Company  will  continue to  recognize
  significant losses for the foreseeable future.
  
  Summarized  consolidated  financial  information  for the  Company for the three
  months ended March 31, 1997 and 1996 is as follows  (dollars in  millions,  "NM"
  denotes percentage is not meaningful):
  Three Months Ended
                                                                          March 31,           Increase / (Decrease)
                                                                     1997          1996          $            %
  Revenues..................................................       $1,130.8       $950.7       $180.1        18.9%
  Cost of goods sold from electronic retailing .............          291.9        270.1         21.8         8.1
  Operating, selling, general and administrative expenses ..          505.2        410.5         94.7        23.1
                                                                   --------       ------
  Operating income before depreciation and
     amortization (1) ......................................          333.7        270.1         63.6        23.5
  Depreciation..............................................           95.8         68.4         27.4        40.1
  Amortization..............................................          116.6         88.5         28.1        31.8
                                                                   --------       ------
  Operating income..........................................          121.3        113.2          8.1         7.2
                                                                   --------       ------
  Interest expense..........................................          133.3        134.8         (1.5)       (1.1)
  Investment income.........................................          (12.2)       (18.6)        (6.4)      (34.4)
  Equity in net losses of affiliates........................           70.1         34.5         35.6          NM
  Other.....................................................            8.9         11.3         (2.4)      (21.2)
  Income tax expense........................................            9.9          0.9          9.0          NM
  Minority interest.........................................          (24.0)       (15.1)         8.9        58.9
                                                                   --------       ------
  Net loss..................................................         ($64.7)      ($34.6)       $30.1        87.0%
                                                                   ========       ======
  ------------
  (1)  Operating income before  depreciation and amortization is commonly referred
       to in the Company's  businesses as "operating  cash flow."  Operating  cash
       flow is a measure of a company's  ability to  generate  cash to service its
       obligations, including debt service obligations, and to finance capital and
       other  expenditures.  In part due to the  capital  intensive  nature of the
       Company's  businesses  and the  resulting  significant  level  of  non-cash
       depreciation  expense  and  amortization  expense,  operating  cash flow is
       frequently  used  as one of  the  bases  for  comparing  businesses  in the
       Company's industries. 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.
  18
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  Operating Results by Business Segment
  
  Domestic Cable Communications
  
  As a result of the Scripps Acquisition,  the Company commenced consolidating the
  financial  results of Scripps Cable  effective  November 1, 1996.  The following
  table presents actual financial information for the three months ended March 31,
  1997 and pro forma  financial  information  for the three months ended March 31,
  1996 as if the  Scripps  Acquisition  occurred  on January  1,  1996.  Pro forma
  financial  information is presented  herein for purposes of analysis and may not
  reflect  what actual  operating  results  would have been had the Company  owned
  Scripps Cable since January 1, 1996 (dollars in millions):
  Three Months Ended
                                                                          March 31,                Increase
                                                                     1997          1996          $            %
  Service income............................................        $501.1        $457.3       $43.8         9.6%
  Operating, selling, general and
       administrative expenses..............................         270.8         240.6        30.2        12.6
                                                                    ------        ------       -----
  Operating income before depreciation
       and amortization (a).................................        $230.3        $216.7       $13.6         6.3%
                                                                    ======        ======       =====
  ---------------
  (a) See footnote (1) on page 18.
  Of the $43.8 million  increase in service income for the three month period from
  1996 to 1997, $10.0 million is attributable to subscriber growth,  $32.0 million
  relates to changes in rates and $1.8 million relates to other product offerings.
  
  Of the $30.2 million increase in operating,  selling, general and administrative
  expenses  for the  three  month  period  from  1996 to  1997,  $7.6  million  is
  attributable  to  increases  in the  costs of cable  programming  as a result of
  subscriber  growth,  additional  channel  offerings  and changes in rates,  $5.0
  million is attributable to increases in costs associated with the implementation
  of three regional  customer  service call centers and $17.6 million results from
  increases  in the  cost of  labor,  other  volume  related  expenses  and  costs
  associated with new product offerings. It is anticipated that the Company's cost
  of cable  programming  will  increase in the future as cable  programming  rates
  increase and additional sources of cable programming become available.
  
  Electronic Retailing
  
  The following  table sets forth operating  results for the Company's  electronic
  retailing   segment,   consisting  of  the  operations  of  QVC,  Inc.  and  its
  subsidiaries  ("QVC"), a majority owned and controlled subsidiary of the Company
  (dollars in millions):
  Three Months Ended
                                                                          March 31,                Increase
                                                                     1997          1996          $            %
  Net sales from electronic retailing.......................        $479.7        $450.1       $29.6         6.6%
  Cost of goods sold from electronic retailing .............         291.9         270.1        21.8         8.1
  Operating, selling, general and administrative
       expenses.............................................         108.7         107.6         1.1         1.0
                                                                    ------        ------       -----
  Operating income before depreciation
       and amortization (a).................................         $79.1         $72.4        $6.7         9.3%
                                                                    ======        ======       =====
  
  Gross margin..............................................          39.1%         40.0%
  ---------------
  (a) See footnote (1) on page 18.
  19
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  The increase in net sales from  electronic  retailing  of $29.6  million for the
  three month period from 1996 to 1997 is primarily attributable to the effects of
  a 7.1%  and a 14.0%  increase  in the  average  number  of homes  receiving  QVC
  services in the United States and the United Kingdom, respectively.
  
  The  increase  in cost of goods  sold from  electronic  retailing  is  primarily
  related to the growth in net sales. The decline in gross margin from 1996 to the
  same  period in 1997 is a result of a change in product  mix and an  increase in
  shipping and handling costs.
  
  The increase in operating,  selling, general and administrative expenses of $1.1
  million for the three month period from 1996 to 1997 is  primarily  attributable
  to start-up  costs  incurred by QVC in Germany,  which began  operations  in the
  fourth quarter of 1996,  offset,  in part, by the reduction in expenses realized
  upon  consolidation  of QVC's  multichannel  operations  and an  increase in net
  finance fee income from credit card operations.
  
  Cellular Communications
  
  The following table sets forth the operating results for the Company's  cellular
  communications segment (dollars in millions):
  Three Months Ended
                                                                          March 31,            Increase/(Decrease)
                                                                     1997          1996          $            %
  Service income ...........................................        $104.1         $98.2        $5.9         6.0%
  Operating, selling, general and administrative
       expenses ............................................          66.4          69.7        (3.3)       (4.7)
                                                                    ------         -----        ----
  Operating income before depreciation
       and amortization (a) ................................         $37.7         $28.5        $9.2        32.3%
                                                                    ======         =====        ====
  ---------------
  (a) See footnote (1) on page 18.
  Of the $5.9 million  increase in service  income for the three month period from
  1996 to 1997, $8.5 million is attributable to the Company's  subscriber  growth.
  Offsetting this increase is a decrease of $2.6 million resulting  primarily from
  a reduction  in the average  rate per minute of use from 1996 to the same period
  in 1997.
  
  The $3.3 million  decrease in  operating,  selling,  general and  administrative
  expenses for the three month period from 1996 to 1997 is primarily  attributable
  to  expense  reductions  achieved  through  implementation  of fraud  management
  programs and a reduction in commission costs resulting from fewer gross sales in
  1997 as compared to the same period in 1996.  These  reductions  were  partially
  offset by increases in volume related expenses resulting from subscriber growth.
  
  Consolidated Analysis
  
  The $27.4 million  increase in  depreciation  expense for the three month period
  from  1996 to 1997 is  primarily  attributable  to the  effects  of the  Scripps
  Acquisition and the effects of capital expenditures.
  
  The $28.1 million  increase in  amortization  expense for the three month period
  from  1996 to 1997 is  primarily  attributable  to the  effects  of the  Scripps
  Acquisition.
  
  The $1.5  million  decrease in interest  expense for the three month period from
  1996 to 1997 is  attributable  to  decreases  in  rates,  offset,  in  part,  by
  increased  levels of debt. The Company  anticipates  that,  for the  foreseeable
  future, interest expense will be a significant cost to the Company and will have
  a significant  adverse effect on the Company's  ability to realize net earnings.
  The Company believes it will continue to be able to meet its obligations
  
                                         20
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1997
  
  through its ability both to generate  operating  income before  depreciation and
  amortization and to obtain external financing.
  
  The $6.4 million  decrease in investment  income for the three month period from
  1996 to 1997 is primarily attributable to the effects of higher average balances
  of cash,  cash  equivalents  and  short-term  investments in 1996 as compared to
  1997. In May 1997,  the Company sold all of its 2.76 million  shares of Teleport
  Communications  Group,  Inc.  Class A  Common  Stock.  The  Company  anticipates
  recognizing a $68.9 million  pre-tax gain on the sale during the second  quarter
  of 1997.
  
  The $35.6 million  increase in equity in net losses of affiliates  for the three
  month  period from 1996 to 1997 is  primarily  due to the  effects of  increased
  losses  incurred  by  Sprint  PCS and  certain  of the  Company's  other  equity
  investees  and the  effects  of the E!  Acquisition  (see  below) and the Sports
  Venture Acquisition.  Based on Sprint PCS' current operations and business plan,
  the Company  anticipates that its proportionate share of Sprint PCS' losses will
  be  significant  in  future  periods.  In  addition,  as  a  result  of  the  E!
  Acquisition,  the Company recorded a charge  representing the cumulative  amount
  that would have been recorded had the Company accounted for its investment in E!
  Entertainment  under the equity method since the date of initial investment (the
  "Cumulative   Charge").   Since  the   Company's   proportionate   share  of  E!
  Entertainment's  cumulative  losses were in excess of the  Company's  historical
  cost  basis in E!  Entertainment  and as the  Company  was under no  contractual
  obligation to fund the losses of E!  Entertainment,  the  Cumulative  Charge was
  limited to the Company's historical cost basis of $12.1 million.  Such amount is
  included  in  equity in net  losses of  affiliates  in the  Company's  condensed
  consolidated  statement  of  operations  and  accumulated  deficit for the three
  months  ended March 31, 1997 as it is not  significant  for  restatement  of the
  Company's prior year financial statements.
  
  The $9.0 million increase in income tax expense for three month period from 1996
  to 1997 is a result of increases in non-deductible  foreign losses and equity in
  net losses of affiliates as well as increased  goodwill  amortization  resulting
  from the Scripps Acquisition.
  
  The $8.9 million  increase in minority  interest for the three month period from
  1996 to 1997 is  primarily  attributable  to the  effects  of changes in the net
  income (loss) of QVC and Comcast UK Cable.
  
  For the three months ended March 31, 1997 and 1996,  the Company's  distribution
  from an investee and earnings before income tax expense, equity in net losses of
  affiliates and fixed charges  (interest  expense) were $150.4 million and $135.6
  million, respectively.  Such earnings were adequate to cover the Company's fixed
  charges,  including interest  capitalized of $8.6 million, of $141.9 million for
  the three months ended March 31, 1997.  Such earnings were not adequate to cover
  the Company's fixed charges,  including interest capitalized of $7.1 million, of
  $141.9 million for the three months ended March 31, 1996.  Fixed charges include
  non-cash  interest,  net of  interest  capitalized,  of $17.0  million and $16.1
  million for the three  months ended March 31, 1997 and 1996,  respectively.  The
  inadequacy  of earnings to cover fixed  charges for the three months ended March
  31, 1996 is primarily due to the substantial  non-cash  charges for depreciation
  expense and amortization expense.
  
  The  Company  believes  that  its  losses  will  not  significantly  affect  the
  performance of its normal business activities because of its existing cash, cash
  equivalents and short-term investments, 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.
  
                                         21
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 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:
  
             (i)    Comcast  Corporation  filed a Current Report on Form 8-K under
                    Item 5 on January 31, 1997 relating to the announcement of its
                    agreement  with The Walt Disney  Company to form a new company
                    to acquire a majority interest in E! Entertainment Television,
                    Inc.
  
             (ii)   Comcast  Corporation  filed a Current Report on Form 8-K under
                    Item 5 on March 27, 1997 relating to its  announcement  of the
                    intention of its wholly  owned  subsidiary,  Comcast  Cellular
                    Holdings,  Inc., to offer approximately $900 million of senior
                    notes in a private placement.
  
                                         22
  COMCAST CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 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 CORPORATION
                                       -------------------------------------------
  
                                       /S/ LAWRENCE S. SMITH
                                       -------------------------------------------
                                       Lawrence S. Smith
                                       Executive Vice President
                                       (Principal Accounting Officer)
  
  Date: May 15, 1997
  
                                         23